<a href="http://www.linkedin.com/in/balajikrishnamurthy" rel="author">Dr. Balaji Krishnamurthy</a> - <em>Chairman</em>, <strong>–Think.Shift.</strong> has been recognized by TIME,CNN, Wall Street Journal and other national publications for his unique and innovative style of corporate leadership. TIME magazine included him in their list of 25 Global Business Influentials for his influence on corporate leadership. Unlike most consultants, he is an operating executive with 30 years of experience as a corporate leader in both large and small corporations, during which he has personally modeled his innovative leadership principles. Food for Thought is our way of sharing interesting concepts on corporate leadership and management with others who might find it useful. The thoughts offered are intended to be controversial and thought provoking. They are intended to help our readers intentionally realize their potential, what we call <a href="http://www.youtube.com/watch?v=UpdnkilG8Uk&feature=youtu.be">Potentionality</a>.

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Employee Performance is not just about Results

employee-appraisal

Happy New Year! I hope you had a relaxing holiday and are back to an exciting start for 2016. For some of you this might also be the start of a fiscal year and you might be considering employee performance appraisals.

This topic is a logical, structured way to approach performance appraisals.

In appraising an employee’s performance over a period of time, say over the past year, we tend to focus on what the individual accomplished – the results. Yes, results are important, but equally important is how much the employee has grown during the year, and how positioned the individual is to produce even better results the next year.

To drive home this point, let me recall the definition of stewardship, as framed by my friend, Glenn Mangurian.

Stewardship is the responsibility to protect, preserve and enhance assets that do not belong to you, but have been temporarily entrusted to you.

One of the biggest assets a company has is its human capital. You, as a manager, have been asked to be a steward of your employees. You have a stewardship responsibility to leave behind a richer set of assets at the end of the year than what you inherited at the beginning of the year. Your assessment of the employee’s performance over the past year should clearly reflect your collective success – the success of you and your employee – in accomplishing that.

With that as the backdrop, I offer the following model for writing performance appraisals:

1. Results: The employee’s accomplishments over the past year.

This is like the employee’s individual income statement. That is, the employee cost the company a certain amount and, in return, they produced certain results. It is the manager’s assessment of the balance between the benefit received and the cost incurred, in this period of time.

This assessment makes no claim about their past or future contributions or their ability to make such contributions. It only speaks to this period’s contributions. That is why I view this as an income statement.

Results should be assessed in both the “what” and “how” dimensions.

Not only should you comment on what the employee did, but also how the individual achieved those results. This is an opportunity to communicate to the employee the consequence of their conduct on others around them. So, compliment the employee who rallied the group to achieve that goal that the team had resigned to being impossible. Likewise, comment on the value destroyed by the employee that trampled on everybody in their path to achieve their individual goal.

Both the “what” and the “how” speak to what happened, not what the individual is capable of.

2. Skills: An assessment of the employee’s natural skills and abilities, as related to the employee’s assigned job or potential future assignments.

This is like the tangible items on the employee’s balance sheet, both the assets and liabilities – just the tangible items that can be seen and evidenced.

These would include assessments like being a good salesperson or having good analytical skills. It would also include liabilities like not being able to write well or have difficulty in public speaking. These skills are intrinsic to the individual and are unlikely to change overnight. They can be improved, but it takes time, work and a commitment to doing so.

These skills move with the individual and are likely to be present if the employee undertakes a different assignment – although how useful the skill is in the other assignment is a different matter.

This is where you should reflect on your stewardship of this individual. How much has this balance sheet grown in the last year?

Has the employee increased their assets or reduced their liabilities? Both the manager and the employee must take ownership for this assessment.

3. Style: An assessment of the employee’s interactions with the environment.

This is like the intangible items on the employee’s balance sheet. Unlike skills, which can be demonstrated, evidenced and clearly shown, style is a bit more amorphous and difficult to establish unequivocally.

Style can be broken up into Attributes, which are intrinsic, and Conduct, which is circumstantial.

Attributes would include such things as an employee’s integrity or compassion. A compassionate employee is likely to be so in the workplace, on the sports field and drinking beer with their friends. Attributes of an individual, like skills, move with the employee. They are a statement of the employee, not of the environment. Attributes, like skills, cannot be changed overnight. One might even argue that they are very difficult to change in mature individuals.

In contrast, conduct is the result of the interaction between the employee and the environment. Examples would include an employee’s attitude, their ability to get along with their co-workers, their commitment to the company’s goals, etc. An employee might be dismissive of another individual because of a relationship they have built with that individual. An employee might be a naysayer to all ideas because of their lack of confidence in management.

Whereas the skills and attributes are likely to transport with the employee to any other job, the conduct is a reflection of the employee’s connection to the environment. Neither the good nor the bad will move to another job they take. So a disengaged employee at your workplace could well become very engaged at the next job.

The conduct is a product of the individual employee and the surrounding environment. To change the conduct, one or both of those have to change.

The individual can choose to change. Or you can change the environment surrounding the individual. Unlike skills and qualities, conduct can change practically overnight. It is often a matter of an individual’s attitude and desire, or a matter of something in their environment that is eliciting that behavior. This part of the assessment should include the changes you plan to make for any conduct deficiencies identified.

So results, skills and style. An income statement view and a balance sheet view, with the balance sheet broken up into the tangible and intangible items.

employee performance

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Mediocrity Invited: how to encourage high performers

reward-employee
In most of our companies we have a big sign with bold letters over the main door into our building. It has been there a long time and is such a regular part of the fixtures that we have lost sight of it. Although we diligently practice what the sign says, few of us, if any, notice it as we walk in and out of the building each day. We probably can’t even remember what it says, so let me remind you: “Mediocrity Invited.”

We do many things to ensure that mediocre employees feel totally safe and secure and are not made uncomfortable. This month’s article illustrates examples of things we do to ensure that we stay true to our promise on the front door.

Accountability is uncomfortable, so ignore it.

Most companies have difficulty creating a culture of holding people accountable. When somebody has not done an action item from the previous meeting, we merely note it and move on. Holding that individual accountable on the spot is uncomfortable – both for ourselves and for the delinquent. So, instead, we don’t hold him or her accountable. By the way, who in your company would prefer that you hold people accountable? Clearly, those who are accountable. Who would not prefer it? Of course, those who are not accountable. Oh yes, I forgot the signage on the front door: Mediocrity invited. We wouldn’t want to make the unaccountable uncomfortable, would we?

Put off performance management a little longer.

Most managers who have let go of an employee will confess, when asked, that they waited too long to take action. At the same time, they acknowledge that the peers of the non-performing employee had noticed the lack of performance long before the manager even became aware of it, much less took action on it. So, the performing employees, who picked up the slack of the non-performing, have been waiting patiently for management to take action. Let’s ask ourselves who in your company would like management to take quick action on non-performing employees? Of course, all the performing ones. Who would prefer that you be cautious, deliberate and slow in taking action? I suppose the non-performing ones. Oh yes, the signage on the front door!

Don’t celebrate one person if it’s going to ruffle others.

We all like to recognize employees for good deeds done, particularly deeds that are beyond the call of duty. We want to acknowledge them publicly, but fear its impact on somebody left out. The fear of giving recognition is the fear of upsetting those unrecognized. So, we include a few more people in the recognition.

The other day one of the senior managers came back from a great industry gathering where our advertising work was featured prominently and received a lot of accolades. True to our culture of celebrating success he sent out a company-wide email sharing the joy and recognizing a half a dozen people. Just in case he had missed a few others who might have contributed, he added a caveat that he was rushed in sending the email and promised to send another with any names he may have missed. And yet, I suspect that there were probably one or two individuals who really stood out in making that advertising campaign a success. Would we be comfortable pointing out just one person? Instead, have we not diluted that recognition by including all?

In many companies where management recognizes individuals at their monthly all-hands meetings, executives work hard to ensure that everybody gets a turn to be recognized. They don’t want one name called out too often, and many names never called out at all. Who would prefer this approach? The people who otherwise would not be recognized. Oh I forgot, the signage on the front door.

Pay over-performers and under-performers the same salary.

Recently, the Director of HR in our company sent a memo to the executive team asking for input on the annual salary review process that we will undertake in a few months. Compensation has been a frequent topic in these Food for Thought articles. Although most companies espouse “pay for performance” they practice “pay for pulse.”

If you truly believe in paying for performance, ask yourself this: Does the spread of salaries among comparable employees resemble anything close to the spread of their individual performances?
Most managers will concede that a highly performing employee contributes manyfold the amount that a poorly performing employee does. Yet, is the star performer rewarded with pay that is a manyfold multiple of the poor performer? It is tough to spread the salaries of poor- and high-performing employees through meager annual salary increases. So, how can we spread the salaries to reflect their relative performance? I offer a collection of ideas, though admittedly most of them are bizarre, and end with the only practical idea that I have actually used.

Option 1: Guarantee a raise or resignation

What would happen if you announce to your employees that you are abandoning the practice of annual salary reviews and corresponding salary adjustments? From here on you will practice a flat salary model unless the employee requests a salary review. Tell your employees: “If you want a salary increase, just come and ask. All you have to do is ask! Come on over, anytime. All I require is that you bring your resignation with you. I will guarantee one of the two. Just come and ask. Come anytime. Come often!”

What kind of employees in your company would like this approach? The high performing, confident ones. Who would fear this approach? The non-performing employees lacking in confidence. So, why won’t we do this? Oh yes, the signage on the front door.

Option 2: Take from poor performers to reward high performers

Annual salary increases usually average a small percentage increase, say 3 or 4 percent, reflecting movement in the market and the company’s financial appetite. That small a number leaves little room to really recognize the high performer with a distinctly higher salary.

That leads us to our next bizarre idea. What if you had all employees, upon employment, sign an understanding that the offered salary is for the remainder of the calendar year? At the beginning of each year every employee’s salary will be automatically reduced by 10 percent. Furthermore, indicate in the agreement that you commit to contribute the 10% savings from the entire payroll to the pool of money available for annual salary increases. So now each year an employee’s average salary increase can be 13 or 14 percent! Of course, you intend to reach that average by distributing much larger percentages to the high performers and very low percentages to the poor performers. Again, who would like or dislike this idea? Yet alas the signage.

Option 3: No increases below 5%

Finally to something more practical, and something at least tried out by me. When management conducts salary reviews and plans out annual salary increases for each employee, they are always cognizant of the total payroll impact. It’s usually measured in terms of the (weighted) average of all of the salary increases given to the entire workforce. Seldom, if ever, does management examine the standard deviation of that distribution. Would you prefer a high standard deviation or a low figure? A high figure indicates a wide spread in the increases – some employees (hopefully performing ones) receiving large increases and others (hopefully, non-performing ones) receiving low increases. You would want a high spread.

How do you get a high standard deviation, yet keep the mean at the, say, 3.7 percent you have budgeted? Well you have to give a lot of zero increases to afford a 15 percent increase for your star performers. How can you force that? A practical idea: Require your management to achieve the 3.7 percent average with the caveat that nobody can be granted an increase between the amounts of 0 and 5 percent. So, all the increases have to be either 0 or 5 percent and above. Yet, the average must compute to 3.7 percent. You will get your desired result. Tempting as it is, I will not ask the question of who would like this approach and remind you of the sign. And so I did.

Next time you enter the front door of your building, take a look at that sign. How long has it been up there? Who takes note of it? How institutional has practicing the words on the sign become? If you want to change the signage and are wondering what to put up instead, here is a suggestion: Put up a real sign over the door that reads, “The sign that used to hang here has been intentionally removed.” Cause your employees to come and ask you what the new signage means. You will intentionally cause a conversation.

We welcome your comments on our Food for Thought mailings and encourage you to explore the Food for Thought archive. We hope your business is doing well. We’re happy to chat about the content in this article or anything else with which you’d like assistance.

Food for Thought is our way of sharing interesting concepts on corporate leadership and management with others who might find it useful. The thoughts offered are intended to be controversial and thought-provoking. They are intended to help our readers intentionally realize their potential, what we call >Potentionality.

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Specific vs Diffuse: Part 2

specific-diffuse2

Two weeks ago David Baker, CEO of Think.Shift, wrote a provocative article challenging axioms – statements we believe to be self-evident truths. In this article I want to use him as an example of how to intentionally use both specific and diffuse forms of communication effectively.

In a previous article I noted that some people are specific in their communication with intent to bring forth clarity of thought and others are more diffuse in their communication with intent to bring forth commonality of thought.

Both styles have value, and the value is enhanced if you’re intentional about your natural style and the style appropriate for your audience. While my natural style is specific, David Baker is able to use either style based on what is appropriate for the audience. Let me provide two examples of David’s writing to illustrate this point and speak to the value of being intentional in your communication.

In the last Food for Thought article Caution: Falling Axioms, David wanted to respect the provocative nature of these articles.

To be provocative and controversial, you need to be specific in establishing your point of view and contrasting it with alternative points of view.

In analyzing the axiom, “If you are going to bring me a problem, make sure you bring with it a solution,” David points out that the traditional view contrasts an employee who is building with an employee who is throwing rocks. Having been specific in that contrast, he switches to the other side and provides concrete and convincing arguments as to why you should promote and encourage employees raising issues for which they have no solution. His style of specific communication is very effective.

A couple decades ago, I learned an interesting lesson. Trained as an engineer, with a background in math and a passion for logic, I have always been specific in my communication. But, while listening to my VP of marketing tell our sales force about a new series of products we were introducing, I learned that diffuse communication might achieve your results better than being specific. He drew an X-Y axes, labeled the horizontal axis with old products and new products, talked about how the old products had floundered, spoke about the amazing value of the new products and drew a sweeping graph that zig-zagged from the bottom left to the top right, proclaiming that our new products are going to take our business to new heights.

Questions came to my mind: What was the X-axis? Products? How were they arranged? By introduction date? What was the Y-axis? Units? Dollars? Was this a cumulative graph? If so, how did the graph go down with the current products? I was trying to figure it all out. Meanwhile, our sales force had heard the rallying cry. They were pumped. They cheered! Had my marketing VP not accomplished his goal? How does it matter if the graph didn’t make any sense? Being diffuse might have been the best way to communicate to that audience at that moment!

Let’s come back to David Baker. In his monthly blog, David wrote an interesting post titled “What is Normal?” He pointed out that, while most people try to fit in and be normal, it is the outliers that get noticed. To make his point he drew this picture.

by Think.Shift

by Think.Shift

Of course, I had a plethora of questions: What does the line mean? What is represented by a circle on the left side versus the right side? How about circles above and below? Are circles above and to the right better because that is the way we think? And what do the size of the circles mean? Are bigger circles better? Yet, in spite of all my questions, I understood what he was saying in the article. The picture communicated it. Was he being diffuse? Absolutely! Was he effective in his communication? Superbly! In a blog, where the intent typically is to connect with people rather than provoke them, diffuse communication allows for each reader to interpret as they choose and find common ground.

It’s important to understand both specific and diffuse communication.

Each has its value. Each is more effective in different circumstances. Each of us has a preference in our own individual style. Yet, it behooves us to be intentional about using the right style for the right situation.

On this topic, my good friend and colleague, Glenn Mangurian, pointed out that the appropriate style not only depends on the circumstance, but the speaker-listener chemistry. Glenn and I developed the following model for what might happen based on whether the speaker and the listener are specific or diffuse:

  • When the speaker and listener are both specific, they are likely to assert and evaluate. On the positive side, they might find clear agreement or find disagreement and extend their thought process. But the same conversation could turn into a debate, with each of them arguing and trying to prove that he or she is right.
  • When the speaker is specific and the listener is diffuse, they are likely to assert and consider. The listener respects the speaker’s point of view and learns. But the speaker could also be viewed as being arrogant and opinionated, with the listener agreeing in pretense.
  • When the speaker is diffuse and the listener is specific, they are likely to explore but evaluate. The listener is likely to ask for clarification and agree or offer a different point of view. Alternatively, the conversation could turn into an argument where the listener browbeats the speaker for specificity that the speaker either does not have or is not willing to offer.
  • When the speaker and the listener are both diffuse, the conversation is likely to explore and agree. Both the speaker and listener could become innovative and the conversation could become generative. Or the conversation could meander without reaching conclusion, with both the speaker and the listener agreeing without understanding.
by Think.Shift

by Think.Shift

In each case, conversation can take on a positive tone and create value or a negative tone and destroy value.

It is useful to acknowledge the natural tendency the speaker and listener and intentionally drive the conversation toward the positive, value-creating outcomes.

I want to end this article by recognizing David’s ability to switch modes when appropriate and thank him for letting me use his example to illustrate the value of being intentionally specific or diffuse. I encourage my readers to read David’s monthly blog.

We will be elaborating on these concepts in a webinar on
Wednesday, May 27th from 10:30 am – 11:30 am (PDT).

Two special guests will be at the webinar, David Baker and Glenn Mangurian, who will chime in with their thoughts on specific versus diffuse. We encourage you to sign up and attend; please visit the event registration page here for more details.

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Mind those Q’s

mind-those-Qs

A few months ago, Tom Friedman, a New York Times columnist, wrote an article on how the hiring practices at Google have changed from focusing on GPAs and graduates from prestigious schools to a broader index of indicators. That motivated us to formalize a framework that we have informally used over the years.

Would you like to hire intelligent people?

For most professional jobs, the answer is likely to be yes. What is intelligence? There are hundreds of definitions, and ours, offered here, is probably consistent with most of them: Intelligence is the ability to observe, comprehend, abstract, reason and (from all of that) deduce conclusions. Intelligence, often measured by a series of tests resulting in an Intelligence Quotient or IQ (coined by psychologist William Stern), places undue emphasis on the manipulation of data and facts and little emphasis on the observation of one’s surroundings. Howard Gardner advanced the theory of multiple intelligences and Daniel Goleman popularized the concept of emotional intelligence. EQ became the informal moniker to capture one’s emotional intelligence, the individual’s capacity to “observe, comprehend, abstract, reason and deduce conclusions” from the emotions of people around oneself.

So, should we focus on both IQ and EQ? Hold your horses! We want to offer you many more Q’s!

In addition to IQ and EQ, we suggest that you consider eight other Q’s, an informal measure of eight attributes, in evaluating the suitability of an individual for a specific role – be it as an employee, a friend, a sports teammate, etc. In addition to the definition of each of these attributes, we offer a framework for thinking about them. Finally, we end with a provocative thought for the obvious omission of a potential attribute.

IQ and EQ measure intelligence, the ability to observe, comprehend, abstract, reason and deduce conclusions from structured information or human emotions. These attributes are inherent to the individual and the power of his or her mind. The individual is likely to exhibit these attributes in any situation in which the individual is placed.

Mind those Q'sKQ and SQ, standing for Knowledge Quotient and Skills Quotient, provide a measure of the individual’s knowledge and skill in a relevant discipline. Observe that knowledge is the amassing, retention and recollection of information and skill is the expertise in doing specific tasks, usually attained through years of practice. Both KQ and SQ are specific to the discipline of interest. They do not transfer from one discipline to another. They are subject matter specific. Continue Reading

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Authenticity Index

anonymous

The recent tragedy of Robin Williams elicited much conversation in cyber space. While much of the conversation was probably respectful and filled with fond memories of the talented comedian, there were a number of posts in social media that were outright rude and mean. So much so, that his daughter, Zelda Williams, had to close her Twitter account. She could not take it anymore.

Why do people feel comfortable saying in cyber space what they would probably never say face to face?

Do we all revert to a more primitive state when in the shield of anonymity? This month’s topic is motivated by “Dealing with Digital Cruelty,” a recent Sunday Review article by Stephanie Rosenbloom in the New York Times.

Last winter I was in Chicago during one of their many frigid cold days. Riding the CTA, their local train network, I explored with a Chicago native his reactions to one of my crazy ideas.

What if, I wondered, ridership on the CTA network was purely on an honor system?

People are expected to buy a ticket, but CTA authorities will never ask you to produce a ticket. What percentage of the ridership will actually buy a ticket, I inquired of my friend. My cynical friend had this immediate response. “In Chicago? Maybe 10% will buy a ticket. All you tourists will buy one.” I then wondered how that behavior would change if there were some visible public evidence of having bought a ticket. Say, your face glows red for the next two hours. So, everybody on the train who had bought a ticket would be glowing red. What percentage of the ridership would now buy a ticket, I asked my friend. His response, “Upwards of 90%.”

What changed between the two hypothetical scenarios? Transparency! Transparency is the best form of accountability.

Let’s try another thought experiment.

Imagine two strangers, both decent individuals, walking up simultaneously to the front doors of a tall skyscraper on a cold windy day in downtown Chicago. Would you not expect that one would hold the door open for the other? Yet, imagine the behavior of those same two individuals that evening in rush hour traffic, both behind the wheels of their cars, comfortably seated with their tinted windows and heated seats, driving in two different lanes merging into one. How do they behave? Each would be trying to edge ahead of the other. Why the difference in their behavior? Transparency versus anonymity.

Anonymity can occur even when people can see you, if you are an anonymous individual to the people around you.

My wife recalls a story many holidays ago when our children were home. Peppermint-candy ice cream was a popular holiday tradition and often in short supply at the local grocery store. Laboring to find one in the shelves of the freezer isle, my wife commented to another shopper that just arrived at the freezer shelves that she was looking for one and how difficult it was to find peppermint-candy ice cream. That fellow shopper spotted a stray carton in the adjacent shelf. Right in front of my wife, she grabbed it and away she went. Part infuriated and part frustrated, my wife abandoned her search and walked away. As she was standing at the cashier line, a man walked up to her, handing her a carton of the ice cream, asking, “Ma’am, is this what you were looking for?”

Would the lady have behaved the same had she been acquainted with my wife? What about that good Samaritan?

He was an anonymous bystander who chose to do what he would have done had he been involved. Just during the few days over which I was writing and editing this article, an interesting thing happened to me that prompted me to add this last bit. As I was settling into my aisle seat on an airplane flight, I noticed a mother in the middle seat two rows down trying to calm her little child that was sitting in the middle seat next to me. Clearly, the two had been separated. I offered to trade seats with the mother. As I squeezed into that cramped middle seat I wondered, would I have done that if that whole transaction were anonymous? I don’t know.

Do we all behave differently when our behavior is transparent versus anonymous?

How often does that occur? Are some people more likely to be authentic in their behavior, whether or not it is transparent? This caused us to suggest an authenticity index: The percentage of instances of anonymous behaviors that would have been the same had the situation been transparent. We posit that some people have a high authenticity index while others don’t fare as well. Some people are just fundamentally nice, some are nice because it is the right thing to do and yet others are nice because it is what the society expects us to do. The authenticity index of the people in each of those three classes is likely to be distinguishable.

By the way, don’t confuse authenticity with integrity.

I would like to think that most of our readers would not cheat or steal, whether or not somebody is looking. Yet, my cynicism shows in my belief that many of us will behave as alluded above when two lanes merge in rush hour traffic. A drug dealer who cheats and lies might have a high authenticity index, because he cheats and lies whether somebody is looking or not. Although there is a difference between authenticity and integrity, there is commonality as well. Those of you who participated in our Tool Telecon last week, where we talked about Three Bars of Integrity, will notice some similarities between the third bar of integrity and authenticity.

In keeping with the provocative nature of these articles, let me confess a personal belief with which many disagree.

I personally do not care for anonymous feedback. For example, in seeking written feedback at the end of our workshops, I insist that people identify themselves. I acknowledge that some people might be inhibited from saying what they really think. Do I care to receive the opinion of people with a low authenticity index, I ask myself.

In reflecting on this topic, ask yourself, “What is your authenticity index?”

Even if you cannot associate an absolute number, you can probably compare two individuals and examine who might have a higher authenticity index. Under what circumstances do you behave differently when anonymous? Why? Just that self-reflection can cause you to become intentional. We are not suggesting that you change your behavior, just that you become intentional about your behavior. Intentionality causes you to become the leader you want to be.

Authenticity Index

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