People enter situations with certain implicit expectations. These are best identified and managed through a performance agreement.

The major human interaction problem is unclear, ambiguous, or unfulfilled expectations. Conflicting expectations regarding roles and goals cause many people pain and problems in organizations and in relationships.

Illustrations or examples of conflicting expectations include the following:

•  Company mergers. Look at what happened with Roger Smith at General Motors and Ross Perot at Electronic Data Systems. When these two cultures came together, the executives clashed in their attempts to deal with tough problems and mesh two different social wills.

We saw, on one hand, Ross Perot advocating the rights of the common worker: trying to do away with layers of management and special executive privileges, seemingly unaware that certain features of the GM culture are intergenerational and simply can’t be done away with overnight.

Consultants can’t mandate changes like that. It takes more education and a lot of communication. But most people in acquisitions and mergers don’t get into communication. They play either hard ball or soft ball, win-lose or lose-win.

•  Marriage relations. Today, many of the once hidden issues and expectations of marriage are out in the open. But there is still much debate over the role of the man and the woman.

For example, if a young man from a more traditional family approaches marriage with the implicit expectation, “the breadwinner”, and “you take care of the kids”, he may be in for a rude awakening. It’s evident that young and old couples alike are struggling with conflicting role expectations. Many women are unfulfilled without a professional career outside the home: a phenomenon fueled by a society that doesn’t provide much appreciation, validation, and reinforcement for women as homemakers.

•  Parent-child relations. Parents often experience conflicting expectations in their relationships with their children, especially as these children enter teenage years. Parent and child have different ideas about their roles, and these ideas change as they go through various stages of growth and development.

•  Government relations. Is the role of government to do good or is the role of government to keep people from doing harm? If I am working with someone who believes that the government’s role is to do good, we may have totally different expectations, which leads to conflict, disappointment, and cynicism.

•  Hiring and promoting. What a new person expects of the job and the company is often something very different from what his or her employer expects. During the “honeymoon” period, these expectations are soft and negotiable. It’s a good time to clarify them while people are open and willing to talk things through. If the system is unfair, it shows when people are hired or promoted. For example, if the new hires are paid more, the people in place will say, “How come you pay them this when I’ve been working here this long and make less?” When managers violate such expectations, they must live with the consequences: trust goes down; people start moonlighting; they come up with other agendas; they wonder what’s going on; or they become almost paranoid and begin to see things in the worst possible light.

•  Interdepartmental and entrepreneurial projects. Any time you have interface among different departments or among people from different disciplines, you can expect conflicting expectations. In fact, at the outset of any interdepartmental or entrepreneurial project, you will likely find several examples of violated expectations.

•  Client relationships. Seasoned managers of product and service companies know how hazardous it is to have clients that expect more than the company can possibly deliver. Therefore, they monitor and manage client expectations through empathy and through customer information systems.

They try to identify people’s feelings and expectations: “What are they thinking?” “What are they expecting us to do?” “What service do they expect after the sale?” “What kind of a social relationship do they expect?” If these expectations are not clarified, clients will be disappointed and disillusioned-and later lost.

The Problem: Implicit Expectations

An expectation is a human hope, the embodiment of a person’s desires-what he or she wants out of a situation, such as a marriage or a family or a business relationship. Each of us comes into a situation with certain implicit expectations. These come from our previous experiences, from earlier roles, from other relationships. Some of these expectations may be quite romantic, meaning they aren’t based on reality. They’re picked up from media or from some fantasy.

There’s a difference between an expectation and reality. An expectation is an imaginary map, a “should” map, rather than an “is” map. But a lot of people think that their maps are accurate, that “this is the way it is”, your map is wrong.

Implicit expectation-these human wants, wishes and desires-are the baggage we carry with us into a relationship, into a company, or into a business as customers. For example, if we go shopping, we may implicitly expect courteous and competent service. If a certain store violates those expectations, we are usually quick to change to one that is more customer-oriented and fulfills our psychological wants and needs.

Wise managers make things very explicit, spelling out “what we do and don’t do” so that the client can say, “Okay, we understand and feel good about that” or “We feel good about one area but would suggest another approach to serving our needs in this other area.” They explicitly state what their mission is, what their resources are, and what they have chosen to do and not do with their resources.

The Solution: The Performance Agreement

The performance agreement is the solution to the problem of conflicting expectations. It is the tool for managing expectations. It makes all expectations explicit.

The performance agreement is a clear, mutual understanding, and commitment regarding expectations surrounding roles and goals. If management can get a performance agreement between people and groups of people, management has solved many of its problems. That’s because the performance agreement embodies all of the expectations of all the parties involved. And if these parties trust each other and are willing to listen and speak authentically, and to synergize and learn from each other’s expression-then usually they can create a win-win performance agreement. Then they can create a situation where everybody has the same understanding regarding expectations.

There are three parts to a performance agreement: the two preconditions (trust and communication); the five content elements; and the reinforcement of the systems and structure of the organization.

Two Preconditions

•  Trust. Coming in, people carry many implicit expectations and some hidden agendas. Often real agendas and feelings are hidden because the trust level isn’t high enough to share them. Trust, then, is one precondition of a good performance agreement, and the foundation of trust is the character of trustworthiness: the feeling in others that you will honor your commitments.

If trust has been eroded and respect lost, it’s difficult to form win-win performance agreements because there’s no foundation for it. Companies or departments within companies can still work out acceptable performance agreements, however, by starting small and letting the process of making and keeping agreements gradually develop or rebuild the trust. Construct the best performance agreement you can under the circumstances-even if it’s a compromise- and then work toward a synergistic win-win deal next time around.

The performance agreement should always be open and negotiable-open by either party at any time. If the situation changes, either party can initiate the communication process and change the agreement. While there may be certain inviolate principles, parts that would not be negotiable, much of it is open for discussion.

•  Communication. The second precondition, then, is communication, a reality-testing process: “Oh, I didn’t realize you felt that way. You mean, you expected me to take the first step? I see. Now, let me tell you what I thought.”

It’s horizontal communication, an authentic sharing between people as prized contributors-as equals, not as superiors and subordinates.

“I expected you to exercise more initiative. I was waiting on you, and you were waiting on me? Now that I understand what you expect, next time I’ll study it out and make recommendations.”

That’s the dialogue of people trying to clarify the expectations of a working relationship.

Such communication is easier when the culture supports it. Unfortunately, in many companies, formally talking about expectations almost seems illegitimate, and yet it’s a big part of the informal office talk- “What is your agenda? What are you really concerned about?”

I highly recommend the communication process outlined by Roger Fisher and William Ury in their book, Getting to Yes. It’s a sensible process for making expectations explicit and arriving at a mutually rewarding agreement. Consider again the four basic principles:

o Separate the people from the problem
o Focus on interests, not positions
o Invent options for mutual gain
o Insist on using objective criteria.

This win-win negotiation process requires the skill of empathy, seeking first to understand. People have a lot of front-burner concerns they want to express, and they want first to be understood.

“Seeking first the interest of another” means finding out what his interests are, what is good for him, his growth and happiness. You can’t assume you know what’s best for the person. Find out through empathy, and then build that into the agreement.

Clarifying expectations about roles and goals is the essence of team building. The idea is to get different groups together-salespeople with manufacturing or purchasing people, for example-and sharing expectations regarding roles and goals in an atmosphere that isn’t emotionally charged.

Once people go through this interaction and make their implicit expectations explicit, it is just amazing what happens. People begin to say, “I didn’t realize that. I thought you meant something else. No wonder you felt that way! I see, then, you probably interpreted what I did the next week in this way.”

“Yeah, exactly that’s what I thought.” It’s amazingly therapeutic. People are relieved. “Gosh it’s good to finally get this out on the table.” By getting agendas on the table, we know where each other stands. We can then enter the negotiation process.


There are five parts to the win-win performance agreement.

Specify Desired Results. Be specific about the quantity and quality. Set budgets and schedules. Set target dates and timelines. Commit people to getting results, but let them determine the best methods and means.

Set some Guidelines. Communicate whatever principles, policies, and procedures are considered essential to getting desired results. Go heavy on guidelines, light on procedures, so that as circumstances change, people are not frozen-they have the flexibility to function, exercising their own initiative.

Identify Available Resources. Identify available financial, human, technical, and organizational resources to assist people in getting desired results. Include the structural and systemic resources within the organizations, as well as outside networks. Mention people by name and indicate how they might best be used.

Define Accountability. Involve people in setting the standards or criteria of acceptable and exceptional performance. Holding people accountable puts teeth into the performance agreement. If there’s no accountability, people gradually lose their sense of responsibility and start blaming circumstances or other people for poor performance.

Results can be evaluated in three ways (and if agreements are managed well, you can use all three): measurement, observation, and discernment. When the trust level is high, discernment is often more accurate than so-called “objective” measurement. And if it’s really low, you always go for measurement-and typically that reduces the quality of the interaction to the lowest common denominator.

But that’s where most organizations are. That’s why they exalt measurement. That’s why the academic world extols measurement-because in an atmosphere of distrust, it is the only way that they can decide who wins.

Determine the Consequences. Reach an understanding of what consequences are achieving or failing to achieve the desired results. Positive consequences might include financial and psychic rewards, such as recognition, appreciation, advancement, new assignment, training, flexible schedule, leave of absence, enlarged scope of responsibilities, perks, promotion, or pay raise. Negative consequences might range from reprimand to retraining to termination.


The performance agreement needs the reinforcement of organizational structure and systems to stand the test of time. The compensation system, in particular, must reward superior performance within the terms of the agreement; otherwise, management ends up paying people on credentials or on seniority.

From Control to Release Management

A win-win performance agreement is much more than a job description. Most companies already have job descriptions that define what the job is and what is expected of the person in the position. Most of that’s very clear and explicit. But the performance agreement goes beyond the job description by making the implicit expectations part of a win-win contract, established through a process of synergistic communication.

Most job descriptions have very little sense of what constitutes a “win” for the employee. The only win for them is they’ve got the job and make the money. The job description doesn’t address other needs-psychological, spiritual, social needs. They’re not being expressed at all.

Moreover, a job description is usually focused on methods and based on external control. The performance agreement moves us from external control to internal control, from a situation where someone or something in the environment controls someone to a situation where a person can say, “I understand, and I am committed because it’s a win for me too.”

The performance agreement shifts the whole approach from control to release management. The reason why most companies don’t use release management is because they don’t manage people by win-win performance agreements.

If managing expectations by performance agreements is not something that is now done in a company, individual managers can still initiate this and do it on their own. But they should be aware that they are dealing with social will, and they had better not be naïve to think they can just hammer out some psychological performance agreement, because that performance agreement is interwoven with all social contracts, the unspoken culture of the organization.

A smart manager would say, “We have to be aware of the culture, of the nature of the situation, of the social will.” More powerful than a psychological contract is a social contract, and culture is nothing more than a composite social contract. And what we call “shared values” are merely making implicit kind of norms, explicit-This is how we do things around here.

Managing expectations by performance agreement is one of the things that “ought to be done around here.”

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