Issue 3 | April 2016
perspectives
A FRESH LOOK AT ENTERPRISE
Managing
Performance
www.toriglobal.com/pm
Copyright TORI Global. All rights reserved. TORI Global 33 Cavendish Square, London W1G 0PW
THINGS
7
Robin Davies gives us a brief insight into his views on business and
life in general. Robin is a Co-Founder and Non-Executive Director
at TORI. He has consulted for PWC, founded his own consulting
business (Crane Davies) and been a Managing Director of Penna
Consulting. His prime focus is Leadership Development and has
provided management development coaching internationally
What would your advice be to your 21
year old self?
What was the first record you ever
bought?
Listen to the song ‘I Hope You Dance’ by Lee Ann
Womack. It’s a fantastic message for a younger person.
It struck a chord with me when I came across it, it’s got
lovely poetry.
My Generation by the Who. I lived in London at the time. I
did the paper rounds so I could go to the clubs. There was
a local band that I used to go and see before they became
famous...
Who would your ultimate dinner party
guests be (can be dead or alive)?
I have an interest in history so I would love to meet the
greatest military leaders. Genghis Khan, who established
the largest land empire in history because he was able
to master the technology of shooting a bow & arrow
while on horseback. It would be interesting to see the
interaction between the historical leaders if I was to invite
Julius Caesar and Napoleon for example.
I would like to have some spiritual guests also, like Ghandi
and Buddha. And then also Mother Teresa and Mandela.
What was your first ever job?
I did the paper round when I was 11.
Who are your leadership role models and why?
It’s easy to base this answer on celebrities but here’s a
story of a real inspiration to me.
I used to be a director of a management college. We
had a lovely guy called Derek who was the audio-visual
technician who would set up the rooms for classes and
presentations. He was always the first one in and the last
to go at night. If you looked in the carpark – his was the
bashed up old Cortina and all these industry people who
were coming to these sessions every day would arrive
in their fancy cars. He would always get in his car at the
end of the day and outside of work he was the leader of
the local council. Also, he and his wife ran a hostel for
deprived and disabled children. He was the most unlikely
leader in one setting and a role model in the another.
Leadership isn’t about fame and celebrities but about who
you can help. Leaders come in all shapes and sizes.
2
What is the most valuable lesson you have
learnt in business?
This makes me think of a chapter called the Law of
Longevity. It’s about how you see things from a different
perspective over time. Something that seems like the
end of the world, when you look back at it, you think,
‘what was that?’ Experience and perspectives. How to put
things into perspective. Time is a critical perspective.
What personality trait do you think is
most important in a CEO?
Passion and persistence. If you don’t believe in it, it won’t
happen. But if you don’t do anything, nothing will happen.
Issue 3 | April 2016
perspectives
contents
7 THINGS
Robin Davies TORI NonExec Director, gives us
some of his perspectives
Welcome back!
INTRODUCTION
This is Perspectives, our regular publication aimed
at giving you a fresh view of enterprise.
RECONSIDERING
PERFORMANCE
MANAGEMENT
How do you go about
changing your processes?
ADOBE - CASE STUDY
THE RIGHT FIT
The science of analysing
job applicants
HR IN 2016
An interview with Linzi
Blakey of Vodafone
SPOTLIGHT ON THE
SAMARITANS
How the charity helps
people in central London
toriglobal.com
For more information about the
content of this publication please
contact us at:
[email protected]
TORI Perspectives is copyright
of TORI Global and all rights
are reserved. The contents
of this publication may not
be reproduced without prior
permission.
The theme of this issue is ‘People’.
We’re delving into the world of
human resources.
No matter how big or small, every
company has individuals who
make up the workforce. How to
best manage your workforce
and maximise their performance
is a topic of constant debate.
Human resource management
is a difficult area as individuals
have to be treated equally but
differently at the same time.
Compared to other business
functions, you are dealing
with people, not numbers or
processes, so the element of
individuality makes it a ‘touchy’
area that is often subjected to
strong opinions.
In our first article we discuss
the much debated area of
performance management.
There have been some radical
changes in this area, seeing
large companies like Adobe and
Microsoft turning performance
review on its head. This isn’t the
case with all companies, but is the
area of performance management
on the cusp of transformation?
We’re also very lucky to have
some expert human resourcing
insight from Linzi Blakey, HR
Director for Vodafone Global
Enterprise. Linzi has an impressive
career in the field and gives us
her opinions on the latest trends
and themes HR is seeing, and her
focusses for the year.
Finally we have some information
about a charity that we have
supported for the last 2 years,
Central London Samaritans. A
stone’s throw away from our
office, they are a charity close to
our hearts both physically and
emotionally.
Whether you’re reading this
on the tube, or in the office,
we hope you enjoy a little
perspective…
Best Wishes
Katie Lawton
Editor
We would love to hear your thoughts so please contact us with any feedback.
[email protected]
We then discuss psychometric
testing as a way of enhancing the
hiring process with a spotlight on
the British Psychological Society
accredited McQuaig test.
3
4
As with many things in
life it’s often easy to say
what’s wrong, what’s
not working, but it’s
not always that easy
to work out what you
should do differently,
especially if you want to
do it in a better way!
experience. the difference.
Issue 3 | April 2016
perspectives
Are you one of the
58% of executives
who believe that their
current performance
management
approach drives
neither employee
engagement nor high
performance?1
Have you seen the research that challenges
the traditional approach to performance
management?
The Performance Management Process
(PMP) has come in for a bit of stick over the
last few years and at a recent HR Directors
conference it was voted the number one
topic for discussion. For many business
leaders, managers and HR professionals,
the process has become time intensive,
admin heavy and disconnected from the
performance of the organisation. In a world
where time is at a premium, investing so
much energy and effort on a process when
only 8% of companies report that PMP
drives high levels of value2, is questionable!
There has been a plethora of surveys and research articles around the PMP; this in itself
suggests things need to change. Of course much of the research reinforces what we
already know;
•
PMP is time intensive; according to The Corporate Executive Board (CEB) the average
manager spends over 200 hours a year on activities related to PMP, at a cost of £24m
per 10,000 employees3
•
most people avoid difficult conversations
•
people don’t like being categorised or ranked
•
condensing a year’s effort into a single grade or rating is over simplistic
•
there just isn’t enough time; even good managers who can make these processes
work are struggling to do them well
Advances in neuroscience and motivation theory have started to help us understand why
some aspects of the PMP are being challenged and they have also provided us with food
for thought as we consider how to evolve the process. For example
•
conversations on compensation, ratings, or any critical feedback elicits the ‘fight or
flight’ response in the receiver4
•
how a manager rates an employee is more a reflection of how they rate things (62% of
the variance in the ratings) rather than the employee’s actual performance (21% of the
variance)5
•
a common characteristic of high performing teams that we see is that they frequently
review their goals, certainly much more than once or twice a year!
•
our understanding of employee motivation has evolved; for cognitive roles, the desires
for mastery, autonomy and a higher purpose become key rather than monetary
awards6
A number of companies have taken the plunge and redefined their approach to managing
performance7. Some have been more radical than others, but regardless of the approach, a
number of key factors remain common.
cost of
the average manager spends over
200
HRS
PER
YEAR
on activities related to PMP
6
£24m
per 10,000 employees1
Do we have to make a Are you interested in changing your current
system but not sure how?
radical change?
As with many things in life it’s often easy to
say what’s wrong, what’s not working, but
it’s not always that easy to work out what
you should do differently, especially if you
want to do it in a better way!
It should also be remembered that there is a
rationale behind the current PMP, yes some
of that rationale may be flawed but we
should not automatically assume everything
is wrong with the old process. Working with
a client recently we found that although
most employees were critical of the PMP,
they actually valued a formal process, they
liked knowing that there was a standard
organisation-wide approach and this was
seen as much better than not having one
at all!
Also changing the process raises a number
of tough questions, for example;
•
“How do we show to the Board we are
still managing performance?”
•
“How can we show the regulators
we have control on performance,
especially when looking at sales
performance?”
•
“If we delink compensation from
performance, how do we ensure
fairness?”
The core objective of the PMP is to help
facilitate a high performing culture, of
course this implies that PMP is just part of
a wider set of attributes that are needed to
drive the right culture.
What is clear is that the traditional PMP at least needs updating and made more relevant
for a dynamic world, so whether you are considering a radical or evolutionary approach,
there are a number of common, key factors to consider:
•
Transparency and fairness - expectations are changing: employees value clarity and
being part of adult conversations. Trust is undermined by the ‘dark arts’ such as
the calibration process, forced distribution and/or forced ranking, all of which are
questionable practices at best, and all drive mistrust from employees
•
Engagement: how can you get employees to be much more involved in setting and
managing their own performance? Start by involving your employees in designing any
changes and building their changes into the objectives
•
Simplify: complexity both confuses and, again, undermines trust and raises suspicion.
Keep the process simple and strip out everything else; essentially, decouple the link to
compensation
•
Focus on the valuable bits, especially the performance conversations and help your
managers to become better coaches; for example, why not measure the effectiveness
of the conversations rather than record that one took place?
Our experience is that there is no silver
bullet with PMP, there is plenty of evidence
and research on what needs to change, but
how organisations move forward requires
careful consideration based on where they
are culturally and what their key stakeholder
groups (including regulators) see as being
acceptable within that market.
1.
2.
3.
Garr, Stacia, and Andrew Liakopoulos. “Fixing Performance Management”. Deloitte. N.p., 2016. Web. 28 Jan. 2016.
Garr, Stacia, and Andrew Liakopoulos. “Fixing Performance Management”. Deloitte. N.p., 2016. Web. 28 Jan. 2016.
News.cebglobal.com,. “Faulty Performance Review Processes Cost Companies As Much As $35M Annually - Aug 26, 2015”. N.p.,
2016. Web. 28 Jan. 2016.
4. David Rock, and Beth Jones. “Kill Your Performance Ratings”. strategy+business. N.p., 2014. Web. 28 Jan. 2016.
5. Harvard Business Review,. “Reinventing Performance Management”. N.p., 2015. Web. 28 Jan. 2016.
6. LinkedIn,. “How Accenture And Deloitte Got Rid Of Performance Reviews — And You Can Too”. N.p., 2016. Web. 28 Jan. 2016.
7. Harvard Business Review,. “Reinventing Performance Management”. N.p., 2015. Web. 28 Jan. 2016.
* Survey conducted by Valuewalk in July 2014 - www.valuewalk.com
7
Issue 3 | April 2016
perspectives
CASE STUDY
Performance management is a particularly
challenging business practice which seems to be on
the cusp of a somewhat radical transformation. The
‘rank and yank’ style approach, which has dominated
our thinking for the past 30 years, is arguably
becoming antiquated and seemingly ready to be
usurped by emerging alternatives. Encouraging
competitive behaviour amongst employees – as they
all aim to avoid the dreaded ‘bottom 10% axe’ - is not
always a negative move, but the system can lead to
low employee morale and an increase in voluntary
attrition in the months following performance
reviews. As a result, numerous organisations are
starting to consider a change of tack.
Is there a better way? How can we improve
the system?
Enter Adobe, the California-based company, known best as
a publisher of creative software, and Senior Vice President of
Customer and Employee Experience, Donna Morris. During an
interview with the Economic Times, appearing to be almost
on a whim, Morris committed to abolishing Adobe’s current
performance review format, setting in motion a fundamental
change to how performance reviews take place.
Adobe’s previous
PMP system
followed a similar
stack ranking
methodology used
by General Electric
during the 1980’s.
Ranking employees
Donna Morris, Senior Vice President of Customer
on a scale of one to
and Employee Experience, Adobe
four and forcing the
termination of any employee in the bottom 10%. Adobe’s previous
system, according to Morris, could take three hours or more per
employee, wasting a total of 80,000 hours across 2000 managers
every year. This is the equivalent of having 40 full time employees
working on nothing but performance reviews year round.
Moreover, the process seemed heavily retrospective;
“The performance review
was like a rear-view
mirror – it had nothing
to do with the person’s
progress forward”
Following this realisation, Morris went to work, formulating a new
performance review process that mitigates the mass wastage of
time, effort, and ultimately; dollars, that occurs every year. Soliciting
feedback from the 11,000 employees was a key driver for change.
A blog gave their staff a platform to lend their opinion – and it was
clear; ‘get rid of the rankings!’
Introducing Check-in
Born out of a yearning for a less wasteful, more streamlined
process, the new system, dubbed ‘check-in’ by Adobe, places
emphasis on creating targets and goals for the future, a process
8
cleverly referred to as feedforward. Check-in eliminates the need
for an annual, arduous process, immediately saving Adobe a huge
chunk of those 80,000 hours a year.
Utilising a three tiered framework, check-ins consist of:
•
‘Expectations’: set, track and review clear expectations,
•
‘Feedback’: give and receive ongoing feedback and coaching
on a frequent and timely basis, and
•
‘Growth’: providing opportunities to develop and increase
skills.
Most importantly, Check-in is left
entirely in the hands of managers,
without HR involvement. It places
greater pressure on their ability to have
constructive conversation but it is a
shared responsibility – as employees are
expected to give them feedback also.
“There is no mandated form. There is
no mandated process,” Morris said. “But
there is an expectation that everybody
in the company knows what’s expected
of them.”
Check-in is as much removed from the previous method as it
possibly could be. Doing away with ranking and performancebased terminations, focusing on improving employee morale, and
enhancing the working experience.
Did it work?
The simple answer to the question is yes, it did work, and
immediately saved Adobe 80,000 hours per year. Adobe reported
a 30% drop in voluntary attrition and a dramatic increase in
employee morale.
But is it that simple? Possibly due to increased awareness by
management, involuntary attrition has increased by 50%. Can that
be good for morale? Probably not.
Should everyone use their system?
There is no one-size-fits-all solution, every organisation will have a
different set of motives for carrying out performance reviews and
the process should reflect each company’s performance culture.
Alternatives can be as innovative as General Electric - giving
feedback to its 300,000 strong workforce through a purposebuilt app – to a series of smaller changes that do not have to be so
radical. Google are using a 360-degree process where employees
are assessed by peers, bosses, and subordinates, however they still
rely on ranking employees.
Adobe have shown that changing the process is possible, and
by incorporating the views of their staff, have successfully
shaped a performance management process in which the whole
organisation share a responsibility for making it a success.
T
I
F
T
H
G
I
R
THE
The reams of CVs that are sifted through
by HR professionals and hiring managers
on a daily basis often provide a litany
of references to past experiences and
qualifications without validation and
and indicates the areas/traits one may wish
to explore during interview. In consequence,
organisations are able to ask tailored questions
during the selection process and therefore
obtain richer decision-making information and
reduce the risk of hiring ill-fitting individuals.
context, along with a headache for
the reader.
Professionals simply armed with the generic
questions about an individual’s many previous
roles, their likes and dislikes, hobbies or interests,
will expose them to the risks and costs of hiring
the wrong individual.
The recruitment process can be as painful or as
smooth as the organisation cares to make it, but
little argue against the claim that they are better
supported by the supplement of a psychometric
tool. Step forward the McQuaig Psychometric
System.
Reviewed by the British Psychological Society
(BPS) and awarded the ‘Quality Mark’ from
the Psychological Testing Centre (PTC),
McQuaig advocates the existence of 3 levels
of assessment. The first two, and typically the
features that hiring decisions are based upon,
relate to candidate’s appearance, manner and
‘presence’ (appear to), and their knowledge,
skills and credentials (can do). These, in theory,
should tell us that a person can carry out
the role advertised proficiently, and in a professional manner.
The third level, and the one that is often
overlooked, is what a candidate will do. This is
related to their attitudes and beliefs, maturity
and temperament – the behavioural patterns
that would not be evidenced necessarily by
sitting across from them or talking things
through over the phone. Notably, this doesn’t
just apply to recruitment, but also engagement,
development, promotion, retention – and the list goes on.
The assessment of these qualities can often
make the difference between a short-term hire
that costs both time and money, and a lasting
employee suited to the culture of the organisation.
Combining multi-level aptitude tests (MOTs),
role profiling and self-development plans,
McQuaig produces surveys which capture
the behavioural tendencies of candidates
Assistance does not end with
‘Selection’. The tools also support:
• Succession Planning
• Managing & Coaching
• Personal & Team Development
THE SCIENCE
The self-appraisal provides ipsative measures
of four qualities; Dominance (D), Sociability (S),
Relaxation (R) and Compliance (C); which are
alleged to be subsumed under the Five-Factor
or ‘Big Five’ model of personality. Scores on
these bipolar scales are calculated according to
what you believe yourself to be like (your ‘Real’
profile), and how others view you in a given
role (your ‘Situational’ profile). The subsequent
interpretation is based on profiles made up of
high and low D, S, R and C scores, with a number
of set types defined by particular patterns of
these scores (said to account for 88% of individuals).
The McQuaig System is based on the notion
that there are three major areas to probe
when appraising personnel; ability, character,
and temperament and that these are crucial
in determining how an individual behaves and
reacts under pressure.
So is psychometric testing crucial for effective
hiring? If every first impression you have ever
made has been correct, then perhaps not.
But this is very unlikely! Psychometric testing
goes beyond first impressions and helps you
understand the whole person. Not only this,
but carrying out a McQuaig test is also very
useful for a recipient to understand how they
act and behave at work. Self-reflection can be
very difficult but with the guidance of the test
you can understand what environment and
what role fits you best. Psychometric tests, and
particularly the McQuaig, benefit both sides of
the table. Say ‘goodbye’ to bad hires and job dissatisfaction!
9
Issue 3 | April 2016
perspectives
of people. So in my mind, we’re not
quite back to the tea and sympathy
side, but a little bit back to that human
part in human resources and not solely
focussing on just P&L and strategy.
Linzi Blakey is an accomplished
Human Resources Director with 20
years’ experience in an international
environment and within blue chip
multinational companies (BAE Systems,
Royal Dutch Shell, Noble Resources and
Vodafone). She has had the honour of
being one of the youngest executives
in every company she has worked in..
Currently HR Director of Vodafone
Global Enterprise, Linzi is accountable
for the HR agenda in a global business
driving c£3 billion annual revenues in
Vodafone and c4,000 employees across
the world. We’re very lucky to have
some expert insight from Linzi on HR in 2016!
How do you see the HR agenda
evolving: what new challenges are HR
directors facing today?
After my 20 years in HR, I think we have
come a full circle. From welfare - tea
and sympathy, hiring and firing – much
more focus on the ‘human’ in human resources.
David Ulrich and his wonderful 3 box
model came along, which I’m not sure
did HR directors too many favours but it
definitely upped the strategic focus.
Many people interpreted Ulrich’s
model to mean that as a HR business
partner, you have to be ‘strategic’
and commercial at the expense of
being ‘operational’ as someone else
will take care of the operations. In my
experience, I think a successful HR
person, particularly HR director has to
be all of those things at all times and
if you aren’t getting the basics such as
headcount, interviewing and selecting,
payroll right, you can forget having the
‘strategic’ conversations with your CEOs
Now I think we’re much more focussed
on the employee engagement side
of things and the hearts and minds
10
How has the role of HR director
changed over the last few years?
I have seen a swing more towards the
need to understand data and be highly
numerate. In the same way that we’ve
been helping our enterprise customers
with a total communication strategy, I
think the HR role is starting to lean more that way.
As HR director now, I need to
understand how we can utilise big
data analytics not just for our external
customers but also for our internal
customers. So for example how can I get
the CEO the best insights on his talent?
I can’t ignore the presence of LinkedIn
too. It has made everyone a talent
hunter now. People can contact me
directly about jobs and I must get 10
approaches a week. Each one of those
contacts is either a current or potential
future Vodafone customer therefore it
is really important we ensure a positive
experience for them.
What is your focus for HR in 2016?
Ensuring we continue to build HR skills
and capabilities internally and externally.
Businesses tend to put their own
development as the last thing on the list
but it should be the number one enabler.
If HR is at the top of its game and really
ensuring that the people actions are
driving business performance then I truly
believe that the business results will be
strong. From a personal perspective,
I am doing much more mentoring for
younger HR. It’s good to get them early
and nurture them in the right way.
Most Vodafone offices are openplan/hot desking…do flexible work
environments, such as hot-desking,
have an impact on things like staff
motivation, cohesion and teambuilding?
Most definitely! It’s interesting to see the
changes from 20 years ago. For example
when I started work back in the mid
90’s, status and seniority was defined by
what floor your office was on, the quality
of the carpet and if you could have tea
from the tea lady. I wouldn’t know what
to do with an office now, the banter
and the conversation in an open office
increases the knowledge sharing and
enjoyment of being in the office I think.
The only issue is how do you deal with
the flow of conversation if you really
need to get your head down? You can
put your headphones in but I think it’s
better to have some breakout areas - we have lovely library-like areas for that.
In the PM arena, companies like
Accenture and Microsoft have dropped
forced (stack) from rankings in the
past couple of years…indeed some
organisations are moving away from
ratings altogether. Is this a trend in
your opinion?
Clearly a trend is happening, although
there is a quiet majority (including
some fairly major organisations) who
are just staying as they are – Vodafone
are in that mode. I think it’s important
to differentiate between performance
and pay, and important to reward highperformers and manage low-performers.
Some older companies’ processes are
set in stone and they don’t want to
change the way they work, however
some companies are just trying to
simplify their performance processes
instead of remove them completely.
What are your challenges in attracting
and retaining young talent?
Similar to everyone else’s really. We
hire 750+ graduates over 20 markets
every year at the moment. The challenge
is around offering the right work
environments, competing with the likes
of Google, Apple, Microsoft – companies
which have quite a large appeal to them.
We’re trying to make sure that the
company is known in schools (“at grassroot level”) and that people understand
what Vodafone do, like different projects
that we are involved in e.g. getting signal
to Kenyans. Young people don’t feel
loyal to a company so what does keep
them is things like flexible working, job
rotation and a ‘cool’ environment.
Samaritans is a helpline charity who
provide emotional support for people
experiencing distress and despair.
Central London Samaritans (CLS) was the
first branch of the charity to open and
remains the largest in the organisation.
Located in the heart of Soho, the Central
London Samaritans have been offering
support to those in need for 60 years,
24/7 and have never closed – even at Christmas!
As well as running their famous service,
the CLS are active in the local community,
running a number of out-reach programs
which aid the hungry and homeless.
In 2014 Central London Samaritans
received 92,228 calls for help, 4,583 visits,
3,986 emails and 8,164 text messages
demonstrating that work of Samaritans
volunteers is more important than ever.
TORI Global is proud to
sponsor Samaritans.
11
www.toriglobal.com
experience. the difference.