PerformanceManagementAGuidetoConsultingJune2000DiscussionObjectivesProvideanoverviewofcurrentthinkingandtrendsDiscusswhatPMconsultingisallaboutReview“whatworksandwhatdoesn’t”ShareBestPracticesresearchReviewsomeofthebasicplanningandprojectstepsGroupDiscussionAnswerthefollowingquestions:1.Whatisperformancemanagement?Whydocompanieshavethisprocess?2.Whydoesn’titworksowell?Whatmakesitsodifficult?PerformanceManagementTranslatesbusinessvisionandstrategyinanactionablewaybycascadinggoalsthroughouttheorganizationMeasuresbothwhatisdoneand

howitisdoneAlignsDepartmentgoalswithstrategicbusinessobjectivesAlignsindividualswiththebroaderorganizational/teamcontextEnsurestheclosest“lineofsight”possibleSource:WatsonWyattBestPracticesinPerformanceManagementPerformanceConsulting1.TotalOrganizationCascadingandAlignmentStakeholderMetrics2.EmployeeReviewProcessEngagementandAccountabilityGrowthandAchievementsTwodimensions:PerformanceConsultingTotalOrganizationPerformanceCascadingandAlignmentStakeholderMetricsTheKeyQuestionsofBusinessPlanningWhydoesthecompanyexist?Whereisitgoing?Size SalesMarkets LocationsProducts CompetitiveChallengesSBULinkagesHowwillitgetdone?ValuesandOperatingPrinciples TechnologyResourcesWhatmustthecompanybeverygoodatdoing?Howwillprogressandsuccessbemeasured?ExpectationsofStakeholdersCompanyPerformanceMissionVisionofFutureStrategicOrganizationalGoalsCoreOrganizationalCapabilitiesBalancedScorecardBusinessPlansareDevelopedbytheBusinessUnitsResourceRequirementsIndustryLatinAmericaAsia(Europe)ObjectivesofthebusinessunitObjectivesoftheregionBottom-up-approach:Derivationofsegmentandcorporatestrategicplansandoperatingobjectivesfrombusinessunitgoals.Top-down-approach:DerivationofobjectivesfromcorporatestrategyObjectivesofdepartmentsandindividualsStrategyoftheCorporationObjectivesofthecorporation

PeopleFacilities

TechnologyEquipmentandMachinery Componentsofa

BalancedScorecard

(withsamplemetrics)FINANCIALRESULTSCUSTOMERSATISFACTION

BUSINESSPROCESSES

LEARNING&GROWTH

AFYPROI/ROASurplusGrowthNewsales:newcustomersAdditionalpolicies:currentcustomersMarketshareCollectingpremiumsCalculatingsellingprice:newproductNewlicensing(Region&Corporate)EstablishingtheBusinessCasefornewventures,newlocationsProductDevelopment:#innovations

CompetencygrowthAdditionalcountriesCorecapabilitiesgrowthCascadingStrategic&OperatingPlanGoalsCORPORATEORGANIZATIONMETRICSFinanceFinanceCustomerCustomerBusinessProcessBusinessProcessLearning&GrowthLearning&GrowthBUSINESSUNITTEAMS/INDIVIDUALSDEPARTMENTBalancedScorecardscanprovideorganizationalignmentandaccountability5to7GOALS“SMART”parametersDirectlyalignedTypicalProjectTimeline&Milestones**8weekselapsedtimefromplanningsession2DaysClarifyCompanyStrategyanddeterminegoalsImplementationTrainingandRolloutbeginsImplementationPlanningWorkshopFormalAdvisoryGroupReviewSession&Follow-up1wk2wks1wk1wk1wk1wk1wkProjectPlanning,OrientationandKick-off1Day1DayInterviewFindingsDevelopMeasureRecommendations1DayWorkshoponTargetsFinalizeTargetRecommendationsImplementationPlanReviewReviewPlanforImplementationReviewTransitionStrategy2DaysFormalAdvisoryTeamReview1Day1Day1wk1DayExecutivePlanningSession(s)PerformanceConsultingTotalOrganizationPerformanceClients:CEO,COO,sometimestheVPHRFees:typicalprojectis$180-250KTimeframe:+/-4monthsPerformanceConsultingEmployeeReviewProcessEngagementandAccountabilityClearPerformanceExpectationsGrowthandAchievementsPerformanceManagementIs......theongoingprocessofsettingperformanceexpectations,providingfeedbackandcoachingtoreachthoseexpectations,andreviewingandrecognizingperformanceresults.TiePMtotheBusinessCycleReviewandPlanningPlanningFeedback&CoachingFeedback&CoachingMid-YearReviewNewYearPlanningYear-EndReviewBadtiming...“Idon’twanttoruinyourdayHerman,buttomorrowmorningyou’’rescheduledtobeinmyofficeforyourannualperformancereview...””RememberTheKeyQuestions?Whydoesthecompanyexist?Whereisitgoing?SizeSalesMarketsLocationsProductsCompetitiveChallengesSBULinkagesHowwillitgetdone?ValuesandOperatingPrinciplesTechnologyResourcesWhatmustthecompanybeverygoodatdoing?Howwillprogressandsuccessbemeasured?ExpectationsofStakeholdersCompanyPerformanceMissionVisionofFutureStrategicOrganizationalGoalsCoreOrganizationalCapabilitiesBalancedScorecardOrganizationAlignmentleadstoEmployeeEngagementCOMPANYMISSIONVISIONStrategicObjectivesCoreCapabilitiesCompetenciesLeadershipFunctionalDepartmentScorecardSuccessProfilesEmployeePerformanceProcessIndividualGoalsEmployeeDevelopmentPlansBusinessUnitScorecardCascading:CriticalMetricsandCompetenciesChangerequiresabalancedValueExchangeEmployeeGivesEmployerGivesEnergyEffortCommitmentValueAddLearningTimeOpportunityCareerBenefitsCompensationJobThePerformanceProcesscanprovidethekeystodevelopmentBasePayPromotionTrainingCareerdevelopmentSuccessionplanning89%77%56%51%32%Reductioninforce26%Variablepay34%CurrentUseofPerformanceManagementDataSource:WatsonWyattBestPracticesinPerformanceManagementPerformanceManagementEvolutionTraditionalRecentEmergingMeasuresTraits/OutcomesBehaviors/OutcomesTime/Quality/ValueEvaluatorBossSelf/PeersCustomersOutcomesMeritPayDevelopmentOrganizationSuccessImplementationDistributeFormsTrainandCommunicateOngoingEducationandinvolvementOwnershipHRDManagementEmployeesComplianceVoluntaryMandatoryMotivationFactorsThatInfluenceProcesseffectivenessOrganizationSupervisorPMCultureSkillsProcessTheOrganizationValuesthatSupportPMTheCapabilitytoMeasureandDiscussPerformanceTheInteractionBetweentheEmployeeandtheSupervisorPeopleFactorsTechnicalFactorsPerformanceMeasuresRewardsDeliveryPMFormsMeasuresthatSupporttheOrganizationsGoalsandValuesandarePossibletoAccuratelyMeasureHowandWhyPayisLinkedtoPerformanceHowtheDesignoftheFormSupportstheProcessPerformanceManagementEffectivenessFeedbackfrommultiplesourcesCoachingandfeedbackareintegralDe-emphasisonaratingDecentralizedcontrolGreaterlinkagebetweenpayandperformanceEffectivemeasures-Competencies-Businessstrategies“Champions””—sponsorshipEmployeeparticipationEmployeeinvolvementinsystemdesignCommunication&trainingAlignmentwithbusinessobjectives,strategy,customerneedsOngoingmonitoringofeffectivenessofprogramBestPracticesElementsofSuccessfulProgramsHighImpactPerformanceManagementKeyelementsfoundinall“bestpractices”EmphasisonlookingforwardPlanninganddevelopmentJointprocesswithemployeeownershipCooperativegoalsettingFeedback(continuous,multiplesources)DevelopmentalfocusPayandperformancelinkageSource:WatsonWyattBestPracticesinPerformanceManagementUseofKeyElementsDevelopmentPlanningMulti-sourceratings14%65%81%84%94%97%GoalSettingTeamstandardsNoratingsCompetencies/behaviorsSource:WatsonWyattBestPracticesinPerformanceManagementEvolutionofPerformanceFeedbackTopDownSelf-AppraisalPeerReviewsUpwardFeedbackInternalCustomersExternalCustomers3600ReviewDoesitmakeadifference?Employeesareeligibleforstockplanprograms1.8%Companyterminatesemployeeswhoperformunacceptably1.8%Companydoesagoodjobofhelpingpoorperformersimprove1.5%Topperformersgetsignificantlymorepaythanaverageperformers0.8%Companypositionspayabovemarket0.4%Employeeperformanceappraisalsusedtosetpay0.4%Employeesparticipateinprofit-sharingplanbasedonfirm’soverallsuccess0.6%Payislinkedtocompany’’sbusinessstrategyThePerformanceMatrixOResults“what”Behaviors“how”Std=100%ofexpectedStd=100%alignmentNIHNIWFMEEKey:O=OutstandingEE=ExceedsExpectationsM=MeetsExpectations(80-90%ofpopulation)NIH=NeedsImprovementon“HOW”NIW=NeedsImprovementon“WHAT”F=FailingProjectStepsProjectPlanning,EducationandAssessment:ClientFirst,scopeandtimetable,designteameducation,PMdesignmatrix,documentreview,interviewsDesign:Straw-mandesigns,implementationplanningandscheduleTestingandApproval:Presentation,seniormanagementassessment,sign-off,editImplement:Communicationrollout,modulartrainingrollout,useReview/Revise:Gatherfeedback,testandrevise12345PerformanceConsultingEmployeeReviewProcessClients:VPHR,Dir.Compand/orODFees:typicalprojectis$85-130KTimeframe:+/-3months(excludesimplementation)Think…““Implementation”Asuccessfulprocessis25%designand75%implementation!“It’snevertoearlytothinkaboutimplementation...””PeterDruckerBestPracticesinImplementationDetailedcommunicationsandtrainingstrategyPro-activeproblemidentificationBroadbuy-inSeniormanagementinvolvementMeasurementofsystemeffectivenessSource:WatsonWyattBestPracticesinPerformanceManagementUtilizeBestPracticesinChangeManagementVisibleseniormanagementsupportOngoingcommunicationBestpracticesandstakeholderresearchHighinvolvementandbroadbuy-inCarefulplanning,rapidprocessComprehensiveapproachtoimplementationandmonitoringTraininginintactworkteamsSource:WatsonWyattHR21StudyUnderstanding

Realizehow“mywork”isdifferentbecauseofthechangeCommitment

Believeinthesystemandprocessforchange...insharedaccountabilityformakingitsuccessfulAcceptanceAgreetovalueormeritofchange.Recognizeadvantageof“futurestate”Action

Adoptnewbehaviors=becomeengagedinthechangeprocess.ChampionchangesinternallyBehaviorChangeModelEFFORTAwarenessAQuickSummaryPerformancemanagementcontinuestoevolveNOoneperfectsolutionnotmuchmagicImpact:greatifdonerightBestpracticesforideasThinkimplementationearlyandoftenUpdateandkeepfreshOngoingTrackingTimelyCommunication

&SkillsTrainingConnectionbetween

Rewards&PerformanceDirectLinkto

InstitutionMissionSeniorLeadership

InvolvementEmployee“Ownership”ObjectiveFeedback

&ReviewCriticalSuccessFactorsforaneffectivePerformanceManagementprocessKeyHumanResourceLinkagesBasePayTrainingSuccessionPlanning/PromotionsCareerPlanningIncentivePay100%97%95%85%80%Source:WatsonWyattBestPracticesinPerformanceManagementHRStrategySuccession

PlanningRewardsWork

DesignSelection&StaffingPerformanceManagementTraining&DevelopmentIntegratePMwithHRStrategyPerformanceManagementTeamMethodologyandToolsBrianBrown(Cleveland)BradCarter(SanFrancisco)CassandraFrangos(Boston)**DavidGore(Toronto)JimStewart(Boston)**toKaplanandNorton’sBalancedScorecardCollaborativePerformanceManagementAWatsonWyattGuidetoConsultingJune2000謝謝謝12月月-2223:39:4123:3923:3912月月-2212月月-2223:3923:3923:39:4112月月-2212月月-2223:39:412022/12/1323:39:419、靜夜四四無鄰，，荒居舊舊業貧。。。12月-2212月-22Tuesday,December13,202210、雨中黃黃葉樹，，燈下白白頭人。。。23:39:4223:39:4223:3912/13/202211:39:42PM11、以以我我獨獨沈沈久久，，愧愧君君相相見見頻頻。。。。12月月-2223:39:4223:39Dec-2213-Dec-2212、故故人人江江海海別別，，幾幾度度隔隔山山川川。。。。23:39:4223:39:4223:39Tuesday,December13,202213、乍見翻疑疑夢，相悲悲各問年。。。12月-2212月-2223:39:4223:39:42December13,202214、他鄉鄉生白白發，，舊國國見青青山。。。13十十二二月202211:39:42下下午午23:39:4212月月-2215、比不不了得得就不不比，，得不不到的的就不不要。。。。。十二月月2211:39下下午12月月-2223:39December13,202216、行動出成果果，工作出財財富。。2022/12/1323:39:4223:39:4213December202217、做前，，能夠環環視四周周；做時時，你只只能或者者最好沿沿著以腳腳為起點點的射線線向前。。。11:39:42下下午11:39下下午23:39:4212月-229、沒有有失敗敗，只只有暫暫時停停止成成功??！。12月月-2212月月-22Tuesday,December13,202210、很多多事情情努力力了未未必有有結果果，但但是不不努力力卻什什么改改變也也沒有有。。。23:39:4223:39:4223:3912/13/202211:39:42PM11、成功就就是日復復一日那那一點點點小小努努力的積積累。。。12月-2223:39:4223:39Dec-2213-Dec-2212、世間成成事，不不求其絕絕對圓滿滿，留一一份不足足，可得得無限完完美。。。23:39:4223:39:4223:39Tuesday,December13,202213、不知香香積寺，，數里入入云峰。。。12月-2212月-2223:39:4223:39:42December13,20