5 fatal problems with performance reviews


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  • DARCYIs there really any problem at all?Well, we assume you are here because you agree, or at least suspect, that we could improve how we do performance reviews. But perhaps you’re a skeptic… I think we all have hundreds of anecdotal stories about how much people hate reviews. If we opened the audio up we’d probably be here for hours with the horror stories. When I was researching for this webinar on Twitter I saw one guy whose boss had stapled a burger king application to a coworker’s review… so there is that…I think we all experience frustrations with this process, because we all have the sense that we could be doing better. What isn’t as clear is not always clear is where things are breaking down, and what we can do to fix it. In fact, a lot of companies are considering scrapping reviews all together—which may be a bit like throwing out the baby with the bathwater.And if you think about it, apart from cosmetic changes, performance reviews have not changed much since the 50s… you could argue even earlier. Which is a bit of a mind bender when you think about how much every other business process we deal with has changed since then. I mean… video cassettes and DVDs and electric typewriters all came and went in between then and now. I mean, Sylvester Stallone’s entire career, right? When you think of all the advances technology and management have made over these 40-odd years and how much they have completely revolutionized how we do business. I mean, it is very weird to have this process at the heart of our talent management that basically hasn’t changed since the calculator was state of the art.But lets not take my word for it.
  • JENOk, so here’s where you can tell us what you think about performance reviews.Do you love them?Or maybe you find them completely useless? Or something in between….We’ll come back on a few minutes to see what you said….
  • DARCY And while we wait for that… every once in a while I pop onto twitter just to see what people are saying. You can just search on the words “performance review” –and once you filter out all the people selling stuff, you can see what every day people are saying. You definitely have a few people who are relieved to report that they “passed” their review… and they use that word.. Like it is an exam. And then you get a lot of this. Here we have evaluations driving people to drink. One guy who got a great review of his wardrobe and no mention of his work. Someone who is just happy she didn’t lose it. Or this poor HR guy, “I enjoy the performance review said no HR person, ever.”People overwhelmingly feel negative and stressed and anxious about reviews—even when those reviews turn out fine! Some of that comes from fear of the unknown. Which is tough because really nothing in a performance review should come as a surprise. But a lot of it comes from the inherent sense of unfairness. It’s like performance reviews are this big kabuki play we all take part in. You can only get a five if you walk on water. Are you supposed to be self-critical or toot your horn. People just don’t think it is genuine.And here’s something interesting that I mentioned in the last webinar we did. Research shows that when a person's status is threatened — such as the folks tweeting here— activity diminishes in certain regions of their brains. This is from David Rock, the author of "Your Brain at Work," and he says, "people's fields of view actually constrict, they can take in a narrower stream of data, and there's a restriction in creativity.“ So, traditional performance reviews, far from being all sunshine and lollipops, are actually detrimental to our productivity as well as our morale.
  • JENYeah, and the research bears this outIn fact, in our most recent Workforce Mood Tracker survey this Spring we heard the same sentiments. HALF of all employees responding said their performance rating is inaccurate….
  • JENAnd Salary.com surveyed employees to see if they think performance reviews actually result in better performance. A stunning 61% said rarely or never do they improve performance.
  • JENAnd it isn’t just employees who have lost confidence in performance reviews.When SHRM surveyed 800+ HR professionals this Spring, 45% of them said performance reviews just aren’t accurate. So Darcy, what we have here is a crisis of confidence with performance reviews…
  • Honestly, we could have added twenty slides like those, but I don’t think any of it is news to any of you. So what exactly are the trouble spots? Well there are actually more than five. But we were able to sort of group them into five buckets – meta problems if you will. And five sounded a lot catchier on the title slide..
  • JENOk, so let’s dig into the top 5 flaws we see with performance reviewsThe first one is what we like to call Mission Muddle And this one is about how we’ve lost track of the goal, the mission, of performance reviews
  • JENThey did once have a clear goal –to assess the employee’s performance and give feedback that helps that employee improve their performance. But today, I’d go so far as to say nobody really knows quite why we’re doing them anymore. It’s a process we take part in, but often we just do it because we’re required to…Why is that, well because you might say its an antiquated process, one that’s frozen in timeAs Darcy said, they’ve been around for quite some time – as we know them since the middle of the 20th century in fact. And the process goes something like this…There’s a standard form that the employee fills in once a year to evaluate him or herselfThe manager reviews the form, maybe edits some thingsThen there’s this awkward meeting where the manager and employee sit down and go through the review togetherOn the whole it’s a process that hasn’t changed in decades, even while the business world is changing in real time Maybe some employers have forklifted the paper-based process onlineBut does anyone really know why we’re doing them anymore?
  • JENWhen we asked employees why we do performance reviews we got some surprising feedbackIn fact, we’re seeing that too often the focus by employees and employers alike is shifting to merely compliance.Not all employees see reviews that way, 70% see them as, or at least hope they are, something more – a development tool that helps them grow as employees. But the sad truth is that as employers we rarely treat them like a development tool. We see them more as a paperwork process, a box we have to check every year - so there’s this troubling disconnect
  • The second problem are we see is a data problem. This is a problem both in breadth and depth.
  • This is one of my favouriteDilberts on reviews. Not because of all the hate, although as you can see here, the Pointy Haired Boss is not goining into Wally’s performance review with a very good attitude. He’s saying “I hate today I hate today”But it is because of one of the problems not a lot of people talk about… how limiting the framework itself can be. We create the forms for managers, and the guidelines, and things like MBOs with the hope that they will help managers to give better, more substantive reviews. But in a lot of cases, this tool becomes what kills the review, because managers don’t, or feel they can’t, step out of the box. If it isnt on the form in some way, they can’t talk about it. We begin with a set of objectives that were established 12 months ago. And we get can stuck to them. The form itself sometimes limits the ability of some managers to step outside the box.In this comic, the pointy haired boss pulls up Wallys MBOs and they are “play computer solitaire and drink coffee”… so he throws up his hands and says “Okay, we’ll use what we have. How many games of solitaire did you win?”So there is this self-limiting piece…
  • JENAnd then there is a lack of data at all. This is sort of the “garbage in – garbage out” scenario. And it really impacts employee trust in their review. They strongly believe that reviews are not telling the whole story. You can see the top two reasons why people dislike reviews are both reflecting this idea that the review is not an accurate indicator of work. That one manager—no matter how strong--cannot see everything that is happening. If you’ve ever done a review yourself you know this. You sit down to write it and you’re racking your brain to remember everything your employee did over the past year. Maybe you’re one of the few out there who have this down and keep detailed journals all year long. But more likely your among the majority, digging thru old emails, maybe a couple reports, drinking a 100 cups of coffee… trying to remember 12 months back. Not pretty.
  • Number Three is Trust Trouble
  • So… no one wants their review from this guy. But a lot of us feel like this is what we’re walking into… no matter how well we’ve done or how great our boss is. One of the really astonishing things about reading all those tweets about reviews is how much relief was being expressed on the part of those who did well… which just speaks so profoundly to their anxiety about the process, and their lack of faith.The ideal of a traditional review… the polite fiction, if you will… is that it is an objective performance assessment. But that is an illusion that fools absolutely no one.The truth is, everyone walking into a review feels like they are meeting with this guy, to some extent. Almost everything about the process is subjective—with the exception of metrics that we might be measured by. But even those metrics rarely drive ratings on a given point—and if they do, no one is more relieved than the manager.This Objectivity Illusion really emphasizes the imbalance between manager and employee. It is uni-directional. Employees rarely rate managers back. They feel powerless and often victimized simply because they are being put on the spot and judged.And even worse, sometimes they are victimized. Jack Welch in his book Winning said “at some companies differentiation is corrupted by cronyism and favoritism. The top 20% are the boss’s headnodders and buddies, and the bottom 10% are the outspoken types who ask difficult questions and challenge the status quo. The middle 70 are just ducking and getting by.”Not every company has that issue… but not every manager approaches reviews with the same care, either. Some spend days carefully crafting and then delivering reviews. Some dash it off the night before with a bottle of wine. Some don’t even deliver them… they just hand them over and go through the motions.
  • So lets have another poll here. What are your thoughts on reviews. Do you think they are objective?
  • JENAnother trust issue we see is that employees don’t trust the review to do right by themIn fact, when Blessing White asked employees “What is the most important factor driving them to consider leaving their companyThey found that the top two reasons are all about disillusionment with their ability to grow, to advance, to maximize their talent potential. They desperately want to be developed but they don’t think their company or the performance review process is helping them get thereThey’re just a waste of their time
  • JENTaking that a step further…We as companies like to think performance reviews will help our employees perform better – that they’ll motivate them to work harderBut our Mood Tracker survey found that most employees aren’t moved by reviewsIn fact, most employees are saying they don’t change anything – they’re not working any harder as a result of the processSo we have to ask really, what’s the point?
  • JENOur fourth fatal flaw is the positivity pitfallMany managers approach performance reviews as a time to address problems areas, areas for improvement they’ve been cataloguing along the way over the year. But the pitfall with this approach is that is doesn’t focus on the positive enough to motivate us…
  • DARCYThe topic cuts both ways. I’ve already touched on the negativity that a lot of people bring to reviews. Even those who end up getting great reviews completely stress about them. Those who feel that reviews are unfair get the brunt of it, though.In our most recent moodtracker, these were the top three emotions associated with inaccurate reviews.
  • DARCYThe the reviews themselves are also lacking in positivity. Manager feel pressured to give constructive criticism—which for too many of them translates into criticism full stop. And of course we know that employees hear negative feedback much more loudly than positive.But it is really important to offer that positive feedback. And not just because 90% of employees find it more motivating. Research reported in Harvard Business Review’s blog measured the “effectiveness” of strategic business unit leadership teams found that the number one determining factor between the least successful teams and the most successful was the ratio of positive comments to negative comments. They said, and I’m quoting here. “The average ratio for the highest-performing teams was 5.6 (that is, nearly six positive comments for every negative one). The medium-performance teams averaged 1.9 (almost twice as many positive comments than negative ones.) But the average for the low-performing teams, at 0.36 to 1, was almost three negative comments for every positive one.”Sometimes when I talk about this people complain that you can’t always just be telling people what they do right. And I totally agree. But I’d argue that the negative feedback is something you should be using immediately to triage a problem. If it is an ongoing issue by all means bring it up… but your managers will get a lot more benefit from encouraging the great behavior they see—assuming they see it—than they will in looking for things to critique.
  • JENOur fifth and final fatal flaw is Frequency Failure (how’s that for alliteration? Pretty good right?) It’s really a profound problem that many managers are only having the sorts of in depth performance conversation with their employees once a yearWith the annual performance review process, we build in this structural problem Given the pace of business today, this simply isn’t frequent enough to measure performance and course correct when needed
  • DARCYThis sort of picks up on the negative feedback positive feedback issue to some extent. There’s something I talked about in a blog last Spring that I like to call “Just in Time” Recognition. It plays off of the principles of BF Skinner and operant conditioning. That is that the most impact is seen from feedback when it is given close to the event that took place. Which is why I think negative feedback should be given right away… but it is also why positive feedback should not wait three—six—twelve months to be given, either. 71% of the employees in our moodtracker survey preferred feedback immediately. And another 23% wanted it weekly. To me this only makes sense. If an employee is being rude to customers, would you really wait 9 or 10 months to address that? Why would you wait that long to thank them for delighting customers? Yet sometimes you’ll find managers actually hoarding feedback so they will have something to talk about in reviews!
  • DARCYAnd of course if you wait, you will not give the same feedback anyhow. That’s because managers are subject to something called the Recency Effect. I wrote in our blog a while back about some cognitive biases that are particularly problematic for HR and I didn’t include this one, but I should have. I will probably blog about it sometime in the coming week.The bias refers to our tendency to remember only the more recent events clearly. Sometimes it includes the peak and the most recent, as when we remember pain. But this means if things have been tough for the last month, you are likely to forget everything the employee did right for the previous 11. It works the other way, too.. And some employees know it. I ran across one guy on twitter who said he never used his marketing skills so much all year as in the month leading up to his review.
  • JENOK, so not to pour more salt on the wound, but let’s just pause and review what we just coveredWith annual performance reviews what we have is:An antiquated process with fuzzy goalsA process with a narrow scope of input that rarely reveals true performanceOne that relies almost solely on managers as a single point of failureAnd which employees therefore see as flawed, inaccurate, even stacked against themNot to mention the fact that it elicits feedback far too infrequently – feedback that, for better or worse, is weighted toward recent behaviors
  • JENOk Darcy, all in all, what we’re hearing is this is a process that just hasn’t stood up to the test of time.So help us our here…what are our options? How can we solve this?
  • So if we diagram those five fatal problems, we come up with a short list of things we can do better. We can offer more positive feedback. We can make sure that we’re offering more alignment with goals and values and offering reviews that are meaningful to employees. We can use data to improve the quality of the review, making it more objective and incorporating more data points, more often to avoid the single point of failure and the objectivity illusion. All of these things can combine to give reviews more integrity, and help employees see their value and trust them better. But of course, some of these things are easier said than done…
  • Which is why we want to talk about crowdsourced feedback – because that is actually one way to incorporate all of these things into reviews.Now in the interest of disclosure, of course our recognition platform offers one form of crowdsourced data that fits this scenario. But it isn’t the only way to bootstrap crowdsourced feedback.
  • So crowdsourcing feedback is a way to leverage those state of the art business practices we were talking about. At this point you might be thinking… okay, I’ve heard about crowdsourcing, but really what practical application does that have for me. Or you might just be drawing a blank altogether. So Jen is going to run quickly through that.
  • JENYeah, so let’s pause for a moment and just talk about what we mean by crowdsourcing….
  • JENSo, the idea of crowdsourcing came into the spotlight back in 2004 when James Surowiecki wrote a book you may be familiar with, titled The Wisdom of Crowds. In this book he argues that decisions made by the group, the crowd, are often better than decisions made by any single member of the group. He opens the book with an anecdote that illustrates this really well.Back in the late 1800’s/early 1900’s there was a pretty well known statistician named Francis Galton. Back in 1906, Galton, who also happened to be a cousin of Charles Darwin, went to a country fair in Devon, England and at that fair there was a Guess the Weight of the Ox competition. 787 people, few of whom as far as we know were cattle experts, lined up and wrote their guesses on slips of paper And who won?….give me a drum roll, Darcy….well, it turns out that not one of them guessed the correct weight of the animal.But Galton, clever guy that he was, collected all their guesses, added them up and averaged them. The average of all those guesses came to 1197 pounds. And guess what? Collectively, all those non-experts had got it exactly right. The actual weight of the ox was 1198 pounds. The average of all their guesses was as close to spot-on as anyone could ask. The wisdom of crowds, he concluded, could often get things exactly right when no individual could do it.
  • JENOk, so that’s all very entertaining but how does this relate to our world today? Well, the wisdom of the crowds is alive and well today in places like TripAdvisor where people love to give travel reviewsAnd on movie review sites like Rotten Tomatoes, and restaurant review sites like Yelp.People provide these reviews and use them all the time as consumers. And these reviews are incredibly valuable to us for two reasons: Because they are voluntary… people really only create a review when they are inspired by something, so that makes them all that much more credible. And because they take into account multiple viewpoints, not just an expert movie critic or restaurant critic. And when we asked employees if they’re contributing crowdsourced reviews on sites like these - 75% said they are!What this means is they’re familiar with and in fact very comfortable with crowdsourced feedback
  • Which brings us back to the practical application of feedback. What does that look like.
  • Well for one thing is is not top-down. Crowdsourced feedback is solicited from everyone. Peers included. And I want to pause for a moment to stress that what we’re talking about isn’t 360 degree feedback here. The difference may seem subtle but it really isn’t at all subtle. Crowdsourced feedback has to be voluntary.. And inspired. It has to be captured from the activity and behavior that peers witness. Too often, when put on the spot for 360 degree assessments, peers feel as if they’ve been asked to judge as if they were the manager of an employee… and this puts them right into that constructive criticism paradigm. (I have quotes around that constructive criticism). 360 degree feedback as a result has a reputation for being someone shrill and negative – or conversely a popularity contest. In the case of crowdsourced feedback no one is being asked for their opinion – which is how employees want it, btw. 73% of employees on our Moodtracker said they found peer to peer feedback to be preferable to manager feedback. And peer reviewed employees are more satisfied with their jobs– 88% vs. 67%.Of course part of that is gathering and recording that data…
  • JENAnd another benefit of peer reviews is that they address that single point of failure we talked about. Here’s just one example of how they do that – this screenshot here is just one way we’ve gathered crowdsourced data through our platform to reveal insights about employees and teamsWhat we see in this chart is a team graphed on the horizontal axis by their most recent performance rating (the manager’s perspective) and on the vertical axis by the value of recognition awards (the wisdom of crowds)By gathering and visualizing performance data in this way we get a rich new way of assessing performanceWe can reveal outliers like Bryan Peters on the top left – Bryan is highly regarded by the crowd but rated as a poor performer by his manager. Or Rene Butler who was rated highly by her manager but received little recognition. These outliers begs the question, why such a misalignment. Maybe there’s a problem between Bryan and his manager. And maybe Rene just works in an isolated role where she’s not getting much recognition but does her job very well. We can also spot top performers like Keri Lang who gets top ratings from both the crowd and her managerFor management, this sort of rich data visualization unlocks incredibly valuable talent insights.
  • And of course you need to then add these observations back into the review cycle, and let these observations be part of feedback. This is such a great way to inject true objectivity into the process, and eliminate that single point of failure. It’s also great because an employee knows going into the review what their feedback has been all year—so they have a cushion of trust to take into the meeting. They known already what they can expect from this data.Which is probably why, despite how new this idea of crowdsourcing is, it already has a huge groundswell of support from employees. 76% told us out of the gate on our recent Moodtracker that they would like to see crowdsourced recognition data added into their performance review cycle. How might that look?
  • So I’ll sort of sum up in this ten cent quote from our CEO Eric Mosley, who is really the pioneer for this idea of crowdsourcing reviews. I can only assume you have seen us talking about Eric’s new book. He says, that (READ)
  • The book is called The Crowdsourced Performance Review, and if you are at all intrigued by how not only crowdsourcing, but big data itself is changing performance management, I highly recommend you pick up a copy of this book on amazon. Eric really lays out what is at stake here and provides a vision for how technology is changing how we manage performance, and how we will in the future. It’s very aspirational and forward thinking. And I promise you he didn’t ask me to say that. =)
  • JEN And if your wondering what social recognition is, that’s obviously at the heart of what we doSo with our Social Recognition platform we enable all your employees to see and share in recognition as it happens across your company. This amplifies every recognition moment and it shows employee what good looks like so they can emulate it – there’s no better way to motivate and engage all your employees than showing they’re efforts are on target and appreciated.And the results our clients see are measurable increases in key metrics like employee engagement and retention.
  • JENAnd if you want to learn more, visit us atBe sure to subscribe to our blogOr drop us an email…Jen•       Aren’t crowdsourced reviews just 360 reviews?•       Yeah, it’s easy to see how they might seem to be the same thing and they are quite similar, but there are a few key differences:·         First, in 360 reviews feedback typically comes from the employee’s immediate work circle – so their boss, their direct reports, peers who work for the same boss…but not much further than that. So certainly not encompassing the broad circle of colleagues many employees work with on a daily basis. Crowdsourcing feedback with peer to peer recognition opens the review to a far broader circle. ·         Second, 360 reviews solicit feedback, and this is an important point, that feedback is requested as part of a review process, it’s not given voluntarily. This structure means   it’s not organic, like crowdsourced feedback, which is unsolicited and voluntary. This makes crowdsourced feedback often more candid and credible. ·         Third, in 360 reviews, much like traditional performance reviews you’re getting once a year feedback, not real-time, in the moment feedback as you would with crowdsourced recognition.·         Now this is not to say that 360 reviews don’t have their place – in fact they can be a leap forward from traditional, manager-only reviews, but there’s a clear value add that comes with crowdsourcing performance feedback! [NOT SURE IF I SHOULD SAY THIS LAST PART…IS GLOBOFORCE’S POSITION ON 360’s THAT THEY’RE BAD? DEREK’s BLOG SEEMS TO SAY SO… http://www.recognizethisblog.com/index.php/category/performance-management/page/2/ ) Jen•       What about performance problems? How do crowdsourced reviews deal with these? •       So addressing performance problems, when we encounter them as managers, can have an important place in any performance conversation, but you may have heard the phrase “feedback sandwich” which refers to this approach many of us take when giving feedback of starting with good news, following it with bad news, then ending with some more good news. •       The problem is that the negative, or hopefully constructive feedback, gets lost in the sandwich and that may very well be the most important piece of feedback in the session. •       But I’d say more important that than is that as managers we don’t want to wait until that once a year performance review to talk to our employees about areas where they need to improve. We need to give them specific examples and the best time to do that is when we see the behaviours that need correcting. •       There’s also some research I saw on the Harvard Business Review blog earlier this year that I think is relevant here too. They talked about this idea of an ideal ratio of praise to criticism. And what the researchers found was that teams (and presumably individuals) performed at their best when the ration of praise to criticism was almost 6 to 1. So six positive comments for every negative one…what tells us is negative feedback has its place in performance discussions but it’s the positive feedback that is going to motivate our people to keep doing what they're doing well. Jen•       Aren’t crowdsourced reviews just a popularity contest? Won’t they lead to abuse? •       Yeah, we hear this question all the time and it’s a valid concern•       It’s really the same bias question, just from the perspective of the employee.•       But the truth is we just don’t see it happening with our clients and their employees•       That’s for a few reasons we believe:•       First, because we’re not soliciting feedback with recognition that recognition is organic, people only step up to give feedback when they see something really good. •       Second, with this social approach to recognition it’s self-correcting. The feedback isn’t anonymous, everyone across the company can see it so any bias is going to be immediately apparent to managers and the whole company…•       So people just don’t abuse it.
  • 5 fatal problems with performance reviews

    1. FATAL PROBLEMS WITH PERFORMANCE REVIEWS And the one simple way you can fix them all.
    3. What do you think about performance reviews? POLL QUESTION: A. I love them B. They are hit or miss C. They need some serious help D. They are completely useless 3
    4. HERE’S WHAT THE TWITTERSPHERE SAYS: @DTFT: Finished selfevaluation for annual performance review at 4:15. Can think only of going home and drinking. Was this the intended result? @JPSmeresyk: my performance review was based on inconsistent metrics and a system that management admitted was bad and has changed @megbroph: Didn't cry or yell during this year's performance review! #makingprog ress @HRFella I enjoy the Performance Review process, said no #HR person. Ever. @m_doc15: Got my performance review and "work attire" was listed as a "strength". No such mention of my actual performance. I'll take it
    5. OUR RESEARCH SAYS THERE IS A PROBLEM Half of all employees see their performance reviews as inaccurate. Inaccurate 51% Accurate 49% 5
    6. SALARY.COM AGREES “Do performance reviews lead to improved performance?” Yes 39% Rarely or Never 61% 6
    7. SO DOES SHRM “Do you think annual performance reviews are an accurate appraisal for employees’ work?” No 45% Yes 55%
    12. DATA DEFICIT 1
    13. SELF-LIMITING 13
    17. Do you think reviews are objective? POLL QUESTION: A. Yes, by careful design B. They are only as good as the manager C. No, they are almost never objective 17
    18. THE DEVELOPMENT MYTH 18% 26% I don't have opportunities to grow or advance I don't like what I do/doesn't maximize talent I want to try something new 10% I want to earn more money I don't like working for my manager Other 15% 15% 12% 18
    19. THE EFFECTIVENESS MYTH 47% 53% 53% say performance reviews do not motivate them to work harder. 19
    22. FOCUS ON THE NEGATIVE 10% 90% 90% of employees see positive feedback as more motivating. 22
    24. TOO LITTLE TOO LATE Employees prefer immediate feedback 24
    25. THE RECENCY EFFECT Bias toward overemphasis of recent behavior. 25
    28. More Meaningful More Objective Clearer Alignment to Goals More Positive Feedback More Points of View Great Reviews More Often 28
    29. More Meaningful Less Subjective Clearer Alignment to Goals More Points of View More Positive Feedback More Often Crowdsourced Feedback 29
    31. HUH?
    32. THE WISDOM OF THE CROWD 75% of employees already give crowdsourced feedback on consumer sites. 25% 75%
    33. OKAY THEN…
    34. INSPIRE PEER FEEDBACK Peer-reviewed employees are more satisfied with their jobs. 67% 88% 35
    36. INCLUDE IN REVIEW CYCLE 76% 76% of employees want crowdsourced recognition data added to performance reviews 37
    37. Crowdsourcing input about employee performance creates a market composed of every employee. Social recognition is the transaction engine of that market.
    38. GET THE BOOK crowdsourcedreviews.com 3
    40. VISIT US: www.globoforce.com SUBSCRIBE: www.globoforce.com/gfblog EMAIL US: darcy.jacobsen@globoforce.com jennifer.sartor@globoforce.com 41