The way we manage performance; is it about result or is it about purpose?

We are back to the time of the year where organizations are busy closing their performance years, ranking employee basis their performance and contributions, setting aside monetary rewards and bonuses for those exemplifying worthy outcome against what was expected of them.

Last year, around the same time – I had published my article on “Deciphering the PMS Googly” with an objective of simplifying the concept of ‘Performance Management System’ and aspects that can make “Performance linked conversations”, seamless and effective. The article premise revolved around a simple formula and deciphering it’s essence:

INTENT + ACTION = RESULT

(Please follow the link to refer to it!- https://www.dhirubhai.net/pulse/deciphering-pms-performance-management-system-googly-swati-ramamurthy/)

To recount a recent conversation with a respected and senior leader about the emotion which the word “Result” tends to trigger – very rightly he expressed that when we are so result focused, we end up losing view of the things that cross us in the path towards achieving those results. He meant to inspire the idea of not just having a view of end results but rather observe the path taken, stop once in a while, think, analyze and validate the path taken - either to continue with greater conviction or course correct if needed – in which case there is a possibility to end up with a different yet more relevant result!

I feel that the point of - Goals / KRAs (Key RESULT areas) need further clarification in the PMS process, for above point should not be misconstrued to assume their irrelevance; given that we are treading a fluid path and course correcting frequently. It rather entails a deeper meaning around purpose and conscience. To explain further in cricket analogy (keeping up with the spirit of cricket world cup!):

Purpose that drives Indian cricket team: Nation’s Glory

Goal / Expected result: winning the world cup finals

Milestone: Winning league matches to reach the finals

Imagine if the players were only Goal / result focused? –

1.      Would we be ok for them to win matches with only one or two star players?

2.      Would we be ok for them to win the matches in ungentlemanly way?

Our answer would be a definite NO – because that defeats the purpose of the game!

1.      Game is about the team play and not specific players – in the process of the match , there may be some players doing better than the other depending on conditions of play, context of the match however every player contributes to the best of his abilities keeping in mind what he is doing for his nation. So a player may not be judged as “Man of the match” or “player of the series” however has made invaluable contribution in matches played (even if scored 15 runs in entire match but happened to be the last 15 runs to win, that too in 4 balls!)

2.      How can we earn glory when the game is played in ungentlemanly way? The team may win the matches with rude passing remarks, on field scuffle, cheating but will they win hearts of spectators to upkeep the glory of the game and honor of the nation? Will they be role models and inspiration to budding cricketers to join the future cricket team?

If you notice from the above –

1.      Purpose is a massive reason that drives us to enact our intention (both individual intent as well as collective intent). Goals only help us quantifying that purpose to give us a sense of accomplishment that further validates our purpose (like a catalyzing agent).

2.      While team’s purpose is the “Nation’s glory” however there are individual purpose statements that are equally relevant in the game play. Virat’s purpose may be to spark energy and enthusiasm amongst players even through challenging times or Dhoni’s purpose to share his wisdom of the game with youngsters – both of which are equally relevant to achieve intended team purpose.

3.      Also Goals and milestones could keep changing depending on how you keep progressing – your point accumulation, number of wins in matches etc is not only about your ability but also opponent team’s abilities and other variables (like weather etc).

4.      Your purpose is the constant frame of reference to measure yourself against. Win or Lose; Goal achieved, partially achieved or not at all achieved - larger purpose could still be fulfilled to give you sense of achievement.

Coming back to organizational context -  if an organization’s reason for existence is to offer extraordinary customer service and a customer service agent’s role’s purpose is to bring a smile in customer’s face – it automatically drives performance towards achieving high net promoter score rather than the CSA being given a goal to achieve x% of NPS and he working towards it. Technically it is our purpose that drives us to perform better and better. This way, even in face of challenge - say a very difficult customer issue where one is unable to offer desired service, he or she could still be able to make the customer smile by apologizing and offering a promise to gather feedback and learn from the experience. Here penalizing incumbent for not achieving the desired NPS score as per Goals does not serve the purpose! Instead what is worth recognizing is the incumbent’s humility to apologize, his or her presence of mind to close the query quickly rather than justifying organization’s stance, his or her drive to pass on feedback to be assessed and incorporated and most importantly ability to make the customer smile against all odds!

What organizations end up doing? – Points worth assessing!

1.      Rather than focusing on “why we do what we do” – roles in organizations get converted to targets with KPIs and teams and employees only directed to achieve those numbers. Is it not simpler that way? Because it takes a lot of effort to explain the reason for what we are doing and imagine keep doing that consistently with changing faces in teams given the attrition factor! So managers and leaders take the easy road and end up re-iterating sales targets and NPS targets rather than checking with team members if they came across anything new while doing their jobs - easy or difficult - and gathering their perspectives real-time? God forbid, If sales conversion or service quality got difficult for one person particularly – it is easier to admonish it stating statistically it seems to be working well with larger team so there only seems an issue with that one person – so send him for refresher or behavioral training, reduce his annual rating and incentives, put individual in PIP (performance improvement plan) or CAP (corrective action plan)

2.      Unfortunately recommending individuals for training or incentivizing / de-incentivizing someone or putting them in PIP / CAP – still revolves around the premise of goals and targets – the only frame of reference being how can individuals be motivated to achieve organizational goals and targets? However, question of why the individual could not achieve those targets consistently (though he / she displayed requisite skills and capabilities at the time of hiring or training!) or why the individual is facing challenges particularly, still remains unanswered!

3.      Time and resources are invested in state of art technologies to run Performance Management systems, Reward and Recognition metrics and dashboards, administer talent management frameworks – but all linked to those very KPIs measuring worth of individuals. Technology is only an enabler and is not meant to override our own wisdom to analyze and assess to get to right decision! To cite an example:

a.       Example 1: We have two employees A & B – both equally hardworking, skilled individuals and tenured in the company. In a particular performance period, employee A faced lot of personal family issues as a result of which he had to take up extra work from home job in addition to his full time job to take care of his ailing father, supplement family finances and continue his own studies. His context limited him from doing odd hour shifts and restricted his overtime at work. Same performance period employee B also faced death in his family and ended up being a soul earner for his family. He worked extremely hard in the company – always open to do overtime to earn extra money, ready to fill in for any shift which he was allocated in. Both individuals over achieved their targets in their respective roles – highlighted in their monthly performance scorecard and both receiving equal amount of recognition for their work. Who do you think would be likely to be promoted in the performance year?

b.      Example 2: if in above example, system would have thrown different data for the two employees where in employee A overachieves targets and clearly contributes much more than employee B – would the decision of promoting employee A would be definite and why?

4.      Above point highlights the relevance of individual purpose and how it becomes a crucial point to assess when making performance or promotion linked decisions within teams. This is where personal wisdom comes into play! Are managers and leaders in organizations connected to their teams to understand what drives their team members towards performance? Is performance the only criteria to make the decision? (For which there is data available through the sophisticated systems!) What about individual’s potential or aspiration for the next role? Continuing with above example – there is a possibility that employee A though overachieves in the job however his inflexibility in role may be a result of his individual purpose to keep his family in top priority and his desire to study further. Only upon connect and coaching – will his manager understand whether the promotion would be right for his skills, right for the intended next role and whether it will serve his purpose or organizational purpose at all? On the other hand – greatest disservice the manager would do is to promote employee A because system prompts that decision through data and the manager does not even speak to employee B though he may be more passionate and eligible for next role and his lack of promotion is only attributed to performance data!. In my experience, what infuriates employees is not that they were not considered for promotion (that is just the tip of the iceberg!) but the fact that there is lack of relevant and ongoing conversation and connect on part of the manager to offer clarity to the individual, which they rightly deserve.

5.      Organizations end up recognizing, rewarding, and promoting those that are backed by significant quantifiable data so called results!. Employee X has overachieved NPS targets by 120% or Employee Y has won “B” number of HNI clients clocking the highest ticket value of sales in the month. Performance linked incentives, reward points and increment guidelines get linked up to this data science. My question is that whether this is sufficient? Should we not see value in the right efforts, behaviors and path of those individuals towards achieving the very targets? If yes, how do we give quantifiable data to these softer aspects aside the results they deliver? Do all individuals working with a sense of purpose achieve desired outcomes consistently to be part of the significant pool of people?  If not – how do they perceive failures and what is that they do differently in times of challenges? As an organization, are we rewarding tried and tested, robotic manner of working to diligently achieve the assigned targets or rewarding those who think out of the box, open to implementing different ideas and sometimes may appear to be missing out on targets but rather are bringing greater value through their job? – As in the example above of customer service agent working to bring smile in customer’s face even when faced with most difficult customer situation!

All of the above points clearly establish that performance in any role is much more than the results that get highlighted. Organization performance principles or philosophy often emphasize on “What” (Goals, KRAs, Objectives) and “How” of performance (process, systems, behaviors, skills) however the most crucial “Why” (Larger purpose and reason to perform) gets documented one time as a statement of Vision perhaps and tends to move into oblivion as the organization becomes bigger and bigger. So if we really need to do justice to organizations performance management system, this purpose statement needs to be reinstated back into the performance philosophy and evaluated as part of an overarching framework. How can that be done?

1)      PERFORMANCE PLANNING STAGE: Make goal setting exercise meaningful to employees:

a.      Stop assigning goals – especially setting standardized KPIs for unique roles in organizations but rather align goals to over organization vision and strategy. I understand that this is specifically difficult in organizations with large front line staff where nature of job is same say for example, FOS (feet on street sales roles), Tele service agents, CSAs , GSAs and common practice is to ease the process of setting goals by standardizing them. This eases the process of incentive computation as well given that incentive models get linked up to the same KPIs. Here role of managers is very critical, to start having conversations around what employee intends to achieve given his experience historically and rather assess alignment of those inputs to fit the organizational context. Every manager is equipped with vital information about his team performance history and capability. All he or she is required to do is to gather whether his team member is aware of the same and what are his or her intentions! This exercise in itself throws lot of insights to managers about their team members, who is more keen learner, who is struggling to align to the role requirements, which skill sets are bringing success in role etc etc

b.      Seek inputs on specific goals to instill accountability – to begin with especially from beginners, nature of inputs will lack the depth and quality however this is an ongoing process. The more they get matured in their role, with more and more exposure, their perspective will broaden in order to appreciate deeper purpose of their role and that of the organization. For example assuming tele service agents will not be given a standardized goal of X% of NPS score, one junior TSA may pursue to deliver Y number of calls on daily basis – instead of criticizing his thought as it is insufficient for the role, it would be better to understand and probe further on his target calculation logic (like how long does it take for the TSA per call, what is the deviation from potential per day calls, what is the longest call duration and reason for the same etc etc) and instead nudge him or her to stretch more and understand in what areas he or she could do better. There may be other little more experienced TSAs who may choose newer targets like reducing average query resolution TATs or specializing in certain segments of customers or certain specific processes – this may also reflect interest areas they have and what gives them a sense of achievement? This will also enable managers to provide additional projects and assignments to those interested and review their progress accordingly.

c.       Converse frequently of why – not just of the role but even tasks within. This helps questioning existing assumptions to have better understanding of what is required to be done. Lot of times during input seeking on goals, as managers we may come across exceptional inputs which have never been tried and tested before. By frequently questioning on “Why” of things – like why a certain process can do better by introducing a new measure of performance – will increase the bar of performance.

2)      PERFORMANCE REVIEW STAGE: Have S.M.A.R.T and meaningful conversations.

a.      Timing matters – Ongoing and real-time conversation matters more than fixing calendars every quarter or in specific intervals to have structured conversations. Let team members take ownership of such conversations. Do not label them performance review conversations but rather “Pit stop” checks. Keep discussions short and relevant. Instead of keeping all the 5 KPIs to be discussed in half hour in one go – break the review points to be discussed in 2 or 3 separate 5 to 10 minute sessions.. for example a TSA may have 3-4 KPIs like average call TAT, transfer rate control, improve his / her idle time  or possibly a specific project etc etc. He or she may be good in some but not so in rest. Dividing time helps focus thoughts on a particular performance aspect for clear discussions and necessary documentation. Imagine if same conversation occurs every month post publish of monthly dashboard for all of the team members? – Then focus shift to the numbers published rather than the events that lead to the numbers being published so. Such frequent discussions and records also remove the effect of recency bias that managers are very easily prone to when reviewing occasionally and that too close to an incident of non target achievement closer to performance year closure.

b.      Recognize and appreciate act of purpose instantly - not all of our team members will be super achievers but all are equally potential and have certain super achiever moments in their careers. Capture those moments and make it special. An employee C is a diligent worker with a potential to improve his / her call resolution TAT. The manager comes to know of a customer testimonial on how this employee C very patiently was listening to the customer (given the language barrier as customer was not fluent in English) and though took longer time to resolve the query but kept updating the customer in a timely manner on the progress to finally satisfactorily closing the query. Now clearly in terms of performance review this event may not create an impact on overall progress on individual’s performance goals however with reference to certain values displayed of listening intently, thorough follow up and solution focus – which represents the individual’s purpose – it is worth appreciating those values time and again to reinforce them amongst team members (may not be specifically for that employee but similar values displayed by others as well!). Recognizing the purpose by recognizing relevant behaviors will inspire those struggling with purpose to reflect on their behaviors and possibly find their purpose and meaning in what they do. This is the glue factor that will keep the team inspired and together. It is critical to note that often managers over kill the practice of recognizing individuals or moments. Recognition is more about recognizing scarce behavior or scarcely exhibited value, critical to have, by appreciating individuals exhibiting those very rare behaviors or values. We often get carried away either by making an ordinary behavior appear extraordinary or in glorifying a hero rather than appreciating the heroism. There is a big difference in the two.

c.       Identify anomalies and be ready for difficult conversations: We may have 3 point, 4 point or 5 point rating systems but ultimately it is about achievers Vs NON achievers – differentiating those who work with clear sense of purpose from those who struggle to. We may have advanced technologies tracking achievement levels wrt hits and misses of an incumbent in the role that further segment amongst achievers (those who are super / exceptional / outstanding achievers) or we may have basic data and observation based tracking mechanism to identify those who stand out more than the rest. Whatever be the systems - they may throw various data points but point is - do we completely rely on the data the system throws or we also rely on our wisdom to observe that sometimes data does not speak in entirety  with what we observe which makes us further probe on reasons for this anomaly? This is also true for cases where data may throw positive data points however certain unethical practices observed which question the very purpose of the incumbent in light. When individuals are confronted with anomalies with an objective of seeking clarifications – it helps reinforce a manager’s credibility of equitable performance. Objective of PMS is not to divide and create segments but rather to unite teams for organizational purpose and when there is discord – it needs to be fixed without doubt.

3)      PERFORMANCE REWARD: establish fair and meaningful reward systems –

a.      Reward periodically and systemically - While recognizing instantly is a good virtue however same virtue holds no good for rewarding individuals. Reward is for consistency and an individual is required to establish credibility to be found worthy of the reward. Organizations may apply standard guiding framework for specific roles while designing incentive schemes / implementing increment guidelines or rather use combination of multiple platforms to quantify incentive / increment eligibility (example – 360 degree feedback or manager feedback in addition to performance data). In preceding lines I had raised a point around quantifying softer traits and values so that reward systems are not only based on end result numbers but also factor in the efforts of the incumbent to achieve that result. While we will never be able to exactly quantify efforts emerging out of acts of purpose but we may be able to devise a system to assign a notional value to those acts and link them to reward system. Any form of feedback – peer to peer, Manager, customer, subordinate etc offer that notional value. What is also critical is to determine right period for rewards – quarterly / half yearly / annually. Too soon or too late depending on type of reward – may have their drawbacks.

b.      Embrace technology to quantify contribution and assessing reward eligibility– elaborating the point on incentive systems that get linked to performance against KPIs – for complex reward criteria – PMS systems need to be advanced to incorporate relevant measures of performance for each employee which get integrated with other linked systems relevant to that employee (example time sheet linkage, roster linkage, NPS linked, customer query management tool linkage etc etc) to have minimal manual intervention wrt record keeping. Processes can be defined to authenticate records to make it full proof. With AI capability, today tools can throw exhaustive data and insights that can further performance enhancement capability of organizational reward systems.

c.       Let promotion decision be based on assessment rather than intuition – While we have a clear view of any employees’ past / present performance but this may not necessarily predict future performance that too in a new role. When it comes to promotion decisions, organizations need to invest in scientific ways to assess incumbent’s eligibility and potential to take up newer responsibilities. This may be done by running specific assessment centers, simulated assessment tests to assess his / her worthiness.

The below write up (I received as a forward!) in some way summarizes the essence of my article. David viewed his role as a mountaineer with larger purpose to climb to enjoy the view rather than plant a flag on the summit – it is this purpose that made him give up the last mile of the climb. He chose to live instead and get more opportunities to climb in future with more learnings, rather than go after a goal to make it to the summit, come what may! Even if miraculously he had returned successfully after climbing the summit – I doubt he would have felt any sense of achievement on this feat given the tragic ending to lives of fellow mountaineers. It is up to us as leaders whether we are to manage performance or inspire purpose. Latter is difficult to achieve but more essential to establish a self-nurturing and self-fulfilling act of progression.

“On May 22, 2019, Mount Everest saw a traffic jam as 300 mountaineers made it to the summit that day, creating a traffic jam, a picture of which went viral the next day. German alpinist, David Gottler, was not among those who summited. He was just 200 meters from the peak when he turned back. David was also among the lucky ones, This spring, the Everest climb saw 21 mountaineers die while attempting to scale the world’s highest peak – the highest number to die so far!

Why did he turn back despite being an experienced climber who had already conquered five of the 14 different 8000m peaks on Earth, reaching the summits of Gasherbrum II (8035m), Broad Peak (8051m), Dhaulagiri (8167m), Lhotse (8516m) and Makalu (8481m), as well as ascending to 8200m on K2 (8611m)? He took a crucial decision. That day that the risks were way too much to attempt to summit despite being so close. 

His experience told him that the crowd trying to reach the peak would make him wait for his turn which could prove fatal as above 26,000 feet you are in the death zone when there isn’t enough oxygen for humans to breathe. The summit of Mount Everest is 8,848 meters (29,029 feet) high, an elevation at which each breath contains only one-third of the oxygen found at sea level. And David was a purist who was climbing without supplemental oxygen.

*At only 200 meters from the peak David took perhaps the most sensible and courageous decision of his life – to give up the climb and come down.* He didn’t win the mountain that day, but he won over his ego. Only a man without an ego can decide when to give up and when to clench your teeth and push on regardless.

*All our lives we have been constantly told by motivational speakers and others, never to give up and yet here was an experienced mountaineer who simply says that making it to the peak is not all that matters, when even the less experienced ones were summiting that day.*

There were many who went up that day, but in the process exhausted their oxygen supplies while waiting for the queue of other mountaineers to clear up before they could summit. Some of them ran out of oxygen on the way down and died. The true climbers respect the mountains and as Sir Edmund Hillary, the first man to set foot on Mount Everest said; “Human life is far more important than just getting to the top of a mountain.” There are climbers who climb to enjoy the view and not always to plant a flag on the peak. Sometimes in our lives it is more important on how we enjoy living than how “successful” we are in the eyes of others or even ourselves. Quitting takes a lot of courage and sometimes only the wise can give up even when success seems so near. They always ask themselves: What is the cost of winning? Is it worth to scale the summit?”