OK, so these are not my thoughts, but this video from RSA, based on a talk by Dan Pink is brilliant. If you never get around to reading Dan Pink’s book “Drive: The surprising truth about what motivates us”, spend the next 11 minutes watching this amusing animation from RSA:
A really good, entertaining summary of what motivates us!
I guess that before I give you more of my thoughts on this, you need to think about what you’re trying to achieve. If by relating performance to pay, you are trying to motivate your people to work harder, then you should first understand whether they’re driven by money! If they are, and you can really measure their performance, then stop reading this post and carry on as you are!
Still reading? Good! What I’m about to say may be a little controversial, but bear with me. Improving the performance of all of the individuals in your company might not improve the performance of the company! You can have everyone working as hard and as they possibly could, using whatever means you can think of. Unless they’re working together, all pulling in the right direction, then they may as well not bother. Putting it that way, may make more sense to you. W. Edwards Deming wrote in “Out of the Crisis” ‘A new book explains how to “Motivate your people to work at top speed!” Beat horses and they will run faster – for a while.” This book was first published in 1982, so it is still a surprise to me to still see performance and reward being used to “improve company performance”.
Instead of focussing on the performance of the people, I encourage you to look at what it is they actually do. This might be uncomfortable for both you and them to start with, but if you can manage to convince them that you’re looking at what they do, to be able to see how you can help them to make their job easier or less frustrating, then you’ve taken the first step on the business improvement ladder. More about that will appear in another post.
Back to the relationship between performance and reward. If you already link performance to pay rises and bonus payments, you need to make some changes as soon as you can. If your company pays bonuses based on performance, find a way of relating them to the performance of the company; larger organisations could split this down to the performance of business units, but this also has risks. Whatever you do, make sure that the performance measures are seen to be fair. The biggest risk is that business units may compete against each other, rather than working together for the good of the business. Keep it simple, focus on the bottom line; the best-case-scenario is that everyone in the business receives the same bonus, either in percentage terms, or in monetary value.
What to do about the performance of individuals? Use your Leaders to lead! Train the leaders at all levels in the business to understand what leadership is, and how it differs from management. Give them the time to coach their teams. Get the teams working together. Creating the right environment, from the front-line to the boardroom, with the right leaders in place is the only way forward.
I’ll leave you with this thought. If you take the time to look at the processes that operate in your business, and listen to the people involved in those processes, then you’re heading in the right direction to move your business forward.
Go on, take the first step!
Inspired by a news release from the Department for Education last week with the very clever title “More freedom on Teachers’ Pay”, I thought that I’d put “pen to paper” and write to the Secretary of State for Education, Mr Michael Gove, to express my concern over this change.
Image courtesy of Paul Gooddy / FreeDigitalPhotos.net
I thought that you might be interested to hear my thoughts on why relating teachers’ pay to their performance is unlikely to see their performance improve.
The first question to ask is about whether teachers are likely to react positively to this change. Do teachers, or anybody else for that matter, actually rate their own performance accurately? If people over-rate their own performance, and we all do, then we’re likely to be disappointed by other people’s view of our performance. Research in the US in the 1970s, showed that 90% of teachers rated their performance above average and more than two-thirds of them put themselves in the upper quartile of performance. This is not a good start…
Secondly, what is it that motivated people to teach? Is it money? Research part-funded by the Department for Education, and published in 2004, looked into what attracted people to train to become teachers. Top ten reasons were:
What’s missing from this list? MONEY!!
So, do you still expect a group of people that are not motivated by money, and that will consistently over-rate their own performance, to react well to performance related pay?
There’s one final nail in the coffin for relating pay rises to performance, and that is assessment of performance by another human being. As a human being, I can’t help being biassed, no matter how hard I try. We humans are programmed to remember the bad things that happen, to protect ourselves from those events in the future. We happen to like some people more than others; we can’t help that, it’s just the way we are. We humans generally remember more recent events better than those from a year ago. So, adding up these factors, if, as your manager, I don’t really like you and your performance last week wasn’t up to your usual standard, I am more likely to rate your performance lower, despite the great work that you did at the beginning of the year.
I assume that you’ve worked out that I’m not a fan of performance-related pay!
What would improve the performance of teachers? Look at what motivated them, and create more time and space for them to do that. Looking at the top two in the list above, I’d find them more time to work with the children to help them to learn. Try removing some of the activities that reduce their contact time with their pupils; that would have a positive impact!
I managed to go to Trent Bridge over the weekend to watch Nottinghamshire Outlaws play Somerset Sabres in a 40 over cricket competition. I saw Marcus Trescothick, the Somerset captain, running all over the field, having a quiet word with his players between deliveries and between overs. As I was sitting there, I started to compare this to the pitchside “coaching” that is given during the weekend’s football matches. I know that the two sports are different, but the players in both sports are all human beings.
What would it be like if a football coach came to coach your team at work?
I’m guessing that it wouldn’t be acceptable for the coach at work to shout across the office directing their frustration and anger at your team. I can only imagine one outcome of “coaching” in that style having one impact: low morale, high staff turnover.
Outside of work, I am lucky enough to coach youth rugby and cricket, and have been trained by both the RFU and ECB in how to coach. I’ve also participated in work-related coaching education, and both types focus on the same thing; observation. I was never coached to shout from the touchline or boundary!
I do see this behaviour from the touchline, and it never seems to have a positive impact!
The good coach watches and listens!
In the work-related coaching sessions, I’ve been shown several different frameworks for coaching, some goal-based, some based on changing behaviours. Whatever the case, there’s always one common theme around listening. Listening with your ears and with your eyes. I won’t repeat some attempted statistical assessment of the impact of body-language, vs the words that you hear, just suffice to say that, as a coach, you need to look as well as listening. As an aside, it is just as important to take note of paralinguistic cues, as well as the words that are used.
As a sports coach, my training takes on more of the observational angle. Watch the players carefully, to make sure that the technical parts of their game are right. As a cricket coach, I remember being coached to be a coach. Rather than classroom style teaching, we were encouraged to explore what our role should be in a very interactive setting. We had all of the technical information on video and in books, and we could learn that ourselves, but what really mattered was how we coached!
Coaching at work
So, if the coach at work can’t behave like a Premier League manager on the touchline on a Saturday afternoon, what should they do?
In general, if you’re coaching someone to achieve something that they want to do, you should not try to solve their problem for them:
What you’ll note in all of these steps, is that the coach is there to help, not to do!
The coach is there to listen, to reflect and to ask the questions that might help you to understand yourself better; you will have to commit to your goal, and then you have to do the work too!
Does your business use annual performance management reviews?
I’m assuming that, because you’re reading on, you answered yes to that question. I’ve been the subject of and have delivered many performance reviews, and have always struggled to understand the value of these annual rituals.
Why do we do this?
Is the purpose of the annual review to help individuals identify how to perform better in the future? Is it designed to set their annual bonus and pay award? It may well be both of these, in which case, can you really expect your team to be honest and open in their own assessment of their performance? If they know they had a challenging year, from which they’ve already learned by their mistakes, are they going to remind you about this, or will they tell you about all of the good things that happened? I know what I’d do!
I’m an employee, a manger and a human being!
As an employee, I’ve always sought and acted on feedback from others around me, so why do I need to be reminded of the mistakes that I made 11 months ago, or the successful completion of a project last week? The answer is usually that my salary is related to my sustained performance, and that the company bonus scheme pays out a princely sum, based on my performance last year. Will my manager play up the positives or remember the negatives? I’m nervous now!
As a manager, I try to coach my team throughout the year, leading them through the difficult times and celebrating their successes with them. I have to assess their performance over the year on a 3 or 5 point rating scale, and remind them of their highs and lows over the year. This is something that I struggle to with, as a manger; performance across a 12-month period has a natural variation, yet I’m expected to summarise this variation with a single rating. I feel sorry for my team members who had learned from their mistakes, yet will receive a lower rating than they feel they deserve, despite having shown improved performance since that error of judgement earlier in the year.
As a human being, I suffer from bias. I am programmed to remember bad things; I remember bad or dangerous events for self-preservation. As a human being, I like some people more than I like others; I can’t help it! The impact of this as me as a manager is that I going to fail to give an objective view of my team members’ performance. I can’t help it, it’s just the way I was made.
What’s the result of all this?
My experience of such systems is that we rarely feel that my performance was assessed objectively. Personally, I’ve had reviews that rated my performance below what I thought it was and, perhaps more surprisingly, above my expectation. It was the latter experience that made me wonder whether there was any real value in performance reviews. Does the fact that my annual bonus is related to my personal performance over the last year make me deliver higher performance? No, of course not! What it does to me, and many others around me, is to demotivate us when it is not as good as we had hoped! I’ll discuss this problem another time!
The good news!
There is a solution, however. Throw away the annual performance review and coach your teams throughout the year. If you must pay a bonus to your staff, link it to business performance. I have been part of an organisation that paid its staff a fixed annual bonus based on the company’s performance. Every member of staff got the same bonus; that seemed to be much fairer than more complex system, based partly on individual performance.
I’m sure that you may think that there are serious risks with taking such a bold step, but ask yourself, what would you gain by not having an annual performance management cycle?