Employers have long touted the mantra that an organisation’s strongest asset is its people.  While this credo has spawned a rash of management practices designed to develop human capital, only recently has the focus been drawn to employee happiness.  A consequence of data insights and wider organisational psychological research, a growing number of organisations are now recognising the value of employee well-being, with good reason. 

The recent evidence indicates that subjective well-being has a major impact on a wide range of work outcomes.  Happier people are more productive, innovative, and have higher occupational success when compared to those who do not (Watanabe et al., 2018; Thompson & Gregory, 2012). 

Paired with an increasing need to compete against organisations for talent, globalism, and the advent of the gig economy, this has prompted an explosion of exploration within the science and practice of positive psychology, or the scientific study of optimal human functioning.

This form of psychology endeavours to identify and promote factors that allow people to flourish (Gable & Haidt, 2005).  The overarching goal of positive psychology is to focus on what is good and try and improve that where possible.  Martin Seligman, who founded the discipline, recognised that psychology had up to the turn of the century focused too much on the negative.  A greater emphasis had to be made to improve the quality of life and prevent pathologies that arise when life is barren and meaningless (Hackett, 2017).  The foundation of why organisations should prioritise positive psychological principles lies in its efficacy.

To what extent can positive psychology impact well-being?

There is now a sizable literature that indicates the impact of individual differences (i.e. personality) and contextual factors (e.g. wealth, health, circumstances) on well-being is indirect and integrative.  Rather, we are often most thoroughly influenced by our cognitive appraisals of objective life events.  It is our perceptions and evaluations of our surroundings that form the crux of our well-being. 

This subjective well-being, or happiness, involves both past experiences and future expectations. Consequently, the key to well-being is interpreting the world in a positive manner.  Employees need to fortify themselves to think positively, rather than negatively.

Sonja Lyubomisrksy and colleagues (2005) posited the concept of the ‘happiness pie’, which outlines the extent to which individuals can influence happiness.  Their research discovered that around 50% of the differences in people’s happiness is heritable (determined genetically).

A further 10% is attributable to a person’s circumstances. Whether you are healthy or ill, married or divorced, rich or broke, in crisis or not, these external and situational factors will impact happiness.  This is however, a far lower proportion of the happiness than many would suspect.

This leaves 40% of the variance in happiness that is influenced by intentional activities.  The positivity levels of one’s predispositions, appraisals, memories, goals, and motivations are instrumental in magnifying the impact of positive events. Such positivity also buffers the effects of negative events.

We often cannot make significant changes to our personalities or our circumstances, but we can change the way we perceive the world around ourselves.  Understanding that 40% of happiness is born of the subjective experience demonstrates that through positive psychology, organisations can make a massive impact on their people.

By utilising the insights and strategies of positive psychological methodology organisations can deliver holistic, robust, and relatively simple well-being interventions.

The PERMA Model

Introduced by Martin Seligman in 2011, the PERMA model is an intervention approach that outlines the keys to leading a fulfilling life.  The PERMA model suggests there are five elements people pursue independently to improve well-being: Positive Emotions (P), Engagement (E), Relationships (R), Meaning (M) and Achievement (A).

Through the lens of the PERMA model, a series of organisational interventions can be designed and implemented.  Goodman and colleagues (2018) compared PERMA and subjective well-being and identified a latent correlation of 0.98.  This indicates that beyond PERMA effectively tapping the construct, this approach when taken to improving workplace well-being should have a positive impact for employees.

At the organisation level, policies and practices can fundamentally change culture for the better. Leaders who drive the PERMA model through the policies they set, and actions they take, are far more likely to see sustained success.  Beyond this, individuals also can improve their well-being through their own goal setting practices.

To demonstrate this point, the following table outlines examples of how individuals and organisations can use the PERMA model in practice to improve subjective well-being.

	Organisational Interventions	Individual Interventions
Positive Emotions	·         Normalise help seeking behaviours at work, ·         Set clear work/life harmony expectations by withholding communications outside of office hours ·         Offer EAP services that encourage proactive usage	Establish a self-care plan: ·         Get at least 7 hours of sleep, ·         Practice mindfulness daily ·         Go for 3 runs per week ·         Have dinner with the family at least twice a week
Engagement	·         Organise strengths-based goal setting and leadership practices ·         Give employees the chance to identify projects that they are interested in	·         Take the time to identify what parts of work are of intrinsic interest ·         Vocalise to managers when you lack the resources to meet work demands
Relationships	·         Create a culture of working lunches and active meetings that give opportunities for employees to interact ·         Foster interdepartmental problem-solving and collaboration ·         Run weekly stand-up meetings and ask employees to keep others informed about their work	·         Eat lunch with other employees at least twice a week ·         Organise and/or attend after work events
Meaning	·         Make role clarity a focus. Encourage employees to discuss their organisational impact.	·         Frequently reflect upon the question: "what value does my role provide the organisation?"
Achievement	·         Recognise the achievements of employees through email call outs, stand up meetings, and rewards acknowledging performance ·         Give employees the autonomy to take ownership over their work and develop solutions on their own	·         Create yearly goals, frequently document progress towards these goals each month

Where to next?

Positive psychological interventions are now becoming standardised more and more within organisations, however there is still work to be done.  Hopefully, given the organisational and individual impacts, businesses come to grips with well-being in the same manner they have with engagement in the past decade.

The future of positive psychology is going to have to accelerate to meet the demands of the modern workforce.  As the world of work is becoming global, virtual and particularly driven by a gig-economy, the onus of well-being is shifting further towards employees. Workers must be able to look after themselves more now than ever before.  This trend is likely to continue for the foreseeable future, so the creation of resources that allow employees to drive their own well-being must meet demands.

Positive Thinking

Critical to the creation and maintenance of a positive and happy workforce is appropriate measurement systems. Personality questionnaires can assist in the selection and development of employees that possess a Positive Thinking mindset.

Positive thinking describes an optimistic attitude that focuses on the bright side of life. Optimistic individuals have faith that their abilities and actions can cause significant positive impact on their future (Kluemper, Little & DeGroot, 2009). Positive thinking scales measures the degree of positive mood and feelings across the range of happiness, enthusiasm, optimism and joy.

The menu-driven Business Personality Reflections^® (BPR) is a personality questionnaire that measures 70 business-related capabilities, tailored to any organisation’s needs. An example of an item from the BPR’s Positive Thinking scale might be;

“I feel lots of happiness in my life”.

Positive thinking plays an important role in generating positive mood. Research has found that emotions and mood are correlated to success in occupational settings, people who are happy are more creative, see opportunities and tend to be more comfortable in taking strategic risks (Fredrickson, 2001; Lyubomirsky, King, & Diener, 2005). Cable (2017) also suggested that positive emotions help with decision-making and problem solving.

Organisational leaders who display positive thinking help employees feel included and increase cooperation and task performance (Allen & McCarthy, 2015). Further, positive actions and emotions enhance the efficiency and the rate of task execution, increasing productivity in the workplace (Anchor, 2011; Cable, 2017). It has also been found that positive mood and emotions lead to a more amicable communication style and therefore result in lower levels of conflict between employees (Allen & McCarthy, 2015).

In addition, research has also found that optimism correlates to happiness and that it promotes positive feelings during stressful events (Lyubomirsky, King, & Diener, 2005). Thus, it is shown that positive thinking leads to better stress coping in individuals.

Individuals who score highly on the Business Personality Reflections^® Positive Thinking Scale are more likely to experience these positive emotions such as enthusiasm, happiness and joy, as well as actively express them in the workplace.

You might consider using a positive thinking scale in your recruiting and development processes if employees often deal with;

• Stressful situations in the workplace in which positive thinking is required
• Challenging and complex tasks that may involve setbacks
• Having to build and maintain professional relationships with customers and/or other employees 
• A fast-paced work environment in which enthusiasm is necessary for task completion and efficiency

Organisations need employees who think positively in the workplace to help maximise productivity.  We hope that the Positive Thinking scale can provide useful information, amongst other relevant scales about potential candidate performance within your work context or environment. 

If you were interested in learning more about the Positive Thinking scale, or the Business Personality Reflections^® Personality Menu-Driven System please simply enquire now for a free trial.

Yearly performance reviews have traditionally been a stressful employee experience.  For some, it can symbolise a yearly bonus or next year’s increased pay package.  For others, the chopping block.  But many forward-thinking organisations are now recognising annual reviews are an unnecessary requirement, dissatisfied with the ineffectiveness and impartiality of the time-consuming process.

Performance reviews can involve hundreds of hours of management time in preparation are still likely to be poorly received.  More importantly, they’re failing to capture the needs of modern employees.

“Always treat your employees exactly as you want them to treat your best customers.”

Stephen Covey

Views on the traditional approach

The fast-paced nature of modern work, coupled with the high expectations of current workplaces, are leading organisations to move away from traditional performance reviews.  A recent Adobe survey with 1,500 U.S. office workers, found that about two-thirds of employees and managers viewed performance reviews as an outdated practice.

On average, managers spend 17 hours planning for each individual’s performance review.  According to research from the Corporate Executive Board (CEB), the average manager’s responsibilities have almost doubled from four to seven direct reports.  Altogether, this leads to managers spending about 200 hours a year on tasks such as filling out evaluations and meeting individually with employees.

For a company with about 10,000 employees, it is predicted that companies spend roughly $35 million a year to conduct performance reviews.  Meanwhile, 90% of managers are dissatisfied with the way their company conducts reviews, and 90% of HR leaders believe they yield inaccurate information.

What’s the alternative?

The biggest restraint on annual reviews is their heavy emphasis on financial rewards and punishments with the end-of-year structure.  Holding people accountable for their past behaviours at the expense of improving current performance can be difficult to navigate yet is extremely important for long-term sustainability.

Adobe’s recent study reported that around 80% of office workers would prefer an alternative method, such as on-the-spot feedback as opposed to annual formal reviews.  Many large organisations are now shifting towards a revised model involving more frequent feedback.

The ‘Check-In’ system adopted at Adobe is a new way of managing performance reviews, transforming the employee experience, and showing real, improved results. Meanwhile, some organisations plan to abolish the system of ranking and rating employees to determine their performance and reward altogether.  

Instead, systems are being replaced with frequent check-ins, involving ongoing one-on-one conversations with managers and employees without formal documentation.  Business researcher Josh Bersin believes that about 70% of multinational companies are moving toward this approach, that prioritises career development and employee experience.

The transformation of many top-tier review systems is providing organisations with a wide variety of options moving forward.

At Accenture their transformation from performance reviews has changed approximately 90% of past processes, says CEO Pierre Nanterne.  They have instead opted for regular and timely feedback following assignments.  This procedure aims to reach goals and address employee development, using more real-time, achievable and applicable feedback.

Similarly, at Deloitte, once-a-year performance reviews have been replaced with a set of four questions asked at the end of every project or every quarter.  Each question is straight forward, with the expectation of regular check-in conversations.  Along with a formal/standardised coaching system, this breeds a culture of mentoring and nurturing development conversations.

At General Electric, the long-time role model for performance appraisals has shifted focus towards well-rounded feedback to inform short-term and long-term goals.  With a focus on performance development, their instantaneous feedback app called PD@GE, is all-inclusive and allows anyone (managers, colleagues) to leave any kind of feedback for an employee.  This encourages workers to organise discussions with managers, prioritise goals and work on their performance on an ongoing basis.

Across the board, large organisations have set the intention to move away from the traditional model of performance reviews.  This includes technology companies such as Microsoft, Dell, IBM, Juniper Systems and other large organisations such as PwC, Gap, OppenheimerFunds, Adidas, SAP, Amazon and Goldman Sachs.

Case study: Adobe

Donna Morris, Adobe’s Executive Vice President of Employee Experience, drove the creation of Check-In, and has noted how this procedure simplifies performance reviews.  HR managers train leaders to have constructive conversations with their employees.  Feedback conversations are expected to occur quarterly, with ongoing feedback becoming the norm.  Adobe’s Employee Resource Centre is available to offer support and guidance where needed.  Managers are shown an internal salary tool that allows them to view their employees’ salary range for each role.  They are then encouraged to operate as a business owner and determine the impact each employee is making, whether they have unique skills in the market and whether they are paid competitively.

Adobe’s guidelines

Within Adobe, their Check-In system revolves around three central elements: expectations, feedback, and growth and development.

1.    Expectations: This includes setting, tracking and reviewing clear objectives.  The roles and responsibilities of each objective also have to be clearly outlined, along with their result or success.

2.    Feedback: Once the expectations have been established, feedback is required on how to achieve goals and improve performance at a faster rate.  Reciprocal coaching on a regular basis is necessary.

3.    Growth and Development: With this intention, ongoing conversations are necessary for the future development of employees.  This allows for an easier view of employee progression.

Results to date

Since the implementations of Check-In, time spent on performance reviews has been redistributed to more impactful Check-In conversations and more important priorities.  In the two years that it has been rolled out, Adobe estimates that over 100,000 manager hours have been saved each year.  They have also reported a drop in voluntary attrition, as well as more involuntary departures from workers who are not meeting expectations.

Based on employee surveys between 2012 and 2015, the number of employees that recommended Adobe as a great place to work increased by 10%, along with a 10% increase in those reporting that ongoing feedback helped their performance.

Adobe’s system of health checks and feedback loops alleviates pressure from such a formal process and saves hours of manager and productive working time.  It contributes towards learning and development goals as well as improving outcomes for individuals and the organisation.  Performance conversations serve to be a better experience for everyone involved, by shifting the emphasis onto development goals rather than punishments and rewards.  It also addresses some of the age-old issues of annual performance reviews, such as the difficulty recalling performance earlier in the year.

Modernise the performance review and see the benefits of an improved employee experience

The benefits of changing the performance review process are demonstrative and worthwhile, especially for smaller scale organisations.  Beyond these reasons, regular feedback loops and goal setting can instil and develop a learning-oriented and supportive culture in the digital age.

Annual cycles are no longer clear cut. In the gig economy of short-term projects and changing dynamics, employee goals and tasks cannot be accurately mapped out a year in advance.  New methods of performance review can support and promote the agile practices that so many tech companies and those in disruptive industries can employ.

In this rapidly shifting environment with reliance on real-time data, feedback can be one of these points that is collected and addressed on an on-going basis.  As businesses set strategic and development goals, changing the performance review process to be more iterative can also be a solid investment in the employee experience. A lot of work needs to go into the performance overhaul, but the results have proven the worth of this process both short and long term.

Support leaders by foster a feedback conducive culture 

The success of any change to systems of feedback needs to be supported culturally. At Psych Press, we recognise the importance of identifying employee readiness early. The Menu-Driven Business Personality Reflections^® is a bespoke 73 scale personality questionnaire that measures business-related capabilities to assist in selection and personal development decisions. 

Through scales like Personal Development, organisations can quickly assess how effectively their personnel would adapt to a feedback conducive culture.

 Personal Development

Personal development is a measure of an individual’s preference for obtaining and developing new skills, as well as their level of receptivity to feedback.  The Personal Development scale in the Business Personality Reflections^® questionnaire indicates the degree to which an individual is likely to desire understanding and developing new skills, and whether they believe advice and comments from others to be beneficial.  Personal development tendencies place individuals at a sizeable competitive advantage as they are catalysts for their own professional development and will continually seek to increase their own intellectual capital.  Without it, an employee may show reluctance in broadening their knowledge and skill set and may be less receptive to constructive feedback.

Individuals who score highly on the Business Personality Reflections^® Personal Development scale are more likely to want to master new situations, and are likely to regard feedback as useful and fundamental to self-progression.  Employees who have personal development characteristics are also likely to be self-driven, goal-oriented, and innovative.

The results of several studies show that the Big Five personality dimensions of ‘openness to experience and conscientiousness’ are positively related to personal development, specifically proactive learning and feedback-seeking behaviour (Maurer, Lippstreu & Judge, 2008; Orvis & Leffler, 2011).  In a longitudinal study, Seibert, Kraimer & Crant (2001) found proactive and open dispositions to be associated with heightened job performance and role satisfaction. This study also found personal development tendencies elicited long-term benefits for employees, including higher salaries and career success (Seibert et al., 2001).  Cultivating employee satisfaction and growing intellectual capital increases productivity and innovation, which will ultimately increase an organisation’s competitive advantage (Roffe, 1999).

A sample item for the Personal Development scale that you may see on our questionnaire could be:

“To be of the most benefit to their company, workers should continually learn new things”.

You might consider using a personal development scale in your selection and development processes if your employees require:

·         A feedback conducive environment

·         Team-oriented tasks where employees offer feedback and advice to challenge and support one another.

·         A flexible and dynamic working environment.

·         Constant career progression and development.

Organisations need employees who are high in personal development tendencies to succeed.  Let us help you find and develop the right people for your organisation so that you can maintain your competitive advantage.

If you are interested in learning more about the Personal Development scale, or the Menu-Driven Business Personality Reflections^® please simply enquire now for a free trial.