The Formula One effect on performance management

The Formula One effect on performance management

As I reflect on the Abu Dhabi Grand Prix that took place two days ago, I can’t help but make some parallels between Formula 1 and performance management. Here are a few not-so-random thoughts :

Even the best can face failure. Sebastian Vettel was in pole position on the starting grid. It was his 14th pole position of the season. Just before the race started, the world was his oyster. Yet in the first lap he ran into a serious problem, had a punctured tyre, got off the track and had to abandon the race, not even 1 minute after the start. In your company, it can be the same. Your best players can and will face failure. This is especially true as the riskiest and most complex projects are (or should) often assigned to the best employees. …Which brings me to the second point :

A star is not made (or unmade) in one shot. Performance is evaluated at each race, but also in a cumulative manner throughout the Season. So Vettel had to give up in this race, but he still keeps his World Champion crown. Similarly in your company, when you evaluate performance at the end of your review period, don’t just focus on one element (whether success or failing). Look at the achievements throughout the year and recognise the overall accomplishments of your employees. One setback from a high achiever does not diminish their value-add for the organisation, as these top performers are usually the only ones who can take on risky assignments on behalf of the company. And lessons are learned along the way (hopefully…).

It’s not over till it’s over. At 50 laps, Webber and Button were in positions 3 and 4 respectively. That was less than 10 minutes before the end of the race. Yet in the end, their positions were reversed because Webber had to do a pit stop in the last lap, and Button finished third. In many organisations it is the same. A last minute effort is what will help close that major deal in mid-december. A projet will get finished just in time for closing the quarter. It’s human nature, because most people hate not finishing what they started. That’s why I advocate doing performance evaluations just after the close of the period, not just before the end of the year. Your employees will prefer to receive their financial reward one month later, if they feel that they have been given a fair chance at being evaluated on their full year worth of achievements, not on an anticipation of what their final accomplishments will look like.

Everybody understands peer ranking. Formula 1 is a sport where only the best of the best ever participate. Just to be on the starting grid is a major achievement, as many racers start their career in less celebrated types of races, and only some of them then rise to the next level and are among the top 28 on the starting grid. So here you have your top performers, the 5% or less who are bringing the most value to your organisation. Yet even between them, there is still ranking. There is only one winner per race, only 3 that will make it to the podium and get doused in bubbly at the end of the event. Millions of dollars are spent and earned just for the public to see who will be the top 3 guys. Well, if that is not peer ranking, then what is ? When employees or managers in your company complain about the ranking system, saying it’s “unfair” or “life does not work that way”, remind them that whenever they watch the Rugby World Cup, Formula One, Roland Garros tennis tournament, Olympics or any soccer championship, they agree to and understand peer ranking. You can be the best salesperson in your region or Product Division, yet that does not necessarily mean you are the best salesperson in your whole company…

Last year’s results don’t necessarily impact this year’s. Formula One drivers are very much aware of their talent and abilities, however they are also humble and understand that at every race, things could change. Winning the previous race does not mean you will win the next one, losing the previous one does not prevent you from winning later on. It should be the same when managers evaluate the performance of their employees : last year’s rating, though an indicator, is not necessarily directly correlated with this year’s performance. A star may not have had another big project in which to shine, an underperformer can come back on track if managed properly. Remember that the evaluation has to be rooted in the analysis of facts, and beware of the halo effect (in positive or negative impact).

 

What do you say ? Are there further comparisons to draw from the world of sport for use in performance management ? Please share your reactions and thoughts in the comments section !

Related posts :

Calibration of employee ratings – a rigid rule ?

How do you link performance management and a performance-driven culture ?

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Comments

  1. Sandrine, I really liked the imagination used in linking performance to F1, I believe its one of your best posts.
    I couldn’t resist not to link Halo effect with football, as long as the team is winning titles then there must be something great about their strategy and chairman/Coach vision, managing their financials to attract and retain top class players, the perception goes on and on, great winning mentality, great team work, great defense and offense … you name it! (it can be rightly so),

    Same goes for a team that isn’t winning anything, their strategy can be perceived as poor, no real cohesion among players and their manager, not attractive football, star players are not encouraged and even be complacent, not good enough in defense etc… (it can be also rightly so)

    The irony is that you will find a very very good team that isn’t winning titles for 4-5 years, the potential and talent is there, great players and great manager, all the ingredients are there to produce the much needed result (trophies) …. But the team fell in short (achieving 2nd or 3rd place), because of Halo effect we tend to judge the club performance as a whole as not successful, on the other hand their financial returns can be absolutely incredible, take Arsenal FC for example, most of English teams and spending huge amount of money on buying players, yes they are winning trophies but they are in debt), Arsenal isn’t winning and they have a youth policy to develop players and not to over spend and they are not winning titles! …. So for a football club is success being measure on trophies or the bottom line (Financials) or both?

    • Ah, thanks Bashar…. Not sure I can comment on football as this is not a sport that I particularly follow 🙂
      You make a very good point though on the impact of halo effect… and also on a dilemma that all organisations face : which KPIs and targets are the ones really relevant to the success of the company ? In many ways, this is one of the most difficult questions that leadership needs to ask as it relates directly to the future of the organisation, yet this is often left to individual Executives as they set a strategy for their Division or Unit, not necessarily with much coordination or thought for the greater good of the company.

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  1. […] Bardot, S. (2011), The Formula One effect on performance management, available at: http://compensationinsider.com/the-formula-one-effect-on-performance-management/ […]

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