First, Define the Behavior

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“So, you tell me. What could we do differently to get the behaviors we want that drive the results that we want?” Reggie insisted.

“You already have the first two steps,” I began. “The first thing you did was define the purpose for the program. You said the purpose to keep your managers focused on the company’s goals and to engage in behaviors to create those results.” Reggie nodded his head in agreement.

“Your second step was to communicate those behaviors you identified to drive the results you wanted, right? You did that in your individual KRA meetings.” Reggie continued to nod his head.

“So, if you didn’t have the bonus program, in two cases you would have achieved the results you wanted anyway, three of your managers would not have spent counterproductive time trying to game your gross margin system, and your other two more of your managers would not have become discouraged halfway through the quarter?”

“Okay, I’m with you,” Reggie interrupted. “But, what can I do differently, to make sure I get the behaviors I want?”

“Every week, you sat down with each manager and reviewed the behaviors you wanted, right? And each week, each manager promised to try very hard to do what you talked about, yes?”

“Yes.”

“So, stop talking about it. You stop talking about those behaviors.” Reggie looked puzzled. I continued, “The wrong person is doing all the talking. You stop talking. Your management team need to be talking about this stuff, not you. The first thing that needs to change is who is doing the talking.

“So, Reggie, here is my challenge to you. In what way can you get your management team to talk about those behaviors instead of you?”

Does Bonus Drive Performance?

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“So, tell me Reggie, what exactly were you trying to accomplish with the bonus system? Because that is where we have start our discussion. What was the purpose?” I asked.

“The purpose, well, you know. I want my managers to stay focused, to have the company’s best interest at heart, to take that one more phone call before going home,” Reggie replied.

“And how did you communicate this to each of your managers?”

“Well, once a year, we sit down and look at their job. We break it down into Key Result Areas, then create a goal in each area, for the year. We attach dollars to each of the goals, to be paid quarterly. We are doing it just the way our consultant told us to do it.”

“And what are the results?”

“It’s all over the board. Two managers made most of their KRAs, but I don’t think they did anything special, it just happened. Three other managers did some suspect things to manipulate the numbers into the last quarter, so they got their bonus, but, they didn’t really achieve the goal, it just looked like it. And two other managers, well, they missed their targets, in fact, they quit trying about halfway through the quarter.” Reggie stopped. He didn’t like his own expert opinion on this.

“So, by your assessment, the bonus program achieved results in two cases, but you figure those results would have occurred with or without a bonus program. And in five other cases, the bonus program created manipulation or became a disincentive to performance,” I restated.

“Yes, that’s it. So, you tell me. What could we do differently to get the behaviors we want that drive the results that we want?”

Incentives as a Guided Misadventure

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Reggie looked at me sideways. “Do you mean that this whole complicated issue regarding incentive compensation, that we hired expensive consultants to help us with, may be a guided misadventure?”

“You tell me,” I replied. “What type of environment do you create when you tell people that you are holding back part of their compensation because you don’t trust them to do their best?”

“You just said it, it creates an environment of distrust,” Reggie declared.

“And what kind of behavior does this distrust create?”

“Whooo! It’s all over the board. Some people work really hard, appear very dedicated and some people try to figure out how to manipulate the system to their advantage. I don’t know. Come to think of it, the people who seem committed, who perform the best, are the kind of people who would work very diligently even without the bonus.”

“And would you describe those people as stupid for working so hard without having a bonus as a carrot?”

Reggie shook his head. “No. I would have to say that is just who those people are. The words are -dependable-integrity-earnest.”

“So, what do you think this incentive plan is accomplishing?”

Bonuses in Most Companies

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“How else are you supposed to motivate people?” Reggie asked. “I look around at what other companies do and bonus systems are used almost everywhere.”

“Why do you think bonuses are used in most companies as a motivation tool?” I asked.

“Well, I just don’t know of any other way to get people to go the extra mile, to give their best effort,” Reggie defended.

“I think you have your answer.”

Reggie looked puzzled.

“That’s your answer,” I continued. “Most companies use bonus systems, because they don’t know any other ways to properly motivate their teams.”

What Does HR Have to Work With?

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“So, you are the best salesperson in the company, and you just got promoted to lead a sales team of ten?” I asked.

“Yes, our company is growing fast,” Miguel replied. “Don’t get me wrong, the orders don’t fall in our laps. We have to work hard for every contract. Our sales cycle is about two years. We have to work with individual administrators and selection committees. There is a lot of data collection. Often, the buy-decision process isn’t well defined and can change in the middle.”

“And now, you are the leader of a team of ten?”

“Worse. There are seven of us, one is going out on maternity leave, so, my manager said the first thing I have to do is hire four new rookies.”

“So, what’s the problem?” I chuckled.

Miguel did not share my sense of humor. “HR is sending all these people to interview. As HR goes, they mean well, but they really don’t know much about the kind of person I need.”

“What do they have to go on?”

“Not much. Candidates are responding to an ad they posted on some job boards. I mean, the candidates have experience in our industry, but not the kind of experience that will be helpful.”

“So, who is the hiring manager?” I wanted to know.

“Well, I am. I will be their manager when they come on board,” he nodded.

“And you will be accountable for their output?”

Miguel nodded.

“So, it is in your best self-interest to help HR send you better candidates? How are going to do that?”

“I don’t know,” he shook his head. “I am really just a salesperson. I mean, I closed $2 million in sales last year, so I know the job.”

“Why don’t you start there? Sit down and clearly define the steps in the work. Without that, HR will continue to send you the luck of the draw. HR can be helpful, but once the candidate is hired, they are not accountable for the output of your team. It’s up to you, not HR.”

The Futility of Planning

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“Planning in this day and age is futile,” Reggie complained. “The world changes so fast in these times, with technology, what is the point of thinking five years into the future?”

“Indeed,” I replied. “Do you think technology will be different five years from now?”

“Absolutely. So what’s the point thinking about decisions five years from now?” Reggie continued his protest.

“So, you think a decision made today might be wrong, five years from now?”

“Of course. Things change.”

“What kind of things?” I prompted.

“Technology drives all kinds of change, in the way we communicate, the speed of information, the precision of measurement. It changes our methods, our systems, our reach, our scope.”

“So, if we don’t think about those things in the future, we might make the wrong decision today?”

Reggie stopped. His head turned around. “You’re right. Planning is not about making a decision five years from now. Planning is about making a decision today.”

Who Drives Personnel Planning?

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Management Blog is proud to announce its selection as Best HR Blog – 2015.

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Loren was not happy. “I have a person on my team, a mid-level manager, who is always late on hiring. We get busy around here and she is always one person short. And we know ahead of time when we are going to be busy. But hiring is always something that can be put off, until it’s too late and you really need the person.”

“What do you think you should do?” I asked.

“I always end up jumping in. At the end of the day, I am the one who drives the recruiting process for her.”

“So, you are the manager-once-removed for the open position. You end up driving the process. Who makes the final hiring decision?”

Loren (MOR)
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Hiring manager
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Open role

Loren had a puzzled look on her face. “Yes, I am the manager-once-removed. But, the hiring manager has to make the decision. Sometimes, I will make a very strong recommendation, but the hiring manager ultimately has, at minimum, veto authority on the hire.”

“And, what if I told you that was the way it works best. You are the manager-once-removed. Your role is quarterback, the hiring manager makes the final decision. So, what are you frustrated about?”

“I guess I am not frustrated with being the quarterback. I am frustrated because the process is always late,” Loren realized.

“But, if you are truly the quarterback, you just have to get your hiring manager into the huddle earlier.”

“You are really piling on the sports analogy,” Loren complained.

“I know, I know, couldn’t help myself. Football starts soon,” I defended. “So, how could you get your hiring manager to the huddle sooner?”

Loren thought for a bit. “We know when we are going to be busy. Perhaps I should draw up a personnel staffing plan, that gives us lead times to hire, so we get the new hire out of training about the time we get busy.”

Connecting Values to Behavior in the Interview

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“We just had our annual planning meeting,” Kelly explained. “We talked about our core values as a company, and wanted to find a way to integrate that intention into our interview process when we recruit new people into our company. But how do you interview for values? You can’t just ask someone, if they have integrity.”

“You can interview for anything that you can connect to behavior,” I replied. “That goes for any critical role requirement. Connect it to behavior and the questions will follow.”

“Okay, integrity,” Kelly challenged.

“Here’s the magic question. How does a person, who has integrity behave? Then ask about a circumstance where you might see that behavior?

  • Tell me about a time when (my favorite lead in) you were working on a project, where something happened, that wasn’t supposed to happen, and you were the only one who knew about it.?
  • Tell me about a time when, you found out that someone took a shortcut on a project that had an impact on quality, but you were the only one who knew about it?
  • Tell me about a time when, you were working on a project, and someone confided in you about a quality standard or safety standard that everyone else had overlooked, and now, the two of you were the only ones who knew about it?
  • Tell me about a time when, you were in charge of quality control on a project, and in the final audit, you discovered something wrong, and it took significant re-work and expense to fix.

“Once the candidate has identified a possible circumstance, then ask about the behaviors connected with integrity.

  • What was the project?
  • How long was the project?
  • Who was on the project team?
  • What was your role on the project?
  • What went wrong on the project?
  • How did you discover it?
  • How were you the only one who knew about it?
  • What impact did the hidden problem have on the project?
  • What did you do? Who did you talk to? What did you say?
  • How was the problem resolved?
  • What was the impact of the re-work required in costs, materials and time?
  • Tell me about another time when you discovered something wrong and you were the only one who knew about it?

“Would it be okay to ask about personal dilemmas, secrets and betrayals?” Kelly asked.

“Everybody has personal drama. I prefer to stick with work examples. It’s all about the work.”

More examples in my book, Hiring Talent. Hiring guru, Barry Shamis also discusses in his book Hiring 3.0.

The Enterprise as a Whole

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From the Ask Tom mailbag –

“Different functions in a business do different things, and they each have their own set of cultures, rules and ways to be measured. We need to respect this, and stop imagining that how it works for us is how it should work for everyone else. Each function needs to be managed in the best way to suit its purpose, and the business needs all of its functions to work well and respect each other and their methods and measures if the enterprise as a whole is to be successful.” Comment posted to Responsibility, Accountability and Authority.

Response:
This comment began by railing against management as command and control, ended up with a brilliant description of what management IS. To understand management, as a subject to be studied and understood, we have to step back. We complain that how management works one way, does not work in another way. We get wrapped around the axle.

In the differences, there are universals. Here is what I pulled out of the comment posted above.

  • Business is a collection of different functions. Each function will have its own set of cultures, rules and measurement systems. And those systems will have different characteristics.
  • Each function must have a purpose. All the discussion about goals and objectives ultimately arrive back at purpose.
  • Each function must work together, must be optimized and integrated for total organizational throughput. Out of balance systems create internal feasts and famine, starving and bloating. Some optimized systems remain appropriately idle waiting for constrained functions to catch up.
  • Management is about the whole organization, separate functions coordinated together for the benefit of the whole system. This coordination depends on discretionary judgement, making decisions and solving problems, in roles we call management.

As the organization grows more complex, it needs more management.

Operations and Command and Control

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“If only life and business were that simplistic,” Scott said. “If you work in operations then your job is about commanding and controlling the time, labor and technical resources towards an agreed output. For the jobs in operations, your vision makes sense. But, I think it is only a functional perspective, not a universal one.”

“You seem to think that operations is all about command and control,” I replied. “It sounds a bit mechanical. Tell me more.”

“Operations is operations. Pretty cut and dried. We have defined processes inside efficient systems. Line up the people, line up the machines, line up the materials. Pop, pop, pop. Predictable output. Yes, it is a bit cut and dried.”

“If that is all there is to it, then why don’t we have robots do all our work?” I probed.

“In some cases, we do,” Scott raised his eyebrows in a subtle challenge.

“Yet, even in the midst of defined processes and efficient systems, even in the midst of robotic welding machines, we still have people engaged in operational work. And in that work, as defined as it is, aren’t there still problems that have to be solved and decisions that have to be made?”

“Well, yes,” he nodded.

“So, inside a process you describe as command and control, there is still discretionary decision making?”

Scott continued to nod.

“So, it’s not all neat and pretty,” I said. “Not all tied with a bow. In fact, some days, the work gets downright messy. Even mature processes are subject to variations in material specs, worn machine parts, delays in pace. Command and control short-changes the discretionary judgement required to effectively operate a well-defined system.”

Inspired by a comment posted to Responsibility, Accountability and Authority