Principle 4: Use 360-degree feedback.
People love feedback as long as it is fair. How much fun would bowling be if you had to wait until the end of the year to see the pins fall? Performance improvements, and enjoyment, come from immediate feedback, adjusting and trying again.
The primary management role is to provide valid sources of feedback. At McDonald's (Stock Quote: MCD), I asked a good restaurant manager, "How do you reward your people?" He said, "Often, when we have a $1,500 lunch, I buy a pizza and we celebrate."
I then asked a top 10 manager the same question. He said, "When we have a $1,500 lunch, I buy a pizza and we celebrate." Similar, but completely different answers. The first saw his role as judge. As the team Alpha, he judged the worthiness of the effort. The second manager shifted control to the crew. His role was to help the team over the bar. Jump the bar and get a cookie - every time.
When objective feedback is unavailable, use 360-degree feedback. Goldman Sachs (Stock Quote: GS) is well-known for using 360s for appraisals. After asking many people if appraisals improve performance, only two confidently said they do. Both were Goldman Sachs executives. Subjective data from a variety of sources becomes objective.
Appraisals provide an ideal opportunity to improve performance. The trick is to ensure that goals are tightly aligned to current business needs and that employees get continual feedback.
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