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Salto Dee Fe Consulting Service
Performance Management
Rajan Kalia, Salto Dee Fe Consulting
People NEXT – SOIL
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Empower | Enable | Excel
About Us
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Salto Dee Fe Consulting (SDF) – A Business Enabling Firm
We are a business enabling firm working at the intersection of Strategy, Execution & Human Resources.""We partner with organizations to smoothly leapfrog their business to its next phase of growth.""We focus on the two primary pillars in any organization - shareholders (with focus on profits and governance) and employees (with focus on execution).
WHO WE ARE
OUR VISIONExcel at solving people problems for businesses to
enhance productivity & employee retention
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Salto Dee Fe Consulting Service
OUR CORE VALUES
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OUR EXPERTISE
Talent Management
Organizational Transformation
Employee Retention
Leadership Skills Learning
OUR PRODUCTSRetention Competencies Based Assessment for Development Tool
A 360 Behavior Change tool that is "Simple, Practical and Forward Looking
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OUR PARTNERS
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We Also work with
Founded and lead by Marc Effron, the author of the #1 best selling HR book, “One Page Talent Management: Eliminating Complexities and Adding Value” .
Our tie up with LIMRA-LOMA would bring cutting edge training, research & consulting solutions to India in Insurance domain
Our technology partner for offering cutting edge, customized solutions for sizeable volumes- e.g. 360 degree, assessment centers, engagement surveys etc.
Salto Dee Fe Consulting Service
Let us talk…
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Where are we headed?""What role does HR play in PMS? What role should it play?""What will it take for us to succeed with PMS?""What do you gain from this?
Salto Dee Fe Consulting Service
● Performance management is viewed as an HR 'program' versus a ‘strategic business
tool’ used to drive success
● Balancing “What” & “How” & “Whom”
● Short Term Vs Long Term goals
●Who the h… Invented the Bell Curve?
● No one is penalized for not giving reviews, who is accountable?
● Employees have little to no involvement in the process (e.g., setting their own
objectives, leading the performance discussion).
● Both management and employees dread the process.
● How do I give difficult feedback to employees
● Any other?
Key Issues HR Managers Face
Salto Dee Fe Consulting Service
●What is our organisational philosophy on the system?
● Inter linkages of various performance measurement mechanisms
●Weaving the different systems together
●How do I implement the system?
●How do I communicate the system consistently across the company?
●Are the managers mature to handle this? What about First time managers?
●How do I deal with outages?
●How do I link the outcomes to rewards?
& Many More………………..
Key Questions to Answer
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Let’s Assess Our “As Is” PMS FrameworkHow do your company’s practices compare to those that drive effective performance management? !"
Salto Dee Fe Consulting Service
Start with the science
Performance management (PM) is the most powerful process available to increase individual performance "•PM fails to deliver results in most companies for two reasons:
Too many goals set without sufficient stretch Too little coaching for performance
•There’s conclusive science to guide the PM design process
Salto Dee Fe Consulting Service
Why have a Performance Management Program?
Performance management curve: The size of the circles indicates the number of U.S. companies at " " that point on the curve by order of magnitude. "
Source: PwC Research 2012
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Operating Principles For PMS Design
❑Alignment – Individual Goals to Organizational Goals
❑Clarity – Measures of success, Expectations & Overall Process
❑Inclusive Meritocracy – Opportunity to all to earn rewards etc
❑Transparency – Clear communication on what, when & how?
❑Balance – Measure “What” & “How” (3600 View)
❑Any Other ?
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Organisational Goals shared
with employees and start
off the Goal Setting Process
MarchFebruary
January April
May
June
July
AugustSeptember
October
December
November
Prepara
tion f
or
Review
s
Review Process in
Action
Presentation of the
organizational performance
to Management Committee
Tracking
Tracking
Mid-year
review
Trackin
g
Trac
king
Trac
king
Coaching &
Feedback
Coaching & Feedback
Coac
hing
& F
eedb
ack
Coaching & Feedback
Bus
ines
s Pl
an P
repa
ratio
n
Fina
l Bus
iness
Plan
prese
ntati
ons
Tracking
Development Actions to
be implemented
Quarterly Review
Individual Goal & Dev Setting Forms in Place
Prepare for Mid-year review
Implementation of Dev. Plans
Kickin
g off s
elf
appra
isals
Discussions on one
on one
Com
pensation
Changes &
Dev Plans
Com
munication
Decisions on Bonuses
and Career Moves
Tracking
Quarte
rly R
eview
Discussions on one
on one. Fill in
Appraisal Form *
Compilation of Data
on Ratings
Tracking
Planning
Track
ing
Revie
w
* Manager to discuss the appraisal with Customer and 2nd Level Manger
Conceptual FrameworkManagament Development
Calendar tobe actioned
Impl
emen
tatio
n of
Dev
. Pla
ns
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Conceptual Framework - Simplified• Operating Principles:!
✓ Alignment "✓ Inclusive Meritocracy"✓ Transparency"✓ Balance (360 degree view) "
• Overview of the System:!✓ Planning"✓ Tracking"✓ Review"✓ Thumb ruling / Calibration"✓ Recognition / Reward"
• Process:!✓ Goal Setting"
o What (Keeping all parameters in view e.g Stakeholders - Customers, Employees, Agents, regulators, Public, Shareholders and Cost management & Competition)"
o How – Process / Roadmap"✓ Tracking – Monitoring / Review"✓ Evaluation – Self / Manager / Two level review on Goals, Management Style, Potential
and Readiness for next level job"✓ Recognition / Reward – Guaranteed / Variable / Others
FORMS" " " PLATFORMS" " " TOOLS
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● Build Performance Focus "● Align line function and HR
team to the system"● Aggregation and analysis of
company and unit-wide trends"
● Seamlessly integrate into other HR Systems"
● Minimize resources and effort to administer process
Achieving Stake-holder Delight...
● Facilitate timeliness"● Quick turnaround of
process"● Facilitate information
aggregation from multiple sources"
● Facilitate review of remote workers"
● Process and status tracking"● Enhance decision support
and coaching capability
Employee Perspective
Manager Perspective
● Process and assessment Transparency"
● Guidance on KRAs and competencies through templates"
● Timeliness prompts"● Track mid-term changes"● Quick turnaround and
resolution of queries"● Convenience / comfort
through self service system
Organisation Perspective
Communicate effectively "Central ownership of performance database"Conflict resolution tools"Consistency checks and communication toolkit
HR Administrator Perspective
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Performance & Potential Review
Goal !Review
"Management !
Review Potential !Review
Readiness!Review
Setting ‘business goals’ and converting them to Departmental & individual goals through structured processes and measuring achievement objectively
Identification of competencies and assessment of an individual on the competencies specified for the position
Assessing an individual’s abilities in the light of higher vertical and horizontal responsibilities
Assessing an individual for the readiness to take up the next higher level of responsibilities
G M P R
WHAT!•Bonus"
HOW!•Salary Increase
WHO!•Development Plan"
•Long Term Incentives
WHEN!•Promotion"•Succession
Linkages to Rewards
Source:Max New York Life
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PMS Process – Snake Chart (Sample)
Goal Setting Individuals
Dept. Head Goals
Individual KRA Sheet
Input
Output
HR Review
G & M ratings
Run the process
Thumb ruling
Reviewed data by HR
Outcomes
Employee Comm.
Final Ratings, Appraisal Sheets, CEO/Func. Head
letter
Accepted KRA Sheet,
Consistent messaging
Self Appraisal
Refer to employee guide
Self Rating
2nd Level Review
First Hand Insights,
Smoothening aberrations
Individual G&M sheets and rating summary
Manager Review
Self appraisal against agreed Measures Of
Success
Individual ratings
Source:Max New York Life
Salto Dee Fe Consulting Service
Performance Planning:Goal Setting
Performance Management
Salto Dee Fe Consulting Service
Science of Goal Setting
• The Harder the Goal, the More it Motivates""
• Goals Aligned with Self Interest Motivate the Most""
• Specific Goals Create Higher Performance than urging “Do your Best”""
• Too Many Goals reduce the Effort on Each One
Motivation
Easy Medium Hard
Motivation
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"•All the goals set by a manager are Achievable & Realistic. Further, if a goal is Specific, it will be Time-bound: ‘Task X by Date Y’." "•An “Important goal” is the one, which is “Relevant for the Company” (To achieve results) & “Relevant for an Individual” (Self-interest).""•Thus Eliminating Complexity & Adding value, we have SIMple goals: Specific, Important, Measurable.
Keep Goals ‘SIMple’
FOCUS ON A VITAL FEW!
"Correct number of goals are >1 & <5. The ideal number of goals are 3.
DO NOT SPECIFY ANY GOAL AS
‘STRETCH GOAL’!"
Every goal should have a right balance of stretch &
achievability. "
DO NOT INCLUDE GOAL WEIGHTING!
"Simpler way is to list the
goals in the Order of Importance. "
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"Should Goal setting be a participative exercise or manager
driven?!
Who sets the Goals?
Pros •Higher Commitment to Goals •Employees’ “buy in” to goals •Promotes a socialistic workplace view
Cons •Research* indicates “no difference in performance” regardless who sets the goals •Adds more complexity to the process •Other equally effective choices available for gaining commitment
Source: Application to Erez-Latham Dispute regarding participation in goal setting , Journal of Applied Psychology 73
What’s your view on this….does this really add value?
Salto Dee Fe Consulting Service
Aligning Individual Goals to Organizational Strategy?
Do all employees understand the Organizational goals/strategy*?
How cascading goals down the levels impact or build commitment?
• Define roles"• Assess position criticality"• Distribute responsibilities across workforce
• Help see the ‘Line of Sight’ "• Explain connection b/w job & organization
• Translate organizational goals into day to day execution
To build commitment, the organization should…
Source: CLC study on high performance culture
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Cascading Goals – Is it the right way?
KPI 1 – Goal Target : 100%
KPI 1 – Goal Target : 120%
KPI 1 – Goal Target : 130%
KPI 1 – Goal Target : 150%
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Cascading Goals – Or is this the right way?
Salto Dee Fe Consulting Service
Should Behaviour Evaluation be part of PMS ?
Pros!•Balance ‘how things get done’ with ‘what gets done’"•Reinforcing “right behaviours” critical to managers success"•Helps build accountability (Clear messaging on good behaviors get you ahead, while poor will hold you back)!
Cons!•Lacks an objective way of measurement"•Adds complexity – Value/Complexity trade off decisions"•Alternate choices available to hold people accountable (Talent Review, Succession Plan, IDP, Corporate Culture or 360 Degree)
What’s your view on this….does this really add value?
Salto Dee Fe Consulting Service
Why Competencies?
Start with the science: "● Leadership Competencies can affect individual performance
"● Leadership Competencies can affect organizational performance
"● Competencies can be developed over time "
● Competitive Advantage can occur when competencies are consistently demonstrated across the organization
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Competency Based Performance Management
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Mixed Model – What & How
1. Performance Results Score
2. Competencies Score
"Overall Score
Will determine the employee’s career movement, and also the
reward to be earned & other HR Linkages to follow
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Key Considerations in Evaluating Behaviors
Size and Complexity!! What is the optimum number of competencies (along with behavioral descriptors) an evaluation framework should have?""Measuring Behaviors!! Is there any objective measurement tool?""Rewarding Behaviors!! Will performance be a threshold for a rating/reward or will it be a cap?"" Or will behaviors have no impact at all? If yes, then why include them?
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Integrating Rating Scale into PMS
Do not use Numerical ratings, at least do not communicate it to employees!"Do not use Labels like ‘star performer’, ‘highly valued’ etc. !"Do not obsess over the rating scale – three, four or five point scale!"
• 3-7 points rating scale has similar level of scale and rater reliability"
• No evidence that behaviourally anchored scales are more effective than numerical scales"
• Managers tend to use only the higher ratings unless you are forcing a distribution
Add complexity
without adding any value
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Performance Monitoring & Feedback
Performance Management
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Informal Feedback Matters Most!
Source: CEB Improving Talent Management Outcomes
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"• If a person is committed to the goal, she’ll improve her
efforts incase they’re not leading to success." "• Feedback is a surefire to increase an employee’s
effort towards a goal.""
• Frequent feedback leads to a shortened performance improvement cycle as it provides opportunity to course correct oneself!"
• The frequency of feedback dependent on the goal, employee’s competence & performance.
Give Frequent Feedback on Progress
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Performance Management Behavior (Transition Desired)
From To
Regular ongoing activity :!"✓Communicating expectations on a regular basis""
✓Providing feedback in real time whenever exceptional or poor performance is observed""
✓Helping employees develop expertise that maximizes their potential.
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Feedback Guidelines
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Reading: Try Feedforward
• What’s more common: Feedforward or feedback? Why? • What challenges does feedforward solve? • In what situations might feedforward not be effective?
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Try Feedforward
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Feedforward exercise
• Identify one item (behavior, knowledge, skill, etc.) that you’d like to improve over the next twelve months
• Describe this item to a classmate • Ask for feedforward and listen • Say “Thank You.” Don’t criticize, evaluate or rank their suggestion • Switch roles and repeat the exercise • Talk to as many classmates as you can in 10 minutes
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Feedforward debrief
• This exercise was . . . . . • What made it . . . . ? • Was it difficult to coach? Why? • Was it difficult to give feedforward? Why?
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Coaching increases an individual’s performance "The Science "▪Feedback PLUS coaching can increase leadership effectiveness up to 60% ▪Coaching strongly increases an individual’s belief in his ability to succeed
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1A quasi-experimental study on management coaching effectiveness, Evers, Will J. G.; Brouwers, André; Tomic, Welko, Consulting Psychology Journal: Practice and Research, Vol 58(3), 2006, 174-182"2 Elizabeth C. Thach, (2002) "The impact of executive coaching and 360 feedback on leadership effectiveness", Leadership & Organization Development Journal, Vol. 23 Iss: 4, pp.205 - 214
Business Case For Coaching Talent
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Forced Ranking & The ‘Vitality Curve’
Performance Management
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Forced Ranking & The Vitality Curve
• The top 20% were considered the future leaders of the organization (A Player) • The vital 70% were the solid worker-bee performers that could be counted on
day-in and day-out to consistently perform their jobs(B Player) • The bottom 10% was fired(C Player)
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Arguments For & Against
Pros "
•Helps deal with “rater inflation” •Makes managers identify high, average, and low performers •Ensures that compensation increases reflect performance differences among individuals
Cons "
•Managers resist placing people in the lowest or highest groups. •Explanation for placement can be difficult. •Performance may not follow normal distribution. •Managers may make false distinctions between employees.
What’s your view on this….does this really add value?
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ConclusionsYour Views?
Validity
Effect on behaviour
Logic
Fact: It was used for 7 years.
"Was it efficient?
Is it logical to reduce10% of your
employees every year?
Is it logical to have fixed
criteria for ranking? Is it logical to have a
strict policy?
Unsatisfied top performers due to inadequate distinction from high-level peers
Fluctuations in
employees’ moral
Constant stress Sabotage colleagues
Or
Cheating the system
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Creating Transparency
Why? !Employees feel fairly evaluated and thus are committed towards achieving goals
How? !"•Share Goal Sources and Linkages!
How goals are cascaded down?"How the employees will be evaluated?"Who has a role to play in the evaluation?""
•Share Rating Scales and Distribution"Will the employees be force ranked?"Where do they stand when compared with others in the organization?"
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Creating Accountability
Why? !Key driver of performance management success
How? !"•Withholding a manager’s bonus until he completes every review!•Withholding the staff’s bonus until the manager completes!•Employee- driven Accountability!
• Use ‘time-bomb communication’"• Involve employees in reminding manager to fulfill his
responsibilities, if he doesn’t- remind HR"•CEO-driven Accountability!
• If he can do it despite his/her schedule, anybody can and should"
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Q & A
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Mail me at – [email protected]
Visit our website – www.saltodeefe.com
Follow us on-
Contact Us
Salto Dee Fe Consulting Service
ADDRESS: "SALTO DEE FE CONSULTING C -‐ 220, Tower C, 2nd Floor, Nirvana Courtyard, Nirvana Country, South City IIGurgaon, Haryana 122018, India " +91 9811201696 +91 124 4288144 [email protected] www.saltodeefe.com
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CONTACT US
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Thank You!