I joined
the workforce in 1982, just as Mrs Thatcher was starting the revolution that
would destroy unions and corporatism in the UK and Reagan was putting in place
the so-called supply side reforms that would do the same in US and sow the
seeds of the inequality we now have.
I can
accept the good side of these changes. Unions had become the ultimate example
of the disastrous approach of “prevent defence”. Ironically, the revolution may
not have done a lot for typical families in the west, but it has transformed
lives in much of the developing world.
Personally,
I gained from the revolution. Blessed with an education, a brain, some
commercial nous and plenty of luck, I saw my pay check expand so quickly that I
was able to jump off the bus at fifty, a ridiculous indulgence really. The
outsize rewards did not make me work harder or be more productive, if anything
the opposite. I recall one quote from the time that still rings true: why do we
accept that in order to motivate the elite we must pay them more, but to
motivate everyone else we must pay them less?
Driven more
by technology then ideology, most things about how we work have changed since
those days in the eighties. Rewards have stagnated, but most of the other
changes have been beneficial.
People are
much less wedded to their companies. When I started it almost felt like
colonial rule, now ties are much looser. People are much more able to develop
their skills than before, and to enlarge their specialisms. We work more in
teams and less as vassals of our bosses, and everything is much more informal.
Work is more flexible in many ways, tailored to our individual preferences. We
are much more self-sufficient, thanks to computers. Best of all, everything is
much more diverse and open.
But one
thing has hardly changed at all. From the start, my boss sat me down in a
formal meeting two or three times a year. I was allocated a set of tasks and
targets. There was a cursory discussion about my personal development, usually
leading to a marginally relevant training course. My boss tried to tell me what
I did well and less well, and what might be a reasonable ultimate ambition.
Based loosely on how I succeeded compared with aforementioned tasks and targets
and my peers, I was rewarded with a pay rise, a bonus and sometimes a
promotion. All of this was surrounded by acronyms, templates, and fixed
timetables.
If this all
seemed quaint in 1982, it seems completely anachronistic now, because of all
the changes in how work gets done. Tasks and targets used to be out of date
within six months, but nowadays it is often true after only six weeks. Many of
us have several bosses and change boss or even company during the year, and the
processes fail to accommodate this. We also work on multiple teams and have
learned to offer and feedback more frequently and not just up and down the
line. Just think about how you choose a restaurant these days, instant feedback
and peer review are everywhere – that is everywhere except corporate
performance management.
Like many
corporate warriors, I can recount many stories from my own experience of
performance management, both as victim and perpetrator. I learned how to game a
staff appraisal meeting. I have observed the full spectrum of bosses, from the
arrogant to the tongue-tied, the cynical to the naïve, but I don’t think I ever
had a boss who had been trained to be a boss or particularly revelled in it, so
most of them weren’t much good at performance management. I believe that my
best ever year of work resulted in my worst ever ranking, and that the very
next year was probably my worst year of work and resulted in one of my best
rankings. Many meetings started by looking at the goals laid down a year before,
with both me and my boss struggling to remember where they came from and how
they could ever have been relevant. I received some great feedback and some
terrible feedback, and no doubt dished out the same. Many of the strongest
emotional moments I recall have been in these meetings, with tears, hope,
denial, guilt, anger, gratitude, shame and redemption all present at various
times. I was told at 22 exactly where my ultimate job grade would be, in all
seriousness, and somehow they got it exactly right.
Not before
time, there is a growing body of literature arguing for change to the whole
edifice of corporate performance management. One school uses the fashionable
label of “agile” (http://www.cognology.com.au/learning_center/agile-performance-management/), and has some laudable ideas and
goals. No one could argue against more plentiful and wide and frequent
feedback, and this can easily be grafted onto an existing system and given some
status in appraisal. A greater focus on development is already a feature of
more progressive systems, though often undermined by less competent or
disinterested bosses.
The
challenge comes in going beyond integrating all this with enough weight into
the established process of set piece meetings. While such meetings are so
central and consequential, anything else faces the risk of being drowned out.
One key mismatch is with goal setting. I am a great believer in goals, but I am
convinced that they should be contextual, both in time horizon and style. In
many situations, three different sets of goals make sense, one for the next few
weeks with immediate actions, one for two or three months with expected
milestones and one with something more visionary for a year or two hence. Each
of these time horizons can be shortened or lengthened, and each set of goals
should be updated once about half the relevant time horizon has passed.
The
contextual method of goal setting does not sit easily with organisational
cascades, business planning and annual rises linked to performance, though they
are not impossible to reconcile. What is wrong is the emphasis: in most
corporations the official machine takes precedence, and contextual goals are
often overlooked. A smart organisation has a full range of contextual goals
working in parallel, somehow fed into the company-wide process.
Why does
the corporate process dominate? Partly it is because business leaders have
always been central control types, almost communistic despite their professed belief
in markets and capitalism. But in my opinion a bigger reason comes back to the
Thatcher/Reagan revolution. Individualistic, shareholder-style capitalism
quickly drove performance related pay of monumental greed. To give this a
veneer of justification, goals became KPI’s and more rigid and cascaded down
organisations. Dogma came to dominate common sense more than ever. This has
held back any moves towards more agile performance management, at least in its
goal setting and appraisal/reward components.
An
overemphasis on faux-rigorous KPI’s damages organisations more widely. Space
for discretion is squeezed, and silos trump collaboration. Everything is more
rigid, and the company moves more slowly as a result, while motivation also
suffers. While greed remains dominant, even internet-economy companies succumb
to this inertia eventually, once they are big enough to require management
levels.
Despite the
obstacles, there are probably ways that companies can make their performance
more suitable for the needs of their staff, and also ways that we as
individuals can follow better performance management practice. A small company
I am involved with called Synthetron offers anonymous, online, real-time dialogues.
Occasionally we run open sessions on topics of general interest, and one of
these will look at fixing performance management on Wednesday March 2nd,
at 5pm CET or 11am EST. Join us – Synthetron sessions are always an interesting
experience. You can register at http://www7.synthetron.com/start/?sessie=thinktank-fpm
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