Emulating High Performance Companies Comes Down to One Thing

The track record of efforts to improve agency performance does not include many successes.  When the 2010 GPRA Modernization Act was passed, one columnist referred to the new law “as the latest chapter in a history of U.S. federal performance reforms that have largely failed to meet expectations.”  Three years after its passage, the Government Accountability Office published the report, “Executive Branch Should More Fully Implement the GPRA Modernization Act to Address Pressing Governance Challenges.”  GAO concluded “OMB and agencies have made some progress . . . but are missing additional opportunities.”  Continuing performance problems suggest there has not been much progress.

For years government’s focus was on installing management systems and technology—answers that were developed and installed under contract.  Now with “modernization,” new products have been introduced and new positions created that make individuals responsible for leading performance initiatives.  The new answers reflect an intent to emulate the way performance is managed in industry. 

But there are three fundamental differences in industry. First, in industry people are truly accountable for achieving performance goals.  It’s effectively a psychological contract. Second, accountability is always linked to consequences for achieving or failing to achieve goals.  The consequences take the form of financial incentives along with career progress decisions.  Individuals who fail to achieve goals can lose their jobs. And third, those practices are extended to middle managers.  They have annual performance goals, are participants in the management incentive plan, and are held accountable with consequences for achieving goals.  Middle managers are treated as members of the management team, and share accountability for their employer’s success.

At this point there are no new methods or systems for improving performance on the horizon.  The elements of performance management are more or less the same at all companies—those that are successful as well as the failures.  They all rely on performance goals; they all rely on metrics to track performance.  Actually, all companies with reasonable business plans have access in a relatively short period to financing, to technology and to needed resources.

The only sustainable source of competitive advantage is people—the capabilities they bring to their jobs and their emotional commitment to the success of their employer.  Research has confirmed that in a new work management paradigm (discussed in hundreds of books) people are capable of performing at significantly higher levels.  Research has also confirmed that the way people are managed is important to their emotional commitment and work effort.  That’s the reason for the focus on employee engagement. 

Significantly, it’s not the management systems or technology that explain high performance companies.  It’s the way people are managed.  Research has identified the behaviors of executives and managers that are common across those companies.  And those behaviors explain the difference in the emotional commitment of employees, all at virtually no cost.  Focus groups can readily confirm where management practices adversely affect performance.

Building a High Performance Workplace

Research tells us that if leaders and managers embraced the behaviors and practices that follow, it would contribute to a positive work environment and higher performance at virtually no cost.

Leaders need to:

• Communicate a clear mission, vision and goals for the organization, and confidence in its direction and ability to overcome challenges.
• Practice open book management and communicate periodically progress toward goal achievement along with problems that need to be addressed.
• Serve as role models of honesty and ethical behavior.
• Support, encourage and guide the development of next generation leaders and managers.
• Encourage employee empowerment by recognizing their value and work group achievements.
• Build the reputation and brand of the organization as a great place to work.

Supervisors and managers need to:

• Define a clear vision of what the work group needs to accomplish.
• Make certain their people know what they are expected to accomplish in specific terms.
• Work with their people to define challenging stretch-goals, provide regular feedback on their progress and hold them accountable for achieving goals.
• Be good listeners and open to staff ideas.
• Provide praise on a regular basis in a way that is satisfying to the individual.
• Be fair, consistent and open in making personnel decisions.
• Identify, encourage development of and reward top performers.
• Provide constructive feedback on developmental strengths and weaknesses.
• Provide advice and mentoring on opportunities for career progress.
• Support their people in meeting family responsibilities.

And that should enable employees to:

• Feel physically and psychologically safe in the workplace. 
• Have a sense of job security so they are comfortable taking risks.
• Feel their work efforts contribute to achieving something important.
• Feel they are valued and that their work efforts will be recognized and rewarded.
• Feel comfortable with and connected to their co-workers.
• Feel they have the support to achieve career goals.
• Be rewarded for team performance.

Howard Risher managed compensation consulting practices for two national firms and has written four books, including Aligning Pay and Results. He has an MBA and Ph.D. from the Wharton School.

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