Interview: Performance Management Design for Organizational Change
March 2, 2010
This morning on The Change Agent’s Dilemma radio show, I interviewed Dr. Janet Hecht of Talent by Design Consulting, LLC about how to design a performance management system for organizational change.
Janet shared the components of an effective performance management design and the tips she learned as an employee implementing a performance management system to 55,000 associates at the State of Georgia. She also warned of some of the pitfalls to avoid when designing and implementing a performance management system.
Listen here (30 minutes):
Be sure to visit the new radio show page to find other ways you can tune in to the show.
Monitor Your Organization’s “Non-Verbal” Communication
February 23, 2010
It is widely cited that verbal communication makes up only 7% of a total message during a conversation. That is, 93% percent of the meaning within the conversation comes from outside the words that we use. These non-verbal aspects of communication include gestures, posture, intonation, and facial expressions. It turns out the concrete language is by far the least important factor in our interpretation and understanding of what the other person saying.
A similar phenomenon happens in organizations. Consider that the equivalent to verbal communication in organizations are the formal words that come to employees in the form of official documents: values and mission statements, strategy, policies, newsletters, websites, announcements, press releases, and other communication devices. The rest of internal communication comes from everything else employees experience. Similar to a conversation, the vast majority of meaning and understanding is generated by “non-verbal” communication.
The following are examples of “non-verbal” communication in organizations that speak louder than words:
Accountability
Employees assess which policies count and which ones are merely guidelines based on how consistently they are enforced. Processes and procedures are generally followed to the extent that they are required.
“Everyone must contact the IT helpdesk to resolve computer issues”
(unless you know who to call to avoid waiting).
Rewards
Rewards in all their forms tell employees how to be successful. Traditional incentive programs signal expectations but may conflict with stated values or even inadvertently motivate a different behavior than what is desired. Furthermore, who gets promoted and what behaviors elicit praise send powerful messages about what is expected.
“Safety first!”
(Here’s your efficiency bonus.)
Decisions
How managers spend resources speaks volumes about what they truly value and prioritize. The decisions they make about how to allocate funds and how they spend their own time demonstrates what they believe will lead to success.
“Strategic initiatives are important”
(until we need to cut something out of the budget).
Management behavior
More than anything, employees look at the behavior modeled by management to see if it matches what is officially communicated. The most influential person in this regard is an employee’s own boss. The attitudes and behaviors displayed by people in authority tell the real story of what is expected.
“We value employees’ ideas”
(but not the terrible one you just shared).
Employees will rely on “non-verbal” communication to understand what is expected and to decide appropriate action in the midst of uncertainty. When introduced to news of change, many employees will take the stance, “I’ll believe it when I see it.” It is not enough for them to hear it or read it. It is imperative to monitor your organization’s “non-verbal” communication to ensure that actions and behaviors are consistent with your official change message.
Ten Essential Tools for Change Agents
February 2, 2010
Change agents are individuals within organizations who influence change without having direct authority over people who are going through the change. The following are ten things that effective change agents use to influence change in their organizations. Read more
Three Myths About Organizational Change
January 5, 2010
Our beliefs about what change is and how it works can influence our willingness to take on the challenge appropriately. Change agents who believe these three myths might find their initiatives stuck in a rut.
Myth #1: The goal is change.
Perhaps we are victims of language. Organizational change practitioners commonly talk as though the end goal is change itself. It is common to say “implement change” as if the change itself is the goal. It’s not! Change is the process of bringing about the desired future state. Read more
The case of a bad incentive
November 17, 2009
A manufacturing company paid sales managers a bonus for forecast accuracy. Great idea, right?
Except the bonus was paid on the accuracy of the total number of cases projected. It didn’t matter what category, or what SKU. If the sales manager said he was going to sell 100,000 cases, it didn’t matter what was in the cases. This makes determining an accurate forecast as easy as mathematically possible. Good for the sales managers, bad for anyone who needed to use the information.
One customer of the forecast was the production planning department, which needed an accurate forecast at least by product group (e.g. a 24ct package vs. a 48ct package of widgets), and ideally by SKU (e.g. 24ct red vs. 24ct blue). Since the sales managers were not expected to be accurate to that degree, the forecast accuracy incentive was essentially worthless to those who actually needed the forecast to be accurate.
The actual desired behavior was not designed into the incentive program.
Ultimately, the forecast accuracy incentive was ignored anyway. Sales managers were paid even more when they sold more. In fact the prevailing attitude in the sales department was not to meet forecast but to beat it. Anyone who did so was celebrated.
Competing incentives – both money and adulation – drowned out the forecast accuracy incentive.
Bad incentive!
Please share your own examples of bad incentives.
Fair vs Equal: Two views of incentives
May 3, 2009
During my Beyond Buy-in webinar a couple of weeks ago, one of the attendees mentioned that different leaders are motivated by different things, and that there is no one-size-fits-all incentive. How true! Now that the comment has had time to percolate, here are some thoughts.
I would like to talk about the difference between fair and equal.
Fair: Getting something of equal value to the effort expended, relative to everyone else.
Equal: Getting the same reward as everyone else regardless of input.
Equal incentives are frequently used for team rewards – a group of people working toward a common goal, and everyone will receive the same reward if the team succeeds. Equal rewards often seem unfair, since every person contributes individually to the effort – especially if the target is missed. On the other hand, equal rewards do engender mutual accountability and collaboration, if the culture allows.
Fair incentives can be tricky, because not everyone associates the same value with the same reward. Besides money, rewards for individual performance might be promotions, time off, more responsibility, parking spaces and other perks. Not only is perceived value different, but the criteria for determining who gets what is often subjective, or at least apples and oranges. At the same time, people like being recognized for their own contributions.
When possible, it’s best to use intrinsic motivation and exclude incentive programs altogether. The recent McKinsey article, “The Irrational Side of Change Management,” lists five different forms of motivation, in terms of impact of the change initiative:
- Impact on Society
- Impact on the Customer
- Impact on the Company
- Impact on the Team
- Impact on Me
If the company and your change initiative can tap into each of these sources of motivation, then each person will select which one is most fulfilling to them. Now that would be fair and equal!
Little blue notebook
December 11, 2008
When I was a fledgling change agent, I kept a little blue notebook hidden in my purse. It was a Mead Five-Star Fat Lil’ Notebook. Inside were one-page observations, comments, quotes and complaints that reflected what I felt needed to be fixed at the company where I worked. It’s probably a good thing that blogs hadn’t been invented yet.
I still have it. Here are a few excerpts:
CULTURE
Lack of follow through. We are good at identifying problems but frequently push them aside to focus on other things. Sometimes we even know the solution and don’t follow through.
INCENTIVES
Sales managers are given a bonus based on accuracy of the total number of cases. The customer of the forecast is the planning department. Total number of cases does not help them plan better. Reward the desired behavior – some measure of SKU or category forecast accuracy.
LEADERSHIP
No one can say anything in front of [name]. He should not be the end of the line final decision maker. Does he know people are closed-mouthed around him? His decisions sometimes are reversed at meetings he doesn’t attend.
STRATEGY
What is our strategy? To sell to anyone who will buy? Why are we not more discriminating in what we sell? What is the process that makes us continue to try to sell every combination of goods?
The notebook served a few purposes.
- A record – it’s easy to lose sight of things that need to be fixed when you either get used to them or move on to something else. Writing it down preserves the memory, and you can go back and count the number of instances something is mentioned to measure its importance (forecast accuracy was a big deal).
- An outlet – you can tell by the tone of some of the comments that I was mad or annoyed. Writing was a way to vent the negative emotion. It can also help clarify what is the crux of the problem.
- An integrity-keeper – writing down your thoughts privately can help you refrain from complaining to others. According to The Transparency Edge, one of the books in my reading list, one way to destroy your integrity is with unproductive criticism or complaining. (Of course, if someone had found the little blue notebook, that would have been another story.)
Granted, I was not able to fix everything on the list, but I was able to take a stab at some of it. And that’s really my point. Don’t keep a journal like this just to document the list of everything you don’t like about your company. Write with the best intentions to take action and improve the important things.
Inquiry: What’s in your little blue notebook? What are you going to do about it?
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