The pressure is on for HR leaders to boost employee performance, but that’s a tall order for people teams tasked with a host of other competing priorities: budget cuts, waning engagement, and complicated total rewards strategies to name a few.
During Lattice's webinar, Creating a Culture of High Performance: HR Success Strategies for 2023, attendees sought tangible advice on how to implement strategies that will actually boost performance. David Perring, Director of Research at Fosway Group, provided them with practical steps HR can take to unleash a high-performance organisation.
Though the presenters ran out of time to answer the full scope of attendees’ questions during the webinar, their queries were so valuable that, following the session, Perring offered his insights in writing. His responses have been edited for style and clarity.
Q: How should we think about driving high performance by differentiating compensation (e.g. bonuses) and installing more rigour around performance reviews?
A: Equity, inclusion, and recognising performance are at the heart of delivering a high performance organisation. For many, that means thinking about bonuses and creating a final year appraisal to differentiate superb performance.
From our research, this is an area fraught with challenges. Annual appraisal ratings connected to bonus awards are not always positive in motivating high performance. People who have worked exceptionally hard may not get the rating they expect, and benchmarking the high performers across different business units is not always incentivising — for the vast majority who will not get the highest rewards. Almost all organisations struggle to get this right.
The key lessons learned from most are:
- The bonus process needs to be reflective of the culture of performance that is true to your organisation’s desired identity.
- Training managers and individuals to own motivation and performance is essential. A manager’s inability to effectively align, motivate, recognise, and reward performance is why performance management frequently goes wrong.
- There needs to be transparency in linkage between business performance and individual contribution to the bottom-line — performance ratings need to have supporting objective data.
- Many innovative organisations also adopt a spot bonus approach to more readily recognise people who go above and beyond at the moment of exceptional work. It drives greater recognition. Quibbling about who gets an extra 2 or 3% or not because [of their performance rating] is often more effort and less rewarding than a cash award or gift nearer the moment.
Q: How can we help managers balance their need to deliver projects and find the time to do the leadership work?
And how can we help middle managers understand the impact of people-driven programs when they may not see it as a priority?
A: Some organisations build employee growth and development as a qualifying criteria for managers’ bonuses. The view being that without growing our people then we won’t have high performance in the future.
Managers are responsible for delivering results now as well as building for results in the years to come. This means managers need to demonstrate how their team has grown to qualify for their own bonuses. This method is a way to help managers focus on longer term value, rather than just this quarter’s numbers.
Some HR teams use employee listening to analyse manager effectiveness, costs from employee churn, and business performance — it helps focus managers’ attention on the importance of a people-centred culture. By analysing employee engagement and talent retention, managers can be shown how their management fits with the goals of the organisation to be an employer of choice.
Q: What role do Exit and Stay Interviews play in the development of a high performance culture?
A: Exit and Stay Interviews are really important as a way of identifying toxic behaviours, inspirational leadership, and the effectiveness of your talent enablement strategies.
Good employee listening at these moments of truth is essential if your organisation is to understand whether you're an employer where people want to work, and what needs to change to make it a great place to work.
This is especially true for high performing employees. Understanding why they are leaving is the only way to take the right actions to stop more high performers leaving in the future.
Q: Are certain aspects of high-performance more important when working with remote, globally distributed teams?
A: Yes. A strong sense of purpose, clear goals, good people connections, trust, and support become accented.
Adopting a “Tight, Loose, Tight” approach to managing can help:
- tight on expectations
- loose on how and where work gets done
- tight on follow up and supporting behaviours
This approach helps build that mix of purpose, autonomy, and mastery that helps motivate high performance.
Q: When is the best time to focus on psychological safety as part of our high performance culture strategy?
A: From the outset. Trust, failing fast, and making adjustments are at the heart of fast moving, agile, high-performing organisations. Without safety around us, people will play in their comfort zone; to grow and try new things means taking risks.
Ambition needs people to stretch beyond the normal expectations. So supporting people and motivating them to learn fast and adapt is essential. Much of high performance is about coaching — so trust and psychological safety are at the heart of that relationship.
If I don’t trust, I hold back — that’s no basis for high performance, and no way to build the resilience to keep going.
Q: How does mental health and wellness play into the high performance culture roadmap?
A: There is no high-performance without wellbeing and health. We can only give our best when we are mental and physically well. And often the mental and physical are connected.
Getting enough sleep, for example, is a huge contributor to wellbeing — and feeling fatigued is often the cause of mistakes, bad choices, and poor service. If we want our people to go the extra mile, they need to have that energy in their tank.
Q: How do you convince leadership to believe in strategic people programs and invest in the tools and strategies to create a high-performance culture?
A: Focus on your leadership team’s stretch goals, use evidence of how their current culture is a barrier to higher performance — especially in your organisation’s ability to be the employer of choice (Glassdoor or other review sites can be interesting here).
You can also provide examples of how other organisations are changing their people practices to deliver exceptional results, both in and outside your market.
For more ideas from Perring on the foundations of high performance, watch the full webinar on demand: Creating a Culture of High Performance: HR Success Strategies for 2023