How being brain-savvy can improve performance management

How being brain-savvy can improve performance management

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The press coverage of Microsoft’s ‘stack rating’ system has put the whole process of performance management and ratings back in the headlines. I am sure many HR people are rather surprised that a system that was popular in the 80s and 90s is still being used by a ‘modern’ company like Microsoft, especially one that needs highly creative people who bring discretionary effort to work. I am sure it is no coincidence that their rather poor showing on a number of product launches and the stack rating system are linked.

As many of the press articles have pointed out it drove a culture of politicking and figure pointing. When you look through a neuroscience lens it is almost the perfect storm for closing down productivity, creativity and reward in the brain. And this is true of many performance management processes; the way most processes are executed creates a brain-fried rather than a brain-savvy experience for employees.

Most performance management processes have the intention of:

  • Achieving improved performance,
  • Fair promotion and pay practices,
  • Reliable legal documentation,
  • Documenting performance against goals, usually for reward purposes and,
  • Helping employees with career and skills development.

In some cases they also aim to help the most able employees get even better.

In my view there is nothing inherently wrong with the intent behind performance management, it is the execution that makes the difference. Now neuroscience is beginning to point out some challenges to the execution of performance management processes that mean organisations may really be creating a no-win situation.

Here are some of the findings and ideas about how you could make your performance management process more brain-savvy and hence get better results.

Brain-fried verses brain-savvy

Threat and reward

The CORE model identifies the common factors that activate both reward and threat responses in social situations. These fall into four elements of human social experience:

  • Certainty: the knowledge that we can predict the future
  • Options: the extent to which we feel we have choice
  • Reputation: our relative importance to others
  • Equity: our sense that things are equitable

These four elements activate either the ‘primary reward’ or the ‘primary threat’ circuitry of the brain. For example, a perceived threat to one’s sense of equity activates similar brain networks to a threat to one’s life. A perceived increase to your reputation activates the same reward circuitry as receiving a monetary reward. The reaction happens in a nanosecond and is automatic, driving behaviour before the individual has a chance to rationally consider their response.

For example when thinking about performance management threat may be activated in the following ways:

  • A sense of uncertainty about the views of the manager with regard to job performance
  • A demand to carry out the role in the way the manager judges is correct reduces rewards for options by reducing choice
  • Offering negative feedback impacts the sense of reputation which leads to reduced connection with the group and potentially creates a sense of shame
  • The power in the process, including timing and rating is with the line manager; creating a sense of inequity.

Let's look at the elements of a typical performance management process and how the science can inform thinking.

Goals
A surprising number of organisations I speak too still have goals drafted by the manager and if they do not completely draft the goals they determine what they should be and the measures. Goals written for employees will lack buy-in. Research on changing behaviour has shown that people need to have buy-in and a vision of the future to resist impulsive behaviour based on past habit. Scientists in Germany found that vividly imagining the future results activates the hippocampus, part of the brain responsible for imagining the future (and memory) and the anterior cingulated cortex , ACC, involved in reward-based decision-making. This resulted in a greater ability to delay immediate rewards and reduce impulsive choices thus maintaining new behaviour. Achieving goals means creating new ways of working and this will only be achieved if employees can overcome their automatic, habit system through activating their planning and goals-directed prefrontal cortex. Where employees draft their own goals for agreement with their manager things will be better but having immediate reward and reinforcement of new behaviour is essential for shifting from old habits run by the basal ganglia to create new habits which must be done by planning, priming and reinforcing using the prefrontal cortex.  

Feedback
Maybe one of the most brain-fried elements of performance management is the whole notion that feedback will improve performance. As far back as 1994 psychological research found that 38% of feedback made performance worse. How it ever became so pivotal in management practice is beyond me! I never met anyone who thought it did any good for them. It only ever helped the feedback giver, usually through the sense of off-loading something that irritated them. Neuroscience is adding to these concerns by pointing out that feedback creates threat in all of the CORE social domains. In addition people create a mental model to cope with the volume of information coming in through their senses. These mental models also occur in work. They create shortcuts to how to do the job. People are highly unlikely to have similar mental models. Therefore feedback rarely fits with the mental model held by the employee. Shifting mental models is hard to do, and very unlikely when there is little or no reward for the brain.

Personal change
The neuro-scientific understanding of goals and feedback raises questions about how people can best be helped to change. Science is showing we don’t always approach work goals rationally. Rather we think about our future self like we think about another person. How well we know our self will determine how we achieve goals and how much we listen to feedback, even positive feedback. People need to have a clear mental picture of their future self and be self-aware enough to know the degree of change that is possible. You can see a short animated video explaining this here.

Rating scales
Rating scales create in-groups and out-groups across the business. Whilst this may not be all bad it can heighten tensions and reduce collaboration.

Reward
The assumption in performance management is that people will perform better if they are rewarded with more money. Research by Dan Ariely suggests performance actually decreases with higher levels of bonus reward. Money is both motivator and stressor. If rewards are very high the stress reduces the performance. You can see him talking about his research here

What is often ignored is that social-based rewards such as praise and positive feedback create a pleasure response and a trigger in the brain of reward and wellbeing. Traditional performance management systems are missing out on the power of social reward and positive feedback. You can see a short video on the neuroscience of reward here

Why performance management persists

Whatever the challenges the current approach is familiar. The brain likes to be able to predict what is going to happen. Maybe more importantly it is brain-savvy for managers. Where performance management mainly creates a threat response in the CORE elements for employees they are mainly rewarding for managers, at least when they are applying the process to employees. They may feel differently when the process is applied to them! Managers have certainty about the timing, rating and messages; they have options about when and how the review takes place; they have power and their reputation is enhanced in the process. They probably feel it is fair.

What to do? The Brain-Savvy solution

The brain-fried elements of performance management can be overcome by shifting the process in the direction of more CORE rewards rather than threat:

  • Give employees control over process, timing and data, especially who they ask for feedback and the goals they create
  • Managers and peers focus only on positive feedback
  • Teach employees to self-assess against well-defined standards. The manager’s role becomes that of a performance coach

Giving employees’ options and control, coaching rather than judging and focusing on what is going right rather than what is going wrong is brain-savvy.

Comments

The conclusions of this article are hard to disagree with. 

Some of the content though makes bizarre suggestions - for example, about feedback 'I never met anyone who thought it did them any good'.  We live in a feedback obsessed world, young people arrive at work expecting detailed immediate feedback about how they are doing all the time.  Online people want feedback ( 'likes' ) .  I think what is meant here is that people dislike criticism, and rarely find it helpful.  Feedback is not criticism, nor does it always have to be 'good news' - the classic manager training example of having to help someone recognise they have body odour problems highlights the case.

 

Our approach to performance management is to work with organisations to separate out

1 performance management ( a manager;s job),

2 performance ownership ( employee's responsibility), and

3 reward ( a commercial decision by the organisation, usually based on a multiplicty of factors internal and external to the organisationm in which individual performance may or may not be included)

Neuroscience is giving us some early insight into how to engage and communciate more effectively, both of which may be valuable in helping us understand how to do some of the 'performance management tasks' more effectively.  We should be careful not to take poor examples of 'doing' and draw the conclusion 'don't do'.

Finally, organisations should be honest about what they seek from people:  look around the top management team of many 'succesful' organisations - perhaps FTSE 100 as an example.  The people at the top are highly competitive, ruthless in their pursuit of performance, often superb at managing corporate politics.  We know from stories at collapsed banks that bullying, ignoring wise advice, selfishness and operating at the edge of legal limits characterised those who were promoted to the top.    Here we have people taking absolute ownership of their performance, bending everything to personal gain.  It is no point saying they were 'bad people', they just worked out what the real criteria for personal success were, rather than follow a formula that was patently false.

We absolutely need performance management, we need managers to set limits, focus corporate energy, and make the best use of their team's skills.  Above that we need very high levels of accountability.

Go into any organisation and ask the people on the ground what is their biggest performance management bugbear - over and over again you will hear that they are most de-motivated by seeing under-performers not being held to account or 'getting away with' poor delivery or behaviour, or as in my example above, those who often most flout the behavioural rules are the most promoted.

Hi Jan, a really interesting article and some useful tips. I was surprised by the section on feedback and your comment "I never met anyone who thought it did any good for them".  I would be really interestd to know more about this and in the absence of feedback how do we 'feedback' on performance, success, ways to improve, what's gone well etc. If we worked in a culture of zero feedback how do people know how well they are doing and also how do we challenge things that are not working well? How would we set objetives and goals without basing them on feedback?

Jan Hills's picture

Thanks for your comments and it is interesting to read about how you are using neuroscience in performance management. I agree it is a powerful tool.

On the point I made about feedback, I mean what I say although maybe I should have been more explicit that I am here referring to negative or 'constructive' feedback as it is often called.

I have managed large global teams in business particularly financial services so my comments are based on practical experience as well as having researched the science. There is evidence that task roles can benefit from feedback on how to do the task better.   But in the case of knowledge workers there is no evidence it works. I certainly never found anyone who had received constructive/negative feedback and been able to do anything useful with it or improve performance.  However positive feedback and praise can have very beneficial effect as can self feedback or self evaluation. 

It is much more constructive and more likely to get results in improved performance if the managers efforts went into ensuring people in the team understand the standards they should work too and have the skills to self assess against them. 

This is both my point of view from 20 odd years of working in business and most of the science both neuro and psychological says a similar thing 

Jan Hills's picture

I completely agree  that poor performance that goes on without  being dealt with it demotivating. There is nothing 'soft' in my approach. if people are not performing the data be that behavioural, measures against goals or their own assessment should be available and action taken. in my experience especially with knowledge workers they know well their performance levels and will often remove themselves.   As i mentioned in my reply to the first comment.

I do mean negative or constructive or negative feedback .

On the question of goals i think they should be about the business and improving performance to execute the strategy. I do recognise there is also a role for goals about personal growth and skills development but most people are capable of working out what these should be with a little performance coaching.

I guess I come from a place where i think the business has hired smart people and should tap into that. if you treat people as capable and believe they want to do a good job most will.

I am aware this is a major shift for most businesses, but having run such a system I have seen it work 

I completely agree with the statement that feedback does not work.  It links to what you say about goals, that if we don't own it we won't engage in doing it.  If I am given constructive feedback, the only circumstances in which I may take action on it are where I already recognise it is something I have an issue with.  In which case the feedback did not add any value.  And if I don't recognise the issue already then the constructive feedback can only be threatening and damaging or at best simply 'fall on deaf ears'.  The support managers need is to become better coaches, able to help employees to understand how they can take action on the areas they want to improve.

Jan Hills's picture

Jo thanks you for this comment. It is an interesting observation that when you already 'know' the feedback, even if you haven't acknowledged it you act, other wise not. this is a good illustration why traditional feedback doesn't work very well with the brain. 

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