It's the thought that counts...

The Christmas season is upon us!  That usually means the typical scramble to get those last minute gifts, prepare for family visits, or send off Christmas cards.  It is also the time of year for work-based Christmas parties and events.  In my healthcare experience these have taken on many forms from unit-based social events, to Board/senior executive formal functions, to larger site-based or team-based gatherings at a local restaurant, and even holiday-themed meals provided for free to all staff during the Christmas season. 

What some may fail to realize is that these events say a lot about the organization's or the individual manager's commitment to staff and can send strong messages about the reality of employee engagement in the organization.  In a previous blog entry on employee engagement I touched on a couple of issues that I believe need to be reinforced in regards to how Christmas functions are managed.  It is my hope that you see value in my perspective and can use that input in considering your options for this or future years.

I recall from painful experience a year in which budget and optics caused my organization to cancel what had been a long-standing event - the annual tradition of offering a free meal to staff in the week leading up to Christmas.  Given the nature of trying to serve hundreds of people at 3 or 4 points in the day the food provided was of a nature that lent itself to industrial production - hot food dished out of a cafeteria style buffet line, with cake or squares for dessert, and your choice of juice or coffee.  There was cost, but not extravagance.  However, it was the thought that counted.  Staff social committees put forward their best effort to provide entertainment for these functions as well so there was music, carolling, and perhaps a contest to encourage socialization and camaraderie.  What I believe staff also enjoyed was the fact that very many of their managers took turns serving out meals at the event.  This included senior executives as well.  A colleague of mine and I made a particular tradition of taking on the night shift - which if memory served was 1 or 2 in the morning.  Staff were generally impressed that we made the effort to come in at night to put in a couple of hours of work and engage in conversation with them.  And we both thoroughly enjoyed it.  There certainly was a cost to this event, but in my estimation it was an investment that paid off many times over in conversation and engagement. 

Needless to say the cancellation was not well received by most.  It was a challenging decision to make.  Some believed that public perception as much as cost supported the decision.  If there were budget challenges for the healthcare system how could we justify spending dollars on a staff Christmas meal?  Others believed that if other parts of the health system were making similar decisions we had no choice but to follow.  However, for most management and staff it was not a warmly received decision.  Many felt it diminished the hard work and sacrifices of all staff.  Many felt that this was the one true reward and recognition that they received in a year and now it was gone.  Others may have taken the tradition for granted and it simply became an entitlement.  Nevertheless the cost to the organization in terms of goodwill was not insignificant.  We definitely came across as Scrooge-like.

What also went by the way that year was any formal lunch time gathering of management teams.  All of my managers would have gotten together at a restaurant or some other venue to have a buffet style meal, socialize, and listen to me give greetings of the season and thanks for a year's hard work.  Other senior executives would have done similar things with their direct reports.  That was no longer on the table.  I could have chosen then to forgo any annual Christmas gathering of my team.  However, it's not that easy to just give up these types of events if you really believe in rewarding and recognizing your team.  With the support of my direct reports and my family we decided to take a different approach to celebrating Christmas - we opened up my house over two days to a potluck style celebration.  What did this mean?  Well mostly it meant parking challenges for my neighborhood and space challenges in my house with upwards of 100 people in our house each day enjoying each other's company and culinary creations.  It was a house full to the brim of Christmas spirit!  Adversity turned to celebration!  What could have been a season of discontent was turned into a huge positive team-building event.  The comments that my wife and I received from my management staff were overwhelmingly positive.  Many even suggested that this home-based event become the new Christmas tradition.  The team was strengthened that day and the Christmas spirit was alive and well.

I also kept my own more intimate work-based Christmas celebration going.  For probably the last 10 or 15 years, I have invited my immediate direct reports and their spouses over to my house some time in the Christmas season.  Again all the food is home-cooked with contributions from all.  More importantly for me, I have always used the occasion to individually recognize each of my team members with a gift - paid for by myself - that I believe spoke to their individual achievements or reality in the past year.  I put hours of thought into each person's gift.  Sometimes this related to a singular event, sometimes to their particular personality or character, or perhaps some key accomplishment - personal or work-related - that was noteworthy.  In all cases, the gift giving was preceded by a mostly humorous, and always heart-felt, presentation on my part.  I believe this was warmly received by my colleagues precisely because it demonstrated that I paid attention to their efforts throughout the year and thought enough about each one of them to put in this individualized effort.  Our success was made possible by their individual and combined efforts.  It certainly would have been easier and less time-consuming to give them all a gift card to Chapter's, or give them some corporate swag, or something equally as generic.  I also could have assigned the task of getting these gifts to my support staff or similarly had them make arrangements for the party.  After all, I was a senior executive and could have pulled out the "I'm too busy or important" excuse to support the delegation of work.  But I don't see that it would have had the same meaning for any of us.  And the reward I got for the effort was the laughter, the tears and team building that came from this Christmas tradition.  I enjoyed it and got energy from the effort!

Ultimately, regardless of organizational circumstances, I believe that any leader can demonstrate an ongoing commitment to staff, to engaging their team, and building a strong culture.  It does take effort, it does take creativity, but ultimately it really is all about sincerity of commitment to others.  As the leader you set the tone for the culture you work in.  You build the culture by all of your actions, both large and small.  You build the culture by how you treat and work with your colleagues on a day-to-day basis.  You build the culture of your organization by your level of engagement and interest in your staff.  You demonstrate by the level of your effort how much your team really means to you.

There is no better time to demonstrate your commitment to your team than at Christmas. 

After all, it's the thought that counts.

______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Succession Planning Takes Leadership

Increasingly, organizations feel compelled to consider some form of succession planning.  Most often the reasons identified for undertaking this effort is an aging workforce or a shortfall in skills of available candidates for key positions.  These certainly seem like logical reasons to aggressively implement or refine a succession planning initiative.  However, I believe these stated reasons mask a fundamental truth - succession planning has always been critically important for the long-term success of any organization.  Good times or a more robust labour pool in years past may have reduced the perceived cost of error - just go out and get another candidate - but in reality having the right people in place or waiting in the wings to keep the organization's momentum flowing forward in a positive direction has always been important. 

In a market-driven enterprise lost time with a wrong hire means lost ground to the competition which may not be recaptured - we lose market share or profit or both.  In the public and not for-profit sectors we don't benefit from similar incentives and historically appear to have put less effort into constructively, assertively and with real intent growing managerial and leadership talent.  This is despite the fact that these organizations have broad-ranging and substantial impact on many aspects of our lives that we hold dear - like health and education.

I've seen a variety of models proposed and used for succession planning.  Whether they are formulated on the basis of a multi-step process, multi-component model, or some other framework, there are some key elements in any succession planning initiative that are critically important - identify key positions, understand competencies required to perform in the key positions, identify gaps in your talent pool, formulate individual development plans or target external recruitment as necessary, update on a regular basis.  A structured process on paper, however, is no guarantee of success in reality.  More important than adherence to any particular model or formula I believe is need for the right leadership mentality if you are to truly achieve the benefits of the effort.

Fundamentally, some organizations and leaders have to decide whether they have the courage and confidence to engage in meaningful succession planning.  If done with the right intent, and with the long-term success and sustainability of the organization in mind, as a leader you are really trying to develop your own replacement.  More than a few leaders find that prospect a bit threatening to their own personal security!  Therefore, they go through the motions of succession planning but never fully commit to what it takes to develop the qualified candidates that might step into their role in the future.  After all, if someone becomes too skilled or competent perhaps the succession plan might be accelerated or taken out of their hands!

There is also another risk in allowing only the immediate supervisor to identify their succession plan.  As noted above, there may be a reluctance or hesitancy to really fully support or develop a replacement due to perceived personal risk.  Just as much a concern is that a current leader may identify and groom a successor that is a carbon copy of themselves.  A carbon copy of a successful leader may not be a bad idea - presuming that the current leader is in fact a good leader.  However, if they have not been effectively performance managed over time, or they have not been an effective champion of key organizational values or strategic directions, then the consequences of leaving succession planning solely in the hands of this individual will certainly compromise long-term success for the organization.  This can be particularly challenging when staff in the area view the current leader has highly competent, a champion for their particular issues, and the epitome of their current sub-culture.  If some new level of performance or new direction is required from this work group it will be tough to find from a hand-picked successor.

Another misstep in succession planning is confusing success or competency in a current role with predicted success or competency in the next.  In healthcare we have been guilty of this error on many occasions.  In particular, we have often erred in equating potential management/leadership competency with success as a clinician - a great nurse, physician, or tech will make a great manager. Unfortunately, we often compound this error by not providing good mentorship and development opportunities to the newly minted or promoted leader.  We never provide them with the skills and training to take on a fundamentally different role.  The new leader is left to their own devices, often experiences the school of hard knocks, and ultimately succeeds or fails based almost entirely on the strength of their character and the toughness of their skin.  The likely consequences of failure, however, are a damaged career and a dysfunctional work unit left in the wake.

The last paragraph also presumes that there is actually ongoing assessment of individual performance.  As I have touched on in previous blog entries, performance management is important in its own right.  For the purposes of effective succession planning it becomes absolutely critical.  In the context of succession planning, this process must again include robust 360 degree assessment with results tied to the creation of a personal development plan.  Effective leaders are made through constructive feedback and concrete development opportunities - not wishful thinking.

Finally, there must be real accountability for succession planning from the Board of Directors, through senior administration, to all levels of management.  It must be as important, if not more important in terms of accountability, as budgetary performance.  If an organization wants to build and sustain high levels of performance over time it must hold itself accountable for cultivating talent and investing in its future.

Organizations that do succession planning right end up having the talent on board when they need it to step into key leadership positions.  Future leaders have been provided with the skills necessary to ensure success and just as important they carry the values with them into roles that define the organization's culture.  In the end organizational success can only be sustained by ensuring continuity in quality of leadership developed from within. The leaders of today can lay the foundations of success for tomorrow through their investment in others.
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Charting Your Leadership Course

Over the course of the past several months I've touched on a number subjects related to leadership, how I believe leaders should perform and behave, and how they set the tone for the organization as a whole.  I've also discussed at some length the importance of well-articulated and supported vision and values for an organization, a process that the leader must facilitate with significant energy and commitment.  What I haven't touched is the imperative for a leader to put the same amount of energy and thought into their own personal plan and journey as a leader. 

I've had my own personal Mission, Vision and Values statements for at least 15 years.  I've made effort to review these statements on a periodic basis and particularly at points in time where I've either been considering or experiencing a major transition in my career or life.  In general, I can say that an intensive review has taken place at least every two to three years.  Otherwise, I keep the statements close at hand and visible enough to remind me and support me in my day-to-day work.  The frequency with which I review my commitments to myself seems to work and I've surprised myself in seeing how stable my vision  and values have been over the years despite some major changes in personal circumstances.

Key to the long-term stability - and relevance - of my personal mission, vision and values was some pretty intense up-front work and personal introspection.  I wasn't always interested in that level of self-work and there are days even now where I cringe at the "touchy-feely" exercise that it can sometimes feel like.  Certainly some of my closest colleagues over the years will attest to the challenge of trying to get me to explore my inner self!  So I thank them for the effort!  It's been worth the trip.

I strongly believe that every leader should put this kind of work into themselves.  They owe it to themselves, but they also owe it to those that they hope to lead.  And it's not just thinking about it - you need to spend time crafting, articulating and ultimately putting pen to paper.  It's not something that you may share with anyone but yourself, but it will clarify what is important to you as a person and as a leader, will help guide your decision-making in an organization, and will help place your career goals within the context of your broader life goals.  This latter point is critical.  We don't exist in a vacuum nor in a manner that allows us to easily compartmentalize our lives.  Our work life impacts our home life and vice versa.  I believe that this reality is too strong to ignore and we do a great disservice to ourselves and others if we try to force that compartmentalization.

What are the necessary steps to creating the components of your leadership plan?  In some ways, the effort and the components very much mirror the work most of us as leaders have done in crafting strategic plans for our organizations.  We have experience and templates/processes already available to us that we can scale back to an individual level.  Most efforts need to start with some process of self-evaluation or self-diagnosis.  This could take a variety of forms.  Over the years I have continued to take advantage of opportunities afforded to me by 360 performance reviews/ assessments, self assessments, or even something as simple as a SWOT framework applied to my leadership.  This self-evaluation process may include both reflections/lessons learned from your past experiences as a leader - how did people in the past respond to your leadership?  Your process may also benefit from an assessment of the approach, style, qualities and perceived values of leaders you have worked for in the past.  I have found that I have learned as much from poor leaders as I have from excellent leaders.  Poor leaders have helped me define what I don't stand for and how I won't lead.

There is also benefit in writing down your thoughts about your vision and values as you go.  You need to engage with yourself and struggle with the work of articulating what is important to you as a leader.  Don't expect to come up with the perfect statements in the first - or seventh - attempt.  As you know from work on organizational strategic plans, there is a lot of back and forth, refining and clarifying that is going to happen.  Cut yourself some slack in the process and understand that you make refinements as you grow and develop in your leadership knowledge.  Don't be afraid to listen to what others say about what are important leadership qualities to them.  That doesn't mean just adopting what somebody else has said, but there will more grist for the mill in your process and at this point more input is better than no input or ideas.  Talk with some of your trusted colleagues.  There is great benefit in bouncing ideas off those who will be honest with you about your strengths, weaknesses and current leadership behaviours - if you have the strength and courage to really hear them.

Charting your leadership course may mean that you end up with far more than just a set of statements about your personal Mission, Vision and Values.  You could choose to create other components of your own strategic plan including a personal action/learning plan (Human Resource Plan), personal strengths/approach that characterize your leadership style (Marketing Plan), how you want to be known or remembered as a leader, and any number of other components.  The choice is up to you.  At a base minimum, however, I have always found value in establishing and finalizing in written form a personal Mission, Vision and Values.

My personal vision is perhaps a bit different than some.  I have not articulated it as a statement of which position I expect to hold in five years or how much money I'm going to be making.  Rather I have talked about the characteristics of my life that I want to be known by - honesty, integrity, hard work - the lifestyle I expect to lead (e.g., physically active, life-long learner), and my commitment to family and others.  At a professional level I have focused on being of value to my profession, contributing to the improvement of health services, and being respected and valued by my colleagues.  The value in this approach is that it allows you to be true to your core rather than defining success by whether you achieve or don't achieve a particular position.  Moreover, it allows for a greater degree of personal flexibility in responding to both adversity and opportunity - life can throw us curves, both good and not so good, but if we keep our eye on our personal north star we will be successful in navigating short-term "surprises". The ultimate benefit of knowing yourself is the ability it gives you to truly take control of your journey to becoming the most effective leader - and person - you can be. 

Your future is yours to create if you understand who you are and what is important to you.  Chart your course.  Your star is out there.

______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

What is Culture and Why Does it Matter?

Earlier this week I was privileged to attend an early morning presentation that focused on a particularly challenging set of events for a large organization, the changes in leadership that took place at the time, and the dynamic environmental circumstances in which this organization faced and overcame its time of crisis.  There were a number of gems of perspective and wisdom that were presented by the guest speaker.  Amongst these were the need to persevere through adversity with optimism and energy, a commitment to celebrate milestones and achievements even in tough times, a need to continuously develop one's own leadership and the leadership skills of your team, and the necessity to balance work with one's whole life.

In and of itself there was more than enough food for thought in the presentation to spark my thinking and reinforce some of my own beliefs.  But for the purpose of my blog entry today, I choose to focus on a question that was posed by an audience member in relation to whether the guest speaker had a recipe for culture change in large organizations.  As the guest speaker themselves identified if they had such a recipe they likely would be retired by now!  So being either bold or foolish I'll take a crack at the question.

First, I believe there is some value in defining what we might mean by the term culture.  Being a creature of our time, I googled the term and came up with the following (amongst a variety of definitions) - "...the total of the inherited ideas, beliefs, values and knowledge which constitute the shared bases of...action.." and "...the total range of activities and ideas of a group of people with shared traditions, which are transmitted and reinforced by members of the group."  I've highlighted what I think are some key elements of the definition and upon which I will touch in this blog. 

The phrase "Culture Eats Strategy for Breakfast" is probably familiar to most of us and reflects the very real challenge in moving an organization forward or changing its direction.  As many an executive will attest to, you can have spent countless hours and money on developing a world class strategy, putting together and delivering a slick internal marketing strategy, and engaging all manner of expertise and external resources and yet find that after a year (or less) that you have made no progress on your lofty goals - and may actually have taken your organization a step or two backward.  The culture of the organization - it's inherited ideas, beliefs, values and knowledge - became an effective barrier or block to your strategy. 

So instead of developing the glitzy strategy, or restructuring the organization, or implementing new processes or systems, why don't executives focus on organizational culture?  My perspective is that it often appears easier to tackle structure and process than it is culture.  One can implement structural and process changes in a far shorter time frame than cultural change.  Quick or easy, however, doesn't equate to effective.  Such initiatives can certainly disrupt the organization and give the appearance of action especially to those looking at the organization from an external perspective (e.g., shareholders, community leaders).  Cultural changes take a much longer period of time to realize and take more intense and sustained effort.  Unfortunately, our leaders (and too often a variety of stakeholders) don't have the patience for these types of efforts.  We all want instant solutions and instant results.

The term "inherited" implies to me something that is built or created over a long period of time.  And it will take just as long to mould, alter or modify something as it took to create.  Moreover, it's critical to understand that, for the most part, this set of shared ideas, beliefs and values have worked for the organization or key stakeholder segments.  It doesn't mean life has been easy or great, but that the culture has worked at some level for people and has done so for some extended period of time.  So change will not come easy or without effort. 

One of the first key steps in changing culture will be defining the characteristics of the new culture and why it is important to shift to this new set of beliefs, behaviours and practices.  If the leader doesn't have a clear idea about where and why they want to take the organization it will be impossible to overcome resistance from the current culture. 

Just as important as defining the new desired culture will be the concrete actions that a leader and the organization as a whole must take to reinforce and support the shift.  This includes such steps as recruiting, hiring, retaining, rewarding and promoting individuals who will by their behaviours and actions develop and reinforce the tenets of the new culture.  People build culture.  Focus on cultivating the right people.  Make a long-term commitment to them.  They become your stones thrown into the water, with ripples emanating out from them and influencing the behaviour of others.

Communicate, communicate, communicate.  Along with that becomes the importance of leadership visibility and reinforcement, by word AND action, of the key organizational values.  As a leader you are being watched all the time and people will rapidly determine whether you hold the values of the new culture sincerely or merely as another fad of the moment.  Your energy is going to be critical to success.

Make sure that all processes and systems of the organization are aligned and supportive of the culture you are trying to create.  If you are marketing yourself as an organization that prides itself on innovation but have an incentive system that rewards everyone at the same level regardless of performance than creativity is not likely to be sustained.  If you are touting yourself as an organization that fosters empowerment and employee participation but have a human resource system that tolerates old-style management practices you will quickly short-circuit your efforts.

As leaders you also have to ensure that your own personal words and actions are aligned with the corporate culture you say you are trying to build.  If you set yourself apart from what you are expecting of your staff - do as I say, not as I do - you will have compromised your leadership credibility.  You won't be able to retain your best leaders or get the kind of change you were expecting or hoping for.  In addition, you have to have patience for this effort, you have to be in it for the long haul.  Culture happens through long-term, consistent behaviour and effort.  The best and most successful organizations build from within and stay true to their core. 

Rome wasn't built in a day. Neither is the culture of your organization created or changed in a fiscal year.  And building a new temple to the gods won't keep the barbarians away from the front gates.  Only strong and vibrant citizens/staff working from the same page will ensure long-term success.
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

What is Executive Coaching anyway?

Executive Coaching is increasingly being used by a variety of organizations and individuals in a range of sectors.  As I have recently discovered, however, there are many who don't really understand what executive coaching is, where and how it can be applied, and how to get the greatest benefit from its use - both from an individual and organizational perspective.

As a management consultant, executive coaching is one of my key service offerings.  Throughout my health care administration career, I've had the opportunity to be a coach for a number of individuals in my workplace and through my involvement with my professional associations.  I've also had the benefit of having my own executive coach.  Invariably, at the outset of any coaching process, a key theme emerges even though it might be framed in a number of ways - "What is Executive Coaching?"  Most people who are about to be coached don't really understand what they are getting themselves into, how to prepare, or what to expect. 

The challenge with putting a solid definition to executive coaching primarily relates to the reality that there are simply a multitude of circumstances in which it can be applied.  A CEO is going to have very different coaching requirements than a newly minted supervisor.  Ultimately, however, regardless of circumstance I believe that coaching really is about helping an individual develop personal insights, channel effort and energy into growth and opportunity, and develop and support acquisition and application of new knowledge and skill. 

Each coaching situation is unique - as unique as the individual being coached.  This is a critical point.  As the individual pursuing a coaching engagement you are in charge of - or should be in charge of - selecting your coach.  There has to be a fit between who you are, what you are looking for and what your prospective coach can deliver.  Above all there must be the ability to establish a relationship with your coach.  To be as effective as possible you must be able to develop a great deal of trust and confidence in your coach's ability, be comfortable sharing your challenges with them, and be prepared to receive tough feedback from them when necessary.  It should be a very engaging partnership focused on YOU!

So in deciding to use the services of an Executive Coach there is some work for you to do up front.  Be clear about why you - or your organization - wish to engage the services of an executive coach.  Is it to develop your skills in your current role?  Is it to prepare you for future roles in the organization?  Once you settle on the base goal of the engagement next be ready to undertake some form of self-assessment.  Ideally this takes the form of a 360 assessment from a wide variety of your stakeholders - supervisor, subordinates, peers, external contacts - anybody that can help you evaluate your skills and abilities.  It's that assessment and the discussion around its results that forms the basis for developing your personal action plan and ongoing engagement with your coach.  At this point, your coach continues to work with you, provides you constructive feedback, helps you identify options and tactics to develop your skill sets, helps you to question your assumptions, and otherwise works with you to meet your goals. 

You can start to appreciate how critical the selection of a coach is when you consider the nature of the work they will be doing with you as described above.  In addition, this is a relationship that should continue for a period of months if not longer.  Your personal change and development is not achieved after one or two meetings.  So take the same care in selecting your executive coach as you would in making one of your most critical hiring decisions.  You must have trust and confidence in your coach's ability to support and challenge you.  You have to believe that they can help you generate options and solutions to your current and future challenges.  One final note on selecting a coach - I strongly believe that a coach should come from outside of your organization.  This provides greater assurance of objectivity and confidentiality to your personal journey and development.  You may be able to find a mentor within your organization, but you should engage a coach from outside. 

I've focused exclusively on the benefits of executive coaching for the individual.  But organizations often are the ones initiating and supporting the coaching engagement.  To get the maximum results out of this effort, it is clear to me that coaching needs to be intimately tied to overall organizational and human resource strategy.  Otherwise its a nice thing to do but doesn't necessarily leverage all the potential of the coaching resource to the benefit of the organization.  Other human resource initiatives, programs and resources should be tied in with executive coaching so that efforts can be mutually supporting.

Finally, I believe excellent Executive Coaching takes into account not only work objectives but also places work life within the context of the individuals total life.  We all have a broader range of experiences and realities than the time we spend at work.  I believe that in order to be as successful as possible - by our own personal definition - we must balance all aspects of our lives in accordance with our own personal vision and values.  You bring your whole self to work and you take your whole self home at night.  I believe your coach needs to understand the entirety of YOU in order to most effectively support your growth and development as a leader.  Make it so!
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Performance Management - The Good, The Bad and The Ugly

Thanks for bearing with me as I've tried to cover off a lot of territory on performance management.  I started this series of blogs by touching on the dread and anxiety too many of us - leader and follower alike - feel when we approach what has been the traditional annual performance appraisal meeting.  I hope that over the past several weeks you have taken away at least a few nuggets of information and thoughts that you can incorporate into a more functional process for you and your followers.  Not the least of these pieces of advice is don't have a performance appraisal be the one and only time that you have a discussion around performance!

Just as important, be sure to ask yourself what the fundamental purpose of the performance management process is for you and your organization.  If in fact, you have a desire to have a once annual meeting that engenders fear, dread, anxiety, and other negative consequences for its own sake then you are doing well!  As we probably already know too well, that annual event often can culminate in a process of argument and counterargument, diminished morale, and lower engagement.  Probably doesn't do much for your psyche as a leader either.   However, if the true goal of the performance management process is to improve employee and organizational performance than the process should be geared towards that end - mutually established goals, continuous feedback, 360 degree feedback, and decisions/support on how performance can be improved.

This is where we start to really address the Good, the Bad and the Ugly.  If you have adopted all of the steps leading up to the formal performance appraisal you are now left to deliver the formal written results of a performance management process and commit to next steps.  Even in the best circumstances no one - in my opinion - rates a perfect 10 on their performance.  I believe there is always room for improvement and new challenges.  So as the Leader of the Good, the next step is to truly be prepared to to discuss with the follower where there are further (real) opportunities for improvement AND be even more prepared to discuss other developmental challenges these high performers can take on.  In regards to the latter, this might mean further developing their skills and abilities to move up in the organization.  This might include opportunities to lead broader initiatives for the organization that are beyond their day-to-day roles.  It might also include financial commitments to ongoing education relevant to their current or future positions in the organization.  For these Good people, there is real risk that if all you say is "Good work, keep it up!" you wil actually diminish their effort in the future or lose them entirely to opportunities outside the organization.  If these individuals are true high performers and motivated by the challenge they will likely seek it out in ways you didn't intend.

Just as critical is being prepared to address the Bad performance.  Again, the results of the performance management process at this stage should come as no surprise to the individual receiving the appraisal.  Ideally, you would have been working with them well before this formal meeting.  At most, this meeting should again attempt to formalize the results on improvement achieved to date and what else remains to be done.  Depending on the significance of the performance issues, the targets for improvement and timeline for achievement might have a particularly hard edge or short time frame attached to them.  Regardless, at this point you have to have crystal clear clarity about what is expected in the next number of weeks or months relating to performance.  There should be no need for guessing on the part of the employee as to what they should be working on - and what kind of support they can expect from you to improve performance. 

Finally, we have the Ugly.  Performance in this circumstance has been so poor that there really remains no option other than termination or redeployment to another part of the organization.  Again, it would be my sincere hope that this reality would not come as a bolt from the blue to the affected employee.  This would either speak to incredibly poor performance management on the part of the individual leader or a complete disconnect from reality on the part of the employee.  I have seen both occur in my career.  I'm not intending to speak to any aspect of termination processes and procedures in this blog, but suffice it so say that the ways and means by which the organization handles the situation will say as much about it as it does about the departing/redeployed employee.

Both Bad and Ugly performance must be dealt with expeditiously and appropriately.  It's relatively easy to evaluate and reward Good performance.  Most of us, however, are not nearly as adept and comfortable in dealing with less than stellar performance.  Yet the rest of our management team and employees - and research - would tell you that there are major impacts on the organization if poor performance is not addressed including lower productivity, conflict, and disengagement of all of those around and impacted by the poor performer.  This situation is only worsened if the performance appraisal results are tied to the organization's compensation and bonus systems - if poor performance and good performance are not sufficiently differentiated in this regard inevitably many start to gravitate towards the lowest common denominator of expectation and reward.  It is not a recipe for organizational success.

Performance Management.  It takes energy and effort.  The results and rewards are worth it though.  As a leader you owe it to all your staff and your organization to do it well.  It's one of the most important things you do as a leader, particularly if you are committed to developing the human potential you are responsible for.
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

 

Performance Management - Using 360 Degree Feedback

One of the tools that I believe is under utilized and/or poorly executed in performance management is 360-degree feedback.  I have found it to be worth the effort it requires both as it relates to my own performance assessments and to those that have received evaluations from me.

The value of a 360-degree assessment comes from the fact that no one individual or supervisor ever has a complete picture of an individual's performance.  As I've noted in my recent blogs on performance management, a leader often has many individuals reporting to them and has their own individual tasks and duties to perform.  So there isn't the time on the part of one person to get the full story.  In addition, with only one perspective in play, we run the risk of maximizing our personal biases.  This can mean either overly positive or overly negative performance assessments.  So the ability to assess the performance of a direct report in a comprehensive fashion is significantly aided by enlisting the assistance of others who interact with the person being evaluated either on a more frequent basis or in ways that the leader can't possibly replicate. 

The way that I have approached 360-degree assessments in my past leadership roles has been through a partnership approach with my direct reports.  We work together first to identify categories of people that we would engage in the evaluation process.  Oftentimes this has meant that we are looking to capture feedback from peers, subordinates, and external clients/customers for the process. 

There are several keys here.  First, we are looking for a representative sample of key groups of individuals that the employee interacts with.  We are not going to be exhaustive in this process and work to capture all people in a given category.  Second, I strongly believe in having subordinates be part of this evaluation process.  They are the people who, on a day-to-day basis, directly experience the quality of leadership skill that the individual being evaluated brings to bear in their work.  Third, I also see value in including external contacts in the evaluation process.  These evaluators provide an unique perspective on relationships outside of the work unit or organization that are critical to organizational success. 

One of the first reactions to this sampling procedure might be "Well, wouldn't the person being evaluated simply make sure they picked people that would give them a positive evaluation?"  If left entirely to the individual that could happen.  However, the way I approach the final selection of the 360 degree evaluators is more by way of elimination.  Once the key categories of evaluators has been established the next question I ask is whether there is anybody that the employee would not want me to talk to and the reasons why.  There may be very valid reasons for non-selection, including both personal and professional conflicts that would not support constructive feedback.  That being said we might still proceed to include these potentially "hostile" evaluators.  I have done this with 360s performed on me.  The feedback received might in fact be very constructive and valuable in helping to improve personal performance and should not be discounted out-of-hand.  However, both the leader and the person being evaluated should understand the context or circumstances in which the feedback might be provided and weigh it accordingly.  Ultimately, I believe the entire evaluation is not about getting 100% positive results, but rather forms the basis for goals and objectives for ongoing leadership development.  Our harshest critics might in be our greatest source of knowledge about where to focus our improvement efforts!

I strongly believe that anonymity in the 360 degree evaluation process is critical in getting good feedback on performance.  I believe this is the most effective way to get honest and open feedback.  It does have the potential drawback in that you cannot do follow-up or seek clarification on information provided.  However, I have seen some extraordinarily bad outcomes when this anonymity was not assured.  While some individuals are prepared to provide feedback regardless of format many others tend to water down their feedback in the interests of preventing hurt feelings.  In the worst case, particularly where a leader is being evaluated, there can be huge actual or perceived risks to the working relationship or even the employment status of the evaluator.

The 360 process must also include self-assessment.  Ultimately assessment, learning and action come from personal insights and commitments.  So there is great value in personally evaluating one's strengths and opportunities for improvement, identifying potential challenges in achieving greater levels of success, and finally (and most importantly) setting goals and objectives for the coming year. 

Make no mistake.  A 360 degree evaluation process is a lot of work.  As a leader (and as the person being evaluated) you are putting additional workload on others to give time, thought and effort to an evaluation process.  As a leader, there is also significant effort required on your part to manage the process and synthesize the diverse perspectives into one common evaluation report back to your direct report.  This is often one of the main reasons that leaders or organizations do not pursue the 360 degree evaluation option.  In addition, the culture of the organization must be supportive of this type of assessment.  If your organizational culture isn't one that can handle giving or receiving constructive feedback or isn't one that is "trust-based" a 360 degree evaluation process is unlikely to succeed or accomplish much.

However, I believe the benefits of a 360 degree evaluation process far outweigh the challenges - if properly done.  Individuals should be assured of getting a comprehensive assessment of their skills and abilities; they get feedback from more than just one person and can have more confidence that the evaluation is less subject to personal bias; they have a better sense of how their personal assessment does or does not match with the views of others; and, ultimately the 360 degree assessment provides a strong base for developmental efforts. 

With the right effort, commitment, intent, transparency and connection to organizational goals, a 360 degree evaluation can help you build leadership skill and capacity - including your own. 

______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Performance Management - It's Not a Magic Act!

If you are old-school like me, one of the enduring images of magic is the proverbial rabbit out-of-the-hat trick.  For some reason I even conjure up images of magic being performed by looney tunes characters - Bugs Bunny turning the tables on Elmer Fudd or Yosemite Sam.  Aside from Bugs making whatever scheme backfire on his nemesis at the end of the skit, the lead-up to the end is always characterized by more than a few chase scenes and a lot of gunfire.  It seems to me that too many of us adopt this same approach to the performance management process.  The evaluator and the person being evaluated look forward with some element of dread and anxiety to the "required" annual (if we are lucky) performance appraisal, both hoping to pull the rabbit out of the hat at the end of the session. 

In my last blog entry on this topic, I focused my attention largely on development of performance objectives.  In this blog, I'm going to advocate for meaningful, ongoing continuous performance feedback relative to those mutually agreed upon goals. 

A major reason why both a supervisor and a direct report approach the annual performance meeting with so much anxiety is that all too often they are not sure what to expect in this once-per-year session. In preparing for an annual meeting, the supervisor tries to come up with a meaningful assessment and dredge their memory for examples of good performance or areas for improvement.  Too often as well, the supervisor is pressed for time as they attempt to fit in a one-hour appointment with their direct report while trying to deal with a myriad of other demands on their time.  How many of us can relate to the experience of a performance appraisal being postponed multiple times?  For the direct report, who may have been tasked with self-assessment as part of the performance review and has had limited feedback on performance since last year, they walk into the annual review guessing at what might come up in the meeting - are they doing as well as they think they are, what things might they have to defend against if they disagree with their supervisor's assessment, and so on.  Both supervisor and direct report are waiting to see whether they pull a rabbit - or an elephant - out of the hat.

There is a far better alternative.  If an organization and its leaders are truly interested in effective performance management - and in creating an environment in which their staff grow and develop over time - then performance feedback must be provided to an individual on a continuous basis.  I'm not suggesting that there has to be daily monitoring and reporting back to an individual, nor anything that starts to smack of micro-management of individual performance.  I believe that one of the key objectives of performance management has to be growth and development and that is only going to be achieved by allowing individuals to work on their own, make some mistakes and get regular support and guidance.  Again, as identified in the previous blog, the focus of such monitoring should be on results being achieved, individual behaviours and other factors impacting agreed-upon objectives.

So what does continuous feedback look like?  There might be immediate concern or questions about how can I as a leader provide continuous feedback to a direct report if I have trouble even finding the time for an annual performance review?  The answer lies in providing this continuous feedback in a different way.  I do not believe it has to be as formal as the annual performance appraisal and it should be incorporated into other opportunities that likely already exist.  I expect that on a regular basis a leader and their direct report interact as it relates to projects, tasks or duties that have been assigned.  These project/task updates provide not only an opportunity to evaluate results being achieved but present a chance to touch base with the individual and provide immediate and personalized feedback in the moment.  The leader can immediately reinforce and support good performance or provide coaching to better performance related to specific events.  The leader and the direct report have a concrete example that can be used to reinforce expectations and goals set in the annual performance appraisal.  There may even be an opportunity to adjust objectives based on real time information, changes in priorities for the organization since the last formal meeting, or to identify the need for extra support for the direct report to be successful. 

Continuous feedback, coaching and performance feedback provides great benefits to both leader and direct report.  The leader has opportunity to demonstrate their skills, can ensure that projects/ tasks are in fact progressing as planned, and ultimately ensures effective advancement of organizational objectives.  For the individual receiving continuous feedback, they are assured of ongoing support as required, they are clear about expectations at all times, and they feel valued and recognized for their efforts on a consistent basis.

More importantly for both parties there are no surprises in this approach to performance management.  Neither is waiting for the curtain to rise on the magic show.  Neither party should be approaching the performance appraisal with dread or uncertainty.  All this should have been done away with because there has been regular communication throughout the past year.  Both the leader and the direct report are on the same page, both understand each other's expectations, both understand the realities that may have impacted on performance, and both know what yet needs to be done to achieve or set new goals. 

Make no mistake, ongoing performance monitoring and feedback still requires effort and energy.  However, it comes in smaller doses and has the benefit of not letting performance issues fester for a whole year - far easier to course correct in small doses than having to address a major performance issue later on. 

If you engage with your staff on a regular basis your job as leader becomes easier - and you won't need any magic to get a great performance!
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Performance Management - it is what you make of it!

A previous blog entry of mine on team-based compensation generated more than a few e-mails, questions and comments.  The themes that came back to me included:

• Are we willing to remove the people or teams that hold everyone else back?
• How do you get everyone engaged and moving in the same direction?
• If I'm a high achiever/performer why would I want to carry the weight of those that don't perform?
• What if the goals and objectives set for me are not achievable or simply don't make sense?  I'm set up to fail from the beginning!

I believe that one of the most - if not the most - important mechanisms to address these questions and concerns is a well developed and managed performance management system.  There are so many aspects to what I believe constitutes a good performance management system that I'm actually going to tackle the subject in more than one blog entry.  I'm also going to approach the issue from the basis of what I've seen be successful from my own personal experience and learning over the past 20 plus years of management.

Unfortunately, too many of us - leaders and followers alike - approach the performance management exercise with anxiety and dread.  Historically, the process seems to have been defined by its potential for conflict and disappointment - and tremendous relief when it's over.  However, I'm going to suggest that performance management, if well done, can create the exact opposite feelings in most cases.

I'm sure most leaders recognize that effective performance management is key to maintaining and increasing employee commitment and productivity.  Moreover, with current and projected labour shortages no organization can afford to lose current staff through poor, or non-existent, performance management practices.  Yet we seem to miss a golden opportunity to retain staff - and develop them - through an effectively structured and supported performance management process.

First of all, there must be some fundamental building blocks in place to set the stage for the performance management process.  At the outset, the organization itself must have clearly established strategic directions to which it is expecting to align all individual goals and performance expectations.  It's more than a tad difficult and frustrating for an employee to be told they are not making the grade if the organization itself has not been clear about what its goals and objectives are.  Just as importantly, the organization should take time to clearly articulate its vision, values, and expected behaviours - basically be clear about the culture that defines the organization.  An organization might be very clear about its objectives (e.g., revenue generation) but not be at all pleased with how those goals were achieved (e.g., illegal activity).  Both the goals and the cultural expectations should be well articulated to set the stage for performance management.

This is just the start, however, of the goal setting process.  Large strategic goals need to be translated down to goals for individual business units of the organization and then down through to the individual.  A large strategic direction like revenue generation may have very different application and meaning for the Finance department versus the Human Resources department versus an operational division or program.  Time must be taken to make the large strategic goals relevant to the individual in their day-to-day performance and as part of the formal performance management process.

In addition to the establishment of the hard metrics around organizational/sub-unit performance, goals should be clear as it relates to the performance behaviours identified above.  Just as with the work required to explicitly describe what realization of strategic goals looks like, similar work must be undertaken to describe in factual terms what it means to be a good performer/leader within the organization.  The organization must be able to paint a clear picture of what it means to be a good performer within the organizational culture - and each organization will have distinct features and performance expectations of its staff, so this is not just a cut-and-paste effort from looking at what has worked for other businesses.

Finally, there must be meaningful discussion between a leader and the person who reports to them on the goals, objectives and performance expectations.  This is critical in not only establishing the performance parameters but also in ensuring that there is understanding and buy-in to the objectives.  This conversation goes a long way to ensuring that both the leader and the direct report agree that the performance objectives are in fact achievable or actually even relate to the job the direct report is doing.  There may even be opportunity to understand or appreciate under what circumstances the desired performance might not be achievable - e.g., key environmental variables change.  Moreover, this is a point at which other non-strategic objectives and goals can be discussed.  There is much in the day-to-day role of any employee or manager that is not strategic in nature but is critically important to maintaining and advancing operational effectiveness of a business unit - good fiscal oversight, resolution of operational problems, hiring of other staff, etc.  These basic functions require attention and consideration in setting performance management objectives. 

At this point I have only discussed what is required as the base foundation for effective and meaningful performance management.  In subsequent entries I will focus on processes of continuous feedback, 360 degree performance reviews, and connection to reward and recognition systems.
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

How engaged are we with employee engagement?

I recently came across two different articles focused on the same fundamental issue - employee engagement.  The first article by Dov Seidman started with the very provocative headline of "(Almost) Everything We Think About Employee Engagement is Wrong".  The article  http://www.forbes.com/sites/dovseidman/2012/09/20/everything-we-think-about-employee-engagement-is-wrong/  got a lot of reaction from the author's readers and from those I shared it with.  And just this week there was a complementary article in my local paper entitled "The fine art of faking it".  

Both articles, in one way or another, touched on the "cost" of employee engagement efforts.  In one respect, this cost was referenced in terms of actual expenditures on extensive morale boosting efforts undertaken by all manner of companies and industries.  In another respect, the cost of not having engaged staff was identified in its impact on quality of customer service, product quality and other objectives.  In health care, there have been number of connections drawn between engaged staff and better patient outcomes.  So clearly there is a business imperative for leaders to improve their employee engagement and positively impact their ability to deliver on organizational mandates.

It's not as though there hasn't been a lot of effort and energy put into employee engagement efforts.  Certainly many organizations have put a significant amount of resources into surveying their staff, holding staff forums, revamping their employee recognition programs, emphasizing the importance of performance reviews and feedback, and trying to implement team-building exercises.  Unfortunately the effort, and the cost, has not been reflected in the results.  In some cases, despite these efforts, employee engagement scores have actually gone down.

So what's going on?  What are we missing?  What do we have to do differently as leaders to get better employee engagement and impact our ability to deliver quality service to our customers?  There are certainly a few clues to be found in both articles that certainly resonate with me personally and that I believe passionately in.  First, I believe that we have to make a very deliberate and conscious effort to move away from some of the mentality that exists in our leadership/management ranks that employee engagement is a cost or expense line on our financial statements.  This becomes a particularly challenging notion to overcome when employee engagement scores aren't going up as a result of current efforts and the need to achieve other "bottom line" results would seemingly benefit from a redirection of resources.  We need to change the tone of our approach from one of cost management to one of investment in our most valuable resource.

Second, we need to reconsider whether our customers are in fact our #1 priority - or should staff be our #1 priority?  In healthcare particularly this can be a very challenging discussion and one that I have struggled with myself.  However, if you accept the connection between quality of service and an engaged workforce then it seems clear that there must be a greater emphasis on staff and enjoyment of their work environment.

Third, and touched on by the picture above, leaders/managers must take steps to align all elements of the workplace to make it easier for staff to do great work.  Slogans, lunches, team-building exercises and similar exercises may create hope at the beginning of an effort.  They may also create expectations of positive change as well.  However, all of this effort is easily derailed once a staff member encounters the reality of a poorly done (or not done) performance appraisal, the lack of equipment to do his/her job, or the barrier of some bureaucratic process which confounds an ability to do good work.  Hence, why engagement scores can often go down when an employee engagement effort is launched - reality fails to meet expectations and cynicism rises.

Finally, I believe it is fundamentally important in all of these efforts at employee engagement that leaders be sincere in their commitment to such efforts.  Leaders cannot just be engaged at the launch of an employee engagement effort.  Even more frequent events - monthly or quarterly - in large settings are not likely to demonstrate to staff an understanding of their challenges or the barriers they face in trying to do good work.  Nor can an employee engagement merely be a priority or initiative of the human resources department.  It has to be a specific performance expectation of all senior leaders and departments. 

Ultimately as well, I believe that to be truly successful an employee engagement effort must come from a leader's own interest in other people.  If you really don't involve yourself with your staff and set that tone for your direct reports it's unlikely that you will make major headway in engagement efforts.  In addition, individual leadership actions outside of formal employee engagement events and pronouncements must match the direction and philosophy of the initiative.  Nothing will do more damage more quickly to employee engagement efforts if leaders are seen as not sharing in the same challenges, making the same sacrifices, or reaping the same rewards as their front line staff.

Ironically enough the best success in employee engagement is likely to come less from a focus on bottom line results as a driving force - profit, revenue stream, customer satisfaction, market share - than from a sincere interest in your people for it's own sake.  If you are genuinely interested and committed to your staff, prepared to truly engage with them on a day-to-day basis, then success on the organization's bottom line metrics will come.  Your employees will know when you are being genuine versus just seeing them as a means to an end.  Your leadership shows in every interaction you have and every action you take.

So how engaged are you with employee engagement?  It's a major effort and requires a lot of your energy.  Are you prepared for this leadership challenge?
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.

Team-based compensation - Is it the answer?

I guess that depends on what the question is!  Almost invariably one of the first questions that a prospective employee, whether manager or staff, is interested in getting an answer to is "How much will I be paid and how will I be rewarded?"  There is no doubt that other factors come into an employment decision for any individual - what kind of work will I be doing, who will my supervisor be, who else will I be working with, what's the reputation of the work unit, etc.  But all of us have a base interest in what our compensation will be.  And most of us are also interested in knowing how good performance will be rewarded.

Organizations - and leaders - are even more interested in how their compensation systems impact their bottom line profit/cost performance; how the compensation system allows them to attract, retain and motivate staff; and, how a compensation system helps the organization deliver on its key business objectives. 

Historically, most organizations and leaders have operated with a philosophy that individual performance dictates individual reward.  Increasingly, however, a number of shortcomings have been identified with that approach, most notably that it can set up unhealthy competition between staff and between business units - what might be good performance for one area of the organization might negatively impact the ability of others to perform, and might limit the ability of the organization to achieve overall goals and objectives.

Enter team-based compensation.  The idea is that pay or bonuses (or both) become tied to the organization's overall achievements.  The intent is to shift a culture that perhaps encourages a me-focused perspective to one that is focused on team or broader organizational achievement. 

Making such a shift in compensation system is not to be underestimated.  There are at least two fundamental requirements to make that shift successful and there a number of issues to be managed in the transition.

First, a team-based compensation system requires that a well-articulated set of performance goals and metrics be established for the organization.  These could take any number of forms and might include service goals, budget targets, productivity measures, etc.  Regardless of form, they must be well-defined, broadly communicated, and their connection to pay/bonuses well understood.  If this first step is not done, or is done poorly, an effort to implement team-based compensation is unlikely to achieve desired results if not fail completely.  Without this clarity up-front, managers and staff will at best be confused about expectations or at worst may continue to evaluate their compensation/bonus received against the old model of compensation.

Second, and just as critical, is a need to actually evaluate and manage performance against the new team-based model of compensation.  Once announced or implemented, the work for leadership only really begins.  Leaders now really need to step up to the plate to ensure that the new system is implemented, that performance to the overall objectives of the organization becomes paramount, and that compensation/bonuses directly connect to performance.  If that transparency and linkage is absent the system will rapidly lose credibility. 

There are a number of issues that I believe need to be considered and managed in a team-based compensation system.  First, is the amount of the team-based bonus going to be equitable for all levels of the organization, i.e., same percentage opportunity for all or not?  If not, disincentives for performance may be built in to the system right from the start.  Leaders may need to commit to truly being part of the organization in this very visible way as it lends credibility not only to the compensation/bonus system but to a variety of other organizational initiatives and leadership pronouncements.

Second, leaders need to consider how they can incent innovation and creativity from individuals if only team-based performance is going to be rewarded.  If the efforts of one individual or team contributed to a particular organizational success, but all business units get to share in the gain that is ultimately distributed, will similar individual efforts be forthcoming in the future?

Third, and related to the above, how will a team-based compensation system manage those individuals or business units who consistently don't contribute to the achievement of team results?  In this context, it's not usually the really poor performers/business units that present a challenge in management.  Their lack of performance is usually so poor that management (should) become relatively easy.  Of greater concern is a need to motivate everyone to the same high level of motivation and achievement relating to organizational goals.  This is where regular (more than annual) and rigorous performance management comes into play.  This is where strong leadership and commitment are necessary.  If such does not exist then it becomes all too easy for low or average performers to ride on the coattails of high performers with all getting the same team-based bonus.

Finally, there is an equally contrary need to manage excessive or unhealthy peer pressure that may arise from a team-based compensation/bonus structure. There may be very legitimate reasons for an individual/business unit not being able to contribute in a substantive way to achievement of key organizational objectives in a given reporting time frame.  If a team-based culture - supported by a team-based compensation system - is well established, articulated and supported then such issues can be managed easily enough.  This is particularly true if transparency and sharing of issues is part of a well-established organization culture. 

From my perspective the type of compensation system chosen by an organization is important but of less consequence than how it is implemented and managed on an ongoing basis.  For any compensation system to succeed leadership must be there from day one and through its day-to-day management.  There are no simple solutions.  It's About Leadership.
______________________________

Greg Hadubiak, MHSA, FACHE, CEC, PCC
TEC Canada Chair/Executive Coach/Senior Consultant
hadubiak@wmc.ca

Helping leaders realize their strengths and enabling organizations to achieve their potential through the application of my leadership experience and coaching skills. I act as a point of leverage for my clients. I AM their Force Multiplier.