LSG Webinar - Development Driven Performance Management

I'm a big fan of Josh Bersin and I'm thrilled to be on the second LSG webinar of the day where he's talking about development driven performance management. I've had a rough afternoon having lost visuals on the previous webinar, so I'm hoping I have better luck with live blogging an event. So, I'm not going to say much more and I'll start writing away.

Josh's topic stresses on how management and performance management has a profound effect on learning. By focussing on development as part of performance management, Bersin's found how companies drive high performance.

Performance Management Drivers
Performance management is a set of management practices to set measurable goals and objectives for employees and to assess achievement of such objectives. This leads to improve performance through coaching, compensation, development, etc.

Most importantly, performance management is management!

Companies focus on this to create a high performance culture and to decide compensation. And then again there's the reason of compliance, equity (ensuring fair compensation) and improving business results. Organisations want to align individual and overall business goals to ensure employees understand the kinds of contributions supervisors expect. Of course, we want to retain good people and reduce the cost of employee turnover.

When it Breaks down

Performance management is underperforming though and the focus tends to become about goals than just performance. The focus is on the individual and not on the whole. Only 27% people in Bersin's research feel that this process helps employees align goals to company objectives.
Bersin's come up with a maturity model that you see above. Most companies as you can see, sit at the bottom, but only a few companies actually tailor their practices for key workforce segments. They maintain success profiles of top performers and high value workers. Very few companies integrate career and succession management, coaching and performance support with their performance management models.

The model needs to move from being competitive to being coaching and development driven. The competitive evaluation focuses more on appraisal while development driven performacne mangement focuses on coaching and development. This is crucial to the lifecycle of a company from being a startup to maturity.

"Companies that reach maturity, need to focus more on coaching and development" - Josh Bersin

The coaching and development model does well in:

• retaining top performers
• hiring the best people
• developing employees
• developing leadership pipelines
• and developing great leaders

The competitive assessment model however does well in:

• responding to current economic conditions
• planning our future talent needs
• ensuring compliance
  

We however don't need to focus on all goals equally. The focus needs to be where the impact is really high. Right now, our focus seems to be compliance and equity as against also focusing on improving business performance.

The gap we need to overcome is the the gap between our activities and our expectations. Coaching has a strong impact on business results almost 150x and 200x greater. In a similar manner development plans have at least a 2x impact on revenue. This is all based on Bersin's recent research. This is good enough reason for companies to invest in development driven performance management.
 
Keys to Transitioning to Development-Driven Approach
Josh recommends the following steps to transitioning to development driven approach.

1. Change the definition of PM
2. Introduce Competencies
3. Create and support high quality development plans for people
4. Enable managers to coach
5. Create frequent occasions to reflect on peformance

For #1, Josh introduced a case study of Kelly services who have made performance management go beyond writing performance appraisals for hours over having rich discussion. They have now made performance related conversations more frequent and focus entirely on performance improvement. Conversations do not diverge to compensation, ratings, rankings. (I think that's key). They now have made employees responsible for developing their own goals for the year.

For #2 Stacia and Josh mention that there's a direct link between competencies and an outstanding performance-driven culture. They have a strong research dataset for this. This seems obvious because:

• Competencies are almost a 'common currency' for assessing performance and potential for promotion.
  
• It gives employees a clear set of objectives.
  
• It helps the whole organisation to select high potential leaders effectively.
• Companies can provide success profiles to help recruiters and hiring managers to select for a position.
• Competencies allow L&D to create meaningful performance improvement initiatives.
• Competencies create alignment and a clear understanding of corporate culture and values.

This is perhaps way too formal for a company like mine, but I do see the value that a clear articulation of competencies can bring to an organisation.

Now what is a competency? It's a set of performance outcomes you can determine for individuals in your companies. These could be related to your core values, job effectiveness, functional areas, career development and leadership. The key is to break competencies down and not try to do all of them together. Also, fewer competencies work better! The idea is to think "capabilities not competencies", because if you focus too much on job descriptions then you're likely to become too granular to affect performance.

The example Stacia picked up for #2 was from Flextronics, who created 15 competencies known as performance behaviours and provided examples of how these look like. The organisation then communicate these to their managers mentioning that it's critical to coach their direct reports to success.

For #3 Josh mentioned the importance of individual development plans or personal development plans as we know them in Thoughtworks. There are several activities that you can create through learning and development to support employees to success. The example the duo introduced was again Kelly services. Kelly has already made employees responsible for development of their business and professional goals for the year. The moment  they enter these into their online system, they get to seek out recommended deveopment opportunities. This has caused a huge pull-based development culture amongst Kelly's staff.

For #4 Josh mentioned that managers need to know how to coach - establish goals, help people monitor progress, find solutions to problems, appreciate strengths/ weaknesses, etc. This is something that I believe is key - a manager who can't coach is a bit of a paper pusher IMO.

ADM is Stacia's example for this key. ADM is a 25000 strong company in the agriculture space. They've launched a coaching program to help managers understand how to effectively coach their employees. The program is 8 weeks long and is a thorough blended experience. It's apparently been hugely successful and ADM has saved $100,000 saving (in terms of retention/turnover/hiring) and a lot of leaders are looking to enroll in the program.

Key #5 is something I really like because it's about reflection - which is a great learning tool. Feedback is a crucial tool that Josh mentions here. Stacia picked up the Travelex example here. Travelex has found that peformance management through regular 360 feedback is more frequent, authentic and useful than they were ever before. The response in that firm has been overwhelmingly positive, though the practice is relatively new.

Josh lastly mentioned that we need to have integrated platorms that help automate such approaches. I would say however (with all due respect), that the focus should first be on the cultural change than the tool. There are several tools that perhaps do this - including Cornerstone, that Josh mentions.

This has been a really dense presentation -- very informative and a great lot to reflect on later! Thanks Josh!