The (unpleasant) experience of going through our performance review process at work this summer, primed by Dan Ariely’s book The Upside of Irrationality (even better than Predictably Irrational), left questioning a lot about how we management talent. In particular, I began to wonder whether coupling performance feedback with compensation and promotion decisions really makes the most sense.
If we got back to first principles, would the two still be coupled? Does the performance review actually better inform compensation or does compensation distract from providing and receiving valuable feedback? Do raises and bonuses reinforce the feedback loop of performance reviews or frustrate intrinsic motivations? Do the business needs to award raises on a fiscal calendar compromise the timeliness and relevance of the associated performance feedback?
The hypotheses I came up with to answer these questions all went into the system of mastery feedback loops described below and the performance support groups I suggested as a near term way of realizing some of the benefits.
The name “Mastery Feedback Loops” is derived from Daniel Pinks’ Drive. In it, he identifies three intrinsic motivations in the workplace: purpose, autonomy and mastery (to which I would also add identity, to account for the social nature of the human animal, but that’s another discussion). The practice formerly known as performance management needs to be better aligned with these intrinsic motivations. For that reason, mastery feedback loops would differ in three important ways:
- The focus would be on mastery of capabilities – Instead of obsessing on backward looking metrics, the goal would be to constantly improve and make appropriate investments in a firm’s talent (even when that means “reallocating resources” away from underperforming talent). Coaches, rather than managers, would help individuals identify the capabilities that are important to the success of the business (collective, purpose-driven goals) as well as the individuals ongoing professional development (autonomous goals). Metrics would then be set to monitor progress toward the ideal mastery of those capabilities.
- The process would be decoupled from compensation and promotions – Tying feedback to promotions and raises only increases the stress and negative emotion from both receiving and giving constructive criticism. Taking that out of the equation returns the focus to where it should be – continuous improvement, kaizen for the individual. Concerns about that next bump up create a distraction and can poison the employee/manager relationship. Money may also not be the best way to motivate the desired behaviors.
- Feedback would be social and continuous – Freed from the strictures of the fiscal calendar, feedback could be delivered with more frequency so individuals can monitor their progress on an ongoing basis, helping to set the stage for flow in the workplace. Brining in a greater variety of perspectives will improve the quality of feedback and incentives for improving, helping individuals understand how they are perceived by all parts of the organization (social esteem being important to human happiness).
An interesting area for further investigation might also be how to align performance management better to the intrinsic motivations of groups as well as individuals. As the social behavior of hives and swarms suggest, it cannot just be assumed that the same intrinsic motivations will dominate in a group.
- Organize into groups of 7-13 individuals, ideally around specific capabilities or competencies that the constituents are looking to develop or that are important to their roles at the company
- Meet regularly (weekly if possible) for an hour or so over coffee (or other refreshments) in something like a performance support group (hmmm, maybe that’s what we should call this hack)
- Working together without any nominated leader, set mastery goals for each person in the group; maybe assign some at home individual pre-work so the process moves quickly while meeting
- Help “coffee chat” members set specific metrics to monitor their progress toward mastery and figure out how to take the necessary measurements
- Each week (two weeks or month), discuss where each person is at and provide advice on how to improve
- Use an online tool (e.g. wiki, Google Site, etc.) to post metrics of progress and to solicit and provide feedback asynchronously
- At the end of the year and start of the formal performance review, prepare documentation on each group member, signed collectively by the group, recording how that person’s performance has changed over the course of the year; this document can be brought into conversations with management as an additional data point in the review/evaluation/appraisal and help make the case for promotions and raises where appropriate
Visit http://www.mixhackathon.org/hackathon/getting-performance-without-performance-management to read the original post as well as other hacks of the same sort.