Monday, March 17, 2008

Managing Human Resources: Personnel and performance management

Any expert in 'human resources' (once simply known as 'personnel') can explain the importance for business results of 'interpersonal problems'. In simple non-jargon, getting on badly with others at work is a well-trodden path to business and personal failure.
To activate the dreaded problems, just be 'insensitive, manipulative, critical, demanding, authoritarian, self-isolating, or aloof', according to two of those HR experts. By the same token, adopting the opposite behaviour should achieve the magic aim: getting the best from those who work with and for you.
The key lies in the word 'authoritarian', a fault especially prevalent, it seems, in Europe. True-blue authoritarians never explain orders, expect those who receive commands to do exactly as they are told, ruthlessly punish failure and capriciously reward success - again without explanation.
Some of these tough nuts make fortunes: like Linda Wachner, the Warnaco textile tycoon, who once ordered a manager to head office and kept him waiting three days for a two-minute interview. Tom Watson, the founder of IBM, had similar rude habits ('They're well-paid,' he said when Tom, Jr. complained about the waiting minions). But so did the awful, disastrous Robert Maxwell.
Don't make the mistake of assuming that authoritarianism equates with success. Brutes might well do better with the anti-authoritarian methods of properly organised feedback, review and appraisal. In fact, one study of 437 companies showed spectacular before-and-after results from introducing this so-called 'performance management.'
Productivity soared by 94.2%, while the shareholders were better off by a quarter. The study's authors, though, report that the managers involved didn't think much of the procedures, rating them only 'slightly effective' or 'somewhat effective' in helping to achieve a company's ambitions. So what produced the bumper results?
The researchers, quoted in the Harvard Business Review, say that people need to know clearly what's expected of them: to be told clearly how they have lived up to expectations - or haven't: and, in the latter case, to discuss how to improve. Mismanaging subordinates, by ignoring this trio of needs, isn't going to help them, the mismanagers, or the business.
But there's a fascinating point about those expectations. Pitch them high. That doesn't mean setting impossible targets, but it does mean high rating of people's ability and potential. Do that, and you'll benefit from what Professor Dov Eden, who teaches at Tel Aviv University, calls 'the Pygmalion effect.'
To turn Eliza Doolittles into stars, try regarding them as such. Working with the Israeli military, Eden found that soldiers whose potential was rated 'high' received superior grades, and got more out of their training, than comrades whose rating, so their instructors were told, was only 'regular' or 'unknown'.
The catch was that the ratings were fictitous, entirely random. They plainly influenced the attitudes of the instructors, however. The same thing happens with managers and the managed. It's another proof of the old adage, 'Give a dog a bad name.' Give a dog a good name, though, and he becomes even better.
The crafty Eden arranged for soldiers to be told, again at random, that they had high potential for success. The blessed 'considerably' outperformed course members who believed themselves to be only average. In other words, if somebody is under-performing, maybe it's because they're underrated - by you and consequently by themselves.
That helps explain the irritating phenomenon, which every boss has experienced, of the man or woman who is sacked for under-performance, but proceeds to work wonderfully well elsewhere. Review, feedback and appraisal will help avert such waste, but you need something extra: reward
One school of thought pays more for performance against clear targets. Another advises paying extra only for super-performance. A third says that super-performance should be part of the expectation, and that bonus payments should only come from profit-sharing schemes. Whatever the system, the interpersonal success formula includes sharing that wealth.
Also, consider the virtues of another piece of jargon: 'upward appraisal.' Not only do subordinates get their performance reviewed, but so do the bosses - by the bossed. That should finally scotch the authoritarians who think that in all circumstances father knows best. He doesn't. --(ThinkingManagers)

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