EPM Principle 4 - Dialogue - The Why, How & What

Introduction

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. The next set of article explain how these pillars are reinforced and operationalised.

All feedback is most welcome! 

Dialogue - Why is this a principle?

Around 80% of our time at work is spent having emotional interactions and complicated conversations – these human interactions are the lifeblood of organisations. And, as organisations become more collaborative, this percentage will only increase. There are lots of positives to this particularly for the EPM process as the relationship between managers and employees is a strong predictor of perceived fairness in appraisals. And, as we discussed in the three previous articles, Fairness, Inclusivity and Transparency are prerequisites for effective appraisal.

But, as Google found, although human interaction (e.g. listen, inquiring, reflecting, affirming) is key to building high performing teams, it cannot be optimised. Human interaction is like sand, the harder you squeeze the less you are left holding. Because human interactions are so nebulous it can be a tricky skill to develop in managers. 

Indeed, only 5% of employees believe that their managers are skilled in having candid dialogue about their performance. 

Yet, organisations list having a candid dialogue as the one skill that will have the biggest impact on their overall performance.

Generally, when organisations talk about human interaction they talk about feedback. But feedback comes later. The reason that I chose to use ‘dialogue’ is that dialogue is broader than feedback – dialogue builds relationships in which feedback can be given. Starting with feedback could be a recipe for disaster if managers don’t understand the needs of feedback recipients. Also there are other mechanisms that can be used to improve performance such as strengths based conversations (e.g. feedforward), performance coaching conversations (e.g. GROW model) or motivational interviewing . The word ‘Dialogue’ is also used because it allows us to connect with others creating a sense of belonging and connectedness so important to motivation, performance and behavioural change. 

So in the rest of the article I outline the steps that managers should adopt in order to get to that ‘holy grail’ of dialogue that drives performance.

Dialogue - How is it implemented?

Be safe

There couldn’t be a more apt quote for this section than

‘ Nobody cares how much you know until they know how much you care.’ (Theodore Roosevelt). 

But is wasn’t until the 90’s that the father of employee engagement, William Khan, provided the evidence. He suggested that companies that create psychological safety engage employees. This is because they feel they can bring more of themselves (physically, psychologically and emotionally) to their role leading to higher levels of performance. However, psychological safety does not emerge naturally in organisations and can vary from department to department and team to team. In her TED talk Amy Edmondson outlines a 3-step process to create psychological safety in the workplace:

1. Create a reason for speaking – This can be done by re-framing work as a learning problem not an execution problem. This approach is supported by Carol Dweck (founder of Mindset concept) who observed that ability development goals (learning/mastery goals) increase persistence and challenge seeking whereas ability demonstration goals (performance goals) can create a vulnerability to helplessness.  The founders of Goal Setting Theory (Locke & Latham) echo this issue and suggest that performance goals can lead to 'tunnel vision' - a focus on just reaching a goal rather than building skills.
2. Acknowledge own fallibility – If trust is defined a willingness to be vulnerable to another then a great way to build organisational trust and safety is for leaders to show vulnerability. This demonstrates that managers don’t know everything which opens the door for them to be actively challenged with different perspectives. Research shows that trust also allows employees to focus on tasks that add value to an organisation driving performance.
3. Model curiosity – asking a lot of questions creates a necessity for voice. Giving employees an authentic voice (i.e. listening to an employee’s point of view) in the EPM is also likely to result in a more positive perception of the appraisal discussion and the outcome.

But psychological safety is not ‘cart blanche’ for employees to do what they want with no accountability. As IKEA founder Ingvar Kamprad said,

‘making mistakes is the privilege of the active’. 

So, the more accountable an employee is, the more mistakes they make, the more opportunities there are for a manager to make them feel psychologically safe and learn from those mistakes. Amy Edmondson suggests that high psychological safety and high accountability put employees in the ‘learning zone.’

Psychological safety is such a powerful concept it should be used as a strategic asset to drive performance rather than simply a tactic to reduce employee stress.

Be there

So the foundations have been laid and managers have created a psychologically safe environment. The next step is for the manager to self-reflect and ask 4 questions:

1. Why do I feel I need to give feedback? In most cases employees will be aware if they have under-performed particularly high performers and will proactively seek feedback because they want to improve. Proactively seeking feedback gives employees a sense of control and autonomy – a key foundation for their ongoing motivation and self-efficacy. So waiting to see if an employee seeks feedback may give a manager more insight into the employee than giving feedback.
2. Are my intentions for giving feedback very clear? When receiving feedback, accuracy is the first thing employees will check. If the feedback is not perceived as being accurate then the manager could lose credibility as the feedback will be seen to be bias undermining the Fairness principle. Perceived accuracy is dependent on whether psychological safety is present (i.e. whether they trust the manager and whether there have been frequent feedback sessions).
3. Am I in the right frame of mind to give feedback? Managers becoming the observer of themselves is important for creating transparency (see Principle 3). It ensures that they stay calm and grounded and helps to mediate their perception of how salient they are being and helps to avoid the 'transparency illusion'.
4. Will the employee be receptive to feedback? Unsolicited feedback may be simply discarded if it is seen as biased (see Principle 1 on Fairness). If feedback it is seen as being out of sync with an employee’s own beliefs  then they are less likely to respond to it. Since most employees will generally hold a favourable view of themselves and their actions, managers should err on the side of caution and start with positive feedback (see the next section). However, contrary to previous findings, personality seems to have little effect on receptivity to feedback.

So, there is a virtuous loop in this process. If employees see feedback as useful and it helps them achieve their goals they will seek more of it. In turn, managers will be seen to be competent and trustworthy creating a more psychologically safe environment for more feedback.

Be positive

The trouble with feedback is that it has an inconsistent relationship with performance as positive and negative feedback can both boost and reduce commitment and effort in goal pursuit. Here are some evidence-based rules when to use positive and negative feedback:

Never give negative feedback if:

-     Competence (self-efficacy or self-esteem) is low - Research suggests that competent students prefer more negative feedback and beginners positive feedback on how they can improve. This may be because experts seek negative feedback not only because they can tolerate it (i.e., negative feedback does not undermine their self-esteem), but also because they sense negative feedback will make them get even better.

-     Relationships are weak – Friends can stab you in the front with negative feedback and often tease each other to create deeper relationships. But overdoing it can undermine friendships. But if you don’t know the employee then negative feedback could be seen as controlling and reducing an employee’s sense of autonomy.

If managers do give negative feedback then it should be delivered along with open questions and active listening (see Principle 3 on Transparency). This invites mutual exploration of the full range of possibilities for addressing problems and helps employees learn from their mistakes.

Mix positive and negative feedback depending on whether you want to:

-     Boost commitment or effort- Research shows that positive feedback is effective only when it signals a boost in commitment and negative feedback is only effective when it signals a lack of goal progress (effort). Also employees who are unsure of their commitment will also seek more positive feedback to give them reassurance. Employees who receive positive feedback feel more competent and autonomous which boosts their intrinsic motivation.

-     Encourage Goal Completion - When the completion of a goal seems a long way off then positive feedback increases effort and negative feedback will reduce effort. This relationship is reversed when the goal is close; positive feedback is likely to induce coasting whereas negative feedback can trigger an increase in effort.

-     Have an Impact - People can learn more or are maybe more attentive towards rarer feedback. Negative feedback is rarer if you are highly competent and positive feedback rarer if you are less competent.

Never give destructive criticism

-     It goes without saying that giving destructive feedback can damage the recipient's self-esteem, compromise the recipient's sense of psychological safety and undermine engagement. Honesty should not be confused with hurtfulness.

So, feedback can be used strategically to keep employees motivated towards a goal. However, it comes with a health warning; managers should only give negative feedback to experienced competent employees they know well. In these cases, the employee probably knows the why and how of their poor performance and what to do to remedy it. This begs the questions – why would you ever give someone negative feedback?

360-degree feedback

360-degree feedback has an advantage over traditional 121 feedback because it widens the scope for feedback making it more objective and less biased. Recent research amongst surgeons shows that it can be an accurate source of feedback and can drive behavioural change. But as discussed above, because surgeons tend to be highly competent they are probably more receptive to negative feedback. 

On the other hand 360 degree feedback can be divisive as being left out of the 360 degree review could ostracise employees (see Principle 2 – Inclusivity) negatively affecting their self-esteem. 

Overall there is little evidence-based analysis that definitively shows whether 360 degree feedback works or not. 

360-degree feedback suffers from the same problem as traditional feedback; the relationships between feedback and performance is inconsistent because ultimately if relies on perceptions which can change according to depth of relationships, how competent employees feel and how fair, inclusive and transparent employees think the 360 degree process is.

Feed-forward not backwards

So giving feedback is complex and problematic because it is:

-     Subjective - feedback relies on recalling events from the past managers and employees may have different perceptions of what actually happened. This introduces bias (see Principle 1 Fairness) into the process and can create an illusion of transparency (see Principle 3 Transparency) which can undermine the whole EPM process.

-     Backward looking - Research also shows that past performance can only predict 27% of future performance. That means that if an organisation is on an annual EPM cycle it would take it would take around 4 years to get a full picture of an employee's potential leaving just 1 year before they quit!

-     Reactive – Feedback can never really keep up with the rapid rate of change within organisations. It is a lag measure - it is like driving a car using the rear-view mirror. Creating an image of future potential and purpose is generative while feedback can become a self-fulfilling prophecy.

-     Telling not asking – Arguably, feedback evokes a particular type of conversation of recalling information rather than inquiring into possibilities. This can be seen controlling undermining autonomy and intrinsic motivation.

Fortunately, there are alternatives. One of these is feed-forward, a strengths-based approach taken from Appreciative Enquiry. Feed-forward is a future focussed conversation that draws on the success employees have had and tries to replicate them in the future. CIPD conducted a study to assess the effectiveness of the feed-forward technique. The research showed that after the strengths-based interventions, employees are more likely to agree to the statement ‘I receive regular feedback on my performance’.  Critically the research shows that employees whose managers undertook the strengths-based interventions are more likely to report that they find their conversations with their managers useful, and find the conversations help improve their performance.

I was lucky enough to be able to conduct my own research in this area and found conversations that focussed on development (feed-forward) had a higher correlation with overall performance than traditional feedback conversations that focussed on past performance. This seems to fit with Amy Edmondson’s advice that to create psychological safety, managers should re-frame work as a learning opportunity not an execution problem.

Feed-forward may also help solve the perennial problem of traditional EPMs where managers are trying to have a conversation about development and performance at the same time. Maybe focussing on development conversations creates a foundation of psychological safety that can lead to more challenging performance conversations as the relationship deepens?

Focusing on the future should help reduce bias (see Principle 1 – Fair) because managers are 'highly consistent when rating their own feelings and intentions' about their future actions towards an employee. Focusing on future development requires ongoing dialogue which helps build a 'richer picture' making judgements about performance less subjective. For example, at the end of every project Deloitte ask team leaders to respond to the following questions about each team member.

-     ‘Given what I know of this person’s performance, and if it were my money, I would award this person the highest possible compensation increase and bonus’

-     ‘Given what I know of this person’s performance, I would always want him or her on my team’

-     ‘This person is at risk for low performance.’

-     ‘This person is ready for promotion today ‘

Deloitte believe that asking questions about what a team leader would do with an employee rather than what they think of that individual helps to reduce subjectivity.

Don’t force frequency

Frequency depends on the quality of dialogue. There is no point increasing the frequency of conversations about performance if employees find it demotivating and stressful. Research shows this will drive down employee self-efficacy. Once psychological safety is in place and managers have deep relationships with their team, the frequency of performance conversations should grow organically as employees seek performance dialogue. Certainly, the evidence suggests that to sustain behavioural change dialogue needs to be continuous.

Trying to force managers or monitoring the frequency of conversations may backfire as employees may perceive the conversations as insincere, controlling, and compliant undermining the manager-employee relationship.

Other research suggest that monthly feedback is optimal. However, the company in the research used monthly bonuses to drive performance on simple tasks using quantitative metrics e.g. % repairs completed on time. Hence, the results might not be relevant for more complex tasks. A more recent study on the effects of communication on performance show that quality face-to-face communications trumps frequency of communication.

What measures can I use to know it is working?

In summary, the relationship between the manager and the employee is critical to having productive positive dialogues. Maybe managers should check-in with employees after performance conversations and ask whether the felt the feedback was accurate, useful, tactful, motivating and transparent.

In addition to a questionnaire you could use comments entered into your EPM software as a proxy for the quality of dialogue. It assumes that managers who make the effort to enter meaningful feedback into the system are having quality dialogues and care about their employees. You can even estimate the time managers & employees take on writing up their appraisals by using the average typing speed and the number of characters they write! This all helps to build a business case for and effective EPM process.

But maybe the acid-test of whether managers have created and environment for productive positive dialogues is when employees start to proactively seek feedback?