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HR Series – Performance Management in an Enterprise 2.0 Context

by Jon Husband

March 12, 2010 at 12:07 am · Filed under FASTforward'09

First … no answers here. Only questions and ideas based on past HR experience, observations and some familiarity with interactive and participative dynamics online.

Back in January in one of the sections of a post titled “Exploring the HR Management Framework for Enterprise 2.0” I offered up the following:

Employee Performance

Performance management has been a hot-button issue in most enterprises for a long time. At its best, a well-designed and disciplined approach to performance management can play a positive and constructive role in delivering sustained high performance, and can be central to creating a performance oriented culture in the enterprise.

All too often, however, performance management schemes serve to remind us that too many workplaces are the adult version of grade school, with report cards and a parent-like boss who has unwanted power over employee’s future and fate.

360-degree feedback processes (soliciting input on performance from subordinates, colleagues, superiors and even external customers and liaisons) have been around long enough now to have most of the kinks worked out, and are probably a decent pre-cursor to forms of ‘crowdsourcing’ input on employees’ performance. Many (most ?) of the social computing / collaboration platforms out there have features and functionality designed to offer support to gathering and processing information about peoples’ performance.

The culture of an enterprise is an all-important aspect of why and how performance management is used. I expect that this aspect will become more important as social computing and collaboration continue to grow and spread.

Let’s talk a little bit more about how managing peoples’ performance might be practiced in an interconnected, interactive (and cross-silo / cross-organization) and more transparent organization.

Sharing information and building pertinent and applicable knowledge from that sharing is one of the core (and still much-discussed) tenets of knowledge management (KM) – the buzzword that won’t go away. Sharing information .. links, content, opinions, specific expertise, etc. … is also at the core of using social computing in the enterprise. Some of the skepticism about being able to control it comes from not understanding clearly how it will fit into, or with, existing business processes, and I suspect that there is an accompanying fear that it may upend or distort some or mamy business processes, if the inmates are handed the keys to the gates.

At the same time, we are at the back end of at least 20 years of calling for breaking down or at a minimum de-rigidifying the walls of specialized functional silos in most hierarchical organizations.

In some sense, the invaders, or the barbarians if you will, are at the castle gates clamoring for the gatekeepers to let them in. They’ll argue, with some reason, that customers have more power, and that empowered and trusted employess can and want to contribute more to any given organization’s effectiveness.

So … let’s assume that Enterprise 2.0 implementations continue to spread and grow. Let’s further assume that many of them are at least semi-successful, and that net-working in collaboration with flows of information feeding increasing flexible business processes gains more and more traction. Will we need to begin setting objectives and targets differently, and will that in turn necessitate that in a socially-networked or ’social business’ environment employees’ performance will need to be assessed and managed differently ?

My sense is that the answer is probably Yes. People will be working differently, and in all likelihood in more interdependent ways than in more traditional teams.

Setting objectives, for example, will probably need to consider more the role and dynamics of the networks that are pertinent .. whether it involves greater connections to/with customers and markets, or to what purpose and degree the work that addresses the objective involves net-working inside the organization. In other words, I think it will mean considering the nature of the work more than ever before.

Bring an organizational objective down into an individual net-worker’s performance objectives will also require consideration of how she or he works in the relevant networks, and what kinds of contribution are generated from the interaction in which they engage with others in the network(s) that are addressing the organizational objective.

I believe that there are a range of work design tools that can be useful with these issues .. mainly drawn from the organizational development (OD) field, such as the RACI matrix and accountability mapping. They would need to become more commonly and frequently used, and I suggest that they would become as or more important than the traditional job description, with its assumptions about relatively static tasks and accountabilities.

Competency models are the most recent work design tool (I’ve written briefly about them here) that has become embedded in most workplaces in support of recruitment, employee – performance fit and as a foundation for assessing individual performance. I also believe that the competencies associated with most roles (and certainly those that operate mainly in networks and with social computing and social networking tools and platforms) will need to be re-visited as the cross-functional, cross-organizational and internal – external connections proliferate.

In terms of actually assessing performance against objectives and required / desired competencies, today’s organizations have a foundation upon which to build. Many organizations have implemented and have experience with using what is called 360-degree feedback as a core element or the input about demonstrated performance in a role or job. The 360-degree feedback process can, I think, be reasonably well-adapted to the E2.0 context … the more difficult challenge is articulating the performance objectives in clear and meaningful ways whilst acknowledging that the roles being performed are participating in a range of networks and flows of information and activities.

Additionally, most (if not all) E2.0 collaboration platforms have or will have mechanisms that track activities, whether around objectives or around issues using tags, click counts, and elements of social network analysis (SNA), organizational network analysis (ONA), or value network analysis (VNA). As organizations acquire more experience and expertise in using these concepts, I think there will come to be a base of information that will enable new forms of ROI .. namely what I and others have called Return on Investment in Interaction (ROII).

Performance management in organizations has always been a complex set of sociological and political processes. It doesn’t promise to become any easier, but there are signals on the horizon that suggest some ways forward.

Like I said .. no answers, just ideas and questions at this stage. Beyond the ideas outlined above, there are more far-reaching ideas and issues being discussed in some of the conversation circles I inhabit that are examining more human-centered notions of knowledge work and how they may come together in new forms of organization. Those ideas and issues will no doubt continue to evolve as collaboration platforms and the Web continue to grow their impacts upon today’s organization and the work that is carried out in those organizations.

I’d be really interested to hear what you think.

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Dan PontefractMarch 12th, 2010 at 12:25 am

Not sure if those in charge who have become accustomed to the ‘tried and true’ practice of performance development practices can or will change.

Might take a few years …

See Karl Moore of McGill – http://www.youtube.com/watch?v=K8oCkWkTfJ8

That stated, where I work, I’m pressing ahead with ‘Return on Performance’ … a way in which to take the various formal, informal and social contributions, juxtaposed against personal and business results, to achieve a metric that is useful to the org.

We’re mulling it over right now, ideally into implementation for Jan 2011.

Mike RicardMarch 12th, 2010 at 10:10 am

Jon, this topic is a crucial one for the take-up and long-term success of Enterprise 2.0. To date, many organizations pilot their E2.0 initiatives but don’t truly integrate them into the infrastructure. It often stays a peripheral activity.

When HR gives recognition to employees around their participation in E2.0, then this is a major step towards making collaborative working an established practice and process within the business. The effect on employee morale will lead to an increase in the quantity and the quality of contributions, resulting in a positive feedback loop.

Jon HusbandMarch 12th, 2010 at 5:39 pm

@Mike .. I couldn’t agree more. I’ve helped clients design and implement a decent few PM schemes in the past … it can almost always be done better than it typically is, and I think I am suggesting it will HAVE to be done better in the rapidly-approaching future.

Jon HusbandMarch 12th, 2010 at 5:41 pm

@Dan …

I had lunch with Karl in Montreal in December, and this issue / topic was one that we discussed at relative length.

I am off to Montreal again at the end of next week, and am hoping to lunch with him again. if I do, I’ll let him know you thought the clip was interesting and useful.

Jo JordanMarch 13th, 2010 at 4:41 am

I think organizations muddle reviewing the systems that sustain performance with managing.

A person with any level of training, will perform much as any one else when they can see the goals and the progress towards the goals at a glance and have the resources they need at hand. This is by definition.

The question is what is the average level and spread of performance. What factors change performance, under real-time conditions?

Chasing after individuals is pointless. That implies the critical assets of the company are not yet in the company.

There are two conditions when we recruit liberally from the open market but both render performance management pointless.
1. When one trained individual is much like the other and talent offers no competitive advantage to the company.
2. When the value is created in a supply network much larger than the company (such as fundamental science research) and the goal is provide “housing” so the company/university is in the game. The key then is providing resources to attract key players into the economic unit. They will be “performance managing” the company, not vv.

Heretical perhaps but it is long past the time for HR to abandon the “henchmen” role and start running organizations.

Bill IvesMarch 13th, 2010 at 8:15 am

I believe the transparency built into the E20 tools will change performance by their nature and by human nature. People do a better job when they know that others can see what they are doing. In the XM Radio case I reported on in 07, the company had its first on time on budget project after using a project management tool with E20 transparency. So Jon you are right, the new work environment and tool sets requires some creative thinking on performance management. I think this is on of the unrealized opportunities in E20. A small part of the solution is tools that provide clear monitoring and analysis. A much bigger part is new policies that recognize that we are in the 21st century. The FCC has recently recognized this and is changing how they assign bandwidth. Companies and their HR organizations need to make these changes. The winners will do it.

Jo JordanMarch 13th, 2010 at 8:43 am

@Bill do you think people do a bad job with intent to do a bad job?

Jon HusbandMarch 13th, 2010 at 9:54 am

!Jo ..

I think your points are correct, an I would wish for a company to take that logic and work with it going forward.

As to accepted practices shifting from the focus on the individual, I too think that would be a good idea. Having to explain clearly why, and then implementing, would be a clear initiatiing point for some real culture change, which is what everyone says is critical these days.

That said, I also agree with @Dan .. I think it’s a good bet that moving off of and then beyond current practices is gonna be like pull-wisdom-teeth, get-root-canal-work-done for a fair few organizatons.

Heretical perhaps but it is long past the time for HR to abandon the “henchmen” role and start running organizations.

Sounds to me like somethimg Charles Handy (my major inspiration) would say.

Jon HusbandMarch 13th, 2010 at 10:15 am

I believe the transparency built into the E20 tools will change performance by their nature and by human nature. People do a better job when they know that others can see what they are doing.

First, we shape our structures (or tools), then they shape us” (variously attributed)

and as @Jo points out, that’s “we”, not “I” .. though of course each individual has her or his own cognition and social skills and strategy with which they engage in “we”.

The challenges to managing collective performance are clearly collective in nature, and involve, I think, a significant combination of individuals’ characteristics – motivations, personal skills, abilities to learn, and so on mashed together with both business processes and group dynamics and constantly changing rapid information flows, etc.

There’s a good reason for business process frameworks … those are where employees in effect engage with the whole, and what the group dynamics ultimately serve … and where the tangible things that come out are the business results.

I think the work design, HR, culture change, and people development fields are going to be very interesting for the next twenty years. I do not think there will be as much of a standard approach .. such as the iconic structural and management principles represented by the pyramidic organizational chart. The network, generically, will replace that symbol.

The two .. hierarchy and networks … will become woven together, will shift shape(s) as conditions change and will come together offer a new lens on what performance means and how to work towards effectiveness.

Jo JordanMarch 13th, 2010 at 10:20 am

Mmm, just the basic principle of TQM but perhaps not the people to quote right now.

I think you have to work the other way round. Find companies who don’t manage by whim and managerial temper tantrum and stick with them. The others survived by having control over assets. The world is not in the mood for that any more and social media is the lever by which the common wish will be exercised.

I know it is difficult to see who will change first. Remember, I was given that challenge. I decided that new industries are likely to emerge. If you google RMM, you’ll find a great questionnaire for a Relationship Management Matrix for developing the aerospace supply network. It seems to have degenerated into box-ticking (a Brit way of passing the working day). The idea is good though and sums up where global companies are going and what will determine the ‘race’ from here on in. The complimentary mgmt reference is Hagel and Brown, Davos.

Time to do what I tell others to do and run my organization.
Cheers!

Jo JordanMarch 13th, 2010 at 10:44 am

“The challenges to managing collective performance are clearly collective in nature, and involve, I think, a significant combination of individuals’ characteristics – motivations, personal skills, abilities to learn, and so on mashed together with both business processes and group dynamics and constantly changing rapid information flows, etc.

Well put. I think I’ll pinch it for my blog.

RotkapchenMarch 15th, 2010 at 10:28 am

The more I read this stuff, the more I start to wonder, does ‘managing’ get in the way of just getting stuff done?

Jo JordanMarch 15th, 2010 at 11:13 am

@Rotkapchen

Most of the time management/manager get in the way of the work.

I used to give MBA students three rules. Get out of the way. When in doubt, do nothing. If your boss runs in circles – stand still. He is coming back soon.

Yup, first rule of management design is to make sure that it does not cost more than the value it adds (long wall mining studies).

A good test is to take managers away and see what the result is!