There was a recent article on Zappos in Strategy-Business that suggests
that getting the right emphasis on culture and the right people on board,
(e.g. who fit with that culture) can be a basis for driving success – it certainly
seems to be so for Zappos.

Before I pull in some of the data from that article, let me ask you a question:

If you had only two metrics to use in an employee interview, one being
technical/business skills and  the 2nd some form of a personality style
or emotional IQ derivative… what would be measured on the 2nd criteria? 

I’m waiting… but I bet something specific doesn’t jump immediately to mind.

Personal fit often gets a very short shrift at many places, but with Zappos, it is
an (all) important data point to suggest that the business world just may
have it all wrong?

Zappo’s  “2nd” or personal fit criteria is key to their business success
and customer experience.   Or maybe it’s the CEO, Tony Hsieh’s, emphasis
upon this criteria.  Either way they have been phenomonially successful
in the past 11 years and it’s worth taking a look at.

Very briefly, Zappos began selling shoes and other products online in 1999.
In 2009 they were included in Fortune’s 100 Best Companies to Work for, and
were purchased by Amazon for almost $928 million in Amazon shares.

Here’s part of the secret that intrigues me.  Only 1 in 100 pass their hiring
process “that is weighted 50 percent on job skills and 50 percent on the
potential to mesh with Zappos’ culture.”   Then they have to pass a 4
week training “show us your stuff on the job” process… all to be included
in an 1800 person culture in which:

1. Back stabbing and ladder climbing is out – “humbleness” is in
2. Creating fun and a little bit of wierdness is a working value
3. A “happiness survey” takes the pulse of the organizational culture monthly.

The article’s author,  Dick Richards, writes, “ Zappos has a belief that the
right culture with the right values will always produce the best
organizational performance, and this belief trumps everything else.”

Whether that belief matches yours or not; whether it is the
“trump” card or not; it certainly makes you wonder, what
would it be like to work at a place where humbleness and happiness
are keys, and playing politics gets you kicked out.

Bottom Line:
Zappos offers a very interesting alternative to hiring new employees,
managing organizational culture and driving business success, with
great results to back it up.  Maybe Jesus’ statement in the gospels,
“the meek (humble) shall inherit the earth” really is true.  Based
upon Zappo’s information, it looks relatively rare (less than 1%),
and very directly linked to success through collaboration and
creation of a good user experience.

Links:
Why New Hires Fail – what to look for when hiring 
Performance Reviews; Do they Fit

Resume’s are important; they serve as an initial, albeit rough screening
device… but for what?  Technical skills and experience of course.
But what if technical skills are only marginally related to success on the
job and not the area you should focus on in initial screening?  Would
it surprise you to know that only 11% of new hire failures is due to
technical skill deficits?  I was surprised.

There’s an excellent one page read on the topic, derived from a study by
LeadershipIQ.  Here’s the results after interviewing over 5,200 managers
over a three year period.

“The study found that:
26% of new hires fail because they can’t accept  feedback,
23% because they’re unable to understand and manage emotions,
17% because they lack the necessary motivation to excel,
15% because they have the wrong temperament for the job, and only
11% because they lack the necessary technical skills.”

Technical skills and ability are critical to succeeding on a job, but
skills at managing one’s emotions and interpersonal relationships,
or the lack thereof, is underscored in this study as what will lose you a job.

If you knew that 90% of the reasons people you were interviewing,
would be due to emotional and interpersonal IQ, it would only make
sense that it would get a high priority in both pre-job interviews and
in annual reviews.   Check your annual review form and see if it is there.

Finally, there was also a hidden gem in this report, underscoring the
old 80-20 rule.  The report finds that 46% of new hires fail in the first
18 months, “while only 19% will achieve unequivocal success.”  That
adds up to 19% that succeed, and 81% either failing or adding
marginal value.

Bottom Line:
Pay attention first to prospective and current employee’s coachability,
emotional intelligence, motivation and temperament, they represent
the factors most highly related to delivering value on the job.  Technical
skills are important, much easier to evaluate and unfortunately not
nearly as good a predictor for success at your work place and mine.

Before I dive into this, to give you an idea of how far we’ve gone amuck
with performance reviews, just roll around some of her blog’s keywords
in your brain.  Keywords like: “dread, criticism, discussions turning
into battles, employee comments having little final impact on
ratings or money (sort of the spilt milk effect), and complicated forms
that don’t clearly tie to the employee’s department success.  It does
cause you to pause and wonder “How did this get to be such a
negatively framed experience?” doesn’t it?

Maybe the following warning signs should be attached to
performance reviews:

WARNING:  Only Complete if:
1. The employee is well adjusted and has demonstrated the
emotional resilience to listen to, absorb and profit from feedback.
2. The reviewer is trusted by the employee and perceived as
both accurate and fair.
3. Adequate data has been tracked throughout the review 
period to ensure the review will be fact based.
4. The performance review would actually add significant value
to the work process and outcomes within no more than 30 days
5. Both employee and reviewer are committed to the value of
improving performance as the primary reason for a review,
vs. completing a form, qualifying for a raise, avoiding a layoff…

When you read the list, doesn’t it make you think that
maybe performance reviews aren’t for everyone? 

I know that the research suggests that not everyone benefits from
setting goals, mostly just the people interested in performance
improvement.  So wouldn’t the same be true for reviews?

If performance reviews are really best suited for a minority of
employees and companies, several questions come to mind:

1. Are you, is the organization you work in, in that minority?
Why?  Why not?

2. Instead of a performance review, what would the majority
 of employees find to be less disruptive and more helpful?
-  A highlights film? 
-  A simple list of what works and what doesn’t? 
-  30 minutes of recognition for anything they have done that
    created value, capped by an affirmation?
-  What would you add here?  I have some thoughts, maybe next blog,
but meanwhile am curious about what thoughts come to your mind.

 Bottom Line:
Performance reviews are both widely used and widely associated
with negative connotations.  In this blog I cover 5 guidelines that
should be a pre-requisite for conducting performance reviews in
their current state, and propose the consideration that performance
reviews are not well suited to most employees or companies, hence
all the negative associations, and the needed alternatives.

Link:
Do Performance Reviews Really Work?
Performance Reviews; Skill, Outcome or Process Review?

In short, Samuel Culbert, claims that everyone hates performance
reviews and that it is time to put this “sham“… “out of its misery“.  He
suggests that it would be more accurate to define performance reviews
as we know them, as based on “whether or not the boss likes you…
or is comfortable with you,” not primarily based upon performance.

I watched an exemplary executive I know recently get whacked with
a poor performance review this month (after delivering tremendous results),
because his boss was discomforted by the process.  It underscored some of
what Samuel is writing.  I wonder if most people at one time or another
collect that type of (bad) review?  Have you?

As an alternative to traditional performance reviews, Samuel suggests:
“The one-sided, boss-dominated performance review needs to be replaced
by a straight-talking relationship where the focus is on results, not personality,
and where the boss is held accountable for the success of the subordinate…”

A couple of observations popped up as I was reading this:

1. Why is having the boss accountable for the success of the subordinate
a good alternative?  seems like that also introduces a point of imbalance.

2. Without someway to track and measure performance, (which ManagePro
does nicely as it displays not only the projects, but also the progress updates
along the way and the results) most managers don’t have access to an
accurate review of performance results throughout a review period. 
E.g. the whole ability to have “straight talk” about performance is
compromised for most by limited access to data – which gets replaced by
recall through the filter of memory, emotional tags and perception.

3.  Straight talk about performance induces anxiety for most people, with
or without the vertical dimension of boss to subordinate relationship
introduced in the traditional performance review.   

Given that, in addition to being adept at feeling anxious when confronted
with feedback, we also are good at rationalizing… what would be a better
format for performance reviews?

Culbert suggests straight talk with your boss (is that an oxymoron?) and
basing the talk on your boss being responsible for your success or lack
thereof… that sounds like that will work .

Bottom Line:
Here’s my quick take on performance reviews:
Performance reviews always work better when based upon data, facts.
At the end of the day there are really two fundamental questions to be
addressed in a good “straight talk” performance review.
     1. Is this job a good fit for what you bring to the table?
     2. Are we (you and I) doing the right things to help you be successful?

We have some differences about how much the review should be
focused on personal goals (Ted), versus focused on personal impact on company goals (Me). But this morning, I’d like to introduce another thought about performance reviews and rating, and perhaps upset the apple cart a bit more.

Historically managers approach such reviews with a paper or software based rating scale, typically rating effectiveness at job skills deemed to be required to function well in the position for which the person being rated holds.  Perhaps they include some key performance indicators, which often are impacted by numerous factors.  Conducting this process is presumed to document and improve employee performance.

STOP.  Why does receiving a skill rating make performance improve?

Some suggest Employee reviews don’t work and lead to lower morale, mistrust and communication lapse.  Very negative outcomes, if correct,  for something that’s supposed to improve performance.  Certainly not what you would vote for if selecting the top three drivers for a performance improvement process.Historically we equate skill ratings and fuzzy assessment (without specific backup metrics) of goal achievement with job performance.  Why?

Why don’t we equate job performance with job performance?   I think the answer is because we typically don’t have access to (have invested the resources to measure and track) good measures of job performance.  But it gets worse, sometimes the “direct” link between employee performance and job or business outcomes gets over-ridden by larger environmental forces (like a recession) and so it’s really difficult to accurately say what employee performance lead to specifically what outcomes represented as specific increases or decreases in business or organizational indicators.

If we aren’t really measuring job performance most of the time, why not approach performance reviews as a more open-ended, less threatening, review of “what worked and what didn’t” as it applies to core day to day processes, deliverables and business outcomes?  It’s certainly a question that drives out development of our product ReviewWriter.

Maybe something as simple as discussing what’s working and what doesn’t work so well in relationships (with peers, customers and management), and in the area of completing tasks (on time, on budget, innovatively, with documentation, with quality). 

Bottom Line: Maybe reviews best help performance if they are a scheduled “discussion” and feedback period which should include setting performance improvement objectives, and less of a rating session.  Your thoughts?