-
Perform
ance
Management
Elim
ination or Revolution:
Taking Performance Management to the Next Level
Tara Morey, Senior Consultant
-
2
-
Objectives
1.Recognize how performance management tools are
evolving
2.Review of best practices
3.Discover how technology is evolving with the new
practices in performance management
4.Use a proven process to revise your organization’s
performance management process
5.Understand how pay for performance programs are
impacted and evolving
3
-
Performance management
Performance management
Performance management
Performance managementis the systematic process by
which an organization aligns its resources, systems and
employees to strategic objectives and priorities.
[Daniels]: “It consists of three primary elements –
measurement, feedback, and positive reinforcement."
-
Is Perform
ance M
anagement Working?
Strongly Agree
Strongly Agree
Strongly Agree
Strongly Agree
It ItItItIs Working As Is
Is Working As Is
Is Working As Is
Is Working As Is
Strongly Disagree
Strongly Disagree
Strongly Disagree
Strongly Disagree
It Needs Im
provement
It Needs Im
provement
It Needs Im
provement
It Needs Im
provement
Provides business value
26
.2%
73
.8%
Managers coach for
development
8.2
%5
6.5
%
Business
and performance
goals are aligned
12
.8%
54
.4%
Performance expectations
communicated
11
.4%
41
.6%
Exemplary behavior
recognized & rewarded
19
.5%
30
.9%
Source: 2014 Brandon Hall Group Performance Management Study
(n=223)
5
-
Perform
ance M
anagement Evolution
In t
he
be
gin
nin
g…
•D
iscr
eti
on
ary
(“b
lack
bo
x”)
•La
ck o
f co
nsi
ste
ncy
•N
o f
orm
al
pro
cess
•E
mp
loye
e f
rust
rati
on
Ne
xt
ge
ne
rati
on
…
•D
isci
plin
ed
an
d o
bje
ctiv
e
•Tr
an
spa
ren
cy
•G
oa
l se
ttin
g a
nd
ra
tin
g
•Fo
cus
on
th
e a
pp
rais
al
form
–A
lo
ok
ba
ck
•A
nn
ua
l re
vie
ws
•S
tro
ng
lin
ka
ge
to
pa
y p
rog
ram
s
•H
ea
vy
ad
min
istr
ati
ve
bu
rde
n
•M
an
ag
er
an
d e
mp
loye
e f
rust
rati
on
Tod
ay
…
•Fo
cus
on
de
ve
lop
me
nt
an
d
imp
rov
em
en
t
•M
an
ag
ers
as
coa
che
s
•M
ore
fre
qu
en
t d
iscu
ssio
ns
•S
imp
le a
nd
le
ss o
f a
n
ad
min
istr
ati
ve
bu
rde
n
•Le
ve
rag
ing
te
chn
olo
gy
•M
ov
ing
aw
ay
fro
m n
um
eri
cal
rati
ng
s
•A
fo
cus
forw
ard
•R
ew
ork
ing
lin
ka
ge
to
pa
y
pro
gra
ms
•E
ng
ag
e p
ee
rs,
sub
ord
ina
tes,
tea
m m
em
be
rs,
cust
om
ers
an
d
oth
ers
in
pro
vid
ing
in
-th
e-
mo
me
nt
fee
db
ack
•F
rust
rati
on
le
ve
ls?
??
6
-
7
-
Perform
ance M
anagement Best Practices
Go
als
an
d
com
pe
ten
cie
sE
va
lua
tio
n
me
tho
ds
Fre
qu
en
cyF
req
ue
ncy
Tie
s to
oth
er
pro
cess
es
Tie
s to
oth
er
pro
cess
es
8
-
Best Practices
•Aligned and cascaded from the
top
•Managers and employees jointly
set goals
•Goals are set annually and
adjusted as needed
‒Updated as relevant and as
business needs change
•Goals are job specific
Goals
9
-
we heard…
“Our perform
ance
man
agem
ent process is
measures meaningless
activities. We wan
t to be
able to differentiate
perform
ance and help
our workforce grow and
develop.”
Introducing goal setting to an organization
10
-
Best Practices
•Aligned and cascaded from the
top
•Managers and employees jointly
set goals
•Goals are set annually and
adjusted as needed
‒Updated as relevant and as
business needs change
•Goals are job specific
Goals
11
-
we heard…
“Our perform
ance
man
agem
ent process is
measures meaningless
activities. We wan
t to be
able to differentiate
perform
ance and help
our workforce grow and
develop.”
Introducing goal setting to an organization
12
-
Introducing goal setting to an organization
we heard…
“Our man
agers will
struggle to help their
team
s set goals that align
to the organ
izational
objectives.”
Draft goal
Draft goal
Draft goal
Draft goal
What’s missing?
What’s missing?
What’s missing?
What’s missing?
Final goal
Final goal
Final goal
Final goal
Find out about
possible
competitors in
new markets.
�Specific?
No
What form will the output take?
When is it due?
What geography will you cover?
Complete
competitive
intelligence
studies of
potential
new
markets in
theUS by
February 1.
�Measurable
?
No
Withoutspecificity, it’s difficult to
apply a metric to this goal.
�Attainable?
Yes
�Relevant?
Yes
�Timely?
No
Whenis your deliverable due?
13
-
we heard…
“At the en
d of the year,
our lead
ership is quick
to rationalize why an
em
ployee co
uldn’t
achieve his or her goal”
Refining goal setting in an organization
14
-
Best Practices
•Employees are assessed on a core set of
common competencies that align with
organizational culture
•A competency is defined as a
knowledge, skill, ability or behavioral
characteristic that is associated with
superior performance
•Competencies must be observable,
measurable, linked to job requirements,
and linked to business strategy and
needs
•Managers and leaders may have
additional competencies
•Everyone is evaluated on job specific
competencies
Competencies
15
-
we heard…
“We wan
t to m
ake sure
our man
agers develop
their skills as lead
ers of
the organ
ization .”
Introducing competencies to an organization
16
-
Best Practices
•Employees complete a self-
assessment
•Managers are encouraged to provide
ratings that differentiate
(but with no forced distribution
no forced distribution
no forced distribution
no forced distribution)
•Have a unified process with tailored
elements for different levels/roles
•Technology is used to automate and
enable the process
•Separate performance discussions
from compensation conversations
Evaluation
Methods
17
-
How technology fits into the picture
we heard…
“It’s tim
e to m
ove away
from paper form
s.
We need a process that
helps man
agers deliver
efficien
t feed
back.”
18
-
How technology is evolving
Focus on goals…
19
-
How technology is evolving
Focus on
feedback…
20
-
How technology is evolving
Focus on
continuous
conversations…
21
-
How technology is evolving
Focus on
development…
22
-
Best Practices
•Conduct formal planning meeting to
agree on goals at the beginning of the
period
•Schedule mid-year, quarterly, or monthly
“touch base” meetings
‒Performance and progress on goals
‒Career goals
‒Training and development
•Provide informal feedback as needed
•Keep performance documentation
throughout the year
•Conduct formal appraisal on an annual
basis
Fre
qu
en
cy
23
-
we heard…
“Our perform
ance
man
agem
ent process is
always looking back at
past perform
ance. We
wan
t to start helping
employees develop.”
Introducing development plans to the process
24
-
we heard…
“We wan
t to turn our
perform
ance
man
agem
ent process
into a coaching
experience. Our
man
agers need help in
delivering tough
messages and helping
peo
ple develop.”
Creating a coaching experience
25
-
“Our perform
ance
man
agem
ent process is
broken
. Employees don’t
know w
hat is expected of
them
. We are thinking about
getting rid of perform
ance
appraisals altogether.”
Creating a coaching experience
26
-
Best Practices
•Can link to pay
•Link to succession planning
•Link to development and training
Tie
s to
oth
er
pro
cess
es
27
-
Linking Perform
ance to Pay
The most common ways employers support a pay for
performance culture include:
1.Deliver annual salary increases that provide for
differentiation between your top and bottom
performers
2.Pay annual bonuses to reward for company, team
and individual success
3.Offer long-term incentives to the leadership team
to drive sustained and profitable growth
28
-
A Culture W
ith N
o Pay for Perform
ance
Unclear expectations
and priorities
Non-performers are
overcompensated, never
want to leave
Reduced incentive for
employees to be high
performers
Higher turnover and likely
to lose frustrated top
performers
REDUCED BUSINESS
REDUCED BUSINESS
REDUCED BUSINESS
REDUCED BUSINESS
RESULTS
RESULTS
RESULTS
RESULTS
29
-
we heard…
“We have a pay for
perform
ance philosophy but
man
agers don’t know how to
differentiate pay effectively.”
Linking Pay to Perform
ance
MIN
MA
X
Ex
ce
lle
nt
E5
5.5
0%
-8
.00
%
Ab
ov
e E
xp
ec
tati
on
sA
E4
3.0
0%
-6
.00
%
Va
lue
d
V3
1.0
0%
-3
.50
%
Ne
ed
s I
mp
rov
em
en
tN
I2
0.0
0%
-0
.00
%
Un
sa
tis
fac
tory
U1
0.0
0%
-0
.00
%
Pe
rfo
rma
nce
Ra
tin
gs
30
-
we heard…
“Our co
mpan
y is m
oving away
from perform
ance ratingsan
d
hope to sim
plify the process. ”
Linking Pay –
Rewards For Contribution
“On” or “Off”
Track
Methodology
Documentation
and Guides
Rewards for
Contribution
31
-
we heard…
“Our top perform
ers are
leaving for different
opportunities an
d
experiences.”
Link to Succession Planning
Need to plan for anticipated
labor shortages (e.g., baby
boomer exodus)
Need to extend succession
planning efforts beyond the
top layers of management
Need to obtain visibility into
existing leadership skills or
need to know where they
need to be developed
32
-
Evolving Your Perform
ance M
anagement Process
33
-
we heard…
“We haven
’t done
anything in
perform
ance
man
agem
ent for years.
Each m
anager is doing
his or her own thing.
It’s tim
e we got on the
same page.”
Using a pilot group
34
-
we heard…
“The cu
lture here will
not open
ly accep
t perform
ance
man
agem
ent. M
ay have
to sell an
d even force
it.”
Identify Barriers
35
-
Steering Committee
36
-
To transition, our clients are…
1.
Receiving top down support to change the
way performance is managed
2.
Forming cross functional committees to
lead the initiative and to present
recommendations
3.
Obtaining employee feedback/input
through surveys or focus groups
4.
Branding the initiative
5.
Recognizing a need to go back and clarify
organizational goals first
6.
Moving away from ratings (e.g., 3.5) and
moving to some sort of qualitative rating
(e.g., on track/off track, meets
expectations/does not meet expectations)
7.
Moving away from just an annual appraisal
to quarterly conversations (“check-ins”)
and a year end review
8.
Providing Directors and Managers with
conversation and goal setting training
9.
Striving to align goals across the
organization (not necessarily cascaded)
10.
Realizing the culture shift that takes
time, training and communication to
develop
11.
Beginning by focusing not on job
specific competencies but on
organizational competencies and values
(while they improve job descriptions and
job competencies along the way)
12.
Leveraging technology to manage the
process more efficiently
13.
Focusing on performance process first,
then compensation
14.
Conducting pilot groups with areas of
the organization that are more goal
focused already
15.
Taking the time to do this right –on
average, our clients have invested six
months to develop the performance
management foundation
37
-
For performance management to work, it must
undergo significant changes and shift toward:
•Providing clarity on what the organization expects of
each employee
•A focus on user friendliness and manageability
•Ongoing, less formal performance conversations
•Developing managers to be better coaches
•Fostering an environment that encourages
employees to own their development
38
-
Questions?
Tara
Tara
Tara
Tara Morey
Morey
Morey
Morey
[email protected]
[email protected]
[email protected]
[email protected]
216
216
216
216- ---875
875
875
875- ---1909
1909
1909
1909
39
