How E.L. Goldberg & Associates Shifted from Evaluation to Performance Enablement

Andrea Lagan:
Thank you for joining our webinar today, which is focused on changing the focus of performance management. We are going to be reviewing a presentation on research and findings from Edie Goldberg, PhD, who is the founder and president of E. L. Goldberg & Associates in Menlo Park, California. And her presentation is going to highlight research that explains why performance management needs to shift from evaluation to enablement to improve individual and organizational performance. I’m Andrea Lagan, I’m the chief operating officer at Betterworks and thrilled to be here with you all today. Throughout this session, which will be about 45 minutes of presentation, we will have some polls interspersed to ensure that everybody is engaged in the presentation.

Would also like to highlight that we have the ability to take questions throughout the session, encourage you all to use the chat window if you have a question. We will also have about 15 minutes at the end to take additional questions. And without further ado, I would really like to formally introduce our guest speaker today, Edie Goldberg, PhD is the founder and president of E. L. Goldberg & Associates again in Menlo Park, California. Edie is a nationally recognized expert in talent management and organizational effectiveness. Her practice focuses on designing HR strategies and processes to attract, engage, develop, and retain employees. Prior to starting her own firm over 20 years ago, she was a global thought leader in human capital practice for Towers Perrin.

Edie has published and presented at numerous conferences on performance management, career management, the future of work, internal talent mobility, and succession planning. She is also the co-author of The Inside Gig: How Sharing Untapped Talent Across Boundaries Unleashes Organizational Capacity, which was released in April of 2020. She earned her PhD in industrial-organizational psychology from the University of Albany SUNY. And as if that doesn’t keep her busy enough, she also serves on the board of the SHRM Foundation and is a fellow of the Society of Industrial Organizational Psychology. She is the recipient of the HRPS Lifetime Achievement Award for contributions made to the HR profession. And Edie was recently named one of the top Silicon Valley HR executives to watch on social media, and we are beyond thrilled to have her with us today. So without further ado, Edie, why don’t I hand it over to you so you can take us through this great session today.

Edie Goldberg:
Wonderful, great. And let me go ahead and share my screen with everybody so we can get started here. Good morning, good afternoon, good evening, depending on where you’re calling in from. And thank you to Andrea and the entire Betterworks team for inviting me to come share my vision for the future of performance management. And how we really need to change our perspective to get a process that is not something that we love to hate, but something that we love to love. So I’m excited to share this journey with you. Would you guys believe that only 23% of employees strongly agree that their managers provide meaningful feedback for them? I think that’s actually a pretty sad number, but something is even more important than that. And if I can get my screen to advance it would be helpful. Let’s see. Of those people who do believe that their manager provides meaningful feedback, they are 3.5 times more likely to be engaged. And since we all know about the research that says employee engagement leads to increased business performance, we know that this is really, really important.

So I hope that this little statistic here can set the tone for us and set the stage for why we need to move from performance management to performance enablement. So I’d like for you guys to start sharing with each other in the chat. I want to know what is the single driving purpose behind your performance management process? And I think it’s really important that we start with this question. And I think part of the reason why our performance management processes are broken today is because we aren’t thinking about that single question. Why do we do performance management? And then designing the process around that. And you’re going to see a little bit more about why that’s the case. Now, since performance management was invented originally to create fairness and promotions, we keep piling on the different reasons why we do performance management. So most of the performance management processes that your companies have developed, they’re a little bit like a Jenga game, right? We’re trying to do everything with one single process.

And I’m going to argue that you cannot do something well by trying to do so many things at the same time. It just doesn’t really work that way. I believe that the single purpose that we should all be pursuing is to improve individual and organizational performance. And then let that be the lens that you look at your performance management process through in terms of everything that you do around the design of that process. So that just kind of sets the tone here for what I’m going to talk about. But what I want to do before I get there is really talk about the changing nature of work. And how our changing nature of work is really demanding that we rethink a lot of our talent management processes because of how work has changed. So there are a lot of factors that are reshaping organizations today, I’m going to start with our general population, right? We have a workforce that is largely comprised today of knowledge workers and those workers are geographically dispersed all over the world.

And we have an employee population that’s kind of leaning millennial, but generally representative of four different generations in the workplace. And the fourth industrial revolution is bringing us new technologies that are creating economic game changers as we have ways to work that were never possible before. And these digital technologies have changed the speed at which we operate as a business. So we need to be able to pivot and move in a new direction as new challenges or new competitors come and face our organization presenting us with new challenges. This digital transformation is also majorly changing the skillsets within our organizations. And as a result, what you’re starting to hear more and more about again is a rise in talent shortages in most organizations. Now, the talent shortages that we had pre-pandemic, they never actually went away because the roles that we were having shortages for, they were different from the roles that presented a huge rise in unemployment.

So these talent shortages have existed, but now we’re starting to see more and more talent shortages across a lot of different job categories. And the consequence of this is that it’s really important for us to now re-skill our workforce because the people aren’t out there. We have to retool the people that we already have inside of our company. So development all of a sudden is more important than it has ever been in the past. And now we have a new work ecosystem that democratizes work by putting power in the hands of individuals because they have the technology that lets them work on their own terms, like remotely as we have seen in the past year and a half. Our global teams often collaborate through social collaboration platforms to help their teams get work done. So we’re communicating today more digitally than we are face-to-face, and that of course was exacerbated during the pandemic. 

And today our work is really super complex. We’ve seen a huge rise in the need to collaborate across organizational boundaries. Today’s matrix and T-based structures mean that more and more employees actually have shared accountabilities. One person does not have the sole responsibility for outcomes in our organization. Often it requires input of many, many people. And one of today’s top business trends is the move away from our traditional hierarchical organizational structures to more interconnected, flexible teams that can form, expand, and contract based on the changing needs of your business. More and more companies are relying on those traditional organizational hierarchies more for governance purposes rather than… and then getting their day-to-day work done in purpose-built networks of teams, so getting that day-to-day work done in teams. And today because of the pandemic, we have seen the idea of staffing project-based teams take off like a rocket.

A lot of our business changed quite quickly during the pandemic and then we had to move people to new roles and new projects because the pandemic kind of shifted the type of work that we had to get done. So reflecting on this, I want to think about what are the implications for performance management of how this world of work is changing? So I’m going to start with goal setting. Our traditional process of setting goals annually does not fit the pace or the needs of your organization today. We need to be able to adjust priorities and shift on a dime. And change where people are focusing their direction based on new competitors, new technologies, any kind of disruption or changing requirements from your customers.

Second, we continue to set individual-based goals and reward people for individual performance when our work today is more complex and done more in teams. So I might make the argument that perhaps goal setting should reflect more team-based goals than necessarily individual goals. Feedback. The global dispersion of our workforce means that sometimes managers and employees are not co-located with each other. So managers may not always be the best source of feedback for an employee. Also, I would argue that in a lot of our very, very technical roles, sometimes it’s our peers who have a better idea of how we’re contributing to the team than our manager. So I want you to think about who’s the source of feedback and perhaps do we need to widen the aperture and allow more input from peers, direct reports, people in other parts of the organization that we work with?

And from the data that I shared at the very beginning of this webinar, we know that employees are not feeling very good about the feedback that they’re getting. The quality of that feedback isn’t very good, but I’m going to argue that the frequency that we get that feedback in general is not all that great either. The idea of giving somebody feedback once or twice a year, the midyear or end-of-year performance is just a terrible idea. The idea of saving all that feedback up, number one, we lose a lot of information over time because we simply forget. Number two, feedback needs to be given at the time of impact right after that event happens in order for people to mentally really connect the feedback with what happened to be able to change their behavior. I’m going to argue that we need to move beyond occasional feedback to ongoing coaching for performance and allowing individuals who have observed our performance to provide feedback, not just our manager.

Now, I’ve interviewed a lot of leaders and managers about their performance management processes, and inevitably what I get told is by the time we get to the development planning portion of our performance management process, everybody’s exhausted. We spend all our time focused on creating performance goals and then giving people annual feedback. And by the time it gets to the development planning, it either gets the short shrift or it doesn’t get done at all. And if it gets done, it kind of sits on some imaginary shelf somewhere and doesn’t get brought out or re-looked at until the end of the year, and that’s certainly not serving our employees. I already mentioned in the beginning our skill sets are changing rapidly in organizations today. Development is more important than ever before, and the way in which you rise up organizational performance is to develop individual performance.

And finally, evaluation. There’s been a lot written lately about whether or not managers are actually capable of accurately evaluating individual performance. There is a lot of research that says our own personal biases play a really big role in how we actually perceive other people. And after speaking, I would say with a lot of different managers, I would argue we actually don’t need a rating process to know where individuals stand. We don’t have to rate and label people for managers to know who’s my highest performer and who deserves extra special recognition. And who are my lowest performers who I need to take some special action with, or they’re not really going to make it here. Managers know that by the accomplishments people have achieved as well as what other people are saying about working with them. So managers don’t actually need a formal rating system to understand who’s the best and who’s the worst. Differentiating people in the middle has always been much, much harder. 

And finally, when pay for performance was first introduced in most organizations, we had much bigger budgets and for both merit and bonus for employees than we have today. So there was a better ability to differentiate people based on pay. I would argue that with our 3% merit budgets and smaller and smaller bonus pools, today we have very little meaningful differentiation happening within organizations. So that’s a little bit of a setup about how is our world of work changing and what are the implications for performance management.

Andrea Lagan:
Edie, there was a question around goal setting being designed around individual 360 and team-based concept. Also, a comment I think agreeing with your frequency with respect to shouldn’t be annual, but probably more likely quarterly or even monthly, built around one-on-one and team-based meetings. Do you want to comment on that?

Edie Goldberg:
Yes. So I’m actually going to get into some research to talk about the frequency, and I’m not sure what the question was about the team goal setting. But yes, I mean I absolutely believe that as teams are coming together and focusing on what is it that they need to accomplish, by letting those team goals be the thing that you are focused on and then recognizing and rewarding people for the accomplishment of those team goals. I think that we will actually, and the research shows that we will drive better performance than strictly focusing on those individual goals that often are not the sole responsibility of an individual, the things that we’re trying to accomplish. So what I want to do now is introduce some very, very recent research that my colleague Alan Colquitt and I conducted at the end of last year. And we did this research to support a new book chapter that we’re writing on performance management.

So the data were collected here between October and November of 2020, and our participants were either heads of performance management, heads of talent management, or chief HR officers. And I was thrilled that because we had a really, really long survey, we got 113 companies to provide us with data from our survey. And you see here a representative sample of the companies that participated. These of course are bigger, more well-rounded companies and they’re very representative of our population. But for those of you who come from smaller organizations, I want to let you know that we did have a range of companies and we actually looked at some of the results by company size, and I’m going to comment on one of those in a minute. So our goal in this research really was to understand what are the practices that lead to positive outcomes for performance management? So for a moment, I want you to really think about and imagine what does it look like if you had a performance management process that was really delivering on all of your expectations, it was giving you everything that you wanted out of your process.

What outcomes would you achieve? Well, we thought long and hard about that, and we came up with these 11 items that were what we thought were the desired outcomes from an organization that was implementing performance management. The first seven items we asked in a yes-no manner. “Did you select those things that you achieved through your performance management process? So did you create a more performance-oriented culture? Did you create a feedback culture? Did you align goals within the organization? Did you hold people accountable for results? Did you achieve strong company and individual performance? And did you motivate or engage your employees?” 

Next, we asked, “Has your process achieved its intended goals?” And here we let people say yes, no, and somewhat, and admittedly, most people said somewhat, but it was very interesting to look at those people who said yes. Then we asked, “What kind of a return on investment did you get from very high to very low? That is with all the time and money and resources that you put into designing your process, what did you get out of it in terms of individual organizational performance, motivation, engagement? What did you get out of it?” And then finally, on a five-point rating scale, we asked people, how good of a job does your process do in helping you recognize and reward high performance or taking quick action on poor performance? We normed those 11 items and created a composite called outcomes. And then we looked at what practices differentiated those people who achieved a lot of those outcomes versus those people who achieved few of those outcomes. 

So consistent with what we’ve been reading about in the popular press, people really are not happy with their current performance management process. Only 7% of our participants said that they achieved their intended goal, not very good. And less than 25% said that their return on investment of their process was actually high. And actually, I believe the number is 30% said that their return on investment was low. So that is sad. You guys are putting a lot of time and energy into this and you’re not really getting out of it what you want. I think companies are searching for the right combination of practices and they don’t seem to be happy with what they’ve got, and they continue to make changes. Little tweak here, little tweak there. And I would argue that there’s a lot of chasing the flavor of the day without having any real impact. We ask people, have you made changes in the last one to two years? Are you about to implement changes? And we found that 86% of companies have either recently made changes or are about to make changes to their process. That is a lot of chasing the flavor of the day without achieving the outcomes that people really want.

So this data really stopped my colleague and me in our tracks when we looked at this. So we asked upfront, what were the practices? What was the main purpose of your performance management process as designed and implemented today? And you see here, a majority of our companies said that the main purpose of our process is to evaluate employees to pay for performance. And a smaller number said it was to drive or improve performance, but really strongly it’s about pay for performance. And then we asked them, in a subsequent question, “What should be the purpose of the process that you have implemented for performance management?” And we got a very different answer. You see in the red bar, the purpose should be to drive and improve performance. And secondarily, to provide feedback to develop employees. What was interesting is the bigger the company, the bigger the gap between how it was designed and how it should be designed.

So practitioners know what to do, their processes just don’t emulate what they think how it should be designed. So I want to hear a little bit from you and Emmy, if we can launch our first poll. What I want to hear from you is, which element of the performance management process is, in your mind, the most important for driving motivation and performance? Is it goal setting? Is it feedback and coaching? Is it your evaluation process? That process of differentiating people? Or is it linking pay to performance? What is the most important driver of motivation and performance within your company? And I’ll tell you, I was actually a little bit surprised at the results that we got in our survey, and I’m going to explain that after I see your results. So Emmy, are we ready to show those results? Here we go. Ah, very much mirroring what we found in our study. In our study, 56% of the participants felt that feedback was the biggest driver of motivation and performance.

Here’s what I was surprised about, from the research that I know, goal setting is really about how we motivate performance. But it turns out, I think because of our large kind of knowledge worker component, that feedback and the coaching is what’s really getting people to work harder and be more persistent in the work that they’re doing. So I think that’s a really important thing to kind of take to heart as you think about designing your process. 

Okay, let me move on. I actually have a second poll and now my slides are not advancing. I’m not quite sure why here. There we go. Poll number two. So, Emmy, you can launch poll number two, doing two back-to-back here. Which element of the process is most responsible for disengaging and de-motivating employees? Again, is it goal setting? Is it feedback and coaching? Is it the evaluation process or differentiating or is it pay for performance? What is most responsible for disengaging and demotivating your performance?

Okay, give you another 10 seconds here to get your answers in, and then Emmy can show us what we got going on. Emmy, who’s working behind the scenes. So well, wow, look at this. Again, very similar to what we saw in our survey. A strong majority say it’s that evaluation process that is absolutely killing motivation in our company. So you have to ask yourself if you continue to have this evaluation process, is it about fixing it or is it about eliminating it? So I’m going to move on and I’m going to address a bit more of that in a little bit. So this is my lovely visual attempt at showing what a continuous performance management process looks like. Just like your traditional performance management process, it all starts with planning and aligning individual or team goals to your bigger company goals. You have to start there, align with your business strategy, so important.

And then throughout the year, you see this kind of ongoing coaching happening throughout the year. And then I have some little visuals here. You’re getting feedback, whether that be from your manager or from other people. You’re tracking progress against your goals. Maybe you’re making some adjustments in your goals. I have development here in the middle really to make sure that you’re getting more focus on the development planning part of the process. But there’s nothing wrong with tying a development plan directly to your business goals and doing it at the beginning of the year. It just needs to be done. And here, tracking progress all throughout the year, and maybe at the end of the year you assess progress or if you just continue tracking it all year long, you don’t really need to assess it because everybody knows where they’re at. 

So here is the important fact I want you to take away from this. Those companies in our study that had a continuous performance management process, regardless of whether or not they had ratings or didn’t have ratings, they were significantly more likely to achieve their desired outcomes than companies that had more of an annual or a semi-annual process. So one thing that I will note on here, I don’t have paying people against achievement of goals anywhere on here, and I’m going to get into that a bit more later. But for now, let’s just say I think pay belongs in your compensation process, not in your performance management process. So most companies in our study were happiest with their goal-setting process, which kind of surprised me because most companies that I talk to say they really struggle with setting good goals, but okay. 

And here is a model of what we know from goal-setting theory. It’s one of the most well-proven psychological theories that we have. And that is that setting specific challenging or difficult goals that are within somebody’s control and having that individual committed to those goals, so they have to play a role in setting those goals, and then giving them feedback on progress towards goals. That dynamic is what provides motivation. And when you do that, people perform better than if they have no goals at all or if they’re just told, “Do your best.” And while smart goals continue to be the dominant framework that most companies are using, about 25% of our participants said that they had moved to OKRs, objective and key results. And I think a big reason for doing that is that the OKR process is really designed for shorter-term goals. It’s designed for quarterly or monthly kind of a cadence of goal setting. So I think no longer can we set and forget goals and only look at them at the end of the year. You know that if you’re doing that, everybody’s just kind of fixing what goals are in the system at the end of the year because those things became obsolete that we set at the beginning of the year as your business needs changed.

Now, what’s interesting is over half of our companies in the survey said they set challenging or stretch goals. And those companies that set stretch goals, they outperformed companies that didn’t. So setting those stretch goals is really important. And again, that is another feature of OKRs. They’re designed really to be stretch goals. The other is that feedback is more important for success. And again, those companies in our studies that provided feedback more frequently were more likely to achieve positive outcomes. And of course, goal-setting theory reinforces that. But the problem is this is where most organizations really fall down. We set goals, we forget it. We don’t provide ongoing feedback. Most of that feedback tends to be very task-based, and we don’t talk to people about progress against their goals. So most organizations actually say that they are communicating more frequently about the importance of feedback. They are telling their managers, “You need to give your employees feedback more often.” And at least 50% of our participants said that they are providing feedback quarterly. But this picture kind of tells the story of what the problem is.

Managers just aren’t very good at giving feedback. And again, we saw that in the very first statistic that I gave you. Here over 58% of our participants said their managers were really only fair at giving feedback. And almost 15% said that they were flat-out poor at giving feedback. But companies that rate their managers as being skilled in providing feedback were significantly more likely to achieve positive outcomes. So training your managers on how to provide feedback is really, really important. So staying on this feedback vein, in our study, we found that companies that gave feedback more often were more likely to say that they achieved their outcomes. And that supports previous research from the Center for Effective Organizations at USC. Those companies that have a performance feedback culture achieve better business results. So you might ask, “What in the world is a performance feedback culture?”

And the authors of this study define it very clearly. It’s where managers feel compelled to deliver high-quality feedback on an ongoing basis because their leaders communicate the importance of that to the organization and to organizational performance. Leaders model that behavior, they train managers on how to have effective performance feedback conversations, and they recognize and reward managers for doing it. They also encourage their employees to ask for it. And here we see the results from their study. Companies that use more performance feedback culture elements, the things that I just mentioned, were significantly more likely to achieve positive business results regardless of how we measure it. Net profit margin, return on interest, return on assets, return on equity. Regardless of how you measure performance, you see a direct linear relationship. Those companies that engage in more performance feedback practices have better financial performance. 

So if you want to convince your leadership team that you need to make these kinds of changes, this is the data that you need to bring to their attention. But the nature of that feedback is important too. In our study, we found that companies that are using feedback to enable performance improvement in the future, were more likely to achieve their intended outcomes. So coaching for future performance led to better outcomes than simply looking in the rearview mirror and giving people feedback on things that already happen. So if you remember one thing from this webinar, it’s feed forward, don’t feed back.

Now, earlier I shared that skill sets and companies are rapidly changing. So it’s a business imperative that employees have to continuously learn and grow, and we know that our employees actually want to learn and grow, right? So it’s important to actually leverage performance management as a tool to help you create a learning organization. Consistent with the research that you see here from i4cp, which shared that managers in high-performing companies were twice as likely to create and execute against development plans for their employees. We found that companies that view development plans as an important or a very important part of their performance management process were much more likely, again twice as likely, to achieve positive outcomes for performance. So that’s really important. 

Now, I shared earlier that over half of our participants felt that ratings led to disengagement and demotivated employees. And you guys certainly said that in your companies that was absolutely true. And when we asked people what was the process that they were least happy with, 38% of our employees said it was the employee evaluation aspect of their process. There was more dissatisfaction with this element than any other part of performance management. 

Now, there’s still a ton of debate about whether or not eliminating ratings is a good thing or a bad thing. In our study, we actually found it to be just noise in the system. Whether or not a company rated or did not rate did not impact whether or not they were able to achieve positive outcomes. Achieving positive outcomes has to do with something much bigger. It is about feedback and coaching. It’s about enabling performance, not rating performance. Ratings don’t add value in and of themselves except that they help facilitate other HR processes like compensation or succession planning.

But they aren’t actually helping you to improve performance in your organization. In my experience, and this has been echoed by other researchers, companies that have eliminated ratings have done so to create a symbol or to indicate a cultural change in the organization. To value real in-depth, good feedback, and not let managers rely on the crutch of a rating to communicate what they think about performance. Now, I will tell you, if you have an evaluation process as part of your system, the trend towards simplification and maybe just rating people on overall goals or overall behaviors or competencies, that’s not a good trend. If you actually do rate people on goals and competencies, our study and other studies have shown that being more specific, rating people against each goal and each behavior actually leads to better outcomes than providing more global ratings. So do it or don’t do it, but going somewhere in the middle actually doesn’t help performance.

And our biggest problem with ratings is that compensation is driving your performance management bus. Given small budgets and the fact that most of our workers are knowledge workers who are intrinsically motivated, not extrinsically motivated, pay for performance has really had limited effectiveness within most organizations. So I think this is really, really telling. We asked our participants, how much do factors other than performance, performance against goals, performance against behaviors, how much do other factors have to do with that final performance rating? Only 18% of our participants said no influence. A large majority of our participants said that other factors play a significant role in what that final performance rating is. 

So here’s the problem. I have all these conversations with managers and they say, “Well, we’re really manipulating the performance ratings to get the compensation outcome that we want.” But I would argue taking all of those things into account, taking, does this person have a hot skill? Are they a flight risk? Do they have leadership potential? Are they a retention risk? All these different factors, those are important things to take into account when determining compensation. But the message gets mixed up in that we say, “This is your performance rating.” And it’s important that we communicate all of those elements, but it comes off as communicating it about performance. And that’s I think, where the big problem is.

So I think we need to transform how we motivate and how we reward our employees. We need to motivate without money, right? We have knowledge workers who are intrinsically motivated, not extrinsically motivated. And many of you may have seen a lot of the more recent research around providing employees with purpose and meaning at work. And when you really tie them into the purpose of your company and the bigger impact that you’re trying to have, individuals in those kinds of companies that are really tied to purpose outperform other organizations. Because that is a very motivating factor that drives engagement and drives performance.

The research is very clear when we talk to employees about the progress that they’re making and the impact that they’re having, that actually gets them to persist longer and harder in achieving their goals. We all want a sense of belonging, to belong to a team, to be important to be part of that company, to be part of that community. Tapping into that sense of belonging by using team goals and rewarding team performance is really important. 

And I don’t know how many of you have read Dan Pink’s book Drive, but in that, Mr. Pink says that motivation is about purpose, it’s about autonomy, and it’s about mastery. Autonomy is, “I’m not micromanaged, but I’m allowed to do my work as I see fit, and I have the autonomy to approach this task the way that I think is important. Maybe I get coaching along the way, but I’m really left to do my work on my own.” Mastery, of course, is that we all want to grow and develop and remember, that development piece is really, really important to motivation. 

Now, companies that recognized and rewarded high performance in our study were significantly more likely to achieve positive outcomes. But recognition and reward doesn’t always mean merit pay and bonus. There are other meaningful ways to recognize and reward employees who achieve outstanding results. Now, first and foremost, you have to pay people fair relative to the market. And then increase their pay based on their contributions, the impact that they’re having within the company. But linking rewards to team and company performance that drives that sense of belonging. There’s a whole kind of group motivation factor involved in that. And then I think using other financial rewards to motivate performance. 

Recent research from Gallup came out and said that when a manager provides positive recognition of performance, an employee remembers that for a lot longer and it’s more personally meaningful than if you give them a bonus which goes into their paycheck and they use it to pay for groceries. Or if they’ve been working really long hours and they’ve had to spend time away from their family pre-pandemic, and you give them a card for having a dinner at a place that they really love, now my spouse gets to kind of play into that recognition, and that is really rewarding. 

Okay, so I’m going to change the topic a little bit and I’m going to move us to implementation for our third and final poll. So what I want to know is how visibly does your senior leadership team support your process? They don’t, they sponsor the redesign effort, or do they really role model and advocate for the process? So I want to know how does your senior leadership team visibly support your process?

And I will tell you that we found a direct linear relationship between senior leadership support in the process and success of that process. So let’s see what say you. Let’s see the results here. So a lot of people, sponsoring was more important than playing a role model. So let me provide a very, very important lesson here. Our research showed sponsorship was necessary but insufficient for success of your process. They have to live it themselves. They have to be that vocal advocate. Kind of going back to that performance feedback culture where it’s really important that senior leaders talk about the importance of providing feedback, that they role model it to their direct reports. If you’re not getting that, you’re unlikely to get your lift. We found this to be the single biggest predictor of positive outcomes in performance. And a prior research study that I did in 2007 also showed this to be the single biggest predictor of success. So I want to get us towards the end here so we can take some questions. 

So I’m going to give you my colleague Alan’s recipe for success in performance management. Goal setting is critical for motivation, but providing stretch goals is really important. And that’s the reason why I think a lot of companies are moving towards OKRs.

Create a feedback culture again by having leaders role model that behavior, training managers, recognizing and rewarding managers. You can’t just provide lip service about this. It has to be really embedded within your culture. Coaching for future performance that is feed forward. It really differentiated our best from the rest and develop and reinforce that skill in your managers. Don’t let development planning be an afterthought. Development is critical for engagement and retention, but more importantly, it’s how we improve performance in our organizations. Knowledge workers do not want to be checked up on, they want to be coached and they want to be inspired. And that’s what manager one-on-ones should be about. Companies that hold their managers accountable for having these kinds of conversations. Those companies outperform others, and obviously, if compensation is driving your performance management bus, you’re likely to have a problem. 

So this is a new model that Alan and I came up with as a consequence of our research. And we really refer to it not as a model for performance management, but a model for performance enablement. It really starts with, at the foundation, understanding the guidance and the direction, the company’s strategy, where you’re trying to go, and then setting goals that align with that strategy. And then this middle part, the ribbon, and this is a continuous ribbon. You can see how it’s enveloping everything. It’s about coaching, feedback, and ongoing support, whether that be removing obstacles or getting people the resources that they need.

And development is that thing that really lifts up performance and helps us to achieve, to enable greater performance in our organization. And when you engage in all these things, you have better alignment within your company, increased motivation, more progress against goals, and increased capability. So in light of time, I had one last slide, which is really, and you’ll see this in your handout about what can you do? Where can you start if maybe you can’t do all of these things? Remember that training your managers is really critical because they don’t have the skills to do it. Have quarterly touch bases, have more frequent touch bases. Make sure you’re talking about progress against goals and not just focusing on tasks. Have a recognition process, and don’t forget about development planning because you cannot improve individual and organizational performance without it. So, Andrea, I’m going to open it up to you and to any questions that we have to kind of wrap up the session.

Andrea Lagan:
Yeah, there were a few really good ones that came through while you were going through your slides, several of which I knew you were going to speak to, so I didn’t interrupt the flow. But there was one really good one that I think would be interesting to hear your perspective on is, is there a generational difference in the perception of quality feedback? Did you uncover anything in your research?

Edie Goldberg:
Well, the way the question is phrased is interesting. It’s not that it’s a perception of quality feedback. There has been some recent research that said that people at different stages in their career or of different generations speak out different kinds of feedback. So younger employees, are much happier with more directive task-based feedback. Older, more established employees who really know their craft, are more interested in that interpersonal feedback about how they have greater impact, how they’re more effective in what they do. That’s the only generational research.

Andrea Lagan:
Okay, great. There was another question on the concept of feedback versus feed forward and the idea that we should be thinking ahead, but the question was around what does that say with respect to past performance? How would you combat the perspective that maybe you’re not considering past performance as a relevant input to overall performance?

Edie Goldberg:
Yeah, so here’s the trick. Feed forward relies on you understanding what happened in the past to improve in the future. So it’s leveraging that knowledge to talk about what was achieved at that point in time and what kind of new actions can we take going forward that will actually improve outcomes for the future. So it’s not harping on what happened in the past that you can’t change, but rather focusing the conversation forward so that we learn from the past. I’m a huge believer in after action reviews, so we learn from the past so that we improve what’s going forward, and that’s the difference.

Andrea Lagan:
Yeah, and on the development side, you talked about the importance of development, personal development, professional development. What is your view on managers actually creating development plans for their employees or employees actually owning their development?

Edie Goldberg:
So goal-setting theory, and this goes for both, whether I’m setting a development goal or when I’m setting a business performance goal, it says commitment towards that goal is really important. So it has to be done jointly. The employee has to want to develop in that area, otherwise they’re not going to commit and persist in that direction. So I do believe it may be guided by the manager, but it has to be done with the employee because they need to commit to it.

Andrea Lagan:
Agreed. One last question. You ended with a nugget on the importance of recognition. When you think about the ribbon diagram that you have, where would you see recognition fall in the overall flow there?

Edie Goldberg:
Recognition is so important and it’s overlooked. And what’s interesting to me is it’s often not perceived to be a part of the performance management process. Recognition is critical to driving performance. When you recognize performance, people performance repeat what’s been done. So recognition is so important and it is a totally cost-effective thing that any manager can do that will help to improve performance within the organization. So I highly encourage teaching your managers about the importance of recognition and doing that in a very authentic way. Because that does increase the likelihood that you’ll get that behavior repeated. But it’s super important to performance.

Andrea Lagan:
Yeah, agreed. You have to be very intentional about it.

Edie Goldberg:
You used the word intentional, and I want to follow up on something that because of the pandemic, a lot of people have been saying, “How do we have to change performance management because of the pandemic?” And I’m going to say the pandemic has actually, during this time period, employee engagement has actually gone up. And the reason employee engagement has gone up is because managers have intentionally connected with their employees, talked about what’s going on, how can I support you? What kind of resources or help do you need to better perform? So engagement has gone up, and the research also shows organizational productivity has also increased. I think there’s still a lot of debate about whether or not that productivity will continue. Is it more hours or is it actual output? But right now we’re seeing improved organizational productivity. That intentional connection with your employees does have a very big positive payout. And you should continue that behavior if you engaged in it in the last year and a half.

Andrea Lagan:
Yeah, we have found that to be the case as well, just in talking with many of our customers that the intentional focus on objectives and how people are aligned to strategy in their organization and how they’re tied to results. That’s been a big, big area of focus across our customer base I can speak to at least. And really meaningful in a world that was completely turned upside down over the course of the last year. 

Okay. Well, I think we are ready to wrap, and I just wanted to thank you all for being here, and appreciate you taking the time to be with us. Edie, we’re so grateful that you joined us.

I wanted to remind everybody what we do at Betterworks and our mission in closing the loop between people and strategy and results in order to align organizations and teams to execute on what matters most. And aligning the people and the strategy and the results so that measurable objectives are achieved across an organization. And we really appreciate you all being here. Hope to see you at the next Betterworks webinar. Thanks so much.