Blog

The team at McAdam King Business Psychology is passionate about all matters relating to busines psychology and maximising the productivity of all staff, thereby improving morale and retention. On this page you'll find our opinions on topical matters and business issues that we feel are worthy of attention. Do get in touch with us if you want to discuss any of these issues.

The End of 360 Feedback? 28/06/2017 08:45

In 2015 Harvard Business Review published a paper about the reinvention of Performance Management at Deloitte, one of the world’s biggest accounting firms. They have joined the likes of Adobe and Accenture in completely redesigning their performance review system. As a company who is always looking for new and innovative ways of managing performance this piqued our interest.

They spoke of plans to scrap the once a year 360 feedback that was currently in place. This came from the discovery that 58 percent of managers felt that traditional performance reviews did not serve their purpose. Furthermore assessing employees’ skills was found to be very inconsistent. 4,492 managers were assessed by 2 bosses, 2 peers and 2 subordinates. Worryingly it was found that 62% of the variance in ratings came from raters individual perceptions rather than actual performance, which accounted for only 21%. For example, if you are rating someone on their ability to engage with their co-workers, you are rating that person based on how important you think engagement is. As such the authors concluded …most of what is being measured by the ratings, is the unique rating tendencies of the rater. Thus ratings reveal more about the rater than they do about the ratee.

To combat this problem they developed a method of seeing performance more clearly; the performance snapshot. Instead of asking for multiple people’s opinion of a particular employee, they decided they only needed to ask an employee’s immediate team leader. In order to avoid these inconsistencies in ratings, they needed to start asking different kinds of questions.

Whereas individuals are often quite inconsistent with their ratings of others’ skills, they are very consistent with their feelings and intentions towards others. As such, they decided a total of four specifically worded questions, or statements, was all that they needed to monitor employees’ performance. They were:

  1. Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus [measures overall performance and unique value to the organization on a five-point scale from “strongly agree” to “strongly disagree”].
  2. Given what I know of this person’s performance, I would always want him or her on my team [measures ability to work well with others on the same five-point scale].
  3. This person is at risk for low performance [identifies problems that might harm the customer or the team on a yes-or-no basis].
  4. This person is ready for promotion today [measures potential on a yes-or-no basis].

 

The term ‘snapshot’ refers to the fact that performance reviews reflect that particular moment in time. Research found that around 2 million hours per year were spent on performance review cycles at Deloitte, most of which was spent discussing ratings rather than giving feedback to employees. By ditching the quarterly or yearly feedback cycles, feedback could be provided immediately after a project has ended and therefore provide real time, accurate feedback, as well as allowing more time for development and improvement. Then the feedbacks gathered over the course of a year can provide analytics on the learning and development processes of individual employees.

These are aided by regular staff check ins; weekly or fortnightly 15 minute conversations about how employees are doing and the progress of various projects. By making these check ins informal (no records are taken or documentation filled in) it avoids any feelings of dread which often come with performance reviews and focuses on building the strengths of employees.

A year later and Deloitte National Leader of People and Performance says the response has been ‘overwhelmingly positive’ with an uptake of 40,000 members of staff around the globe. Workshops and webinars to coach managers on the new system have been oversubscribed and most importantly Deloitte’s people are really enjoying the new process.

This blog post is referencing the article 'Reinventing Performance Management' by Buckingham and Goodall published in the April 2015 edition of Harvard Business Review.

Selection Moneyball 13/01/2017 02:35

The film 'Moneyball' tells the story of how the performance of a major league baseball team (Oakland A's) is transformed by the vision of Billy Beane, General Manager (played by Brad Pitt) to adopt new innovative methods for selecting a team. His decision to deploy the services of an economics major called Peter Brand and make greater use of player analytics to guide selection decisions not only delivered signficant performance improvements but changed the game. The story demonstrates the value of being innovative, setting a vision, persevering when faced with resistance, and making better quality decisions through the use of more objective data. Hitherto too many key decisions were being influenced by more subjective factors.  

There are clear parallels between the film and best practice in relation to selecting future talent. Research has shown that carefully designed robust selection methods (e.g. assessment centres; situational interviews; individual assessments) are more likely than most other selection measures to produce reliable assessment information which can be predictive of future performance in a role. Given the difference of 40-70% between high and moderate performers the potential uplift in productivity can be marked. Let's take a practical example of the potential value from improving a selection process for a given role:

Utility Analysis: extra value per employee per year  = (r x SDy x Z) - (C/P)
r=validity of procedure; times calibre of recruits (SDy x Z) minus cost of selection divided by proportion of applicants selected. 

"Worked Example: employer recruiting for a salary of £ 40,000, so SDy (standard deviation of performance) estimated at 70% of salary or £28,000; employer using a selection process within proven validity say r=0.45; people recruited 1 standard deviation above the mean for present employees, so Z = 1.  Consultancy costs are £1,000 per candidate. Of ten applicants, 4 are appointed - so P = 0.40". 

So extra potential from using reliable and valid selection method is: (0.45 x £28,000 x 1) - (£1,000/0.4) = £12,600-£2,500 = £10,100  per employee. Those benefits are even greater when the salary is greater and when one looks at multiple job holders or across an entire company. 

However, achieving better results are not guaranteed unless the selection process is well designed and professionally run i.e. designed using job critical competencies; grounded in exercises that are job relevant, and ideally where most noticeable differences in performance can be observed; and assessors are effectively trained.

Using robust selection processes won't always guarantee a 20 game running streak like the Oakland A's but it offers an effective way of making key business decisions more objectively and delivering better results. All too often a key way of driving increased productivity isn't taken; given the pressures of increased competition, and in many markets modest if any growth, can we afford not to show the bravery of Billy Beane and challenge historical practices and seek to optimise the effectiveness of our selection processes?   

Giving Difficult Feedback 10/10/2012 10:51

Giving effective feedback, and being receptive to receiving feedback, is a key requirement for any leader/manager.  As social beings our self-worth is fuelled by meaningful and mutually beneficial interactions with other humans. It's not surprising therefore that many business goals are heavily influenced by the quality of manager/leader interactions with their team and peers e.g. employee engagement, improving workforce productivity, retaining talent. Yet all too often this isn't a strength of many line managers/leaders, and even more concerning for the future organisational success is often a key development need.

This is particularly true when it comes to delivering difficult feedback.  Some managers/leaders struggle to give praise and recognise success or effective behaviours, but from my experience the desire to avoid giving what could be perceived as negative feedback is even more prominent. 

The first problem is delaying giving the feedback in the first place, in the hope that the issue will go away!  It rarely does; so immediacy is key. Acting quickly helps ensure the individual concerned can remember the actual behaviour in detail that you are talking about.  This enhances self-awareness, and makes subsequent stages easier when discussions move on to how behaviour should change. I see too many examples of managers/leaders sitting fizzing in their office, negatively effecting their own motivation, doing nothing to address the issue at hand, and when they finally do act can't remember most of the detail so end up delivering sub-optimal feedback. Moreover, when they have taken action it is often once the problem has got so bad they almost are forced into tackling the issue.

This leads on to the next stage: actually delivering constructive feedback.  It's vitally important for any feedback to be specific about 'how' the individual receiving feedback actually behaved - ideally linked to an organisational competency framework -  and that feedback is balanced  i.e. giving credit/praise for effective parts of work performance as well as highlighting areas that need to improve.  All points raised should be objective - with hard evidence to back-up points. Avoid subjective comments like 'I think.. I feel'; this is not the time to vent your emotions or to major on intuitive thinking.  Also this should be a shared discussion - don't present your evidence as indisputable facts; invite contributions from individual on their perceptions about the effectiveness of their current behaviour. 

The final stage of the process is making sure something actually happens to change the situation, and the majority of the conversation is future focused. All too often good feedback is given but isn't followed by getting down the detail about how performance will change.  Firstly record the feedback in some form (I use an electronic system where all feedback is recorded and visible against the relevant competency; this is visible to myself and relevant team member. Along with positive commentary and the individual in question own self-recorded notes).  The next step is jointly agreeing what behaviour needs to change and more importantly 'how' it will change. Absolute clarity is needed about new behavioural expectations, and check for understanding. Turn this shared commitment to change in to a SMART objective and arrange relevant follow-up and support. The latter often involves reviewing the individual's personal development plan and making adjustments as needed.

Those managers/leaders confident in taking early action and having these difficult conversations, whose self-esteem is no longer threatened by their lack of skill being exposed or thinking they will no longer be liked by the person in question, will more often than not reap the reward in a more productive and engaged team/workforce. 

Personality and Management Failure – exploring the ‘Dark Side’ 09/09/2012 10:46

Research has shown that firm’s financial performance is linked to the degree to which it followed “well-established practices” in the areas of operations, performance management and talent management (e.g. Bloom & Van Reenan, 2007 study of 732 manufacturing companies).  The economic literature also shows that good management enhances organisational performance - e.g. cost of management derailment estimated in studies at around half a million pounds to £1.5 million.   

Moreover, published estimates of the base rate of management failure range from 30-67%, with an average of 50%. This suggests up to two-thirds of managers will not shine and at least half will eventually be fired (or moved). Research also suggests that most CEO’s fail primarily due to their unwillingness to remove ineffective managers, and even more significantly a failure to admit they have made bad staffing decisions. 

Evidence has been accumulating since Bentz’s (1985) 30 year study into the reasons for management derailment, with attributes such as a lack of interpersonal skills and  strategic awareness, a failure to deal with conflict, avoiding making tough decisions, and low self-awareness featuring prominently as key reasons for management derailment.  Problems with interpersonal relations and adapting to change have become even more prominent in recent years given the pace of organisational change. Most studies of managerial failure also point to a lack of personality fit with role requirements. These aspects of personality disrupt the interpersonal relationships needed to build a team and corrupt the judgement needs to guide its performance.

Consensus has been widely reached on the five-factor model (FFM) or the big five elements of personality (i.e. extraversion; agreeableness; conscientiousness; emotional stability and openness to experience). These five factors of personality show people at their best. the bright side of personality; dysfunctional attributes of personality identified by Bentz and others characterise people when they are behaving badly…the dark side of personality (Hogan & Hogan, 2001). Both sets of characteristics are within the realms of normal personality. 

Everyone has a bright side and a dark side, and many aspiring managers have an attractive bright side that hides their dark side. Dysfunctional dispositions or the ‘dark side’ of personality erode the effectiveness of managers and executives over time. The Hogan Development Survey (HDS) has 11 scales drawn from research into management derailment: excitable (or potentially volatile); sceptical (mistrustful); cautious (or potentially risk averse); reserved (aloof or uncommunicative); leisurely (or passive aggressive); mischievous (or potentially arrogant/over-confident); bold (or potentially manipulative); colourful (or dramatic, attention seeking); imaginative (eccentric); diligent (perfectionistic or picky); or dutiful (overly dependent). Persistently engaging in these behaviours will undermine a manager’s ability to lead a high functioning team.

The bottom line is that bad management costs money and poor selection decisions lie at the root of many of these failures. Therefore gaining insight into an individual’s behavioural preferences, both bright and dark, can help avoid poor management hiring decisions. A process that can be further enhanced by a well designed selection process assessing competence in critical work situations such as coaching, performance management, budgeting, or strategic planning.

This blog is influenced by Hogan’s (2009) paper on management derailment.

 
Stacking the Selection Odds in Our Favour 27/10/2011 10:43

Most of us would agree that it's hard to beat a bookie! Their comprehensive analysis of the probabilities of different outcomes generates odds that make it very difficult for the average punter to get the better of them.  Even the select few who out smart the bookie end up being remunerated at the expense of other punters.  
In other situations like going to the Doctors we are unlikely to ask for the 2nd or 3rd most effective drug to treat our condition/ailment, readily accepting this is often a false economy.  We will generally push for the treatment that has the highest probability of success. 

Yet when it comes to selection, all too often undue faith is put in ineffective methods (e.g. CV, reference check, unstructured interview) rather than investing in more robust approaches, such as assessment centres, that have been shown over decades to make it significantly more likely to identify a winner (or this case a potential top performer). 

With differences in productivity of 40-70% between top and moderate performers can organisations afford not to ensure all work processes, including selection, are world class. Isn't it about time we all took a lesson from the bookie and stacked the odds in our favour when making important decisions.