Friday, May 29, 2009

Everyone Hates Performance Reviews

Why are we so bad at Performance Reviews?

I think a big reason is we hate them. So many of us see them as a time-wasting, burdensome process, full of inaccurate measures of performance - which often result in demotivating staff. At least this is what I often hear.

I've heard start-ups just shouldn't do them. They take away the zest, the common drive start-up employees already have, and... the laissez faire, independent, hard work ethic attitude. Reviews are part of 'the system', 'the man', another useless process which is exactly why your employee left their last job.

Well wow ... there it is out in the open. I do admit - a review free, no BS, garden of Eden work environment sounds pretty sweet. We can just work hard, talk to each other everyday about performance and tasks, and give high-fives and recognition at-will (read with sarcasm).

The problem is you don't communicate as well as you think you do. Employees need more.

A recent New York Times article on reviews focused on the inability of reviews to improve company performance. While ditching reviews because off a weak link to improved performance is reasonable, I'd argue we should do reviews for other reasons.
  • Employees are NOT motivated by money alone. Often, they are not even primarily motivated by money. They want to be engaged and to contribute to something bigger.
  • Employees want to hear you know what they are working on. They like being acknowledged. I mean, come on - even if you everyone knows the website was released and looks sharp (for example), wouldn't you want your boss to sit down and SAY you did great, you met the deadline, you faced some technological challenges and went out of the box to solve them? Perhaps you even get it in writing?
  • Employees want feedback about their job. They want accurate feedback. (Of course, I can't find the link now, but I saw a study showing a majority of employees feel they do not get accurate feedback about their work performance - and that accurate feedback is top factor in job retention).
  • It is a good idea to be forced to set goals and to hand out acknowledgments and kudos.
  • Employees have good stuff to say that you don't know about. Despite how much you think you are approachable and 'talk with your team everyday', there generally isn't a good time to talk about the TPS reports, the co-worker they are having difficulty working with, or how they wish they could be doing a different job.
  • We need more specific times to force you and employees to ruminate over performance. Just thinking about the year, thinking about what your subordinate (or your boss) might say, thinking about what you want, and what you want to say 'thank you' for (or what you should say 'thank you' for) is a good process.
  • You don't want to encourage the whole year being open to salary scrutiny. It's nice to have a designated time allotted to discuss increases and adjustments. Create that time.
  • Of course, reviews serve a very real world purpose of documentation - justifying a promotion or termination of one employee over an other. You never care about these until it is too late - so take care of your legal obligations.
I realize I said 'forced' a couple times. Force you to set goals, force you to communicate. I think we imagine we get to these points throughout the year. But, too often we don't - and it's nice to have a date and structure pushing things along. Reviews are not going away. There is always new discussion and new tools. New reasons to not do them, and new ways to do them - 360 reviews, 5 point ratings, forced distribution, self-evaluation, whatever.... Rypple is taking a new social media type approach - friends, colleagues, and customers give frequent, direct, anonymous feedback. We don't need traditional systems, nor do we need to keep it them the same each year.

I guess in short, if you are doing 'boring' reviews you need to improve them. If you don't do them, you need to start.

Tuesday, May 26, 2009

Constructing the Salary Offer

I realize there is not a lot of hiring going on right now, and candidates are likely settling for less than than they would. But, I imagine job offers will always be lower than many candidates hoped for. Seasoned executive recruiter Mark Warren understands this well. In a blog post from earlier this month, he helps recruiters prepare candidates to be realistic about an employer's offer.

Mark explains that candidate's need to know the thought process employers go through when making on an offer. He explains the employer's evaluation is processed using the following criteria in order of importance.
  • (40%) Internal restrictions such as budget requirements, department parity issues, established pay bands
  • (30%) The market value of the candidate as perceived by the employer, not the candidate
  • (20%) The candidate's current compensation and compensation history
  • (10%) The candidate's compensation needs
Nice! I think he's pretty spot on, but I'm not sure how many employers know they are going through this process. I don't think there is much salary planning at all in many start ups. I think this break down helps employers understand what they are doing. Perhaps this process and percentages can be used proactively to establish salary ranges and job offers? To plan (gasp).

Certainly, this reminds me to add salary strategy to start up's list of areas where HR can help. It's a lot harder to fix these issues than it is to do some prior planning. Do you understand each position, the market range for that position in your area (industry and geography) - just roughly, that is (there is a lot of subjectivity here). More importantly, do you know if you pay above or below market? Is this part of your strategy? Do salary increases fit into the plan? Does salary mix with equity or other incentives offered?

Friday, May 22, 2009

Do-ocracy vs. Talk-ocracy

'Let's make note of that and start making plans at our next meeting' .... 'Yes Bob, that does need to be corrected - I will get approval from the Managers of each department and make that change.'

This is a 'Talk-ocracy' in action - and it's time we move to a 'Do-ocracy.' I'm reminded that the start-up environment has different rules than many companies - it is a place where a 'Do-ocracy' can thrive. Still, I imagine the minion at the bureaucracy entrenched megacorp could stand out (in a good way) by a little more doing.

This concept first came up in our office when we were looking at the patterns of successful communities (specifically open source online communities). Members of productive, healthy and growing communities DO. There needn't be over-monitoring, limiting and editing. And importantly, when specific areas or projects are delegated to people, it usually makes the projects uninteresting. Instead, people are engaged, and responsibility is given to those who actually do the work. They are fully empowered by the rest of us to get it done. The 'do'-er makes the rules. Not by appointment, but because real world action was created by them. They become active, they are contributors, they are leaders.

Talking about ideas for too long becomes demotivating. Not being engaged and not being able to choose what is important sucks.

I know this may seem unrealistic. With an open source project some projects never get worked on - no one 'does' them. We can't operate a company like that. But we can change our attitude, change how we assign work, how we let people lead, and the way we do work.

We enjoy calling people out in our office. Asking someone if their ideas is a 'do-ocracy' and 'talk-ocracy' is a quick way to call someone's bluff - 'are you just talking or is this really important"?

This week, before I finished making a note about improving something, it was fixed. I need a little more doing. How are you do-ing?

Friday, May 8, 2009

Team building on a shoestring

ok. Frankly, I think this is kind of a cheesy topic. Yes, even for me. In fact, I often don't like planning team building things, or talking about them. I guess I get the sense that people don't think they will be fun - I have to convince them to participate.

But, I do it. I plan activities, block time on calendars and I pretend it will be fun. And ..... it is. These are the types of things making small groups know each other better - they create common things to make fun of later on, they bring software engineers next to accountants. People remember these activities, they mention it to their friends and family, and it builds a unique culture.

Without giving it too much thought, here are some things we have done here.

Trivia: Pull unique facts, past jobs, and awards from employee resumes. Ask employees to send you 2 things others don't know about them. Get essential facts about your business (#1 customer service complaint, top account, whatever). Or even asking what Rose's home town was Golden Girls or what drink B.A. Baracus was scared of. End a Town Hall meeting with Trivia, with the winner getting a huge bag of Swedish fish candy, gift certificate, or $200!

Join a bike ride: - A small team of employees, friends and family volunteered as marshals for the New York City Century Ride. We got to the ride for free, help guide people along the route, and bike through the hear of New York. It was fantastic.

Tent building:
Divide your employees into teams of 4-6 or so (hopefully people that don't work often together). Half the team is blind folded, no talking allowed, and assembles the tent. The others instruct without touching. Make sure you blindfold a couple of managers - it would be nice to have those normally giving directions to see what it feels like. First team done wins. This can take 30 minutes, can be frustrating, but is memorable. You don't even have to follow up with a discussion about 'what you learned' and 'how did it feel to be blind folded and not get enough information' - that might not be so fun. Pack up the tents nicely and return them when you are done.

Gong: Hang a gong (or bell or something loud and significant) and ring it when something big happens in the office. A milestone. Let the employee who helped make it happen explain to the others the reason for the gong.

Bathroom decorating contest: We had very bland, all white little bathroom stalls. No personality. If you want to have a sweet start-up in SoHo, bland and boring isn't going to do. Divide into teams (i.e. men vs woman, engineer vs sales), set a budget of $50 and a deadline of Friday. Invite your customers to come down and judge the winner. This likely wasn't down with a $50 budget, but look what you can do!

Nerf darts: Do you consider your workplace fun if you don't throw nerf darts across the room?

Volunteer: Go to a soup kitchen and help prep food. It might sound unpleasant, but we went and it was awesome. We were tired and busy but mixing hundreds of pounds of raw beef with your hands next to your boss in a hair net is fun. We also really felt like we were doing something good, and that we should do it more often.

Slide show: You'd better be taking pictures of Holiday parties, days in the office, after work events, et al - put them in slide show and show them before your a meeting or company Anniversary party.

Gallery Tour: In New York you can go check out loads of art galleries for free. Take a morning with the team, browse the galleries, get some creative juices flowing, talk with co-workers.

Do a, cliche, Adventure ropes course (looks like New York City Department of Parks and Rec has a program) or make your own in the parking lot. Have a dessert potluck. Every other week have an employee lead a meeting on a topic of their choosing (how to write a java Hello World, make sushi, understand a complex part of your product). Organize a during work Call of Duty II capture the flag game video game session.

Every once in awhile do something. It doesn't have to cost anything (or much) and can make work fun, help you communicate better with your co-workers, and all that retention, recognition, refresh, productivity type stuff. What do you do?