‘Tis the Season for… annual performance reviews!
As an HR Consulting firm, Helios is a big supporter of managing employee performance. Performance Management includes annual performance review meetings that we hope managers at every organization are having with their staff. Many employees see an end of the year review as an administrative task to check off a box before they can get that long awaited merit increase at the end of the year – and that, in a nutshell, is the problem with performance reviews.
What’s the point?
Performance review meetings serve as a formal channel of communication between an employee and his/her manager. They allow both parties to discuss progress against previous goals, identify performance concerns, establish goals for the next year, and work together in an effort to develop and grow the employee at the organization. It seems pretty straight forward, right?
Where it goes wrong:
Managers and employees are often so busy with their day-to-day job and finishing out projects at the end of the year, that performance review meetings may get pushed further down the priority list each day. Some employees may rush through their self-appraisal while others may spend hours noting every detail only to have their managers quickly check off the boxes that are required, sign the form and send it back to the HR Department. If performance is managed throughout the year, and managers and employees are meeting on a regular, on-going basis, the ideal performance review meeting is held face-to-face, lasts around 30 minutes, and fulfills the purpose as detailed above. If employees and managers get caught up in the day-to-day of their job they may find that the annual performance review quickly becomes a five minute phone conversation to cover the main points of the form, meet the bare minimum requirements directed by HR, and both parties move on with the day.
How do we fix it?
Slow down, and remember that your employees are your biggest asset! These performance reviews are intended to make sure that employee performance aligns with the expectations of the organization. Use this time to recognize the effort that your employees are giving to the organization. Identify areas of improvement and ways that the employee can grow in his/her current role and perhaps into another role, if desired. Establish goals for yourself and your employees to ensure continued success of your department. Taking the time at the end of the year to discuss past performance along with goals and expectations moving forward will help maintain an engaged and successful work force in the coming year.
Have you ever considered an Up or Out personnel policy? While traditionally used in the military and academics, I recently had a client shift their career development approach to an Up or Out policy in order to attract, retain, and motivate high performing individuals.
What is an Up or Out Policy?
This policy means that each member of the organization must achieve a certain level in their career path within a defined period of time. If employees are not promoted after a designated length of time at their existing career level (usually no more than 4–5 years), they are counseled out of the firm. There is a very specific and narrow career path, and employees must demonstrate their ability to succeed at the next level before being promoted.
Why Use an Up or Out?
While the policy is not for every organization, it has proven to be very successful in many management consulting, accounting, and law firms. The Top 3 benefits associated with an Up or Out policy:
- Organizations are able to clearly define and communicate their career development program and career paths to current and potential employees.
- Employees in turn are able to have a clear understanding of what it takes to move ahead in the organization.
- This approach encourages employees to take ownership of their career development, and ensures that only the strongest performers reach leadership positions.
How to Make the Up or Out Policy Successful
For my client, we implemented a few tools and resources to ensure the new policy would be successful and accomplish the goal of attracting, retaining, and motivating high performers.
Top 5 Resources to Have in Place for an Up or Out policy:
- Career Paths: For this type of approach to be successful, career paths must be established and clearly communicated throughout the organization.
- Training and Development: Internal trainings help to ensure an employee will gain the knowledge, skills, and abilities needed for success at the next level and will help them to move up their career path. Since an Up or Out encourages an employee to own their career development, they will need access to resources that will enable them to drive their own careers such as internal training and resources and support to attend external trainings. Internal trainings should also include education tools and programs that allow for lifelong learning and skills development. This is vital to the success of implementing this policy.
- Knowledge management tools: These databases such as an intranet or an internal social media network should be used to organize content to make it easily findable and accessible. Employees should be encouraged to connect with fellow employees and share their knowledge.
- A Support System: In order for the new career development strategy to work, there needs to be a support system put into place. Employees cannot be expected to simply move up in the organization without any support from their company and managers. Managers will also need training to ensure that they provide their employees with the clear expectations, feedback, support and resources needed to maintain the high standards associated with this practice.
- Mentoring: A mentoring program is a great way to provide employees with a champion and consistent feedback, while also ensuring knowledge is shared throughout the organization.
What to Expect with an Up or Out Policy
A company must be prepared for the potential of high attrition that results when this career development strategy is a part of the corporate culture. With an Up or Out policy, there is a great amount of pressure put onto recruiting. Due to the extraordinarily high levels of employee attrition, which can be an outcome of this practice, organizations must put a lot of effort into recruitment of high quality entry level employees. If the organization is not able to recruit the large number of entry level positions this practice requires each year, or is unable to attract high quality entry level candidates, the Up or Out policy will not be able to succeed.
Many areas of the business must be evaluated before deciding to implement a policy of this nature. Recruiting, performance management, training and development, and the culture of the organization must all support the intended consequences. I must point out that an Up or Out policy will not be a fit for all companies. But if the culture fits, the strategy is aligned with the goals of the business, and the proper resources and support system are put into place, it can be a very successful and powerful career development tactic.
I love fall. The crisp, cool air reminds me of walking to basketball practice in sweatpants and a hoodie, and I get excited! At the time I was just having fun, but looking back I realize how much I learned from sports that can be translated into life and into business. Coaching is one of those things.
When we hear the word “coach”, most people think about a sports coach; but, people can be coaches outside of the sports arena too, and I believe that every manager should play a coaching role. I don’t mean get out your clip board and whistle. I mean get to know your employees as individuals so you can set them up to succeed as individuals and as a team.
John Wooden is one of the most admired coaches in not only NCAA basketball, but in sports. He won ten NCAA titles as head coach at UCLA and was named national coach of the year six times. And yes, he had a very talented team that helped him get there, but he had to get 10 very talented individuals to work together as a team year after year. And that took coaching off the court.
There is a video on the official site of Coach John Wooden where Coach Wooden talks about how he wanted his athletes to know that he cared for them personally and not just what they did on the court. He says, “I got acquainted with them early because of their athletic ability and I wanted them because of their athletic ability. But, I wanted them to know that I was concerned for them personally…”
I take what John Wooden says about getting to know his athletes, and I translate “athletes” into employees. We hire employees for their ability to perform a job. Once they are hired, it is our job as a company and as managers to help those employees reach their highest potential.
Here are 13 tips I give to our clients on how to develop relationships with their employees and help them reach their potential:
- Show your interest in your employees as people and as employees
- Ask about their family and hobbies and what makes them tick*
- Share your own experiences
- Provide constant, open, honest, and constructive feedback
- Let your employees know when they did something good and when they could have done something better
- Provide timely feedback
- Give your employees your undivided attention (that means close the door and turn off your cell phone)
- Show your trust in your employees by giving them autonomy
- Ask your employees for their opinion
- Help them get from A to B without doing the job for them
- Walk through their thought process with them and let them find the answer without you telling them the answer
- Let them make mistakes, but don’t set them up to fail
- Show your support for them
*As HR, I must throw a disclaimer in here and say don’t pry and try not to go down a path that could later be used in a discrimination claim.
Use the information you learned about your employees personally and professionally to cater your manager style to each individual employee. They will appreciate that you know when to listen and when to give feedback. They will be motivated to do their best for you and in turn, for the company.
Good luck. Now get down and give me 20!
As HR consultants, clients often approach us seeking guidance on how to manage an employee who is under performing in their current role. By the time a manager has decided to approach HR with the situation they are often frustrated with the poor performance and are seeking HR intervention. Poor performance is an inevitable part of every organization and it is imperative that supervisors and HR work together to determine the best course of action for each situation.
In many organizations you can find a progressive discipline policy within the Employee Handbook. This approach is exactly what the title indicates; a process whereby an employee is given an opportunity to correct poor performance in a process where the offender’s punishment progresses if the poor performance does not improve.
The first phase of progressive discipline is typically to hold a conversation with the employee to identify the performance issue. The intention of this initial meeting is to make clear to the employee that they are not meeting performance standards and to identify expectations moving forward. This conversation should take place between the direct supervisor and the employee; the supervisor should reach out to their HR representative for guidance on structuring this conversation and always adhere to company policies.
While holding poor performance feedback discussions, managers should consider the following:
1. Be Intentional: Before meeting with your employee, be sure to identify your desired outcome. This initial conversation with your employee should be to inform the employee of the unsatisfactory performance and provide them the opportunity to improve.
2. Maintain a Positive Nature: While the purpose of this meeting is to be clear that you are unhappy with performance, you want the meeting to be an open discussion of the issues at hand and measures that the employee can take to improve. You want the employee to view your message as an opportunity to improve and step up.
3. Be Specific: When you’re letting your employee know that they are underperforming, this cannot be a general statement. Specific examples of actions (or lack thereof) that have proven detrimental to the team, other departments, and/or the organization need to be discussed. The employee needs to understand exactly what area of their performance needs improvement.
4. Discuss Impact: It’s not always enough to say what an employee is doing wrong for them to understand the effect that one employee underperforming can have on an organization. Provide details on how their performance has impacted the team, other departments and/or the organization.
5. Ask Questions: Be sure that you are being fair to the employee and try to understand if there is a legitimate reason for the poor performance. Are there any problems amongst the team that can be addressed? Is there potentially a need for accommodation? Is there a training issue? Ask the employee if there is anything you could do, as their manager, to help them be successful. Understanding the big picture will help determine how to move forward.
6. Determine Next Steps: While you should go into the meeting with a good idea of what you would like to see from your employee moving forward, the conversation may give you a different perspective. Talk with the employee and identify specific, preferably measurable, areas of performance where you would like to see improvement. Determine what steps each of you will take to guide the enhanced performance and schedule a follow up meeting to check in with the employee in thirty days.
While it’s not always easy to provide this kind of feedback to your employee, it is imperative to address poor performance early. The above guidelines will help focus the discussion with your employee to allow for open and honest conversation in order to identify methods for improvement. Maintaining an atmosphere where employees are held accountable will lead to a successful and more engaged workforce.
Direct Holdings Global, most notably associated with the success of the Time Life brand, is a multi-channel marketer, distributor, and leader in entertainment and lifestyle direct-to-consumer marketing. In this interview, President Chris Hearing shares how they foster an environment that encourages trust and innovation. Check out the full interview below!
Helios HR: What makes you excited?
Christopher Hearing: For me, seeing a new product or a new marketing program come to life. Our business relies on a steady flow of new products each year. We typically test about 15 new products annually. Of those, usually 10 products are launched. A huge amount of preparation goes into the product development and to see it become successful is incredibly gratifying. That’s what really motivates me to come to work every day.
An example that comes to mind is an oven that we’ve developed that uses a new technology to cook food faster, similar to a microwave cook time, yet browns and cooks food like a traditional oven. We set up a joint venture with Wolfgang Puck Productions and spent more than 2 years with Wolfgang and a team of engineers here and in China to prefect the technology and to bring it to the market. Last month we finally launched the oven on Home Shopping Network (HSN) and it sold out in 23 minutes! Now we are in the process of developing a TV commercial, working with our international and retail distributors, and continuing to market the oven. Everyone in our organization has a hand in making the success happen and it’s really exciting when we see it come full circle.
Helios HR: You’ve been with the organization for more than 26 years. How has the culture evolved at Direct Holdings throughout the change over the years?
Christopher Hearing: When I joined the company as a Financial Analyst 26 years ago, I certainly never expected that I’d be running the company now. If anyone who was with us 26 years ago came back today, they wouldn’t recognize the company. Twenty-six years ago, we had 10 locations in the US, another 7 overseas, operated under Time Incorporated and then Time Warner, making us part of a very large multinational corporation employing thousands. Today, we are privately held and we’ve got the same global distribution, it’s all done from our office in Fairfax, Virginia with just 62 employees. Even with a much smaller footprint, we’re as profitable today as we were back then. I believe that part of that is because of our culture. Now as a small organization, we operate with complete control, allowing us to have a much quicker response time and move at a faster pace. Direct Holdings is nimble and flexible, adapting to change and seeking new opportunities. We also ask all of our employees to be involved in a variety of responsibilities of the organization, whether it’s part of their job description or not. We are a team that embraces change and enjoys being challenged. We made a conscious decision 10 years ago to change the company structure and culture to be smaller and more nimble and we had to focus ourselves on making that culture change happen, the habits we had developed from our experience as a large organization were hard to break. A major cultural shift doesn’t happen overnight – 10 years later we are still focusing on ways we can improve, but it is critical to our ongoing success.
Helios HR: You’ve recently created an unlimited vacation policy. What initiated this policy change and how do you create such a trusting environment in the workplace?
Christopher Hearing: We’ve always had a generous vacation policy at Direct Holdings because we believe it’s important for employees to balance work and life. In order for us to be successful with our business model, we need employees who are really dedicated, motivated, and are willing to get the job done whether it’s in their job description or not. Therefore, it’s very important for us to treat our employees the same way we want them to act. They are free to take an appropriate amount of vacation as agreed upon with their manager. Obviously, we care about their work getting done and we require that they are having open communication with their managers and coordinating their schedules but that’s really no different than a more traditional vacation program. One of our biggest resource constraints is time. Making sure our attendance records are up to date wasn’t a good use of time nor did a structured vacation policy contribute any value. So whether someone takes 10 days or 13 days off per year, as long as they are demonstrating their commitment to the success of our business, the exact number of days isn’t really important. I get asked about managing employees who take too much time off or abuse the policy. It’s actually pretty simple; an employee who would abuse an unlimited vacation policy is not the kind of person who can be successful in our environment.
Helios HR: In an ever-changing marketplace, how do you encourage innovation at Direct Holdings?
Christopher Hearing: To give you some background, there are four different business lines at Direct Holdings: we have our traditional entertainment line where we sell music, CDs, DVDs on TV, web and retail. Next we have live entertainment business where we bring our nostalgic entertainment products to life through live experiences like our Soul Train Cruise where we charter a cruise ship for a week and bring entertainers like Earth, Wind & Fire and Gladys Knight onboard to perform. We have our lifestyle products group where we produce new kitchen products such as the Puck oven, juicers, next generation grills, etc. We’ve been in the lifestyle products market for about 4 years, it’s very new and different from our traditional lines of businesses, but we use the same core competencies as our legacy business line. Lastly, our fourth product line is Cash for Gold, which is a great example of innovation at Direct Holdings. We acquired this business out of bankruptcy last November. Although it was an opportunity in an industry that we had no experience in, we were able to play off what we are good at - direct to consumer marketing. We have been very successful in bringing Cash for Gold onboard and never missed a beat. It’s contributing meaningful profits to the organization.
Over the years, we’ve morphed Direct Holdings into where it is today. When we stop innovating, we will stop growing and will eventually fade away. Constant innovation is critical to our success. What’s really important is that everyone has a voice in the organization and that we are encouraging participation across the entire company. We have a quarterly town hall meeting, where we all meet to discuss what’s going on in the organization, have questions answered, and encourage new ideas to be shared. Additionally, I host smaller breakfast meetings inviting employees of all levels and across all departments to have breakfast and an opportunity to speak up and bring invaluable ideas and feedback in an informal setting. Some of our best ideas bubble up from inside the organization and so it is critical that we give voice to everyone in the company.
It’s also important that we bring new ideas to the table from outside the organization. A recent example is the hiring for a newly created position, Vice President of Entertainment Marketing. We intentionally wanted to find someone who wasn’t in our industry, who wasn’t an internal hire, someone with a completely new and fresh perspective. This new hire was brought in from well outside our normal hiring circle to help us innovate, challenge the way we do things, and change for the better.
Helios HR: How do you hold your leadership team accountable to managing performance?
Christopher Hearing: I am a very firm believer in the power of having a well-developed goals program. It gets everyone in the company focused and moving in the same direction. It’s too easy for us to get distracted and for people to work on things that aren’t central to our success. To make sure everyone is working towards the same goals, we spend a lot of time in the fourth quarter developing 4-5 large corporate goals that we want to accomplish in the coming year. The key components and reasons why we are going after those goals are then shared across the organization in our town hall meeting. Then, each division and individual develops their goals cascading from the corporate goals to ensure that everyone is aligned with our key priorities. I review everyone’s goals to make sure they are specific and measurable for performance and we add in financial goals from our budget process. Managing performance is all about being really clear about expectations of the organization and giving constant feedback on meeting those goals. We meet regularly to monitor performance against expectations and if things aren’t on track we develop plans to get back on course.