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The Case for Performance Reviews

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By March 6, 2015

How Performance Reviews Pay Off

Sometimes, the least productive workers will bounce back the most.

Title: Driven by Social Comparisons: How Feedback about Coworkers’ Effort Influences Individual Productivity (PDF)

Authors: Francesca Gino (Harvard Business School) and Bradley R. Staats (University of North Carolina at Chapel Hill)

This paper examines the impact of performance reviews on productivity, and finds that feedback delivered on a regular basis, whether positive or negative, tends to result in improved performance. On a short-term basis, though, the impact varies, sometimes in ways that are counter-intuitive: Positive reviews, for example, do little to boost productivity, and negative reviews that are somewhat vague and indirect cause performance to fall off, but reviews that are directly negative cause productivity to leap. The research offers guidance to managers concerning the pitfalls and potential benefits in framing their messages in reviews, and suggests there is a need to provide feedback on a frequent basis.

In an ideal scenario, employees would be evaluated through the use of objective standards, but as the researchers point out, in organizational settings this is rarely possible. Instead, the very nature of performance feedback promotes what they call social comparison processes, as employees are informed about their performance relative to that of their co-workers. In this study, employees were not told their exact ranking, or that of their co-workers, but were informed where they stood in relation to either the “bottom 10” or “top 10” in terms of productivity.

The researchers conducted their experiment at APLUS, the consumer finance subsidiary of Shinsei Bank, a medium-sized Japanese bank. The 70 employees in the study performed largely repetitive tasks: They entered information from customer applications into a central data system. Their salary was not linked to their performance, and they had no specific goals to meet, which enabled the researchers to weigh the effects of performance feedback in an incentive-free context.

At the beginning of the monthlong study, the workers were split into three groups. One received negative feedback on a daily basis, a second received positive feedback on a daily basis, and the third, acting as the control group, received no feedback. The groups were randomly chosen without regard to past performance — in fact, none of the workers had ever before received a performance review from the company. Over the course of the month, the researchers analyzed more than 480,000 data-entering transactions performed by the three groups. By tracking the completion times and accuracy of the employees’ efforts, the researchers were able to measure daily changes in productivity for each of the workers.

Employees in the “negative” group were told they fell into the bottom 10 if, in fact, that was the case that day (what the researchers called direct feedback) or that they were not in the bottom 10 (an indirect approach that implied poor performance). In other words, even the best-performing employees in the negative group would get indirect negative feedback and know only that they were not ranked near the bottom. Similarly, employees in the “positive” group were told that they ranked in the top 10 or that they were not in the top 10.

On a day-to-day basis, the researchers found that neither form of positive feedback had much effect on productivity. Bad reviews, however, carried far more significance. When workers first received direct negative feedback, their performance jumped 13.6 percent, on average, the next day. But when employees first received an indirect negative review, they faltered, dropping an average of 17 percent in productivity the following day. ip info . The difference, say the researchers, is that those in the bottom 10 were motivated to improve by the shame they felt, whereas those who were not in the bottom 10 simply felt relief.

In the long term, however, all forms of the performance feedback used in the study helped. The researchers found that both groups receiving feedback boosted their performance over the course of the month in comparison with the control group; the positive group’s productivity was up approximately 20 percent and the negative group’s about 30 percent. So although couching an employee’s performance review in positive terms may not make a difference the next day, it will over time. And whereas giving an employee indirect negative feedback can hurt performance in the short term, over the long term it’s still better than no criticism at all.

The researchers acknowledge that the study’s setting — a Japanese bank — may raise questions about whether the results are widely applicable. Because reputation and saving face are particularly important in Japan, employees there might react more strongly to criticism than workers in other societies. But the authors point out that the feedback was private and did not include specific rankings. In addition, because the company had no history of laying off employees for inadequate performance and offered no bonuses for working harder, the researchers could focus solely on the effects of the feedback itself. These two factors make the findings relevant beyond Japan, the researchers say. The researchers also believe the findings are applicable beyond job settings that are highly routine and quantifiable.

The results show that although regular feedback can improve worker performance over time, the pace of change can vary. Managers shouldn’t expect to see an immediate increase in productivity from their best workers. As for the rest, indirect praise isn’t likely to produce an immediate uptick, and indirect criticism may actually make things worse for a while. Telling underperforming employees that they are in the bottom segment — which, of course, could be defined more broadly than the “bottom 10” — offers the best chance of getting a quick and dramatic improvement.

Bottom Line:
Managers should consistently tell their employees where they stand: Whether presented in positive or negative terms, feedback tends to improve performance over time. In the short term, the biggest improvement may come from workers who are told they are in the bottom rankings.

Publisher: Harvard Business School Working Paper No. 11-078

Get Your Brain More Creative

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By March 6, 2015

Can you make yourself more creative?

According to Shelley Carson, author of the new book Your Creative Brain: Seven Steps to Maximize Imagination, Productivity, and Innovation in Your Life, you can.

In a recent conversation with the Boston Globe, Carson, who has a PhD in psychology from Harvard University and teaches at Harvard Extension School, noted these three things: “In the business world, creativity is now the number-one quality that head hunters are looking for in top-level chief executives. Most of the elite business schools in the country now have courses on creativity, and many Fortune 500 companies have hired creativity consultants.”
It’s possible, she says, for creativity-challenged people to use “biofeedback programs and other types of cognitive behavioral research” to change brain activation patterns to “mimic the brain activation of highly creative people.”
“What we have found in recent years in the neuroscience of creativity is that highly creative people tend to activate certain neural patterns in their brain when they are solving a creative problem or doing creative work,” she told the Globe.
Creativity and control are closely linked, she says. “I subscribe to the cognitive disinhibition theory of creativity,” Carson said. “A lot of people are really afraid to turn down the volume on the executive function part of their brain. They want control over their cognitive awareness and their mental workspace. It’s very difficult for them to relinquish that control and say to the guys back there in research and development, throw at me what you’ve got.”
An interview with Carson posted at her website gives a little more detail about this idea that you can make your brain more open to new material:

What do you think are the greatest challenges for people who want to get more creative?
Everyone has a built-in censoring system in their brains that filters thoughts, images, and memories, and stimuli from the outside world before they reach conscious awareness. Our censoring system keeps us focused on our current goals and on information that prior learning has taught us is “appropriate.” Learning to loosen up this mental filtering system to allow more novel ideas and stimuli into conscious awareness is one of the biggest challenges for people who don’t think of themselves as creative. In Your Creative Brain, I provide a lot of information on how to loosen the censoring system so that ideas can flow more fluently.

Does every brain really have the potential to be creative?
Yes! While it’s true that some brains are naturally more inclined toward creative ideation than others, all brains have a marvelous ability to continually change and develop. Research has shown that people who are naturally highly creative can switch between various brain activation patterns more easily than those who are less naturally creative. However, this is a skill that can be practiced and learned. Although it may not make an Einstein out of everyone, practice and exercise can definitely make any brain more creative.

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Meet The Kings Of Innovation

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By March 6, 2015
Bruce Mau and John Kao
Image: Dave Gillespie (Bruce Mau) and Eva Kolenko (John Kao)

 

Bruce Mao: The Labor of Creativity A renowned designer of everything from carpets to soft drink packaging to planned communities says that creativity comes from going the extra miles.
“Creativity has been made into a mythology. Certain people have it and certain people don’t. The reality is it’s hard work.” That’s the creative wisdom of Bruce Mau, one of the world’s most sought-after designers.
Mau — whose company, Bruce Mau Design, has offices in Toronto and Chicago — has made a career of challenging the sacred priesthood of creativity. He demonstrates how to meld big ideas with practical realities and consumer psychology. He is at the vanguard of a movement to transform design from an insular world of magical seers to a practice that can solve problems from sustainability to poverty.
Mau’s reputation as a savvy creative tactician has led to a very unorthodox client list, from Guatemalan leaders looking to create a brighter future for their people to Arizona State University, whose president is working with him to redesign higher education. Mau’s firm has designed everything from the look of Canada’s largest bookstore, Indigo, to the décor of New Meadowlands Stadium in New Jersey, future home of the New York Jets and Giants.
Belief in the myths, instead of the reality of creating, keeps companies from reaching the pinnacle of inventiveness necessary to stand out in a crowd and grow, Mau says. Chief among the folk tales is the belief that great ideas or product designs spring fully formed from the minds of innovative people. We see the finished result, not the hundreds or thousands of hours that went into spawning, developing, refining, honing, testing, retesting and rethinking. Mau thinks entrepreneurs are too impulsive and don’t spend nearly enough time on the crafting, thinking and vetting.
“They look only at the idea, and the real challenge is looking at the idea in context,” he says. “You have to look at the market as well as the product. You have to get into the heads of customers. The ability to see the context as well as the object–that’s a design method.”
When Mau was hired by architect Frank Gehry to design the signage for the Walt Disney Concert Hall in Los Angeles, he tested 5,000 typographic variants. Running the fonts through animation, he and his team invented a new font from imagery that appeared as one font blended into another.
The creative process is far from inscrutable, Mau says. There’s an actual methodology that can be taught to others. He’s just launched a new business with partner Bisi Williams, the Massive Change Network, to spread design techniques via the web to help solve issues from overpopulation to climate change. He spelled out his keys to the creative process in “The Incomplete Manifesto for Growth,” a 43-point menu of strategies and attitudes (see it at brucemaudesign.com).
The gist? Throw out everything you thought you knew about creativity. A few examples:
Keep moving. Allow failure and migration to be part of your practice.
Ask stupid questions. Assess the answer, not the question.
Capture accidents. The wrong answer sometimes is the right one in search of a different question.
With the complex issues facing entrepreneurs, Mau is adamant about the necessity of teams. And, he contends, the difference between great design and design that misses the mark is empathy–the ability to make the human connection.

John Kao: Think Like a Musician

A leading expert on business innovation has a radical prescription for any company serious about growth: Play harder.
John Kao thinks you need to play on the job. “When people use the word play in a business context, it sounds kind of frivolous, but being playful is very much the source of new ideas,” says Kao, author of Innovation Nation and chairman of the global Institute for Large Scale Innovation.

Kao, a jazz pianist who once played with Frank Zappa and the Mothers of Invention before going on to create executive and MBA programs in innovation at Harvard Business School, says entrepreneurs can learn a lot about the creative process by listening to jazz music.
Creativity requires a skill set that’s polar opposite from results-oriented production mode. Instead of end points, the goal is what Kao calls the jazz musicians’ white space,” the zone of improvisation in which new associations and connections are born in the moment, without regard to where they are going.
“The balancing act is finding the sweet spot, as jazz musicians do, between discipline and structure on the one hand and freedom and inspiration on the other,” says Kao, author of Jamming: The Art and Discipline of Business Creativity. “You need to have freedom from judgment to explore new things. If you laugh at other people’s ideas or go to the feasibility questions of how much is it going to cost and how long is it going to take, you’re never going to get new ideas.”
Motivation research shows that we are more creative when we are driven, not by the external reward or result, but by the enjoyment or challenge of the experience itself. This allows for freewheeling brainstorming without the fear of failure.
Failing is good, Kao says–at least in the idea department. That’s where innovation has always come from, whether it’s in the experiments that lead to discoveries in science or the doodling that leads to new products and services. That kind of environment is hard to find at most offices, though, because few executives have a clue when it comes to the creative process.
“They think creativity is about periodically letting your hair down and coming up with wacky ideas, being bohemian for a day,” Kao says. “It’s about coming up with ideas that have value and execution. There’s a lot of execution in creativity. It’s not just inspiration.”
Creativity isn’t an option anymore, if it ever was. “If you don’t have it, you’re behind the eight ball,” Kao says. “Other companies and countries are striving to be in this race and they may be more creative than you.”

This article originally appeared at Entrepreneur.

Joe Robinson is the author of Don’t Miss Your Life, on the hidden skills of activating life after work