Reinforce Culture with Regular Performance Reviews

Understand the Difference Between Productivity and Behavior

Behavior matters.

In fact, many companies prefer to have an employee that lives their core values over one that does not. As a leader, your ultimate goal should be to fill your company with employees who showcase your core values and deliver the productivity their role requires. But when given the choice, more employers would rather have someone who exemplifies those core values and is slightly less productive than someone who over-produces but doesn’t live out your core values.

Why? It is typically much easier to change someone’s productivity than their behavior.

The Importance of Performance Reviews in Practice

In my experience as CEO, and also while coaching my clients, I’ve used a performance evaluation system that weighs behavior and productivity equally. 50% of the performance review should measure productivity, while the other 50% evaluates how that employee demonstrated the Core Values and culture of the company.

My recommendation: Perform these reviews on a quarterly basis.

Like your business, you want your employees to continually evolve and grow. It’s much easier to keep things on track by checking in more frequently than trying to cover six months at a time. By committing to conducting employee performance reviews on a quarterly basis, your feedback becomes more timely and relevant, which can resolve issues before they become much larger and help keep this process top-of-mind for employees.

Zappos: Putting Culture First

A great example of this mindset in action is Zappos, whose hiring process is well documented. As a company, Zappos is driven by culture and core values. They take their culture very seriously. Who they hire is an important process and decision for Zappos – probably more important than the why.

Tony Hsieh is the founder and CEO of Zappos. At a Gazelles Growth Summit, he shared some of the practices and principles around his company’s culture, core values, and hiring practices. Suffice to say, I was very impressed.

First, they interview a candidate for culture fit. They move on to interview for skill fit only after passing that culture test. But Zappos takes it a step further. In order to test a new employee’s commitment, they offer a sizable “departure bonus” after having joined the company. Essentially, that team member is given the opportunity to leave and receive a bonus OR stay and continue working (without the bonus).

Why does Zappos do this? They really want to test to see if the company’s culture and Core Purpose are the real attraction or if people are there primarily (exclusively) for the money.

The question you should ask yourself: How serious is your company about the importance of culture when hiring new leaders?

Theo Epstein & the Chicago Cubs: Character Matters

In 2017, Fortune magazine named Theo Epstein Number One in the magazine’s list of the World’s 50 Greatest Leaders. Who is Theo Epstein, and how did he earn the top spot? Epstein is the President of the Chicago Cubs, and with him at the helm in 2016, the team won its first World Series in 108 years!

Epstein requires his scouts to deeply explore the player’s character during recruitment. In fact, he expects his scouts and recruiters to provide answers to eight questions before the team drafts or trades for any given player:

1. Give three examples of how the player handled adversity on the field.
2. Give three examples of how the player handled adversity off the field.
3. What is the player’s family situation like?
4. How does he treat people when no one’s looking?
5. How does he treat people he doesn’t necessarily have to treat well, perhaps people who have been unfair to him?
6. What do his friends say about him?
7. What do his enemies say about him?
8. What motivates him – is he mostly externally motivated (i.e. money, Twitter followers)?

In that Fortune article, Epstein stated:

“If we can’t find the next technological breakthrough, well, maybe we can be better than anyone else with how we treat our players and how we connect with players and the relationships we develop and how we put them in positions to succeed. Maybe our environment will be the best in the game, maybe our vibe will be the best in the game, maybe our players will be the loosest, and maybe they’ll have the most fun, and maybe they’ll care the most.

When people do things they weren’t even sure they were capable of, I think it comes back to connection. Connection with teammates. Connection with organization. Feeling like they belong in the environment. I think it is human need – the need to feel connected.”

Setting Goals

When setting goals, you should take a tiered approach. Ideally, your goal should be that 100% of the people who report to the CEO live the culture fully and produce what is required of the role. Company-wide, this number should drop slightly to 70%. The remaining 30% of this number is comprised of employees who live the culture fully but need some coaching on productivity.

“What about the people who produce but don’t follow the culture?” you might ask. My response? Do your best to quickly change their behavior. If you can’t, free up their future (and yours) so they can find a company that embraces a different culture that is better suited to them.

Looking for additional insights, or need help developing a performance review system that fits your Core Values and culture? Contact me today for a free consultation.