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Sunday, 26 June 2016

Annual Appraisals Time? Ditch Them For a One-to-One!

I seem to have developed a reputation in my Vistage CEO peer group for being somewhat averse to the concept of the annual appraisal and the subject has raised its ugly head yet again this week.
The prestigious Forbes business magazine as long ago as May 2013 ran an article headlined “Time To Stop Performance Appraisals?” and making the point as follows:

“Why the process must change.

Why do companies have annual reviews in the first place? They are an artifact from traditional top-down organizations where we had to “weed out” the bottom performers every year. By forcing managers to rate people once per year we can have annual talent reviews and decide who gets more money, who to promote, and who to let go.

Coupled with the performance rating is the “potential” rating, which tries to capture an individual’s potential to move up two levels in the organization (the traditional definition).

This approach is based on a philosophy that “ we cant totally trust managers” so we’re going to force them to fit people into these rating scales. And in many companies (around 20%) there are forced distributions, which mandate that some percent of employees are rated at the bottom and only a limited percent can be rated at the top”.

There is no question that many businesses are now looking seriously at the validity of the annual appraisal and especially if it is linked to remuneration.  The optimum method is to shift the date of the appraisals to six months before or after the salary review so that they are not linked but try to explain that to the people.

If we only formally consider the performance of our people on an annual basis and make decisions based on that then it can be compared to running the business on the annual financial results only.

If we insist on checking the financial performance of the business on a monthly basis then why is it that we formally assess our major asset, the people, only annually?

Businesses are run using sensible monthly management accounts so that the leadership knows the present position ideally with some trend analysis.   Doesn’t it seem sensible therefore to assess the performance our people in a comparable way?

Another point about the annual appraisal is that many bright people have evolved systems that are claimed to measure the performance of the individual.

In the majority of cases this “measurement” can be construed solely as the opinion of the appraiser and that can bring with it a raft of personal likes and dislikes that are not necessarily relevant.  Indeed they can be biased.

The ideal solution is to have formal monthly one-to-ones with the team members.  These one-to-one meetings should be scheduled for both parties so that they become a natural part of the working month.  These meetings must be considered sacrosanct with no excuse accepted for missing them.

The agenda should be the individual’s call rather than the leader.  At the same time the leader must try to achieve a level of trust that will encourage the team member to open up and say what is possibly being unsaid.

If that level of trust is attained then the likelihood is that much can be achieved with the team member beginning to accept that he/she is being listened to.  Essentially if an idea is put forward and action is taken as a consequence it should be visible.  There is nothing so demotivating as suggesting perhaps a solution to a problem and nothing being done about it.

Monthly one-to-ones take time and the results can amply justify the care being demonstrated to the team member.  The system needs to be a stated part of the values of the business; that we listen to our people and involve them at all levels.  We can’t achieve that only once a year.

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Sunday, 19 June 2016

Seven Great Tips To Keep Your People Happy!

In these days of a genuine shortage of people with required skills it becomes even more important to make sure that the best people in the business are happy, motivated and productive.  It is a delicate bloom that we try to cultivate and it demands constant application on the part of the leader and indeed the leadership right through the business.

One of the nice things about social media is that just occasionally, very occasionally, we come across a useful post that can really resonate with what is currently happening.

I picked up such a little epic a couple of weeks ago that is based on the need to retain talented people in the business and listed those attributes that encouraged them to stay.

Not necessarily in the order of importance or validity they are as follows:

  • Well paid

I am just a little unsure about this one. Certainly people must be remunerated at a level that satisfies their needs so perhaps it should be read as “acceptably” or “appropriately”.  It is of prime importance and must be monitored to make sure that they are not falling behind in the salary market.

  • Appreciated

It has been said that one of the most motivating factors in business or in life for that matter is to tell someone that something they have done is really appreciated.  Indeed expand it to include everything that they do and think of someone you know to whom this apples.

  • Listened to

One of the things that I have learned over the years of being chair of Vistage peer groups is that we become professional listeners.  People want to feel that their opinions and thoughts matter and to propound them to someone who is genuinely interested and demonstrates it by listening is again motivational.  It indicates that their opinions matter.

  • Promoted

Again this is not always the case.  While we all have people in the business who want to know what their career path looks like, implying what are the possibilities of promotion, some people much prefer to do a great job and leave it at that, happy in what they are achieving without the ambition to change. We need to cultivate both types.

  • Involved in decisions

Just ask yourself, how can people grow in stature in the business if all decisions are taken at the top and then merely passed down to them for action?  Decision-making should be encouraged at every level throughout the business and even if one or two go awry it is not a matter for concern but should be looked upon as an opportunity to learn.

  • Mentored

This is possibly the most important factor. One of the leader’s primary functions is that of coach and this applies particularly where an entrepreneur has started the business.  I have heard so often the cry that “they don’t seem to understand what is needed” when what is needed is great one-to-one communication.  Rid yourself of the “Do you understand?” syndrome and try the trick of paraphrasing instead.  It really does work.

If the leader finds that people don’t seem to understand then it is up to the leader to coach and mentor them to help them to learn and grow.

  • Challenge

On the face of it this is a surprising factor.  We find in Vistage that our members actively want to be challenged and can lose interest if they aren’t.  Obviously challenge needs to be effected positively rather than negatively and with the right people just watch them blossom.  It demands a level of imagination and that is a compliment to the challenged.

These are simple criteria and taken as a total package can result in great, enthusiastic and motivated people who want to stay in the business because the like being in the business.  Make them an important part of the values of the business.

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Sunday, 12 June 2016

Business Could be Doing Better? Develop a Winning Mentality!

Vince Lombardi, the legendary and very successful coach of the Green Bay Packers football (American) team was almost as legendary for his long list of pithy quotes.  One of them that I like very much is:

“Winning can become a habit.  Unfortunately so can losing”

He could easily have replaced “winning” and “losing” with “positivity” and “negativity”.  Both of them can be catching.

One of the drivers in transactional analysis is the “Be Perfect” drive which can be very painful simply because perfection as such is unattainable.  This driver can make an individual both frustrated and dissatisfied both of which are pretty unhealthy.

I recall a colleague telling me that when asked how her day had gone, would reply:

“If I had done something different, which I thought about after the event, it would have been much better”.

Her husband, cleverly, would say:

“Before you decide what didn’t go well, tell me what did go well”

Again, on one occasion I was waiting for one of the members of my Vistage CEO peer group in a hotel where we were meeting for his monthly mentoring session.   As he came through the door still on his mobile phone, I could see that he was in some turmoil.  He sat down and started to bang on about how difficult people could be and what a problem he had and etc, etc, etc.

I stopped him, said that what I wanted to hear was what had gone really well since we had last met and when he had finished telling me that, then he could tell me about his problems.

After some thought and telling me the good news, I asked about his difficulties that had seemed almost overwhelming when he came in.

“Oh, nothing of any significance really” he said.

We had a Vistage speaker from the USA who started the session by saying that the word “but” would be banned from the day and if anyone used it then he/she would be stopped short.

It was quite extraordinary how this seemingly minor adjustment had such a remarkable effect in keeping the level of positivity high.

Someone once said to me that if we use “but” then everything said up to then was nullified. Listen to any conversation and check that one out.  Vistage speaker John Cremer demonstrates it by consciously using “Yes, and…” rather than “Yes, but…” and just watch the change in body language as a consequence.

One of the primary functions of the leader is to help the team to make winning a habit, not necessarily in the sporting sense but more in terms of an attitude of mind – the “can do” culture. 

When a leader (or a customer for that matter) asks for something unusual the answer should always be “Yes” and then find out how to achieve it afterwards.

Too often we experience that metaphorical intake of breath, the shaking of the head and the negative response that is always a turn off.  The winning mentality is an attitude of mind and needs to become a habit in everyone on the team.

It is yet another primary function of the leader to make sure that the winning habit is ingrained into the team.  Vince Lombardi certainly knew how to do just that.

As a footnote he also said:

“I want you guys to be fired with enthusiasm and if you aren’t then you will be fired with enthusiasm”.

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Sunday, 5 June 2016

Democracy or Meritocracy? It All Depends On What You are Leading!

I feel another rant coming on.  I don’t know if you feel the same but I am finding the atmosphere around the Brexit/Bremain controversy increasingly confrontational and less and less of value for the uncommitted voter at least mainly because both sides are deliberately confusing the electorate with opinions disguised as facts.

Worse, they are peering into the future as if they knew what was going to happen.  That most respected economics sage, Vistage UK speaker Roger Martin-Fagg says that all forecasts and predictions on whatever subject and by anyone have two potential results:

       They are either lucky or wrong.

Of course there is little that we can do about it until June 23rd when we can enter the cross on the voting paper and hope that we will be spared more controversy for a while.   It is called democracy in action – the whole of the UK electorate expressing their views on the matter in hand.

On another though relevant subject there has been much angst recently following a report by experts (or as Kenneth and William Hopper call them in their brilliant book, The Puritan Gift “so-called experts”) as to the potential effects of the rampant Zika virus during the forthcoming Olympics in Rio.

In essence the “expert” opined that the Games should be postponed, moved or abandoned t0 prevent the spread of the virus into currently unaffected countries.

I was intrigued and not a little irritated by a comment from yet another so-called expert that as the World Health Organization, the public health arm of the United Nations was “not democratically elected” its conclusions and opinions should be ignored.  Really?  Was he being serious?

If it is to be “democratically elected” then what is the electorate?  Is it everyone in the world?  Such crass stupidity does little to encourage anyone to listen to these people.

I am a committed democrat even though Winston Churchill described democracy as the “least worst option”.  Democratic methods are rightly used to elect our representatives to local councils, Police and Crime Commissioners (in the UK), members of the European Parliament and above all, Members of the UK Parliament.

That having been said however, the executive branch is first elected through the majority of MPs from one party and then the Government is appointed by the Prime Minister and therefore not democratically.

In the Gettysburg Address, President Abraham Lincoln described democracy as “the Government of the people, by the people, for the people” and that description has not been bettered.

However we must accept that democratically elected Governments are not automatically perfect.  For example, and we don’t need to expand on it, the populace democratically elected Hitler and the Nazis.

What, then, has this to do with business and more to the point, leadership in business?

We have yet to see democratically elected leaders of businesses apart from perhaps in the case of some exceptions like co-operatives.  In the main they are self-starters, have come up through the ranks or have been appointed from outside the business.

In each case they are there because of demonstrated or potential performance and the ability to drive the business to growth and success.

The method, meritocracy, could almost be termed “undemocratically selected” and it seems to work pretty well.

Those who do not meet the expectations of all the stakeholders generally get pretty short shrift and rightly so.  They have the lives and careers of the employees in their hands and that is a mighty responsibility.

Fortunately we generally take care in selecting our business leaders, judging them on demonstrated ability, past performance and overall would they be a good fit in the business.

There is no better or worse option.  Democracy only works where there is a logical electorate and if there isn’t one, undemocratic selection is a working alternative.

It starts with either talent spotting potential leasers already in the business or by good recruitment techniques that emphasise attitude rather than skills and experience.

Rant over, I feel better now, thank you!

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