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Performance Reset

Performance Reset

How Did We Fail?

October 20, 2011
Related Topics: Strategy and Management

When Ron Dennis was center manager at a Dollar General distribution center in Zanesville, Ohio, he assembled his management team any time an employee quit or was fired to ask, “How did we fail that person?” The first assumption was that management did, or failed to do, something that subsequently resulted in the employee leaving. The usual first response in most companies, however, is to discuss performance characteristics or personality traits of the person who left or was terminated. It is worth noting that sometimes there are factors beyond management’s control that cause employees to leave. However, it should not surprise you to learn that this distribution center never had to advertise for new employees. Turnover was low and most new employees hired were those referred by current employees.

Dennis understood that leaders create work environments and are responsible for the performance they get from employees, be it poor or excellent. I am sure that many who read this will not accept the premise of that statement, but behavior research supports it.  I do understand that people come to work with histories of reinforcement that make them more or less able to perform a job successfully, but if they are accepted for employment, someone thought they could perform the job required. In another context Dr. Fred Keller, a pioneer in the technology of teaching, stated that, “If the student didn’t learn, the teacher didn’t teach.” The management parallel is that, “if the employee doesn’t perform, management didn’t manage.”

Once a person is hired, the responsibility for his or her performance is that of management.  In fact, the mission of a manager must be to “create successful employees.”  To do so, management should continuously examine all organizational systems, processes and management behaviors from the perspective of how they help employees perform better.

For example, one system that clearly does not do that is the performance appraisal system. It has been tweaked for more than 50 years and is no more effective today than it was 50 years ago. It is behaviorally flawed and no amount of tweaking will ever fix it. The performance appraisal process should be scrapped! Of all the reasons that people give to support the process, none stand up to close scrutiny.

I have stated often that the best job one will ever have is one where the person knows at the end of the day how well she or he has done. Sports have this built in. It is no wonder that people love them. While frequency of performance appraisal is an issue, it is not the most serious flaw.

The real problem with the typical performance appraisal system is the assumptions that underlie the process. Even though we hire the best available employees, they are then placed in a system where they compete with their peers.

Let’s say you have a five-point rating system, where five is the best. I have never seen an organization where managers are unhappy when everyone fails to get a five. Does this not seem strange? If five represents outstanding performance, why would we not want all to achieve it? It makes no sense why we would settle for mostly 3s and 4s.  This practice should be abandoned altogether.

Instead, we need a process where supervisors are responsible for the success of each employee. The supervisor’s success is measured by the number of successful employees. Success for the employee is measured by meeting or exceeding production, quality and safety goals while enjoying accomplishing them (measured by survey).

Too much time, energy and money is wasted by a process that has questionable value and is disliked by all. How much more time has to pass before we realize the process is broken beyond repair?

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