It may seem like an account auditing term, but performance vs. compliance actually has a lot to do with corporate flow. Companies will usually have a set of guidelines for employees to comply with, followed by a performance measure on those employees. What corporate leadership rarely factors in though is a cross check between performance and compliance. The question they should be asking, but rarely do, is:

Is performance affected by compliance?

The answer, invariably, is always yes. You can either look at the question mechanically in terms of work product, training, management, customer interaction, or any other level of performance measures – or you look at it in terms of creating a stimulating environment with a progressive corporate culture that bolsters performance and innovation. The concept of putting performance ahead of compliance works in either regard. In order to increase performance, you have to focus on performance … not compliance.

Cliff Oxford, founder of the Oxford Center for Entrepreneurs, summarizes it best in his NY Times post about “The Art of Running a Small Business.” He eloquently blasts a corporate culture where employees are treated as almost sub-human, where they can “count on birthday-cake celebrations and shallow conversations about what their hobbies are outside of work.” Conversely, bosses in this environment are “superficially nice and periodically pretend to be interested in employees as people.” Oxford astutely calls this type of “call-center environment a second-rate corporate culture.”

He goes on to argues that instead of working about compliance and regulation, companies (specifically HR) should be doing everything it can to find the best talent. The best talent though won’t play well with these infantile compliance measures nor will they stay motivated in a company that doesn’t break barriers. In short, if you’re lucky enough to source even half decent talent in this environment, you can be sure they’ll quickly grow bored and move on.

Pushing performance first, what leaders should be targeting is a culture of “High Performance Happy,” as Oxford phrases it. He follows it up with an example using Steve Jobs, who in his hatred for “time-clock punching morons” created a culture where performance superseded compliance. It was more important to create great technology than to create a team of compliance yielding team members. This means a more easy going work environment and even some creative immaturity.

As Oxford points out, with this performance heavy scale comes a more rigorous bull dog work ethic. Because you’re not treating employees like sub-human morons, they’re not plotting for the quickest way to punch at 5pm; they’re not looking for excuses. As Oxford points out, “High Performance Happy means you give employees tremendous responsibility, and they are happy [and motivated] to show you that they are the best. You don’t have to con them into doing things with a flavor-of-the-month methodology that suggests they will only perform if you make them happy first.” Oxford then sets up a loosely weaved together philosophy; loosely weaved because there’s no need for rigidity. The compliance though seems more for leaders than it does for employers, teaching them how to rethink what it means to have a successful team. He first recommends dumping your just-getting-by slacker lot and replacing it with people who’ve accepted an open call to be brilliant, do brilliant things and not mind the hard work that comes with it. In exchange they have a level of freedom and privilege most companies are still too deep with their heads in the sand to notice a fast-changing environment.

The theory behind High Performance Happy is also in keeping with Josh Patrick’s NY Times post entitled, “Do You Pay Employees to Exist or to Produce?” Also propelling performance over compliance, Patrick articulates a key: treating your employees like experts at their jobs is the best way to help a work force develop responsibility. This is a far removed mindset from a drone-bot punch-in punch-out work culture.