How NOT to butcher your performance management redesign

Seven out of ten performance management redesign initiatives never yield the desired objectives. How do you make sure you’re not one of them? In this episode, we help you understand the ‘why’ behind modern performance management.
In this episode:
  • Obsolete relics of traditional performance management
  • Common mistakes in performance management redesigns
  • Role of the talent management team in bringing redesign to life
  • Sustaining new habits to make performance coaching part of culture

About the speakers

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Alright. A big hello to all our beloved people and culture practitioners. Delided as always to have you join us today. I'm your host GC, people science leader at mesh dot ai, and someone who considers himself extremely blessed to have worked with and learned from hundreds of people and culture leaders over the past decade and a half. When it comes to solving for business performance through their people, modern companies pretty much find themselves rebuilding the plane as they're flying it. With that said, the future is already here. It's just unequally distributed.

And that's where the performance puzzle comes in. A show where people leaders from around the world volunteer their experiences and playbooks to help you navigate the intersection of people's strategy and business success.

Joining us today is a real world talent management guru.

He's someone who works with big name companies like Apple, Amazon, Google, and the list goes on. He's the brains behind the talent strategy group, where he helps companies worldwide up their talent game.

Mark's core written the super popular book one page talent management something that I read and benefited from almost a decade ago when I had a lot more hair in my head and a lot more string in my step, to be honest. He's also got a hot new book out on, due to the shelves. It's called eight steps to high performance, and I'd highly recommend you check it out. He's also co founded the talent management Institute at the University of North Carolina. And I can go on and on about Mark's extensive CV, but then again, I'll be eating into all of the insights he has to share with you in the next hour or so. In a nutshell marks the go to expert for talent wisdom and one of the world's leading authorities and talent management.

Welcome to the show, Mark. Thank you so much for taking time out to do this today.

Thank you, GC. I'm looking forward to the conversation.


We'll jump right into it. But before that, I have a little something for everyone who's joining us live on this particular webinar. Turn your focus on the little nav bar on the bottom of your screen. We'd love for you to engage. There's the chat option where you can just share your free flow thoughts as you hear, mark, share his insights, There's a separate Q and A section where I'd highly encourage you to post your questions and I'll bring them into the conversation at the right time Don't wait for us to turn for questions. Just keep sharing them in the Q and A section as in when they occur to you and as in when you hear something.

And then last but not the least marks curated a really, really interesting poll for you folks, which will come up at some point in the webinar. And we'd love for you to get a jump in and share your honest raw authentic responses to that.


No points for guessing today's today's topic. It is how not to butcher your performance management redesign.

And when we hear about anything succeeding or failing, that means we're very, very clear about what it means to succeed at this particular change. So Mark, I'm gonna start at thirty thousand feet.


How much of any organization's performance management redesign is dependent on the clarity of the objective behind the performance management approach itself?

How much of any organization's performance management redesign is dependent on the clarity of the objective behind the performance management approach itself. And how often do you see organizations get that very element wrong?

Yeah. You're starting in the exact right place, and the place where very few organizations strangely do start, which is by asking themselves the question, What is the point of performance management in our organization?

Performance management is a tool to solve a problem. If you don't have that problem, you don't need that tool. Unfortunately, a lot of us in HR simply look at performance management as an inherent good Oh, you need performance management. Now, it's like saying you need a hamburger. Well, are you hungry for a hamburger? Do you need a hamburger? Are you even do you even eat meat?

Performance Management is there to solve a problem. And so that's the first question that we ask when we work with a client is what's the purpose of performance management at your organization?

And it is amazing how few people have actually thought through that. The challenge being, as your listeners can guess, if you don't have a purpose for a tool, you're just gonna be swinging it around and hoping you're gonna hit something with it, or you're going to design it to do everything.

In which case it likely will do nothing.

Start with the problem first. And, obviously, the problem sets the context from your organization mark.

But whenever you come across an organization that's kind of struggling to articulate the very purpose of the objective of their end to end performance management or even why they're embarking on a redesign.

You know, what are the common objectives that you kind of typically, let's say, for the lack of a better word, end up spoon feeding them on?

Yeah. Let's, let's work backwards. Performance management can do many different things, and that's a lot of power. It could we normally say it can do one thing well and another thing kind of well.

So let's figure out what one thing do you want it to do well? Do you want it to increase engagement? Great. We'll design it one way.

Do you want it to link seamlessly to compensation. Probably has a different design. Do you want it to focus really around development? Okay.

Well, it's a different set of things. Do you want it to be around actually elevating performance or behaviors?

Those are all fine outcomes, but you can likely optimize the the equation to achieve one outcome, not to achieve two outcomes.

What's interesting is when we start the conversation with HR, we'll often hear things like, oh, it's about engagement. It's about development. And then wanna review the executive team. What does every executive team member say? It's about raising performance.

So the the line from the top of the house is pretty clear. If we're doing this, we'd like to have more performance at the end of the process than we had at the beginning. We're somewhat agnostic When we design for our clients, we can optimize it to achieve whatever you want, but it feels like a bit of a waste to take the only process that we in HR have to actually elevate performance directly and not use it for that pro for that purpose.

That actually really resonates Mark with what we've been hearing from our community of talent management folks at mesh. In fact, a lot of them, that we've been kind of listening from have been telling us that our CEOs want us to relocate performance management in order to improve the ability for the organization to actually develop better quality talent in house. Is that something that you've recently seen become the objective at least some of the progressive organizations, you know, especially as they plan for twenty four?

Short answer. Yes. We had a number of years where I think companies wandered through the desert looking for their home.

And, you know, performance management is bad or you shouldn't do reviews or There was a lot of stuff out there. And a lot of it, my view was it was projections of personal beliefs, Well, I think it's wrong to do extra. I think it's right to do y as opposed to what does the business need from us And so I think we had we did see a bit of a, a bit of vagueness around the purpose of performance management over the past ten years. We're seeing a lot of narrowing, especially the executive suite to say, we need good performance. Now, we want that balance with good behaviors and engagement, etcetera, But this does feel like a really good way if we're setting goals properly, if we're coaching and following up with people to actually elevate performance. So Long answer to your short question, we are seeing much more focus on let's elevate performance.

Got it. Hence the set goals crush them such a webinar for people. That's the way you do it. It's not that complicated.

I I love that you came dressed ready and prepared for the particular topic, Mark. Come. Thank you enough for me. I asked about the dress code, and and this is how I interpret it.

Perfect. No, I hear you long and, you know, the long and short of it is if you're really going to embark on redesigning your performance approach, in the coming year. Don't leave it at the tactical level. Actually push yourself to think about how you can elevate every individual performance at the end of the cycle.

So a good way then to measure it, measure measure the success of your redesign and actually get the buy in of your leadership is If at the end of this one cycle, the redesign actually led to better performance per se itself. And again, you know, you can have various metrics like talent density, improvement in percentage by performers, the number of internal leadership roles you're filling in through internal talent. You know, the world's your oyster people. You can come up with the right metrics based problem you're looking to solve is what we learned from Mark.

The the second thing that Mark, you know, it makes me think about is, and especially keeping the lens of change, We've looked at, alright, what's the objective, how to, you know, what should I plan my change backwards from?

The second thing that I've seen people really, really need some unfreezing is performance management itself, since it's it's it's been a relic of the past. It really came up in the eighteenth century to begin with. There's a lot of, you know, lack of willingness to give up some common relics of traditional performance management And a lot of these actually aren't even clear to people that they're they're actually just dwelling in the past and trying to achieve for a forward looking objective.

Simple question to start and set that tone off.


What are some of the common relics of traditional performance management that companies still struggle to give up?

What are some of the common relics of traditional performance management, Mark, that you've commonly seen companies really, really struggle to give up?

Sure. And let's work our way through, relics and goal setting, relics and coaching, relics, and reviewing. I I think throughout that, there's just added complexity, but specifically goal setting things like weighting goals. So, g c, you give me you give me my goals and you say, Mark, this goal is worth forty six percent of of your evaluation.

That feels like an exercise in false precision. I mean, really forty six percent. Why not forty seven percent?

It just feels like we're trying to make something that isn't precise, precise, or give people certainty. When instead, you could simply say, Mark, you have three goals. The most important one for me.

Number one. Second, third. Great. We've just prioritized what I need to work on. So things like that.

I think are I think our, a relic of the past. I think having employees set their own goals with no input is another relic and I think it came from kind of an empowerment movement. Oh, you know your job best. Well, yes, you know how to do your job best. But not with no direction.

It still is helpful if you're my boss to say, Mark, we're going in this direction. How can you help us to go in that direction. So the, you know, let a thousand flowers bloom, and let's hope it results in a meadow, doesn't always work. In the the coaching part or the everything between goal setting and reviews, assuming that managers are having, great high quality regular conversations.

I think it's always just a bit of a silly assumption. It's not that managers don't have good intentions. Think ninety eight percent of managers have really good intentions to to coach to follow-up.

Most simply don't do it. They have a hundred other things to do, and we never raise up the accountability ladder. The accountability for doing that high enough that they care. And or we never enable it, and we never make it easy for them to actually go back and say, hey, you know, here's a piece of advice.

You're doing pretty well here, you're doing pretty well there. So this assumption that, for some reason, every leader is going to be having regular high quality conversations and check ins. One, if you know anything about human nature is just a little bit silly, but also there's just no record of that happening along with kind of the mid year review. Six months in, let's have a big heavy mid year review and It's not horrible.

It just feels a little bit wasteful that you're going to formalize something, you know, write stuff up in the system, annoy every manager, as opposed to saying, well, what does a series of regular conversations look like instead? Why is it that six months into the year some big deal, needs to happen? At the end of the year, I would suggest the same thing around heavy weighting, formulate calculation of a result, G. C.

You are at three point eight two one this year. Well, how do you know that, Mark, well, because I added this number and this number, along with that, assuming that any smart manager can't back into whatever formula you and HR give them. Like, oh, there's a seventy, thirty balance between performance and behaviors. Well, let me tell you about Susie, and she had a perfect rating.

And so let's not assume that managers aren't smart enough. To figure out any system we give them to to make sure that they give the right answer or they give the answer they wanna give you to get their people the best rating. So long answer, but we see a lot of artifacts like that still in place. A lot based on kinda good intentions, good human nature, but not on facts of data.


In all three buckets, so super and so succinctly kind of summarizes the entire, you know, flavor of an end to end performance approach. And I'm gonna quickly try and paraphrase what you mentioned, Mark, When it comes to goal setting, you can't give people complete free reigns. They do need to have a two way conversation in terms of, hey, where's the business and the team headed?

Certainly focus on high quality goals rather than focusing on converting them into a metric driven scorecard with weightages, which I think correct me if I'm wrong is a relic of only having goals for the purpose of performance reviews from the past.

And I can see, you know, when you use the word complexity, when a manager which segues into the coaching side, is the manager expected in coaching to spend more time helping people understand how to achieve those goals? Or explaining the arithmetic of how those goals will be used at that complicated rating at the end of the year. So really the big question is the quality of the conversation and and the time spent on various agenda items, they know why why waste any sort of breath on explaining a super complicated rating and assessment framework. That segues into the review piece, which is if you get the first two pieces right, you don't need to over index on another layer of weighted averages and arithmetic And we do get a lot of questions.

In fact, even in the run up, you know, to this webinar, where we invited questions, Mark,


The problem with worrying about the right rating scale

there were a lot of questions in terms of what's the right rating scale? What's the right way to weight goals? And I think what I'm hearing you say loud and clear is the value isn't in whether you have weighted averages or a three or five or six or seven point rating scale or two decimal points of ratings to show adequate differentiation go back to what your objective was. And somewhere down the line, you realize that tinkering around with, you know, this arithmetic framework isn't gonna help you meet that objective.

Yeah. Well, it's not unimportant to make sure the end of the year process flows smoothly. You cannot increase performance at all in a performance review. That that horse has left the barn and gone around the track once.

So if you want to increase performance, you have great goal set and you have great check ins and coaching along the way. That's how you get great performance. Yet, some reason, we as HR professionals spend all of our time worrying about ratings and ratings and how it ties to comp. Instead of saying, well, and it could go what a purpose.

If you don't know what the purpose is, then you're gonna spend your time on that. If the purpose was to increase performance, then ideally, you would have spent a lot of time getting goals setting right, training leaders doing it, auditing it, see if it was done well. Same thing with coaching, making sure they understand how to have good quality feedback conversations, They have some tool to help them to make it easy. That's where you would have spent your time.

If you're worrying about, well, the the rating scale doesn't work, then, you know, you're probably finding yourself with a lot of upset managers who say, hey, I all of my people are above average. Your rating scale doesn't work. If you set goals properly, then you're gonna have a more natural distribution at the end of the year. You're not gonna need to worry about forcing people into too many categories.

Yeah. And correct me if I'm wrong, what I'm hearing you say is both the goal setting quality as well as the ongoing coaching quality is how you ensure that the rating scale doesn't fall prey to the central tendency bias because the coaches have had the difficult and the good conversations through the year. So they position themselves that much better to be able to kind of deliver a very, very deliberate kind of assessment at the end of the year.



If goals have been set properly, some people should not achieve their goals.

A key message we give to all of our clients is if goals have been set properly, some people should not achieve their goals.

If goals are set to be achieved, you're you're taking all the motivational power away from a goal. Go the science is very clear. The goals have the power to focus our attention to sustain our attention to elevate our our effort.

If you're setting a goal that can easily be achieved, none of those things happen, So if I'm setting goals that are big and challenging, for my team members, not everybody should achieve every goal. That means I've left performance on the table. That also means, though, and and normally what I hear from my my clients is, yeah, but at the end of the year, how do we evaluate that? Well, you then you need to allow a little bit of flexibility to say, we gave GC a gigantic goal.

He actually got a a fair ways there, but he didn't meet it. How do we evaluate that? That's not necessarily failure know, he didn't achieve a massive goal, but we're still gonna give him appropriate credit for that. So I think you can set big challenging goals.

You can have some people not beat their goals and not have that be the end of the world if somebody gets a lower rating one year because they had some big challenging goals, but we understand we understood the, the challenge in achieving those.


Static vs dynamic goal-setting

James, from the audience, is, put in very pertinent question, Mark, and we hear this very often as well, and it's on goals, which is, what's your view on goals changing and evolving through the course of the year and not a set and forget kind of an experience where it's set for the full year. What would you share with James?

Yeah. Absolutely. Yes. And, two thoughts. One, we like to have at least quarterly call them formal, the small app, not recording the system, but if GC's my boss, we sit down and I know it's a goal review conversation.

At least quarterly, Let's look at your performance. Let me give you some feed forward advice for being even better. And let's check-in on these goals to see if they still work.

Now, the the other important part is if you set goals properly at the beginning of the year, not many should change. I often times hear from my So we can't even set goals. Everything's always changing. Well, then you're setting goals at too low of a level.

Because just like your executive teams, you need to go out and make cases to Wall Street and say, we're going to earn thirty eight cents a share. You can't come back the next quarter and say, the world's completely changed. We're gonna lose twenty five to share because your company will quickly go bankrupt and you'll all be fired. You need to set goals at a level that you think, yes, things will change underneath that, but we can still find a way to achieve that high goal.

So when we're setting goals, they should be at a level of I'm going to deliver x to you recognizing a bunch of stuff underneath x will likely change during the year, but I'm still confident that I can commit to deliver x. So, yes, goals should be reviewed during the year, but let's make sure that we're setting goals properly at the beginning of the year. So not very many of those should change. Yeah.

And I think if I have to now be a student, be a student mark, which I've been almost for a decade without you knowing, and apply what you mentioned on the objective side, James, if your business objective is the market is changing very, very rapidly. And the market dynamics, I mean, a week is a month, a month is a quarter, and a quarter is a year.

Then if that objective is very, very clear, the only way for you to elevate performance is by designing in the mechanism to be able to iterate on both people's goals through the course of the year. But if you're in a market where things aren't really changing and you're competing on efficiency and control, then Maybe not. Maybe you'll spend your time in your performance management design on other aspects of, let's say, coaching, the, and and and transparency. Mark, have I I applied what I learned from you in the first fifteen minutes well? Yeah.

I like that. I would also add in, if for some reason you are in an in credibly dynamic environment, then great. Make sure that the behaviors that you're rewarding reflect that. We're gonna reward you for being flexible.

If you whine every time goals change, then, okay, maybe that's not the right fit. We need you to say, yeah, we were going in that direction. Change. Now we need to go in that direction.

You need to be agile, and so maybe we're rewarding you for that behavior as well. So for some reason, the goal is don't quite work out as they should. We can still say you did all the right things that should have achieved that goal. So we'll still give you some credit, against achievement.

That's amazing.

James was happy with the response. So job well done, I guess, Mark, just kidding. But To you as well.

But, you know, we've spoken about some of the relics of the past that we just won't give up. But then at the same time, the science, the underlying science of, you know, behavioral psychology and the people science, that's really stood the test of time or at least some of those. And yet we see in the redesign poor application or misunderstanding of the people science around motivating behaviors or driving high performance. And I know you're a very, very clear succinct point of view on that mark.


Audience Poll

But before I kind of turn the question on to you, you know, All of you in the audience are going to find a poll question pop up anytime now, which are three true and false questions that mark specifically curated for this conversation.

And it would be great if you could start sharing your responses on the poll, but We can jump into the polls live now folks. You can see it in front of you.

So mark the three questions that we've put to the audience that you'd put together. The first one's employees achieve high performance when they set their own performance goals.

Before I let you, you know, get the cat out of the bag, we let folks respond to that particular question. The second one is if you give someone harder goals, they will work harder to accomplish those goals.

And the third one is asking an employee to do their absolute best on a task will create higher performance than setting a goal.

These questions, I'm pretty sure come up in many conversations and many redesigned discussions with everyone sharing their anecdotal experience.

But the fact of the matter is there is formal behavioral science that you can rely on that's to the test of time to answer these questions. Mark, I'm going to turn it over to you because you're the master at these three questions, guide our audience through how they should think about these questions and definitely what the right answers are as well.

Yeah. As we go through the results, I'll just reiterate. There is so much great science in the area of performance management, around goal setting, around how people respond to coaching on what constitutes a fair review. The challenges, most of us in HR are not experts in that science, and it takes a lot of work to become an expert in that science. So we rely on we did this and my last company or whatever the folklore is that that we learned from my last boss. And If we apply that science in the wrong way or if we don't know the science, we can actually make some pretty fundamental errors in how we're designing goal setting and coaching which will take away from the power that those processes have. So getting the answers right or as as right as science can guide us to is gonna help you to get the power out of the goal setting and the coaching process.

So let me walk. I don't see the the poll results here, but let me walk through my, my answers. Oh, there we go. Let's see.

Even. Oh, nice and evenly divided. I like it. Okay.
Very good.


Poll Q1: People achieve higher performance when they set their own performance goals. (True/False)

So let's start with the achieve higher performance when they set their own performance goal.

What the science would say is actually it does not matter. Whether a manager sets a goal or the employee sets a goal, they will work equally hard at that goal. But it kind of does matter for this reason. Ideally, a manager's role in this process is among other things, to be able to cascade goals from above her to below her to make sure that the translation of what are the the big guys and gals doing at the top to what should we be doing?

And a manager should be stretching your performance. So if g c is my manager, I come to you and I say, you know, I think I can do a hundred five percent of last year. And you say, well, Mark, I know you. I know the market, and I'm pretty sure you have a hundred ten percent of last year in you.

So the manager should be adding some value in that process. While the science says it doesn't matter, it doesn't technically, but it matters practically and that a manager should be stretching you because if you're setting your goals and you know your bonus depends on those goals, are you setting really stretch goals or just kind of stretch goals. So, well, technically, it doesn't matter. Practically, we like to have managers actively involved in the process.

Again, not dictating goals, but leaving the conversation.


Poll Q2: If you give someone harder goals, they will work harder to accomplish those goals. (T/F)

Number two, if you give someone harder goals, they will work harder to accomplish those goals, probably one of the most conclusively proven pieces of science out there surrounding human motivation.

We respond to challenge with effort. We respond to challenge with effort. So, if you say Mark jump a foot in the air, I'll give you a dollar. I'm gonna try and jump a foot.

If you say Mark jump two feet, I'll give you two dollars. I'm trying two feet three feet, three dollars. I will keep putting out more effort to more challenge until either the, too exhausted to do it. So I can't jump anymore.

Or the reward doesn't match what you bet. So you say, Mark, jump four feet. I say four dollars. You say, nope.

Still three dollars. I might say now that that deal wasn't fair anymore. But up to that point, I'm gonna keep trying. What's the practical implication of that?

Pratic I was raised in old school HR. We used to say things like set three regular goals in a stretch goal.

Science says, nope. Every goal should be a stretch goal. Now I've modified my language about this because whenever I said every me a stretch goal. People said, oh, you're gonna kill employees and burnout. I get it. I get it.

Maximum reasonable stretch.

You should know your employees well enough to say given who they are, what's going on in their lives, what they want to accomplish. I think this is a maximum reasonable level of stretch to give them. If you're not doing that, you're leaving a few things. When you're leaving performance on the table for the company, but you're also not giving that employee the opportunity to win.

Because if you come to me and say, Mark, I actually think that big project bet you can get that done by next March instead of next June. When I say, I have no idea how that would happen. You say, the the business is going to really value it being done in March I'm gonna work with you throughout that time with a coach who needed some more resources. I think you can actually do a lot more than you think.

Let's give our team members a chance to excel, to exceed, we only do that when we give them that maximum reasonable stretch. They're likely going to respond with a lot more effort to get that done.


Poll Q3: Asking employees to do their absolute best on a task will create higher performance than setting a goal. (T/F)

Final, asking employees to do their absolute best on a task will create higher performance and setting and goal. There's been a lot of noise over the past ten years on new set goals, you know, KPIs, OKRs, and and I heard more than half word more than once. Oh, don't set goals. Give people the big vision, like, build a rocket to the moon, and they'll figure out their own place in that.

No. They won't. Science is really, really clear. The vast majority of people will not. If you say your job in helping us to go to Rock to the moon is doing x, people are really, really good at that.

But for the most part, people perform better when they have a specific goal. Goals have the power to focus our attention, sustain our attention, motivate our effort. Simply saying do your best, people constantly overachieve what they thought they could do when goals were set for them. So simply saying, okay, dig that hole as deep as you can, You're not gonna get as deep of a hole as if you say, I need a ten foot by ten foot by ten foot hole, by six o'clock this evening.

So if we don't know that science, we might say, you know what? I'm gonna have employees set their own goals because they know their job best.

And let's not kill people. So let's set moderately challenging goals. And, you know, I'm I'm not gonna put too much structure around this. You write a goal in whatever way you wanna write a goal to do whatever you want.

You're just taking all of the performance power away. From goal setting. And again, you're not giving that individual chance to shine, and show what they're capable of. So kind of a long section, but it just reinforces.

If we're not sharp on the science, we can really undercut the power of of goal setting and coaching.

Mark, I'm tempted to ask you two questions on top of that.

Starting with the third piece because that really has been an ongoing debate and there are two schools of thought that I have kind of met with.


Effort vs Outcome : Which one do you reward?

The effort versus the outcome piece. Which one do you reward? And I think you know, the science tells us that, just rewarding effort will kind of put your business in the ditch if you aren't bringing in the necessary clarity around the outcomes being the accountability as well. And that's pretty much where we also see a lot of organizations coming in and saying, Hey, We have tasks, and we meet once every week and we clarify who's gonna do more task, but then there are surprising messages that come at the end of the year, because we never talked about outcome. Is is is that something that you kinda tend to agree with if I summarize it in that manner?

Yeah. Absolutely. Now do I care about behaviors along the way? Yes. Our behaviors a substitute for an outcome?

No. They are not. Which is why having competencies like results oriented is silly. I don't care if your results oriented.

I care if you get results. We already have a process for that. It's called your goals. Now I'm gonna look have you done all the right things along the year?

Even if you didn't achieve the goal, you know, every single thing you did should have gotten us there for some reason we did I'm gonna weigh that in the final evaluation.

But if there's somebody else who did get the job done, then I'm gonna give them more of the prize because that was the higher point is to get x done. If you got x minus one done, that's that's not quite as good.

The second out of, piece that really jumps out at me when I look at the first two questions together, Mark, is what you mentioned in the common relics of the past, which is If you're really redesigning in order to enable and empower your manager to be an effective performance coach, they need to be involved in discussing and setting the goals and they certainly need to be involved in getting buy in on those stretch goals. So that really sets you up for the coaching piece as well. Have you would you agree with that?

Yeah. Absolutely. And hopefully, the rational manager would say my team's performance is what's going to lead to my performance. Therefore, I want the best out of them because I'm gonna look good when they perform at a high level.

And so not being involved, not providing side. It's not helping to stretch. The person who it really hurts is a people manager is you. So it's kind of silly not to be actively involved because it's simply under your own ability to could be a superstar as well.



Have ratings or go ratingless: What does people science tell us?

The next one I'm tempted to ask you, especially where to understand, you know, what people sign tells us about this is not about a relic from the past, but a recent fact, which is have ratings or go ratings. What does people science tell us this particular fed. I'm super curious to know Mark.


I wish that this conversation had never come up because it has a waste so much of our time in this field about should we have ratings or not have ratings? Let's start here. Raidings are a tool. If you need that tool, use it.

If you don't need that tool, don't use it. Rreetings are not inherently good. Raintings are not inherently evil. The pseudoscience that, you've seen from some consulting firms that somehow ratings cause our brains to spin and fight or flight.

That has nothing to do with, do we need to differentiate people's performance during the year? I'm a fan of ratings, but I'm a fan of ratings because I know the psychology of both leaders, which is to overestimate or over evaluate, the performance of their teams. Just like each of us as individuals think we're just a little bit better than we actually are, most of us as people managers think our team is just a little bit better than somebody else's team. What do ratings do? Ratings give us a standard against which to evaluate people so we have more consistent evaluations.

So if you and I are comparing our teams, we can compare them on an even basis. So I can explain to my team member. Here was the standard, and here's so you can pair it against it. So we can eliminate bias. Ratingless systems, bias can just flood into those because now we have no standard.

And so I didn't say, well, you know, I played golf with Bob, but, yeah, he's a good guy. It's all good, boom. You know, when you take away standards, you take away the precision or the possibility decision of the valuation.

So I like ratings for those reasons.

Anything you hear about radioist companies, most of it is untrue. Our consulting for his, has helped many of the companies who went readiness bring ratings back So almost every company who has gotten famous for taking ratings away, I'm proud to say we have returned ratings to that company, but in reality, it the CEO had a new CEO, a step in and said, you do what?


And and we brought it back in because they recognize that, yes, people show up at different levels. There's nothing wrong with saying, GC, you had a great year. Mark, you had a good year. Sam, you didn't have the best year.

There's nothing wrong with that. In fact, it's very helpful to understand what's the quality and depth of talent that we have. So the short answer is ratings are a tool. If you need the tool, use it, if you don't, don't use it.

But our most recent research, we we publish big reports every year on things like performance management. We asked how many people don't use ratings. And I think we had a three hundred company global sample, all sizes, all regions. Ten percent, say they don't use ratings.

So it's still a very minor thing. Again, it's not right or wrong. If you wanna go rate and less great, but you'd better be super confident that your manager is gonna have very clear, precise, transparent conversations at the end of the year, and ask yourself Seriously, are our managers able to do that? I'm gonna guess the most companies you're gonna say, not quite yet.

Yeah. Two things I hear loud and clear there, Mark, is Don't make going ratings is the objective of your performance management redesign. Work backwards from your business problem and then see whether you need ratings or not. A hygiene element to that is ask yourself, are your managers already mature enough to be effective performance coaches?

Otherwise, going rating lists will be Harakiri.

And also I think we've recently seen organizations come out in the open and say, Hey, we never really did go ratingless. We just didn't share those ratings with the individual themselves. So, yeah, that's that's something for folks here to think about. Mark, the Q and A section is buzzing. So let me let me jump into that right now.

I think one that immediately kind of speaks to certain elements is first up, since we're talking about redesign, Asia wants to know,


How often can I actually redesign my performance management system?

how often can I actually redesign my performance management system?

And to be very honest, as you know better than me, a lot of organizations have tinkered and redesigned, but not met their objectives. So now they're wondering, do I need to give it a cooling off period? Or can I immediately jump into some iterations the next year? Who hates it most when you redesign performance management?

Line managers hate it. They roll their eyes. Oh, you HR people. You have nothing else to do, but screw with this thing every single year, really?

It it does us no good as HR leaders to redesign this every two years.

Good performance management should probably be good for five years or seven years or ten years even your company has fundamentally changed. Let's say you go from drilling oil out of the ground to making solar panels. Cool. What are your goals?

Are you coaching? Are you reviewing people? The need to change the the fundamental framework should be very little or, you know, should be very little need to do that. But in our most recent survey that I was just mentioning, I think fifty percent of companies had played with some element of performance management in the past two years alone.

So it's just that a lot of companies are still trying to get this right.

Our view is in many cases, they keep looking for the magic answer instead of recognizing the things that we've already talked about today are the right answers It's the hard work around goal setting, the hard work around making sure they're regular, high quality conversations.

That's what makes performance management work. And if we're always looking for the the hack, there's not a hack. There's just hard work around it. So, I would suggest redesign it as infrequently as you possibly can only when needed. Just your reputation as an HR leader will go up. If people don't see an email from you about the new performance management process.

Love that answer, Mark. And I think sometimes, people confuse changing the design of their performance review form as a performance management redesign, but all that we've heard from you in the last forty five minutes is that's that's where the value isn't that much. But if you're rolling out initiatives like, hey, dear manager, I'm gonna enable you to have better goals setting conversations with your people I'm gonna enable you to have better coaching conversations with your people, then it seems and is positioned like an investment in their abilities or their skills rather than a redesign which they roll their eyes on.

Perfect. The only caveat I do see would be if I'm making things simpler, I'll change it.

Here's another way we've made your life easier. Okay. That's okay, but that's the only time. You know I'm gonna come. I'm a huge fan of the valuers. It's complexity curve, and I am gonna come to that, you know, in a quick bit, but I'll I'll move on to the next question, which seems very relevant.


How do you encourage and drive individual performance and balance that with effective collaboration at the same time?

How do you encourage and drive individual performance and balance that with effective collaboration at the same time?

Let me load that question up a little bit. In the past, that was a big reason why companies didn't want to do the normalization of the bell curve. Per se as well. Right?

Correct me if I'm wrong, but yeah. Mark your thoughts.

I think it's actually pretty straightforward and that performance and behaviors are separate. So you can say, g c, I'd like you to hit these big goals, and we have a behavioral standard here. Here are the four behaviors we one of them is that you collaborate with your team members.

So sometimes I hear, oh, we can't have ratings because if you rate people, they're gonna get the long knives out and stab each other in the back. Like, we'll then have a standard that we don't stab each other in the background here. It's it's not that challenging. And most of the time, we aren't working on the same things.

It's not like You have a sales territory, and I have the exact same sales territory, sales territory. Therefore, we're gonna go at each other. You've got your chunk of the I've got my chunk of the country. We got.

So so the the odds that somehow will be a natural conflict over stuff we're doing just seems a bit odd.

So I think as long as you have clear behavioral standards that, yeah, we we play well with each other, and that's a meaningful enough, waiting in the reviews. It shouldn't be a big challenge.

Absolutely. Thanks thanks for sharing that, Mark. I'm going to very quickly move on to the next one. Now, this is this is something that's kind of you know, being been on the table to solve for when it comes to performance management redesign for a while.


How do we ensure fairness in manager evaluation of performance?

How do we ensure fairness in manager evaluation of performance.

How do you know, is the answer in the right design of the form? Is the answer in crowdsourcing feedback? Is the answer in my manager's ability, whatever the answer is, but this one just doesn't seem to go. Where does it?

Yeah. Like most things we've already talked about today, the secret not lie in optimizing the review process.

There are things you can do in the review process, but goals are going to be fair. Or evaluations are gonna be fair. If goals have been fairly set. If conversations have happened along the year.

Now a few tricks, one, For goal setting, we wanna make sure that goals have been set at a relatively consistent level of challenge. So your goals, GC, and my goals, They're the same goals, but if our manager looks at them, they say, yeah, that kinda stretches them both equally. So if we're stretching or we're setting goals at a relatively consistent level of challenge, And we've done some goal calibration. A lot of companies don't do this.

At the beginning of your performance cycle, have your team sit down read their goals to each other. I'm working on a, b, c, and d.

Around the room, you're gonna listen for one. Have I already worked on that? Maybe I can help you.

Oh, that dovetails is something that I need to get done. We should talk. I thought I was working on that. We should definitely talk. So having that goal calibration discussion helps to level those goals during the year.

But then also at the end of the year, many of your clients probably already do this, but goal calibrate or a rating calibrations are really important, especially at the high end of the low end. So if I say g c is one of my best, then someone should say great. What did they do? And they might say, oh, yeah.

That was a big goal and a big result, or they might say, doesn't sound like that big of a deal to me. I've got Susie. Let me tell you about Susie. She's up here.

So getting goals right, getting coaching right makes it a lot easier to have fair evaluation at the end of the year. To our what we were just talking about, ratings help as well. A good, clear ratings definition gives me a standard against which to evaluate your performance. If we take away the yardstick, Then it's just kind of a, well, you know, I think you're you didn't do it pretty well.

A lot of bias creeps in with that.

Ma'am, believe it or not, but we have an attendee, who mentions that, and this is Jim, He mentions that he's already implemented, you know, principles and evidence based approaches as prescribed by you yourself in the US subsidiary The question is a very interesting one which is does cultural context matter?

Can can he confidently go ahead and implement this in, let's say, West europe or Asia, and will these principles and these kind of directional designs actually, also deliver results in, let's say, a high context culture versus a low context culture.

Great question. We hear that a lot. Here's the good news about designing performance management for people.

There are people. And people are generally people around the globe. They have the same personality structure, the same differences in intelligence, and they want the same thing from their employers. They want a company that they can respect They want a manager who cares about them.

They want opportunities to grow and develop. So the fundamentals of how I'm going to design something people respond to goals. Great. I know that.

People wanna be fairly evaluated. Great. We know that. The context, with which you apply that might differ.

So if I'm having a transparent conversation in New York City, that might sound different than a transparent conversation in Tokyo. But as long as the receiver of that conversation says, yes, that was a transparent conversation.

I I've ticked that box. So the good news is you can design a system that adheres to the science and that should get the results you want. Now you need to listen to your local folks about, hey, in in Western Europe, we approach it like this. Or in Japan, we approach it like this to make sure that you're tailoring it appropriately, but the foundation works.

I use sometimes the analogy of every culture as something that feels like a sandwich.

In India, you've got a kati roll in Mexico, you've got a taco. In the US, you've got a hamburger.

It's all a sandwich. It's interpreted slightly differently, depending on where I go. But we'd all say, yeah. It's it's some bread with some meat in between. So the fundamental principle applies. It's gonna taste a little bit different different cultures.

I'm never gonna be able to look at a cartier role the same now, Mark.

Perfect. The Indian hamburger, it is alright. I'm I'm gonna I'm gonna combine two questions, from Steph and Sandehr because they're both about performance reviews. Before I put these questions on Demark, something that, you know, would resonate again or reemphasize what Mark mentioned.

The performance management redesign isn't just about re engineering the reviews. There are two steps before that goal setting and coaching. Nonetheless, the first question, and I know you have a very strong point of view about some of this is


What is the best process flow for a performance review? A self, a manager, peers?

What is the best flow, process flow for a performance review? A self, a manager, peers, What do you think works best?

What would be your response to that, Mark?

Yeah. I'm glad you, type in the question, Sandy. We have a point of view, which we think is pretty well backed by science, that for employee participation, we want them to have a voice but not a vote. A voice, not a vote.

What does that mean? Many organizations use self reviews. You can go to my website talent strategy group dot com. Type and self reviews, get our article on that.

We think those are a bit of a waste of time to force people to do it. Now let's start with if you wanna voluntarily do a self review. Fantastic. But the science is clear that we are the least aware.

As as individuals, we are the least aware entity of our own performance and behaviors. So in a self review, we're asking the least accurate observer How do you think you did?

So you're not likely to get a very accurate response. And often times they hear, oh, but Mark, there's value in knowing the distance between your evaluation and your managers. Signs would say, no, there's not. If GC rates me low, I'm gonna have thirty eight excuses why he's wrong.

About rating me low. I'm not gonna say, oh, let me let me reflect on that. And maybe I could do a little bit better. No.

I'm gonna say I had a great year. I don't know what you're talking about.

So there's just not a lot to be gained from having that self review process. Again, we think voluntary yes. If you say, look, I just wanna tell GC that type that Great. We'll put in the system.

But in many organizations, you've already determined my rating before that self review comes in. So now we're just lying to people that that actually matters. If it's going to matter, then great structure the flow so that it actually matters. But we'd suggest it should be interesting, but not calculated into the, into the rating process.

It's not a debate. It's not that you say, Mark, you were I think you're a three. And I say, well, I think I was a five. So let's agree on a four.

That's not how this is supposed to work.

The second out of that question actually is from Steph, which is


How frequently should we do performance reviews?

how frequently should we do performance reviews, quarterly by annual annual once in ten years, a number of options ahead.

No no answers. I know all from the science on this. I think it it really goes in your business cycle. Most business cycles are a year.

I think a year is fine. Again, feedback during the year is different than the review, but the sit down, you told me you'd do a, b, and c. Here's how you did. Personally, I think once a year, it's absolutely fine unless your business cycle dictates something different.

Yep. I'm gonna keep these questions coming in, Mark, I think I'm gonna marry two more.

These are folks that seem to have tried encouraging their managers to take time out for more continuous check ins.


How do I convince my managers to spend more time having performance discussions?

The question is how do I advise how do I convince my managers to spend more time having performance discussions more frequently and coaching people on the achievement of their goals.

And the second question that I'll add to that is How do I ensure that they're having higher quality feedback conversations?

Sure. At the heart of one page talent management, thinking is make the process embarrassingly easy and add an accountability.

So from a process standpoint, What's the the lift that you're asking for and how are you enabling a manager to do that easily? There's great technology like mesh that helps out with that. I certainly encourage folks to to explore that. So do we have a good technology solution that makes it?

So I don't have to go into thirty eight pages of work day and, you know, find out where I type in some notes. One guy enabled a manager to easily engage in those discussions to get feedback, peers to give insight and feedback, but also then what's the account ability. And when we ever talk about accountability, we always say use the lightest amount of accountability you can to get the job done. You don't need to hit everything with a hammer.

Our favorite way of, encouraging leaders to to do frequent feedback is what we call a one question survey. That one question survey is as simple as, have I had a quality coaching conversation with my manager in the last ninety days? Answer is yes, or no. You can do that on any platform out there.

You can do it by email if you want to. And it's simply made to generate data. You don't need to incorporate that into a performance review. It's just that you might come back to me GC and say either, Mark, nine out of ten people gave a yes on that.

Good job. Keep going. Or you might say, Mark, two out of ten people gave me yes on that. Either they they don't know you're having the conversation with them or it's not happening, but you need to pick it up.

Something that light and easy is a great form of accountability because now I know someone's paying attention to this. And you know, we made that process really easy, so Mark has no excuse not to do it. So that combination of ease of process clear but light accountability is probably the best way to encourage it. The heavier we make the process, the the more of a hammer we use, I think the, the encouragement goes downhill quickly.

Super powerful, Mark. I think the last one, and again,

I'm gonna kind of merge two questions here. Because it's still kind of in the realm of what people science tells us is


Normal curve: Yes or no?

normal curve.

Yes or no.

And then I'll come to the follow-up question mark.

Yeah. Regina's question's a great one.

Most Most performance distributions do not not meet a normal curve. The normal curve suggests there's a low end of the tail that represents fifty percent. But in most cases, there was not one. You would've gotten rid of people at that lower end.

So you've already trimmed the tail and the the actual distribution tends to be very closely grouped around the the central tendency. Kinda that that central fifty percent. And to Regina's point, and read the McKinsey article. It's it's really interesting one.

There's this long positive tale as well, which we tend to forget, which is there's probably two percent of your company who's making an amazing difference, you know, adding ten x twenty x value. We say, oh, you're a high performer. Why she know they're kind of a high, high, high, high performer, and a power law helps us understand that. The challenge is most of us don't even have the basic distribution logic down, power law is kind of a two zero one, level of performance management, but you asked the right question.

It is the right way to approach it. And read the McKinsey article they did in this one, they did a good job. Yeah. Absolutely.

And for organizations that are still using the normal curve, which typically is because there's a central tendency bias and managers have been avoiding difficult conversations and they don't wanna have it at the first time as part of the performance reviews.

What Nara mentions is, you know, they struggle to easily reward the entire team based on a forced ranking because obviously you force the manager to do that ranking.

What's your advice to Nada Mark?

Yes. Part of life is that some people will do better than other people, even in a team. Now if you have a team goal, that's different. So let's talk about team goals for just a moment.

If you're saying as a team, we're trying to achieve x.

And there's a metric. Great. Then you can say you're all going to get equally rewarded on the team achieving X or not achieving X. So if it's truly a team goal, then great. Let's measure the team's accomplishment. We're all gonna share in the rewards, and we're all gonna share in the lack of rewards. Cool.

But if it is simply that, GC's responsible for sales and I'm responsible for R and D, and he did a better job in in sales and I did an r and d, then, yeah, he's gonna get more of the goodies that you have that are available. Now we should be transparent about that mindset, we should also have a good goal setting process where I don't say, yeah, but his goal's easy. That's not fair. So we'll go all the way back to goals again. If goals been set properly, it's a lot more defensible to be able to say Well, yeah. We set a big sales goal for him, and he was forty percent over it. So I'm sorry you're unhappy with that, but that was a really good year.

So, yeah, it might not be that everyone gets rewarded equally, but let's make sure people feel comfortable that the process was a fair one. If you get great rewards and I know you did a great job, I'm not unhappy.

If you did if you get great rewards and I think this guy's a lug. Then I'm unhappy. So clarity on goals, clarity and performance, I might not be thrilled that my bonus wasn't quite as big as yours, but at least I don't think was something fundamentally wrong with the process of getting there. Yep.

Mark, over the past few answers, I think a common theme that I can draw if I'm doing my job well on this webinar is a lot of us are trying to solve for problems of performance management by over engineering the performance review or the calibration conversation that happens after a performance review.

What is your advice to talent management leaders? People who are looking at, you know, fixing performance for the right business objectives next year.

Because very often why managers roll their eyes, like you mentioned earlier on in the show, is what comes to them is easily understood by a talent management expert who's deep into that field but isn't something that immediately resonates with someone who's not a talent management expert.

How much design from a complexity perspective versus how much effort in my redesign should I actually be spending outside of the design itself and in driving the change on the ground.

So is the question more about how do we help managers to get this done versus give them new process or refine the question just a little bit for me.


What's your advice to talent management experts in terms of not overdoing the design?

Alright. I'll break it into two parts. First up, what's your advice to talent management experts in terms of not overdoing the design because they've got a billion ideas for because they're experts in that field.

Yeah. Let's go. Gee, you mentioned earlier, value complexity curve. If you're not familiar with this, it it's in my first book, one page talent management.

Value complexity curve basically says, When you're designing performance management or any other process, you should be looking at every single element that you add from a box on a forum to a line of instruction by saying, does this add more value to a manager's life than it does complexity? And if it does great, add it in. If it doesn't, then you don't add it in. It is amazing how all the bells and whistles fall off of your process when you simply challenge yourself to say, with the average tough nose manager, say thank you for this or roll their eyes at this.

So we should always be thinking, what's the least amount of effort a man or could engage and still get to a good outcome, not what's technically precise. If you're focused on the outcome, a high quality set of goals, You should be thinking about what's the shortest, easiest, fastest path to get there.

And once I've got this this well balanced value versus complexity design ready on my desk.

Clearly, the role of the talent management team today has evolved behind be beyond designing the best design of the performance framework itself.


Where should I be spending my time in order to build these new habits and role out the new design?

Where should I be spending my time in order to build these new habits sustain these new habits. What is that role evolving role of everyone who's on the webinar today really look like? What's your advice and suggestion? In terms of how they should be thinking about rolling out the design.

Yeah. Ideally, they're wearing the performance coach hat at all times. And so from from goal setting through coaching, they're always working with individual leaders to say, is this process working for you? How did it go?

Let's talk about the goals that were set? How comfortable are you with these? Let's talk about the coaching process. That's starting up, you know, next month.

What are the tough conversations that you think you're gonna have to have? You wanna talk through those and and role play those in advance.

Making sure that you are worried that performance coach had. There's no better value that we can add as HR leaders than being that performance coach. Now we can be a shoulder to cry on when needed, but I'd much rather have ninety eight percent of your time being spent elevating performance and elevating the quality of leaders, and that means that one on one attention needs to be paid.

Have a minute, and we've got two questions left, Mark. So I'm gonna run them by you because this is I know you you're gonna give a very, very simple answer to to a certain thing that never seems to go away another one of those.


Crowdsourced stakeholder feedback: Anonymous to the individual or not anonymous to the individual?

Crowdsourced stakeholder feedback, anonymous to the individual or not anonymous to the individual.

Yeah. The size is pretty clear. If I know that it's going to have impact on your compensation, I'm going to shade the the truth and and be nicer to you. So I don't want you to get penalized.

For that reason, a lot of folks don't want to, give feedback if it's not going to be anonymous.

I also though think if we're crowdsourcing, I only wanna hear from people who have observed you in action. So crowdsourcing may be small c crowdsourcing, not capital c crowdsourcing, where I'm gonna reach out to eight people who I know you've worked with and ask some very specific questions about how you performed against either goals or against behaviors. So I think listening is great. But assuming the wisdom of the crowds is going to get you to a great result, not true, because some members of that crowd are more valuable than other members.

Mark, I'm pretty sure we can spend the entire day with questions, especially given, you know, the actionable answers we've been getting from you as is not a surprise of the last sixty odd minutes. But I'm gonna give the rest of the day back to you. Thank you so much for taking time out and so candidly responding to all of the questions that came in not just from me, but from our audience as well. I know I'm better off, and I have a clear plan and I had to implement or redesign something at mesh.

And I'm pretty sure everyone who joined today is better off from the last sixty minutes spent with you. Come thank you enough. Thank you so much, for doing this. Thank you.

Great to interact with all of you. Thanks for attending today, and, be well.

Thank you, everyone. See you on the next show.

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