Are Performance Reviews Dead?

Posted on June 19, 2013 by CEO Leadership Skills

Performance reviews are essential to increase employee engagement and staff performance, but they do need to be structured in a way that fosters engagement. How can an organisation achieve that?

Performance reviews can be a high stress situation for employees as sometimes pay, promotions and benefits can rely on the outcome. In high-stress situations we are rarely at our best and we may close down our conversational capabilities and be hesitant about speaking up if we don’t agree with feedback from a manager.

Annual performance reviews under these conditions are not sufficient to ensure true personal growth of an employee. Clear communication is needed from both parties in order for a review to be a catalyst for change in an employee’s behaviour.

The two most common mistakes made when conducting a performance review are:

Managerial attitude – The mistake managers often make is to see performance reviews purely as a process or a ‘tick the box’ exercise. To make performance reviews effective and valued, managers need to invest time in developing a relationship with the employee that is built on trust. To do this, managers need to be able to conduct effective workplace conversations by listening with interest and engaging in regular dialogue with staff. Managers need to wholeheartedly believe in both the relationship with the employee and the performance review outcomes in order for them to be effective.
Regularity – Annual performance reviews as a stand-alone method are not enough. Managers should provide feedback as often as is required, highlighting areas for improvement as development opportunities. It can be a quick two minute conversation to let an employee know they are doing a good job, or a scheduled meeting to discuss how an employee could do a task more efficiently the next time around. A once a year conversation is not enough to engage employees and make them feel valued.

Now that you know what’s wrong with performance reviews, what are some habits and tools to use to increase effectiveness?

Enhance conversation skills

There are a number of tips to keep in mind to increase conversation skills, such as:

Set clear expectations
Ensure there is agreement on those expectations
Seek clarification as necessary
Don’t avoid conflict, as it may then become a bigger problem later on
Think before you speak
Always remember to listen

Conversations are at the base of everything we do, but not every organisation sets expectations around effective conversations between managers and employees.

Relationship, relationship, relationship

The quality of the relationship is the strongest factor in the effectiveness of a performance review. A good relationship provides the foundation for giving feedback which empowers and motivates employees and accelerates the learning process.

Individualise reviews

No two employees are the same, and while you may have hired them for the same, or similar, roles, each person will have a different skill set which adds value to the organisation. This should be recognised and taken into account when assessing someone’s suitability to a role. Individual skill sets should be embraced by managers and discussed regularly. The performance review process is an opportunity to work through all factors to a point where both employee and manager are happy that all the variables have been taken into consideration.

Foster a learning environment

A workplace conducive to fostering learning outcomes is one where ideas from everyone – from the junior to the CEO – are respected and employees have access to resources and training to allow them to increase their capabilities. Leaders with strong coaching skills can aid the encouragement of a learning environment in the workplace, leading to greater engagement and staff motivation.

Performance reviews can increase positive business outcomes and support growth within an organisation if they are prepared strategically, keeping the above tips in mind.

Guest Author

Julie Parkinson, Director, The Institute of Executive Coaching. The Institute of Executive Coaching works with organisations to provide innovative leadership and coaching support to improve the performance of individuals, teams and organisations. Since 1999 the Institute has trained more than 2,500 coaches and become known as one of the region’s most respected executive coaching, coach training and leadership development organisations. All of the Institute’s services are designed on the key principles of the Institute’s mission to empower people to fulfil their potential and develop the leaders of tomorrow. http://www.iecoaching.com/

Republished from IIDM – your online business resource – www.iidmglobal.com. Get valuable business tips and easy-to-read articles delivered direct to your inbox. Register NOW for your copy of IIDM’s FREE e-newsletter: http://www.iidmglobal.com/subscribe/

Tips For Successful Performance Reviews

Posted on October 3, 2012 by CEO Leadership Skills

The following 10 tips are designed to help you prepare for your next performance review process.

Most managers will tell you that they don’t look forward to the annual performance review season. It’s not hard to see why. Reviews are time consuming, they can often take hours to prepare for and many of us have had little or no formal training in facilitating a performance management process, let alone delivering sensitive feedback in a constructive manner or conflict resolution.

Relax. With a little bit of preparation and a positive attitude, you’re certain to learn a great deal about your team and more importantly yourself.

The golden rules

Before we look at the 10 tips below, there are a few golden rules of management that overlay the entire performance review process and in fact successful management techniques in general.

Remember that your employees are probably just as anxious about the review process as you are.
Like you, your team members have feelings and may from time to time show emotions at work.
Treat your employees with the same respect and courtesy that you would expect from your manager.

Establish the right mind-set – If I asked you to rate your level of satisfaction with your company’s annual performance review process, how would it fare? If you’re like most managers in most organisations, it probably doesn’t rate highly on the list of tasks outlined on your position description.For your performance reviews to be a success, it is imperative that you go into the process well prepared and with a positive frame of mind. To do this, you need to take a step back and see the process for what it really is; an opportunity for you to spend time with your team so that you can uncover ways to improve their performance and satisfaction. Why is this important? Well, if your team members are happy, they’re more likely to perform better and less likely to leave your organisation. With happy, committed and more productive staff, your life as a manager can only get easier.
We know for a fact that an employee’s manager is the number one reason for employees seeking alternative employment. With this in mind, the performance review process is your opportunity to learn more about your team; specifically what motivates them, what new challenges they’re looking for and how your needs (i.e. a stable, productive team) and theirs (i.e. personal development and career path) can align. Happy team members really do stay!
Remember, reviews are a two way street – As mentioned earlier, managers have typically viewed employee performance reviews as an opportunity to point out all the things an employee’s “stuffed up” over the previous 12 months. Warning: If this is your approach, it’s a sure fire way of increasing staff turnover and damaging employee morale and trust.Savvy organisations have long been using the performance review process to find out how their managers and indeed the organisation can lift its game. By allowing the employee to have their say about where they feel the company or manager could improve, they are also more likely to accept comments about their own performance gaps and areas they need to develop over the next 6 to 12 months.
A small caution for all managers when hearing feedback about your own performance: sit back and listen to the team members comments – take it all on board. Do not jump down their throat in your defence as this will defeat the purpose. Instead, try to ask probing questions, “can you give me an example of that so I can better understand?’ ‘How do you think I/we could handle that better in the future?”. Acknowledge their comments, “‘I appreciate your comments on that.’ ‘I’m sorry you feel that way.'”
Take time out to prepare – A large percentage of managers I speak with only spend 10 minutes on average preparing for an employee performance review. Often this is done 5 or 10 minutes before their next review meeting.If you’re looking to get maximum value out of your review process you need to make time to prepare. Block out at least 1 hour in your calendar for every team member and if possible leave the office to do it; you need time to think about each team member without the normal day to day interruptions. Talk with your manager if you don’t think your current workload or schedule will allow for that to happen and ask for assistance in covering for you during this time.
Talk with other people before the review to source other opinions – Performance reviews have traditionally been very insular. That is, they have been based on the opinions of two people – the manager and the employee. If you don’t already, try talking with some other people such as your fellow managers, the employee’s peers and even their subordinates. Try to do this at various stages throughout the year so it doesn’t look like a last minute effort.We know that when feedback is obtained from multiple sources:
If obtaining the thoughts of other managers, subordinates and peers is a little difficult in your organisation, there are a number of online performance review tools that can facilitate the collection of information from multiple sources. This is often referred to as 360 degree or multi rater feedback.
Prepare an agenda and communicate this to employees in advance – It is vital that you have an agenda for the review meeting: a road map that includes the things you intend to cover off. Having an agenda will convey to your team that you are treating the performance review process seriously and that there will be some structure to the conversation. It is particularly useful to provide each employee with the agenda several days before their review and that you encourage your team to add agenda items that they’d like to discuss. Understanding what is on the mind of your employees before the review meeting will help you to be better prepared. No surprises.
Stay on track – It is possible that the review meeting may get a little heated. Conversation may also head in a direction that takes you out of your comfort zone or is non work-related. The minute this happens, excuse yourself [interrupt] and reiterate that you only have an hour now so whilst this issue is of obvious importance, it might be best to get back to the agenda given there are other important issues to get through. If required, the point of contention can be addressed in another forum at a later point in time.To minimise the likelihood of this occurring, make sure you keep the conversation work-related at all times and don’t ever criticize or blame team members directly.
If you can’t reach consensus on a particular issue, always go back to the agenda and move on. The agenda is your friend; you just need to remember to refer back to it when required.
Start and finish with positive feedback – They say that as a rule of thumb, you should give 5 pieces of positive feedback for every 1 piece of negative or constructive feedback. Whilst this may be a little difficult to do in some cases; what it does indicate is that the overall theme or flavour of your review needs to be positive.Always start off by thanking the team member for their contribution over the past 6 or 12 months. Regardless of what you’re about to say, you have to remember that they have turned up for work more often than not over the past 365 days and that they have probably spent more time sitting at their workstation than they have with their family. Scary but true.
Ensure that you finish the meeting off on a positive note. The following point about action items will help you to do this.
Create a list of action items – One of the main complaints employees have of the performance review processes is that nothing ever seems to change after the review. In fact you can hear these sentiments echoing around the corridors of almost every organisation in the land, “I just spent an hour and half talking about the same stuff I talked about last year and nothing ever changes”. It’s easy to see how employees can be skeptical of the performance review process.Managers have historically left the performance review process and immediately become ‘busy’ again with their own day to day tasks.
Like any serious business meeting, it is important that you take notes during the meeting. At the end of the meeting, recap the content of the meeting back to the employee; ask them whether you’ve missed or misunderstood anything. Spend 5 or 10 minutes at the end of the performance review meeting to brainstorm the top 5 key action items that can form the basis for that employee’s development plan over the next 6 to 12 months.

Make sure you spend 5 minutes to brainstorm the top 2 action items for you as their manager to walk away with. This will demonstrate to the employee that you’re also serious about continual improvement and making their life at work better.
Have the team member agree on the action items and next steps – So you’ve created a list of action items. The next step in the process is to get the employee to agree and more importantly commit to the action items; that is to treat them seriously. Before leaving the meeting, seek verbal confirmation that the employee understands what was discussed and that they are comfortable with the proposed action items.The final piece of information to convey to the employee in the performance review meeting should be to advise them that you will be typing up notes from the discussion and booking in three half hour ‘catch ups’ over the next 12 weeks to ensure momentum is maintained and the next steps are on track. This is best done in a more relaxed environment; say at a coffee shop over a drink, breakfast or even lunch. Don’t underestimate the power of taking your team out of the office for a meal or a drink.
View this as the start of the process not the end – Many managers walk away from the performance review meeting and leave the conversation back in the meeting room. This is only the start of a 12 month program designed to improve the performance and satisfaction of your team.When you walk out of the review, schedule in at least 3 catch up sessions over the next 12 weeks. Once you have completed all of your performance reviews, block some time out of your diary once again to finish off the performance review process. This will include typing up the notes from each review and reviewing each action item to ensure you know what is expected of you as manager. Type up your action items as well and if you’re brave enough (and you’re not breaking confidentiality or trust to do so) stick them up on the wall in your office so that you are looking at them every day.
As a rule of thumb, you should allow at least 30 minutes per employee for the post performance wrap up.

Guest Author:

Founded in 1999, Onetest’s goal is to provide a more effective and economical way to recruit talented people for your business.

Republished from CEO Online – your online business resource – www.ceoonline.com. Get valuable business tips and easy-to-read articles delivered direct to your inbox. Register NOW for your copy of CEO Online’s FREE e-newsletter: http://www.ceoonline.com/subscribe/

Determining Your Pay DNA

Posted on September 21, 2012 by CEO Leadership Skills

More and more, employers are redefining and allocating their mix of rewards based on individual needs – like a stock portfolio of investments – and finding trends amongst workers as they begin to look at work-life balance, flex-time and other original ways to keep people happy and productive.

There’s much talk today circling diversity in the workplace, both in the make-up of workers and the delivery of rewards. Smart companies have also discovered that contributions of this new “multi” workforce – multi-cultural, multi-generational and multi-otherwise – positively impact the competitive advantage of the organisation.

However, companies will not benefit unless they keep these widely-varied groups happily rewarded and retained. This presents a totally new compensation challenge: When designing total rewards packages that work for each employee, regardless of segment, it is now necessary to understand multiple needs and desires from different workers, and then compensate them accordingly.

When it comes to packaging pay, employers today are clearly challenged. In the average company, there are as many different vehicles to reward employees as there are diverse segments within the employee population.

To get a clearer idea of how to assess what is important to your top talent, let’s take a look at the four distinct employee population segments and what each group values in the work experience – ground zero for understanding what drives their rewards needs.

Traditionalists (1909-1945), or Veterans, are part of the old school, command and control, brick and mortar chain of authority. And while they may be the “old guard” of a company, they are traditional in the best sense: They know that people, face-to-face communication and ideas are what make businesses run.They are willing to change and see new points of view, but it may not be easy. Hardworking and hierarchical, they have seen business change for decades – and adapted. They are “company” men and women.
Baby Boomers (1946-1964) traditionally have been motivated by money and career advancement. Yet ironically, as Boomers age, yet remain in the workforce, flexibility and work/life balance have become much more important than the need to make senior partner – a goal that may have driven them two decades earlier.Today, many Boomers’ complex lifestyles have shifted to include caring for both their children and aging parents, sometimes in the same household. They have already made a significant mark in the business world, and while they may not be quite ready to relinquish life at the top, they have come to understand the value of balance and life beyond the board room.
Among the most popular rewards requested today for the Generation X (1965-1978) crowd include better benefits: wellness, work-from-home arrangements, education reimbursements and, in some cases, child care in the office. For this independent group, it is critically important to set goals and then step away, letting them find their own solutions rather than “how things have always been done”.They are often unconcerned with long-term loyalty and have experienced significant downsizing during the dot.com bust, fostering a spirit of self-preservation, rather than survival of the company. They build strong relationships and serve as a bridge between older and younger groups.
On the other side of the coin, Millennials (1979-2000), or Generation Y, are looking for a high level of engagement on a team and employment-based rewards, a concept they hold as near and dear as their 80 GB iPods. They like instant gratification over long term investments of time and effort and want to contribute to society and have full and balanced lives.They want responsibility, the ability to make a direct impact and be rewarded accordingly. And they continually redefine their commitment to the workplace with the knowledge that they are able to “move around” significantly until they find the best employment fit – and they will.

Given the variety of priorities across these four groups, it is nearly impossible for a company to be all things to all people. Therefore, an important first step toward developing a competitive package is to examine organisational demographics.

Understanding what people in your organisation value will help guide decisions on setting compensation opportunities and benefit options. However, in looking at demographics, you must consider expectations and timing of future shifts of the makeup of your workforce. Planning for these shifts can help retain high-performers, as well as attract new talent.

In addition to demographic analysis, collecting information that can add an essential qualitative aspect to a rewards strategy is important, sourced from:

employee opinion surveys,
exit interviews,
focus groups, and
recruiting feedback.

Armed with this knowledge, competitive compensation and benefits packages should be designed to reflect the values held by employees.

Increasingly, professional and office employees are willing to put pay at risk for the opportunity of being rewarded for superior performance. Team-based awards and project-based bonuses are becoming more prevalent and attractive to lower level employees.

The difference in values across generations can be addressed by varying opportunities at different levels in the organisation. Comfortable base salaries can be offered at the executive level, whereas individual recognition through significant merit awards and variable pay may be more appropriate for middle managers. Similarly, deferred compensation or supplemental retirement contributions will help to keep key leaders engaged and satisfied up through their retirement years.

Individualising rewards

There is no longer a “one-size-fits-all” approach to total rewards. It is time to shift your view on how you promote and reward employees. The system presently utilised in most organisations often promotes and rewards seniority, rather than results.

If you look at most companies today, you find the executive leadership tends to come from the older group and more of the entry positions are filled by the youngest. This approach needs to be exploded and rebuilt, to allow for a more collaborative team ethic that taps into the collective wisdom that all four generations bring to the table.

Younger employees are not going to be patient and follow the path that Baby Boomers set of working up rungs of the corporate ladder. If they are not engaged quickly, they will simply move on. Gone is competitive advantage, and succession plans crumble.

Perhaps the most important considerations employers can incorporate into how they pay today, include a strict performance management assessment process, that is based on individual goals and metrics, unrelated to seniority and utilising the “3-F” appeal to each job: balancing;

family,
fun, and
flexibility.

In fact, an HR executive for one of the world’s largest Internet information portals recently revealed an experimental program for top employees to work in a “few months on, few months off” schedule, an extreme – and workable, in this case – solution to keep a talented team member happy.

Despite differences, all employees want some of the same elements when it comes to the work experience:

the ability to be satisfied,
valued,
have clear objectives, and
most importantly, directly report to a superior who empathises with a strong degree of work/life balance.

Using the same rewards vehicles – cash, equity, flex-time, incentives – employers can invest differently depending upon the needs of the individual.

Guest Author:

Jonamay Lambert and Adam Steinbrunner, Capital H Group.

Poor Performance – It’s Time To Bury The Walking Dead!

Posted on August 23, 2012 by CEO Leadership Skills

You can receive varying levels of service. The service at one company I dealt with recently was exemplary, whilst the other could best be described as zombie like. A large percentage had ‘died’ many years ago, the problem was no one told them to go home and ‘get buried!’. Zombie like service exists everywhere, maybe even in your organisation. Take charge, grab your shovel and bury them now!

What can you do about it?

I believe in organisations today there are four categories of people:

New Recruits
The Battle Scarred
Walking Zombies
Engaged Employees

Understanding where your people fit will enable you to support and encourage them, or maybe just get on with it and ‘bury’ them.

New Recruits

New Recruits are simply that, new people to your organisation, who are usually young or fresh to the workplace. They are keen to learn and be part of the team, they want to contribute to the success of their team and the organisation.

Not only that, they are keen to better themselves and look for opportunities to shine and stand out in the crowd. They do this by going the extra mile in service or productivity and generally are willing to tackle any challenge presented to them in the workplace.

These people are easy to nurture and with little effort, will maintain this happy and productive demeanour for as long as you support them in their role. Over time, these people will progress across to the Engaged Employee category.

The Battle Scarred

The Battle Scarred are people who have been attacked or hurt in some way, either by their boss or colleague(s) at work. Like someone in a battle, they will call out in their pain and will tell anyone who stops by to listen, to all their trouble and woes. Deep down these people still like their job and the organisation, it’s just that they have been attacked by someone and come off second best.

A typical example is when someone is overlooked for a promotion or a plum project role within the organisation. Sometimes their hurt is the result of their own action or inactions in the workplace.

These people can recover and be helped into the Engaged Employee sector by some recognition of their hurt or anger. A caring manager will take the time to listen to this person and coach them back to either New Recruit or Engaged Employee status. The Battle Scarred can recover quickly, if identified, and can be saved.

Walking Zombies

Walking Zombies are people who have been battle scarred and never recovered. Often they have been hurt and when they cry out for help and get no response, they get bitter. They employ “work to rule” campaigns, the problem being they make their own rules as part of this campaign. These people not only have a poor attitude, they do their best to share that attitude with others and even recruit others in the team to their cause.

They are like a viral infection, hard to cure yet often hang around for a long time before you can shake them off. These people continue to turn up for work even though they loath the experience. Amazingly, if these people are moved on, they often return with a new lease of life and report that they should have left the organisation ages ago.

Engaged Employees

Engaged Employees are the people who wake up on Monday mornings and say “I’m going to work today” and have a smile on their face. They find their job or career fulfilling, challenging and fun.

The reason these people love their work is because they usually have a worthwhile contribution to make and they are appreciated for their contribution. Their team leader or manager listens and hears their suggestions and takes the time to encourage and compliment them for their efforts.

Moving from Battled Scarred or Zombie to Engaged Employee

So you have some Battle Scarred or Walking Zombies in your team, what can you do with them? If they are Battle Scarred there is a good chance you can quickly resurrect them to New Recruit or even Engaged Employee status.

Take some time to catch them doing something good and praise them extensively for it. Sit down with them and talk about the vision for the team and reinforce where they fit in to the team and how their contribution is essential to the success of the team. Review their performance agreement and focus on achieving simple goals together.

Is it possible to change a Walking Zombie to an Engaged Employee? In my experience, the best treatment for these people is to ‘put them out of their misery’. Termination is always a good option for these people. You will be doing them a favour and may even give them a new lease of life to begin again in a new organisation.

I can hear some of you groaning already, “but it’s so hard to sack someone!”. Of course it takes some effort, but think about the effort and the cost of having a Walking Zombie on the team, spreading the virus of discontent and lethargy.

Guest Author:

Lindsay Adams, Teamocracy. There are many organisations that provide training, but Teamocracy is fully committed to providing more than just training. We are willing to consult with you to clarify what you are trying to achieve.

Incentive Compensation During Challenging Times – Boom Or Bust?

Posted on August 6, 2012 by CEO Leadership Skills

Some good news: During times like these, we have the unique opportunity to really determine – with a huge degree of certainty – the viability and efficacy of our incentive compensation plans.

Bottom-line (no pun intended), if you are seeing poor earnings or results today, but still paying out boatloads of money, then …

You’re doing it wrong!

Not that we cannot ever pay for effort versus results; sometimes we do just that, but at lower levels of the organisation, where “line of sight” to profitability is less than clear.

But folks, if you’re paying big (or even “any”) bonuses or incentives to managers, leaders or executives, and your company’s performance is in the tank – “Stop it!”

First, some definitions. I use specific words in compensation to mean specific things, and the two that are key to this article are Bonus and Incentive.

Bonus – A Bonus is just that. Something more than expected. Something provided on top of that which I felt deserved or was entitled to. If I buy a single-scoop ice cream cone, and the young lass gives me two scoops, that’s a bonus. Not sure what I did to get it, not sure how to get it again, but plenty pleased that I received it now.

Same thing with a Bonus in compensation. Happy to get it, certainly grateful, but no clue exactly why, or what I can do to ensure its payment again next time.
Incentive – An Incentive, on the other hand, is the payment for an “if-then” statement. If you do this, then I’ll pay you that. If you exceed production by 10%, then I’ll pay you 5% of your annual salary. I know what I did to get it, and presumably know what to do to get it again.

And Incentives are expected. We had an agreement, and I expect you to honour it with payment.

So, if we want to encourage behaviour with compensation, it’s clearly going to be through incentives. But we must use caution; it’s easy for the “law of unintended consequences” to creep into incentive efforts. So, what makes an appropriate, effective Incentive Plan?

First, it must reward correctly. In the compensation world, it’s not what you want, wish for, hope for, or manage to; it’s what you pay for. Many an incentive plan short-circuited when it was discovered it promoted behaviour we did not want, just to get to results we did.

Pay attention there.

Next, it must influence behaviour. By that I mean a couple of things:

It must be understandable, that is, I must realise what I can do to reach the incentive, and
It must be sufficient to warrant a behaviour change. Make it chump change if you want, but don’t expect your best and brightest to get on board. Realise that, if you get it right, it doesn’t really matter anyway, does it?

Finally, it must, must, must be kept simple. Complicated plans create two significant issues:

They become too onerous for people to comprehend. No understanding, no change in behaviour.
Employees believe that complicated plans are simply corporate subterfuge. And I agree. Plans do not need to be tomes like War and Peace. A page or two tops is all they should take. More than that, and you are clearly talking about why we won’t pay the incentive, instead of why we will.

Incentives can work. They can provide the behaviour changes you need in your employees today to drive results in the face of almost any economic conditions.

Done well, and you’re paying incentives from a bucket of money that you wouldn’t have had anyway, so it’s great! Done poorly, and you’re paying out money after losing money.

Let’s avoid that last one, shall we?

Guest Author:

Kevin Berchelmann, Triangle Performance. Described as a Human Capital Expert by The Harvard Business Press, Kevin Berchelmann helps new managers at private equity, Fortune 500 and small to medium sized businesses become top leaders that deliver results.

Paying Incentives – Do You Need To?

Posted on February 20, 2012 by CEO Leadership Skills

If an incentive plan is designed correctly and implemented properly it can reinforce the key objectives of the business, support the culture you want and have a significant affect on the performance and profitability.

Let’s start off with some definitions.

Firstly, any base salary review should have a significant focus on performance. If this is done properly the need for further incentives or “performance pay” is often removed.
Secondly, part of the definition of bonus in the English Oxford Dictionary is “over and above that which is normally expected”. We see this as a discretionary payment which a business may give to employees. There is no real contractual obligation to do this. Employees may see this as “cream on the top”, but often are not sure what to do to make sure they get it again.

We see incentives differently. This is a payment that will be made if certain actions are taken or targets achieved. It is a contractual obligation.

While bonuses in some businesses, usually small, private companies, can work, there are some downsides. They are usually provided without clear targets being set and they often lead to expectations that they will continue regardless of performance. Sometimes they can make the “giver” feel good but have little impact on employee performance.

On the other hand, they can build a strong culture within a business when the boss is seen to share some of the gains without any prior agreement to do so. Incentives are far more focused and for this article we will discuss a few guidelines to assist in implementing a plan that works.

The first step is to decide what you are trying to achieve. If it is something employees aren’t doing, but should be, will a financial incentive change their behaviour? Is there some other reason why they are not doing what they should be? If you are clear on what you want them to do and think an incentive will help, try asking employees what they think about the idea.
If you have decided that an incentive is the way forward – to either maintain good staff performance or encourage even further effort – then you need to make sure the measures you have in place align with your business objectives. Don’t set targets based on volume if your focus is on quality.
Participants in an incentive program should have some control over what is being measured. It is not much good providing an incentive for sales if someone has no influence on sales at all. The targets must be challenging, otherwise there is not much point in having a plan, but achievable. Where the targets are never achieved people will lose interest. Where they happen too easily it will be expected each time without any extra effort being expended.
The amount paid must be meaningful – too little won’t make the difference you want. A percentage of salary is usually best to have a similar affect on each participant. Non-financial incentives such as trips may have a different appeal for individual employees.
It should encourage high performers to stay with the company. It should be rewarding, with the chance of it being even more rewarding in the future. Long-term incentive plans can be designed to achieve this more easily than short-term plans. Often a combination of these plans can achieve the desired result, as just a focus on short term profit can deter investment in longer term plans that will bring future benefits.
Participants must be able to understand the measures and what they have to do to earn an incentive. It is no good having a complicated formula that no one understands. It should be clearly communicated in writing so there are no disagreements as to when it will be paid, how much and under what circumstances.

There should be a review process at regular intervals to determine if the plan is delivering the results you need.

If these guidelines are followed you stand a greater chance of success than if you approach setting targets and offering incentives in an ad-hoc way. You will also be able to avoid much of the friction that badly planned programs often cause.

Guest Author:

Paul Phillips, Horizon Management Group.

Republished from CEO Online – your online business resource – www.ceoonline.com. Get valuable business tips and easy-to-read articles delivered direct to your inbox every week. Register NOW for your copy of CEO Online’s FREE e-newsletter: http://www.ceoonline.com.au/subscribe/

Giving Engaging Feedback

Posted on February 6, 2012 by CEO Leadership Skills

People are reluctant to give each other feedback in the workplace. On the one hand, some people hold back on giving constructive feedback as they worry about how the other person will respond. But on the other hand, inaction leaves staff performance problems going unaddressed and building over time.

Even when constructive feedback is given, it is not always done well. People are not giving enough positive feedback either – due to either not appreciating the importance of recognition or getting stuck in unnecessary paperwork.

Here are five keys you can use to get a better result from any staff feedback you give.

Feedback is always better received from those with whom we have a good relationship. So get to really know your co-workers and manager and let them get to know you. Chat with them, tease them, laugh with them, and be human. You are effectively placing deposits in the emotional bank account of that relationship which increases the likelihood of your feedback being well-received.
Feedback also needs to be occurring regularly, not just out-of-the blue. A yearly performance review is nowhere near good enough. Touch base with your workmates at least on a weekly basis, letting them know what you are happy about. Some staff with a strong need for connection or recognition need feedback even more frequently. When you are giving positive feedback, you have to mean what you say, of course. If people sense you are not being genuine they will simply feel patronized. Positive feedback also has to be specific and targeted towards those things the individual values about themselves. Positive feedback that is specific and meaningful to the person is always better received.
Constructive feedback is always easier to give when it is asked for. But you will find constructive comments are better received when they are outweighed by five times more positive feedback. This does not mean that when you give feedback there needs to be five compliments followed by one criticism.
Of course, constructive feedback needs to be given in ways seen as respectfulby the person receiving it. So although your intentions may be respectful, it is important to monitor how your feedback is being received and to adjust yourself for the individual. For most people, simply sounding respectful and speaking to them privately will be sufficient. For the sensitive types, you can allow them to save face by criticising yourself first – perhaps you weren’t clear in what you were expecting from them. If you are going to criticise, keep this to their behaviour and not them as a person. You can soften the blow by using the ‘kiss, kick, kiss’ approach, where you start and finish on a positive note.You can also say what you would prefer to see rather than what you dislike. There is a difference between saying, ‘You’re a self-centred, control-freak!’ and saying, ‘I really would like to have more say in how I do things.’ But you are allowed to think the former.
Feedback is also better received if you are open to feedback yourself. Sometimes feedback will be uninvited, given poorly, and you may be feeling defensive. But remind yourself that it is only feedback. You won’t die from it and it is good that any frustrations are coming out. Apologise and agree where you can before offering something for the future. For example, ‘I’m sorry if I came across that way. And I agree you do need to have some say in how you do your work. How would you like to do your work differently?’

If you are in management, make it easy for others to give you feedback. Staff surveys are one option, but you can also do so by routinely asking, ‘What can I do to better support you in your role?’ You can also let them know you know you are not perfect and will be OK if they give you constructive comments. You could say,‘I know I have been caught up in my paperwork and haven’t touched base with you much of late. What do you need from me so you can feel better about your work?’

So, that’s it. You can give engaging feedback by:

Having a good relationship with that person
Being frequent, genuine, and specific with your feedback
Giving five times more positive feedback than constructive feedback overall
Monitoring how the other person is responding and adjusting your approach
Being open to feedback yourself

Guest Author:

Ken Warren is Australia’s leading speaker on Dealing with Demanding, Aggressive and Unmotivated People. With his engaging, interactive and positive approach, Ken has shown thousands how to turn difficult people around and bring out their best.

Five Factors That Disconnect Your Team

Posted on December 13, 2011 by CEO Leadership Skills

Dealing with these will improve synergy and stability within your company, freeing up your staff’s energy to move the business ahead.

“What’s wrong with my team? Why don’t they co-operate more? Where’s their team spirit? Why do they seem surly so much of the time? Why don’t they speak up at staff meetings? Why do we have such a high turnover of staff? Why do people seem to operate in their own little world and not care about the ‘Big Picture’?”

Often we fail to get the best from our staff simply because we haven’t yet made ways for each member of the team to actually live in a healthy relational connection with the rest of the team. In fact the word team is a misnomer for many workplaces which are staffing a bunch of individuals doing their own thing in ways that merely keep them employed.

Is your workplace a place where people compete for resources rather than collaborating toward outcomes? Where self-protective behaviour prevents innovation and synergy?

While your staff can quote the mission statement, do their daily activities actually seem to work against it?

If you’ve answered YES to any of these questions, perhaps some of the following disconnecting factors are affecting your team.

Napoleonic wars
There are some individuals who – while occupying “small” positions in context with the wider organisation – pursue their own grandiose dreams with a super-sized passion. Effectively they wage a war of attrition on your resources, your time, the morale of the team, even your relationship with your customers. At the very least, they annoy and distract some of your most talented and loyal people.At the same time, there is an upside to this Napoleonic lust for conquest and expansion. You may have in your midst some true mover and shakers, pioneering go-getters. If treated correctly, these people can be an asset rather than a pain in the assets – a force for the up-turn rather than the stagnation of your business.Rather than blocking and crushing them, negotiate with them to find the way in which their “vision” can serve your vision. Debrief and rebrief them regularly. Make them go through management to access resources so that they don’t play people off against each other. Keep them on a tight (not necessarily short) leash through clear direction and consistent accountability. Empower them fully to the limit that you set. Remind them constantly of their place in the team.
No relational space

When there are no rhythms that place us across the lunch-table or pool-table from each other, then misunderstandings and offences can take root and fester far more easily. When there are no shared spaces where team-mates can laugh, debate and commiserate, workplace relations can be colourless and superficial. You don’t need to program relationships; it’s our default setting. We just need the opportunity.Make a physical space which invites your team to chat, to spend time together without a productivity-focus. Create traditions where your team can “break bread”. Give your staff the chance to do life together, to ask “What’s up?” or “Have I done something to offend you?”, to dig through their differences and find common ground.
Faddish cycles of change

Personality profiling tells us that up to 70% of the general population actually dislike and resist change. If that’s true, then when you are initiating change in the workplace, you better make sure it’s worth the hard work of helping these people adopt it.If your workplace has a proven track-record of adopting the latest business or marketing idea, it’s possible it also has a track-record of alienating over half its staffers in the process. While this might contribute to those staffers banding together to form passive-aggressive resistance movements, I think you’d agree that’s not the kind of teamworkyou’re looking for. You now have a disconnect between management and staff.Long-term team-members watch the fashionable initiatives come and go, slowly losing their passion and commitment, finding their own ruts to stay in, regardless of what the latest memo says. Change for change’s sake can be easily justified with flashy charts and jingoistic phrases, but its nature is unhealthy and unhelpful.When considering any major change to the organisation’s environment, methodology or other systems, think long and hard about old adages like “If it ain’t broke…” and “reinventing the wheel”!
Fear

Nothing causes people to hunker down and keep to themselves like this “f”-word!Where staffers seem reticent to share their thoughts, where they avoid contact with management, where they lash out in completely irrational ways – these may be indications that these people are scared.Spend some time discerning what could be causing the fear. Is there an air of uncertainty in the air? Are disciplinary issues dealt with harshly?I love the story I heard about an Australian CEO and one of his new admin staff. When it turned out the young lady had made an enormous error in regards to printing promotional material – an error which would cost the organisation over $16000 – she reported it to the senior manager.

She ended her confession with: “I suppose that’s the end for me?” The CEO replied “Why would I sack you? I’ve just spent $16000 training you.” While she was left in no doubt as to the seriousness of her mistake, the grace that was shown this young woman resulted in her fast-paced professional development and deep loyalty toward her employer.

It also worked wonders for the morale of other team members.

What can you do about anxiety and uncertainty in your company?
The Talk Monopoly

Who holds the floor in the staff meeting? Can you pick the small group of individuals who do most of the talking, who freeze out others’ contributions opinions and ideas?Try finding ways to acknowledge the monopolisers while giving other team members equal time. (“Ralph, thanks for that perspective. I’m really interested in what Betty sees as the issue here.”)Remember that some people won’t speak without being asked, yet they could hold the very idea your group needs. Others need help focussing their thoughts so you will have to ask them a specific question to elicit a response (“Graham, what would you do in my position?” rather than “Graham, what do you think?”).

Guest Author:

Peter Aldin is founder of Great Circle Life Coaching. In a complex world, instinct and habit often drive us off course rather than steering us toward success and satisfaction. Great Circle is about re-learning and re-thinking our approach to family and business dynamics and relationships.

Republished from CEO Online – your online business resource – www.ceoonline.com. Get valuable business tips and easy-to-read articles delivered FREE to your email inbox every week. REGISTER NOW for your copy of CEO Online’s FREE e-newsletter: http://www.ceoonline.com.au/subscribe/

6 Steps To Effective Incentive Compensation

Posted on November 28, 2011 by CEO Leadership Skills

The elements of a successful incentive plan – whether for a manufacturer, a credit union, a general contractor, or a restaurant franchise – are all the same. Here are 6 steps to making your incentive compensation a success and motivating employees to better performance.

Determine what the plan intends to accomplish
Identify, in detail, the improvable conditions desired, and the likely, attainable behaviours necessary to achieve them. Analyse for appropriateness in your environment.And really determine what you want when motivating employees. Be specific, because in compensation, it’s not what you wish for, hope for, or even plan for … it’s what you pay for that you get.For example: A client wanted to reduce worker’s compensation claims and their subsequent costs in two of their facilities. They simply created a “safety bonus” of 10% of the manager’s pay, reduced by 3% for the first accident, and 7% for the second.So what happened? You guessed it: fewer reported accidents, though they put no other safe-work or prevention efforts in place. Needless to say, this one got ugly before better, to be sure.
Determine participants
Realise that missing a key employee or position can put a wrench in the viability and success of the entire plan. Consider more inclusion than exclusion.The key to success in incentives – the basis of which behaviour is changed – is that the right people must be motivated to do the right things. If you exclude a group of people, specifically, from an applicable incentive, don’t be shocked when they don’t put that particular goal achievement at the very top of their daily “must-do” list.Human nature kicks in here, and employees will, first and foremost, do the things that most benefit their self-interest. This doesn’t mean they’re mercenaries, it simply means they’re human.
Develop clear performance goals
These should be simple, supported by historic, valid information, and clearly quantifiable. Think 2-3 total goals – the fewer the better. If you exceed 4 or 5, you’ve gone too far, and are trying to do too much with the plan. Model the potential payouts to ensure affordability.Be realistic. Be prepared to pay for incremental improvement, not just home runs. I was working with a metal smelter once; we were implementing a gain-sharing plan whereby line employees would share in all financial improvements from a predetermined threshold. Where we argued, of course, was where to initially put that threshold. I wanted it at or near the three-year historical performance levels; the client wanted it several percentage points below that. Bad juju. Employees can sniff out one-sided deals.
Determine logistics This includes dates of incentive consideration, payout dates, what is and isn’t considered, plan revision procedures, termination payouts, and effective dates of the plan.All plans should have a starting date and ending date.Two reasons: you’re giving yourself an automatic review cycle, and it lessens the likelihood that the incentive plan will morph into an entitlement with participants. We want incentives to always remain something extra, don’t we? Don’t even get me started on how many incentive plans I’ve encountered that evolved into a bonafide employee entitlement.
COMMUNICATE
Effective and thorough communications cannot be over-emphasised. Participants must realise the attention given to the incentive plan, clearly understand its parameters and intent, and have ample knowledge to successfully achieve those behaviours necessary to reach various incentive levels.Tell participants, in plain, easy-to-understand English, what the plan is designed to do, and what your expectations are for their performance within the plan. Sort of like the “whereas” parts of the recitals at the beginning of a contract. Further, the communication should be brief, and again, easy to understand.If you need four pages for an incentive plan, I’ll tell you what you have: One page, maybe a page and a half, for the actual “who does what, and who gets paid” part; the rest to tell participants how they can lose out under myriad conditions. Don’t do it. Be direct, and realise there will be judgement calls along the way.
Rinse and repeat
Evaluate the success and/or failures of the plan. Determine what worked, what didn’t, and what can easily be modified or improved for better results. Check payouts against modeling done earlier for accuracy and variations. Don’t rely solely on a consultant’s expertise. Make sure it passes your own sniff test, and that real dollars are appropriately in play, on both the incentive target side, and the payout side.Reward levels are determined by the triangulation of desired results, employee efforts, and financial impact (savings versus costs).

Dig deeper than most, and look to share something closer to 30-40% of savings/additional revenue; if employees believe you are simply enjoying a windfall for their efforts, while providing them just a few extra peanuts in their box, they’ll eventually rebel, and employee motivation will reverse. After all, if incentives are accurately implemented, you’re paying them from money you wouldn’t have had anyway… Think about that.

Guest Author:

Managing Remote Employees

Posted on November 13, 2011 by CEO Leadership Skills

Remote working is undoubtedly the way of the future. But just because they’re out of sight doesn’t mean they should be out of mind. Don’t leave them stranded.

Remote employees are those who work from home, or on a different floor, a different site, or even from a car.

Managing employees who work remotely is just like having them stranded on a desert island. Instead of being separated from civilisation, they’re separated from head office. So what people do to survive on a desert island are the same things remote employees need to perform and be engaged.

Review resources
Top of the list for desert islanders is to take stock of what they’ve got, such as radios and maps. Resources are top of the list for your remote employees, too. Make sure they’ve got easy access to manuals, stationery, and people.
Start a fire
Desert islanders use fire to cook food and stay warm. The equivalent of fire for remote employees is technology. Having fast and reliable computer systems, email servers, and phone services are paramount for remote working to be successful.
Build shelter
Desert islanders need to build a safe place to sleep. Your remote employees need a similar safe place to work. Make sure that their workspaces are ergonomic, conducive to high productivity, and have safety protocols in place.
Find food and water
A primary goal for a desert islander is to find food and water – the basic necessities for survival. The basic necessity for remote employees is feedback. Hold coaching sessions which focus on results. You’re not there to monitor how and when they work, so your expectations need to be explicit, objective, and clearly understood.
Make contact
People stranded on a desert island use mirrors, radios, and flares to desperately make contact with rescuers. Communication really needs to be ramped up when you’ve got remote employees. Make the most of tools like the telephone, instant online messaging, and video conferencing to stay in touch.
Become acquainted
Eventually if no help arrives, desert islanders need to become friends with their fellow animals – as must your remote employees with their peers. Hold frequent team meetings, maximise interaction between your remote employees and their colleagues, and encourage them to visit the office occasionally. Nothing beats face-to-face.

Guest Author:

James Adonis is Australia’s leading expert on employee engagement. He shows companies how to reduce staff turnover, engage Gen Y, and win the war for talent. For more information and free e-books, visit http://www.jamesadonis.com, phone +61 2 9331 2465, or email james@jamesadonis.com.