Sarah Katherine Schmidt – Revolutionizing Performance Management for Today's Workforce
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Welcome to the HR Data Labs podcast, your direct source for the latest trends from experts inside and outside the world of human resources.

Listen as we explore the impact that compensation strategy, data, and people analytics can have on your organization. This podcast is sponsored by Salary.com, your source for data, technology, and consulting for compensation and beyond. Now, here are your hosts, David Teretsky and Dwight Brown. Hello and welcome to the HR Data Labs podcast. I'm your host, David Teretsky, alongside my friend, best friend...

From salary.com, Dwight Brown. Dwight Brown, how are you? David Teresky, I am good. How are you doing? You're just getting over the vid. I am. I was the grand prize winner in the COVID raffle this past week. There were a lot of those people. Not a raffle I wanted to win. No, no, but it is like lotto. You just don't know when you're going to win it. Yeah.

Well, today we have with us a very special guest. She has two first names, Sarah Catherine Schmidt. Hey, Sarah Catherine, how are you? Hey, David, I'm well. I'm so thankful to be on the podcast today. So excited for a great discussion. We are excited as well. But before we get started, tell everybody a little bit about yourself.

Sure. So I have been in HR and people operations leadership roles for the last 16 years, and I have done everything for startups and consultancies from recruitment to benefits to compensation to learning and development, all of the things.

that an HR professional can do, including the difficult conversations. So I have taken all of that experience and I have come to PeopleLogic, which has an AI enhanced performance management system. And I get to coach and guide our customers. And I'm really excited about what I get to do day to day and leveraging my experience and also helping them transform their technologies. Outstanding. Well, we're going to dive into that today with our topic. But before we do...

What's one fun thing that no one knows about Sarah Catherine? Hmm.

So when I retire, I want to open up a hot yoga studio in Nepal, specifically Kathmandu. I visited in 2006 and it's gorgeous. It is my happy place and I can't wait to go back. Ideally, I retire when I'm like 50. So I just turned 41 a couple of weeks ago. So I only have nine years to make my millions and get out of Dodge into Kathmandu. But I want to open a hot studio. So you have a vision board. Yeah.

It's on the vision board. It's on the vision board. And the song, Ka-ka-ka-ka-ka-catman do is on it. Yes. Among many other songs, including some Taylor Swift. I got it. Oh, really? You're a Swifty. I am a huge Swifty. I saw her in October. Yeah. Saw her in October. I was fourth row and it was just the most amazing experience for me.

Hard to beat that experience. Yeah. Two things we now know about Sarah Catherine. First, she's a Swifty. And second of all, she likes sweating with a bunch of other people as well. I do. It's therapeutic. As weird as that sounds. I'm sure. I'm sure. I've been told that hot yoga is a phenomenal experience.

It is. It's truly centering. I found it after I got divorced because I needed to come back to myself. And so I rediscovered myself through hot yoga and it has been a grounding force for me ever since.

Well, we've all been there. I've been there twice. So not the hot yoga, but the other thing. So yes, it is definitely a grounding experience as well. So Sarah Catherine, why don't we get started? Yeah, let's do it. So our topic for today is one that's near and dear to all of our hearts. Everyone loves performance management.

No, I'm sorry. I was just kidding. Not everybody. But today we're going to be talking about agile performance management, and we're going to be talking about transforming the way we measure success. ♪

So, Sarah Catherine, our first question is, what prompted you to champion a more agile approach to performance reviews? And by the way, what also does it mean to have an agile approach? What does it... We will get there. So, I mentioned, you know, my career in HR and people operations for the last 15 years. And, you know, I have been guilty of leading a number of traditional performance management processes. And it's just...

it became super painful and cumbersome. And I saw the engagement of our employees and our managers in particular decrease significantly. And so I discovered Agile Performance Management. I pushed a proverbial rock up a hill

At my last company, trying to initiate small changes in performance management and moving away from annual reviews. But there had to be a better way. And that's why I came to PeopleLogic, because we were able to develop the 12 principles of agile performance management. And so agile performance management is this future-oriented, process-driven approach that focuses on

Frequent feedback, measurement, continuous skill development, and it's designed to adapt to internal and external changes. And I think that's where traditional performance management has become so rigid and it's become bureaucratic and the dynamic workplace is asking for something more. And so we developed the 12 principles as a blueprint for organizations that are seeking to become more

Before we get into the agile performance management, what's wrong with performance management? Why does it need to change? And you mentioned that you had a lot of disengagement. What drove that? Hmm.

What drove that were these cumbersome, time-consuming processes. And I think when we think about annual performance reviews, there's so much wrapped up in those. There's so much emotion wrapped up in looking back at six months, looking back at 12 months, what we've accomplished, and being able to regurgitate that in a very long form. And then for managers to do the same thing, and it introduces this significant element of bias that...

Ultimately, continuous performance feedback is very real-time and very much grounded in data and fact. And when we look at annual performance reviews, the system was created, gosh, back in the 1900s when the Army needed to assess performance for...

cadets and individuals who were enlisting or enlisted. And we've come a long way since then. So we need to shake some things up a little bit. Well, one would argue we have and we haven't, right? Because our culture still hates feedback, whether it's real-time feedback, whether it's yesterday, whether it's today. We all think that we're doing the best job we can, even though we're obviously not. Right.

And, you know, you talked a little bit about the managers remembering what you did for last year. You know, we have so much recency bias in our minds that, you know, if you if you knocked over the the the fish tank yesterday and it spilled all over the floor and it disrupted lunch service, you know, not only might you be fired, but you know, that's obviously something no matter how stellar you were for the rest of the year, that's going to overtake anything, any good you might have done.

Absolutely. I think that's where delivering feedback in real time comes with a level of curiosity and empathy. You know, what else happened when you were perhaps, you know, when the fish tank was in a precarious position? What else was going on that day? How are you doing? Is something off? So there's a level of

Of that curiosity and growth mindedness that comes along with real time feedback that I think is so essential. And we have come to fear feedback because we don't know how to give feedback and we don't know how to give it action. Yeah, we suck at it. Yeah. Well, and when you bring in that, for lack of better term, historical perspective, when you're when you're doing it far after the fact, right.

There's always, everybody's always worried about getting blindsided in the feedback that they're going to get. So there's sort of this trepidation going into performance management, like, okay, what's this going to look like for me? And, you know, and well, being able to, even being able to look at the constructive feedback, we just don't want to see the bad stuff in ourselves. And so...

It can feel like a terrible process to a lot of people, I guess is what I'm saying. Absolutely. Does my salary depend on it? Does my future with the organization depend on it? What does this mean in terms of my growth at the company? All of that's wrapped up in huge emotions around the annual review process. And when you create this environment of psychological safety within an organization where you can give constructive feedback,

You can give affirmative feedback in a continuous manner. You build a relationship where that constructive feedback isn't as alarming and elevated in terms of your emotions because you've built a relationship and you've built safety. Unfortunately, though.

Things happen. Things change. Like we just saw with Facebook where Mark Zucker took a left, sorry, took a right-hand turn and said, oh, we're going to get let go all the people who are underperforming. And a lot of those people were not documented to be underperforming. So, so there's, there's gotta be that psychological safety built into not just your process, but into your promise, right?

into your brand promise, into your employment promise that we're not going to mess you about. And even if you're having a bad period, you know, while yes, we do make hiring and firing decisions based on performance management and promotion decisions, you know, there's a safe space here and we're going to give you a lot of time prior to a, an event, uh,

to rectify your performance before we let you go. That is not translating in the arena of public opinion right now. It's not. Those honest conversations are just harder for managers to have. They immediately leap to, I need to put this person on a performance improvement plan because...

Because our minds automatically go to the negative and they go to a place where this isn't working. I need to take some big action versus leaning into empathy, leaning into curiosity and having some of those conversations that can ultimately excite.

accelerate performance for an individual because you believe in them or they sense that you believe in them. When you don't just write them off, they will come back to you and they will come back to the fold and ideally perform better.

Ideally. Ideally. Yeah. That's not always the case, right? It is definitely not. Let's not live in a rose-colored glasses situation. But that's why I say that if you look at what's happening today, either the federal government or to many large organizations that have taken a turn, they are shedding those low performers who there might have been that contract with them or at least that promise that we're going to work with you.

And now people are looking at them and going, hmm, you lied. Or how could I trust you? And even organizations that aren't those organizations are now going to have to suffer because employees are not going to trust that a low rating is not going to lead to success.

an exit from the company. Absolutely. Well, it's interesting because when you look at the, you look at the Jack Welch approach where on an annual basis, what was it? 10% of his workforce got cut every year. Yep. Yep. And it, it turns the performance management process into a pretty cutthroat process too. Yeah.

making people do stuff they probably wouldn't otherwise do. Is it the wrong approach? Not necessarily. You know, you want to keep your high performers, but...

To the point that you brought up, David, there is more of that contract that needs to be there to really have that effective performance management process work. Probably sits somewhere in between, you know? Probably. Like what you hear so far? Make sure you never miss a show by clicking subscribe. This podcast is made possible by Salary.com. Now back to the show.

And let's try and transition to find out what's the difference between traditional performance management and agile performance management. How can agile performance management help improve engagement and retention? Yeah, so, you know, talking about continuous feedback loops and, you know, success and agile performance management really comes from

creating the supportive environment that we've talked about already where feedback is seen as a tool for growth rather than criticism. And key engagement drivers in agile systems,

This is grounded in the agile performance approach for software teams, right? Immediate recognition for contributions and achievements, things like regular opportunities to discuss your career opportunities or your career growth and goals. And then...

What we've talked about as well is transparent communication. That's agile performance management at its best is this collaborative approach to setting and tracking performance objectives. And it's not just a point in time. It's an ongoing conversation that has feedback frequency. It's goal setting. It has employee involvement.

And flexibility based on where the organization is going, where the individual is going, and melding those two together to bring out the best. But it's not like an agile development environment where you're having stand-ups and people say, so what did you accomplish yesterday? No.

Everybody shares that stuff. It's more manager-employee, right? It is. It's more manager-employee and building that one-on-one relationship because individualized management is what a lot of individuals in the workforce are looking at today or looking for today. We have

four, maybe five generations in the workforce now and their needs for feedback are all very different. Their desire for an annual performance review versus something that is more continuous is very different. So,

It's really getting away from that point in time feed or from the point in time annual review to something that is ongoing. And no, it's not daily standups. It can be. But it's more of those regular weekly check-ins and talking about growth and leaning into being curious again about what's going on with the individual themselves and what's going on with their goals and their development. Yeah.

I was part of an organization prior to coming to salary.com that had a technology that enabled continuous feedback and continuous conversations between managers and employees. And I will tell you, it was good in one way because you kind of knew where you were. The problem is, is that it got kind of onerous that every week,

managers and employees were required to have a check-in. And a lot of times that check-in was via technology. It was not face-to-face. It was not even Zoom. It was, you did it through the software and you gave a thumbs up, thumbs down, or hand to the side or whatever to kind of say, I'm feeling supported. I'm not feeling supported, blah, blah, blah. And it became kind of rote after a while. How do you keep that

going so that engagement's still there and that it doesn't become just another process I have to do every week. So I look at weekly one-on-ones specifically as they can be routine or they can be ritual.

And my routine in the morning is to get up, make coffee. I can't speak full sentences without my coffee. But in the afternoon, I fix tea. And that's my ritual because I sit down, I reflect on my day, and I savor that cup of tea more so than I need the caffeine in my veins. And so you can look at weekly one-on-ones in the same way.

Is it something that I have to do? Is it a checkbox that I need to just check off? Or is it a valuable moment or moments of my time?

where I'm connecting one-on-one with someone that trusts me, that is loyal to me, that is really engaged in the organization. How do I make sure that this person continues in that thread of engagement and looking at it as a ritual and that sacred time, so to speak, versus that thing that just has to get done? How do you get both the manager and the employee to that point? Hmm.

That's a great question. It's a mindset shift, right? It's a mindset shift that has to happen at the top of the organization in terms of here's the path for growth and connecting and finding psychological safety and building relationships. It has to come from support from the top and then be filtered down to the managers and the individual contributors and creating that time and being able to

to save that time, right? Nothing should come over the top of one of your one-on-ones. And so that needs to be made very clear. And I find that, you know, once you establish that first one-on-one with an individual, when they join the company or when you're their new manager, right?

That sets the stage for making it more of a ritual than a routine because you're talking about things that are both engaging to you and engaging to them and you're starting to build that rapport in your relationship. And so then you want to come back and you want to do that again and you want to keep building on it. But you've got to set the framework at the top that it's really important and it's an essential piece.

Unless you hate your boss, in which case then it becomes a chore and you say to yourself, oh my gosh, I have to spend time with them again.

But is there a silver lining in that space? Is there a silver lining? Yes. When you hang up, that's when this over lining happens. Is there a silver lining? And sometimes that is, that is a no. But that's, that's the reason why though people get disengaged is that these intimate moments with a person that they don't respect, don't like whatever are forced on them. And, um,

Yeah, I'm coming back around. Don't worry, Sarah Catherine. No, I was just going to say, dare I say this manager doesn't need to be a manager. Well, yeah, but I mean, that's an easy answer, right? You know, either the relationship's not good, you have to change the players in it, the manager, you know, should go or the employee should get reassigned or something like that. Yeah, sure. But when does that come up? Does that come up through these conversations or does that happen at different conversations? Yeah.

If you're an agile, you're constantly trying to improve things by knowing that it's not working. Right. Absolutely. I think it can come up in these conversations, but you have to look at other data points around this. So you need to look at your engagement surveys. You need to look at your performance review process. You need to look.

at some of those other KPIs around goal attainment and skills improvement, right? If the individual is not thriving or if the manager is not thriving, it's going to be reflected in the data somewhere. And this is where organizations don't look at that data often enough or they don't know what to make of that data. So yes, you're

You can know day in, day out that something's not working, but you've got to pull the threads across all of those other points of influence to that decision and not just rely on your gut. Well, this is the HR Data Labs. We love measuring things. I love data. And we love outcomes, too. So one of the things that we like to look at is, or what we talk about is, having good data that enables you to make better decisions about whatever process we're talking about. Yes, exactly.

And so I imagine when you're talking about engagement scores, you're talking about doing it more thoroughly, more rigorously, more often, rather than that once a year engagement score that, you know...

We all look forward to taking. Everyone looks forward to that 40 question engagement survey. Yes, we do. They have a place. They have a place. But I also think that pulse surveys done right can really...

can really provide information on your managerial effectiveness and how people are growing. And then I like to talk about stay interviews a lot. So stay interviews, you know, are a retention mechanism that should be used by most organizations when they want to connect deeper on,

How an individual wants to grow, how you're leveraging their skills, what projects they're excited about, where you could continue to leverage things that you maybe don't even know that they're capable of. So the qualitative and the quantitative data points are really important in figuring out what that giant puzzle looks like of engagement. Yeah, it is. You know, so much of it comes down to the technology and being able to have that

that data in a, in a constantly feeding way. And, um, you know, I think that there are some systems that have tried to do that, but it's a challenge too, because what do you measure? How do you measure it? And how do you get the, the data there? Um, and how do you help people understand what the, what the meaning of the data is? And, um,

Well, frankly, that's what I love about my role because I spent so many years in that space of what do you measure, how do you measure it, and what do you make of the data in and of itself? And so I now get to talk to customers about that and help them pull those threads on their engagement data, their reviews.

their individual development plans, putting all of those things together, because it's not just one piece of data. It's that across the employee lifecycle, what are you measuring? How are you measuring it? And how are you putting that together to complete this vision or visual of the employee experience at your organization? Yeah.

That's what I love most about my job, because we have a platform that'll do that. But we also talk about the philosophy and the methodology behind some of those things. I imagine that implementing this, and maybe we should wait until the third question for this, but implementation of this seems like it's going to add a lot of administrivia.

to organizations that may not have this as a routine part of what managers do. It may actually have to add a significant chunk of work to managers to actually be managers instead of be player coaches. Hey, are you listening to this and thinking to yourself, man, I wish I could talk to David about this? Well, you're in luck. We have a special offer for listeners of the HR Data Labs podcast.

Yeah.

If you take the 12 principles of agile performance management and you try to implement all of them at the same time, yes, it's going to be overwhelming. But what I tell companies and what I strongly believe is that you start small and you measure the results and you use the learnings to refine your approach. So starting small means using a single department or a team as a test pilot group.

implementing maybe it's 15-minute check-ins each week between managers and team members and creating a simple feedback template. What I want to emphasize here is that

The cultural shifts needed for agile performance management for it to succeed in the process of implementing those small changes is around growth mindset, and it's around psychological safety and trust and transparency. So if those things are there in the organization, then you can start to look at your processes and see where there's friction, and then you can start to make those small changes. They don't have to be overwhelming changes.

HR is already trying to make transformational change happen in multiple areas. So starting small is what I recommend and picking an area that where you think you can get some change champions and you can find some wins and you can gather some data to tell you the path forward. Yeah, to me that the things you just mentioned are not necessarily core competencies of organizations, you know, the trust, the safety, right?

the psychological safety especially, and especially in the environments that we've been dealing with lately, these are probably going to have to be trained quite emphatically actually. And hopefully the company that we're talking about as a target company for this has the culture that could open to this because it does require a mind shift

And not just in work and how you work, but also how that relationship happens between the manager and the employee.

Right. Absolutely. You know, I spent a fair bit of time in learning and development roles, and it was that mindset shift that was the hardest to train managers in. And it, again, became the proverbial rock up a hill. And ultimately, that's where I said there's a better way to do it. And I want to go do it in a way where it's appreciated and where it can be accepted and embraced.

But you're right. It starts with training your managers. It starts with actually training your leadership and making sure that they're all aligned. Because if they're not stacking hands, then none of this will be successful and it will all be forgotten. You'll get that leader who goes, don't worry, you don't have to do this. It's okay. Yeah, there's always the one. I'll talk to HR. We'll exclude your group. You can do the annual review. Don't worry about it.

But then you're not equipping them to articulate the longer-term vision. So you failed on the change management side. Exactly. But that's why you're correct that leaders have to lock hands, that this is required, that we're going to be doing this across the board. And there is no, don't worry, I'll talk to HR about it. That doesn't exist. You've got to be able to show the value of it. Right. Right.

Absolutely. And performance management can't just be an HR process. Like that's, that's well, yeah, when HR calls, I'm looking at the reviews. Yeah. And you haven't turned in your reviews for 2000 people. Yeah. Yep. Right.

I get it. Where's the sense of ownership on that manager though? Like where's the sense of ownership and accountability? To your point, it hadn't become a business process from the goal setting through the goal updates throughout the year, the check-ins through the evaluation. Hey, listen, we've had these conversations throughout the year. You've done a really good job. You've met all your goals. We've talked where you've had challenges. I've tried to break down some of those issues that you've had.

And no blockers anymore. You, you were able to accomplish all your goals. So great job. You gotta, you, you gotta meet expectations. Wait, what? I gotta meet expectations. I satisfied all my goals. Yeah. But you didn't, you weren't exceptional. You just met all your goals. All right.

And that's where the other part gets in. There has to be an alignment on what does performance management mean? What does it affect? How does it impact you? What do I need to do? Set me an example for what is outstanding performance versus what's just enough. And then collaborate across your entire organization and calibrate

Yes. And make sure everybody knows what stellar, outstanding, and exceptional means instead of it being Dwight, you know, he reviews his people, I review mine. Half of mine are exceptional. And he looks and he goes, wait a minute, wait a minute. You missed all your numbers. My group doubled their goals and output.

What are you doing, David? I call that norming on your ratings and your rankings. And so you have to norm with your managers on what those, whether it's inconsistent performer, developing performer, outstanding performer, you want your managers rating and ranking very consistently across the board to reduce bias. Yes, there will still be calibration that needs to happen. There usually always is. But

when you're setting that foundation with your managers and your leaders of this is the example or these are the examples, provide more than one example to your habits. And when you're setting that norming with them, being really clear about

Here are the scenarios. Let's throw out a scenario. Let's throw out an instance. And being able to get a mind share on those things is really important. And how about we have the business lead those discussions and not HR? Yes. So that, by the way, my dad's name is Norm.

So, or was. So how about the norm becomes something that everybody across the business can latch onto because they own it, not HR going, hey, Dwight, hey, David, I think we have a problem with your distribution. What?

That bell curve. Yeah, right, right. Let's look at our distribution. It'll get you every time. It'll get you every time. Yeah, 50% of your team is not exceeds expectations. Yep. Well, what leaders are afraid about there is that they will be held to the same standards, right? And they'll be held accountable for their own performance. And I think that's the hardest thing for managers and leaders to be okay with is that it's,

It's across the board. These are the norms. Here's what you're held accountable to. Yeah. Sarah Catherine, I don't know about you, but a lot of the organizations I lived in and worked in, the leaders never did performance evaluation. So we could never look at them and go, all right, so what were your ratings? Because they didn't exist because they were, I'm too busy. It's not for me. It's for everybody else. Or they get a pass from the CEO. Yeah.

Well, yeah, because the CEO is not doing his evaluation either. She's not doing hers either. So, you know, really? It flows up, Bill, and it flows down now. Yes, it does, Dwight. And it's called plumbing.

Sarah Catherine, it's been really fun having you on the HR Data Labs podcast. This is a conversation we could continue to have for hours. But unfortunately, we respect our listeners and their heads are spinning for all the phenomenal information you fed them today. So thank you so much for being on the podcast. Oh, thank you so much. I hope they're spinning in the right direction and in a positive way. Yes. And in a way that's inspiring. Yeah. Don't let us know in the comments if they didn't like it. And I...

I'm hoping they did. I hope you all enjoyed listening. And David, Dwight, thank you so much. Appreciate the time. Thank you, Sarah Catherine. Thanks for being with us. Yeah. And thank you, Dwight. Thank you. My pleasure. Thank you for listening. Take care and stay safe. That was the HR Data Labs podcast. If you liked the episode, please subscribe. And if you know anyone that might like to hear it, please send it their way.

Thank you for joining us this week and stay tuned for our next episode. Stay safe.