Why Structured Performance Management & Evaluation?

0:08 hello 0:09 it's great to see you again this week 0:11 we're talking about 0:12 managing performance evaluation and 0:14 feedback 0:16 let me ask you why do you think we need 0:18 structured performance management and 0:19 evaluation 0:20 in organizations having structured 0:23 performance management 0:24 is not a freebie for companies it's 0:26 actually a very expensive process 0:28 it takes a lot of time energy and effort 0:31 to define performance come up with 0:33 performance dimensions 0:34 rate every single employee fill out 0:37 performance appraisal forms 0:38 have conversations about performance and 0:40 development 0:42 so why do it while you're pondering this 0:45 question 0:45 i'm going to ask you to fill out this 0:46 quick online poll where i'm asking you 0:49 to 0:49 rate yourself compared to other students 0:52 taking this course 0:53 on the following dimensions that range 0:55 from public speaking to ability to lead 0:58 teams 1:02 you can see your aggregate results but 1:04 here's what we know about our 1:05 self-evaluations 1:07 first we tend to have inflated 1:10 perceptions of our skills and 1:12 performance 1:13 we tend to be overly optimistic about 1:15 how good we are 1:18 in classic studies scholars ask people 1:20 how good of a driver are you 1:22 and more than 90 of respondents that's 1:24 9-0 1:25 said they're above average driver 1:28 similar studies were replicated with 1:30 computer programmers who also believe 1:31 that more than 90 1:33 of them are above average so we tend to 1:35 have 1:36 inflated perceptions of the self 1:39 but there's a further complication to 1:40 this effect which is it turns out that 1:43 we're especially 1:44 confident in our superior skills and 1:46 performance 1:48 if we're less knowledgeable in a given 1:50 area 1:51 now think about this for a minute the 1:54 less experience and expertise we have in 1:56 a given area 1:57 we're more confident we are about our 2:00 superior skills and performance 2:03 it's known as the dunning-kruger effect 2:05 it seems completely counter-intuitive 2:08 why would this be the case it turns out 2:11 that if we're less knowledgeable in a 2:12 given area it becomes 2:14 harder for us to anticipate a variety of 2:16 nuances 2:17 risks and contingencies that can 2:19 accompany different projects and tasks 2:22 and as a result it's difficult for us to 2:24 evaluate our skill set 2:25 in terms of both anticipating and 2:27 dealing with those contingencies 2:30 we don't know what we don't know now let 2:33 me provide you with an illustration 2:36 in the medical education system of many 2:38 countries including the united states 2:40 once you finish medical school you start 2:42 your internship 2:44 which is a period of supervised medical 2:46 practice 2:47 as a recent graduate of medical school 2:49 this is the first time when you begin to 2:51 see patients and work with patients on a 2:53 regular basis 2:56 in a study published in the journal of 2:57 medical education les barnsley and 2:59 colleagues 3:00 asked first-year interns to evaluate 3:03 their skill of 3:04 venipuncture which is a process of 3:06 obtaining intravenous access 3:08 such as when we need to draw blood for 3:10 analysis or 3:11 make an injection and in response to 3:14 this question 3:15 nearly 100 percent of first-year interns 3:19 said that they're so good at 3:21 venipuncture they can teach it to others 3:24 which you can see is the highest level 3:26 of skill and confidence on that skill 3:29 which ranges from i'm not even sure i 3:31 can do it myself 3:32 unsupervised to all the way i feel so 3:35 good about my skill 3:36 that i'm capable of teaching it to 3:38 others 3:40 and then these scholars asked 3:41 experienced doctors nurses 3:43 watch the students perform venipuncture 3:46 and evaluate their skill set 3:49 and you can see that in only 10 percent 3:50 of the cases experienced doctors 3:53 clinicians agreed with the interns that 3:56 they were so good 3:57 that they were capable of teaching 3:59 venipuncture to others 4:01 in nearly 50 of the cases and you can 4:04 see it on the graph here 4:06 the experienced clinicians believed 4:08 these interns 4:09 need supervision themselves when 4:11 performing that procedure 4:13 so forget about teaching it to others 4:15 you don't even know how to do it 4:16 yourself 4:17 you know ignorance is bliss in this 4:19 particular case 4:21 we don't know what we don't know in the 4:22 words of a famous chinese philosopher 4:24 confucius 4:25 real knowledge is to know the extent of 4:27 one's ignorance 4:30 watson colleagues conducted a similar 4:32 study with first year nursing school 4:34 students 4:36 where they asked them to dress a wound 4:38 and video recorded these experiences 4:41 and then these experiences were 4:42 debriefed with experienced nurses and 4:44 clinicians 4:45 and while first-year nursing school 4:47 students on average spotted about 4:49 three mistakes of how they could 4:51 contaminate a wound 4:52 experienced clinicians identified more 4:54 than six 4:57 similar effects were found in financial 4:59 services in investment decisions 5:01 in project management so you can see 5:04 that 5:05 when left to our own devices our 5:08 evaluations of ourselves can be biased 5:11 they can be biased in a way that's 5:13 particularly detrimental for 5:14 organizations 5:16 because the people who are going to be 5:17 most confident in their superior skills 5:20 and performance 5:21 are the least knowledgeable in that 5:23 particular area 5:25 now from this standpoint a formal 5:28 validated standardized approach to 5:31 performance management 5:32 can help us mitigate those biases now 5:35 you can think of performance management 5:37 as a continuous 5:38 process of identifying measuring and 5:41 developing performance of individuals 5:42 and teams 5:43 while aligning performance with the 5:45 strategic goals of the organization 5:48 it's an absolutely critical part of 5:50 organizational life it's a central 5:52 pillar of formal systems 5:54 of most organizations performance 5:57 management helps us understand 5:59 who deserves and should get the next 6:00 race who should be promoted 6:03 who is the right person to take on more 6:04 responsibility who needs extra 6:06 development and 6:08 and if so in what areas 6:11 i should also tell you that this week 6:12 we'll talk predominantly about 6:14 identifying and measuring performance 6:16 you'll talk about development in 6:17 subsequent weeks with scott and sherry 6:21 so if you get structured performance 6:22 management right the benefits for 6:24 organizations can be enormous 6:27 robust performance management systems 6:29 can help increase motivation and 6:31 engagement 6:32 they can help us acquire new skills and 6:34 competencies 6:36 they can give you a wealth of insight 6:38 into your talents current skills and 6:39 competencies 6:40 and because you compare the performance 6:42 of your talent against 6:44 organizational goals and objectives a 6:46 robust performance management system 6:48 can also give you greater clarity and 6:50 commitment to organizational goals 6:53 but more importantly a robust 6:56 performance management system 6:58 can help you attain alignment between 7:00 your strategy 7:01 and talent it's nice to have a great 7:04 strategy but you need to execute it 7:06 and this is where you people become a 7:08 critical piece of the puzzle 7:09 your strategy is scared out by people 7:13 the key question here is do your people 7:16 have the right skills 7:17 and competencies to execute the strategy 7:20 and having a well-designed 7:22 robust performance management system can 7:24 help you give a positive response to 7:26 that question 7:27 because your system will help you 7:29 evaluate reward and develop the skills 7:31 and competencies 7:33 that would enable your people to carry 7:34 out that strategy 7:37 let me give an example of borders many 7:40 of you may remember this 7:41 brick and mortar retailer of books the 7:44 company was 7:45 headquartered in ann arbor michigan 7:48 right next to the university of michigan 7:49 one of the borders brothers went to the 7:51 university of michigan 7:53 now this storied 40 year old brand 7:56 that it speak operated more than 1300 7:58 stores globally 8:00 and employed over 35 000 employees 8:03 filed for bankruptcy and went out of 8:05 business in 2011. 8:07 a few people know that in 2001 borders 8:10 signed a partnership agreement with 8:12 amazon where it's redirected all of its 8:14 online sales of books to amazon and at 8:16 the time amazon was just gaining 8:18 foothold 8:19 in the market for book sales so in a 8:21 sense 8:22 boris branded its largest competitor 8:24 that in the end 8:25 killed the company but this is not what 8:28 i'm telling this story 8:29 in 2008 boris broke off the partnership 8:32 with amazon 8:33 and tried to integrate online sales into 8:37 the company 8:38 the strategic message was clear going 8:40 aggressively into online sales of both 8:42 printed and electronic books 8:44 and this is where they found it 8:46 challenging to implement that strategy 8:47 given the skills and competencies of 8:49 their talent 8:50 they realized that their people were not 8:52 well equipped for 8:53 and trained to develop 8:57 an attractive and functional online 8:59 sales platform 9:00 to design and execute online promotions 9:02 to develop 9:03 and integrate electronic readers into 9:05 that online sales platform 9:08 and one of the things that malfunctioned 9:10 at borders was exactly the system of 9:12 performance management 9:13 where the skills that the company was 9:15 evaluating rewarding and developing 9:17 were much more aligned with the 9:18 traditional brick and mortar 9:20 strategy as opposed to the new digital 9:22 age strategy 9:26 so if you don't get this right if you 9:28 don't get your performance management 9:30 right 9:31 the consequences can be equally 9:33 significant 9:35 poor performance management can lead to 9:36 disengagement dissatisfaction 9:38 high rates of turnover it can lead to 9:41 damage relationships at workplace 9:44 it can lead to perceptions of inequity 9:46 where i might be feeling that i'm 9:47 just getting a piece of cucumber that 9:49 while somebody else is getting a grape 9:50 for comparable contributions poor 9:53 performance management can even invite 9:55 high risks of litigation in the form of 9:58 wrongful termination and discrimination 9:59 lawsuits 10:01 and more importantly poor performance 10:03 management can 10:04 undermine your strategy execution 10:07 because the skills and competencies you 10:09 will be developing your talent 10:10 might not be very well aligned when 10:12 those needed to carry out the strategy 10:16 so this week we'll talk about some of 10:18 the central approaches that companies 10:19 use to performance management 10:22 different ways to collect performance 10:24 feedback we'll talk about some of the 10:26 key radar errors and stereotypes 10:28 that permeate our evaluations of others 10:30 performance 10:32 we'll learn how to recognize them and 10:34 discuss possible countermeasures 10:36 i look forward to seeing you in the next 10:38 session