EPM Principle 2 - Inclusive - The Why, How & What

Thanks to everyone for your comments on the Employee Performance Management (EPM) principles - they are still work in progress so please give me your candid feedback!

So far, I have published 3 articles on the 'pillars' of EPM which should make the process FIT (Fair, Inclusive & Transparent) for purpose. The articles explain: 

- WHY the principle was chosen

- HOW to implement the principle

- WHAT measures can be used to ensure the principle is working 

Here is a list of published articles:

PRINCIPLE 1 : FAIR - https://bit.ly/2zWLXXk

PRINCIPLE 2 : INCLUSIVE- https://bit.ly/2LPmxMU

PRINCIPLE 3 : TRANSPARENT - https://bit.ly/2Oq5wdA

These articles explain why the concepts of organisational justice and social context are so important to the success of an EPM.

All feedback is most welcome! 

Inclusive - Why is this a principle?

In the previous article on Fairness we established that organizational justice can account for 50% of the variation in appraisal satisfaction which in turn drives employee satisfaction and engagement. Employees can be dissatisfied because they feel the process is bias (distributive justice) but this can be outweighed by employees feeling there is 'one rule for them and one for others'. This lack of adherence to a ‘due process’ is called procedural justice and can make the EPM ‘power-saturated’ where employees either feel coerced into the process or mangers make excuses for leaving employees out of the process.

I have heard lots of excuses as to why employees have been left out of an EPM process such as ‘they are in a temporary position', 'they are about to leave the company' 'they are just a contractor' etc. If you view the EPM as an annual review process to produce a rating for pay increments, then these arguments maybe valid. However, if you view the EPM as a

process of ongoing human interaction that focuses on improving future potential, current performance and well-being amongst employees to optimise their contribution to an organisation’s goals

then everyone should be invited to the party! Organisations should even consider including all stakeholders in the process (including board member evaluation of a CEO’s performance) - after all if they are helping to achieve the delivery or can provide feedback on your organisation’s services, omitting them could be a potential performance blind spot.

Another aspect is leadership. All too often the C-level suite exclude themselves from the process and the EPM is relegated to middle management which diminishes the importance of the process. Ensuring leadership 'walk-the-talk' is a question of integrity. Research suggests  that if leadership can demonstrate their commitment to the EPM and tell stories of how it has helped them develop then employees will follow, and performance will improve. Again is seems sadly ironic that the C-level suite want feedback but only 55% are seen to be supporting the process that is designed to facilitate it. Maybe one explanation comes from this research which suggests that whilst having lots of subordinates and authority reduces stress amongst leaders, having to directly supervise lots of senior executives can increase stress levels.

Defined as ‘neglecting to take actions that engage another organizational member’ ostracism at work can be more damaging than workplace bullying. Leaving employees out of the EPM could reduce their sense of belonging, self-esteem and organisational commitment. This can negatively affect employee well-being and potentially lead to a cases of constructive dismissal.

So, the Principle of Inclusion aims to set a level playing field and give senior leadership the opportunity to model the behaviours of high performance they want to see in others.

How is it implemented?

Start with Inquiry

Employees, particularly managers, need to appreciate what value the EPM brings to them and the business. I am a big advocate of Appreciative Inquiry (AI) which suggests that change starts with inquiry. So why not run interviews and workshops to understand how employees feel about the current EPM and capture its positive core? You could use the EPM principles as a talking point and maybe use some analysis on how the current system is used (e.g. do C-suite executives use it and how?). Here is a case study of how AI was used to improve an EPM process. With any change intervention, exhibit the behaviours you want to see e.g. if inclusivity, transparency and dialogue are your principles then your inquiry should start with an inclusive, transparent dialogue.

Vulnerable leadership

Nearly all CEOs say that they want feedback but nearly 66% say they do not get it. Making a CEO’s development public could help improve CEO board relationships but also relationships with employees and get more support for the EPM. There seems to be a virtuous circle here that boards are becoming increasingly interested in talent development and employees will show more interest in their development if they see the C-suite are open to development too. This may also help organisations who experience low levels of trust in senior management. There is a lot to be gained from bosses being vulnerable.

Reveal Preference

It may seem contradictory but a good way to test how engaged and satisfied employees are with your EPM is to make it voluntary and allow them to ‘vote with their feet’. Stripping away barriers to allow employees to reveal their true preferences is the acid test of any system. If you have low levels of participation, say less than 30%, then your current process may be beyond repair. However, if voluntary participation is between 30-60% you could conduct workshops to understand what is working well and try to amplify this through the organisation. Higher levels of EPM engagement may just require a few tweaks to increase participation. Ultimately, it may boil down to manager team member relationships which may require management training or more drastic measures.

What measures can I use to know it is working?

EPM completion rates is an easy one to calculate and most EPM software will measure this. Whilst it is easy to calculate, does it drive the right behaviours? For instance, a manager/employee who has rushed and completed their EPM(s) in the day before the deadline will score higher than a manager/employee who has taken their time in completing the EPM process but missed the deadline by 1 day. Who is probably giving better quality appraisals or feedback?

Now imagine drawing a straight 45-degree line from the day the EPM starts to when it finishes i.e. a completion rate from 0% to 100%. You can then measure the deviation from that line. A low deviation shows managers/employees who are gradually completing and submitting their reviews/feedback. A high deviation suggests a behaviour of 'just getting the reviews out of the way' or 'completing them last minute'.

I found a positive correlation between a low EPM deviation rate and divisional performance (measured using performance against a balanced scorecard). This would suggest that managers/employees focusing on quality rather than time/quantity may achieve better performance. This is a great metric (particularly if you make the process voluntary) to feedback to managers/employees - the more you invest in your EPM process, the more you will flourish and contribute to the organisation's purpose.

 If you have moved to an EPM model of continuous feedback you could measure the number of times employees record these conversations in the system as a proxy for levels of engagement with the EPM. You may find similar results – the higher the interaction with the system the higher the performance - if you don't, maybe managers are using the system for the wrong reasons!

I hope you find this useful... Please like and comment on this article as it is still work in progress!

The next principle in this series will be Transparent. 

 Thanks

Alex