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Performance Appraisals – If Getting Rid of Them was Easy, Wouldn’t They be Gone?

Control through appraisalI  joined an interesting discussion at the Deming Institute official site on LinkedIn about performance appraisals. As expected in the Deming community no one spoke for the use of performance appraisals. However, a good list emerged of why organizations use them.

Here is what a contributor (John Schultz) defined as the reasons for why organizations have performance appraisals:

“When organizations are asked why performance appraisal is important. A variety of answers are put forward to bolster intentions and rationalize the scheme’s overriding purpose and legitimacy. These responses can be categorized accordingly:

• Improve performance. Give direction and focus to the workforce so quality, efficiency and effectiveness are increased with the ultimate goal of getting better organizational results.

• Enhance communication by providing routine feedback. Let the employee know how the organization is doing and how the individual is perceived as a contributor to organizational wellbeing.

• Provide a basis for compensation. Identify and respond to outstanding performance. Reward the most diligent employees with increases and bonuses so they and others will be motivated to continually do better.

• Assist staffing decisions by identifying those who are ready for promotion or layoff. It is thought that appraisal systems are fair enough and robust enough to provide rational information that will select employees for promotion or in many cases for layoff.

• Recognize and clarify training or education needs. Identify staffing and training needs, and assist employees with career development by recommending further education, instruction, tutoring, or mentoring.

• Create a paper trail that will legally document reasons for termination and defend against alleged unfair treatment. The appraisal system when properly administered should provide effective impartial and objective documentation that can serve as the foundation for employee removal or defend against perceived wrong doing.”

I believe this provides a pretty good summary of the majority of reasons for the existence of performance appraisals.

The question is “how to get rid of them?”

The short answer is to just get rid of them. However, this won’t happen unless you have an enlightened CEO like Robert Rodin of Marshall Industries. He got rid of them, but in a private reply to me he said it took a year of planning to accomplish.

Or Pluralsight where they really have never had them – but their attorneys wanted them. Funny thing, Dr. Deming had the same problem at Ford – the attorneys wouldn’t let them divest performance appraisals. Begs the question of having a great environment to work in vs. those that think they are protecting the organization.

I offer a different approach. I don’t believe that you can get the full benefit of Dr. Deming’s philosophy unless you do all the elements or with my method at least try them all. This is the subject of my ebook.

You don’t need to go cold turkey, but you can with the right leadership – some like Marshall Industries, Bama Companies and Pluralsight have accomplished this. However, for the rest of the organizations you can conduct a small scale pilot with a group of workers (and a couple managers) that can deliver end-to-end service to customers. You can design-out performance appraisals, bonuses, fear and use Dr. Deming’s principles as a guide. This gives you a chance to work through any issues that may arise. Performance using the Deming philosophy will improve along with morale, customer trust and management focus.

You can download the free ebook – The Service Cost Paradox.

What if you tried different design principles in your organization? Would you discover a better way to improve your service? The 95 Method is about giving you and your organization a method to help you answer these questions. You can start by downloading our free ebook or booking our on-site workshop. Tripp can be reached at tripp@newsystemsthinking.com. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt

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Want to Be a Change Agent? Here is a Method and a Challenge

Change agents often are working on efficiency and not effectiveness. The key is to know the difference.

Maybe I shouldn’t assume you don’t – and in that case if what I write here is not unfamiliar to you than it is probably someone else. In fact, I know many Lean and Six Sigma folks that get it.

There are four areas that you need to understand if you are do make your organization effective and this means something very different than being efficient. They are:

  • Systems Thinking
  • Theory of Variation
  • Theory of Knowledge
  • Psychology

Yes, this is Dr. Deming’s System of Profound Knowledge and the message that he was delivering was to management. Yet, many doing Lean and Six Sigma are only addressing machines and front-line workers to increase productivity (efficiency). Management is -after all – the ones that hired these folks – internal or external. Don’t bite the hand that feeds you, right?

The problem is that we are walking by the largest gains that are only achieved by being effective. So, what is being missed?

Well, if you are in service industry you may be missing the functional separation of work. Too often I see lean practitioners making a process efficient that doesn’t need to exist at all. Balancing workloads between front-office and back-office doesn’t make a lot of sense if there is no need for the back office. You won’t be very popular when you start stirring up the office politics. The back-office executive will label you as trouble and the fun begins.

What about performance appraisals? Biggest waste of time and effort on earth. Yet, most mid-size and larger organizations have them. The loss is enormous in terms of time and effort. However, if you don’t understand variation and why ranking and rating people is ridiculous – you won’t address an enormous source of waste.

There is more to the Deming philosophy than getting rid of back offices and performance appraisals that sets management on a track to effectiveness. The benefits of the Deming philosophy are well-documented through the Japanese Industrial Miracle and many organizations in the US and elsewhere.

A reason that the Deming philosophy is hard to embrace is the mindset shift that has to take place. This is the reason I wrote a short eBook (62 pages, but a big font!). There are four chapters. The first two chapters takes you through an “unfreezing” process. Organizational mindsets are frozen with internal measures and institutionalized processes and work designs. Getting a different perspective will help melt the ice.

The two perspectives that will provide the heat to melt  the ice are a Customer-In and a Cultural perspective. The Customer-In perspective is Chapter 1 of my eBook and Chapter 2 is the Cultural perspective. If you do the things in Chapter 1 to get a Customer-In perspective and you identify the Cultural beliefs and assumptions in Chapter 2 you are on your way to unfreezing “Arendelle” (yes, from the movie Frozen).

Chapter 3 and 4 set the stage for a redesign. I have found most large organization’s cultures so institutionalized that the best way to make change is to have a fresh start. I like to call it, “What if . . . ?transformation.” The incremental improvements you get from small step improvements are fine, but let’s go for the total effectiveness. I lay out some things to try as you build your new organization. This is the time to find out what makes a better organization, but start on a small scale.

Intrigued? You can download my free eBook from my website at www.newsystemsthinking.com.

Down load my free eBook at www.newsystemsthinking.com. Take a look at your organization as your customers see it – our 4-day workshop has been called “an awakening experience.” You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance. Tripp Babbitt is a service design architect and organizational futurist. His company helps service organizations understand future trends, culture and customer. The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness. Read his column at Quality Digest and his articles for PEX and CallCenterIQ. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

 

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Is Your Obsession with Schedule Killing Your Quality?

Time to LearnA couple weeks ago, I went to the W. Edwards Deming Institute pre-conference facilitated by David Langford of Langford Learning. During his workshop David talked about how teachers give a test over material on a date. The test date and schedule of learning is set in stone, but the quality of the learning is flexible – flexible meaning that the student’s knowledge of the material is of less importance than the date. The student learning is compromised by the date.

After some reflection, it occurred to meet that this is what happens in programs and projects in organizations. They set a date, put together a project plan and all focus is to hit the date. The quality is questionable when delivered, but the date is hit. This is completely backwards from the thinking that should prevail.

Our projects, plans and programs have come with more rigor around the dates. Project managers are used to carefully schedule and track progress on Gantt charts – this doesn’t solve the glaring systemic issues in management, design, culture and quality.  In fact, in many organizations if you try to suggest improvements during the course of a project you are informed that this would compromise the delivery date and probably some incentive for hitting the date. Good quality work be damned!

If education and other organizations want to deliver quality students, products or services, then the focus needs to be on the method and not the date. Otherwise, waste and mediocrity will continue to prevail in our systems.

Take a look at your organization as your customers see it – our 4-day workshop has been called “an awakening experience.” You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance. Tripp Babbitt is a service design architect and organizational futurist. His company helps service organizations understand future trends, culture and customer. The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness. Read his column at Quality Digest and his articles for PEX and CallCenterIQ. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Is Your Efficiency Killing Your Effectiveness?

The advent of the quality movement has morphed into efficiency spawned by cost-cutting.  However, to be efficient doesn’t mean you are being effective.

Customers want you to be efficient because costs get lower, but not at the expense of effectiveness.

Confused?

Efficiency needs to yield to effectivenessAs a service organization — or even as a manufacturer — you have products and services that make the life of your customer better, easier and/or more fun.  You could say your reason for existence is to  achieve this.  The actions of service organizations  seem to indicate a lack of understanding of this simple fact.

OK, still confused?

Let’s take the Interactive Voice Response (IVR) system that customers have to go through with service organizations.  You know, the push-button or voice activated greeting you get.  Customers hate them.  Rarely do you find a menu of options that makes any sense to a customer.  Frustration ensues.  Misroutes are notorious with an IVR system.

It doesn’t end there.  Customers often have to give their name, account number and other pertinent information to the IVR and when the service representative answers they ask the same questions.

If customers hate them so much, then why do service organizations use them?

Because they assume they make their organization efficient.  If any organization wants to make a customers life easier, better and/or more fun — they wouldn’t put in an IVR.

One other word about IVR and customers.  I did some internet research for a survey about how customers hate IVRs.  Most of these surveys are done by — you guessed it — the ones that sell IVRs. One blog promoted with delight that only 66% of customers hate them.  They found this encouraging.  I am not kidding.  Could you find  any other product with a 34% approval from customers that still exists?  Beside politics?

Service organizations happily keep buying these modern marvels despite there ineffectiveness.  Technology is treated  this way in general.  Say the word “technology” and people swoon over having to get one.  Then it becomes “just keeping up with the Joneses.”

There is a constant push to move customers to “more efficient” channels to conduct business.  This is done in the name of reducing costs.  IVRs are one category, and websites are another.  But something is lost.  The interaction between a customer and an organization becomes less intimate.  Building a strong bond does not come from CRM systems, it comes from relationships  through front-line workers.

In the end, effectiveness has to beat out efficiency.  Being effective means doing what increases the chance of doing what is important to customers.  The financial, mechanized approach won’t get you there.

Take a look at your organization as your customers see it – our 4-day workshop has been called “an awakening experience.” You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance. Tripp Babbitt is a service design architect and organizational futurist. His company helps service organizations understand future trends, culture and customer. The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness. Read his column at Quality Digest and his articles for PEX and CallCenterIQ. Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

 

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Gallup Survey: 70% of American Workers are Not Engaged or Actively Disengaged

Coercion by inspection and audits doesn't change thinkingA shocker? Not really. 70% of American workers are not engaged or are actively disengaged. Dreadful and depressing.  Unfortunately, Gallup has decided that worker assessments are the answer – it is not.  Not to say there isn’t interesting information to be learned about individual interests, just not very impactful to the business.

The real reason that workers are disengaged is because their work design is awful.  As a worker, you get told daily about what you should do and organizations have the processes, rules, scripts, performance appraisals, etc. to back it up.  Even the support areas get more respect than workers and even dictate their edicts to workers – after all, they are the smart ones . . . just ask them.

The survey also mentioned that “actively disengaged workers” are costing the US economy between $450 and $550 billion dollars a year.  No small sum and you will be adding to this sum if you turn to coaching the individual as the answer.

Design work that workers enjoy and embrace and the rest will take care of itself.  The individual is rarely the problem and represents only 5%, 95% of the problem is in your organizational design.  Design good work and engagement will be a problem of the past.

Take a look at your organization as your customers see it –  our 4-day workshop has been called “an awakening experience.”  You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance.  Tripp Babbitt is a service design architect and organizational futurist.  His company helps service organizations understand future trends, culture and customer.  The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness.  Read his column at Quality Digest and his articles for CallCenterIQReach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Back to Design Basics

I recently watched Peter Skillman (VP Designof HERE) discuss an experiment he conducted and the discoveries he made while doing it – listen below:

The kindergartners outperformed all the “smart” people in the experiment!  The lowest performing group . . . business students.

Telling.  Organizations have over-thought and over-designed just about everything – leading to complexity and waste by designing in  their own problems.

Over and over again I have found that the approach from management in service organizations is to get an idea, plan and roll-out to the organization via project management the implementation of the idea.  Long projects (Over 6 months) have requirements change because of the dynamic nature of service.  The project is typically obsolete before the implementation is finished.

Information technology companies selling software perpetuate and lock in the waste by “nailing down” requirements and writing contracts that impede or dismiss an iterative approach.  In fact, the whole software development process has created a barrier to changing requirements.

Those software companies that do iterative type of software development are still missing the work design issues that need to be dealt with before starting to code.  The business requirements are born from a poor work design and can only be seen when developers actually understand the work – not through written requirements, but through observation and iteratively improving the work.  This is a programmer-user activity with no intermediaries.

Few software companies address the work design itself and when they do it is usually a retrofitting activity.  Slam the software in and then make process improvements.  The operating assumption is that the design ONLY needs process improvement rather than redesign BEFORE any software is provisioned.  Monthly sales targets in a software organization wouldn’t allow such diligence and even if this didn’t exist most software organizations don’t have the knowledge to do a redesign (one of the reasons I offer a workshop and consulting in this area).

Service organizations would be better off to design/redesign services before pulling in IT companies.  When you have iteratively discovered a better design, then software may make sense.  Service organizations just like to do things backwards . . . an operating reality.

Regardless, there are better ways to go about improving service organizations than the large single-focused project.  We are better off being armed with knowledge and an “iterative” discovery process than the business school definition being used today.

Take a look at your organization as your customers see it –  our 4-day workshop has been called “an awakening experience.”  You will understand the customer view of your organization and take inventory of the assumptions, beliefs and perspectives that drive performance.  Tripp Babbitt is a service design architect and organizational futurist.  His company helps service organizations understand future trends, culture and customer.  The 95 Method designs organizations to improve the comprehensive customer experience while improving culture and management effectiveness.  Read his column at Quality Digest and his articles for CallCenterIQReach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

 

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The End of the Expert

The era of the expert has officially come to an end.

Most purported “experts” today  have decided to give themselves this label.  When you hear the words, “I am the expert” you should run.

Why?

English: Charles Cornwallis, First Marquis of ...

English: Charles Cornwallis, First Marquis of Cornwallis (1738 - 1805) (Photo credit: Wikipedia)o start with . . . it is a fixed mindset and holds a manacle on future learning. After you become an expert, where do you go from there? More expert? The mostest expert? Once you label yourself an expert there is little room to grow.

Being an expert seems to be a pass to judge others as not expert.  Calling out the non-experts as not worthy to walk the sacred ground of the expert.  You will hear things like, “everything I do is purposeful.”  Wow!  The deity has arrived to right the world.  We have been waiting for your arrival.  False prophets abound.

English: General Sir Henry Clinton, Commander ...

English: General Sir Henry Clinton, Commander in Chief of the British Forces in the American Revolution, 1778-1782. (Photo credit: Wikipedia)

We haven’t seen such arrogance since General Cornwallis and General Clinton traipsed the American landscape over 200 years ago.  Good thing, their overconfidence was the Americans gain  Both Generals left the US with dishonor.  Both later writing books to blame the other for their colossal failure in America.

The self-proclaimed expert has a clear message, “I am the man.”  Until something goes wrong that effects their image then the message is let’s find someone to blame.  My expert image may get tarnished.

Embracing a growth mindset instead allows the unworthy to become worthy.  All have the propensity to improve their current position and no one has all the answers – at least on this earth.

A better label would be to declare ourselves life-long learners and try to live up to this.  No one is left out with this mindset.  We all have room to improve.  Otherwise, we set the world back to the days of monarchy and elitism.  Who wants that in country where “all men are created equal.”  Unless, of course you are an expert.

Tripp Babbitt is a service design architect.  His organization helps executives find a better way to link perspective to performance and enable workers to build and refine their service.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn atwww.linkedin.com/in/trippbabbitt.Enhanced by Zemanta
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Atlanta Cheating Scandal – A Messy and Predictable Result

Let’s be clear.  A good person working in a bad system will lead to poor results.  The whole Atlanta School system– and education systems like them – have created environments where the system is dictating performance . . . and survival in that system.  The Atlanta education system created the environment for administrators and educators to cheat.

These systems designed in this fashion need to be eliminated in education systems, government and private industry.

The US has created a culture of cheating by the way we have contrived and managed systems.  Lance Armstrong, the recent KPMG scandal of insider training, an assortment of jailed CEOs and manipulation of every day measures to survive or get ahead are results of these poorly contrived and managed systems.  Our short-term thinking for immediate gain is like a boat anchor hanging around our societal necks.

Pay for performance or any derivation of pay for performance like:, administrator and educator rewards tied to test scores, school funding tied to test scores, school takeovers tied to test scores and graduation rates,  etc. will lead to cheating and/or manipulation – if not for personal gain, for survival.  I wrote about this back in 2009  (see A Step Back: Pay for Performance in Schools).  We are making our own bed and we have to continue to sleep in it.  We are better than this.

The current education system is expensive to boot.  The added attorney costs and inspection costs to avoid cheating and manipulation make this design inefficient and not just ineffective.  Now, we may have more expenses to jail “cheaters.”

To improve education, we need to  change our perspective and contrive better educational systems.  The culture of cheating and manipulation comes from our current culture.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.

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Trust – Your Obstacle to Increased Revenue and Lower Costs

I have often talked about the zero-sum game in my articles and blog.  The belief that good service costs more and cancels out any benefit.  “Customers”, they say, “should not be trusted or they will screw us out of every penny.”  If your organization thinks this way it can become a self-fulfilling prophecy.

In fact, service organizations strike the first blow with poor and cumbersome service.  A customer having to wait on hold, navigate an IVR, and gets transferred around to different agents is bad enough.  If it only ended there, customers have to arm wrestle with technologically hand-cuffed agents that are scripted like robots.  All this costs money but management thinks it less costly then giving customers “what matters” to them.

Trust has to be built into what we do.  Starting with enabled agent that can actually help the customer.  How absurd would that be?  Customers that get good service not only cost less, but they bring more customers.  Good service is a diamond in the rough and giving it to customers attracts more customers.

Customers already trust you by giving you their business.  It just costs less to deliver it when trust us present.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbittor LinkedIn atwww.linkedin.com/in/trippbabbitt.

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American Overjustification

Cover of

Cover via Amazon

The Overjustification Effect . . . the act of doing something for mere pleasure is compromised by rewards.  When first reading Alfie Kohn’s Punished by Rewards, I came across the concept.  We see it in everyday American life.  The evidence is that in organizations, there are a lot of people that either expect something extra for doing extra or won’t do something unless there is a reward involved.

As Americans, we have grown up with this concept.  Most of my friends and many that I have spoken with were given rewards for good grades.  Money, pizza, McDonalds and more were our incentives.  This later morphed into “what will you give me” when asked for any favor from friends or family.  The satisfaction of just doing to help has been erased.  The entitlement mentality we see in America today is certainly connected to this thinking.

It was also Kohn that talked about rewards and their effect on people.  Yes, they drive behavior . . . the wrong behavior.  It was also Kohn that pointed out that B.F. Skinner did many experiments on animals, but wrote his papers on people.

However, extrinsic motivators are part of everday American organizations and so many organizations violate the 95/5 Rule (where the individual is at the mercy of the system they work in). Rewarding the individual, doesn’t make sense when their performance is dictated by the system.  Unless, of course, they have found a better method.  Even then, organizations have to be careful that the individual doesn’t hoard the method for continued reward.

As Americans, we need to find our way back to the days where we did things because they are the right things to do.  We have become overstimulated by rewards.  Overjustification has been woven into our fabric and needs to be purged.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbittor LinkedIn atwww.linkedin.com/in/trippbabbitt.

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