Performance Management

Bringing out the Best in People through Positive Reinforcement

February 5, 2024 By Nagesh Belludi Leave a Comment

Aubrey C. Daniels’s Bringing out the Best in People: How to Apply the Astonishing Power of Positive Reinforcement (2016) stands out as one of the most practical and comprehensive handbooks I’ve encountered on effective management techniques by a behavioral psychologist.

Central to Daniels’s approach is a management system rooted in positive reinforcement, which he argues leads to significant and measurable outcomes in both the short and long term. He contrasts this with traditional methods of punishment and criticism, which he finds to be ineffective and counterproductive. Instead, he advocates for praise and rewards to drive lasting behavioral change and enhance productivity. Drawing on principles from behavioral psychology, the book provides actionable strategies for implementing positive reinforcement effectively, fostering an environment of appreciation and support, and unlocking individuals’ full potential. Now in its third edition, it also offers insights into organizational change and establishing fair performance standards tailored to each person.

Here are some key takeaways from the book:

Incentives Drive Behavior. People don’t do what you tell them; they do what gets them a reward. “Managers must understand why people behave as they do with the same depth that scientists understand gravity” and align desired behavior with organizational objectives. Don’t “find fault or place blame, but analyze why people are behaving as they are, and modify the incentives to promote the behavior you need.”
Value What They Value. Positive reinforcement proves to be the most effective method for motivating individuals. It extends beyond mere monetary rewards or verbal praise; it encompasses anything of value to an employee. For instance, allowing an employee to dedicate some time to working on a favorite feature can serve as a form of reinforcement.
Consistency Shapes Behavior. Positive reinforcement has to be an everyday affair. It is most effective when it occurs immediately, is specific, and happens frequently. (Studies indicate that children with ADD and learning disabilities can maintain focus for extended periods while playing video games that offer 85 positive reinforcements per minute.)
Pure Praise, No Prompts. Positive reinforcement loses its effectiveness when followed by criticism (such as in “but, you need to improve X, Y, Z”) or suggestions for improvement because it dilutes the impact of the praise and can create confusion or mixed signals for the individual receiving feedback. “Do not use the occasion for praise as an opportunity to prompt or instruct.” The popular sandwich feedback technique has many pitfalls.
Regular Talks = Better Performance. Plan, give feedback, and adapt weekly. Hold weekly planning and feedback sessions. Relying solely on monthly reinforcement offers only 12 chances per year to influence someone’s performance. The annual review and bonus process doesn’t give employees the chance to make adjustments when it’s most crucial.
Reward High Performers; Redirect Others. Managers should prioritize recognizing and reinforcing the efforts of high-performing employees rather than solely focusing on addressing issues with underperformers. When dealing with employees who are not performing well, allocate a limited amount of time to address factors such as lack of necessary skills or abilities, inherent personality traits, or deep-seated behavioral patterns. However, if despite considerable effort there is only marginal improvement, it’s best to minimize losses by suggesting that their strengths may be better utilized in a different role. Assist them in finding a position that suits them better.
Continuously Refreshed Goals = Fresh Motivation. After reaching a goal, individuals may lose motivation due to complacency, like students after an “A” grade. To combat this, set new goals, offer feedback, recognition, and incentives, and foster a culture of continuous improvement to sustain motivation and drive progress.
Coercion Kills Motivation. An authoritarian or coercive “do it or else” demand typically only prompts individuals to perform at the minimum level required because it instills fear or compliance rather than genuine motivation. When faced with threats or coercion, people often focus on avoiding punishment rather than striving for excellence. This approach stifles creativity, initiative, and intrinsic motivation, resulting in minimal effort and limited engagement.
Clear Targets, Unstoppable Momentum. To motivate employees, establish a transparent method for measuring achievement. This encourages self-motivation. For instance, a software programmer’s performance could be measured by the number of bugs fixed, with extra recognition for addressing severe issues, or by the volume of documentation produced.

Recommendation: Quickread Aubrey C. Daniels’s Bringing out the Best in People. The book thoroughly reinforces principles and highlights the transformative impact of recognizing and reinforcing desired behaviors, benefiting both individuals and organizations. Enhance your team management by implementing systems and structures that effectively reinforce individuals in alignment with organizational goals.

The Never-Ending Office vs. Remote Work Debate

November 22, 2023 By Nagesh Belludi Leave a Comment

Don’t we love talking about it endlessly! The debate on the balance between office and remote work days continues, with a possible shift from the current two or three office days to four days in the office and one day working from home.

Remote work was vital for business continuity during the pandemic, but it has limitations. In-office work fosters collaboration, innovation, and spontaneous interactions that nurture a unified company culture. It also delineates work-life boundaries, improving well-being, focus, and discipline.

The question of whether more office time boosts productivity lingers. In a cohesive company culture, flexibility in office days is crucial, tailored to the unique needs of employees, culture, and clients. Rather than strict rules, workplaces need to focus on building team chemistry and accommodating diverse work styles, enhancing collaboration and talent optimization for productivity.

Idea for Impact: The office itself doesn’t possess magical productivity powers; it’s the quality of focused, distraction-free time that drives productivity.

Fostering Growth & Development: Embrace Coachable Moments

November 21, 2023 By Nagesh Belludi Leave a Comment

To make coaching a dynamic part of your workplace culture, encourage managers to seamlessly weave coaching and feedback into their daily interactions with employees. This not only saves time by preventing avoidable issues but also propels employee growth.

Coaching opportunities often spring up when there are unexpected twists or triumphant moments. Managers should invest time observing team members in action, whether they’re in the field or on the phone, engaging with customers and prospects. This observation uncovers hidden insights and provides an impartial view. It’s a tricky task for individuals to self-diagnose while deeply immersed in their tasks.

In addition to these impromptu coaching moments, managers can schedule coaching sessions to create a safe space for individuals to explore their thoughts and challenges. This fosters self-awareness, precise self-evaluation, and enhanced problem-solving skills.

To identify coachable moments with staff, managers should consider questions like, “Is this situation urgent?,” “Could it offer valuable learning?,” “Is the individual receptive to this conversation right now?,” and “Am I available for this discussion?”

Moreover, celebrating achievements, no matter their size, provides an exciting opportunity for coaching to strengthen the behaviors that led to success.

Steering the Course: Leadership’s Flight with the Instrument Scan Mental Model

November 6, 2023 By Nagesh Belludi Leave a Comment

Instrument Scan Mental Model: Leaders Must Employ Their Instruments for Guided Insight Embarking on flight training comes with a nifty habit that instructors eagerly instill from the get-go: the art of instrument scanning.

Whispers from your instructor echo in your mind, urging you with the mantra, “Scan, scan, scan!”

Keep a Good Scan of Your Instruments, Never Be Stumped

A vital cautionary command follows closely, “Don’t stare!” You learn to effortlessly let your gaze flit from one instrument to another. The altitude indicator, heading indicator, airspeed indicator, and vertical speed indicator each hold a crucial piece of the intricate airborne puzzle.

There’s a natural instinct to fixate on a single instrument, yet doing so can lead pilots astray. Gazing at the altimeter may cause heading drift, while focusing solely on heading may compromise airspeed control.

Pilots are trained to maintain a cohesive scan of all instruments, constantly cross-checking the streams of data. By doing so, they can swiftly identify any inconsistencies, such as an altitude indicating descent while the altimeter shows level flight.

With instrument scanning, pilots can promptly isolate the problematic instrument or data stream, and if necessary devise alternative plans to obtain the necessary information and ensure the aircraft’s safe and steady flight.

Just as Pilots Use Instruments in the Air, Leaders Scan Their Realm

The concept of an instrument scan mindset serves as a potent analogy for effectively managing critical information within the realm of business. Much like pilots, leaders must engage in ongoing monitoring, analysis, and cross-referencing of pertinent data. To achieve success, it’s imperative to proactively pay attention to emerging trends, maintain a steadfast focus on the larger picture, and cultivate a curious mindset.

It is of utmost importance to avoid fixating on a single metric to the detriment of considering other vital factors that could impact the business. Leaders should routinely revisit their goals, objectives, and key performance indicators (KPIs,) and conduct a thorough analysis of data to discern trends, patterns, and areas of concern, all while embracing a proactive and inquisitive approach. They should be unafraid to pose challenging questions, challenge assumptions, and maintain a comprehensive situational awareness.

Sadly, in the world of business, this mindset is frequently overlooked. Reports are often generated, and actions taken without the rigorous cross-checking or sense-checking of the underlying data. Stakeholders become overly fixated on a single “instrument,” and in doing so, they fail to maintain a broader scan of the business landscape.

It is crucial to refrain from accepting data at face value, as maintaining a vigilant scan and a more extensive situational awareness is of paramount importance. Embrace the wisdom of instrument scanning to chart a course toward success, steering clear of perilous assumptions and acquiring a comprehensive understanding of your business’s performance.

Leaders Must Employ Their ‘Instruments’ for Guided Insight

Within the symbolic framework of leadership, as in flying an aircraft, the concept of instrument scanning encompasses the continual practice of gathering and interpreting information. This process is vital for making well-informed decisions, safeguarding the welfare of the organization or team, and steering a precise path toward the envisioned goals.

Much like how pilots depend on their instruments to navigate their flights safely and on the correct course, effective leadership through instrument scanning is essential. It serves as the linchpin for steering an organization or team toward triumph and preserving their vitality and stability.

Job Crafting: Let Your Employees Shape Their Roles

October 23, 2023 By Nagesh Belludi Leave a Comment

Employees invest a quarter of their lifetime in the realm of work; therefore it becomes a moral imperative to allow some of their waking hours to be a canvas upon which they paint the strokes of purpose and significance.

Isaac Getz, professor at Paris’s ESCP Europe Business School and author of the bestselling book Freedom Inc. (2012,) asserts that granting employees autonomy can tailor their learning and development and unlock the doors to realizing their full potential: “A company is liberated when the majority of employees have complete freedom and responsibility to take any action they themselves—not their boss—see as being best for the company’s vision and purpose.”

Idea for Impact: Encourage job crafting. Within reason, allow employees to take the initiative to actively and intentionally shape the contents of their jobs to better align with their skills, interests, and motivations and make them more purposeful. It’s a key talent retention strategy.

Where Empowerment Fails

September 28, 2023 By Nagesh Belludi Leave a Comment

Empowerment—giving employees greater autonomy—boosts engagement and creativity. It builds job satisfaction and improves retention. However, the success of empowerment initiatives depends on the personality traits of the managers implementing them down in the trenches.

Middle managers who value behaviors like team orientation, collaboration, and respectful interactions are more likely to enable their teams to set their own goals and entrust them to complete tasks in their way. But many managers in hierarchical structures embrace a certain command-and-control reflex that gets triggered in positions of power. Empowerment means transferring power to someone else, something they loathe. The alpha dimension to the personalities of these managers ends up micromanaging and impeding the autonomy of those in their team.

Idea for Impact: Relinquishing control over others and trusting employees not to abuse that responsibility isn’t easy for most managers; it takes someone very self-confident and secure to discharge empowerment.

From the Inside Out: How Empowering Your Employees Builds Customer Loyalty

August 7, 2023 By Nagesh Belludi Leave a Comment

At a time when apathy and distrust are so endemic in many organizations, some companies have nurtured employee loyalty to create customer loyalty flourish. The following case studies will substantiate the cultivation of a positive work environment that prioritizes employee recognition and support invariably results in exceptional customer service.

The Nordstrom Way: Enabling Employees to Have the Freedom and Vision to Become Self-Directing

Nordstrom’s founders created a culture that prioritized a “worshipful relationship” with its luxury department store customers and empowered employees to do everything they could to please them. The Nordstrom Handbook emphasizes outstanding customer service and encourages employees to set high personal and professional goals, expressing confidence in their abilities. The company’s Rule 1 reads: “Use good judgment in all situations. There will be no additional rules. Please feel free to ask your department manager, store manager, or division manager any question at any time.” Nordstrom’s success is a testament to empowering employees and supporting policies prioritizing exceptional customer service.

Flying the Fun Skies at Southwest Airlines: Giving Employees the Freedom to Deliver a Great Brand Experience

Southwest Airlines achieved great success early on due to its committed and motivated workforce. Founder Herb Kelleher recognized the importance of prioritizing employee satisfaction to create a culture of caring for one another and providing excellent customer service. Kelleher famously said, “The business of business is people—yesterday, today, and forever. If the employees aren’t satisfied, they won’t provide the product we need.”

To create a positive work environment, Southwest Airlines encouraged fun among its employees, setting it apart from other airlines that were considered dull and unappealing. Celebrating employees and their families is deeply ingrained in Southwest Airlines’ culture, and it is evident in the prominent display of pictures capturing these special moments throughout their office spaces. This people-centric culture helped the company attract and retain talented workers passionate about their jobs and provide top-notch customer service, which made flying with the airline a fun experience. Despite the potential cost savings, Kelleher remained committed to celebrating employees with parties, banquets, gifts, birthday cards, and outings, citing the value of having the fewest customer complaints in the industry.

Beyond the Call of Duty: Ladies and Gentlemen Serving Ladies and Gentlemen at Ritz-Carlton

The Ritz Carlton is renowned for its exceptional customer service, with the empowerment of employees being a critical factor in their approach. The company’s philosophy of “Ladies and Gentlemen Taking Care of Ladies and Gentlemen” highlights the importance of treating customers and employees with respect and dignity. Regardless of their rank and title, employees can spend up to $2,000 per day per guest without seeking supervisor approval to solve problems and deliver personalized and unforgettable guest experiences. This approach may seem costly, but it empowers employees to use their judgment to create memorable and personal experiences for guests. One of my friends enjoyed staying at a Ritz-Carlton hotel a few months ago, where he ordered a burger and a milkshake. Unfortunately, the hotel did not offer milkshakes, so he settled for a glass of water. However, to his amazement, the waitress surprised him with a milkshake to accompany his burger. She went the extra mile without being prompted by scouring the kitchen for milk, ice cream, and cold milk to create the shake.

Idea for Impact: Empowering Employees is a Strategic Approach That Yields Significant Benefits

Empowering employees goes beyond providing the necessary tools and training; it fosters a culture of trust, autonomy, and ownership.

How you treat your employees directly impacts how they treat your customers. When you prioritize making your staff feel appreciated and supported, they are more likely to provide exceptional customer service. A positive work environment can foster innovation and creativity within your organization while attracting and retaining top talent.

Why Incentives Backfire and How to Make Them Work: Summary of Uri Gneezy’s Mixed Signals

June 20, 2023 By Nagesh Belludi Leave a Comment

Misguided Motivations: The Folly of Incentives in the Great Hanoi Rat Massacre

In the late 18th century, Governor Paul Doumer of the French colonial government had a vision to modernize Hanoi. His plan included the introduction of toilets, which unfortunately attracted disease-spreading rats. As time passed, the rat population became a growing concern. In a desperate attempt to control the vermin invasion, the government launched a program that rewarded citizens for every rat tail they brought in, hoping to reduce the rat numbers. However, this seemingly brilliant solution turned into a catastrophic event.

Unbeknownst to the government, the citizens of Hanoi discovered a loophole in the system. Instead of exterminating the rats, they started amputating the rats’ tails without killing them. This allowed the rats to continue to breed more rats with tails, as these would become a future source of income.

The situation quickly descended into utter madness. Driven by insatiable greed, some individuals established rat-breeding farms to maximize their rewards, while others resorted to importing rat tails from distant regions. The unintended consequence of this perverse incentive scheme was a massive explosion in the rat population, exacerbating the very problem it was meant to solve.

This ill-fated event, known as the “Great Hanoi Rat Massacre,” is a notorious example of the dangers of perverse incentives.

The Unintended Consequences of Incentive-driven Actions

In his insightful book, Mixed Signals: How Incentives Really Work (2023,) Uri Gneezy, a distinguished behavioral economist from the University of California-San Diego, masterfully presents compelling examples that highlight the profound disparity between the intended behaviors incentives aim to promote and the unforeseen behaviors they unintentionally trigger. Gneezy’s astute analysis illuminates the perplexing nature of these gaps, offering invaluable insights into the actual workings of incentive systems. Another example of this point is the situation with many doctors operating under Fee for Service (FFS) payment models. In these models, doctors are incentivized to perform additional tests and procedures to increase their own payment. As a result, their focus may shift from promoting overall health to simply recommending more procedures.

To avoid sending confusing messages through incentives, Gneezy emphasizes the importance of carefully considering such initiatives’ potential outcomes and unintended effects. Gneezy strongly advocates for the use of prototype incentive programs.

Consider the case of the Wells Fargo cross-selling scandal, which was caused by aggressive sales practices. To increase the number of accounts held by existing customers, the company decided to motivate bank employees to promote additional services, like credit cards and savings accounts, to customers with checking accounts. However, due to a lack of proper oversight, employees resorted to fraudulent practices by creating over three million unauthorized credit card accounts without customers’ knowledge or consent. These unethical practices harmed customers who ended up with unwanted and unnecessary accounts, violated their trust, and exposed them to fees and penalties. In order to prevent such a scandal, Wells Fargo could have implemented prototype techniques and established an auditing system to verify the legitimacy of accounts randomly.

The Irony of Fines as Deterrents in Action

Gneezy brilliantly dissects the flawed notion that imposing fines is a universal remedy. He highlights how fines, often intended as deterrents, can backfire by diverting people’s focus from deterring behavior to merely avoiding punishment. For instance, when drivers are warned about the perils of texting while driving, they may genuinely reflect on the risks involved and the value of their own lives. However, the introduction of a $500 fine shifts their mindset. Now, their attention shifts from personal safety to the likelihood of encountering law enforcement. If they perceive a lack of police presence, the thought process changes to “No police around, no risk of getting caught—time to text!” In this way, the imposition of fines skews individuals’ attention from contemplating potential hazards to the probability of facing the consequences.

Recommendation: Fast-read Mixed Signals: How Incentives Really Work (2023.) Greezly’s work serves as a resounding reminder that designing an incentive system to encourage desired behavior while minimizing unintended consequences is no easy feat. Greezly’s advice on balancing multiple metrics to avoid the pitfalls of fixating on a single metric at the expense of others and the importance of regularly reviewing and updating the system while keeping a vigilant eye on unintended consequences is undeniably accurate.

Numbers Games: Summary of The Tyranny of Metrics by Jerry Muller

June 19, 2023 By Nagesh Belludi Leave a Comment

The Tyranny of Metrics (2018) by Jerry Muller, a historian at The Catholic University of America, is a poignant reflection on our society’s obsession with measurement. Muller’s eloquent arguments shed light on the dual nature of metrics—they can be valuable diagnostic tools, yet their misuse as the sole measure of success and tied to rewards poses significant problems. Drawing upon many empirical examples across various fields, Muller skillfully reveals the inherent pitfalls of our reliance on metrics.

Consider the initial allure of measuring and publicly disclosing the success rates of surgeons performing specific procedures. At first glance, this transparency appears beneficial, empowering patients to make informed decisions. However, a disheartening trend emerged once these performance scorecards entered the public domain. Surgeons, fearing a decline in their reported success rates, started avoiding the most complex cases. Shockingly, even cardiac surgeons refused to operate on critically ill patients, jeopardizing lives to protect their perceived success.

Muller further elucidates the case of hospital emergency rooms, where the pursuit of improving the metric for timely patient admission became paramount. In a tragic turn of events, the desire for statistical accolades overshadowed the urgent needs of the suffering. Ambulances formed a distressing queue outside the facility as the metric was manipulated, leaving genuine care and compassion languishing in the background.

In 2009, when Medicare implemented public reporting and penalties for hospitals with higher-than-average 30-day readmission rates, hospitals resorted to manipulating the metric. They cleverly distorted the numbers by categorizing many readmitted patients as outpatient services, concealing them and evading penalties.

Education, too, falls victim to the obsession with metrics. The relentless focus on using metrics to influence teacher retention or determine school closures has given rise to a phenomenon known as “teaching to the test.” Educators find themselves trapped, compelled to prioritize teaching subjects aligned with standardized exams, such as math and English while neglecting crucial skills like critical reading or crafting extended essays. Pursuing metric-driven success inadvertently sacrifices holistic education on the altar of narrow measurement.

During the Vietnam War, the US Defense Secretary introduced the “body count” metric. This idea, advocated by US Defense Secretary Robert McNamara, suggested that a higher number of enemy casualties indicated greater success and brought the US closer to victory. However, an unintended consequence emerged when the body count became an informal measure for ranking military units and determining promotions. In this dangerous pursuit of numbers, the metric lost touch with reality, often inflated to fulfill the desire for perceived success. Counting bodies became a precarious military objective in and of itself, overshadowing the true essence of the conflict.

Muller’s perspective does not advocate completely disregarding metrics as a management tool. Instead, he emphasizes the importance of utilizing meaningful and comprehensive metrics that contribute to informed decision-making. He distinguishes between measurable aspects and measurements that hold true significance.

To achieve this, Muller discourages starting with the metric itself. Instead of asking, “What metrics should we use?” he suggests a more practical approach: “What are we trying to accomplish?” This approach involves establishing goals and metrics that evaluate achieving desired outcomes and customer satisfaction (effectiveness) while efficiently utilizing available resources.

In a compelling concluding chapter, Muller encapsulates his central thesis with a resounding declaration: “Measurement is not an alternative to judgment; measurement demands judgment.” This statement emphasizes the need to make informed decisions regarding whether to measure, what to measure, how to interpret the significance of measurements, whether to assign rewards or penalties based on results and who should have access to the measurements.

Recommendation: Skim Tyranny of Metrics. This tome serves as an authoritative guide for comprehending the profound influence of numerical indicators on the very foundation of modern society. It should be considered essential reading for anyone seeking to understand why organizations often operate below their full potential.

Treat Employees Like Volunteers

April 20, 2023 By Nagesh Belludi Leave a Comment

Treat your employees as volunteers—as if they’re free to leave at any time. Volunteers want to connect to a mission. They want to make an impact by investing their time and energy because they want to, not because they need to. Moreover, unlike employees, volunteers aren’t constrained by the command-and-control structure.

You’ll pay greater attention to the non-monetary needs of your employees, and you’ll better align your goals and their goals. You’ll be more intentional, preferring transformational motivation, not transactional motivation.

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Performance Management

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Keep a Good Scan of Your Instruments, Never Be Stumped

Just as Pilots Use Instruments in the Air, Leaders Scan Their Realm

Leaders Must Employ Their ‘Instruments’ for Guided Insight

Wondering what to read next?

Wondering what to read next?

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The Nordstrom Way: Enabling Employees to Have the Freedom and Vision to Become Self-Directing

Flying the Fun Skies at Southwest Airlines: Giving Employees the Freedom to Deliver a Great Brand Experience

Beyond the Call of Duty: Ladies and Gentlemen Serving Ladies and Gentlemen at Ritz-Carlton

Idea for Impact: Empowering Employees is a Strategic Approach That Yields Significant Benefits

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Misguided Motivations: The Folly of Incentives in the Great Hanoi Rat Massacre

The Unintended Consequences of Incentive-driven Actions

The Irony of Fines as Deterrents in Action

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