Poking through 13+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

5 years ago s+b created a video based on brain science to show how and why people often reacted negatively to performance reviews.

Ducks in a Row: Brains and Performance Reviews

Performance reviews are a frequent subject of management gurus, the media and pundits of every variety, myself included.

More recently the focus has been on what’s wrong with reviews and how they often act as a demotivator.

A new article in strategy + business uses brain science to look at exactly why and how reviews demotivate.

YouTube credit: strategy + business

A year later GE scrapped its notorious rank and yank review system as implemented by then-CEO Jack Welch. A year after that Amazon followed suit. There are still plenty of companies that use the system — whether they admit it or just change the name. Individual managers are also guilty of it no matter their company’s attitude. Be it company wide or individually the effect is the same — higher turnover, lower productivity, decreased engagement, and increasing recruiting costs.

Read other Golden Oldies here.

A Sea Change for Annual Reviews

Years ago I wrote about how to make annual reviews painless and effective — more a review of the  year’s accomplishments and setting goals for the coming year than a critique of work past.

It worked because mini-reviews, coaching and conversations during the year were frequent.

Typical annual reviews were fraught with fear and loathing.

For decades, General Electric practiced (and proselytized) a rigid system, championed by then-CEO Jack Welch, of ranking employees. Formally known as the “vitality curve” but frequently called “rank and yank,” the system hinged on the annual performance review, and boiled the employees’ performance down to a number on which they were judged and ranked against peers. A bottom percentage (10% in GE’s case) of underperformers were then fired.

Jack Welch championed a lot of very bad stuff (e.g., work/life balance, HR), but the negativity of rank and yank is near the top, if not number one.

(As for GE’s stellar results keep under Welch keep in mind that businesses like GE Financial practically printed money until it all blew up.)

But times are changing.

According to Raghu Krishnamoorthy, the longtime GE exec in charge of Crotonville (GE’s in-house management school) “Command and control is what Jack was famous for. Now it’s about connection and inspiration.”

And to that end, GE has developed a new in-house app that basically does what I and others evangelized a decade and more ago.

The new app is called “PD@GE” for “performance development at GE”  There’s an emphasis on coaching throughout, and the tone is unrelentingly positive. The app forces users to categorize feedback in one of two forms: To continue doing something, or to consider changing something.

If you don’t have the luxury of an app you can simplify it even further.

• • Care about your people.
  • Interact with your people.
  • Talk with your people.
  • Challenge your people.
  • Help them grow and advance — even when that means they leave for a better opportunity that you can’t provide.

Read what GE is doing and adapt it to your own group — whether your company does of not.

Image credit: Mark

Poking through 11+ years of posts I find information that’s as useful now as when it was written.

Golden Oldies is a collection of the most relevant and timeless posts during that time.

It’s said that money is the root of all evil, but there are plenty of evil people with no money and lots of wealthy people who do enormous good. I think it’s more accurate to say that greed is the root, since people will do anything to satisfy it. And often, what they do is perfectly legal — but legal doesn’t mean either ethical or moral.

Read other Golden Oldies here.

I’m no happier about the AIG and other bonuses paid to screwed up Wall Street banks, but I’m not sure why any of us are surprised.

“In the largest 25 corporate bankruptcies between 1999 and 2002, while hundreds of billions of dollars of investor wealth and over 100,000 jobs disappeared, the Financial Times found the “barons of bankruptcy” made off with $3.3 billion.”

Giant compensation packages, guaranteed bonuses and platinum parachutes are excused by Boards and executives as necessary to attract the “best and brightest,” but here’s what’s really going on.

The ‘names’ demand outsize compensation/stock options/guaranteed bonus/etc. in order to validate their ‘brand’.

Those responsible for hiring not only meet the demands, but even exceed them in an effort to attain or sustain the company’s reputation as a better home for ‘stars’ — the more stars you have the greater the bragging rights — mine’s bigger than yours in high school locker room talk.

Now let’s consider the folly of this attitude.

Those hiring often seek a name brand in the mistaken belief that the brand comes with a warranty that guarantees good results.

But no matter who you hire you’re actually paying for their past performance, which is always influenced by

• • circumstances—boss and company positioning in its market and industry
  • environment—culture and colleagues;

and let us not forget that minor factor

• • the economy.

The hiring mindset is that everything the brand accomplished was done in a total vacuum and dependent only on the brand’s own actions, therefore changing every single surrounding factor will have no impact on performance.

Put like that it sounds pretty stupid, doesn’t it.

This is one of the prime reasons that so many CEOs bring their ‘own team’ over when they move, as do managers all the way down the food chain—they know they didn’t do it alone.

CEOs aren’t like movie and rock stars whose very names draw consumers into spending money—nobody ever bought a product from GE because Jack Welch was CEO, nor do they carry Jobs iPods—so why pay them that way?

Moreover, assuming that performance occurring during an expansion is a valid yardstick for performance in general, let alone a downturn, is sheer idiocy.

You have only to remember the difficulties faced by people whose management skills were honed between 1991 and 2000, the longest expansion in our history. When the recession hit in March of 2001 they had no experience whatsoever of how to drive revenue or manage in a down economy.

That recession and the previous one in 1990 lasted only 8 months each. The longest recession we’ve had was 2 years, January-July 1980 and July 1981-November 1982, and that one had a 12 month break in it. This means there are a very small number of managers with any actual experience managing in anything even close to what’s happening now.

The current recession officially started in December 2007, so it’s already 15 months old and the end isn’t in sight.

What experience makes these folks the ‘best and brightest’ for today’s world?

Just why the hell are companies still guaranteeing oversized compensation and exorbitant exit packages when now is definitely the time to pay for future performance—no guarantees.

Image credit: flickr

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here.

A few years ago I wrote that good bosses need to be part shrink in order to deal with imposter syndrome and real programmer syndrome (for lack of a better term).

Now, there’s a third mental quirk to add to that list; call it high performer expectations syndrome.

Founders have notoriously high expectations of themselves and everyone they hire.

Those expectations are great motivators as long as things are going well.

However, those same high expectations, both external and internal, can have a negative effect on the best people — including the founder.

What we found essentially is this: When the going gets tough, favorites are more likely to quit. […]  When people walk in with high expectations and they begin to falter and experience setbacks, they have two options. They could persist and try to grind it out, or they could take the easier route that might preserve their self-esteem, be less embarrassing, and exit.

Founders and other high-performance team members aren’t likely to quit, although massively hyped stars are another matter.

Most high performance people know they are fallible, so the hit to their self-esteem is more internal and they are less likely to personalize public embarrassment — both attitudes that usually respond positively to “we’re all in this together” team support and coaching.

Stars, however, typically have a strong belief in their infallibility and a high sensitivity to public embarrassment — not a combination that lends itself to team support or coaching.

Good bosses take care of their people and themselves.

They also meld high expectations with a strong culture; one that makes glitches and even failing a learning experience that leads to both company and personal growth.

Image credit: HikingArtist

Yesterday we considered the error companies make by basing offers on salary history, instead of future performance.

That may be about to end, at least in the outliers of Philadelphia and New York City.

In short, the law prevents employers from asking candidates about their current/previous compensation.

Candidates can volunteer the information, but can’t be asked for it by the company or any recruiting process, including third parties.

Doing so opens them up for lawsuits.

Ignoring implementation and legal hurdles, what does it really mean and why do I see it as such a positive?

Primarily because I don’t believe that either performance history or salary history has a damn thing to do with the value candidates bring to their next job.

Companies need to have a hiring range for each opportunity based on the impact that specific position should have on the company’s success.

The low end is based on average performance, while the high end is the result of an over achiever in the position.

The offer should be the highest number within the range based on the hiring manager’s evaluation of the candidate in light of two strong constants.

1. 98% of star performers become stars as a function of their management and the ecosystem in which they perform.
2. People who join for money will leave for more money.

Merit raises are then given based on that individual’s actual contribution to the company’s success, as opposed to some number from HR.

This puts most of the responsibility on the hiring manager — exactly where it belongs.

Image credit: gardener41

A couple of years ago, in a post citing Robert Sutton’s comments on scaling, I said,

A company isn’t an entity at all. It’s a group of people all moving in the same direction, united in a shared vision and their efforts to reach a common goal. (…)Yes, it’s the people. It has always been the people all the way back to our hunter ancestors.

And it will always be the people.

Years before that I wrote about creating a Good Culture in a Toxic Environment.

My e-buddy Wally Bock says bosses need to have a duel focus to be truly successful.

One is to accomplish the mission, make your numbers in business. The other is to care for your people, keep them safe and help them grow.

To that end, I thought I’d share Wally’s review of a book offering guidance on carrying them out.

Book Review: Winning Well

There is nothing wrong with Marissa Mayer’s compensation.

Yahoo! Inc.’s Marissa Mayer was the country’s highest-paid female CEO. The 39-year-old was awarded $59.1 million in 2014, making her No. 3 among the eight women on the Bloomberg Pay Index…

However, there is a lot wrong with Marissa Mayer’s performance.

The problem is, as As Wally Bock succinctly said last year, “We live in a world of microwavable answers and quick fixes” — and bosses see stars as quick fixes,” and Yahoo’s board thought Mayer the star would quickly fix Yahoo.

Hiring stars is often a function of bragging rights, better known as “mine’s bigger than yours.”

But in a world where where people want star status in order to brand themselves, boards and bosses would do well to remember that they don’t come with any kind of money-back guarantee — in fact, they more often come with some kind of golden buyout.

Most star performers are a product of the ecosystem in which they perform. Change the management, culture, especially culture, or any other part of that ecosystem and stars may fall.

And never forget that that ecosystem is permeated by that insidious little detail that impacts success and is so often ignored in discussions — the economy.

As everyone knows, Yahoo isn’t Google, so…

A rising star at Google has become a falling star at Yahoo.

And a lesson learned for thinking bosses at any level, especially those responsible for hiring  executive and strategic talent — the past is no guarantee of the future.

Flickr image credit: Tim Spouge

It’s amazing to me, but looking back over nearly a decade of writing I find posts that still impress, with information that is as useful now as when it was written. Golden Oldies is a collection of what I consider some of the best posts during that time.

This particular Oldie is one of my favorites; probably because it poked such large holes in all the giant egos back in 2000. And it should do the same thing to the even larger egos walking around today. Read other Golden Oldies here.

Gotcha! I see all you readers twisting your arms in order to pat yourselves on the back because you know that even though you could improve at least you’re not incompetent.

Are you sure of that?

Way back in 2000 I read about research that stuck in my mind, an unfortunate reminder to me that I’m not nearly as good/smart/interesting/funny/etc. as I’d like to think I am.

It was done by Cornell’s Dr. David A. Dunning, who describes his research in the field of social psychology this way, “My social psychological work focuses on two related phenomena. First I am interested in why people tend to have overly favorable and objectively indefensible views of their own abilities, talents, and moral character. For example, a full 94% of college professors state that they do “above average” work, although it is statistically impossible for virtually everybody to be above average. Second, I am interested in how people bolster their sense of self-worth by carefully tailoring the judgments they make of others. That is, people tend to make judgments of others that reflect favorably back on themselves, doing so even when the self is not under explicit scrutiny.”

According to the research, “most incompetent people do not know that they are incompetent. On the contrary. People who do things badly are usually supremely confident of their abilities — more confident, in fact, than people who do things well…One reason that the ignorant also tend to be the blissfully self-assured, the researchers believe, is that the skills required for competence often are the same skills necessary to recognize competence.”

Isn’t that encouraging.

How bad is it? “Asked to evaluate their performance on the test of logical reasoning, for example, subjects who scored only in the 12th percentile guessed that they had scored in the 62nd percentile, and deemed their overall skill at logical reasoning to be at the 68th percentile.”

However, since the skills that make you competent are the same that you use to evaluate your ability, if you’re good at something you’ll know, right?

Wrong! “Unlike unskilled counterparts, the most able subjects in the study were likely to underestimate their competence.”

So, damned if you do and damned if you don’t.

The research did find that, “…a short training session in logical reasoning did improve the ability of low-scoring subjects to assess their performance realistically…”

But if you don’t know, why would you get the training? Or should you get it as preventative medicine.

Or maybe, just maybe, you should actually start listening to those around you and really hearing what they’re saying—even if it’s not complimentary, makes you uncomfortable and you don’t agree.

It doesn’t mean that “they” are always right, but if multiple people are all saying (by word or body language) the same thing, it’s very likely that they know something about you that you don’t know.

Listen, learn, think, change.

Performance reviews are a frequent subject of management gurus, the media and pundits of every variety, myself included.

More recently the focus has been on what’s wrong with reviews and how they often act as a demotivator.

A new article in strategy + business uses brain science to look at exactly why and how reviews demotivate.

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On another front, it’s Leadership Development Carnival time and the offerings are excellent. Click on over and I’m sure you’ll find information that will be of active use both at work and in your non-work life.

YouTube credit: strategy + business

A Friday series exploring Startups and the people who make them go. Read all If the Shoe Fits posts here

Today is Valentine’s Day and a good time to consider how best to show your love for your team.

Basically, there are two ways bosses show their love, either with cool tools or magic minutes.

Think about the old saying, “give a fool a tool and you’ll still have a fool,” which is frequently forgotten in our tech-happy world.

For discussion purposes, the term ‘fool’ denotes an underperforming person or group.

Showing your love by showering them with the latest, greatest technology or apps is unlikely to turn the fools around.

That’s where the magic minutes come in, because the majority of fools really aren’t fools.

They’re more like lost souls looking for a path to productivity, personal satisfaction and success.

Most people want their company to succeed, want to do their work well and want to feel good about what they do.

And whether you like it or not, when you chose to found a company you took on the duel roles of leader and manager.

That means your real job is spending whatever minutes are required to guide them to the path out of fooldom and into becoming an appreciated member of a powerful team.

It’s also one of the most important and satisfying experiences you will ever have no matter what happens to your company.

Image credit: HikingArtist

The dreaded annual review is on us once again, so I rounded up some great information to help you deal with them.

The second most important thing to know about performance reviews is that using software to write them creates a totally inauthentic experience for your people.

Number one-and-a-half is a great commentary on the stupidity of waiting to apply a retention tourniquet until an employee is frustrated, disgusted and ready to leave.

The most important thing to know about performance reviews is that they should be ongoing conversations throughout the year.

Most managers understand the need to help their people grow and do their best to give them timely feedback—although some do a better job than others. But even the managers who are good at it have trouble when it comes to providing feedback to their top performers, even though they are often the most eager for challenges and growth—neither of which can happen without candid feedback.

Image credit:  MykReeve on flickr