08 P.I.P. ... Q.I.P. ... R.I.P.

This is part of a series of posts about operational performance management in Services. As part of my job, I get to advise and work with companies on their daily operations and several aspects of business through the COPC Performance Management Framework. I get to see a lot of interesting things, from a vantage point that is insightful as well as amusing.

It is my endeavour to share some of these insights and, also the fun, without sounding preachy. For this purpose, I will employ one chart / visual at a time for each post and try to weave the narrative around it. Hopefully this will also help in data appreciation among the readers.

This latest post is on how to make the P.I.P.’s (performance management action plans) for your staff members actually work and become more effective.

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08 P.I.P. ... Q.I.P. ... R.I.P.

Consider this situation. Say you are running a fairly successful, mid-sized business operation in some industry for the last few years. You have a team of reasonably dedicated, relatively talented and generally motivated individuals who by and large get things done and keep the numbers ticking.

There are, of course, some bad eggs. You know who they are. You have been tracking their performance across different key indicators for some months now. And some of them are just plain terrible. Take, for example, a team member of yours, Chetan, an average to below average staff member. Chetan has been with your team for over a couple of years. His performance was average earlier. But now it has dipped. He has never been a shining star, but now he seems to be dragging the overall numbers down too.

You or your managers have given Chetan sufficient coaching and feedback, according to you. But he just doesn’t seem to improve. Or maybe he does for a couple of weeks, and you think alright, it’s done. ... And then it’s the same thing all over again. What do you do?

Well, in several such cases, after a few frustrating rounds of coaching, and feedback, and coaching again; you will put Chetan on a performance improvement plan (P.I.P.). You get him in a meeting room with his reporting manager; you discuss the history; you discuss the implications; you probably set a timeline for him to shape up (or ship out, if there’s a thinly veiled threat that could ever be used!); and then you let him back into the business – hoping that this time it will be different. This time, he will finally come around.

But he doesn’t come around (at least in most cases), does he? … Folks on these P.I.P.s usually get super stressed, scared or upset; their performance gets worse; and that builds further pressure on them and on you. They also start affecting others around them, and things just keep getting worse. These people keep looking out for an opportunity and eventually move out, or you let them go. So, now reflect, hasn’t all that managerial effort gone down the drain? What is the best way to avoid this?

And what do you do when these folks are large in number? What do you do when they continue to be on P.I.P.’s month over month?

You might say we should have hired right. Okay, agreed. But now that you have hired, and now that this is the group that you have to make work, what do you do? … Some might say we will try to “intensify” the P.I.P.s. It hardly works.

I have a rather grim anecdote to share for this. A client of mine, a long time ago, had a problem with performance on quality parameters. They thought that their current P.I.P.’s were too generic for this problem. As usual, the existing P.I.P. process was used for all sorts of things – poor attendance record, lack of discipline, low efficiency performance. So they thought that they needed something specific for staff performing poorly on Quality metrics, like accuracy, resolution to customers etc. So they created a new program, and called them – Quality Improvement Plans (Q.I.P.).

Obviously, that didn’t work as expected, either. At the start, there was a bit of push, a “Hawthorne effect” of sorts, but that subsided quickly; and things went back to where they were. Now they had two programs, P.I.P. and Q.I.P.; neither of which helped result in a sustained, ongoing improvement in quality metrics. So what do you do now? ... “P” is done. “Q” is done. Do we now create a third program, and call it “R.I.P.”? And is it just a coincidence that it also stands for “rest in peace”? … And, and, what happens when all letters in the alphabet run out? What do you do then?

Think about it. There seems no end to this approach. It is turtles all the way down from here, like they say! ... Now, I’m not dissing these performance improvement actions that help work on outliers in the program. They do work, and work well, especially when you have to take specific actions on specific people. But in many such cases, they just end up creating what is called an “escalation process” within the firm and the staff, that quickly goes out of control, without really effectively improving your performance.

So what should we do? ... Here are a few steps, which probably could have been taken, in order to make these P.I.P.'s more effective:

See the forest for the trees.

The first thing to do is to find if the problem is with an individual or a group of individuals, or if there is some systemic failure. For example, if a whole lot of people are not meeting your performance expectations, either there’s something wrong with the expectations, or there is something gone fundamentally wrong. It is not just about the outliers, but about the business process itself.

A tool called “Process sigma” typically helps in assessing this rather quickly. Take an example of a program here. This is a Tier 1 program, where staff handles simple customer queries. If they have doubts or if they cannot solve the customer queries, they escalate to Tier 2. The target for this escalation rate is 15% (lower is better), which means out of 100 customers that come to Tier 1, the Tier 1 can perhaps escalate about 15 customers to Tier 2. The other 85 customers should be addressed by the Tier 1 guys.

A quick look at this Process Sigma chart lets you know what is going wrong. The blue part of the curve shows the part of performance that is good (meeting target). The red part is not good (not meeting target). What do you see? Almost half the team is unable to meet the target. The Process Sigma is quite poor (1.4, typically one can expect around 2.5 to 4 Sigma).

Now, you can’t possibly put all these folks on P.I.P.s. There’s something fundamentally missing here. In all likelihood, there is a “process” issue. Either the escalation procedure is unclear, or the training done on that procedure for the staff is incomplete, or there is something in the system. In some cases, the target could simply be unrealistic to achieve. This needs more study and a structured approach. Doling out P.I.P.’s before this study is not going to help.

Do your homework.

Maybe it is not a process issue. You do have an outlier. But even then, before you put someone on the P.I.P., do your homework. Especially for larger organizations (over 150 people), it becomes really important to dig deeper. But this is true for all. Before you put someone on P.I.P., collect some more data. Not anecdotes and stories from the manager only, but actually look at the data. Compare with others. Others who have similar profiles, backgrounds, time in the system etc. Is it worth investing time and effort, or is it something where you need to cut things down and minimize future losses?

Is the problem one-off or more systemic? Is it “symptomatic of poor performance”, as the COPC body of knowledge says? You can’t simply walk into that meeting room with Chetan, before getting your facts and your data. What is your hypothesis on why Chetan’s performance has deteriorated? Have you tested the hypothesis? What do you think are the causal factors?

Consider that Chetan has high escalation rate. Now, is his escalation more in certain cases or types of work? For example, when customers call with issues related to billing, does he have a tendency to escalate more, or does he escalate everything? You might need to do some observations, collect some more data points, before you get into that room with him. How many times do you really do this? Spend some time in preparation.

Have specific actions and milestones.

It’s not enough to have a more “acute” meeting with the individual. You are not playing good cop / bad cop. You are not there simply to emphasize on the importance of this meeting. You are there to solve the problem. So just like any other problem-solving approach, you need to get into this discussion with a plan.

Based on what causes you think there are, what actions would you like Chetan to take? By when? What actions will you take? By when? What do you expect to happen? Activities, as well as staged outcomes? Have stages, milestones, governance, and review mechanism clearly identified and communicated.

Follow up.

The next tip is to ensure that there is a long-term approach to this performance improvement. Most P.I.P.’s start and end in a month or so. So what happens after the P.I.P. is over? What does Chetan do? What do you do? What does his manager do? Is there an approach to see what happens over a larger time frame, maybe a year or two (assuming the person sticks around)?

Consider if this intervention can be reviewed longitudinally - over a longer period of time. This means that P.I.P.s should not be used as bandages. Performance improvement needs to be intrinsic, systemic and organic. If it is forced, then it is bound to be short-term.

Create stories – both good and not so good.

And finally, the last tip is to create stories. Like any initiative, a performance improvement approach needs stories. It needs a narrative. So you need cases of staff members who succeeded after the ‘intervention’. How they were identified. What happened to them. How they improved. How they contributed to the company. How their life got better in general. Understand this last point. It is not only about reducing escalation rate from 20% to 15%. How did it help Chetan show that he has actually demonstrated learning abilities, that further led him to some career enhancement or growth?

And then you also need stories of those who didn’t, and what you think happened. Either it was too late, or there were too many areas to work on, or the time was not enough, or the person simply didn’t take the program well. You need a great amount of details here too to make the stories become real.

In summary, by taking a process view of things, by doing sufficient study and analysis, by putting up a list of specific activities and outcomes, by taking a more long-term view and by creating stories of a few of your staff members who went through the process, I believe you will be able to have a more successful performance management approach for your teams. I know that a lot of you do a great job of managing your teams. I hope this list resonates with you, and perhaps gives you a "ready-reckoner" in case of doubt.

Have a good weekend!

-Shreekant

15 December 2018