Want to Define Your Talent DNA? Don't Waste the Values Section Included in Your Performance Review...

I've been thinking a lot about performance management lately.  Of special note is the fact that I'm thinking of ways - real ways, not lip service - that the performance management process can be used to reinforce and/or build culture at our company.

The main thought I've had?  In order to make the true cultural play when it comes to your performance management system, you've invariably got to make some of your current team members uncomfortable and possibly even make them think that they don't belong at your company.

Stay with me on this one and we'll discuss after the jump.  More from KI's Byron Abramowitz over at the HR Technologist:

"Every company has a specific DNA which defines who they are and what makes them successful.  For Oracle, their DNA is wired in such a way that their M&A process includes acquiring anything that they feel is a threat to them in the market, and their sales organization aggressively seeks to win every deal.  For Apple, their genetic makeup is wired around simplicity in design, allowing form to follow function, and creating an such a strong aura around their products that they can command premium pricing for what is typically a commodity (computer, cellphone, etc). 

In the HR Technology space, SuccessFactors has a specific DNA as well.  They have experienced a fair degree of success in developing their platform organically and building their staff around the hiring philosophy of "No A-holes".   What this means is two things; SuccessFactors isn't likely to hire someone from Oracle (see above), and they haven't built out their capabilities through acquisition of other vendors like some of their competition.  As a result of these decisions they have built a successful company full of nice people, and have a technology platform which is largely built upon a single set of standards, has a consistent look and feel throughout the suite, and tightly integrates from one process to another. 

So let's take Byron's examples (although there are plenty of people out there who would claim that SuccessFactors doesn't practice what they preach when it comes to the "No A-hole Rule") and think about culture.  How can an Oracle employee take a glance at what is most valued at SuccessFactors and see if they fit and vice versa? 

Corporate Values? I doubt it.  Most of the Values and Mission statements are so far removed from daily activity that they've ceased to become useful as gauges on how work is actually done in a company.

My preference?  If a company truly wants to drive culture, they ought to put what they really value on the old "Company X Values" section of the Performance Review.  You know where to find that, right?  It's usually the section 2 of a mature performance review process that comes right after the position specific goals and objectives.  The Goals and Objectives section of the review is position or individual specific, but the Values are usually the same for all talent at the company, rated for each employee as items that are consistently expected out of every position in the company.

Unfortunately, it's usually soft things that are included in the Values section.  For example, consider the competency "Integrity" that's often included in this section of the review.  How can someone exceed your expectations regarding Integrity? 

Right - they can't.  You only know Integrity is a factor when it's not there.  That's why it doesn't belong in the values section of a review. It's impossible to rate or distinguish if someone has more of it than their peers.

Instead, work on your culture by forcing meaningful dialog on items that your company really thinks separate the stars from the ditchdiggers.  I recently worked an exercise with a company peer of mine and had the peer list the 5 things that successful people at our company have that are critical to individual success.  One of the ones he listed was "Ambition".

Ambition as a corporate value.  Think about that for a second.  Many will disagree, many will squawk.  It feels mean.  BUT - if that's what is valued at your company, don't you owe it to your OD and performance efforts to be truthful with your employees?

Work on your culture by being honest regarding the values you promote in your performance review process.  Larry Ellison would be proud.

Editor's Note: By day, Kris Dunn is the VP of People at DAXKO, a cool software firm dedicated to providing solutions to the best membership-driven organizations in America. At night, he morphs into a blogger at The HR Capitalist and the Founder and Executive Editor of Fistful of Talent. That makes him a career VP of HR, a blogger, a dad and a hoops junkie, the order of which changes based on his mood. Tweet him @kris_dunn...

Comments

[Chris Ferdinandi - Renegade HR]

KD - sounds like what you're really describing is what Tony from Zappos calls "Committable Values." Those are the values that you actually live every day. Values that you would make hiring and firing decisions by.

Do they belong on a performance appraisal? Assuming you think performance appraisals are an effective performance management system (I digress), absolutely!

[twitter.com/HeartofHR]

KD-I agree wholeheartedly. Whether it is ambition, nice people only…, an honest assessment must be made of the corporate values and those critical success factors that drive the economic engine of the organization. These values must be clearly stated and demonstrated by all employees. How can we be fair to our employees or have an effective performance management system without it?

[Paul Hebert]

One of the more obvious ways to judge culture is to look at what the company rewards and recognizes over time. While most companies look at their internal recognition strategy as a check box in HR - it really is a DNA code for the company. If you have a Peer2Peer program do you look at what people are recognizing others for? Do you compare what they think are important efforts to what your corporate mission/values are? What do you do with that info?

Too often the only recognition in a company is in the sales department. What does that say - it says the DNA for that company is sales. Nothing more. Nothing less.

Relegating the "values" discussion to an annual review is worthless - like you said - it's what you do regularly - what you see being rewarded. People do what is noticed and validated - publicly.

I may be approaching this in a very simplistic way but just look at the individual's "recognition stream" - that's a good way to see if they're living "la vida corporate"

[Kris Lundin]

Wouldn't it be cool if you could develop your list of corporate values based on what behavioral competencies your high performers (based on measurable goal results) have in common? In other words, based on practice.
Better yet, decide if your culture is delivering the reults the business needs.
Hmmmm food for thought

[StephenOwens]

Do you think this happens because the managers who actually manage people don't understand the values to begin with? Unfortunately, most companies come up with these "missions/value statements" at the senior levels but never find a way to permeate them throughout the organization.

I applaud the idea of putting them on the evaluations. This would at least get managers to see them once a year. The problem? I see a calculus problem about once a year. I just don't get it. Good luck having me explain it to someone who knows less about it than I do.

[Kevin W. Grossman]

Right on the money, mister. Measuring a "black and white" qualitative competency like "integrity" that's supposed to align with corporate values is subjective and tough to do. But if only that was a valued company value, we may not be where we're at economically and the "too big to fail" whales wouldn't have drown in the global pool of money.

[Derek Irvine, Globoforce]

"Most of the Values and Mission statements are so far removed from daily activity that they've ceased to become useful as gauges on how work is actually done in a company." -- too true.

And yet, it doesn't have to be that way. We've been advocating for years for strategic employee recognition that happens frequently and in a timely way such that an employee's excellent efforts are linked to a company value: "John, great job on project X. You showed great Integrity by continuing to work through a difficult project with your usual positive attitude and creativity after a key team member was reallocated. Your leadership and commitment in this situation was greatly appreciated."

With such recognition, you are now taking the company value of "integrity" off the plaque on the wall and making it real in that employee's every day work.

How does this relate to the performance review process? Strategic recognition encourages peers and managers to frequently and, critically, in a timely way acknowledge efforts and achievements that demonstrate the company values in contribution to company objectives.

These “recognition assessments” and kudos can then be used during the annual performance review as an additional data point on the strengths (John has been recognized repeatedly for innovation) and even weaknesses (but John has been recognized only once for teamwork) as potential areas of improvement. This presents a much more rounded view of an employee’s contributions of which managers may not even be aware. Moreover, since such a strategic recognition program is deployed company-wide, data can be gathered and used to benchmark an individual’s performance and demonstration of values in their work against direct peers, team members, the division and even the company as a whole.

More on my take on the problems with the traditional performance review here: http://globoforce.blogspot.com/2009/09/evaluating-performance-appraisals.html

[Jeannie Fratoni]

Great article Kris. I feel that culture and 'truly living by' your core values make or break the success of a company. We live by our handful of values every day at Red Door Interactive ~ including my personal favorite '100% Jerk Free'. We have an area on our intranet where employees can give 'Mad Props' to peers based on our core values. The employee with the most props each quarter is given an extra paid day off. We also include our core values as part of our performance reviews within SuccessFactors and they count towards our overall performance rating. It doesn't stop there. We also ensure that each of our clients and customers also fit within our culture and values. This model has been working really well for us. The key is to follow through and keep them top of mind every day.

[Mike Carden]

We have some very interesting research on this at Sonar6. Values typically come into a section of the review (often termed potential) that also includes role specific competencies, or leadership competencies. For measures of potential to be really useful then they need to demonstrate predictability – so if someone rates highly on potential then they are likely to rate highly in the future for performance. Interestingly in the client cases we have studied (using primarily different regression techniques) we have found that a handful of competencies (rather than the whole set measured) tend to predict a large chunk of next three year performance for an individual. Value adherence has almost no impact on future next two year performance.

But, and it’s a huge but, you definitely should measure values... because all the research shows that businesses which reinforce their values frequently outperform those that don’t. So while values may not be predictive of individual performance, they seem to be predictive of company performance. A rich area of research for the future we think.

You can’t grow what you don’t know, as my old boss used to say!