Employee Performance

How Are You Identifying Your Top Talent?

The competition to attract and retain top talent in any industry is fierce, and gaps exist from the bottom of the pipeline to the top. On the other hand, a talented, engaged workforce is one of the most effective competitive advantages any organization can have. Identifying and developing the shining stars and high-potential individuals was once relegated to the HR department. Today’s successful organizations have found that intentional and focused plans to identify and develop the talent needed for the future needs a much broader and more inclusive approach.   

The Cost of Getting it Wrong

Most organizations probably understand that a poorly chosen hire or promotion or a bad fit costs them money, but do they know the depth and potential magnitude of these choices? According to the U.S. Department of Labor, the price of a bad hire is at least 30 percent of that employee’s first-year earnings. While they do not compile similar statistics for inappropriate promotions, it’s probably safe to assume that the number is in the same ballpark.

The Less Quantifiable Losses

There are also implications of poor decisions beyond the dollars associated with them as problems in the workforce tend to spread and snowball. The absence of a strong pipeline can create a challenge in finding the right people for the right positions. This in turn increases the potential of moving ineffective people into leadership positions or requiring a lengthy hiring process to acquire leaders from the outside. While these problems all cost money, a bad apple can also cost the organization in terms of an increase of conflict, poor communication, and difficulty cooperating. 

The rate of change is high in terms of technology, the skills needed to be successful in a position, and what the demands of the future will be for an organization. For that reason, combined with all the evidence of the impact of low engagement, leaders in every organization need to be agile: they must be able to think quickly, develop healthy relationships, and have an ability to coach others while bringing a deep sense of integrity to a company. All of these moving pieces drive the need to engage in the identification and development of top talent as an entire organization. Let’s take a look at how businesses are evolving this process.  

Determination of Talent Needed

Performance levels against job descriptions and profiles is a common way for organizations to identify top talent. The concern with this method though is that the focus is on the current state – what is needed to be successful in the job today.  

In determining what talent to look for, organizations need to go beyond today and look at what will be needed for it to be successful in the future. Take for example a manager role today. Skills and talents needed may include budgeting, team building, process management, and efficiency. In looking to the changing world we live in today and what the future is expected to be, skills like change resiliency, high impact communication, and collaboration might be necessary. As technology changes on a continual basis and market needs shift rapidly, a skillset that is a must-have today may be obsolete in a few months or years. 

Tools to Use in Talent Identification

Historically, organizations approach the identification of talent through performance evaluations that are done in a formal way with standard documents and semiannual or annual conversations. While the information discussed in those meetings should not be a surprise to the employee, often times it is. This is a result of the leader not engaging in conversations with and giving feedback to employees throughout the year. Things are starting to change, however.  

Smart organizations are moving toward expecting their leaders to interact with employees on a regular basis to discuss current performance, goals, career aspirations, etc. This approach enables both leaders and employees to take immediate action on necessary changes and development or learning opportunities. It also encourages a coaching leadership approach that enables employees to take the lead on their future development and contribution to the organization.  

Different data points and how they are used in talent identification has also changed.  Predictive analytics has become more popular as a tool to identify risk related to the retention of talent in organizations. Leadership assessments are used to determine an individual’s strengths and potential derailers. Common assessments used include Hogan, Caliper, 360 Degree Feedback Surveys, the DiSC, and the MBTI. There are two keys though to using data as a talent identifier; one is that it not be used as a standalone input and second, that the analysis and interpretation of the data be shared with the employee and used to create an action plan for moving forward. This helps create a partnership in learning, behavior change, and both individual and organizational success. 

Considerations When Assessing Talent

The Impact on Your Talent Pipeline

Traditional succession management plans are built on vertical ladders and rely strongly on seniority and who’s “next in line” rather than a broader, systematic approach to identifying and developing talent. The problem with the old system is that it leaves many opportunities for rising stars to be overlooked simply because they’re on the wrong ladder or perhaps on no ladder at all. This then leaves potential gaps should a key player leave the organization.

A more inclusive approach involves a well thought out intentional focus on what is needed for the organization to be successful in the future, the identification of talent using the outcome of that future focus, assessment against and development aligned with the future state, and ongoing coaching, feedback, goal setting, and acknowledgement conversations. When top talent is spotted and given the tools, support, and growth opportunities to grow within the organization, they are more likely to stick around resulting in the organization having a more robust pipeline and being more prepared to fill roles when vacated.   

Head in the Right Direction

Organizations that are successfully identifying, hiring, and retaining the best talent in their industries are doing so by taking a holistic approach to managing their workforce. By keeping an eye on the future and ensuring that workforce decisions are tightly aligned to the long-term goals and strategies of the organization, the entire company stands to gain in every direction, from employee satisfaction to profitability.

Why Middle Managers are the Fall Guy (and How to Fix That)

Too often, middle managers get a bad rap. Among the ranks, middle managers can sometimes be seen as inept and more concerned with preserving their position than meeting the needs of their subordinates. These key roles often get blamed for failures from both the top and lower levels of the organization. They are often caught in a no-win situation, creating higher levels of anxiety and emotional reactions. On the other hand, at least one recent study has found that effective middle managers can contribute directly to improving an organization’s bottom line. Why, then, is there such stark disagreement? Perhaps the answer lies in what’s coming down the pipe from senior leadership.

The Role of the Middle Manager

In most organizations, one of the roles of senior leadership is to establish and articulate the strategies that will be used to achieve the company’s goals. Middle managers are to execute that strategy by leading their subordinates in the right direction. Of course, there is the potential for a wide gap to form between the development of a strategy and its implementation and execution. In that gap, we’ll find ineffective middle managers who are not motivated by the organization’s mission while also being worried about the consequences of failing that mission. 

That fear of failure may be at the heart of the problem as senior leaders who are committed to the mission and strategies blame the managers for being incompetent, and the ranks feel unsupported by a manager who appears to be more committed to retaining their position rather than the success of his or her team. In other words, middle managers become the fall guy for a systemic problem that’s likely to be pervasive throughout the organization.

The Rise of the Middle Manager

According to a report from Gallup, managers account for at least 70 percent of the variance in employee engagement across business units. The report also found that only 35 percent of managers are engaged and that employees who have a highly engaged manager are almost 60 percent more likely to be engaged themselves.

To improve the engagement of managers—and, therefore, their subordinates—senior leaders must close the gap between the strategies they have developed and their expectations for its execution. They must find a way to connect managers to the vision and mission of the organization, as well as the merits of individual strategies.

Closing that gap starts by ensuring that the organization has a clearly articulated mission and vision that serves all potential stakeholders, including the community, customers, and employees. When managers can see that their purpose is more significant than simply ensuring their subordinates complete checklists, they can begin developing the engagement that leads to motivation.

Respect is the Magic Word

After spending several decades talking to and observing middle managers, one expert compiled a list of some of the problems that lie in the gap between strategy and implementation. While the list contains a dozen points, most of them can be summarized under the umbrella of respect. Some of the specific struggles that were noted include managers who feel forced to accomplish mandates without sufficient resources, feeling unappreciated, feeling excluded from decision-making that affects them, and feeling expendable when the organization needs a fall guy. 

The result of the accumulation of these types of problems are middle managers who are disengaged and lacking the motivation and energy necessary to inspire themselves and their subordinates; a sort of domino effect of a disincentivized workforce. The good news is that these dominoes are relatively easy to pick up and send cascading in the opposite direction. The correction begins when senior leadership reimagines the role of the middle manager and reframes the position from a more respectful vantage point. 

The first step is to include middle managers in the development of strategies, not just their execution, so managers not only feel heard, but also have an opportunity to connect more deeply with the expectations of the strategy and how strategies tie in with the organization’s overall mission. After all, it’s nearly impossible for managers to bring this energy to their subordinates when they cannot internalize it themselves. Then, senior leaders must work to support managers as they go forward to deploy the plans among their teams.

Supporting the Middle Manager

To develop the successful middle managers that are necessary to keep an organization moving toward its goals, one expert suggests a series of interventions from senior leadership. First, middle managers must be able to take ownership of their work if they are to be proud of the results. This happens when people are free to make decisions. Senior leaders should act as guides during decision-making rather than simply handing down prearranged plans of action.

Next, middle managers cannot be afraid to do their jobs. Senior leadership must work to cultivate a culture of growth, appreciation, and respect and avoid sabotaging the manager’s growth by not allowing them to make decisions, contribute ideas, and by forcing them to be held accountable for every failure. No more fall guys!

Lastly, middle managers need to feel personal connections within the organization. Most avoid developing true friendships with their subordinates to maintain professional boundaries, so senior leaders should fill that void with genuine mentorship that includes the manager’s full range of interests and career goals. Managers need to feel supported, like someone “has their back” and will stand behind them when necessary, and this trust can be developed with authentic mentorship.

The Secret Recipe

Employee engagement is the secret sauce for successful organizations, and highly engaged middle managers are directly responsible for the engagement of their teams. Better engagement leads to an increase in productivity and morale while reducing absenteeism and costly turnovers. Senior leaders who are willing to focus on keeping middle managers engaged will keep these lynchpins in the loop when relevant decisions are made, accept responsibility when things go wrong, support managers with the resources they need to execute strategies and serve as genuine mentors to keep managers growing. 

The Key Ingredients for Employee Engagement Success

What employee engagement looks like may vary a bit from one company to another; however, Gallup defines it as workers who share and are aligned with the company’s goals and are enthusiastic about contributing their efforts to achieve those goals. The benefits of an engaged workforce are clear: lower absenteeism and turnover, fewer safety incidents, better sales and an increase in productivity and profitability. Engagement sounds like the silver bullet for businesses that want to leap ahead of the competition and set down a path of long-term success. Why, then, does global engagement hover around a dismal 16 percent?

Changing Needs

For older generations, obtaining a position at a high-profile company was considered a privilege and sacrificing one’s personal life in service of the company was not only the norm, but the ones who gave up the most were rewarded with bigger bonuses and more promotions. Then the Millennial generation came along and smashed the old arrangement to bits. (Many people think Millennial is synonymous with entitled, petulant teenager, but keep in mind that the oldest Millennials are nearing 40 and many have teenagers of their own at this point, so we’re talking about grown adults who already make up more than half of the workforce, and will rise to 75 percent of the workforce in the next decade.)

The younger segment of today’s workforce demands to not only know what the purpose and goals of a company are, but also must feel that their personal values are aligned with that purpose before they can give their talents to an organization. This group is entirely unsatisfied with boring, meaningless work and instead craves valuable, worthwhile work and this feeling is leaking out into older generations, too. After all, who wouldn’t want to feel challenged and satisfied rather than bored and restless at work? Another difference: Millennials are far less willing than Boomers to make work their priority even with substantial compensation possibilities in the future. Instead, they want flexible positions that leave plenty of room to live outside of the office.

This apathy at work is costing real dollars: Millennial turnover is costing the U.S. economy more than $30 billion every year. As these people search for companies that prioritize the workers, the environment and society over the bottom line, failing to find such employment leaves them with a lack of loyalty and no qualms about hopping jobs more often and close to half of all millennials envision leaving their current position within the next two years.

The Root of the Problem

In most cases, companies don’t have sinister purposes and goals; the world is not full of comic book villains actively working against the greater good. Instead, the root of the problem appears to lie in poor work design. The Harvard Business Review conducted a study to understand how managers are developing work roles for others. One portion of the study asked managers to take a fictional, tedious part-time job of repetitive tasks such as filing and making copies and flesh it out into a full-time job by selecting from a list of available tasks. Almost half of them made the job even more boring by adding in another half-day of the same repetitive tasks.

Another part of the study involved problem-solving in terms of a fictional worker who was failing to meet her deadlines. The participants were told that the work design was poor, and that the worker was fast, yet still managed to fall behind. The vast majority of the study participants focused on changing the worker through training, advice and threats of a cut in pay, while only a handful looked for ways to improve the role even when they were told upfront that the position was designed poorly and the worker was considered fast.

On the surface, it can seem to be in the company’s best interest to make jobs as efficient as possible; however, this can mean repetitive tasks and responsibilities that are more similar to an assembly line than a rewarding work environment. While this arrangement might work well for machines, human beings need significantly more than reducing their daily lives into a repeat of yesterday, or we tend to suffer from a strong lack of engagement along with burnout and overall job dissatisfaction.

Organizations Must Evolve

In the above study, there is probably nothing that the fictional worker could do to save her position and her reputation as a hard-working human being with most of the managers who participated in the study. Her position was designed so poorly that she was destined to fail, yet managers insisted on blaming her for the failure rather than change their own views and restructure the position.

Managers have the ability to create meaningful and motivating environments for their employees, and the research has proven over and over again that doing so will improve productivity and profits across the board for the entire company. To stay competitive and to attract and retain the best and the brightest of the younger generations and to retain the loyalty of older generations who are coming around to the wisdom of their successors organizations must see that hierarchical structures are dinosaurs that have no place in the modern workplace.

Business ecosystems are the path to success and creating one requires a new mindset around how work gets accomplished. The idea behind the business ecosystem are groups whose contributions come together to create value. Each segment and individual in the group will benefit from a holistic view of the collective efforts as each can see the value of their contributions along with the accomplishments of the group as a whole. This might not be entirely new as a concept, but the difference today is that we have the technology collaboration software, data, analytics and IT infrastructure to build ecosystems that succeed.

How to Make the Leap

What employees need from managers and others who are defining job roles is to recognize the importance of well-designed work. Leadership teams must buy-in and then train managers and provide support as systems move away from narrow, repetitive work and into satisfying, engaging roles with room for individuals to stretch their capabilities and add something of themselves to the job. People want autonomy, not demands of strict adherence, and they expect to be heard and have their thoughts about the job design considered especially during performance reviews.

In many cases, breaking out from the old model can be difficult, even for those who are committed to the process. If that’s the case, it’s time to bring in professionals. Specialists who have expertise in and a deep understanding of the type of roles that people want and how success profiles not job descriptions are created to bring success can absolutely transform how your company achieves high rates of employee engagement, and therefore all the riches that come along with it. Once the roles are redefined, the next step is to change the way new hires are assessed for fit and what existing employees need to develop and flourish in your new ecosystem to bring enduring success for both the individuals and the company.

Whether you have yet to design and implement an employee engagement program, or you want to ensure that your current program positions your organization for success, we’re here to help. Contact Holly Teska at 262-786-9200 or via email, if you have questions or to schedule a conversation about your approach to employee engagement.

How to Turn Performance Reviews into High Performers

According to one study, 90 percent of people feel that performance reviews are painful and ineffective. Ouch. On the other hand, 78 percent of employees said the recognition that often occurs during reviews is motivating and 92 percent agreed that when delivered appropriately, negative feedback is effective at improving performance. If so many employees find reviews painful while also considering feedback essential and effective, the disconnect must lie in how the performance review is conducted. 

What Isn’t Working

Employee development and engagement is critical to the success of any business. In an attempt to deliver quality feedback and help people understand what they are doing well and learn what areas need attention, companies routinely turn to the annual performance review.

For many, this experience can be stressful, or even worse, lack the specificity and value that employees (and organizations) need.Over time, employees are called into an office with their supervisor, where they sit and listen to a list of things he or she has done right and wrong over the past year. While the employee listens to feedback, they are rarely engaged in a balanced discussion around their development. 

Most employees stress as their review meeting gets rescheduled around other priorities. They watch as their colleagues walk into their reviews and anxiously await their return in hopes of getting an idea of what their own review might look like based on the experience of others. In most cases, employees take away a few key things to work on; however, in general, most are happy to have simply survived the process and are glad to have it over with.

On the management side, preparing for annual performance reviews is a long, tedious process that requires completing complex assessments to determine how well employees have met vague markers such as “revenue goals,” “client success,” and “leadership.” While these goal posts are essential to the overall success of the company, they are often difficult to explain to workers concretely and are even more troublesome to translate into everyday actions one should or should not take.

It’s time to scrap the old notions of what a performance review should consist of and how they are delivered and instead develop a better way of communicating with your employees so they can effectively improve while also being recognized for a job well done. That’s why the LAK Group believes that focus should be a cadence of performance development discussions, not reviews.

Performance Reviews that Work

The annual review may remain an important part of the employee development process, especially when it is time to consider raises and promotions. However, they should not be the only or even the most important part of an evaluation procedure. Employee performance is not a “set it and forget it” proposition, it should be focused on development and career growth.

Additionally, we suggest that management meets regularly with workers to create an environment of ongoing conversation and support. Every workplace is different, so determining a reasonable time frame for these discussions varies. Weekly meetings may be too frequent and disruptive to the overall workflow, while meeting every six months may be too broad to encompass the finer details that may get lost or forgotten over such a long period of time. That’s why we suggest customizing your approach to performance discussions based on the situation or needs of each individual.

During these development discussions, collaborate with each employee to set goals and expectations for the next three, six, and twelve months. Remember, this isn’t a time to only list the good and the bad; it is a time to focus on achievements, both met and unmet. Along with your desires for employee development, ask each employee what he or she would like to accomplish and how you can be supportive of those ambitions. Be specific and develop a plan that includes what both you and the employee are going to do to meet business demands while maintaining each person’s passion and enthusiasm for their position and career growth.

Lastly, use yearly reviews as a consolidation of a yearlong process of development discussions and performance feedback. In accounting, annual reports are built by aggregating each month’s figures into one that represents the entire year. Do the same with employee performance discussions.

Productive Performance Meetings

Once you change the structure and frequency of employee performance reviews, it’s time to focus on the purpose of these reviews. We recommend shifting the focus from “performance reviews” to “performance development.” Transform the experience by engaging in discussions that demonstrate how leaders and employees can collaborate to harness their capabilities, inspire optimal performance, leverage their strengths and effectively meet business goals.

Performance discussions should be relaxed and conversational. Create an atmosphere that focuses on delivering an engaging dialogue, not a one-sided presentation; you want each individual to feel like he or she is picking up where the last conversation left off and that they have space to share their point-of-view. The objective is for everyone to feel that you are all working together to ensure that the needs of the employees are met along with the goals of the company.

Keeping this in mind, preparing for reviews means taking the time to create an experience for each employee that is as unique to them. Don’t use a cookie-cutter approach; instead, consider the personalities, results and strengths as you prepare to meet with each employee. When each discussion concludes, provide follow up and action plans that employees can review after they leave the meeting.

These action plans should include key points of the meeting and a review of the goals set along with job plans and expectations for the time until the next meeting. Again, make sure these are specific and unique for each person and be sure to include any actions that the company or managers will be taking on the employee’s behalf (i.e., training seminars or other developmental support).

A Continual Process

In one survey, almost every employee stated a preference for addressing learning opportunities in real-time rather than a one-time review process. From immediate supervisors to the executive suite, your entire management team should be engaged in an ongoing process of developing skills and rewarding achievements on a daily basis to avoid anxiety over and surprises during performance reviews. These informal moments are what drive the most success and job satisfaction in virtually every position in any company. Regular performance reviews should be a roundup of these moments rather than a substitution for them.

If you have any questions regarding your organization’s performance reviews, or you would like to review your current process for efficiency and effectiveness, please contact Mike Grubich at 262-786-9200 or via email at mgrubich@lak-group.com.