Corp America February 2017

26 CORP AMERICA / FEBRUARY 2017 , Roger Ferguson is not your typical Human Resources (HR) guy. He understands the importance of legal compliance, can recruit at any level, and can generate an airtight policy on just about any issue that surfaces. He prefers, however, to focus his efforts on process improvement and the bottom-line impact that HR can have on organizations, having amassed a career total of some $80M in documented process improvements. His latest effort is the creation of Big Five PerformanceManagement, an amazingly simple but effective alternative to traditional employee performance appraisals. High Five for Big Five! “In 2015, Deloitte research showed that their 55,000 employees spent an average of 2,000,000 hours per year on the performance appraisal process. That’s a little over 36 hours each year for every employee on the payroll. The pay-off for all that effort? Only 42% of their executives thought that their efforts actually improved performance or drove employee engagement. Other companies have had similar results as the research generally shows the traditional process (annual goal setting, mid-year adjustment review, year-end documentation and scoring) to be tedious, time consuming, morale killing, and outright ineffective,” says Ferguson. He concluded with this summation, “Let’s face it, everybody hates performance appraisals! “Until now, that is,” claims Ferguson. A 30-year veteran of two Fortune 500 companies in HR and Operations, Roger formalized the Big Five process after some 15 years of prior use in various forms at both JPMorgan Chase Bank and the Fluor Corporation. Here’s how it works. In Big Five Performance Management, employees are asked to submit one, half-page, monthly report to their managers detailing two items: 1. Their five most significant accomplishments from last month, and 2. Their five highest priorities for the current month. Bullet points are valued over lengthy narratives as Big Five is designed to be nimble, concise, communication between the employee and their manager. This simple format allows the employee to tell their story, taking credit for the contributions they have made to the team. The on-going use of this process actually helps to shape the way employees begin to think about their jobs, becoming much more aware of their ‘highest and best’ use and developing a habitual method for thinking about their next and future contributions. Requiring the reports to be completed on or before the fifth working day of the month (or the first working day after) helps to install the process into the organizational culture. Managers have five days to respond to the employee’s reports by commending, affirming, guiding, coaching, and yes, even correcting the employee’s monthly priorities to better align with longer term, strategic objectives. The manager’s response is also expected to be concise. Short, simple sentence responses are all that is required for most reports. It is not unusual for managers to respond to high performers with nothing more than a, “Looks good; carry on,” type comment. It is also necessary, on occasion, for the dreaded, “Let’s talk. We do not appear to be aligned on some of these priorities.” As in any bell curve, the detail and complexity of each response will vary from team member to team member from month to month. The results of gathering these 12 monthly reports, that include the manager’s documented coaching, is that Big Five tends to paint a much better picture of the employee’s overall contribution to the team. But the best news is that the 12 monthly reports can totally eliminate the need for the traditional, annual appraisal process. After all, coaching has occurred monthly and continues to occur on a rolling, monthly basis, eliminating the need for any final, summary meeting or process at year end. Employers can still use Big Five documentation to determine an annual score, rating, or ranking for employees, but Ferguson advises against it. “In most organizations scoring is a senseless process. Besides the obvious obstacle of rater bias (some managers grade more easily or harshly than others), I have identified 25 other problems with this practice. Without going into too much detail, the bottom line is that scoring causes more conflict, problems, and liability than it cures,” says Roger. Does this process mean that the manager can run the business by email, never having to leave their office? Absolutely not. Big Five users reports that these monthly reports do not replace face-to-face communication but actually improve it, serving as a catalyst for conversation between managers and their team members. How well does Big Five work? NACE International in Houston, the worldwide leader in coating and corrosion testing, education, and certification for its 35,000 affiliates, installed the process in November of 2015 and have been using it since. The results are impressive. NACE reports that: 1702CA61