The fallacy of corporate excellence

It’s probably not contentious to state that most organisations claim to value performance excellence. To name just one, Barclays plc has ‘excellence’ as one of its 5 core values.

Equally, you would probably have to speak with many Human Resource Directors before you found one expressing a dis-interest in developing talent. Talent development is a core function of any HR department, with small fortunes spent on training courses. Indeed, corporate Universities are becoming increasingly popular.

Yet it is the contention of this blog that much of this is a fallacy. There is a disconnect between what some companies claim to be their core purpose, and what actually goes on behind the scenes.

Of course, there are exceptions. But many companies ultimately fail, and studies of ‘great companies’ often turn out to be simply winners of a random walk. This lack of resilience suggests people within these companies are focused on something quite different to ‘being excellent.’

The approach corporates use to develop talent is a case in point. More specifically, how the business world appraises and reviews performance of staff. How companies go about this process is a barometer of what their attitude really is to developing talent, and creating a climate where people are able to perform at their very best.

Performance or results?

Many businesses believe they are performance-focused, when in reality they are results-focused*. The difference is not one of semantics. Rather, it illustrates what organisations value. In turn, this impacts what they spend much of their time thinking about and trying to achieve.

An exemplar of this results-focused culture is how business reviews the performance of their employees. Performance reviews occur at regular intervals, largely entail assessing if targets have been achieved, and rating an employee’s performance. They are confidential, the details known only to the performer and their boss.

Such an approach is the antithesis of high-performance. Not only is the review process distinct from everyday work, but it also creates a conflict of interest between team and individual performance. It is based on the premises that competition between employees’ cultivates excellence, and that people need to be motivated. Both beliefs are seriously flawed, with pernicious consequences.

High-performance cultures

High-performing cultures use performance reviewing to serve one purpose only; to help performers improve. It is part of the holy trinity of learning any skill. Reviewing is tightly interwoven into daily work, with the process being congruent to both individual and team success.

To that end, performers have to want to be critiqued because they are driven to get better. Line managers must not use reviews to exert power or control, or even try to make people feel better. All feedback must be premised on helping someone perform better.

High-performance cultures create climates that support self-motivation. They don’t ‘try to motivate.’ Churchillian speeches serve little purpose in these cultures, as do promises of financial rewards conditional on targets being met. Contingent rewards for attaining pre-set goals is manipulative and controlling, a guaranteed method of de-motivating staff and ensuring behaviour is not intrinsically driven. Humans are not dogs that can be trained by promising them a treat. 

Yet for some reason, the belief persists in business that in order to ensure greater effort people need to be incentivised to achieve results. So much so that it is not unheard of for staff who under perform relative to their colleagues to be sacked.

The logic underlying this is that competition between staff breeds excellence. It may do in sport, but in business there are some very unwanted consequences of this motivational tactic, not to mention the implications for how teams operate when team members are trying to outperform each other.

Wrong kind of excellence

A preoccupation with meeting targets leads to companies focusing on the ‘wrong kind of excellence’**, with damaging consequences both for the organisation and employee talent development. It has also been suggested that a results-focused culture has contributed to the UK’s problem of low productivity in recent years***.

Performance and results are not synonymous. Companies would be better advised to expend more energy understanding how they plan to achieve the core purposes of their business. Results will then look after themselves.

 

This blog is a condensed version of a paper contrasting performance reviewing and motivational climates in business and high-performance fields. To receive the paper please email paul@humanperformancescience.co.uk


* Suggested read: ‘Perform’ by Hatter, Shambrook & Constable

** This term was first coined by Human Factors psychologist James Reason

*** ‘Executive pay holds the key to productivity puzzle’ Andrew Smithers, Financial Times May 28th 2015