performance management – Talent Revolution

Contrarian thoughts on PIPs

Lauren Webber and Chip Cutter of the Wall Street Journal wrote about performance improvement plans (PIPs) the other day — click here for the article. What they found is striking: today, nearly 44 out of every 1,000 workers face formal performance procedures. That’s up significantly from just a few years ago. In their article, they trace how PIPs got their start, how managers respond, and how employees respond. No surprises, nobody likes them — except lawyers protecting their clients.

I don’t believe PIPs effectively manage performance. If a manager must resort to a formal measure of performance management, then what has that manager been doing during the lifetime of the employee? The data backs this up – at Cisco, they found that 90% of employees who received a PIP left within a year, whether they survived the process or not. That’s not performance improvement – that’s a slow-motion exit.

Great leaders actively share feedback that helps employees grow and perform better — in real time if possible. Take Michael Pizzorno’s approach at Salient Medical Solutions: address issues through daily conversations that escalate in intensity when needed. No formal documentation, no bureaucratic process – just direct, honest communication.

I don’t believe PIPs are effective for employee experience. Even as a child, I knew of incident reports, academic success reports, JUG (justice under God – a Jesuit thing), I’ve heard of pink slips, and more. These images are symbols that represent danger. A PIP is no different – it’s a symbol that something is wrong; and your employees know it. The numbers tell the story – only 10-25% of employees survive PIPs. That’s not a development tool; that’s a exit ramp.

The alternative is simple — mutually agree on an end date and give a generous severance. This agreement gives employees the dignity to walk out with their head held high and an opportunity to close work relationships. All around, a much more pleasant and supportive experience. As HR veteran Steve Cadigan puts it, when given the choice between a PIP and a generous severance package, 75% of employees choose to leave – proof that even they know PIPs are usually just window dressing.

Some jobs work out, some don’t. It’s a traumatic experience to lose a job. Why make it worse with a device like a PIP? Remove the bureaucracy, and treat your team with dignity. In today’s world of AI pressures and post-COVID workplace adjustments, we need more humanity in our management approaches, not less.

Overthinking collaboration

I have a theory that leaders overthink how to create highly collaborative and productive teams. This article from the Harvard Business Review recommends the new rules include a culture statement, a way to measure performance, and continuous improvement systems. What’s novel? And why is there demand for this knowledge?

I respect HBR’s work, and I value that they’re serving a need. Thank you, HBR. And I believe their output is not new, it’s what we do everyday — culture.

Let’s consider culture a system of transmitted behaviors, norms, values, and status markers that shape our society or organizations. It’s everything we see and can’t see. The system, like any organism, evolves in adaptive and maladaptive ways.

If that definition is true, here are my reasons for why we’re overthinking teams.

Life Finds a Way

Critique: Large teams are composed of people likely organized in sub teams. When people are organized together to create work outputs, they’ll create a system of behaviors, norms, values, and status markers that help them create valuable outputs — Robin Hanson calls these developments “cultural gadgets“.

Alternative: Allow sub cultures to form and thrive. Great work cultures can have contagion effects. Enjoy that. In fact, go out of your way to share subcultural practices with other teams so that they can be adopted. You’re creating your own internal and mini culture market.

Robustness vs Performance

Critique: Establishing key performance indicators is critical. No disagreement. However, as initiatives change your team will need to adapt. You’ll want robust culture systems that evolve to meet the shifting demands and pressures.

Alternative: Employ real time performance management dashboards (recommended by the article) and track how well the team adapts to changing priorities. Keep a history of all of the changing demands your team evolved to meet, productivity levels during those changes, and challenges you all overcame along the way. Share that story with your team constantly!

Maximize for Bottom Up

Critique: It’s common to hear that culture starts at the top. I disagree. I believe, based on my experience, that the inverse is true. Organizational culture statements are often feel good statements defining “who we are”; however, those statements aren’t a system — they’re words. Platitudes ≠ outputs.

Alternative: Allow your cultures to pop up and grow. In fact, allow for cultural drift — the process of a culture system evolving and adapting to new demands. As leaders, create selection pressures that favor more effective team cultures — celebrate the groups (collectively) that are making the most valuable outputs. And be wary of rigid company-wide policies that may stifle cultural evolution.

Do My Ideas Work and Scale?

Yes. My ideas are not novel. Scrum teams and creative groups operate in similar ways. The teams I build need to be high executing and creative problem solvers — adopting ideas from software and collaborative arts makes sense.

Scaling is both easy and hard. It’s easy to allow cultures to form. As a leader, it’s hard to let go. I am comfortable letting go and allowing culture to form. It’s my experience that people want to feel trusted, and when they do, they create good work. Your mileage may vary.

Potential Downsides

My ideas may not be suitable for teams that need to run a certain way to be successful. More rigid teams or organizations may find my ideas too radical — and that’s okay. As a leader, you need to assess your own culture and determine what’s best.

Wrapping it Up

This blog is for people who are obsessed about talent — spotting it, cultivating it, retaining it, and successfully exiting it into better roles internally or externally. If you’re going to be that person, it’s critical that you create environments for talent to do their best work. That means, creating space for micro cultures to take root, evolve, and adapt.

Teams goals outweighing personal KPIs?

Tyler Cowen’s August 17th Bloomberg column (Bloomberg) highlights a significant shift in how how talent is evaluated and rewarded in modern organizations.

The Question

If the output to be created is a result of team-based functions, how do you determine who to put on the team and how to compensate that person for their inputs?

The Problem

Giving credit where credit is due. Who owns the largest % of meaningful contribution? How does that get measured?
The use of AI. How much was AI leveraged? Do you compensate people for improving the AI database? To reward or not reward for effective prompt engineering?
How do we find the right people to work on the team? Tyler notices that firms are starting to focus on ex ante signals of quality (a degree, signals of status, etc.) vs taking a chance on outsiders that may prove more beneficial.

My Take

Talent Spotters/Hiring Managers: Get better at spotting talent! Talk with other leaders about how they assess and look for talent. Talk with highly talented contributors and learn about their work. Learn about other disciplines and imagine how talent from that discipline may help you in yours. I found that engineering and music professionals are fantastic customer success managers.
Managers: Depending on your business, it’s possible you’ll need to rethink your KPIs. Perhaps team-based KPI and comp plans are best when the ideal outputs are a result of team dynamics.
Talent: Realize that the signals you put up to indicate your availability will need to change. Networks will become more important for people who have and don’t have credentials.
Managers: How do you reward people who improve the use and adoption of AI in the firm? It’s not enough to suggest good prompts. How are people incentivized to use AI as an efficiency and problem solving partner?

One Useful Action

If nothing else, simply ask yourself: do I have the right talent in the right seats? And, how sure am I that I’m not missing out on undervalued talent?

Problem Solving, Creativity, and the Receptionist

People often comment that they wish they could be as creative as me. 100% of the time they are surprised when I say: “you can.”

I see creativity like an input/process/output framework.

A problem presents itself. The problem demands a solution. The problem walks into an office and greets the receptionist and says, “Excuse me, I demand a solution.” Reception replies, “a solution, you say?”

The Problem, aggravated by having to repeat itself, “Yes, of course, a solution. I don’t want to ask again. I want a solution that addresses me, the problem.”

The Reception, “You’re the problem?”

The Problem, “Yes, I’m the Problem.”

And now for something completely different.

Feedback 101 – Engage vs Tell

Instead of thinking about how to give feedback, what feedback to give, or when to give it; consider engaging in your team’s work.

When team members first join my team, they typically ask how I handle feedback. I typically answer, I don’t give feedback. I get a puzzled look.

Many managers, perhaps you, engage with their teams by sharing their feedback on their work. They will offer balanced critique of what they like and then offer areas for improvement. Skilled managers help their teams grow by engaging in their development. That method works, but it positions the manager (in my opinion) more like a professor vs a fan.

I share that I am their biggest fan. And as their biggest fan I want to engage with them in their work. I want to help them strategize, be a second pair of eyes as they make interpretations of data, and be their negotiating sparring partner. I share that I’m happy to play the role of editor if they need. When they’re ready to pitch, I often ask if I can play the customer so that I can give them ideas at the end that will help them prepare. After their pitch, I’ll ask how it went — what did they expect to happen, what happened, and what learnings can we pull forward for the next pitch.

In that process I shared, where is the feedback? Where is the point where I ask, “may I share feedback?”

People want to tell themselves a story about themselves. In that story, they are doing work that matters. The best way to show someone that their work matters is to engage as a fan.