1、Executive Human Resource Program The Promise of Performance ManagementHay GroupBostonThe Current Challenge of Performance ManagementThe HR processIs completely unrelated to other key businessprocessesIs dreaded by managers and employees alikeDoes not result in any meaningful feedbackDoes not differe

2、ntiate performance or payIs a focus for only one or two daysor hoursperyearThe Promise of Performance ManagementImagine a system that couldIncrease the likelihood that your strategy is effectivelyexecutedHarness and direct the 1060 minutes a day ofdiscretionary effort that every one of your employee

3、s hasRationalize and focus the number of goals that anyonein your organization hasImprove the decisive dialogue that occurs in yourorganizationReward performance in a way that it is motivating andengages peopleDifferentiate performance in ways that make linemanagers feel good about their decisionsPe

4、rformanceNumber ofEmployeesSource: Hay/McBer Optimizing the performance of your people will have apositive impact on business performanceImproving Performance Management Improves Business ResultsPercentage of variation in change in company performanceaccounted for by managerial practices19%2%1%1%6%1

5、8%3%1%1%8%0%10%20%30%40%Profitability ProductivityHRMStrategyQualityTechnologyR&DSource: Sheffield Effectiveness ProgrammeHuman Resource Management Practices Drive Profitability and ProductivityHighly Successful Companies are defined as having 5-year sales growth = 17.5% per year5-year profit gr

6、owth = 10.8% per yearAnnual equity growth = 16.7% per year5-year dividend growth = 13.4% per yearSource: D. Karvetz, The Human Resources RevolutionClear Employee Goals Participative Style Attention to Development Encourage Creativity Performance-Based Rewards Highly Successful Companies Less Success

7、fulCompanies80%70%67%62%86%26%4%27%10%30%High-performing companies are better at managing,motivating, and rewarding employeesImproving Performance Management Improves Business ResultsStrategy Execution Matters to ShareholdersThirty-five percent of an institutional investors valuation of a company is

8、 attributable to nonfinancial information that gauges the ability of the management team to deliver results:Strategy Execution: Can management make tough decisions andseize opportunities quickly?Management Credibility: Does the company keep its commitments?Strategy Quality: Is managements vision of

9、the future likely tooptimize value creation in a volatile, globalized, and connectedeconomy?Innovativeness: How readily does this company adapt?Attracting and Retaining Talent: Is turnover higher or lower than keycompetitors? Do new hires surpass leavers in skills and experience?Management Experienc

10、e: What skills and experiences does themanagement team bring to the table?Compensation: Do compensation policies support the firms strategicintent?Source: Mavrinac & Siesfield, Measuring Intangible Investment35% improvement in human-capital systems resulted in10%20% gain in shareholder valueAlig

11、nment and Integration of HR System“Human Capital Enhancements 290310330350370390020406080100Quintile Improvements in StrategicM ark e tV al ue p e rEm p l oy ee(000Source: Huselid and Baker, 1995Human Capital Systems IncreaseShareholder ValueImproving Performance Management Improves Business Results

12、High-performance companies define PerformanceManagement in its broadest sense: it is critical to executing and implementing strategyPerformance Management is now widelyrecognized as delivering more returns anddelivering more competitive advantages than other HR investmentsPerformance Management is t

13、he key to raising thebar in an organization, for all levels ofperformanceOrganizations with a high-performance orientationand strong management capability have higherrevenue, profits, and market valuationsPerformance ManagementPerformance Management is about improvingbusiness performance by improvin

14、g team andindividual performance, and ensuring that thecompanys strategy is executed and implemented.It is A process that ensures that people execute the strategyof the organization A process for establishing a shared understanding ofwhat is tobe achieved and how A process for ensuring that decisive

15、 and constructivedialogue occurs A process of managing self and others so that peopledo achieve A process for ensuring that people are doing the rightthings inthe most effective ways, to the best of their abilityPerformance Management StagesDesign Parameter PerformanceAppraisalPerformanceManagementP

16、erformanceOwnership Human Resources“Check the box”compliance-orientedManage poorperformersPassiveReport card(retrospectiveManagers andHuman ResourcesEvaluation rewardemphasisManage the tails ofbell curveJoint ownership forgoal-setting/reviewBarometer ofprogress (periodicEmployees,managers, andleader

17、shipStrategic clarity,coaching, dialogueRaise performanceof organizationSharedaccountability forresultsDialogue(continualFunction Role of Employee Focus Emphases OwnershipPerformance AppraisalPerformance ManagementManaging PerformanceHighLowLowHighImpact on ResultsLevel of Organizational CommitmentI

18、mproved business results require organizational commitmentCommitment to achievecompany goalsGood setting and reviewMerit increases efficiently allocatedPerformance Management Stages thisThe performance management model is not new, but the way inwhich leading organizations do it is very differentD i

19、a l o g u eDialogueBest PracticesBest PracticesWhats Different?There are four differentiators of best practice:Clear Strategy Translation ProcessIntegrated Performance ProcessesCulture of DialogueMultiple and Differentiated RewardsStrategy Translation ProcessA Definition:Early in the history of the

20、company, while thinking about how a company like this should be managed, I kept getting back to one concept: if we could simply get everyone to agree on what our objectives were and to understand what we are trying to do, then we could turn everybody loose and they would move along in a common direc

21、tion. Dave PackardStrategy Translation ProcessChecklist:Are all top team members unified and focused on the must-win battles of the organization?Are the interdependencies clear between the top-team members?Are the middle managers clear on the must-win battles?Do employees know what they need to do f

22、or the organization to be successful?Financial goals, operational goals, behaviorsA Definition:Leaders must see to it that the organizationssocial operating mechanismsthat is, the executive committee meetings, budget and strategy reviews, and other situations through which people do businesshave hon

23、est dialogue at their center. These mechanisms set the stage. Tightly linked and consistently practiced, they establish clear lines of accountability for making decisions and executing them. Ram Charam, HBR 4/2001Checklist:Do the goals of the organization reflect interdepartmental objectives?Are the

24、 financial, operational, and people processes integrated?Is the information from these processes used to make business decisions?Are the processes efficient and effective?A Definition:A leader should be constructing his appraisal all year long and giving his appraisal all year long. You have 20, 30,

25、 60 opportunities a year to share your observations. If, at the end of the year, someone is truly surprised by what you have to say, that is a failure of leadershipBy failing to provide honest feedback, leaders cheat their people by depriving them of the information that they need to improve.Critica

26、l feedback is theheavy lifting of leadership EDSs Dick BrownTypically a newemployees productivity curve increases quickly, then levels offWithoutreinforcement andfeedback the levelstays the same ormay fall offSporadic,inappropriate, orgeneral feedbackwithoutreinforcement has adistinctive effect onmo

27、tivation andperformanceConsistent, specificfeedback anddialogue build self-esteem andperformanceFeedbackFeedbackFeedbackFeedbackPerformance Coaching/Feedback Is CriticalCulture of DialogueChecklist:Are managers (and employees trained in and good at performance dialogue?Are managers selected and held

28、 accountable for performance coaching?Are coaching behaviors lived by the leaders of the organization?Is the dialogue open, informal, and candid, and does it provide closure?The better my performance, the better my total compensation will be35%27%38%0%10%20%30%40%Agree Neutral DisagreeWhen most empl

29、oyees, even the stars, get the same pay, it reduces clarity about what good performance looks likeSource: Hay GroupApproaches:Increase dialogueUse multiple currenciesReview use of ratingsUse forced rankingsFind new ways to differentiate meritSeparate means from endsTactics/StrategiesBehaviorsTrainin

30、gTraining Training Training Tactics/StrategiesBehaviors TrainingTrainingObjectivesEnablersConduct analysis of why OT is so high; develop strategy to reduce OT; implement strategyImplement 3 programs aimed atincreasing customer satisfaction: begin training programs; upgrade call center software; esta

31、blish a monitoring programSet high goals for yourself and for the team: try to reduce from 50 to 30 per month;communicate to team what needs to be done; “own” this processIdentify customer issues: think about and act on opportunities to address these issues; act as a role model to subordinates show

32、them how to work with customers; improve call-center software systemTrainingTrainingTactics/StrategiesBehaviorsDevelop a plan to meet with each of your subordinates and get the “pulse” on how they are doing (re: jobs, projects,expectations; develop career-pathing plans with each of your subordinates

33、; develop ideas around nonmonetary rewardsCoach consistently: deliver timely and constructive feedback; address issuesimmediately; make sure others contribute and have what they need to do the jobTactics/StrategiesBehaviorsBusiness Objectives Career DevelopmentObjectivesImprove consistency of custom

34、ers delivery (evidenced by 98% customer satisfactionGoals set for yearImprove employeeretention in department by 50%Goals set for next 8 monthsReduce overtime from 150 to 50 hours/month (cost not to exceed $12,000Goals set for yearExtent of Differentiation 1.Company wide success measures Company rev

35、enue Profit ability measuresNoneNone2.Business unit success measuresUnit revenueProfitability measures Other measuresAnnual incentiveSome, based on individual contribution3.Success measures current role Contribution to unit/company measures Salary increase Little4.Requirements current role Meet curr

36、ent job description Live the valuesNoneNone5.Success measures future rolesDemonstration of success competencies/behaviorsAchievement of development goalsFuture earningsSalaryAnnual incentive Long-term incentiveRecognitionSignificant, based on potentialMeasuresFirst-Level ManagersReward Linkage1.Comp

37、any-wide success measuresCompany revenue Profitability measuresLong-term incentive Annual incentive Some, based on roleSome, based on role2.Business unit success measuresUnit revenueProfitability measures Other measuresAnnual incentive Significant, basedon unit performance3.Success measures current

38、roleContribution to unit/company measuresAnnual incentiveSome discretionarycomponent4.Requirements current roleMeet current job description Live the valuesNoneNone 5.Success measures future rolesDemonstration of successcompetencies/behaviorsAchievement of development goalsFuture earnings SalaryAnnual incentiveLong-term incentive Recognition Significant, based onpotential Salary increase tiedto market movementLittleMeasuresExecutivesReward Linkage Extent of DifferentiationExtent of DifferentiationDont double -count!In Summary: Two Examples Organizati