A company’s performance management system either hinders or enhances high performance in an organization. The way in which managers assess individual performance and the role of HR business partners in the year end performance review process says a lot about an organization’s maturity when it comes to creating and sustaining a high performance culture. High performance cultures differentially reward their top performers; but this requires high performance distributions. Arriving at such distributions requires a robust performance rating calibration dialogue among managers. This is where HR business partners can play a major role in both implementing the process but also facilitating the performance calibration meetings to surface the differentiating behaviors and results that distinguishes top performers from everyone else.
1. PERFORMANCE CALIBRATION SYSTEM FOR
SUSTAINING HIGH PERFORMANCE
Malcolm Gabriel
malcolmprestongabriel@gmail.com
Cell: 734-730-2405
Profile: www.linkedin.com/in/malcolmgabriel
Blog: www.malcolmprestongabriel.wordpress.com
2. The following is a summary of various presentations that I
designed and delivered across different companies to
implement a performance calibration system to sustain high
performance.
Embedded images were purchased from Fotosearch
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3. The stock market evaluates a company’s
performance relative to its competitors
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4. Company Performance is Relative
• Even if Company B exceeded its EBIT targets, there is still
an overall industry ranking as to which companies have
outperformed others.
• Once ranked, the market rewards top performing
companies through share price appreciation.
• Relativity induces action to exceed market expectations
Company A
Company B
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5. Evidence of High Performance Cultures
What is a High Performance Culture? Why strive to be a high performance
A system of beliefs and values centered on culture?
continuously creating break-through We need transformational change, not just
performance. incremental improvement.
Leverage the energy and benchmark of the top
performers to drive up the performance of the rest
of the organization.
What does it look like?
§ High performance cultures distinguishably Create the environment for employees to be and
achieve more than they can imagine.
identify, recognize and reward top performers
§ Expectations of performance and leadership
are continuously raised for everyone
§ Lower performers are identified and proactively
managed
§ New “talent” replaces low performers
§ High sense of accountability for outcome
§ Rate of learning is exponential
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6. High Performance Cultures sets the benchmark
“relative” to others and distinguishably rewards the
top performers
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7. The relative standard becomes the benchmark
New system Revisit Objectives:
Objective: Produce 10 introduced Produce 12 Downsizing
Average Team Production:
widgets by December by December. 14 widgets
January June December
Capital budget Someone found a way to The relative standard becomes
cuts improve their process
the benchmark even if
performance exceeded the
original target.
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.
8. High Performance distributions distinguishably reward their Top
Performers
60%
60%
50%
Distinguishably rewarding top
40%
performers in a fixed envelope
30% 20%
15% requires a very aggressive
20%
5% distribution
10%
0%
Below Meets Meets Exceeds Top
% Bonus % Bonus % Bonus % Bonus
Payout Payout Payout Payout
#% of Combined Annual Base
Salary
Otherwise, why Fixed bonus
envelope
bother?
Motivation = Reward > Effort relative to other’s rewards for their efforts.
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9. Some challenges
• Distribution level
• The size of the evaluation pool
• Including exits throughout the year
• New promotes
• Stigma attached to “fit”
• Downsizing and the bottom ratings
• Exit and renewal
• Timing of evaluations
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10. Evolving expectations in an ever evolving performance year
Don’t become a pinball!
In an ever changing environment,
continuously clarify the
deliverable and the expectation
of performance.
Expectations of
EP Performance
Performance Rating = D > EofP D Deliverables
“show me how you measure me and I’ll tell you how I’ll behave?” – Eli Goldratt
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11. Performance rating calibration meetings are
necessary to identify the relative benchmark in an
ever evolving performance environment
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12. Calibrating on the relative performance benchmark is necessary
because:
• Employees generally:
• have visibility to each others’ contributions and overall effectiveness
• share their performance ratings
• are very aware of which environments are more difficult than others to achieve
results
• are aware of windfall environments that could have affected results
• are acutely aware of which are “favorites”
• Assigning performance ratings that are incongruent with real
achievement has a profoundly negative effect on employee morale
and aligning their energy to the desired behaviors
• Getting to a common understanding of “real achievement” is the
toughest and most necessary part of the performance evaluation
calibration discussions
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13. Performance rating calibrations
r o
Toni May
Calibrating
Performance Experience
expectations
Environment
Impact
Role
What is:
• Exceeds Expectation?
• Meets Expectation?
• Partially Meets?
Performance for a “Meets”
Individual Expectations of 11.5 Nikita Slobodkin
Developing a “Shared
Understanding” of “Meets” 11 Toni Mayor
for a specific position
e.g. 10 widgets by December 10 Michael Coulson
9 Jack Nicholson
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14. Performance rating calibrations – differentiating performance
Before the roundtable:
• Complete individual evaluations of performance and leadership.
• Evaluate performance against objectives, expectations of performance and peers.
• Prepare documents with concrete examples, citing the context, environment,
experience and impact of the performance.
At the roundtable:
• Discuss process and ground rules for giving input into each others ratings
distributions and employee appraisals
• Establish a common understanding of the reasons for the emerging benchmark
• Balance performance ratings to target distribution
After the roundtable:
• Rollup and consolidation of performance ratings across different departments or
business units in the organization
• Communicate performance rating after approval of distribution
• Initiate development plans or performance improvement plans for the bottom
performers
• Begin objective setting planning for the following year
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15. At the performance rating calibration, be ready for
“Why?”:
9-‐B loc k
G rid
P erformanc e
R ating
&
L eaders hip
C ompetenc y
R ating
5
7 8 9
Key Questions
E
X
C
• Will the rating be a surprise to
E
E
D
peers and other managers?
S
• Will the “exceeds” rating on an
objective be a surprise to
4
Performance Rating (Y)
4 5 6
M
customers and internal clients?
• Is the “exceeds” rating on an
E
E
T
objective affected by a “windfall”?
2.5 • Was the result really a result of
E
X
1 2 3 their individual effort?
P
N
E
O
C
T
T
A
M
T
E
I
T
I
O
N
1
2.5 4 5
DEVELOPMENT NEET PROFICIENT STRENGTH
Leadership Competency Rating (X)
A 9-block grid is common across many companies and In some companies the x-axis may denote “potential” or
industries and reflects the triangulation of an individual’s “runway” and involves an assessment of an individual’s
achievement of results and demonstration of certain potential to develop and grow into high levels in the
leadership traits. The leadership competencies will vary by organization.
company based on the cultural emphasis.
16. Performance rating calibrations
Performance
Did Not Meets Meets Exceeds
Is Richard Nixon’s
performance better 1. Elvis Presley (MG) 1. Anne-Marie Slobodkin (QR)
Strong
than Charles Bronson
N/A
(MG)?
2. Richard Nixon (FA) 2. James T. Sullivan (QR)
3. Michael Wazalski (FA)
1. Mary-Jane Lewis (MG) 1. Charles Bronson (MG) 1. Bruce Nick (MG)
2. James T. Kirk (FA) 2. Maryln Munroe (FA) 2. Catherine Callaway (QR)
Leadership
Proficient
3. Roger B. Ellis (QR) 3. Jean-Luck Picard (FA)
4. Richard Snider (QR)
5. Chris Lee (QR) Is Christine Tucker’s
performance better than
6. Christine Tucker (MG) Michael Jackson (MG)?
Jackie Welchen (QR) 1. Michael Jackson (MG)
Development
2. John Doe
Needs
3. Jane Smith
* Names are fictitious
17. Performance rating calibration
Deparment A Department B
58%
74%
80% 60%
39%
60% 40%
40%
9% 13% 20% 3%
20% 4% 0%
0%
0% Needs Improvement Solid Performer Strong Performer Top Performer
Needs Improvement Solid Performer Strong Performer Top Performer
Department C Department D
71%
80% 80% 62%
60% 60%
32%
40% 21% 40%
20%
7% 6%
0% 20% 0%
0% 0%
Needs Solid Performer Strong Performer Top Performer
Improvement Needs Improvement Solid Performer Strong Performer Top Performer
How do the distributions compare between departments?
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18. Avoiding pitfalls in evaluating high
performance
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19. Avoiding pitfalls in evaluating high performance
Evaluating the role; not Rating employees favorably because they are in critical roles rather than
the employee rating their performance or leadership attributes within the critical role
Ranking for downsizing Ranking employees for downsizing rather than ranking employees for their
overall end of year performance rating
Not clearly Not rating at employee Needs Development on leadership or performance
distinguishing b/w relative to peers because the employee received an Exceeds rating on
performance and performance or leadership relative to peers
leadership
Defaulting a rating Automatically ranking a new hire or promotion as a Needs Development
based on time in role
Ranking based on Focus on the most recent examples of behaviour or performance rather
recent incident than the entire performance management cycle
Ranking based on one Base the evaluation on one incident, good or bad
incident
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20. Surface examples in the performance rating calibration
meeting that distinguishes top, solid and lower performers
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21. Examples of behaviors that resulted in a “Meets” rating
60%
60%
50%
40%
30% 20%
15%
20%
5%
10%
0%
PME Meets Exceeds Exceptional
• Self-induced journey outside of “comfort” zone.
• Initiating ideas and driving them through to completion.
• Complete a job even if it is not within their accountability.
• Meet all their objectives within an acceptable range of the performance metrics, and is exceeding some
of their stated objectives and relative to their peers
• Embrace change, speaking positively, and presents mitigation strategies along with risks.
• Entrepreneurial and have or work with for-profit and / or not-for-profit organizations on a part-time
basis, and show this entrepreneurial flair inside Bell through their ideas and execution.
• New promotes also shined as solid contributors often inspiring confidence from others who normally
react with surprise that the employee is a new promote
• Contribute ideas across functional expertise, but they also make cross-link connections for others.
• Eloquently connect technical and global view and make cross-domain link connections
• Ensured that there were “no surprises” on budget items.
• Good management practices, and above average employee engagement scores
To some managers this was described as “meets” while to others
this was described as “exceeds” or “exceptional”.
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22. Examples of behaviors that resulted in Exceed Expectations
60%
60%
50%
40%
30% 20%
15%
20%
5%
10%
0%
PME Meets Exceeds Exceptional
• Excel at cross-functional linkages, often gaining commitment from other business partners to propose
items previously not supported
• “end-to-end” accountability and ensure mutual understanding
• Winning mindset, collaborating, showing linkages,
• Inspiring commitment, in new and ambiguous situations with no predetermined procedures
• “win over” critics by collaborating “behind the scenes” to iron-out assumptions
• Demonstrate interpersonal tact and charming influence in high politically sensitive projects
• Perceived by peers as “business-focused”, yet perceived by clients as the “technical-expert”.
• Always (not only often) seeing new ways to run the business, seeing the long-term picture
• Special projects and balances workload through appropriate delegation
• Demonstrate confidence in self and builds confidence in others.
• Showing tact in apportioning accountability
To some managers, the individual’s placement on their compensation
range was a key factor in evaluating whether this type of action and
behavior culminated in a meets or exceeds rating.
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23. Examples of behaviors that resulted in Below Meets Expectation
60%
60%
50%
40%
30% 20%
15%
20%
5%
10%
0%
PME Meets Exceeds Exceptional
• Shows consistent negative behaviour to new ideas without exploring the merits
or assumptions
• Communicates in a “silo” mentality
• Negative attitude
• Did not induce or initiate an improvement change in the absence of a top-down
change project
• Doesn’t carry the load that peer groups have done or achieved.
• 70% of the scope and responsibility is comparable to a lower level position.
Specifically, the employee hasn’t elevated the role significantly to be comparable
to the expected outcomes of the position.
• Comments like: “it’s not part of my task” / “not in my job scope”
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24. Once leaders discuss how they arrived at a Solid rating or
an Exceeds rating, they started adjusting their own
calibration points on a performance standard.
Inevitably, ratings then get adjusted upwards or downwards
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25. Reactions and Approaches to the those with lower performance ratings
Potential reactions Description Recommended Response
Disbelief “I don’t believe it.” ; “This can’t be happening.” Confirm that it is happening.
Heightened Anxiety Concerned about stigma and their future Don’t rescue; Acknowledge feeling
Don’t debate the “whys”; Regular feedback
Anger / Mistrust in the “Why me?” Don’t rescue; Don’t debate the “whys”; Acknowledge
System “Shouldn’t that person be there before me?” feeling
Reduced Self- Experience a “knock” in their self-esteem after Acknowledge feeling; Don’t rescue; Build confidence
Confidence hearing their rating
Depression A more sever form of reduced self-confidence Do NOT avoid the employee in hallway interactions or
Solemn silence and / or noticeable stressful non- meetings,
verbal behaviour Engage the employee in all possible situations to make
them an important part of a decision or outcome.
Recommend the Employee Assistance Program (EAP)
Sick and Disability In more severe cases, it can be expected that Respect the disability management guidelines,
employees could “call in sick” as a result of the Schedule many face-to-face time
anxiety associated with the rating
Re-build their confidence
Relief Most people suspect something is “in the wind”. Respond with empathy and follow up with strong
support to make things better.
Always close off with “I’m here in case you need to talk”.
Acceptance How do I fix this and change the situation? Coach / develop
What’s Next? Help me get through this quickly Coach / develop
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26. Here is what to do if you find yourself at the BOTTOM of the
performance ratings
• Perception is reality.
• Partner with your leader to change Your situation.
• Acknowledgement gets collaboration.
• Get to know how you are being perceived.
• Surface assumptions about actions and perceptions.
• Get to know what others are doing relatively well.
• Is the role and / or environment right for you?
• Plan for a “come back”.
• Build an action plan to over deliver.
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27. Here is what to do if you find yourself at the TOP of the performance
ratings
• Show humility
• Share your learning and experiences with others
• Build confidence in others
• Set higher standards for yourself
• Mentor / coach those at entry level positions
• Consistently re-invent yourself
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28. Next….
• Begin the process for cascading corporate and business
unit objectives, targets and metrics
• Conduct goal setting calibration discussions just like you
did with performance ratings
• Establish what a “meets” and “exceeds” looks like for
each goal for every employee relative to their experience
and position within their compensation range
• Communicate these to employees with a disclaimer that
these will be influenced by the relative contribution of
each employee as well as the changing circumstances
within the performance year
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29. CONTACT ME FOR HELP ON IMPLEMENTING PERFORMANCE RATING
CALIBRATION SYSTEMS FOR SUSTAINING HIGH PERFORMANCE IN YOUR
ORGANIZATION
Malcolm Gabriel
malcolmprestongabriel@gmail.com
Cell: 734-730-2405
Profile: www.linkedin.com/in/malcolmgabriel
Blog: www.malcolmprestongabriel.wordpress.com