Insider: Melissa Phillippi on the Evolution of Performance Management

Performance Management Process

Melissa Phillippi, President and Co-founder of Performance Culture Inc. and Daniel Williams Senior Editor at MGMA discuss the evolution of performance management and the impact it is having on workplaces all around the globe.

Key Discussion Points

  • The trillion dollar impact on organizations annually from voluntary turnover.
  • The importance of top-down alignment from leadership to front line workers.
  • Too many direct reports leads managers to become administrators, not coaches.
  • How to avoid larger issues by addressing conflict and expectations along the way through the use of check-ins.
  • The challenges change management presents and ways to overcome the challenges.

Transcript

 

Daniel Williams 0:00
Hello, and welcome to the MGMA insider podcast. I’m Daniel Williams. Today I’m talking with Melissa, Phillippi President and co-founder of Performance Culture. Melissa is here today to talk about performance evaluations in medical practice. Melissa, thanks for joining our podcast today.

 

Melissa Phillippi 0:18
Thank you for letting me be here in this opportunity. I’m excited to share with you a little bit about what we get to do every day helping leaders build better teams for better results.

 

Daniel Williams 0:28
For the purposes of today, I really want to not talk to about the outward focusing patients or clients, but the the internal team, because in a medical practice, there is so much importance placed on the processes, how things are done, but there’s also the coaching and the management side of it. And you recently wrote an article for MGMA that examined how often managers should meet with employees about performance. And I wanted to talk to you about that. Is there a one size fits all answer? Or what is the right mix there on how often that communication should take place?

 

Melissa Phillippi 1:14 

That’s a great question. I’m really happy to talk about that. And I get that question. What everybody should feel good about is that is a very common question across the spectrum across industry sectors, you name it, we’re all trying to figure this out. And it does, it is helpful to kind of discuss this. Let me step back one, one moment, though, when you talked about switching from the external to the internal. And I know, you know, this, but the reason why it’s a good transition is because we know that if we take care of our people, they will take care of the patients, right? And if we’re modeling the way and we’re leading the way when it comes to core values, and you know, proper care, and, you know, just taking care of our people, and letting them feel valued and respected, that they’re going to do the same thing for the patient. If we’re not doing for them, we’re expecting them to do for the patient. And that’s really backward, right? That’s not a recipe for success. So by checking in on a regular basis now, what is that regular basis, we’ll talk about that. We’re starting to, you know, build momentum towards that relationship and these expectations and this accountability structure that is going to impact the patient experience. What is there a one size fits all? No, there’s not everything is actually not even one size fits all for a particular industry, or even the company itself. So for example, in our system, our performance management system, you actually can change the cadence, the frequency throughout the year. So not only might it be different from one manager to another, as far as what are the needs in order for that employee and that manager relationship to be as healthy and as successful as possible? You can also be changing the cadence and the frequency and the setting and the structure throughout the year. Because how much do we know that as behaviors change and life changes and things like that occurring your life, there’s going to be times where you’re gonna need to meet more frequently. And there’s going to be times where maybe you can go a little bit further in between having a more structured process. So there, there’s not a one size fits all answer. And a lot of times, I just want to encourage people to lean on the good sense that you have, when it comes to relationships, if we expect to have an authentic, healthy relationship with our spouses or loved ones, our family members, and only really sit down once a year or even a couple of times a year and have an authentic relationship, that that’s really asinine, right? We’re not going to have a healthy relationship. I don’t know why we think that that same human interaction is going to somehow work on that lack of frequency. And within managers and employees, people don’t care how much you know, until you know how much you care. Right. So I had to have a way to build up that relational collateral with my employee, if we’re only sitting down and being intentional about that person’s success, where their meeting goes, where they’re where they may be getting off track a little bit and what kind of help they might need, what their morale kind of level is, if I’m only doing that a few times a year, then that’s really not enough. So even though there’s not a one size fits all, I did an article submit some rules of thumb. And that is at least monthly, if at all possible for a manager and employee relationship. So and this is not to replace the informal when you’re checking in in the office saying hello. In the I’m in the south, we say how’s your mama, you know, so, you know, those things are good that that builds that relational, relational collateral. But the purpose of a check-in is to take a pause. And actually, let’s talk a little more intentionally about your professional development, and what you’re needing to be successful. And frankly, how are you feeling? And are you getting that personal vision met so that you still feel engaged and inspired by the mission and the leaders of the organization? So once a month is really what I’d recommend on a frequency, but it could be more frequent if there’s if the circumstances demand it, and it could maybe go a month and a half to two months. I really don’t encourage anything past two months of doing this check-in process.

 

Daniel Williams 5:10
And that prompts what I want to talk to you about now. I started my career in the late 80s, early 90s. This was at a time when there were a mid-year and a year-end performance review. I mean that was yet and I’m just curious, what prompted this shift in philosophy between, you know, the communication between managers and employees? Is there? Was there research that was done? What prompted it to get things kind of moved in a different direction?

 

Melissa Phillippi 5:43
You know, I would love to spend the time to pull all the resources together that kind of outline the historical changes that we’re going through during that time frame. You know, here’s what I know is that there has been a shift in the type of work and the type of economy, the economy we have now versus then the what technology has done for our workplaces. Health care to very much impacted by this has really shifted not only the type of worker but the type of work we do. Right. So I think some of those managerial techniques. So if a mid or year-end performance review that kind of I think I would, you know, I can’t back this up without going back and looking at some of my textbooks on this. But I’m pretty sure some of those philosophies come all the way from the Industrial Revolution. And remember, management and managers were actually created thing. That was not something that kind of existed something that was actually like a philosophy that was created around the Industrial Revolution timeframe if I’m not mistaken. So I think we’ve got some, some shifts and just the type of work that is being done and the economy, which then changes the workplace dynamics. I think also some behavioral science has caught up. And always, I always chuckle I love behavioral science, I love reading all these things and finding out why we do what we do and how our hormones impact things and what it does to us. I really geek out on all of that. But it’s so funny when I read it all. I go, Well, duh, you know, and I know that’s not very professional sounding. But I mean, if you just got a lick of emotional intelligence, and you’ve had, you’ve had any amount of experiences throughout your life with relationships, you see these patterns. So we do have this consistency, and our behavior patterns and what, what brains need, and what different types of personalities need. So I think there’s just been own awakening, for Hey, the way we used to do it just was not successful. Let’s, let’s use some common sense. And we’re talking humans and human behaviors and relationships. A once a year, twice a year thing just doesn’t make any sense.

 

Daniel Williams 7:52
Yeah, no, in your article, you list different types of communication. Some of these I’d heard of before some I hadn’t. One of the ones I knew about, we have those here at MGMA, and other things, pulse check stand-ups, check-ins. Are these just fancy terms? Are these all actually different types of communication?

 

Melissa Phillippi 8:13
Some are different, pretty much what I’m referring to is the fact that everybody calls it something different. Okay. This is where in the article I talked about check-ins being the less structured cousin of a performance review, right? So as such, we do have this kind of wild west approach, everybody’s kind of doing their thing. So going back to the previous question, there has been as this shift in the type of work we’re doing, and people are catching up to the fact that I’ve got to talk with my employee on a more regular basis to maintain that alignment. People are just trying to figure it out. And they’re putting labels to it, right. And different companies are labeling things. And then there’s performance. You know the Human Resources industry are putting names to it, stand-ups, or what it sounds like, there’s a lot of companies that will come around before shift and they do it usually in group settings. So Hey, everybody, Ritz Carlton is famous for this, they call they say shine a light on your mistakes, they’ll actually get together and they still do this. But this is what I remember hearing about. This is what happened before on these shifts. And they go ahead and shine the light, they talk about it actually in a very transparent spectrum. So Daniel messed up, then we’re going to actually call out that Daniel did this thing, but not to beat him down, but to shine that light. And so we can make sure that we don’t have that happen again. Sometimes stand-ups are that transparent. Sometimes it’s just information sharing what I would submit that is not a when I call a check-in and those are that’s the verbiage that we’re using a performance culture. check-ins are one to one private meetings that are happening from employee and manager relate related. So that’s really the only difference and whether you put a pulse check word on it some other semantics choice. Those are really the differences there.

 

Daniel Williams 9:54
Okay. You in your article, you cite a Gallup poll. And, and I that’s important, because as you know, in healthcare, we love to measure things. We love to put statistics to ideas, we can actually have some foundation and some facts behind just merely stating an opinion. And in this Gallup poll, it found that voluntary turnover, people leaving their current jobs, it’s estimated that it costs us businesses, a trillion dollars a year when I read that I had to look over it a couple of times and make sure there wasn’t a typo or something like that. But that number is just staggering to me. And I’m just wondering, can an individual manager turn that around? Or how much of it is dependent upon the manager? And how much is dependent upon the organization itself?

 

Melissa Phillippi 10:49
That’s a brilliant question. Very excited to talk about this. One thing I’ll know, you said, it’s a staggering number, I’ll tell you that the employees on the front lines would not be surprised by that number. I’m not kidding, just go and canvas employees across not just the healthcare, but all types of sectors on the ones all the way towards the bottom of the pyramid, who are on the front lines interacting with the end user, whether that’s the customer, the patient, what have you. And the reason why that is because we’re losing that alignment, we’re losing those good leadership skills from top down. Now, how, why are we losing that. And that’s where we do say that that manager-employee relationship is so critical. Because if we’re not investing, and if we’re at the top leadership level, if we’re not good leaders, you can’t expect to raise up good leaders below you. And if you don’t lead the way, and you don’t hold your leaders below, you accountable to being good leaders, you’re not going to get that engagement all the way down, you’re not going to identify and work on things like creating not only engage but inspired employees, inspired employees don’t leave you, they don’t turn over, you know. So people leave when they do not feel valued, when they do not feel like their personal vision is going to be met. And they don’t have people that are in the game with them that they don’t feel like they’re part of a great team. Right? So you know, we all hear that a lot of times employees will leave managers, not necessarily companies. So can the manager impact this? Absolutely, they probably have the most, the closest and the biggest chance for impacting turnover. With that said, I always talk about organizational design. So one of the things that I struggle with all the time on the call and it just in Astro when I mean my struggle I struggle with this is call with some, you know companies that are looking at evaluating performance culture, is when they tell me that their managers and I’m going to put that in quotes, air quotes, you can’t see it. The managers have a span of control of anywhere from 15,20,31. Just the other day, I had someone that had 60 direct reports. That is absolutely asinine to expect that manager to and I would say that’s not a manager, that’s an administrator at best. So if we’re talking about a turnover problem, and we’ve got an organizational design problem that is going to prevent that manager from being effective at engaging employees and in decreasing turnover, what would that’s like giving the wrong tool to the craftsmen to go do his job? Right? So we do have to how much does the organization impact a lot as well. So really, the organization has to have the right, you know, design, the right processes, then the employees have to have the tools and resources to do their job. But yes, that manager-employee relationship will probably have the biggest impact employees will actually stay longer with the company, if they feel like they’ve got a manager mentor that cares about them and is willing to go to bat for them, they’ll stay longer working in battle, you know, not bad, but like not great situations. And because of that trusted relationship with the manager said that probably has the biggest impact on them.

 

Daniel Williams 13:57
Right? You mentioned the situation where there was a manager with 60 direct hires. I know it can depend, it can shift depending on what the role is. But is there a sweet spot where there can actually be a relationship and communication can be very strong between the manager and employees, the sweet spot of how many people should be reporting to someone?

 

Melissa Phillippi 14:24
Yeah, I would submit there is and I’ll talk about that, of course, everything you know, with that economics background, you know, our favorite phrases? It depends. Yeah, exactly. It does depend on a lot, right. It depends on the actual work being performed and the timeliness of those projects, you know, and so I’m going to put that to the side. So all else being equal, that’s another phrase that we love and economics, but all else being equal, generally about six to no more than seven direct reports for one manager. And I know by the way, everybody that just heard that number that has a they immediately go, how is that possible? This lady’s out of her mind? Stay with me here, let me kind of explain. Okay, six to seven. Think about a pitcher of water, right. And now remember, there are little Dixie cups, I guess they still make all of those. But anyway, so if I have a full pitcher of water, and I, that’s myself that represents me and what I can pour into others, if I am pouring into 60 or less even cut it down to 30. Right, it’s 30 Dixie cups. And I’m trying to pour an equal amount into these 30 Dixie cups, how much are each of those Dixie cups actually going to get? Not a lot, right? And but if instead, I have about six or seven of these Dixie cups, and I got that same amount of that pitcher of water because we have a finite amount of resources in the day and a finite amount of energy. And as myself as a leader. If I now instead pour into those six or seven, how much more are they going to get? Now think about this, if those six or seven have six or seven people below them? And we don’t have to give them a manager title and salary and all that mesh. That’s ridiculous. How about give them a team lead? Hey, I see something and you. And I’d like to pour into you so that you can pour into others do for some what you wish you could do for all right. So those six or seven are pouring into 67 below them. Now what’s really neat is that what those water that water instead of being completely bone dry, which is what people get completely burned out, we talked about that in the MDMA research report, right? The burnout problem, now I’m actually something really interesting is going to happen, my water is going to be replenished, I’m going to be replenished, because I’m going to start to see the fruits of my labor, because I’m going to they’re going to be able to be effective, so much faster, and they’re going to be now effective down the line. And that’s how we can scale these leadership concepts further down the org structure. Right? I love that example. It’s very visual and made me kind of thirsty to say.

 

Daniel Williams 16:52
So let’s actually focus in on that. So let’s get an example. Then we’ve got six or seven employees reporting to someone. They’re not all of the people reporting, though, are not equal. Some of those are veterans, they’ve been there 10 years, some of them are new hires, what are the check-ins look like? Then what do they look like for them, for the new person for that first year or so? And what are the check-ins look like for people who are established and been around for a while?

 

Melissa Phillippi 17:21
another great question. Another one that is always going to have some it depends. wrapper around it again, but just to provide some rule of Psalms, you know, when it comes to new hires that first and we all at least, we’ve all figured out that the first 90 days is really critical for any kind of new higher success rates. So you know, we really submit that actually, a weekly check-in is best for the first say, 60 to 90 days of that employee. Now, again, let me I would really encourage the readers the listeners to go back and look at the article because I really spell out some of these structures so that this does not become a laborious, time-consuming concept. If you guys an idea of your head of an hour-long check-in process. That’s not what I’m talking about. Okay, so please refer to the article for that, for that. But these are meant to be short check-ins. And we’re also proactive in nature. So we’re doing this same Monday, just as an example, I’m checking in with you Monday about the week ahead, so that he or she can be now successful and know what they need to be working on for the week ahead instead of that person, frankly, wasting a lot of time and being internally frustrated, because they’re, they just learned where the bathroom is My goodness. So we need to really help them be successful for the week ahead. And so I’m going to then check in again next Monday, with this individual to make sure they’re getting what they need to be successful so that we’re frankly getting a return on our money faster. And that person feels like they’re going to be successful here. That’s when they’re the most excited about their job. Let’s make sure it’s a great experience for them. After about, you know, say 60 to 90 days, and they’re showing a lot of you know, like they’re getting the hang of things, then we might go in and edit that frequency that cadence to maybe a monthly or twice a month to kind of check in now for the veterans. Again, I’m a really big fan of not really letting too much time more than a month time go in between checking in. But if there is a need if there if you guys are so working closely, that there’s maybe less need to kind of be as intentional with this, maybe quarterly is okay, I’m not going to rule that out and say that’s, that’s against it, it’s just that a lot of times people will err on the side of not being frequent enough. And that usually creates problems. So I would rather be safe than sorry, when it comes to making sure my employee stays engaged and actually is inspired.

 

Daniel Williams 19:36
Right now you’ve talked about the frequency of a check in but what do you actually want to get accomplished there? It seems like an informal get-together, but there’s gotta be some type of objective. Right?

 

Melissa Phillippi 19:53
So another great question. Again, we kind of outline some of this in the article. But I would submit that we offered 300 questions in the article that I think are a good framework, the goal really is to make sure that one that they’re, we’re appreciating them, and we’re coaching them, there’s actually three forms of feedback, coaching, appreciation and evaluation. No wonder we’ve all hated the performance review because that’s the evaluation component, right? I’m providing a score and evaluation, here’s where you are, here’s where you need to be. And if I’ve not done two-thirds of the type of feedback throughout the year coaching and appreciation, then no wonder that stinks. Right? No wonder that’s not a good feeling for either party, because we’ve skipped over two-thirds of the feedback. So a check-ins goal should be to coach the employee for success and goal attainment, behavior, excellence, also to appreciate them make sure that they feel valued, that we are appreciative of the work that they’re giving to us. So three questions is a good takeaway for this audience in order to do those two things, and the first one is, what are your biggest accomplishments since our last check-in? What are you most proud of? Essentially? And a lot of times we think we know the answer so many times, you’re surprised by this, it might be that really awful Excel report that you would have cringed to do. But that was something they kind of stayed up late just to make sure it was just right, just perfect for us. And if we just take it, and sometimes we forget to say thank you, that’s going to really create a wedge between my employee and may because they’re like, I can’t believe she didn’t even stop to say thank you for that. But if I have an opportunity to find out what it is that made them tick, and also that’s going to help me with some career development discussions with them, because it’s something that they’re there may be passionate about, I can appreciate them give them kudos, recognition for it be thinking about maybe where they might be able to transition throughout the company as they grow. And as we grow. So that’s number one. Number two, what are your key priorities for this next cycle? This is a brilliant coaching question. Instead of just telling them what they should work on, let’s find out what they think they should be working on. Writing forces clarity. So when they are answering that question first. And they’re writing it out in our system, we are big fans of writing and journaling, they write these questions out, I will now get to see the inner workings of that employee’s mind. And now know where there might be some hang-ups, some maybe where they’re actually excelling. And I will now be able to better coach and develop that employee because I got them to tell me where they’re, you know, where their brain processes were versus me assuming for that. So I’m going to be able to coach and provide some assistance around that. The last question is, hey, how can I help? And a lot of times, we think as managers that we’re asking this question on a regular basis, but we’re not. So by being very intentional and giving them the opportunity to process and again, just instead of hitting outside of the hallway, hey, Daniel, what’s going on? Do you need any help? Daniel’s gonna be like, Oh, no, no, I’m good. Because he’s not had time to process it. But if he’s going to have time to intentionally write out, Okay, you know what, I could use some help with this particular project, I’m a little stumped on how to handle this. Now, I’m going to have the ability to coach him and also be intentional about helping him he’s gonna feel like he’s got someone in the game with him. And he’s got a true coach, versus someone that’s just like, Oh, yeah, I got an open door policy come anytime. You know, that’s just a completely different approach to that. So those are for us. Those are the goals. And then some three actionable questions that everybody could start implementing today.

 

Daniel Williams 23:13
Sure, that we had talked about earlier that performance evaluations, and the process is very different than it was back in the 90s, where there was very little communication. Is it done now with we solve the riddle of performance evaluations? Or is it continuing to evolve?

 

Melissa Phillippi 23:32
I think it’s continuing to evolve. So I get the honor and the privilege to talk to literally hundreds of companies across all different industries and sectors throughout the United States, Canada, Australia, some European countries, and, and everybody applies a little bit differently, different cultures, different workplace environments, the more manufacturing side of things, it looks very different than the healthcare sector looks very different from the technology professional services sector. I think it’s evolving. One thing that we’re all figuring out, and you right now, the buzzwords are like continuous performance management, basically, like, again, we don’t need to just talk a couple of times a year about your performance and help expect you to telepathically figure it out throughout the year, and get the coaching and the guidance that you need. So we’re figuring out all of us throughout all the industries that we do need to be speaking on a more regular basis, specifically about where are you? What do you need help with? And where can we help you be successful? And where are there areas and maybe some unmet expectations that we need to vet out now, versus letting that you know, really, that awkwardness, build up between the relationship and then get to performance review time, and you have a complete surprise and shock about how I feel as a manager, so that those days are gone, and they should be gone? And if you’re still doing it stuff? So I think we’re getting to is this more continuous model? Mm-hmm.

 

Daniel Williams 24:59
It any final thoughts as a tool, a takeaway, anything you’d like to share with the audience on performance management?

 

Melissa Phillippi 25:06
I mean, Well, clearly, I’m going to be a big fan of the performance culture system as your tool. And you know, I’ll tell you this way, we purposely designed our tool to be very flexible for the different cultures, the different approaches to it. We have some clients, we actually have a hospital that is that over a year, just use the check-ins and did not use those performance reviews yet, because they that’s what they knew was a win if they could get managers and employees talking more regularly and documenting some of this conversation on a frequent basis that that was a win, and that they were absolutely right. So sometimes we try to build Rome in a day. And we really forget that there’s a real thing called change management. So you know, whatever tool you’re going to go with, be thinking about your people where you guys are now versus where you want to go, how you’re going to roll out those changes, look for those change agents, look for those pilot groups, were really big on pilot groups and offer up an easy pricing plan in order to accommodate that is we know that you’re going to figure this stuff out as you go. And what you do now is probably going to look a little bit different than what you’re going to do a year from now or two years from now. Give yourself some grace. be okay with that. And keep just making sure you’re making inroads toward the goal that you want to be at a healthy performance culture.

 

Daniel Williams 26:24
All right. Well, Melissa, thanks so much for sharing those insights today.

 

Melissa Phillippi 26:28
Oh, you’re very welcome. Thank you for this opportunity to serve.

 

Daniel Williams 26:31
Thanks again to Melissa, Phillippi President and co-founder of performance culture. If you’d like to know more about becoming a better manager or leader in your organization. MGMA has an upcoming online seminar, transformational leadership from the front office to the C suite. This event is May 29, and it’s designed to help healthcare professionals embrace change management and strategic vision planning to expand their leadership toolbox. For more information, visit MGMA.com/leadership. Thanks again for being an MGMA Insider. I’m Daniel Williams.

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