Performance Management: Performance Management: Keys to Making It Work!Keys to Making It Work!
Presented by: Alan Todd, Chairman
Raj Ramachandran, Performance Management Research Lead
The PresentersThe Presenters
Alan ToddAlan Todd - Chairman of Corporate University Xchange - Chairman of Corporate University Xchange
Over the past 20 years, he has won many learning industry awards and has Over the past 20 years, he has won many learning industry awards and has spoken at conferences around the world on workforce development spoken at conferences around the world on workforce development strategies. While serving as a thought leader in the learning industry, Mr. strategies. While serving as a thought leader in the learning industry, Mr. Todd founded and served as CEO for two successful global learning Todd founded and served as CEO for two successful global learning companies. Prior to joining CUX, Mr. Todd was the Chairman and CEO of companies. Prior to joining CUX, Mr. Todd was the Chairman and CEO of KnowledgePlanet, a company he founded in 1996 that helped launch the KnowledgePlanet, a company he founded in 1996 that helped launch the eLearning revolution. Mr. Todd led the company through mergers and eLearning revolution. Mr. Todd led the company through mergers and acquisitions, expanded the user-base to 150 countries, and raised nearly acquisitions, expanded the user-base to 150 countries, and raised nearly $100 million in private equity. Prior to KnowledgePlanet, Mr. Todd was the $100 million in private equity. Prior to KnowledgePlanet, Mr. Todd was the Chairman and CEO of KnowledgeSoft, a training company he founded in Chairman and CEO of KnowledgeSoft, a training company he founded in 1986 that was acquired by Staffmark - a $1.2 billion Information Technology 1986 that was acquired by Staffmark - a $1.2 billion Information Technology company - in 1996. company - in 1996.
Raj RamachandranRaj Ramachandran - Performance Management Research Advisor for - Performance Management Research Advisor for Corporate University XchangeCorporate University Xchange
Raj has over 10 years experience in learning and performance management, Raj has over 10 years experience in learning and performance management, studying strategies and best practices in Global 2000 organizations including studying strategies and best practices in Global 2000 organizations including American Airlines, International Paper, Raytheon, Washington Mutual, and American Airlines, International Paper, Raytheon, Washington Mutual, and others. Prior to CUX, Raj was the learning and performance management others. Prior to CUX, Raj was the learning and performance management practice lead for TPI, a global sourcing advisory firm. He has also served as practice lead for TPI, a global sourcing advisory firm. He has also served as a business process consultant for Accenture, IBM and a business process consultant for Accenture, IBM and PricewaterhouseCoopers.PricewaterhouseCoopers.
AgendaAgenda
Performance Management Lifecycle Performance Management Lifecycle
Key Insight Areas in the Performance Key Insight Areas in the Performance Management LifecycleManagement Lifecycle
The Corporate University Xchange Performance The Corporate University Xchange Performance Management Maturity ModelManagement Maturity Model
Headlines – Executives Speak out on Headlines – Executives Speak out on Performance ManagementPerformance Management
Released in May 2007Released in May 2007 150 Organizations surveyed150 Organizations surveyed Average of 24,000 employeesAverage of 24,000 employees Conducted 15 qualitative interviewsConducted 15 qualitative interviews Large, global participants including:Large, global participants including:
The Performance The Performance Management StudyManagement Study
Why Performance Why Performance Management?Management?
Performance Management IS on the CEO’s AgendaPerformance Management IS on the CEO’s Agenda
An opportunity for CLO’s and Talent Management leaders to add An opportunity for CLO’s and Talent Management leaders to add critical valuecritical value
A powerful, strategic tool for transformationA powerful, strategic tool for transformation
Key Insight Areas – Key Insight Areas – Performance Management LifecyclePerformance Management Lifecycle
Goal Setting – Goal Setting – Keys to SuccessKeys to Success
Cascading goals remain visibleCascading goals remain visible Improves alignment to strategyImproves alignment to strategy S.M.A.R.T. goalsS.M.A.R.T. goals Balanced scorecardBalanced scorecard Hoshin planningHoshin planning
72%
17%
11%Yes
No
NotApplicable
Does your organization's performance management process incorporate the notion of cascading goals through levels of the
organization?
Competency Management – Competency Management – The “How” of PerformanceThe “How” of Performance
Established by organization’s desired cultureEstablished by organization’s desired culture Drives career developmentDrives career development Competency models are either purchased from an Competency models are either purchased from an
external provider or developed internallyexternal provider or developed internally Key part of the performance rating processKey part of the performance rating process
Does Your Performance Management Process Include Rating Competencies?
69%27%
4%
Yes
No
NotApplicable
Culture – Culture – Leaders Set the ExampleLeaders Set the Example
Alignment of organizational objectivesAlignment of organizational objectives
Identifying and recognizing top performersIdentifying and recognizing top performers Compensate high performance Disincentive low performance
Identifying and removing poor performersIdentifying and removing poor performers
Creating talent pools & succession planning Creating talent pools & succession planning processesprocesses
Employee Surveys – Employee Surveys – Vital to the Performance SystemVital to the Performance System
Also known as employee satisfaction, climate or Also known as employee satisfaction, climate or engagement surveysengagement surveys
Tracks improvement in employee perceptionTracks improvement in employee perception
Decide where to focus additional trainingDecide where to focus additional training
Correlate manager effectiveness & employee Correlate manager effectiveness & employee loyaltyloyalty
Employee self-assessments are widely usedEmployee self-assessments are widely used
Most important arbitar of fairnessMost important arbitar of fairness
Coaching – Coaching – The Responsibility is On the ManagerThe Responsibility is On the Manager
Objective is to grow and develop employees Objective is to grow and develop employees
Requires regular, honest and open dialog Requires regular, honest and open dialog between employees and their managersbetween employees and their managers
The quality of the conversation is the key to The quality of the conversation is the key to successsuccess
Some companies are conducting spot checks – Some companies are conducting spot checks – providing immediate feedbackproviding immediate feedback
Poll QuestionPoll Question
What type of rating scale does your organization What type of rating scale does your organization currently use to evaluate employees?currently use to evaluate employees?
Likert scale (1 through 7 scale) or greater number Likert scale (1 through 5 scale) Likert scale (1 through 3 scale) In the process of changing the rating scale Other
Ratings – Ratings – Multiple Strategies are VitalMultiple Strategies are Vital
Absolute scales vary – all over the mapAbsolute scales vary – all over the map
Matrix of performance vs. competenciesMatrix of performance vs. competencies
Forced ranking processes have divided supportForced ranking processes have divided support
High use of 360 degree feedback functionalityHigh use of 360 degree feedback functionality
A strategic requirement:A strategic requirement: Informs compensation Rewards Succession planning Improvement plan
Technology – Technology – Nothing More Than an EnablerNothing More Than an Enabler
No dominant vendorNo dominant vendor
Highly customized Highly customized (and therefore (and therefore ‘homegrown’)‘homegrown’)
Buyers tend to focus Buyers tend to focus on the automation of on the automation of the employee the employee assessment and assessment and appraisal process firstappraisal process first
Technology – Technology – Tools for Performance?Tools for Performance?
45%
23%
12%
6%
6%
3%
3%
1%
1%
1%
1%
We do not use a system to automate performance management processes
Home-built system
Other
SAP
Success Factors
Softscape
SumTotal Systems, Inc.
Kenexa
Oracle
Saba Software
SAS
Which, if any, of the following systems does your organization use to automate its performance management processes?
N = 120
Poll QuestionPoll Question
What are the barriers to successfully implement a What are the barriers to successfully implement a performance management program in your performance management program in your organization?organization?
Clear vision and communication from CEO and Senior leadership
No or limited consequence for non-performance (tolerated in the organization)
Managers and leaders are rewarded for developing their people
Lack of consistent review and coaching processes Other
What are the Barriers to Success of A Performance Management Program
12%
11%
10%
10%
10%
10%
9%
9%
8%
7%
3%
The organization's strategic plan has been well communicated at every level
Clear vision and communication from the CEO and senior leaders
Excellent performance is rewarded and there are consequences for non-performance
Managers and leaders are rewarded for developing their people
A clear line of sight from each individual to business goals
Defining workforce competency gaps and target effective learning anddevelopment to close gaps
Managers' commitment to L&D initiatives
Selecting and monitoring appropriate measures of performance againsttargeted goals
Not Applicable
Lack of definition of goals and objectives - and how they support companystrategy
Lack of a solid review and and coaching program
N = 630
Barriers To SuccessBarriers To Success
Con
tinual
Im
pro
vem
ent
Con
tinual
Im
pro
vem
ent
Stage 0Stage 0
No Performance Management process in placeNo Performance Management process in place
Subjective opinions drive annual reviewsSubjective opinions drive annual reviews
No visibility of strategic planNo visibility of strategic plan
Paper performance reviews stored in HR filesPaper performance reviews stored in HR files
Stage 1Stage 1
PM process implemented but inconsistentPM process implemented but inconsistent
Goal statements written but disconnectedGoal statements written but disconnected
Little or no quantitative measures in placeLittle or no quantitative measures in place
Infrequent training on coachingInfrequent training on coaching
No quality assessments of goal statementsNo quality assessments of goal statements
Stage 2Stage 2
Standard, enterprise-wide processStandard, enterprise-wide process
Some steps automated with technologySome steps automated with technology
Visibility of metrics available at higher levelsVisibility of metrics available at higher levels
Managers can prioritize to 5 or 6 key goalsManagers can prioritize to 5 or 6 key goals
Coaching dialog tracked but not assessedCoaching dialog tracked but not assessed
Stage 3Stage 3
PM process steps mastered and automatedPM process steps mastered and automated
Clear visibility and alignment of objectivesClear visibility and alignment of objectives
Technology integrated with learningTechnology integrated with learning
Focus on improving quality of coaching Focus on improving quality of coaching
PM drives other talent processesPM drives other talent processes
Stage 4Stage 4
Real time adjustments to individual performanceReal time adjustments to individual performance
Cultural shift towards improved performanceCultural shift towards improved performance
Managers are empowered as “barrier busters”Managers are empowered as “barrier busters”
Ability to measure ROI of performance processesAbility to measure ROI of performance processes
PM process feeds the “execution quotient”PM process feeds the “execution quotient”
Headlines – Headlines – Executives Speak out on Executives Speak out on
Performance ManagementPerformance Management
““I use Performance Measurement I use Performance Measurement and Management as a core and Management as a core management tool for myself and my management tool for myself and my direct reports, and I firmly believe we direct reports, and I firmly believe we must all see PM not just as a year-must all see PM not just as a year-end review process but as a way to end review process but as a way to manage our individual performance manage our individual performance and direct it in the most effective and and direct it in the most effective and efficient ways.”efficient ways.”
““Performance = Performance = results + results + behaviors”behaviors”
““We have been doing this for 5 years and every year we are getting better at it (and we are light years ahead of the industry).””
““Performance Performance Management is a Management is a CEO-driven initiative CEO-driven initiative and we have 98% and we have 98% participation participation throughout the throughout the organization.”organization.”
Thank YouThank YouQuestions/Comments?Questions/Comments?
Please join us for our next webinarLeadership Development at Pfizer: What
Happens After Class Wednesday, September 12, 2007 at 11 AM ET