Performance management is one of the most basic humanities: initiative.
Editor’s note: This article is from the WeChat public account “Harvard Business Review” (ID: Hbrchinese), author Liao Hui (Professor, Dean of the Smith School of Business at the University of Maryland), editor Li Yuan.
What is the management of performance management? Judging from the accumulation of related research in psychology and management, it manages one of the most basic humanities: initiative. Based on psychological research and combining case studies of several leading global companies, this paper summarizes the five performance management initiatives that incite employee initiative.
Where did the manager’s time go? A thousand managers may have a thousand answers, but “performance management” must be on the list. For example, at Deloitte, the entire company spends as much as 2 million hours per year on performance scores for its more than 60,000 employees.
In a broad sense, performance management refers to activities, policies, processes, and interventions designed to help employees improve performance. Performance management typically includes initiatives such as goal setting, performance evaluation, feedback, training, and rewards. The traditional performance management with annual evaluation units was formed in the 1970s. Some of the performance management measures that are still adopted by many companies were born during this period. However, after half a century has passed, the organization has undergone major changes. Today, organizations need employees who actively learn, actively respond to challenges and create value in teamwork, and provide more attention to individual development for new generation employees with more self-awareness. An environment that emphasizes the meaning of work and motivates work. But the current performance management system runs counter to these needs.
Performance management needs to be updated, where is the road?
This problem has plagued many companies around the world. In the past five years, the wave of performance management reform has emerged. Technology companies such as Microsoft and Adobe, financial and consulting companies such as Goldman Sachs and Deloitte, and traditional manufacturing companies such as General Electric have been actively trying. Based on psychological research, this article combines personal visits and case studies of several leading global companies to explore why performance management should emphasize the motivation of employees and analyze the five performance management initiatives that incite employee initiative.
The core of performance management:Inspire employee proactive
Although performance management has become an indispensable part of human resource management, there is one of the most fundamental problems that has rarely been mentioned: What is the management of performance management? From the accumulation of research related to psychology and management, performance management is one of the most basic humanities: initiative.
Psychological research confirms the positive impact of employee initiative on company development. For example, a meta-analysis based on 103 studies published in the Journal of Career and Organizational Psychology by Jeffrey Thomas et al found that employee initiative for employee engagement, performance, interpersonal relationships, and innovation Both have positive effects. Especially when the environment is unstable, employee initiative is a good help for the organization to resist risks and find opportunities.
Mark Griffin and other research published in the journal of the American Management Society, the top management academic journal in the world, pointed out that whether employees have initiative in their work depends on their three psychological states: there are reasons (Reason to), capable (Can do), and enthusiastic (Energized to).
“There are reasons – I am willing” is the rational judgment of the employee on the purpose and meaning of the work. In many situations where employees need to be proactive and employees have no action, employees are not lacking in ability, but need a strong reason. How can employees be judged “with reason”? The most important thing is to let employees understand why they want to do this work and recognize the value and meaning of the work.
This requires organizations to help employees clarify the link between individual work and team goals and organizational goals – they work together with partners who work side by side for a more ambitious goal. For example, in 1962, when US President Kennedy visited NASA, he stopped a cleaner with a mop and said, “Hello, I am Jack Kennedy. What do you do for work?” The cleaner replied: “Hello, Mr. President, my job is to help people land on the moon.” From the cleaners to the helpers of human landing on the moon, this is a good example of combining personal work with overall goals: Even if you only clean up in the Aerospace Agency, you will feel that you are contributing to a great cause by linking your personal goals to your overall goals.
“Having the ability – I can” is the basis for employees to be proactive and to judge whether they can do the job. Employees’ judgments on competence come from answers to three questions:
1. Can I do it well?
The knowledge, skills and competencies required to complete this work are the basis for employee initiative. There is a concept in psychology called “Self-efficacy”, which refers to the employee’s perception of whether or not he can do something well. Employees with high self-efficacy are more proactive. For example, our research finds that employees’ self-efficacy can predict their proactive behavior in the process of serving customers.
2. Will it bring the desired results when done?
When employees believe that they can bring the desired results through their own efforts, they will have a strong motivation to actively seek relevant information and possible opportunities, and persist in the face of difficulties.
3. What is the cost of doing it?
For employees, the cost of engaging in certain behaviors refers to potential adverse effects. These adverse effects include both failure and the opportunity cost of engaging in this behavior. Employees are proactive in building on the ability to withstand the negative consequences that may occur. So if the risk is high and the organization is fault-tolerant, employees may be stunned.
“Enthusiasm – I am happy” is a fueling agent for employees to be proactive, and is an employee’s emotional judgment on this work. Emotions are accompanied by all aspects of the work. Negative emotions consume the energy of employees, while positive emotions enable employees to maintain a full working condition. The “I am happy” experience has two implications for employee initiative: positive, high-energy emotions such as excitement and curiosity can help employees become more proactive in setting challenging goals and invest more in problem solving. At the same time, positive emotions can also broaden the breadth of employee perception, increase flexibility, and contribute to the creation of innovative ideas.
So, those who think “I am happy to do this job, even if this is not the task listed in the job responsibilities, even if it is difficult, not asked by the boss, is not sure whether it can be achieved, and there is no clear reward. Employees are more likely to be proactive and more likely to seize opportunities in complex chaotic environments.
Inciting employee proactivenessFive performance measures
Planting strategy, clear concept. Every company hasA unique performance management system. But both in terms of practical experience and academic research, effective performance management concepts are derived from matching with corporate strategy. An efficient human resource management system must be based on the company’s strategy. As an important function in the human resource management system, performance management is the same.
Microsoft effectively promoted the success of organizational strategic change through performance management changes. In 2014, when Satya Nadella, the third head of Microsoft, took office, he set a new strategy for Microsoft – “mobile first, cloud first.”
The “cloud” strategy requires openness, cooperation and growth. Before Nadella took office, Microsoft’s performance management has not only been widely criticized for a long time, but also runs counter to the requirements of the new strategy. For example, its performance system of “forced grading ranking” gradually shaped the atmosphere of mutual defense, suspicion and vicious competition among colleagues.
In line with the “cloud” strategy, Microsoft’s performance management has also undergone drastic reforms. This reform focuses on three major areas: (1) emphasizes greater achievement through teamwork;(2) Communicate feedback to help employees learn, grow, and create value (3) reward behavior that truly creates value for the business.
In order to promote cooperation, Microsoft not only assesses the personal contribution of employees, but also assesses whether it integrates, utilizes the work of previous people, and contributes to the success of others. With the new performance management measures and the overall human resources management system, Microsoft’s strategic change is undoubtedly very successful. In November 2018, Microsoft surpassed its rival, Apple Inc., with a market value of $851 billion, making it the most valuable company in the world.
Target transparency, the boot process. Key Performance Indicators (KPIs) are widely used performance management tools. KPIs can have a positive impact on improving organizational efficiency, but they also have limitations. For example, many employees passively accept KPI indicators, on the one hand carrying a heavy burden of assessment, on the other hand, these indicators and teams, departments, and even There is a lack of understanding of the company’s overall performance. In this wave of performance management reforms, the focus has shifted from top-down setting of assessment indicators to a more comprehensive goal setting system that emphasizes organizational collaboration and employee engagement. Among them, the goal and key outcome method (OKR) is the most widely watched.
OKR was first introduced by Intel to work and gradually became popular with other companies in Silicon Valley. Companies such as Google, Twitter, LinkedIn and Airbnb have adopted the OKR work method.
The essence of OKR is to guide employees to take the initiative to clearly define WHAT (what is the goal of the company’s development strategy that I want to achieve? – Object), and actively exploreHOW (I specifically use what measurable key measures to achieve this goal? – Key Results); and focus on employee behavior through important actions such as open and transparent goal delivery, process tracking, and decoupling from the company ( Focus), alignment of personal goals and organizational strategies, enhance employee commitment to goals, measure the progress of goal completion (Tracking), and encourage employees to set more challenging goals (Stretch) – That is, the “FACTS” of OKR summarized by John Doerr.
Focus on growth and take advantage of it. In the past, performance management focused more on “what did you do for the company,” while the new performance management system focused more on how employees get better at work. This is particularly evident in Microsoft’s performance management changes. In line with the new strategy, Nadella promoted the “growth thinking” proposed by Stanford University professor and psychologist Carlo Dewick in the company. Growth thinking emphasizes active learning, meeting challenges, embracing change, seeking opportunities, continually exploring, and learning from failure. In performance management, it is to discuss his development issues with employees, such as: “Which aspects of your past work can you do better?” “What is your priority in future work? “What do you want to learn in the next job?”
Focus on the development of employees helps employees continue to improve their ability and self-efficacy. In the face of problems, employees can tell themselves “I can” rather than timid and doubt their ability.
Frequent communication, real-time feedback. We have noticed that one of the commonalities of major companies in this round of performance management reform is to emphasize frequent one-on-one communication between leaders and employees. The study found that if employees are able to fully receive feedback on their behavior and performance, they will better reflect on their abilities, pursue the meaning of the work and find the shining point of the work, thus enhancing the initiative of the work, and thus improve work performance.
Frequent communication can provide constructive feedback in a timely manner, which is one of the most important responsibilities of the leader. Of course, to make employees more convinced of the content of communication, multi-dimensional collection of information to improve the representativeness and fairness of feedback is also the general trend. For example, when Facebook evaluates the contributions of employees, employees can choose to invite people who they think are relevant to their work to provide feedback. Managers, colleagues, clients, and anyone else who has an intersection with their work can participate in the review. This 360-degree assessment method, compared to the traditional leadership, can ensure that the assessments are more referenced to the voices that employees think are important, which helps to enhance the ability of employees and the meaning of the work they experience.Improve employee initiative.
Timely, flexible management. In addition to starting to motivate employees in the three aspects of “cause”, “ability” and “enthusia”, the company also needs to keep abreast of employees’ opinions and development trends, thus stimulating managers’ initiative and management policy. Make timely adjustments and continuous improvement. This requires the company to get more real-time and accurate feedback from employees. In the moment, most companies rely on annual employee engagement and satisfaction surveys to “check” the company. However, organizations that are at the forefront of performance management reforms have begun to investigate employees in a lighter and faster way. Instant research is like “taking the pulse”, allowing companies to quickly understand employees’ perceptions and attitudes.
For example, in Amazon, when employees open the company computer every day, they need to answer one or two questions before they can log in. (Of course, based on respect for employees, these questions provide the option “I don’t want to answer”). These topics include both an evaluation of the company and an evaluation of the services provided by the team or a functional department, such as: “How is your leadership?” “Have you used HR services in your recent work? (If you choose ‘Yes’) How is your experience?” Wait. For the members of the same project team, they answer the same questions every day, providing a basis for project team leaders to understand the status of members and adjust management measures to help them manage team performance more effectively.
The above we discussed the core position of stimulating employee autonomy in this round of performance management reform. Of course, there is still a certain distance between the implementation of these five initiatives and the achievement of effective performance management. Organizations need strong support, including top-down management and HR management, such as recruitment and training. And cultural implementation. At the same time, many of the initiatives in this performance change rely on the real-time nature of information, the accuracy of data, and the user-friendliness of operations, all of which rely on advanced IT tools.
In short, performance management reform is imperative, and there is still a long way to go. It takes a multi-pronged approach to achieve the goal of truly mobilizing employee enthusiasm and actively creating value for the organization.