A conversation with a HR person and a... not HR person - Part 3

Here's our final installment of the conversation we had with Kevin Brozovich from HRM Innovations. 

Paul Petroskey (PP): Do you think performance reviews are changing because of the workplace or regardless of it. What I mean by that is do you think this advent of PRs is happening because we now have open workplaces and a lot of different working environments that almost seem to require a more effective review? Or is it happening just because the workforce is changing? 

Kevin Brozovich (KB): I think people are finally looking at the status quo and we’ve gotten to the point where you can question it. I don’t think, I mean I know that didn’t used to be the case. If you think about measuring performance, it’s logical, right? Employees, your human capital, are typically an organization’s largest single investment. There are very few places that spend more on investments than employees, especially when you think year over year. So why wouldn't’ you measure that, if you measure everything else? How do you make a quantitatively measure that investment? From a business perspective, it’s very logical, the main hangup is it just doesn’t work with people. 

PP:  Do you think there’s a one size fits all to this? You’ve talked about your system and how you think it’s a mixture of different aspects, that it was a very time intensive process. Say I’m the CEO of Pepsi or some huge company with 200,000 employees, is the time that’ll be put in to switch to this new system going to pay off? It could go on for a while to get all employees updated to the new way of doing things. 

KB: That’s a great question. One thing is, you can group by types of employees. So for example, if you have 200,000 employees, you wouldn’t need 200,000 evaluations. You would need a set evaluation per job class/family/type, so you can restrict it quite a bit right there. Often, we work with a lot of mid-sized companies and we’ll do one leader evaluation. So it’s not necessarily like the controller, the director of operations and the director of HR - it’s leaders. And you can commonize those enough, right? Find those leaders, evaluate them, teach them the way and then that flows through the organization. 

Having said that, I’m going to say yes, it is worth the cost and time. I think it’s really important to have those conversations and get all of that information. One thing I won’t say is that it’s legally required and you need it to protect the company. That’s BS. I don’t think I’ve ever been in a situation where there was a terminated employee that was challenging us and I said ‘oh look, the review supports us’. It just doesn’t happen because leaders aren’t typically very comfortable rating someone low. I’ve seen it time and time again where you’ll have 8 years of average performance and then the leader says I want to fire this person because they’re a poor performer. You’re like ‘and when did they become a poor performer? because according to the past 8 years they’ve been alright. when did it change?’ 

People just don’t like to do that. 

PP: Yeah, that makes sense. No one, or most people, don’t like telling other people they’re not doing well. 

KB: But I think if you don’t have that kind of conversation and in a meaningful way, with measurables/directors, you just won’t address it. Simple as that. 

PP: I think part of that comes from being the gatekeeper, like you said. If you hired the right person, that person is going to be open to getting feedback whether it be positive, negative, whatever it may be. 

KB: Absolutely. 

PP: It’s when you hire the wrong people that are very volatile and blow up when you give them bad news or just not entirely positive news. 

Kind of leading into that, should money or any monetary thought be put into performance reviews? 

I was reading an article from a couple years ago about how to get people to come and participate in performance reviews and this author’s answer was to make it part of their bonus structure or make it the time you talk about raises. However, I come from the school of thought that it really shouldn’t have anything to do with money, that it should be about performance. 

Don’t get me wrong, I totally believe in open meetings about salary increases, bonuses, etc. but I do think performance reviews should be an entirely separate part of that. 

KB: For me, most impactful bonuses are based on one of two things, one is specific accomplishments. An example of that would be ‘Paul, I give you three goals. If you meet those goals, you’ve got bonus potential’. Or overall company performance, and the best is some combination of that where we’ve got these goals and if everybody meets their goals, chances are the organization does well and people get an additional bonus. It’s what we use at HRM. 

PP: Yeah! At Dominion we have company goals and department goals. So if marketing hits their numbers, I get half my bonus and if the company hits their quarterly goals, I get the other half of my bonus. 

KB: Yeah and that’s best in class. You see that working very well at a lot of companies. But if we’re talking about surprise bonuses, if it’s a one off or something, that’s phenomenal. But ongoing profit sharing without measurables turns into an entitlement thing which does not spark engagement. 

If we’re talking about annual or merit increases, I do think there is a place based on performance to recognize those. I don’t think that should be at the same time as the performance discussion, but I do think the performance review process is part of determining what that is. And I’ll also say I’m pretty cutthroat that if someone is below expectations, there should not be an increase. Even if you’re considering cost of living. If you’re not meeting basic requirements, what are you doing here? People say that’s a harsh message. Well, yes it is but it’s the right message. 

PP: I totally agree. I think I have one more topic to discuss. I’ve been reading about performance reviews quite a bit, a lot of the blogs or articles that are out there are almost an attack on performance reviews. They all cover the same points - they’re awful, waste of time, everybody hates them, ineffective. But I read those and think ‘you’re talking about poorly planned and executed reviews, you’re not talking about the same reviews you and I are.’ Do you think they need to be rebranded? Do you think it’s a matter of the same concept being reshaped? 

KB: Yes and no… in the positivity leadership session I just did. I referenced a concept called the Losada line. Losada did research on feedback and what he found was that to drive engagement, employees need an average of 3 positive feedback incidences to every negative. Highly engaged teams are typically in the six to one range, if you’re at one to one, you’re driving disengagement. 

PP: Did they define why that is? Because the negative outweighs the positive? 

KB: Yes, exactly, because one negative comment does more damage than one positive does as repair. 

So, with that, when you would do reviews, one of the training components we go through with that is you start with a positive, you go through all of the issues that that person has had throughout the year and then you end with a positive. 

That was the kind of theory I was taught in school and has been the prevailing concept forever - you should absolutely leave on a positive. Well, if you compare that feedback ratio to the Losado research, it can be something like six negative, two positive - it doesn’t even make the chart. 

On the other side of that, even with the best employees, you have to find something to talk about. You can’t go in and just have a positive review. I think the overly positive review could do just as much damage as the overly negative. But I think both ways have done so much damage over the years that people automatically think it’s a bad thing. It’s like Pavlov’s dog - the training is bad, reviews are bad, etc. 

Having said all of that, I think your rebranding idea might be onto something. Because if you do it well, then it’s more of a coaching base than an evaluatory base. That might get the whole concept to be looked at differently, the rebranding approach could work. 

PP: That’s yours to keep! No charge. Thanks for taking the time today Kevin, I had a blast. 

KB: Thanks Paul, looking forward to the webinar next week!