VANNOY:
Development and performance management tips. Our small business survey results are in. Excited to continue this series. This is number three in a four-part series where we are unpacking the small business HR survey. And if you watch the show regularly, you know my guest if you don’t. Mary Simmons is our own vice president of HR consulting at Ashore. She’s a SHRM certified professional. Also for the past eight years, Mary is an adjunct professor at the New York Institute of Technology. Prior to that, Mary was the director of HR consulting for a 58 year old HR consulting firm, as well as a household name of banks and other large firms in New York. So welcome back to the show, Mary.
SIMMONS:
Thanks, Mike.
VANNOY:
Okay, so for those of you guys who have not seen the first two episodes in this series, we really wanted to understand what were America’s fastest growing companies doing different when it came to their people practices, their HR practices compared to companies maybe growing but not growing super fast, maybe companies that are flat, companies that maybe had a down year and were shrinking and really understand what’s the difference. And so we put together a survey. We had 2065 businesses respond. We asked five questions in eight different areas around recruiting, hiring, onboarding, compliance development, performance management, retention and post-employment. And then we asked a final question after everyone answered these 40 questions, five times, eight sections.
What describes you last year? Was it, were you a fast growth company? Were you growth company flat or was it a down year? And then we compare all these answers to see these are the clear, crystal clear trends that have emerged for the fastest growth companies versus companies who are flat or headed down year. We just want to share these distinctions because I think there’s some pretty clear calls to action, dare I say, really, really obvious simple calls to action that businesses can take to help drive growth in their business. So like I said, this is number three of four. Today’s we are talking about performance management and development. So those are the two sections, I guess five and six of the eight sections. So let’s jump into topic number one, development. The first topic here, development Mary and I love, so everybody knows Sir Richard Branson, founder of the Virgin Group, Virgin Airlines, et cetera.
And I love his train people well enough so that they can leave but treat them well enough so they don’t want to. And I think that’s a perfect quote to unpack this topic of development and how to develop your people. And so I’m going to cite some of these statistics, Mary, and I want you to help explain why you think that is and what’s actionable for our listeners. So first, fast growth companies, they’re 26% more likely to provide regular structured training for employees as to compared to businesses that have suffered a down year. So your fastest growth company, fast growth companies, combining the fastest and fast. So it’s the upper quadrant against people who had a down year. It’s a 26% spread. What is maybe even more remarkable is there’s a 10% spread between the fastest growth companies and growth companies. So clearly there’s the 26% spread growing companies versus shrinking companies, but there’s a big spread by 10% from growers to fast growers. It seems obvious employee training, but
What’s your guidance here, Mary?
SIMMONS:
So I’ve said on our other presentations, I absolutely love this survey. Number one, I think it gives validity to everything that you and I talk about when we’re talking about our webinars and how important it is to pay attention to your employees and show them that you want to invest in them. So I am not at all surprised by these statistics. And listen, one of the reasons is because you can do the best job hiring somebody. You can write this beautiful ad and a job description to go with it, and you’re looking for certain competencies, certifications, education, years of experience. And that individual coming into your organization may have the core skills, competencies that you want and they can do the job, but you probably need to teach ’em how to do it in your organization.
It’s not enough to just hire somebody and then say, go at it. Just go do your thing, right? First of all, employees aren’t going to appreciate that. And second of all, you need to give them some expectations. You need to give them some tools. And when you give them those tools, oh by the way, you kind of have to train them on how to utilize those tools. That’s our responsibility as employers, small employer to big employer. And I would argue that it’s just as difficult for both of those organizations, right? Because the small employer with maybe 10 employees doesn’t have a training department. The big employer may have a training department, but a heck of a lot more employees. So it’s difficult for organizations to keep up with this. Definitely something that our team excels at, and we are telling clients all the time, and again, I love having these statistics to back up, what we’re recommending all the time is to have training.
VANNOY:
Yeah, I like that you talked about having an HR department or a training department. Well, that’s the stuff big companies have. But if you’re an entrepreneur, you’re a business owner, you’re a mid-size company, you might have an HR person, maybe the HR person is you as the owner. You don’t have a training staff, but this really just calls out. I think one of the biggest struggles entrepreneurs have is working on your business versus working in your business. And a lot of times the entrepreneur, they’re an individual contributor themselves, they are the subject matter expert, and so they get their hands in everything. But this is one of those things, I mean, of all the 40 questions we’ve asked, I think this is number one where the biggest spread between the fastest growing and growing companies of a 10 point spread, it is clear, this is one of those things that you, and a key word in the question we asked was, do you provide structured training?
So this isn’t, Hey, why don’t you come the job? Yeah, you want to do a ride along with me or can I just do a sit-in and we can just talk about this over lunch structured training. And I think you hit on the head a lot of times it’s not enough to just hire somebody from the industry, Hey, I’m not going to do training because I only hire people from the industry. So they know what they’re doing when they get here. Well, they don’t know your company, they don’t know your processes. Maybe the training isn’t product or industry. Maybe they are expert in that, but they still have to know you and how you guys work together, right?
SIMMONS:
Absolutely.
VANNOY:
Yeah. Anything else you’d want to say on structured training as it relates to developing your employees? It sounds so obvious, but the
SIMMONS:
Data It does. But you’re right, Mike. Structured training does take a little bit of explanation. So as adults, we learn a lot different than children learn. So we really learn best in small doses and we learn best when we have examples and we can actually perform or exercise that learning. So it’s important when we talk about structured learning, that the organizations are really looking at what is the topic that I’m trying to get to? What is the effect that I want after the training? And by the way, to be really structured, it has to be a continuum of training. It is not a one and done process. There needs to be tools. Let me give you an example. We did interviewing, training for a client, and there was a lot of questions from the managers. Well, what questions? You gave some examples. What can I ask? What can I ask? We developed a 20 page learning continuum for interviewing, training, and that might sound simple, interviewing, training, Mary, that sounds like a half hour and you’d be done, but it’s not, right? So we need to give the tools and those tools are going to include the training. And then for this example, it gave a list of interview questions. It added meeting with our team to create targeted questions for every single position within the organization. I can’t tell you how happy those managers were and appreciative
VANNOY:
Mary. I think sometimes
SIMMONS:
You made their job easier.
VANNOY:
I know I’ve made this mistake in businesses that I’ve run or owned. When you’re the subject matter expert and you run the whole thing, you just take so much for granted about what other people around, right? So your example about good point training, right? There’s a framework that you have to have. You have to understand what competencies and skills that I’m mining for, therefore what questions I’m going to ask. Put together this whole curriculum. And just because you train on it, so let’s say you’re a small mid-size company, you got 50 employees, you’ve got five managers who manage 10 employees each. Well, if you have, let’s say you turn over one person a year per team, so you turn five over. So 10% turnover rate, which would be great, but that means, so you, so a process that you might be doing five to 10 times a year and you’ve been doing it for 10 or 20 years, you feel confident about interviewing and you did the training for your managers. But especially if this is a new manager, if it’s something they only do once or twice a year, it’s not a skill that’s that’s going to soak in. You need to do it, repeat it, read it, watch it on a PowerPoint, sit along and do it with somebody else. Shut
SIMMONS:
Up.
VANNOY:
I mean, more immersive, more as a marketer. I think omnichannel, the more ways I can touch someone experientially, right? So pictures, words, motion on all platforms, emails, social websites, et cetera. The more facets that you can have to teach, the more effective your training’s going to be.
SIMMONS:
A hundred percent.
VANNOY:
Alright, let’s tackle the next one here. So this is really cool. 75% of fast growth companies provide leadership training to managers. Only 41% of businesses who had a down year provide leadership training. Again, this one might sound obvious, but give us your insight. This is a huge spread, 34% difference between fast growers and people who had a down year, whether they invest in training leaders,
SIMMONS:
Right? Right. And listen, I’ll also make the argument, I think there was a LinkedIn learning report that said that 94% of employees would stay at a company if you invested in their learning and development. That is definitely coming from our millennials, which are the biggest generation in the workforce. Gen Zs will also say that. So look, when I do ads with organizations and they have a good training continuum, probably because working with them, I will put that on an ad because that’s going to attract the best employees and the best managers. So when we talk about a leadership training program for managers, if you have that, that’s going right on your ad for new employees, first of all, you want people who are open to learning who aren’t like, I got this, right?
It should be part of your culture that I’m investing in you, Mike, because I believe in you, but I’m going to give you the tools that you need. But when it comes to leadership training, and we’ve said this before, employees don’t leave a company, they leave a manager. So I really look at it twofold. I look at it, I’m going to train you to be the best manager of people. You may know how to be a good salesperson or make a widget, but it’s my responsibility as a business owner, A C E O or the HR person or training manager at an organization to train you to be the best manager of people. And that is always, from my point of view, going to include some compliance. Your managers are talking to your employees more than any of the top management. The owners can protect your organization, protect your employees, and protect your managers by giving them leadership training. And they will stay with you because they know you care about their success.
VANNOY:
So I think previous topic made it crystal clear, you should do structured training for all employees. So I’m not trying to minimize that at all. But if I could choose only one training, I train all my employees on say, skills and competencies, or I train my leaders how to be better, more effective leaders, I choose leaders, life happens. Employees are going to come and go in and out of the organization as they relocate. They have career changes, their life happens to them. You hope you can get as many as you can, but the constant is the leader in a bad, ineffective, toxic leader. They hire bad people. You have the cost of turnover, they create a cancer and a toxicity that drives down productivity. I mean, the expense of a bad manager is just so enormous. This is the place that I would just, if I had to pick one, this is where I put my time and my energy.
SIMMONS:
Agreed. Agreed. Yeah.
VANNOY:
So interesting here, the Society of Human Resource Management, shrm, they found that 84% of US workers said a poorly trained manager creates a lot of unnecessary work and stress. How does that manifest itself in your experience? So when they say unnecessary work, what does that mean?
SIMMONS:
Well, I think the manager, poorly trained manager is not going to be organized. They’re not going to understand how to dole out the work, and that’s just going to create unproductive employees, which of course stresses everybody out. But what I’ll also say, and I’ll bet you 10 bucks that the rest of this article said the same thing I’m going to say is that happy employees, well-trained happy employees who have a manager who are treating them with respect, who is organized and a good manager of people are much less likely to trigger litigation suits against the employer. It’s when your employees are happy that they look for reasons. And in some cases there are reasons to sue their employer. So again, I always go back to my two pillars, Mike. Compliance, very, very important. I need my managers trained. I need them to understand when an employee says, I just can’t come to work, my mom’s really sick and take her to doctor’s appointments all the time, I need that manager to understand, if you’re over 50 employees, go talk to hr. You may be eligible for F M L A. Instead of saying tough luck, you still have to come in and productivity. So those are the two pillars that we try to guide our clients on. I want you to be compliant and I want you to make sure that your employees are as engaged and productive as possible. And training managers key to that success.
VANNOY:
I feel like the day-to-day focus is probably appropriately on productivity. How do I, as a leader, how do I motivate? How do I build great teams? How do I have an eye for talent? How do I develop that talent? How do I train them to be more effective at their jobs? All the productivity stuff. But it has to sit on a bedrock of compliance, correct? But it can’t come at the expense of, Hey, I’m really, I’ve got a really talented manager who really knows the industry super well, super hardworking, but maybe they’re just an a-hole in employees that don’t like their boss. They’re simply going to be more likely to sue whether they’re going to sue on something that’s valid or not. Maybe you, you’re out of compliance and unwillingly you don’t know it and you end up in some horrible wage and hour issue. Or maybe you have actually done nothing wrong, but a disgruntled employee is simply looking for their pound of flesh because they can’t stand the environment that their manager has created for them. Correct. The cost of a single lawsuit could just wipe out years worth of profits that that same manager could have otherwise theoretically generated.
SIMMONS:
Absolutely. Very important.
VANNOY:
Anything else before we move on to the next one on leadership training?
SIMMONS:
Like you said, if I was going to pick one thing, I can’t stress how important that is and to also, you got to make sure that it is targeted to what’s the effect that you want and you’re watching for that effect. So if you’re looking for the managers to have lower, give that training so you have lower turnover, you should be looking at your turnover after you do that training and adjust it accordingly. So you have to look for results, otherwise your training is not being effective and you need to tweak it.
VANNOY:
Yeah, well said. Well said. Okay, next one. So 83% of fast growth companies provide on demand training resources for employees. So we’re obviously hitting training here pretty hard. It’s the category of employee development, so no doubt, right? So the first one we hit was structured employee training. The next one was leadership training. Now we’re talking on demand. So maybe it’s not a class, maybe it’s not face-to-face, but it’s on-demand resources. So 83% of fast gross growth companies provide on-demand training resources for employees, only 56% of businesses who had a down year. So here’s yet a third facet of training the on-demand component. Explain why the big spread.
SIMMONS:
I would say that number one, I’m going to make an assumption here that those fast-growing companies are talking about when they’re hiring people. We have all these training resources for you. I think the other piece is that they have employees who want the training. Those fast growth companies, the more training that you’re giving, the more productivity, the more engagement. So they’re going to have a lower turnover. Lower turnover usually translates into more productivity. And so your offering your employees, Hey, I might have some structured training, but even if you didn’t have that structured training employees, here’s on demand training for you to utilize and grow with the company and grow your skills. So do I prefer structured training? Yes, we usually recommend a little bit of both. So I’ll do customized targeted training for a client that we do live. So people can ask questions and you can say, Hey, Mike, would you think of that so I can get people engaged? And then we also always provide some videos so that the employees on their time have the ability to say, I want a little bit more. Oh, we have on-demand training. And I would say that that is also something that employees are looking for as well as that structured training
VANNOY:
And something we’ve talked about in the previous episodes of this series. If I think about the three types of training we just talked about, structured for employees, leadership, training, and now on demand and on demand, that might be a video you created. It might be just a word doc with a bunch of text that gets read. Maybe it’s a PowerPoint, something that they can consume on their own time. Nowhere in here have we assessed the quality of this training for all we know. Maybe some of this, we’re going to assume that a bunch of this content is great, right? Things to assume that on a bell curve distribution of content, some of it probably sucks, but the delineation is still crystal clear, right? So 83% of fast growth companies provide on demand only 56%, excuse me, only 34%, don’t, excuse me, 56%. So you’re looking at a 30 ish percent spread between the two.
To me, as much as anything, whether you do these things, obviously you want to do them with quality, you want high quality structure training, you want high quality compliance training for your managers, you want high quality assets, videos, PowerPoints, et cetera, have as on-demand resources. But regardless of the quality of the content, you’re signaling to your employees, what you think of them, how much you care about them, and how much you are investing in them. The other thing, maybe the content is great, but the on demand doesn’t. We have no way of quantifying whether employees actually are consuming this content. We just ask the employer, do you provide on-demand content? Maybe people are working so hard, they can barely even consume the content. But again, I think you’re signaling to your team, I’m investing in you. One of the number one things we hear is employees want to join firms that invest them in them and train them so they can grow in their career. They want to acquire new skills, they want to grow hundred percent. They want to develop, they want to be somewhere where they can grow. And so even if they don’t end up consuming that content and using those resources, what a recruiting tool to say, Hey, here’s this on-demand library. I’m going to train you. Here’s the formal process when we bring on board, but here’s this library for you to develop yourself ongoing, right?
SIMMONS:
Nothing else. And you can go back to it anytime you want. Yeah,
VANNOY:
It’s great. And so theoretically, maybe it’s not even the training that’s driving the difference. Maybe it’s the fact that you’re providing the training that is helping you to recruit and retain better employees, and it’s those better employees that result in the fast growth. It’s a multifaceted problem that we’re exploring here. But I go through all that to encourage folks. Don’t get hung up on, oh, I don’t know how to do a video. I don’t know how to don’t have good PowerPoint skills. I’m not a designer. Who cares? Put something down and create something that your employees can consume on demand. They’re going to appreciate it. They probably don’t think you’re a designer. They’re not going to punish you because it doesn’t look amazing. And it looked like it came from some expensive agency just simply doing it as an important act. Anything else? We’re going to wrap on the training part. We’re going to shift to a couple other components of development. Anything else you want to say under this umbrella of training? Mary?
SIMMONS:
Yeah, I don’t want to overwhelm listeners. I want you to realize that if you can’t do all of it, try to do some of it. And where possible bring in experts. You know what they say. If you fly somebody in or you bring somebody in from the outside, sometimes it’s valued more, but do what you can do. Do it with intent and try to measure that training. Don’t just give it and assume that it’s hitting the mark. You really do need to measure it. So try to do what you can.
VANNOY:
Yeah, well said. Okay, so here’s one that there’s a big spread, and I think because a lot of companies just don’t even think about this as a form of development, 75% of fast growth companies frequently assign stretch assignments to employees. Only 34% of down year companies do the same. So I got a bunch of ideas and thoughts about why this is and then the benefits of doing it. But what’s your take on why the 75% of fast growth will be 34% of down your regularly assigned stretch assignments?
SIMMONS:
I think there’s a myriad of things that are playing into this, but number one, employees want to be empowered. So years and years and years of interviewing, why did you like that company? They empowered me. Why didn’t you like that company? I really just did this little rote thing. And when we give these stretch assignments, our employees say, well, they trust me. They’re developing my skills. So this is a form of training and I’m going to combine the training with a stretch assignment. I had an employer. And listen, I’m not always helping our clients with bad employees. A lot of times I’m helping them with, I have this person, they’re really great. I really can’t afford right now to give ’em more money. I can’t have them leave training. And I will say stretch assignments are a way to empower and support those employees. And they are really great retention tools.
And in this example, what we did was we made this person a team lead and we said, you are really strong and you’ve said that you like training the new people. That’s yours. Let’s have you train all the new associates now, stretch assignment here, watch some videos on how to train employees because they had our HR compliance library and we helped support that person. I’m telling you, Mike, they didn’t even ask for more money. They were so happy. That’s not always going to happen, who you know that. But stretch assignments for that strong employee and even for the newer employee, I know from managing the people that report to me stretch assignments, it’s a training opportunity. It’s a way for the person to feel like you trust them and empower them. I just can’t say enough about it. You need to continually do that.
VANNOY:
I agree completely. Something a couple other drilling down deeper into the data. So 75, again, from the top, 75% of the fast growth companies assigned to stretch assignments, only 34% of the down year companies do 57% of that 34%. So over half of the people who had a down year or a flat year failed to assign stretch goals. So it’s less than half of them do it at all. And hitting a topic we talked about on the training theme, the fast growth bucket we’re 17% more likely than the growth bucket. So this seems to be one of those clear differentiator that America’s fastest growing companies, not just growing but fastest growing companies, they assign their employees growth stretch assignments. Now
For the cynics listening, you might think, well, maybe it’s already a growing company. They got a hot product. And so these aren’t stretch assignments for growth perspective. They’re like, oh my gosh, we don’t have anybody else to do the work, so we got to give it to them. And I say, what’s your point? That’s a great thing. All it does is demonstrate, you can assign stretch work to people and they can handle it because these companies are still growing. I mean, 17% of a survey of 2065 companies, that’s not nuanced. That’s hard data proving. So whether you agree, whether you think it’s chicken of the egg, causal or effect here, it’s proof that either assigning stretch goals to employees does make them better and you more productive, or it proves that you are growing and you can assign stretch work and then take some load off of you and spread the workload around a little bit. It’s probably a combination of both. So assign stretch goals, right?
SIMMONS:
A hundred percent. I couldn’t agree more. And make sure again, that you do it with intention. Make sure that your communication matches your intent. So we’re not saying, Hey, I don’t have anybody else to do this. So tag you’re it and you’re going to be the person training new employees. No, the communication is, I’d like to hear your thoughts on the possibility of you training new employees. So let’s write a summary of what you’d go over and maybe we have a one month evaluation to see how the training’s going. And by the way, let’s ask the new employees how they thought the training was and we’ll tweak it along the way. So when we’re doing stretch assignments, let’s make sure we’re communicating it properly. Again, we’re giving the tools. And with a stretch assignment, you’re not just saying, go do it, right? We are talking about development here. So the stretch assignment is with parameters. It could be short term, here’s a project, we have a new client or something like that. It could be long-term like that team manager. It could be, let’s try it, see how you like it, see how it goes. And in three months, let’s reassess. So again, I want you to do it with intention. I want you to do it with a proper positive communication.
VANNOY:
Yeah. Alright, last one on employee development. And this is, I’m going to break this one down a little more detail. So we asked all these companies, 2065 businesses responded to this question, do your managers create written development plans for each employee? So just think about that’s if you don’t do it already, that’s not an easy thing. It’s not even that it’s hard. It just takes time. It’s a time consuming thing when you’re a manager who’s busy. But the data is crystal clear, the value of doing this. Fastest growth companies, 73% of them create written development plans for each employee. Normal growth companies, 61% companies who are flat year over year, 49% companies who had a down year last year, 40%. Is it just coincidence that the 40% who had a down year, is it just the market? Is it just the product? Is it just pricing is just customers? Is that really the reason they had a down year? I’m empathetic to how hard it’s to run a business. So of course some folks are in that category, but when 73% of the fastest growing companies out of over 2000 have written development plans for each employee and only 40% of those who shrunk last year, let’s just be blunt, it’s not just a down year. They shrunk last year, 73 versus 40%. It’s crystal clear. What is it about development plans maybe in and of themselves, best practices? What is it that’s driving that growth, Mary?
SIMMONS:
Well again, now you’re writing down how you’re investing in the employee. So I always say it’s not real until you write it down or it’s on my Apple Watch one or the other. But the development plan actually shows your employee, here’s your gaps in skills, here’s how we’re going to develop you. And you can utilize all of the things that we’ve talked about. If it’s a manager management training, if it’s an employee training, I’m also going to let you have the capability to use this on demand. I’m also going to give you some stretch assignments. It might be all of those. It might be one of those. But the development plan is going to be tied to your succession planning. And I don’t care if you’re a five person company or a 500 person company. You need to know where you are going and what people will be in place to get you there.
And you need to look at your gaps. You need to say, Mike is going to take over for Mary, but here are his gaps. So Mike, this is your development plan because here’s your career path. And again, I will just reiterate that the millennials and the Gen Zs want this transparency. They want you to know that you’re involved. When we do interviewing training, this will be something that we discuss with the employer to say, listen, part of the interview process has to be a summary of the organization and the department that they are joining. And part of that discussion for both should talk about where are they going? Is there succession planning, is there development plans that’ll be written for the employees? And again, small employers don’t get overwhelmed by this. It could be everybody’s going to get these four core trainings, and I can’t afford a trainer, so I’m going to use the HR compliance library from ashore. So it doesn’t have to be a grandiose plan, it has to fit your organization, but there has to be training with intent.
VANNOY:
And I love the way you just went there. So obviously the better the quality of the plan, like a really experienced, talented HR manager like yourself, you know how to put together a really good constructive, effective development plan and you can coach the employer and the employee on both sides of that equation. But I still kind of come back to the fact that even if you suck at it, the fact that you’re willing to sit down with your employee and say, Hey, I put together this plan, even if it’s not a great plan, that employee is going to say, oh my gosh, I know how hard this manager works. They must have done this in the evening after the kids went to bed, or maybe on the weekend, or maybe they did it during business hours, but they’re dedicating part of their time to me and they care about me and where I’m going and investing in me.
So of course, we want to encourage the highest qualities possible. We’d love to have you use sure and Mary’s team to help you do these things. But regardless, don’t let fear of like, I don’t know how to do this. Well, I don’t know how to do a good job at this. Don’t let that stop you. I really believe at least half of this equation is the signal you send to the employee that I am here to invest in you. I believe in you, I want you here for the long haul, and I’m going to do what it takes to make you successful and help you achieve your career goals. Right? Anything else you’d want to say on that before we go ahead?
SIMMONS:
Yes, of course. Because I’m an HR nerd, so I’m going to say that training that isn’t good may miss the mark, but the owners listening that might not have this. There is lots and lots of tools out there and free tools to assist you with creating a good training program. And you know who the best person is to help you with that is your employees. Just pull the employees together and say, we need to do better training on customer service. Where are the complaints coming from? What do you guys think? Everybody just give me one idea.
VANNOY:
That’s
SIMMONS:
Great, right? So be transparent and say, we don’t have a training program right now for customer service. Let’s do this together. There’s a stretch assignment. I care about you, and there’s empowerment all three, and I think you’re going to be more successful. Like I said, LinkedIn is a free resource. They have some trainings. There’s just so many resources out there that I would say as an HR geek that there’s no reason to have training that is really bad. Is it going to be as good as what I could provide? Maybe not. But I think business owners have enough resources out there that they can come up with something relatively good, especially when they do it together with their employees, ask for feedback.
VANNOY:
And I should say, and this is maybe a bit of a plug for you and your team, but it’s true. What you can’t do a bad job of is HR or compliance training. You can’t half ask, can’t afford to do
SIMMONS:
That.
VANNOY:
You what are the illegal questions to ask in an interview training? There are some things around compliance you just seem to have to get right. So by all means, use a professional L Mary team. I think my encouragement, I was saying that ironically, to try to encourage people if it’s for say, the customer support or how do I operate the x, y, Z machine or how do I follow the A, b, C process, don’t let perfection be the enemy of good here. It’s simply just putting something on paper and then in training on that, you’ll get better at it over time. The fact that you just do it, you’re signaling so much to your employees. Okay, Mary, I’m looking at time here. We’re going long today, but this content is phenomenal. So I’m going to keep going, but I’m going to move us to the next bucket of questions. So that that’s it. On what’s the name of my topic? That’s an on development, excuse me. Now we’re going to move to performance management. So developing your people obviously should lead to better performance. The first question here, fast growth businesses, they’re 23% more likely to regularly communicate expectations for job performance compared to businesses that are shrinking. So this is merely the communication of expectations of job performance, 23% more likely. What is driving that productivity difference?
SIMMONS:
I kind of feel like this is a dumb moment,
But employees need to know what’s expected of them. And here’s a perfect example of when I’m talking to an employer and I’m saying, this is just as important for your poor performers. I think we all think, oh, I have to tell the poor performer they’re not performing up to standards. That’s not exactly true. Of course you need to tell the poor performers that they’re not performing up to standards, but you also have to make expectations clear to your stellar employees. Those stellar employees deserve to know how they can improve. They want to know, and I guarantee you, they will ask you in different ways what the expectations of the job are. You can’t be successful if you don’t know what the expectations are. And by the way, if I know what the expectations are and my manager knows what the expectations are, then don’t forget the second piece, which is, Mike, you did a great job.
VANNOY:
Yeah,
SIMMONS:
That’s part of setting expectations.
VANNOY:
I think sometimes I think managers missed this one and owners missed this one. If you’re hiring a sales rep, maybe you have a sales quota. So it’s self-evident. Either you’re making or not making your quota. If you’re in marketing, you’re tasked with generating so many leads, you’re either making it or you’re not making it. But some jobs are just more nuanced. If you’re working in a retail environment and you don’t have any control over foot traffic that comes in the store, maybe your performance is, maybe it is measurable, average sale per ticket, how many add-on sales? And we would encourage managers to think about quantifying and measuring performance and therefore setting expectations. But sometimes it’s how do you engage with customers? And it’s more subjective. How do you guide managers to think about setting expectations of performance? Because how you greet a customer is performance. How do you guide managers to try to quantify and then set expectations in these areas and then ultimately give feedback?
SIMMONS:
So I would argue that even for a position where you feel like it’s black and white, whether they’re meeting the expectations. So let’s take the salesperson, you either sell a hundred percent or more of goal or you don’t. I would say that every organization is going to say, well, there’s a certain way that I want that done here. So it needs to tie to the mission and the vision. And I’ll just give you a great example of where I interviewed a salesperson, thought that they would be great for the organization, I introduced them, and this was a learning moment for me. We never stop learning. At least I hope I don’t. And I sent the candidate into the employer. This was a really tough IT sales position. They had to know it, plus be a sales person, really tough person to find. So I send the person in and the employer who thankfully I knew very well, said, Mary, don’t ever send me somebody like that again.
And I was like, oh, I thought they were great. And they were like, they would probably be successful at selling the products. They’re not going to be successful here because that person is not aligned to my culture. I could tell by the interview that they weren’t the kind of person who was going to do a client management sale. It was going to be a sale move on to the next. They were more concerned about their income than they were of the total success of the organization. And that’s what I think we all need to understand. So here we are the beginning of the year, we’re still at the beginning of the year when you’re going to set goals, job performance should be tied to both personal, departmental and organizational growth. When we do that, we are getting our employees to think about what are the expectations of their job, but taking their blinders off and going, oh wait, I’m part of something bigger and how can I help the organization, the people around me, my clients be successful, not just me be successful? And that goes for salespeople or anybody within an organization. Very important.
VANNOY:
And would maybe the last thing I would add on this is it’s okay to communicate that expectations may change. So I remember a couple years ago, I was spinning up a new sales team and day one with the manager, day one during the interview process with the sales reps, this is a brand new thing we’re doing. Here’s the expectation, here’s the productivity we need from this role. The answer is, the reality is we don’t know what good performance is ultimately going to look like. We don’t know if you’re going to sell X number of widgets, Y dollars in sales, or if it’s going to be here, and your compensation will depend on that. So I don’t want to underpay you under market value and come in and have you be disappointed. I also don’t want to overpay and have runaway expense if this thing turns out to be more successful or easier to do than we thought. So part of your expectation should be after three months, we’re going to change this, we’re going to evaluate, and maybe it’ll stay the same. Maybe I’m going to change the comp plan, maybe I’m going to change quotas. But part of what you should expect is change. So I think it’s okay to set expectations, but don’t be afraid. Don’t think that you have to have it all figured out because part of the expectation you set is that expectations are going to change, right?
SIMMONS:
Yes. And they should change. They should change. And that’s why you have the employees set goals as well as you set goals for them because they should be teaching you as much as you’re teaching them. It should be a joint effort to create those expectations. A hundred percent.
VANNOY:
That’s right. That’s right. Okay, let’s move on to the next question here. So we talked about, first it was setting expectations. The next one, fast growth companies, they’re 22% more likely to have a formal review process compared to companies that are shrinking. So you have set expectations. Now, you’re 22% more likely to be a growth company if you had a formal keyword, I think is the word, formal review process. How you’re doing against those expectations. Again, this feels a little captain and obvious, but give some coaching for businesses, the importance and maybe how they should be conducting this, these reviews.
SIMMONS:
So when I look at the word formal, what I’m reading into this is number one, consistency. So if I’m giving Mike an evaluation, I need to give Scott an evaluation as well. It needs to be on the same cadence. It needs to be if you’re in the same position, the same form. So we need to be consistent, and this is how we are formally setting expectations. What did I say? It isn’t real unless you write it down. So it’s important for that employee to be able to digest that information in a formal process. And I will just say that don’t think formal is robotic, because a lot, we help a lot of organizations do this in different ways. Some organizations have chosen to do monthly, quick 15 minute check-ins with the employees, and that’s their formal process. Others use the traditional, let’s do it once a year, every June. So formal looks different depending on your industry, your business, your culture, your population. And it can be different for let’s say your manufacturing floor and your managers. We’re okay with that. When we work on this with employers, we invite them to be creative and consistent, but this is a key factor to everything we’re talking about because your employees deserve to have this information and to be involved in this process as well.
VANNOY:
Yeah, so it’s interesting. I’m just re-looking at the data here. A previous topic, 23% more likely, the fastest growth companies to set expectations, 22% more likely to have a review process. I’ll have to study the underlying cohorts. I bet it’s damn near a one-to-one, right? If you’re setting expectations, you’re also inspecting and communicating. These things are just hand in glove. But even if they’re not hand in glove, it’s not enough to say, okay, day one of the job, here’s the expectations. But if I never review your performance against those expectations, what am I implicitly saying? I’m saying, oh, your performance is fine. I don’t care.
SIMMONS:
Yeah,
VANNOY:
Yeah, maybe. Yeah, go ahead. That’s what the employee probably,
SIMMONS:
Yeah, I mean, listen, I think the formal review process keeps the organization consistent. And I also would argue that that is a tool that the managers need. It’s not fair to say to the managers regularly communicate expectations of job performance to your employees. How do I do that? When do I do that? How often do I do that? I’m going to do it with Mike because I really like Mike, but I’m not going to do it as often with Scott because I know Scott’s going to give me pushback. We need to set those parameters for managers. Again, my compliance hat, we need to be consistent. What’s going to keep you out of trouble? But having formal review process is a tool for your managers to be better managers of people.
VANNOY:
I think that’s really well said. I think you can have a graduate level studies course on constant, regular, daily, multiple times a day feedback that really, really effective managers are always giving feedback. But the reality is to help you get there. And I think by establishing a process for a formal review, you’re creating that opportunity for, maybe it’s the new manager who hasn’t had the difficult conversations before, but now the employee’s like, okay, I have a great relationship with my boss. I know that they’re new. Okay, this is the time. They kind of have to lay it on me. And it might not make the bad news or the critical feedback, easier to hear, I should say, easy to hear, but it might make it easier to hear. It’s like, well, this is the time that they’re supposed to, this is our company’s process, this is the formal review process. Certainly our coaching would be to do this regularly over time, and there’s no big surprises in the review process. But having a formal process is what ensures that it actually happens and that employees aren’t shocked.
Yeah. Okay, here’s another one. So speaking of graduate level, I suspect, so we asked to this question, and I would say kind of knowing that a lot of companies, especially smaller businesses, might not know what this is. This is kind of a technique that has come, I would say born in larger enterprises but still growing in popularity, super effective. I love this. And it’s 360 reviews. So it’s not just a review from boss to employee doing a survey from the employee. Do they have any directs? If not, you’re interviewing their peers maybe within the same team. Maybe it’s from somebody from outside a team, maybe it’s includes you as their supervisor, maybe other senior execs and maybe even includes a customer or a vendor. In the process, you’re getting that 360 degree review of that employee and giving them feedback how they’re perceived by all angles of the business. 59% of growing companies conduct 360 interviews. Just 44% of businesses that fail to grow conduct 360 interviews. So 59% versus 44%. This is a little more nuanced thing to pull off. I think there’s probably a lot lower hanging fruit that you engage encounter with most small businesses, but this is certainly a best practice. Say more about 360 reviews, Mary.
SIMMONS:
So they can be very formal. You can engage an organization that all they do is 360 reviews and it’s very formal, and a link is sent to the subordinates of a manager, and that 360 review gets done, but it can be done in a very simple way. So we do employee surveys, so we can create a 360 review for a manager at an organization. And like you said, maybe you have a lot of client facing individuals. Maybe you just send a client satisfaction survey to the clients about your client facing people. You could consider that a 360 review as well. I think the thing that employers need to look at is, look, if you’re really small and you have a manager with one direct report, and that’s the one person getting the 360 review, then the anonymity goes away because the manager’s like, oh, Mike didn’t say nice things about me. Is there going to be retribution? So I’m a big fan, it needs a lot of explanation. It needs to be customized. It’s not for every organization, but it is definitely something that I discuss with the appropriate, let’s say clients, because it can be very, very useful. That’s the way that you’re going to find out that your managers are not performing up to standards, right?
VANNOY:
Yeah. Alright, last one. Maybe
SIMMONS:
The only way
VANNOY:
Last one, Mary, we’ll tackle here is performance improvement plan. So if you come out of corporate America, it’s the dreaded acronym of pip. So the fast growth companies, as it turns out, they’re 23% more likely to document a performance improvement plan for under performing employees. So we talked about in the development section earlier about having employee development plans. So that would be for all employees, right? So under performers, high performers, everybody, what’s your development plan? We’re specifically talking about addressing underperforming employees in. So 23% of the fast growth companies, excuse me, the fast growth companies, 23% more likely to use a formal PIP performance improvement plan. Can you help delineate, I guess a couple things. What are some best practices around performance improvement plans? Pips, but help delineate, if you will. We just got done saying you need a development plan for all employees. And what’s different between the development plan and the performance plan?
SIMMONS:
Oh my gosh, they couldn’t be more different. So the development plan is looking at your employee, seeing the gaps in skills and competencies, and assisting them with a plan to help them achieve and learn those skills, competencies, technical accuracy. So I want to teach you Salesforce, I want to teach you Microsoft Word, whatever it is. So that is helping the employee fill the gaps in skills and competencies. And like you said, that’s for, I would do it consistently and it should be for all of the employees, good performance or bad. Now, a performance improvement plan, I usually use that terminology for a exempt employee or a manager. But I will just for argument’s sake for our discussion today, it’s also a warning notice. So maybe some of our listeners are like, what’s a pip? Never heard of a pip’s, a warning notice. And they are very important.
Let me tell you why. So number one, they’re important for the rest of the organization, not just the person getting the performance improvement plan or the warning. Notice why I’m not going to walk around and say, oh, I just put Scott on a pip, but your employees know. And so it’s important that we are looking at expectations, and when those expectations aren’t met, we tell the employee. And when I train managers, and we do extensive training on this, when I tell managers, look, if the person’s been in late 10 times this month, you need to put it in writing on a warning notice performance improvement plan and sit down and go over it with them. And they’re like, well, they know that they’ve been out. I said, but if you don’t tell them that that’s unacceptable. And they’re like, well, it’s in. They should know that.
Anybody would know that, but obviously they don’t. So you need to put it in writing that they are not meeting the requirements of the job. That’s number two. So everybody wants to know that if I’m killing myself again, I’m just using coming in late or not coming in at all as an example, because it’s real easy. Everybody knows that person’s been in 10 times, not been in 10 times in a month. I’m killing myself to get to work. If nothing happens to that employee, you’re going to lose the good employee. And you might keep the bad employee like, this is great. I didn’t come in 10 times this month and there’s been no repercussions whatsoever. The other thing is to let that person know, not meeting standards of the job. This is what you need to do to meet the standards of the job. And you know what I’m going to say next?
I think for compliance reasons, you have to document when employees are not meeting the standards of the job. Because when my clients come to me and say, terminate Joe, that’s the first thing that I’m going to look at. Do we have documentation that shows that we followed a process that is consistent with what we’ve done with other employees to give warning notices If it’s not in writing, it didn’t happen because that manager’s going to say to me, I told him when he didn’t come in, you really need to come to work. I’m like, it has to be in writing to defend ourselves in a court of law. And oh, by the way, also, just so the expectations are clear to that employee.
VANNOY:
Did I get on
SIMMONS:
My soapbox?
VANNOY:
No, no, no. I was going to double down on it honestly. I mean, there’s no line in, there’s nothing in Title VII of the Civil Rights Act that says you must document a performance plan. I mean, that’s not a thing, but it’s crystal clear what you cannot discriminate based on. And if you don’t document the reasons why you’re threatening to let someone go or you do let them go, and there’s no documentation of them missing performance expectations, you tell me, judge, did I discriminate or not? Because this person says I did. I got nothing to prove that I didn’t. Other than I say I’m a good person. I mean, this is one of those things that it doesn’t feel all that natural. And so managers, it
SIMMONS:
Doesn’t work.
VANNOY:
And it’s hard and it’s confrontational, and it’s also super important. And as much as I probably said it 20 times in the last 10 years, if an employee is surprised to receive a performance plan, that’s the manager’s fault. And you know what? In the last 10 years, it’s happened to me a couple times because I think that I’ve communicated to the employee, I think I can point to this email in that chat thread, and I can look at my extemporaneous notes from this conversation or this meeting. I’m like, clearly they know that I’m not happy and they’re not meeting expectations, and yet they’re still surprised. So the fact that sometimes I think I do a good job of this, and this is what I do for a living. I coach other people on it, and sometimes I still miss it, miss the mark. At the very worst, you are documenting clearly the expectations. And I’d say, I don’t know what the stats are. I don’t know that I even want to explore the stats. A lot of times it doesn’t end up working. And this does become a warming letter that becomes your justification and clear audit trail to give you a good, compliant, safe non-risk way of terminating an employee. But sometimes the employee’s like, oh my God, I had no idea. I really love this company. I want to be here. I’m going to turn it around. Right?
SIMMONS:
I love that. That’s very important. The first thing I ask when I do this training is a warning notice or a PIP paperwork to get an employee terminated. And a lot of the managers will go, yes, and I’ll go, no. Our goal is to retain employees. They’ve got institutional knowledge, we’ve done training, we’ve invested in them. So it’s not just to terminate the person, it’s to help them meet the expectations of their job.
VANNOY:
Yeah. Alright, Mary, that’s time. I love this survey so much. I just want to recap. So do I,
2065 people responded. That’s not how many people asked. That’s how many people responded to this survey Five questions times eight categories in the differences between fast-growing companies and companies who are flat or shrinking. You could take away all the nuance of some industries did better in the pandemic versus others. Some products are great, some people just have more skills. That’s not fair. But when you look at a data set that big, these gaps are so huge. There are clear differences in the way fast growing companies think about their people and their HR processes compared to the people who are shrinking. So today we covered development and performance. The last two topics, which will be our next episode, are going to be on retention and post-employment. So from recruiting to hiring, onboarding, compliance, development and performance today in the last two, how now we are developing our people, we’re managing their performance.
How do we retain them? What are the fastest growing companies do to retain their people? What are the companies who are shrinking, not doing to retain people? And then what are the best practices of post-employment? There’s something people don’t necessarily always think about. It’s like, okay, they’re gone. But when the war for talent has hit Main Street, like it has, your employment brand means an awful lot. And what you’re learning from former employees means a lot. So, Mary, love talking to you. Thanks to everybody else for joining today. Can’t wait to unpack the last topics next show.