I remember the first time I was offered the opportunity to supervise someone. I had completed a business degree and was working at the Utah Credit Union League as a manager of consulting services. And of course, along with the feeling of responsibility came a two-way trust that had to be established with my new direct reports, especially because I was only 27 years old at the time and some of my employees weren’t so sure that I should lead them.
Now, more than 30 years later, as a CEO and while thinking of the performance management process, I am struck by how difficult it is to supervise anyone. Our best people manage and motivate themselves, and they make us all look better than we sometimes deserve.
But the fact is, management principles dictate that some form of performance management structure is not only needed, but is also essential for organizational success. Many smaller companies have no formal structure, and oftentimes employees don’t receive the direction or encouragement that they crave. In other, mostly larger, organizations there can be a stifling performance structure that dampens creativity and enthusiasm.
Most of us have been on both the giving and receiving end of a well-intentioned performance evaluation that went wrong.
Brené Brown, author of the book “Daring Greatly,” talked with a thousand people to identify what makes them feel inadequate and to understand the downward spirals of feeling “not good enough.” As she writes: “When our self-worth isn’t on the line, we are far more willing to be courageous and risk sharing our talents and gifts.”
And isn’t that one of the important positive purposes of performance evaluations? That is, to motivate a team member to be vulnerable in stretching to get better at what they do. One way to embrace creativity, Brown says, is to let go of comparison. If you are concerned about conforming or about how you measure up to others’ successes, you won’t perform the risk taking and trailblazing inherent in creative endeavors.
CU Solutions Group offers an industry-leading performance management system branded as Performance Pro. It is used by 550 credit unions and another several hundred companies in other industry sectors. It is a classic, cloud-based, “check the box” evaluation product. But we have learned the importance of providing the HR consulting and training that helps customize performance management to each credit union leadership style.
There is no such thing as a one-size-fits-all approach to performance management, and so CUSG wants to make sure that Performance Pro and associated consulting services provide credit unions with the flexibility to manage the performance conundrum. This is especially important in an environment where progressive credit unions are trying to unleash more innovation and creativity, while holding people accountable for results.
In a recent article by HR expert Tim McElgunn, he highlights eight trends in corporate America that are transforming performance management and helping to balance accountability with innovation.
1. The lingering death of the annual review
This means that, regardless of your performance review software, credit unions should consider structuring reviews to be more like monthly goals and coaching meetings as opposed to relying solely on the year-end review. It’s still important to document performance in an annual wrap-up report, but innovative shops are finding that shorter, touch-base meetings can provide the dynamic, motivating, open communication needed to bolster job satisfaction.
2. Flipping the feedback loop
Research shows that both giving and receiving feedback are stressful, whether in an annual sit down with numerical rankings or in monthly coaching sessions.
So, knowing this, managers should consider asking their employees how they think things are going, rather than scoring them right out of the gate. Good leaders also ask for critical feedback on their management and communication skills.
Creating an environment where the feedback loop is flipped can make the performance and coaching process less threatening.
3. Crowd-sourced performance assessments
This just means that, starting with senior management and the HR department, employees need to be trained to ask for feedback regularly through email and in coaching sessions.
Creating a culture that encourages vulnerability and a desire for feedback makes the performance review process more useful. Again, two-way performance documentation still matters, but it shouldn’t be the primary focus of a good feedback loop that happens throughout the year.
4. Moving away from “stack and rank”
While certainly not universally true, some companies are moving away from point-based assessments. But the key here is that some positions benefit from qualitative measures while others should rely more on qualitative ones. For instance, a credit union’s marketing department and those responsible for product development might benefit more from subjective or qualitative feedback, while definitive metrics work better with front-line staff and lending professionals.
The key is to have a performance software that promotes flexibility, allowing for more or less structure and metric tracking based on each position.
When I was that 27-year-old supervisor, fresh out of business school, I looked at performance in more quantitative, structured terms. And I’ll admit, it has taken a long time to fully appreciate the value of coaching and true communication in performance review settings.
During a formal goals meeting or a semi-annual performance review, it’s often helpful to say, “let’s just put this paper aside to begin with, and tell me, what can I do to make your job more fun and enjoyable.”
Asking employees what they might have done differently when mistakes were made, or asking them for their opinion on something in their department that is outside their control, can show them that you value their contributions versus just ranking or grading performance.
6. Separating evaluations and compensation
Some companies are trying to disconnect formal performance evaluations from compensation decisions. The theory is that it can take away from the opportunity to coach and motivate.
However, I tend to believe that the annual summary evaluation should still be tied in to salary adjustments and bonuses. Like it or not, performance-based pay is an expectation of most employees, and the tie-in can be motivational by showing there is a method to the madness of deciding how people get paid.
7. Job personalization
While credit unions have more homogeneous jobs than most businesses, such as tellers and member service reps, the fact is that most positions require unique skills and training regimens. Technology now enables the personalization of just about everything in our lives. Skill development should be no different.
CUSG is in the process of melding a learning management system with its Performance Pro product. This will enable credit unions to customize training curriculum with each performance review and coaching session.
One of the most motivating things about a coaching session can often be the offer for personalized professional development.
8. Increased focus on emotional health and stress management
Most HR experts understand that a great corporate culture emphasizes mental health and wellness in addition to physical wellbeing. This certainly includes emotional stress management as well as more serious mental health issues.
One of the most essential realities of employee coaching and performance monitoring is that feelings of isolation and loneliness are de-motivators and can be destructive to morale. All good leaders realize that virtually everyone is dealing with personal challenges outside the work environment. Looking for opportunities to lend a listening ear without crossing personal boundaries can build mutual trust and respect.
So, regular check-ins with both onsite and remote employees can really contribute to a positive staff culture.
Additionally, it is important to consider the areas of the credit union where positions tend to be more isolated. Obviously, member service centers are by design more active and dynamic. But for those employees whose positions that are more isolated, managers should be encouraged to check in regularly to make team members know that they are appreciated.
Encouraging a performance management system that relies on both good tracking software as well as less formal, caring coaching dynamics can foster a climate that feeds innovation and high-quality service.