Cracking the Performance Management Code: A Q&A with Marty & Em

Episode #244 Cracking the Performance Management Code: A Q&A with Marty & Em

Marty: One of the toughest elements of leadership is managing your people’s performance. Everyone has to meet a minimum acceptable standard, of course, but beyond that you also want to be able to lead your best people to perform at their peak.

We get an endless stream of questions about the performance management ecosystem, particularly when a team member slips into chronic underperformance.

Every situation is different, but there are some common themes running through all of this. We thought the best way to deal with these would be in a Q&A format where Em can guide me through a bunch of questions that explore the main aspects of the performance management cycle.

So it’s great to welcome Em back to this side of the mic. For those of you who don’t know, Em produces the No Bullsh!t Leadership podcast each week. But of course she’s also the Co-founder and CEO of our business, Your CEO Mentor. Em, welcome back to the mic. How many questions do we get about performance management?

Em: Hello. Hello. Great to be here. And yes, we get a huge number of questions about this, whether it’s through social media DMs, or emails, or just from our Leadership Beyond the Theory students. Every week we get at least one question that talks to the intricacies of performance management. So instead of answering all of these one by one, we thought that it was time to put together the ultimate guide of the most commonly asked performance management questions.

Hopefully, we’ll be able to fill a lot of those gaps for those of you who need some clarity around when to do it, how to do it, and why getting it right is so important. What we typically see is that, because there are so many unknowns in the process, people just don’t do it. They put it in the too-hard basket and poor performance continues. Or even worse, they just throw it over to HR. Anyway, we’re going to cover a huge range of FAQs on this topic today. I’m very excited, Marty.

Marty: Yeah, me too. A chance to showcase some of my scars.

Em: All right. Let’s start with the question from Andrea, which tipped all of this into motion.

WHEN IS IT TIME TO SAY “GOODBYE”?

“I’m performance managing one of my people at the moment, and I’m not sure how long I should give them before I make the decision that they aren’t going to be able to perform at the level I need them to. Any advice, Marty?“

Marty: Thanks, Andrea. I’ve got heaps of advice, and this is a pretty common dilemma for leaders. But before I answer it, I’d like to just talk to a few of the earlier phases of the performance management cycle so that we’ve got a solid platform for the discussion.

Em: Okay. So Marty, the first thing that occurs to me is, how do you know when you need to move someone to a formal performance management process rather than just working with them day to day in the Challenge / Coach / Confront cycle?

Marty: Yeah Em, that’s a really good point. I think this is probably at the heart of the whole matter. How do you manage someone’s performance in general? For everyone that you have on your team, particularly those who are your direct reports, it’s really important to set clear direction and expectations. That’s the foundation of doing anything with performance management. Remember, people want to know three things:

1. What are your expectations of me?

2. How am I performing against those expectations? And,

3. What does my future hold?

So, unless you set really clear direction and expectations upfront, people just don’t know what you expect from them, and they can be blindsided when you give them some negative feedback because they didn’t even know that’s what you’re after. Of course, once you set those expectations, you have to monitor progress, looking at the outcomes and results.

Obviously, this is done in one-on-one mode. When you’re talking to people in their one-on-ones (which you need to hold regularly), you’ll be talking about their progress to plan. Are they delivering the outcomes and the value that you’ve agreed?

You give people heaps of latitude and rope at the start. You can always ratchet up if you see them not hitting the mark. So start with complete trust, and work backwards from there, if necessary.

Em: Okay. So you start by giving them complete trust and autonomy, and then observe how they perform with a high degree of freedom. How would you know when you need to be more directive or to get closer to their work?

Marty: This is a really good question. This was my Achilles’ heel when I was a young leader. I gave people way too much latitude. And that’s okay, except that I didn’t inspect their results closely enough or at regular enough intervals. So I trusted them to do their jobs, and when I had the right people this worked brilliantly. There was no problem at all. But when someone wasn’t quite up to scratch, I was too slow to hear the alarm bells, and I got blindsided a couple of times.

That’s when I learned how to inspect outputs more diligently.

Em: And we are huge on not dipping down into your people’s work. So how do you do this when you see them not performing the way that they need to without dipping down?

Marty: Well, this is one of the big red flags, Em. When you see someone not producing the routine outcomes that you’d expect for their role, level, and experience, as I said, start with 100% trust and autonomy and watch them closely. See if the results you expect are being produced. And if not, bring them back into the huddle. Ask all the questions that help to clarify where they are.

You want to ask questions like, “Okay, what do you think I need from you? What are you trying to achieve? What outputs do you think are important?“

If this doesn’t work, and the results still aren’t being produced to the right standard, go back a little further in the chain. “Okay. We’re still not getting the outcomes we need. Let’s look specifically at what you are doing or not doing that’s preventing you from being successful.”

So, you start with only the outcomes and outputs, the value that you’re trying to see created, and then you give more and more direction until eventually you may have to step back into what they’re doing: their activities. Are they actually doing the things that are likely to achieve the outcomes they’ve signed up to?

Em: Ah, yes. I’ve been here before, and I’m sure you have, more times than you can count.

Marty: Totally.

Em: But often when I push down to get greater visibility of what they’re doing, I get accused of micromanaging, or have been in the past. How do you handle that one? Because people don’t like that transparency and that openness about what they’re doing.

Marty: No, true! And now that I work for you, I can confirm that you’re a shocking micromanager.

Em: What?

Marty: Haha, I’m just kidding. I’m just kidding!

Em: Brutal.

Marty: I know. Look, pretty simply, I would always say something like this,

“I shouldn’t need to be getting into this level of detail. And if you were getting the required results, I wouldn’t be asking these questions in the first place. But when you aren’t producing the outcomes we need, my job is to try to help you to figure out why not.

This is a temporary arrangement while I help you to get back on track. But make no mistake, my expectation is that you’ll be able to perform to the standard I’m setting independently, without the need for me to intervene the way I am right now.”

Em: Okay, yeah. I’ve used the same technique in the past and it worked well in not blurring those lines. It’s clear, direct, and everyone is on the same page. So next question is, when do you decide to ramp it up and go into formal performance management? Because we’re just building up to that right now.

Marty: We are. This is the key question, and we are heading more and more towards Andrea’s question, which is really cool. This is the point at which most leaders hesitate. This, “Do I go into performance management or not?“

This is where they rationalize, make excuses, and ultimately do nothing. Formal performance management processes are a complete pain in the ass. They’re time-consuming, they’re full of conflict, and they’re process-heavy. You want to avoid them to the greatest extent possible.

Which is why, when we look at it through the lens of the Challenge / Coach / Confront framework, it’s way better to bring someone up to the required level of performance without using a formal process.

This tells us that doing everything you possibly can on a day-to-day basis to help your people to perform is where it’s at. You’re much better off front-loading this effort than saving it all for the formal performance management cycle. Because once you’re in there, it is invariably painful. There’s no escaping it.

KNOWING WHEN TO GO FORMAL

Em: So what sort of mental approach do you take to deciding whether or not someone goes into formal performance management?

Marty: Well look, this might be a little bit controversial, Em, but I don’t ever go into formal performance management until I’m 95% sure that they’re not going to make it. For me, it’s an exit strategy for the individual.

Em: Ooh, Marty. Many of our listeners will be thinking something along the lines of, “Hang on a minute. Isn’t the whole point of performance management to give people a chance?

Marty: Totally, Em. But for me, this happens before the performance management process becomes formal. It happens in the informal course of leading your people every day before there’s even a hint of a formal process.

Before I would contemplate moving to formal performance management, I would have already worked with this person so closely and carefully, coaching them, helping them resolve problems, and evaluating their progress, that I would know, almost without a shadow of a doubt, whether or not they could do the job.

That’s why, in my experience, it would be totally left field for someone to resist all my attempts to help, but then suddenly come to life when formal performance management commences.

Of course, having said that, there’s the very rare individual who doesn’t seem to pay attention until they sense that their job is on the line, which is unfortunate. The commencement of formal performance management gives them that 3,000V shock with a defibrillator and, all of a sudden, they start to listen.

Em: Yeah. So you said that a lot of leaders hesitate at this point. Why do you think that is?

Marty: Well, generally it’s just good old-fashioned conflict aversion. They don’t want to be in an adversarial situation that may have an outcome that affects another person’s life, which is fair enough. I get that. We all have those feelings. But the avoidance doesn’t serve the other person very well. Weak leaders will often use the restructure/redundancy option, so they don’t have to go through the formal performance management process.

If they haven’t competently used the Challenge / Coach / Confront framework, they’ll feel guilty about letting someone go. “Maybe I could have done more.” So a bag of redundancy money normally assuages their guilt. There’s a really good podcast episode here to help with this one, which is Ep.225: Handling Layoffs Competently.

Em: Yeah, that’s a great episode, Marty. Look, it’s pretty common to avoid the issue altogether, isn’t it? This is why Module Two, Handle Conflict, in our program Leadership Beyond the Theory is so popular. Almost every leader struggles with conflict to some extent.

Marty: Oh, for sure. Leaders sometimes just tend to rationalize why the person should still have a place on the team. You know, the stuff like,

“Well, Marty’s a really good guy… He gets on with everyone… He’s got some great knowledge of the business after his 25 years here… He knows where the bodies are buried… everyone likes him… and besides, he runs the footy tipping competition. He’s okay. And let’s face it, not everyone’s going to be a star.”

That’s how you end up with tourists on your team. Your good people become disgruntled, because you’re not dealing with issues of underperformance, and mediocrity sets in. There’s no other possible outcome here. And you can bullsh!t yourself until the cows come home, but it doesn’t change the objective reality of how this affects your team.

There are three podcast episodes that I think are going to be incredibly helpful in working out how to lead in the prelude to reaching performance management because you want to sort this out before you get there to that decision point:

1. Ep.206: It’s Still Respect Before Popularity: this is the contemporary reboot of our first ever episode, Respect Before Popularity.

2. Another classic, Ep.6: The Psychology of Feedback.

3. And the guide to developing an effective day-to-day leadership dialogue with your people, which I’ve mentioned before. It’s Ep.57, Challenge, Coach, Confront.

Em: Yeah, I highly recommend going and listening to all of them. Okay Marty, it feels like you’ve laid a great foundation for the actual question from Andrea. Once you are in formal performance management, when do you make the call as to whether or not the person needs to go?

Marty: Well, and for me, there are two distinct considerations here. Like I said, I would never enter a formal performance process unless I was convinced it was pretty much all over. Granted that I need to remain open to the odd miracle. And if you’re a good leader who takes the time and effort to support your people, this is going to be true for you too. But there’s a set of steps that need to be followed to allow due process and natural justice for the individual.

In my case I would ensure that these boxes were ticked in the lead-up to the formal process, but it still meant I had to document it properly during the formal process itself. If the eventual termination is challenged, you’ve got to be able to provide hard evidence of having followed the appropriate processes. So in this regard, you may need support from HR.

Em: Aah, I was wondering when you’d bring HR into this. What role do they play in the formal performance management process?

Marty: Very glad you asked that, Em. I have a pretty strong view on the role of HR in these formal performance management processes. HR is not there to run the process… that’s the job of the line manager. HR is not there to tell you what to do either… they can tend to be a little too conservative in my experience, because they’re thinking of the potential for a trip to the workplace relations tribunal, and they want to see every “i” dotted and every “t” crossed. Like any expert support function HR is there to make sure you understand the process and don’t step on any landmines.

But beyond that, you’re running the performance management process. You’re deciding on issues of timing, and you’re accountable for the ultimate decision on whether someone stays or goes.

Em: Super clear, Marty. So talking of HR and disputes, you have to document the process thoroughly. Don’t you? And not just in the formal performance management cycle. You have to be doing that well before.

Marty: Oh absolutely, Em. And you are, indeed, a master of this. From the minute you start to think that someone might not be hitting the mark, just start to take very brief notes on the conversations you have. You don’t want the commencement of performance management, in a formal sense, to be ground zero for your evidentiary trail, especially when most of your real leadership work is done before you reach that point.

I used to have an electronic file on every direct report, and in fact one for each of their direct reports as well. Any conversations that strayed into performance discussions with my DRs, I would just make a couple of notes after the meeting.

You know, just really informal stuff. “We spoke about this. She raised that. I emphasized this. We agreed that.” That’s all.

Now, as the severity of the situation ramps up, so too does your notetaking. And then, still prior to entering the formal performance management process, you can move to confirmation emails. So here, you just take your file notes, send them in an email form to the underperformer after each meeting. Something like, “Hey Em, thanks very much for your time today. Just to be clear, I wanted to reiterate what we covered in our discussion.” And then cut and paste your file notes. That’s it.

Em: Yeah. So what I tend to do is, I have a Google Sheet for each person that I’m leading, and that’s exactly the way I’ve been doing it over the years. Just putting little comments and notes in here and there. If something’s been said through Slack or through email, I’ll cut and paste that in there as well. Just so that I’ve got everything that I need to make sure that I’ve done everything I possibly can to get that person up to the level that they need to be.

Marty: Yeah. Well Em, you are clearly in the 21st century solution. I’m still using file notes and email. But there you go. Showing my age, right!?

Em: No. No, it’s a critical piece. Doesn’t matter how you do it. So you have to make sure that if you do have to go formal at some point, the long history of coaching and feedback prior to that is evidenced. Now, you said there were two considerations. What is the other one?

Marty: Oh, thanks for keeping me on track. The first consideration is to make sure you follow due process. And the second is to make the call, “when is enough, enough?” See, you didn’t know I was going to get to your question, did you Andrea?

To this point, though, when do you make the call that they’re not going to make it? In my view we always know the answer already, deep down. All the time we spend from that point on is really just to make ourselves comfortable with the inevitable outcome. And you do have to be comfortable with the outcome.

As a leader, if you’re making decisions that affect someone’s life and livelihood, you’d better be pretty sure that you’ve exhausted all your options. And a lot of underperformers will use every possible technique they have to throw you off the scent. So, rather than actually lifting their performance, they’ll often bargain by playing into your own reservoir of rationalization, to convince you that they actually are performing to standard. When deep down, you both know they’re not.

Don’t give in to this. It’s going to destroy your culture.

Em: All right. Come on, Marty, land the plane.

Marty: Okay, I’m getting there. Look, to work out whether or not there’s still a glimmer of hope I ask myself a question that targets two very specific criteria. The question is this:

“Judging by the trend of performance over time since I first started coaching this person to reach an acceptable standard, what’s the likelihood that they’ll be able to perform independently without an inappropriate level of intervention from me?”

This question allows me to test a couple of things.

1. The first, is that I look for the trend of improvement (or not, as the case may be). Trend is your friend, right!?

2. The second is to make a call on whether or not they’ll be able to perform independently.

This is sort-of tricky, because sometimes with all the additional support, focus, and attention that a formal process brings, some people can perform to the standard for a short period. As soon as the focus and support are withdrawn, they slip again to substandard performance.

Oh, and the third thing is to make an assessment of timeframe, of course. How long are you prepared to see minute or incremental improvements that would tie you down for months or years to try and help someone reach the acceptable standard?

In my world, there are absolutely limits to the amount of support you can offer to someone who’s not performing.

Em: Yeah, exactly. Because as long as you’re sucked down into the chasm of an individual who isn’t performing, you’re taking time away from the people who are performing. And we know that you should be spending 80% of time with your top performers, not the other way around.

Marty: Yeah. This is just so true, right!? This is why speed is of the essence in making these types of decisions. Now, everyone I know, without exception, is too slow in performance management. Without exception.

Em: Me included.

Marty: You included. What I learned over my career was that I was probably twice as fast as most of the leaders around me when it came to performance management decisions. But deep down, I still knew that I was 30% slower than I could have been.

WHEN YOUR ORGANIZATION DOESN’T BELIEVE IN PERFORMANCE MANAGEMENT

Em: Okay, Marty, that’s excellent. Just one more thing I want to throw in though, which we get asked all the time. What happens if you work for an organization that doesn’t really support a performance management culture? This one is rife in government organizations, and people can use it as a crutch.

Marty: Oh, totally. Yeah. You’re talking about low-performing organizations, basically. I did an episode on this fairly recently. It was Ep.239: Leading in a Low-performance Culture. Make no mistake, without the ability to differentiate between people based on the individual performance, and without the ability to put consequences in place for people’s choices about how they do perform and behave, you will reap poor performance.

No matter what you tell yourself, and no matter what the leaders above you say, you know that this is true. Look, if you’re happy in this type of organization, hey, your choice to make. Just know that the culture will constrain you and your people.

Trying to buck the culture and bring true performance management is really tricky… culturally, which is not to say you shouldn’t do it. But what it does mean is, you really need to have support from above if you decide that you’re going to set out on that path.

Em: All right, that’s an incredibly comprehensive treatment of the performance management cycle, which will no doubt generate a whole new swag of questions from our community. We’ve put a Google Sheets template into the show notes that I use to keep notes of my people’s performance if you just want something to get started with. So definitely go and check that out.

If you enjoyed this episode, please send it to your colleagues and friends. You don’t know if they’re struggling to get their head around performance management.

It’s always best to prepare for these things before they happen, rather than trying to learn while you’re in the thick of it.