Archive for May 2018

Abandon Annual Performance Appraisals

May 18, 2018

Annual performance appraisals are an ineffective means of accelerating performance.  However, most organizations have an annual performance appraisal process and refuse to consider alternatives; another one of those “we’ve always done it this way” talent processes.  One of the first documented performance appraisal processes was from the 3rd century Chinese Wei dynasty.  They used a nine rank system by which officers were categorized based on their abilities.  The eighteen hundred year old format looks remarkably like many performance appraisal forms we see today.

In addition to the traditional reasons for abandoning annual performance appraisals (waste of time, ineffective, inflated scores), there are several recently developed arguments:

  • Neuroscience advances have shown annual performance appraisals actually cause diminished brain functioning;
  • The new generation of workers expect immediate feedback;
  • Widespread team and matrix leadership methods are a poor fit for the annual performance appraisal process.

Fortunately, companies are moving away from annual performance appraisals.  From 2011 to 2012, the number of HR managers reporting abandoning annual performance appraisals tripled.  Many of those organizations are moving to informal quarterly performance reviews using a single summary sheet focused on a handful of forward-looking goals, past achievements, and have no numbers or ratings.

Empowered leaders abandon annual performance appraisals in favor of quarterly performance reviews and have more successful talent acceleration.

Use Questions, Not Statements

May 11, 2018

Too often when direct reports come to leaders with a problem, leaders speak using statements when questions are often a much better choice.

When a direct report comes to a leader with an issue, solving it for them makes the leader the choke point for future problems and does little, if anything, to develop the direct report. Asking questions exercises their brain for growth and development, while conveying confidence in their ability to solve the problem or issue at hand.  It gives the leader the opportunity to consider some options they may not have previously considered and in the long run, should save them from future interruptions as the problem-solving of the direct report increases.

When a direct report brings a situation to a leader, the leader should try questions like these:

  • What have you done up to this point? What has worked? What has not worked?
  • What options have you considered?  Why?
  • Have you consulted anyone else about this?  What were their suggestions, or from whom might you be able to seek advice (aside from me)?
  • What’s the worst thing that could happen?  What can you do if that does happen?  What preventative measures could be implemented?

When leaders ask questions and solicit solutions, they gain commitment to the execution of that solution since the direct report feels empowered. Secondly, the direct report’s critical thinking ability expands when asked questions.

In Jim Collins’ book, “How the Mighty Fall,” he stresses the importance of question to statement ratio suggesting leaders appoint someone in a team meeting to track how many statements they make and how many questions they ask.  Then, he suggests leaders systematically try to increase the number of questions to double that ratio over the period of a year.

Of course, some problems deserve to be escalated to the leader, but developing the problem-solving skills of others assures that great minds can work together when the problem is significant.

Leaders empower their direct reports by asking questions and communicating confidence in their ability to become successful problem-solvers.

An Excellent Example Of Empowerment

May 4, 2018

Below is an exemplary story from Michael Lewis’ book Liar’s Poker on how empowered leaders can change a company.

In 1968, Lewis Ranieri was a sophomore English major when he took a part time job on the night shift in the Salomon Brothers mailroom at $70 a week. His wife lay ill in the hospital, and the bills simply accumulated. Ranieri needed $10,000. He was nineteen years old, and all he had to his name was his weekly paycheck.

He finally got up the courage to request A LOAN from a partner at Salomon whom he knew only VAGUELY. The partner told Ranieri that the hospital bill would be taken care of. Ranieri thought that meant it would be deducted from his weekly paycheck, which he couldn’t afford, and he began to protest.

“It will be taken care of,” the partner repeated. Salomon Brothers then paid the $10,000 bill racked up by the wife of the mailroom clerk with three months’ tenure.

There was no committee meeting. The partner hadn’t even paused before giving his answer. It was understood that the bill would be paid, for no reason other than it was the right thing to do.

The act moved Ranieri deeply who went on to become vice chairman of Salomon Brothers. He is considered the “godfather” of mortgage finance and in 2004, Ranieri was considered by BusinessWeek one of the greatest innovators of the past 75 years.

Empowered leaders who do the “right thing” have more success.