44. Does performance management work?

In this episode, we discuss performance management and getting the most from your teams. We are joined by Jessica Zwaan, Author of the best-selling book, Built for People, and COO of Talentful.

We chat about: 

• Can traditional performance reviews truly capture an employee's value?
• Are OKRs just a trendy buzzword or a real strategy for driving company success?
• How can organizational network analysis uncover the real influencers in your team?
• What does it take to measure true employee performance in today's remote work era?

References:

Jessica’s LinkedIn

Website

Biography: 

Your company is building three products: A financial instrument, a customer product, and an employee experience. I advocate treating employees as customers purchasing an experience of work, and I encourage us to work like Product Managers in order to iterate and improve on that product. This paradigm shift positions work itself as the focal point of our strive for success, not just optimising the individuals as "human capital". Like the idea? I wrote a book all about it, called "Built for People" which you can buy basically anywhere books are sold.

To learn more about Beth and Brandon or to find out about sponsorship opportunities click here. 

Summary:

• Choosing a life partner and nannies as a "wife hire." 0:05
• Bethany discussed tips for choosing a partner for career success, including finding someone whose mother worked outside the home.
• Bethany values hiring a nanny for the mental load relief and organization.
• Performance management effectiveness and its various components. 4:40
• Brandon and Bethany discuss the ineffectiveness of performance management, with 64% of workers viewing it as a waste of time and 47% considering it a failure in their company.
• Jessica Swann distinguishes between performance assessment and management, highlighting the importance of individualized growth and development in the latter.
• Bethany expresses concerns about goal-measuring and its practicality in the workplace.
• Bethany and Brandon discuss the importance of organizational network analysis and its impact on problem-solving.
• Performance management and leadership development. 10:06
• Bethany suggests rolling out OKRs gently, learning along the way, and avoiding command and control.
• Brandon agrees, emphasizing the importance of measuring marketing and sales performance collectively and connecting it to business outcomes.
• Brandon and Bethany discuss the importance of effective performance management and leadership skills for line managers.
• Bethany questions the feasibility of performance management, citing potential biases and limitations in the process.
• Performance management and assessment in organizations. 15:27
• Jessica emphasizes the importance of understanding employee performance, citing it as the most critical question in HR.
• Bethany agrees, highlighting the need for effective performance management frameworks to assess employee productivity.
• Jessica argues that traditional performance assessment methods are inadequate for understanding team dynamics and impact on revenue.
• She provides an example of how organisational network analysis can reveal hidden high performers in a team, even if their direct impact is limited.
• Building employee lifetime value algorithm, identifying superstars, and optimizing team performance. 20:22
• Jessica and Brandon discuss building an employee lifetime value algorithm, with Pete Fader and Dan McCarthy as experts in the field.
• Jessica explains the importance of identifying team members who are most valuable to the organization based on their network analysis.
• Jessica highlights the need to evaluate the effectiveness of individual team members and determine their total available current value creation.
• Goal setting and performance measurement in organizations. 24:46
• Jessica and Brandon discuss goal setting and the importance of involving the right people in the process.
• Jessica provides a framework for setting effective goals, starting with top-line objectives and working down to individual levels.
• Jessica and Bethany discuss the challenges of measuring performance in a large organization, including the time and effort required to gather feedback and set goals.
• Jessica's team uses a lightweight model to track progress and identify areas for improvement, with a focus on individual and team effectiveness.
• Performance management approach at a professional services company. 29:31
• Jessica prioritizes systemic management over individual performance management.
• Jessica emphasizes the importance of individual performance assessment in a calibrated exercise.
• Performance management and goal setting, with a focus on organizational network analysis. 32:49
• Bethany questions the effectiveness of performance management systems, suggesting they may not be tied to valuable outcomes.
• Jessica emphasizes the importance of goal setting and connecting employee work to company success.
• Bethany reveals surprising insights from organizational network analysis: weak managers, strong teams, and misaligned goals.
• CEO discovers high-performing team members through network analysis, despite low manager performance, highlighting potential for growth.
• Performance management, OKRs, and calibration exercises. 37:15
• Jessica highlights the limitations of individual performance assessments, advocating for a more systemic approach.
• Brandon discusses calibration exercises as a way to connect pay to performance, but Jessica questions their effectiveness.
• Jessica and Bethany discuss the importance of context in decision-making, rather than just measurable goals.
• Jessica advocates for fewer, more impactful goals, rather than many goals with little impact.
• Measuring employee performance and accountability in a changing work environment. 41:55
• Jessica aims to simplify goals, prioritize impact, and hold team members accountable.
• Brandon and Jessica discuss the importance of measuring employee performance and accountability in a more autonomous workforce.
• Jessica advises CEOs to focus on employee lifetime value and return on investment to enable people operations teams to do their work effectively.