performance management

From Australia, by guest blogger Rosemary Kirkby

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bUdSQrPjAustralia has been the lucky country in the years following the 2008 global financial slowdown. However, as individuals, we’ve never quite believed that our economy was strong and recent warnings of slowing growth in China, (our largest trading partner) falling iron ore and coal prices, youth unemployment, as well as talk of a housing bubble following surging prices in our principal cities, have served to fuel national anxiety. The reality is, however, that Australia is actually well placed to transition to a new, broader-based economy, less reliant on commodities.

There is emerging consensus that growth needs to be innovation-led. The change envisaged is not incremental but potentially transformational. It will need a combination of discipline and courage, not least from our major companies who must lead the pursuit of new sources of revenue and growth. For HR this is not business-as-usual. Many of the policies, systems, processes and behaviours (our working cultures) which have served us so well at the end of the 20th Century need to be re-designed to fit the more dynamic market conditions of the 21st Century. This is an opportunity to engage all employees in designing their own futures.

One important enabling condition is the need for greater “flexibility” and there is evidence that Australian employers and their people are embracing it with alacrity. Last year Aecom, a global provider of management and technical services, analysed workplace surveys conducted by its clients to understand their employees desire to work away from the office. They found that between 31% and 54% of employees across the Resources, Finance, Retail and Media sectors would appreciate doing so for 1 to 2 days a week. This has important implications for the leasing of space in commercial buildings, for employee health and wellbeing, for workforce participation, for productivity and other areas such as transport infrastructure and the life of our cities.

Telstra, Australia’s largest telecommunications company with more than 35,000 employees, has demonstrated how Government legislation and leadership can work with employers and their people to accelerate the process of change. At the end of 2013 CEO, David Thodey, introduced an initiative known as “All Roles Flex”, becoming the first large corporation in Australia to ensure that everyone had access to flexible ways of working. This followed the introduction of the Federal Government’s Fair Work Act 2009, enshrining in law the right to request flexible working arrangements. It also followed two years of working with around twenty other corporate and Government leaders as Male Champions of Change, a group established by Sex Discrimination Commissioner, Elizabeth Broderick, to help accelerate development of women as leaders. “What I really like about this approach is that it disrupts the status quo and encourages open conversations right from the start.” David Thodey wrote in November 2013.

Telstra, along with many Australian companies (for example ANZ, NAB, Westpac, CBA, Suncorp, Lend Lease, Macquarie Bank) has over the last decade embraced the inclusive design of the workplace as yet another opportunity to have that conversation with their people about the future. It has given employees and other stakeholders, most notably customers, a voice in the design of the company’s future. It has reduced the cost of accommodation, created spaces which support collaboration, resulted in healthier, more flexible and environmentally more responsive buildings. This has put power in the hands of the organisation’s people to connect freely with others and to better manage their work and careers. This moment in history, and not just Australia’s, is an opportunity for the HR team to lead from the front, as thought leaders about the future of work, setting the need for change in the wider national and global context.

It must necessarily start with HR undergoing its own transformation, reimagining its role in developing and executing business strategy and reconfiguring its skill base so that its traditional strengths in supporting the management of people is balanced by strengths in leading business and culture transformation. Be prepared for conversations which are disruptive of the status quo but which facilitate innovative solutions to increasingly complex problems.

What does motivational performance management look like?

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SONY DSC Here at the Hot Spots Movement, an issue several of our clients have raised recently is performance management.

Organisations tend to base performance management approaches, and many other practices for that matter, on the assumption that human beings are innately self-interested.  As such, motivational tools tend to be individually focused and based on financial incentives. For example, many roles still run along a ‘reward or punish’ line.  That is to say, bring home the bacon and you’ll receive big bonuses; produce mediocrity and you’ll be sanctioned with taking home only your basic salary.

But are we really that self-interested?

Our founder Lynda Gratton has investigated the contrast between the self-interest that organisations expect from their people and what we actually see around us.  She points out that many people give their time and resources to help others. Crucially, they do this without getting anything back in return except, perhaps, personal satisfaction. What gets in the way of this natural propensity to give is in fact the performance management structures that many organisations have put in place.  These structures isolate personal monetary reward as the sole driver of performance, and underplay the contribution of other more complex motivational factors such as autonomy, mastery of a skill, and a sense of purpose. Therefore, despite being institutionalised in many companies, the wholesale belief in the innately self-interested human being is perhaps misguided.

Increasingly complex world, increasingly sophisticated solutions

Organisations seeking to enhance their performance management approaches must therefore look beyond traditional, hyper competitive performance management where the only motivational tool is financial reward. It is, of course, perfectly possible to manage people in this traditional style, but the outcome is usually compliance, rather than innovation or high performance.  As I mentioned in a previous post, we live in a world where the work we do is increasingly complex, requiring employees to produce more sophisticated solutions. A more holistic approach to performance management, in which people are self-directed and engaged, is far more likely to achieve the sophisticated solutions required. To see how this might work in practice, I’d like to introduce you to Atlassian, an Australian enterprise software company.  Every third week of the month, Atlassian gives its software developers 24 hours to work on whatever they would like and with whomever they wish.  The only caveat to this is that they present what they worked on to their company. Not in a formal, boardroom-style meeting, but in an informal, party-style meeting intended to create a collaborative and innovative environment.

Innovative results?

Through creating a more intrinsically motivated workforce, thanks to a reduction in the amount of individualized incentives, Atlassian’s once-monthly 24 hours of innovation has led to myriad improvements for existing software and ideas for new products. This shows that exactly what so many employers are nervous of, giving autonomy to people, can achieve precisely what they need: engaged people producing sophisticated solutions.

For more information about tools that give people the chance to set their own agenda, invest in the future of their organization, and create solutions to complex challenges themselves, you can read about our FoWlab Jam platform here.

Five insights on engagement

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Emma

by Emma Birchall, Head of Research, Future of Work

We had a busy start to the week as we hosted our Engagement 2.0 masterclass in London. It was a diverse event offering a wide range of perspectives on the topic, so towards the end of the day, we asked our delegates to think about – and then share – the key insights they were going to take away. Here are the top five…

  1. The link between engagement and performance

    In her keynote, Lynda pointed out that the popularity of engagement surveys is based on the belief that measuring engagement is a way of measuring performance. But some recent research suggests that low performers can be highly engaged and high performers disenfranchised. If this is true, and engagement isn’t as reliable an indicator of performance as previously thought, what does that mean for the future of the engagement survey? And, what are the implications of tying managers’ bonuses to engagement scores?

  2. Is HR ready for Big Data?

    There’s no doubt that Big Data holds a lot of promise. Guest speaker Guy Halfteck gave us his perspective on the potential of Big Data has to help companies identify the best talent for each role. Guy’s company, Knack, uses gaming to generate real-time data about people’s skills that can predict an individual’s performance in a role. But, as one of the videos we commissioned with Central Saint Martin’s highlighted, there is still a lot of work for companies to do when it comes to ensuring they are extracting the most relevant data and interpreting it correctly.

  3. Appreciating diversity

    One thing our delegates were concerned about was how to customise engagement approaches to reflect diversity. While organisations have traditionally focused on adapting their offerings based on gender, race, disability and other visible indicators, our members felt that diversity ran deeper and that truly customised approaches must now reflect life stages and aspirations.

  4. Renegotiating the employee/employer relationship

    The workers of the future won’t be looking for a “permanent” role – they’ll be looking to organisations to add to their career portfolio by providing them with opportunities that will help build their own personal brand. In light of this, how can organisations prepare themselves to renegotiate the deal? How can they create portable credentials that employees can transfer into their next role?

  5. Managing intangible assets

    As our recent newsletter highlighted, health and wellbeing is at the forefront of many workers’ minds. At the masterclass, it was pointed out that in the days when jobs were for life, employers took care of employee health and wellbeing – a priority that fell by the wayside as careers models shifted. The big question is how organisations can re-integrate health and wellbeing into their outlook given that in future employees will be on the scene for a few years at most.

And finally…We all need more sleep!

One of Lynda’s key take-aways from Davos was the need for a solid eight hours’ sleep. Lack of sleep causes poor decision-making, poor health, and can even trigger conditions such as Alzheimer’s. But does anyone but the most eccentric of senior executives have the opportunity to take a nap in the middle of the day? One of our delegates said their company encourages naps – and perhaps in future this practice should become more widespread.

Insights from the New Ways of Working Masterclass

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Emma

by Emma Birchall, Head of Research, Future of Work

We started this week with a bang by hosting one of our Future of Work masterclasses on the subject of New Ways of Working. Here are some of the highlights.

The impact of social networks

It’s no surprise that social media was a major discussion point. As Lynda pointed out in her keynote, social media has already had a huge impact – but it isn’t quite as entrenched as other habits. While 70% of companies now use social structures and communities internally, with 90% reporting benefits, email remains dominant and many companies struggle to exploit social media’s collaborative potential. Most businesses are only just realising that online communities are becoming just as important as physical communities and many-to-many communication hold great value for the future. Increasingly, social media is becoming the only way to ensure disparate groups of employees make the connections that will help boost productivity and strengthen teams.

Guest speaker Darren Keegan of Tycoon Systems expanded on this theme by highlighting the value of virtual reality workspaces – and why they shouldn’t be ignored as a tool for enabling geographically diverse teams to collaborate effectively.

Global talent pools and hyperspecialised work

Our speakers also focused on job design and the trend towards complex work. With many of the most talented workers choosing portfolio careers and virtual working becoming embedded in corporate culture, companies are waking up to the fact that they can acquire specialist skills virtually instead of hiring experts full-time. By allowing employers to share the most talented workers rather than competing for them this model offers huge benefits such as enabling businesses to carry out complex projects at a reasonable cost. However, it also poses some unique challenges, including the question of how best to assemble teams when some workers are remote, and how to ensure employees stay motivated. Guest speaker Gary Swart, CEO of oDesk – also a renowned expert on the future of work – provided practical insights into this new way of working by describing how oDesk’s business model helps workers build more meaningful, varied and lucrative careers while at the same time enabling businesses to streamline hiring processes and access high-quality work at the best price.

New ways of managing performance

As job design changes, performance management methods have to be updated accordingly. In a world where teams aren’t necessarily co-located, employees frequently work on many projects with different leaders and peers, performance management is following the same patterns as communication and evolving from a one-to-one model to a many-to-many model.

As with communication, social media would seem to be a great solution to this – platforms like Work.com are already offering such services. The real issue around performance management, however, is behaviour. There is no escaping the fact that remote workers receive lower performance appraisals than co-located team members and that people give feedback based on how well they like someone rather than their skill level. Once again, Gary Swart’s take on this provided a glimpse into the future: freelancers on oDesk are already assessed based on their skills rather than what a manager thinks of them.

Finally, we invited members to think outside the box by looking at ways in which human resources professionals can learn from marketing firms when it comes to observing and influencing behaviour. Jonathan Chippindale of Holition provided unique and fascinating insights into how concepts such as augmented reality and gamification are revolutionising consumer behaviours.