Engage, Retain, and Grow Your People: The ERG Method for Employee Development

Gonna get started in just one minute. Today we are going to be talking about the ERG method for engaging, retaining, and growing your number one asset, and that is, of course, your people. So for those of you out there not as familiar with me, I was raised by a single mother who worked nights. I was what we used to refer to as a latchkey kid. I'm not sure you could quite get away with that today, but I was left home alone in the evenings while my mother went out to wait tables to put food on the table for my sister and I. And that means I was surrounded by a lot of both positive and negative influences. There were a lot of life lessons, life lessons that I did not learn at home. And that were things that I had to learn other places. I didn't necessarily pick them up in school sometimes or from my friends' parents, but there are a lot of things I eventually wound up learning at work, like really critical life lessons. And so some of those things that when I was preparing to do this session, I was thinking about were things like philanthropy. So I didn't pick up anything regarding philanthropy and giving from my home life. We were just scratching by trying to put food on the table once again. Manners and etiquette, this is certainly not something that was a high priority for our family. Professionalism, definitely something that I didn't learn at work, or excuse me, at school or at home. And some basic life principles and things like investment guidance, these are all things I picked up from people I worked with or from organizations I worked for. I even think back to taking etiquette training at one of my first employers and learning which fork goes where and how to use which one first and where my hands should be. And and things that, you know, some people pick up at home and others don't. But it posed me and it got me thinking about what's our role as employers in the lives of our employees? How far does that go? If we say we want our employees to bring their full selves to work, well, we have to understand that employees are humans. And if you want people to succeed, you need to understand that human things will find their way into work. And if we need to, if we want to beat the competition, we need to serve the employees' needs. So if we're going to expect our teammates to spend 1/3 of their time with us, we need to help them reach their full potential as an individual. So why is this important? Well, every year Gallup conducts a poll on employee engagement, and every year the, the numbers are pretty similar. And we've all kind of been touting these statistics for decades now. 30% of employees are actively engaged, which means you've got the other 70% of employees which are not engaged. And once again, this will move around a few points. Points at 28 and 31 and what have you. But the bottom line is we all know that turnover is expensive. So the average cost of turnover we've got at $25,000, where sometimes folks will go as high as twice a first-year salary. Sometimes people will go as low as a few thousand dollars. I think that really just depends on what you're including in that number. But when you think about the ripple effect that turnover causes, the training of that new hire, the people that had to spend their time training them, uh, the hiring of that individual, the the onboarding of that individual, the people around them when somebody leaves, when they onboard, it has an impact that is certainly going to— to me, as I started to count up all those things and all of the people that it impacts and systems that it impacts, I think $25,000 is a number we can all come to agree on when we start to look at pure labor costs of not only that individual, but the people around them and the people training them. Here's the upside. And here's the number that I always want to focus on the most. And that's that our engaged employees outperform our other employees by 200%. So that means that top 30% of employees, those engaged folks are outperforming the bottom 70% by 200%. Man, could you imagine if we could move another 10% of our people up into that 30%? And, you know, you can picture this. If you, if you picture your team and you've got 10 people, or if you've got 100 people and you pick 10 of them and you put them around a table, you know that 3 of them are actively engaged and they're ready for the meeting and they're, they're ready to make things happen. There's a couple more in the middle that aren't very prepared at all and are kind of, you know, talking about the Carolina Hurricanes game from last night. And then you've got a few that are literally scrolling LinkedIn, looking for responses to the jobs that they've been applying to. And so what can we do to move some people out of that middle section into that top section and really start to leverage the talent and expertise we have to bring our organizations forward, but also help those people to be more engaged with their work so that they can live a more fulfilling life, which I think is overlooked oftentimes in this scenario. So once again, my name is Matt Vady, and my quest continues to be how do we move these people from the 70% to the 30%? It's a question I've dedicated my career to, uh, because I know the positive impact that it can make on lives of those people and the people around them. And even the organizations they represent. And that's limitless in a lot of respects. And so if you have any questions on anything that I discussed today, you can reach me on my emails, matt@ergpayroll.com. I'm pretty easy to find if you Google me, last name spelled V-A-A-D-I, not too much else going when you Google Matt Vaadi. Most of what we're going to talk about today is going to be based on the principles of a book I wrote a couple of years ago called Ping Pong Is Not a Strategy: How to Create an Awesome Organizational Culture. In preparation for writing that book, what I did was I took the hundreds of organizations I've consulted with, now thousands of organizations throughout my career, small to midsize companies ranging then all the way up to the Fortune 100. I also interviewed dozens of CEOs and owners of best places to work and started to find the common trends and things that they did that seemed to create the most results. And so I've gone ahead and culled that down into this book. And then in today, we're going to cull it down even more into some of the more finer points of what you can do as an organization. I believe that this nation should commit itself to achieving the goal before this decade is out of landing a man on the moon and returning him safely to Earth. So that was JFK's simple but profound statement about landing a man on the moon, the moonshot. But think about how profound the impact was of that. Think about the resource allocation, the focus, the determination that went into achieving such a simple-sounding goal. Simple, not easy, but something that everybody could wrap their minds around and gave them a clear vision for what the target was. And before we get into all these other little pieces of HR and things that create a great culture and all that, if you don't have a clear vision for your company that your team can articulate simply, then you will lose good people. There's just no way around it. You combine that shared vision with shared values and you've got some real magic. Vision and values are where it all starts. Once you have that vision of values, You need to wash your people in it consistently. So people just don't get it after the first time they hear something at the annual rally, and then they just move on and say, oh, that's great. Like, I get it, the vision and values, and now I'm just going to remember it for the rest of my career here. They need to see it, hear it, live it, eat it, breathe it, see their leaders doing the same, and be constantly awash in the vision and values for it to really take root. We talk about the parable of the sower a lot, where the seeds find the fertile soil when the soil is ready. And so sometimes they're going to fall on that rock, sometimes they're not going to be ready, sometimes it's going to get washed away. But when it hits and grows, I mean, man, what a powerful thing to think about. So we want to constantly keep our folks up to date on our vision and values and understand that we really can't talk about it or embody it too much. So let's talk about the ERG method. Once we've got a vision and values aligned, we're working on these 9 facets of building a great workplace. And this is something where we understand that, you know, I'm not gonna have time to cover all this today, first and foremost. So we're going to target a few of these. But one of the most common things I heard from the small business owners, mid-sized business owners that were on the Best Places to Work was that You've got to get at least a B in each of these 9 things. And the 9 things are hiring, compensation, benefits, policies, culture, process, training, performance, and terminations. And so you can't just get an A in hiring and then have a D in culture. And you can't get an A in compensation, but then not train your people well. You've got to get at least Bs across the board, and those Bs culminate into an A when all put together, kind of a reverse effect of what you might normally get. And so one of the things, if you were to, you know, gun to my head, what is, what are the most impactful elements of this to create the type of place that is going to help us to engage, retain, and grow our people? I've found that organizations that have a really strong hiring process, a well-defined training program, and a well-defined performance management system outperform the other organizations by a lot. And so that's where we're going to spend our time today, our focus on these 3 things and how your organization can improve on them on your existing processes. So let's start with hiring. So in hiring, we've got 3 main stages of the process. We've got the screening of the individuals. That's where we're kind of separating the wheat from the chaff. We've got the selection. Once we've found the individuals, like, we're going to actually pick who the right candidate is from those hundreds of candidates who applied on Indeed to the ones we phone screened down to the ones we're going to bring in in person that we brought through our interview process. Now we select that right person. She says yes, and we've got to onboard her into the organization. And so these are 3 critical components of your experience with an organization if you're that candidate. So if you feel like the organization doesn't care about you, you feel like they've got poor processes, you feel like they're running around with their hair on fire and that you can start to get elements of that culture before you even start your first day. Well, that matters. First opinion matters. And so we've got to— first impressions, excuse me. So we've got to focus on each of these elements. But before we dive into each of these in a little bit more detail, I want to talk about the Bozo explosion. So the Bozo explosion is something that— that's a term that Steve Jobs coined back when he was forced to start hiring some "real managers" back at Apple. So They reached a point where they had a few thousand employees and processes were starting to get a little bit away from them because they had so many creatives and they decided that they needed to start getting some real managers in there. So they hired these career managers. What they found was that oftentimes these career managers weren't quite the A players that they were used to because they've been so used to acquiring top talent on the creative and development and design side. But these folks tended to be a little bit more on the B side, and Bs aren't quite as secure as A players. So what do B players do? Well, they hire C players because they don't want somebody there who's going to take their job or who's going to pose a threat to them. And so the Bs hire the Cs. And then, well, what do the As do? Well, As don't want to work around B and C players, so the As quit. And so they had this little bozo explosion and ultimately had to realize that, hey, look, we don't need career managers. We need A players. So that's what we're going to focus on is how do you get more A players on your team, because that's who you want to engage, retain, and grow. And it's a self-perpetuating cycle. If I have great people, they're helping other people to get better and vice versa. So one of the ways we do that is by getting a clear understanding of what our desired outcomes are for a role. Traditionally, folks have created job descriptions or job postings that contain generic information about a job, which is like a laundry list of the tasks that the individual will complete. So in this sample that I'm gonna share right now, we're looking at a swimmer that we want to join our team. So a job description for a swimmer might be fast, strong swimmer, experienced with all strokes, they're competitive, they're a team player. But we want to start to look at this more from an outcome-based perspective. Outcome-based perspective, we might use a scorecard, which will more clearly define what we want this individual to achieve. And this scorecard is something that I'm going to reference throughout this conversation consistently, because with all of our processes, we want them to be consistent throughout that employee experience. So the same conversation I have with you, from my initial phone screen to my last interview, about what I'm going to do, what the expectations and outcomes are, to 6 months in to 6 years in. And obviously things evolve when you start going that far down the road, but I want that consistency. I don't want to hear one set of outcomes in the phone screen, a different on my second interview, and then show up on my second week and understand that things have changed completely. And that's what happens oftentimes with the job description, or at least it feels that way to the individual because nothing was clearly stated. It was just this very vague list of things that I might do. So going back to our swimmer example, a scorecard might say something like, win 3 or more gold medals in the Olympics, break Olympic records in at least 60% of my races, win and break records when swimming for team events. So very different than the fast, strong swimmer experience with all strokes, right? And your outcomes become very different. So for, to, to achieve those things listed in the job description, my 9-year-old daughter does those things on her swim team. She's a team player. She's experienced in all strokes. Whereas the things that I've listed out in the scorecard, only the greatest swimmer in the world, Michael Phelps, is going to help me to achieve those outcomes. And so I can come up with a very different candidate based on how I define the expectations for the role. And so I challenge you to think about this differently. And so instead of thinking about the old traditional laundry list of tasks that you want somebody to create, start thinking about if you were to fast forward 1 year from the day that person started, what would success look like? What are 3 things you can point to and say, "Hey, if I hire Jason and he has done these 3 things at the end of his first year, that's a smashing success." And now I can start to reverse engineer that and I can suit all the other pieces we're going to talk about, the hiring process, the performance management process, the education and training, everything is helping to achieve that moonshot that are those 3 things that we want to achieve for the individual. So when we focus on outcomes, we're going to start to get a little bit more clarity around each of these elements. And so what I want to do is start to talk about a sample hiring process, but, but first and foremost, share what I consider to be one of my favorite quotes as it relates to hiring, and that's Even a donkey can act like a thoroughbred for 3 interviews. So if you only spend 1 hour with someone or have 2 1-hour interviews with them and check some references, you don't know anything about that person. They've got a resume, they've got some references, you've spent an hour or 2 with them, but boy, a sharp person can fool anybody for a couple of hours if they know how to act right. And I think we've all been guilty of that, whether it's, you know, you've been on 2 dates with someone and then realize that they're a a nut job on the third date or whatever the case may be. You have all been a part of something where you thought one way about a person until you spent a lot more time with them. So I'm going to start the hiring elements here as we look at each stage of the process and say, hey, first and foremost, more than anything else, spend more time with your candidates. If you're somebody who's listening to this or watching this and you have already got a process that has 6 interviews and you're spending, you know, 10 to 12 hours with the candidate, taking them out to dinner, great, keep it up, love it. More often than not, I see the opposite where somebody brings somebody in for one interview and then makes a hiring decision based on one interview, which is absurd in the grand scheme of things. So let's talk about our hiring process. So we've got a 6+ touch process when we do hiring. And once again, if you want to use our process off the shelf, Fantastic. I'm happy to provide you with all the templates. Drop me an email, matt@ergparole.com. It's in the book. It's no secret. And we've certainly not created all of it from scratch ourselves. We've had influences and, and things that we've learned from throughout the years. So we're happy to share that with anybody. But here's the process kind of walkthrough. And then throughout, I want to maintain that, that focus on, hey, we're focused on the scorecard, the desired outcomes for the role, and we're grading individuals at each step of the process to make sure that they're an A. If they're not an A, they don't move from one step to the next. So we start with— before I share the kind of key components, we start with those phone screens. So we've got a template for that 15-minute conversation where we're just trying to learn if we even want to bring this person in for the first interview, which is a skills interview. The skills interview is where we're just trying to determine if they can do the things that this job requires them to do. And so we've got a set of 5 to 7 questions that we're going to ask about each of their last 5 or so positions or all their most recent positions and allow them to, to share their career, like a story, and give us the opportunity to learn what they have and have not done in their career. So if they're great on that, we're going to bring them back in again for a behavioral interview. And during the behavioral interview, this is where we're going to ask more outcome-based questions. So, and then we're going to get a feel for how they behave and how they act during certain circumstances. So we can understand if they're aligned with our core values. And we've got core values questions directly integrated into that process. And that'll look a little bit more like what some of your traditional interviews look like, less so than the skills interview, which is the first in-person interview. From there, we're going to bring them back in, and obviously it's 2021, we're doing a lot of this over Zoom with your remote team as well. And people often ask, how does this change over a remote world? It just doesn't. It just happens over Zoom instead of in person. And, you know, you, you send them an email ahead of time, says the expectation is that your camera is on, you're not going to have any distractions. I mean, I've, I've had these Zoom interviews where somebody's got a child in their lap and they're, you know, it's like, well, I appreciate that you're home and you don't have childcare, but you need to figure something out for the hour that we're going to spend on the phone together because that's obviously not a good time for— if you can't get away for an hour for an interview, not quite sure how you're going to get away for 8 hours worth of work. And so, you know, the team interview is an opportunity for us to share— or, excuse me, for us to get more exposure to the individuals that they're going to work with directly. And so we want them to— we want to get more eyeballs on. We want to get another grade going there. We want to understand what are we missing, the individuals that have been involved in the first couple of interviews that somebody else might pick up on. And that is going to vary based on the role as far as the questions asked during the team interview. We're going to get a little bit more specific to the actual things that occur on a daily basis. Then we're going to move into— so now at this point, we've probably spent, you know, 4 to 6 hours with the individual. And we're starting to get a really good feel for who they are and what they are all about. And then we're going to move into a reference check period. And so one of the cool things is during that skills interview, going back to the first in-person, one of the questions is, you know, tell me the last name, tell me the name of your supervisor at this role and how do you spell that last name? How do you spell the name? And so when we go to check references, if they provide us with a list of references, And the key references that we actually want to talk to are not on that list. And we have, we have their names right there. We go, oh, hey, is it okay if I reach out to Joe from this position you referenced? He was your supervisor there. And so now we don't have to backdoor any reference checks. We don't have to go looking around for anything, but we can actually kind of reconcile that list versus the list they provided, because we know the list they provide is going to be nothing but stellar and could just be their friends or people they know. And so we want to actually fact-check that against the folks that we're pulling together in that skills interview. And finally, the last piece, we want to do assessments. So there's so many different ways to assess people's skills, their, you know, their behavioral aptitude, all of anything and everything can be assessed nowadays. So find the assessments that are most critical, whether it's particular to skills, if it's a software engineer, and you just need to know if they can, they can do these particular, you know, write in language that you want, and they can achieve and solve problems that you need them to. Or if it's just simply a behavioral thing, you're hiring a salesperson, and you want to make make sure that they fit the DiSC profile that you're trying to hire for because you've had, you know, success over time, or your industry has had success over time in that particular profile. If you're a small business particularly, I know that assessments can be a controversial thing. You want to hear me have a good debate about it, check out our podcast, HR Simplified. If you're listening to this right now on HR Simplified, the recording after the fact, go back to the James Hornick interview. We had a really good time talking about assessments. I'm a big believer in them. He thinks they're trash. And so you can hear both sides of that point and make up your mind for yourself. So that's the hiring process right there. And then at that point, you know, we're really making the decision. We are making sure that this person is graded A the whole time through. But the point I always like to make is just going back to that, that first part of like, make sure you know what you're looking for. If you don't have those outcomes defined, then you will go back and forth waffling over each candidate and saying, well, this person might be able to do this and this person might be able to do that. What do you actually need to get done? Because if you aim at nothing, you will hit it every single time. And I watch so many people spend countless hours interviewing and screening and bringing people through only to end up with nobody just because they don't have a clear target on what they actually need out of the role. All right, so let's talk about onboarding. And this is a whole other session, and we've done a lot of things on onboarding. We've got another hour session on that as well. But the one key thing I like to point to is that organizations with strong onboarding processes improve their new hire retention by 82%. 82% retention increase by having a strong formalized onboarding program. You cannot do too much onboarding. If you are an organization and you're listening to this and you're saying, well, our onboarding process is really strong, keep on improving. And if you're somebody that says, well, I don't know what that means, when they come in on the first day, we just have them fill out their paperwork, and then they go in the back and get to work. Well, you've got a lot of work to do because the onboarding experience not only is a great opportunity to capture somebody's heart, mind, and emotions in their first few days, weeks, months on the job, but it's also when we look at that training and education and, you know, backing into those desired outcomes and making sure all these things align. This is where it all comes together, is this time that we spend with folks during the early stages of their employment relationship with us. If you want to really really cool, fun way to, to make that better. Check out our employee onboarding scavenger hunt, or drop me an email and ask for it. That is such a fun way to help you to acclimate a new hire to your organization and also get them trained, get them assimilated, get them up to speed, all while they're having fun and your team is having fun around it. So definitely recommend checking that out. So what are some key points related to hiring? Well, first and foremost, your gut is wrong. The same amount that it's right. More often than anything, when these people I talk to are like, oh yeah, we interviewed them once and hired them, they're making gut-based decisions. And 50% of the time, those gut-based decisions are wrong. So if you like those odds, if you, if you want 50% turnover, or maybe they don't turn over, even worse, they stay with you and they're not in that top 30%, keep hiring based on gut. Because if we are consistent in our process and we consistently apply the same processes across the organization, we get better data and consistency breeds that data. So you can't, you can't make better decisions without having a consistent system and process in place. Uh, cause ultimately if you have no target, you'll hit it every time. So you got to get clear on those outcomes and you've got to be focused on the candidate experience. It's an employee's market right now. And it always will be for the A-players. Like it's not just right now, they're always going to have options. You have to be conscious of the experience from the time they apply until the end of their first year experiences. Everything when we talk about engagement, retention, and growth of our people. So let's move into— that's all we're going to share on hiring for now. Hopefully that was helpful. Let's move into training. So training, I'm going to sound a bit like a broken record here, but we want to be outcome-focused. So what is this training actually designed to help us achieve? How will we measure that improvement? That's a critical thought process to think through when you're putting new training programs in place for your team, designing training programs for your team. What, what key business metric are we trying to improve with this? And how will we measure that? So next up is what are those delivery methods? What assets do we have? You know, if you're a smaller business, man, I can't recommend enough leaning on outside partners. So many people have built training specific to your industry, specific to the skill set you need. You don't have to build it all yourself, but I will say this: you have to have a variety of delivery methods. We have kinesthetic people that are hands-on, people that need to touch things, be a part of it. We have visual people that can see things, learn from that. We have audio learners. If you're not touching all three of those— kinesthetic, visual, and audio learners— you're missing a percentage of your audience. So you've got to have a blended learning approach. And then finally, you've got to be able to measure that. You've got to be able to test and see if the training stuck. So that can be quizzes after the fact, you know, so I love it when I'm able to quiz directly after the training took place, 6 months after the training took place, a year after the training took place and see what actually stuck from that specific training. You know, intervals can vary, but definitely want to see long-term and then we can tweak and take those things that stuck and know, hey, we did a good job with that. Oh, but we really wanted this to stick. So why didn't this stick? And so now we can tweak and improve how we deliver that to match the pieces that, that were working. So lots to be gained. And once again, not overly complicated. It's just an execution thing. So in a study of thousands of millennials, when they were asked what is the most valued benefit when looking for a new employer, I'm shocked to say that the top benefit that they valued the most was training and development. And to me, that's very interesting. It's not surprising after I think about it because millennials particularly are a very motivated generation. I know a lot of folks like to say that entitled generation. I've got hours of rhetoric to discuss around that. It's 100% not the case. They're not entitled. They just expect more. And training and development is a big part of that. They want to be better. They want to get better. And A-players, once again, are the type of people who want to continually improve. So creating and implementing and executing on a great training and development program is not only going to obviously help you in that you're going to have more productive, more valuable teammates, but it's going to make them stay with you longer because they know and they believe that you've positioned them for a better career. And they're going to appreciate that. So what's the point of training? It's interesting how many calls I get when, "Hey Matt, I'm looking to fire Susie." Well, why are you going to fire Susie? "She just doesn't get it." Well, all right. How long has Susie been with you? "She's been here about 2 weeks." Oh Lord, here we go. So has Susie been trained on how to do the job? Has she been properly communicated with? Is it a gap in knowledge? Is it a gap in skills? Is it a communication thing? And so typically what I will find, particularly in the small business space, is that there's a lack of training, a lack a lack of communication, a lack of understanding of what the expectations are. Oftentimes that boils down to a lack of training. So a gap in knowledge, a gap in skill, and a gap in ability can be solved with training. It's such a better investment to develop a better training program than it is to have people turn over. Because I would bet, so if you had any level of agreement with me, even if you said, "Matt, I don't think that my turns cost me $25,000 apiece." Let's say you agree with $5,000. I bet you could roll out a heck of a training program if you took $5,000 and invested it into the training of your people, and prevent one more turn in the process. So definitely a great investment. We've all heard or seen this cliché that's kind of been floating around social media the last few years, CFO asks CEO, "What happens if we invest in developing our people and then they leave us?" CEO says, What happens if we don't and they stay? Oh my goodness, so dramatic, but so true, right? In that, why would you want to not invest in your people? What philosophical reason could you say that, oh, you know what? I'm just perfectly content with employees that perform at the level that they're at with no expectation of increasing said level of performance, and with the full understanding that employees on average are going to stay with me for 3 to 4 years, then leave,. And so I'm just totally fine with them kind of getting through for 3 to 4 years and then moving on. That mindset doesn't resonate with me. If that's your mindset, totally fine. But investment in training programs is one of the single best investments you can make. You know, after all, labor is one of your top expenses. I mean, you need to make an investment in maximizing the potential of that asset. For us as an organization, we track training as one of our key performance indicators. We expect all of our employees to train for at least 1 hour per week, 52 hours per year. Some would say that's a lot. I tend to think it's actually on the low end, and most of our people do more than that. So you think about it, it's less than 2% of their actual working time, and it's the exact opposite of what most high-performing teams do. So let's use the NFL as an example, and I do compare ERG, payroll, and HR to the NFL whenever I possibly can. We are high-performance athletes over here. But it's the exact opposite, right? They spend 90-plus percent of their time training and learning and practicing so that they can play games for 16 hours out of the year. And so we don't have the luxury of flipping the script like that and spending all of our time practicing for the actual game, but we certainly can increase the ratio, right? We can put a little bit more of a focus on that training and understand that it's going to pay dividends. With the individual when they go to execute. So what are some of our key points as it relates to the training and education of our people? First of all, we just need to do a needs assessment. Where are our gaps? Where are we underperforming? What are the key knowledge, skills, and abilities that we're lacking as an organization? And let's, let's design things to fill those gaps. We need to make sure that we're executing with variety and to make sure that we're giving delivery methods that are going to be conscious of our different types of learners. Then we need to measure the results of those programs and make sure that we're investing in something that is actually moving the desired results and outcomes that we expect, and then continue to iterate and improve. As we grow from this and as we learn, we're going to never run out of opportunities to improve. It's an organism. It continues to grow and evolve. And most importantly, I alluded to it earlier, talking about using some off-the-shelf training or, you know, different third parties from your, you know, associations or from industry-specific niches or specific skill sets. Steal, steal, steal, steal, steal, buy, buy, buy, buy, buy. Building is not always the right answer. There's a large percentage of this stuff that you can get from others. And I say steal, I use one of our great partners, Bocknight, Peetra, Stormer, as the example where they are an accounting firm and they have CPEs that their team, anybody that's a CPA is required to complete. I think it's 40 hours a year, but across the board at their organization, organization, everybody owns their own training program, and everybody is responsible for designing how they're going to get those 40 hours per year, and they're held accountable to it. And so not only are they actually getting the training in, they're giving the, the individual teammate some accountability in the process. And they're also allowing them to find the trainings that are most impactful to them and their discipline and their role in the organization, because it's, it's not the same for everybody. So giving your teammates some accountability, also another critical point. And when I go back to the good artists copy and great artists steal. That's something we continually try to steal from great folks like them is how are they doing it, how we can improve. So, all right, so we talked about hiring, we talked about training, let's talk about performance management. I'm gonna start with one of my more controversial takes here. And that's that annual performance reviews are an absolute total waste of time. Feedback in performance evaluation needs to happen at a much higher frequency than annually. Leave alone the fact that you need to help your people more frequently, you also have things that creep into those types of processes like recency bias. If you tell me right now that you're going to sit down with somebody in December and evaluate them on things they did in January, February, March, well, you either took some heck of good notes throughout the year or you have a way better memory than I do. We have monthly performance-related conversations and I can't remember things that happened happen the first 2 weeks of the month. So the first part of what we need to do— and now I'll come back with my asterisk now— and that's that, listen, I understand that you can have an annual performance review as part of a better built-out performance communication process. But oftentimes when I see organizations with annual performance reviews, they don't have quarterly check-ins, they don't have monthly check-ins, they don't have monthly or quarterly assessments, excuse me. So It has to be a part of something bigger, or it's— and then I also see the mistake of, hey, we're going to sit you down once a year, do your performance review, and then you're going to walk out and you're going to get a raise between 2% and 5%. And so if we disagree on anything in here, you've— now we've got a number that we might not agree on either. And the bottom line is this: the modern workplace requires much more frequent communication. We need to increase the velocity of our communication, and this is just just completely escalated by the fact that we're now in a hybrid workforce and a lot more remote employees. We cannot be invisible with our team, we have to have a higher frequency, velocity, and much more consistent performance-related conversations. So after I go through that rant, people typically say, okay, well, if we can't do an annual performance review, Matt, how frequently should we be having these conversations? And I say to them, that's a great question, person who asked me that question. The best frequency, in my opinion, is monthly. And that means that every single month I'm sitting down with somebody for at least 30 minutes to have a conversation that is maybe not necessarily— we're not going to talk about this project that you're currently working on. We're not going to talk about, you know, hey, let's go ahead and get that client served this way. We're going to talk about you. Your development, anything you want. This is your time. And I'm going to ask you some questions to help nurture that conversation along. We call it a monthly plan and review. I've got a checklist of questions that I can search into. You know, one month I might ask, hey, so where do you see yourself in 2 years? And other months I might just be asking some other open-ended questions. But really it's about them and it's about giving them the opportunity to talk about anything they want. And then we dovetail that into quarterly assessments, which are focused on those outcomes and our core values. Where we're actually doing a manager and employee assessment, and we're getting a good feel for how they're measuring up. Because one of the things you'll start to notice when you start implementing a process like this is you're always on the same page. So if I rank somebody on a scale of 1 to 5 against one of our core values, I rank them a 3, they're never ranking themselves a 5 at the same time, because we're, we're on the same page, because our, the frequency and velocity of our conversations are such that we know, if they're not meeting the expectations, they've been told, or they know, because they understand what the expectations are. So that's the one of the greatest benefits of all this is that we're always on the same page with where, where we are. And if we're not, we can start to explain why. So in that example of I grade you a 3, you graded yourself a 5, why do you feel that way? And then I can understand if I'm off in my assessment, or if they're off, and we can have that open and honest communication and feedback. And finally, I think, you know, in conjunction with this, you want to just be having a higher level and frequency of coaching conversations. And this typically boils down to how well prepared are your leaders. So training your leaders on how to deliver feedback and how to have coaching conversations and how to properly execute a performance management process is something that very few organizations do well. And so from your side, what you want to think about is are my leaders trained on what we're doing and how we're doing it? Are they bought in? Do we have their actual buy-in, or are they submarining this thing behind our backs? Which also becomes a performance conversation inside of itself. Are they executing? Are they coming up with excuses? And are they sharing this with their teammates so that their teammates can someday execute on this process? So great leaders grow more leaders. So taking a step back after your quarterly assessment, pulling your team aside and going, hey, Hey, look, whenever you're sitting down and having these conversations with one of your teammates, here are a few things I do to make it so that they're comfortable. Here's why I asked you this, this way. Here's why we had this conversation. So I'm growing leaders in the process while leading my team and empowering them and letting them know that I'm committed to them someday taking my job because I want to elevate as well. And so the leadership team is everything when it comes to the success and execution. Of a performance management process. But let's talk about employee coaching for a few minutes, because this is probably one of the areas I see leaders most woefully underprepared. They just don't clearly understand what coaching is and how to execute it. And if you're watching the video, I've got a slide up here, which I apologize, I tend to rarely have this many words on a slide. But Harvard Business Review defines employee coaching as a style of management primarily characterized by asking employees employees questions in order to help them fulfill their immediate responsibilities more effectively and advance their development as professionals over time. And there is a portion of that that needs to be double-clicked, bolded, highlighted, put on a billboard, and that is asking employees questions. Too often we think of coaching and we think about athletic coaches who are screaming at people, correcting them all the time, telling them how to do things, sharing with them the exact way that everything needs to be done and constantly refining. Coaching in, uh, in the professional world is about asking questions. We know going back to, if we've got a good training program and we're hiring great people, then we know that they've got these answers inside of them. So we just need to ask questions to help them tease those answers out. Because unlike progressive discipline, coaching is not a top-down thing. It's not me screaming at you, trying to get results from you. It's not me giving you the answer every time. I used to have an old leader where every time I left his office, I mean, my brain just hurt. He would ask me tough question after tough question. And that's what you want from your people. You want their brain to hurt a little bit after they leave with you, because that means that they're expanding their mind. And that means that they're learning and they're coming up with their own answers. And it's so much more memorable and so much better when they come up with the answer themselves and they'll remember it much better than rather than when you just tell them the answer. So we have a system called the REACT model for coaching, and REACT stands for recognize expectations, ask better questions, create a feedback loop, and trust. So REACT. And this will help you, and I know it's not super memorable, you're going to want to keep it somewhere close by, but First of all, what you want to do is recognize coaching opportunities. And this is something that many of us just don't do in our day-to-day. So if you're like me, a really easy hack to, to make sure that you're doing this is to schedule 10-minute increments twice a week to grab somebody and coach them up. All right. So you can even pick a few people and come up with ideas for improvement. I mean, this requires a real growth mindset and understanding that my people people are not fixed in where they are. It's that they can grow and that the things that they're doing, they can get better at. But starting by finding the time and creating some frequent short conversations and putting it together with those individuals will certainly help to make them more autonomous, engaged, and productive when you are not with them. Now, that expectations— E— is providing the proper expectations with your teammate from the onset to make sure that the impact of the coaching is understood why this is important and why we're doing it. If you just start pulling somebody aside out of the blue and having all these coaching conversations with them and you haven't been doing it with them for the last 3 years or 3 months, they're going to get a little spooked. So make sure that they know that you're trying to help them grow and that the expectation is that they have goals and you will help them achieve them. Now, A, this is once again, if I'm going to double-click, underline, put a, put I put a highlight on, it's ask better questions. Instead of giving your people the solutions to the problems, which is what we all sort of default to when we see somebody doing something wrong, saying, hey, here's what you did wrong, here's how to do it right. You have to assume that they have the wisdom within them and that you can help them to pull that out. And even if you know the answer, bite your tongue and let them come up to the plate and come up with the answer themselves. I ask people this all the time, like, what's 4 4? 8. What's 5 3? It's 8. Sometimes they've got a way to solve the problem that's not 4 4, but 5 3. And so you might not even know what the right answer is sometimes, even though you're just giving them what you think the right answer is. And then C, we're creating that feedback loop. You know, coaching is going to work best when the employee's got some ownership over their own professional development improvement. It's collaborative, not top-down. You're there to support, guide, encourage, and empower them, not just provide them with solutions. And if you ask open-ended questions on a regular basis, and once again, drop me a note, matt@ergparole.com. I got a list of great open-ended questions. If you want one quick hack, my favorite one to go to is, tell me about. I use this everywhere in my life. I use it with my wife. I use it with my kids. I use it with my teammates. And that's if you start a question with 'tell me about.' You can't elicit a yes or no answer from that. That creates open-endedness by its very nature. So go ahead and steal that and start using it. But finally, the T in the REACT model is trust. Create trust with employees and trust the process. You can't just do it once and forget it. You can't be an active listener when you're working with somebody and make sure that you're also excuse me, be an active listener when you're working with them. If you're going to ask questions and you're going to actually genuinely care about what they say and not just look for an opportunity to beat them over the head with how you think things should be done, then walk the walk. You've got to actually show up and create that trust because it's a lot harder to lose the trust than it is to earn— or excuse me, it's a lot easier to lose the trust than it is to earn it. So make sure that you are establishing that trust and you're being consistent and you're following through on anything that you share with that teammate. Everyone benefits from good coaching. It's a can't-lose model. So continue to invest in yourself and become a better coach. You're gonna have better teammates, you're gonna have better leaders. And, you know, one of the key points as it relates here to the final piece, we talk about performance management, is we want to have those outcomes integrated once again throughout hiring, performance, training, still all focused on what, what's the end goal, what's the moonshot for our individual. So we've got visions for the company, we've got visions for this role, we've got for this role. Speed matters. There is no need for delay of communication in 2021. And communication is king. If there's one thing— every time we do an employee survey with a group, the number one complaint is always communication. It never fails. I have not seen one yet where communication was not the most complained about, or— and it's probably not the right phrasing— but the most mentioned thing in free form that has opportunity for improvement. And your organization is certainly no different. But one— and ours is no different either. But one of the ways that we can help to bifurcate that is to have a higher level of communication as far as how well we execute, do it more frequently, increase the velocity of it, because we understand that this is a benefit for our employee. All of this stuff, the training and development, the performance management, like, this is what great people want. This isn't an inconvenience to them or you. This is what— if this is a Golly, I got to sit through another one of these, then yeah, I don't know, you might start to question what type of individual and how much they want to grow and how much they want to grow in their career, or whether or not you've just missed the mark with your processes. So the great quote of Dr. Jim Goodnight, who's the CEO of SAS out of Raleigh, one of the best places to work in the country year in and year out, is that 95% of my assets drive out that gate every evening. It's my job to maintain a work environment that keeps those people coming back every morning. I end nearly every presentation I do as it relates to trying to create a great culture, trying to create engagement, trying to create retention, trying to grow that number one asset with that quote, because I think it's a mindset thing. You have to stay committed to that mindset and understand what the mission is and who is going to help you to accomplish the mission. So if you're following along online and you're not listening to it on one of the channels that I'm about to reference, and please check out some of our other channels. You can check out HR Simplified anywhere where you listen to podcasts. You can subscribe to our YouTube channel. Make sure you like the videos that you do like, smash that like button. And if you're listening to HR Simplified, please give us 5 stars. It helps us to continue our reach and grow our audience and serve more people. And there are a ton of free resources at ergpayroll.com. To help you with the management of your assets. And you can email me anytime at matt@ergpayroll.com. But thank you so much for sharing a bit of your day with me. I am blessed and encouraged that you would take the time to stay this long to learn about how to better serve your team. Thank you so much. Have a wonderful day.