The lack of coaching by managers continues to concern us. When managers fail to coach their direct reports, performance and behavioral issues are neglected and professional development doesn’t happen. The result is:

• Reduced productivity
• Failure to work at maximum potential
• Unhappy or insecure employees
• Unpleasant surprises at the year-end evaluation

In short, managers are not managing for success (our tag line).

When we ask managers about coaching, they tell us that they have neither the time nor the training to do it effectively. Our own sense is that many are conflict averse and don’t want to rock the boat. Knowing how to deliver bad news in a constructive way or managing difficult, emotionally charged situations is not easy. It takes training and the right tools.

So our message for leadership is train your managers, give them the tools, model the behaviors and hold your managers accountable for being effective coaches. How do you know when it’s happening? Use the correct diagnostic tools like 360° reviews. It will all come out. When we’ve coached managers in these skills, we’ve found significant improvement and a positive impact on direct reports. We may be able to help you.

The annual performance evaluation is one of the more controversial HR practices. It is an integral part of the performance management process. It assesses actual performance for the year for the goals and objectives set at the beginning of the year. It provides input for growth and improvement and it enables performance to be linked to the reward system (annual merit increases and bonus/incentive payouts).

The year-end evaluation has to happen and can be highly effective. A thoughtful appraisal takes time to prepare and deliver. Managers frequently have not given feedback, positive or negative, during the course of the year and dread coming to grips with issues they have studiously avoided. Employees also feel insecure, not knowing what unpleasant surprises are waiting for them.

The most fundamental principle of performance management is actually managing performance, which means ongoing reporting, coaching and feedback. It also means goals must be clear and mutually agreed on throughout the period. This eliminates much of the year-end angst. Factors that contribute to a more positive evaluation experience include a mutually convenient time, a comfortable place with privacy, sufficient time for an in-depth discussion and ensuring two-way communication.

On the controversial question of self-evaluations, our experience is that they create unnecessary adversarial situations. Simply put, it’s the manager’s responsibility to evaluate performance, not the direct report’s. Request employees to list their accomplishments in relation to the agreed objectives and what they consider to be areas for improvement. This eliminates the threat of “telling” them or “accusing” them of weaknesses. Most employees are quick to recognize where they need help and to respond constructively.

Important hint: Don’t wait until the evaluation process kicks off. Evaluate qualitative (as opposed to quantitative) objectives, which don’t require the year’s results, as well as core competencies, before year-end. Starting early removes much of the last-minute pressure, leaving time for thoughtful and objective evaluations. You may find our documentation and training programs for conducting performance evaluations helpful.

One of the more challenging and rewarding services PSG provides is in the area of executive coaching. Each assignment is unique, requiring creativity in approach and a recognition that answers often lie beyond the obvious.

Recently, we were asked to help a group controller in a large international company save his career. He had a brilliant financial mind and his rise through the ranks had been meteoric. Responsible for the preparation and analysis of quarterly reports to the CEO and Board of Directors, part of his job required him and his department to work with the business units in processing 47 different sets of financials.

Diagnostic discussions revealed that executives at the business units perceived him as an ambitious, driving and self-serving, single-mindedly focused on his own advancement to the exclusion of all others. They also experienced situations where they were blindsided and caught “doing things wrong.” In short, there were no relationships and no collaboration.

At the same time, we found a man bored with the mundane and, in his mind, ten steps ahead intellectually of his colleagues and direct reports. There was also no recognition of the need to provide customer service to the operating units that supplied the quarterly numbers. The resulting attitude of his department was demanding, critical and uncompromising.

His management style and attitudes were poisoning the work environment, and it was obvious, without intervention, his future with the company would be derailed.

Our findings required a shift from the more conventional coaching role related to management style to the broader spectrum of issues. The outcomes were as follows:

• The controller’s recognition of the issues and his wholehearted commitment to move rapidly to address them;
• Successful efforts to build collaborative relationships with the presidents and staffs of the business units;
• Resolving system problems in the department;
• A shift in focus by the department to provide quality customer service and facilitation, as opposed to demands;
• Increased focus on the basics of performance management in terms of reporting and accountability, ongoing feedback and coaching, and addressing issues raised by direct reports and department professionals.

Following an extremely intensive coaching relationship, there was a dramatic turnaround in the perceptions of colleagues, including the HR department which was tracking progress.

The impact on the controller? While the changes are still a work-in-progress, this coaching initiative has put his career back on track with favorable implications for the business units and prospects of greater effectiveness, efficiency and improved morale within his own department.

There are numerous similar situations in most companies in various functional areas. It doesn’t have to be in accounting. If you’d like to chat about these kinds of challenges, please don’t hesitate to contact us.

Here’s a short exchange that might strike a responsive chord.

John: Michael, I guess we’re meeting because your manager told you that you need an executive coach.

Michael: I’m certainly under pressure. I’ve been stretched incredibly thin and I’m just not coping as effectively as I’d like.

John: What’s the problem? Not enough resources? The wrong priorities? Too much into the details and not watching the big picture?

Michael: You know, it’s a strange thing. I’ve had all this responsibility pushed onto me with limited resources. I ask for help, get very little and I’m knocking myself out.

John: Did you ever get any feedback that it’s working, or more to the point, what’s not working?

Michael: Well, it’s really confusing. I got an “exceeds expectations” in my last performance evaluation a few months back and my highest incentive payout ever. But now, all of a sudden, everything seems to be going wrong. Plus, I haven’t had any direct feedback from my manager.
John: But you know that it’s not working, right? You don’t feel good about your work, you’re always scrambling, and you and your direct reports aren’t delivering.

Michael: Yes. It would be nice to get a straight answer from my manager and to be clear about what he’s not happy about. Some direction would also help.

John: Part of the success of this coaching program will be better, more focused, communication between you and your manager and your improved ability to manage up. Also, we’ll review in-depth the competence of your own management team and determine what you need to do to strengthen their skills. As long as your department has limited bench strength, you’ll never avoid getting into the weeds. Competent people will get the work done and free you up to focus on the more strategic issues and work more effectively with your peers.

Michael: Let’s do it!

The lesson from this conversation: Get managers to confront the issues! A good coach will do that and more, including, in this case, helping Michael’s manager manage down more effectively.

PSG has experienced, mature coaches to assist clients in navigating through these situations. We also provide the essential feedback through our 360o reviews to enable managers to know exactly how their direct reports, peer managers and even customers perceive their management and leadership styles. PSG also provides training for managers in coaching skills and managing with emotional intelligence,

The 360 Review, if managed properly, is one of the most powerful diagnostic tools for a manager’s professional development and for upgrading management practices in general.
The question is how to establish credibility and trust in the process. Here are some tips based on our years of experience in successfully conducting 360s:

• DON’T link the reviews to performance evaluations and therefore dollars. You’ll damage the integrity of the process.
• Build the rationale entirely around professional development.
• Emphasize the need for the individual’s responsibility to work with the findings and the availability of resources to support these efforts.
• Use external consultants to assure reviewers and reviewees of independence and confidentiality.
• Communicate effectively. Tell the reviewees why you’re doing it, the process, the respect for anonymity and the opportunity to learn.
• Give sound guidelines to the reviewers, indicating the need for objective and constructive feedback.
• Ensure the review instrument is designed to address management style issues specifically relevant to your organization and culture.
• Address the major issue of who gets the results. In some organizations, it’s only the reviewee. In others, higher levels of management and HR also get the results. (PSG takes a middle course. We believe there is mutual accountability and recommend the reviewee’s manager receives a one-page summary of results by competency category with relevant themes and is accountable for managing the direct report/reviewee through his or her professional development needs.)
• Make sure feedback is prompt and preferably given through an independent coach, typically from the consultants conducting the 360s.
• Ensure the reviewee provides the manager with a summary of plans to address issues raised for discussion about the “how.”
• Ensure you get a consolidated report by line item to identify training needs of your organization.
• Ensure that 360s are conducted for coaching assignments. The perceptions of the coachee are precisely the wrong way to go! The whole point is what others think!

Follow these tips and with our help, if you need it, you’ll be well on the way to a successful 360o review process.

Why do managers forget to give the positive feedback that motivates their direct reports and gives the necessary encouragement to stay motivated? They’re busy, pre-occupied, but mostly, they just take things for granted — it’s part of the job; it’s expected. However, people like to know where they stand, like to know that when they make the effort or think of something creative, it is appreciated.

Here are some questions to think about, which may help managers recognize when and how to respond:

• When someone does something special or beyond the call of duty, is there a special thank you or something special like dinner-for-two or tickets to a ballgame or even a weekend away?
• When someone works night and day to get a report done or an assignment completed, do you simply nod and ask him to leave it on your desk?
• When you’ve coached someone on a particular behavior or talk, and she does it right or almost gets it right, do you reinforce the behavior with words of encouragement?
• Do you wait until the end of the project to tell someone that he’s done it well or do you provide ongoing positive feedback to keep him motivated?
• When someone simply does what she’s meant to do, do you say anything?
• Or when you praise someone for something done well, do you also pick on some minor issue that really doesn’t matter?

And a few reminders:

•  Even a small “thank you” goes a long way.
• When giving praise, make it specific and make it related to the impact of a specific action or behavior and not a throwaway generalization.
• Keep praise in proportion to the action or behavior. Don’t give phony praise. Your sincerity becomes dubious.
• Don’t overdo the praise for an individual in front of team members.
• And, finally, give praise throughout the year. Don’t wait for the annual performance review!

In recognizing the significance of emotional intelligence, Daniel Goleman’s pioneering work, Working with Emotional Intelligence, has spawned an industry of consultants and coaches. This is appropriate! Research has shown that productivity and performance increase dramatically in control groups where managers or front line supervisors are trained in emotional intelligence skills.

Perhaps the most compelling aspect is that the skills and behaviors required to demonstrate EI are not rocket science. They are pragmatic, common-sense concepts that are easily understood and easy to implement. In fact, Goleman emphasizes that these behaviors require practice and continue to improve as they become an integral part of the way people manage relationships both in the workplace and in their personal lives.

The essential EI skills are as follows: self-awareness, empathy, self-regulation, social skills and social awareness. Recognizing the impact of one’s emotions, moods and actions on others, thinking first to avoid one’s natural (and often justifiable) response, and the ability to empathize by putting oneself in another’s shoes are the essence of emotional intelligence.

The applications for these skills are numerous. Managers coaching their direct reports or confronting poor performance have ample opportunity for constructive use of EI. Team members work more effectively together when utilizing EI skills. Call center representatives or receivables collection clerks are significantly more effective when demonstrating higher levels of EI. And, as Goleman, points out, great leaders exhibit high levels of emotional intelligence.

If your leaders are unaware of the need for EI, you will make a valuable contribution by bringing it to their attention.

PSG recently conducted a training program at a Supervisors Conference in Cromwell, CT, held by the Connecticut Business & Industry Association (CBIA). After attending the program, Dilza Hawkins of Laticrete International commented: “Thank you for a wonderful seminar. The examples and topics clearly illustrate real and everyday situations that so often have negative outcomes simply through lack of EI.”

Companies are becoming increasingly sophisticated in the performance management process with annual merit increases and incentive payouts linked more closely through formula-driven systems. This has been accompanied by a shift towards “metrics” (simply another word for measures). The old adage, “if you can’t measure it, you can’t manage it,” has gained increasing credibility.

We’ve listed some key questions that ought to be addressed when using metrics to evaluate performance:

• Do you use metrics for evaluating performance?
• Are employees accountable for delivering on specific targets?
• Do you pro-rate outcomes (% of plan) where the resulting percentage is meaningful (e.g., sales, production volume or, with not-for-profits, number of grants/sponsorships)?
• Do you have metrics that require qualitative evaluation (e.g., customer perception/satisfaction scores, budget performance)?
• Do you need metrics for your incentive plan?
• Do your metrics include productivity measures (e.g., sales per sales rep, GM% by product line)
• What do the metrics mean? Lots of activity measures with no productivity and no deliverables (e.g., number of invoices processed, number of sales calls made)?
• When are activity measures relevant?
• Have you gone overboard on metrics? (You have too many of them!)

We invite you to log on to our survey of performance management practices. After you complete the survey, we’ll share the results with you so that you can benchmark your practices against other companies. The URL is: http://www.zoomerang.com/Survey/?p=WEB227XZ6AQKCC

Remember:

• Qualitative performance objectives require criteria to answer the question: What does it mean to achieve this objective?
• Performance objectives are the “what.” Each performance objective requires an action plan to answer the question “How will you achieve this objective?”

If you need answers to any of the questions listed above, please don’t hesitate to call us.

Q: Is it possible that an incentive plan was good during robust economic times, but isn’t good when the economy is in serious recession, like now?

A: Yes. If the plan is inherently well designed, the big change that’s required is to reset performance objectives, particularly quantitative ones. These need to be realistic to avoid setting up employees for failure. Nothing is more demotivating than unattainable targets. The challenge is determining what’s realistic!

The conflict is how to reward and motivate performance vs. the cost of the plan. The next step, after changing the targets to realistic levels, is to lower the incentives, the amount that can be earned for meeting or exceeding performance targets.

We know a number of clients who have simply said “No incentive payouts! We just don’t have the funds!” If you choose to do this, just make sure that your top performers understand the situation, that you are seen to be fair and consistent, and that there is still an opportunity for them to be rewarded as your organization recovers.

Q: What are some other things a business might do when the economy is sour?

A: Here are a few options to consider:

• You can defer a portion or all of the incentive, contingent on the company’s turnaround.
• Sales spiffs or special incentives may motivate performance and would be a low incremental cost relative to contribution from the additional sales. This applies equally in the development area for not-for-profits, whose lifeblood is sponsorship funding.
• If you have a sales operation, let the weaker people go and concentrate your business in the hands of the top performers. You want your top producers to be making money.
• Make sure that your customer service infrastructure is working, from order taking through shipment, to avoid any excuse for customers to switch suppliers.

Q: Should you cut salaries?

A: You would want to do some other things first.

• Obvious courses of action are to reduce salaries proportionately or to reduce hours worked for line workers or hourly workers. However, a cardinal error is to make everyone bear the same proportionate burden. This is the time to eliminate weak employees, particularly those who have somehow sailed under the radar screen with insufficient reason to terminate. The fact is that reducing pay for top employees who consistently produce is inequitable. While you may have a sense of moral burden, it may be a question of your company’s survival to let the weak performers go.
• Once you have eliminated the weak employees and if the financial burdens are still significant, you may be forced to cut salaries and hourly time worked. However, it is important that your company is fully aligned and that all employees are motivated and focused on pulling together for survival. Some of our clients have reported how staff have willingly come together and truly displayed amazing teamwork, despite the hardships.
• As an aside, you may also use the opportunity to recruit some additional talent now available in the job market.

In summary, drastic times don’t always call for drastic measures in changing the structure of your compensation plan if you make use of some fundamentals of good plan design:

• Define a new set of objectives with realistic targets.
• Reduce targeted incentives to lower levels (% of incentive to base salary earned at 100% of performance).
• Set a relatively low threshold for payout against plan, to commence with low payouts, gradually increasing as performance moves to 100% of overall target.
• Continue to pay beyond targeted incentive when targets are exceeded.
• Add spiffs for special sales, products or customers.
• Ensure there are company goals to create a company drive for survival and success to keep all aligned and motivated. Company performance should index payouts.
• Reserve a portion of the incentive earned, creating a pool of deferred funds, contingent on the company returning to profitability and normal operations.
• Be transparent with your operating results.

It’s not easy keeping employees motivated during tough economic times.

In a ground-breaking project recently completed for the King Abdullah University of Science and Technology (KAUST), PSG put together a set of HR recommendations that focused on organizational structure, compensation, job families, medical, insurance and retirement benefits, special expatriate benefits, recruiting strategies, governance and other HR policies and procedures, including code of ethics. We also incorporated the notion of pay-for-performance – unthinkable in the world of academia. PSG was awarded the project over a top international HR consulting firm.

KAUST— check it out at www.kaust.edu.sa — is a brand-new institution of higher learning that will open in casino poland two years on the shores of the Red Sea in Saudi Arabia. The official groundbreaking was held on October 21. (Refer NY Times Article Saudi King Tries to Grow Modern Ideas in Desert) With a $20-billion endowment, the university will grant Master’s and Ph.D. degrees to students who will work with faculty on cutting-edge scientific and engineering research to benefit and drive the economies of the Middle East and other regions of the world.

In formulating its recommendations to a client some 10,000 miles away, the PSG team benchmarked HR best practices, visiting some of the top U.S. and foreign universities in the Middle East and combined those findings with relevant corporate and nonprofit best practices. The team also took into consideration the fact that Saudi Arabia was not a location that would immediately appeal to the top-notch faculty KAUST wanted to attract.

KAUST is now using our recommendations to set up its HR department and help recruit the people it needs.

To discuss how PSG can help you assess your current HR practices and operations, call us at (203) 987-3338.

The New York Times in this morning’s article (October 26th) said it all:
“Saudi King Tries to Grow Modern Ideas in Desert.” (To view, click on Saudi King Tries to Grow Modern Ideas in Desert ) We’re proud to say that our company, Performance-Solutions-Group, Inc. (PSG), was the HR management consulting firm that developed the recommendations for establishing the entire HR infrastructure.

Our team of talented professionals, led by Wil Brewer, President of PSG, worked closely with the senior executives from Saudi Aramco, assigned to manage the establishment of the university while full-time faculty and staff are recruited. During the course of this incredibly excitiing and challenging project, we visited some of the world’s top universities to benchmark best practices for development of our recommendations. This required visits to Dubai, Cairo and Ankara, contact with the Education City schools in Qatar and Imperial College in London, UK, and visits to MIT, Carnegie Mellon, Caltech and other top schools in the US.

PSG put together a set of HR recommendations that focused on organizational structure, compensation, job families, medical, insurance and retirement benefits, special expatriate benefits, recruiting strategies, governance and other HR policies and procedures. PSG was awarded the project over a top international HR consulting firm.

KAUST (check it out at www.kaust.edu.sa) is a brand-new institution of higher learning that will open in two years on the shores of the Red Sea in Saudi Arabia. The official groundbreaking was held on October 21, as indicated in the Times article. With an endowment of more than $10 billion, the university will grant Master’s and Ph.D. degrees to students who will work with faculty on cutting-edge scientific and engineering research to benefit and drive the economies of the Middle East and other regions of the world.

In formulating its recommendations to a client some 10,000 miles away, the PSG team combined the benchmark findings from the universities visited with relevant corporate and nonprofit best practices. The team also took into consideration the fact that Saudi Arabia was not a location that would immediately appeal to the top-notch faculty KAUST wanted to attract.

KAUST is now using our recommendations to set up its HR department and help recruit the people it needs.

To discuss how PSG can help you assess your current management practices and HR practices and operations, call us at (203) 987-3338. Please also visit our website at
www.performance-solutions-group.com or contact us at info@performance-solutions-group.com

Wilfred B. Brewer
President, Performance-Solutions-Group, Inc.