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1、Performance ManagementA Guide to ConsultingJune 2000Discussion ObjectivesnProvide an overview of current thinking and trendsnDiscuss what PM consulting is all aboutnReview “what works and what doesnt”nShare Best Practices researchnReview some of the basic planning and project steps Group DiscussionA
2、nswer the following questions:1. What is performance management? Why do companies have this process?2. Why doesnt it work so well? What makes it so difficult? Performance ManagementnTranslates business vision and strategy in an actionable way by cascading goals throughout the organizationnMeasures b
3、oth what is done and how it is donenAligns nDepartment goals with strategic business objectivesnAligns individuals with the broader organizational/ team contextnEnsures the closest “line of sight” possibleSource: Watson Wyatt Best Practices in Performance ManagementPerformance Consulting1. Total Org
4、anizationnCascading and AlignmentnStakeholder Metrics2. Employee Review ProcessnEngagement and AccountabilitynGrowth and AchievementsTwo dimensions:Performance ConsultingTotal Organization PerformancenCascading and AlignmentnStakeholder MetricsThe Key Questions of Business Planning=Why does the comp
5、any exist?=Where is it going?Size SalesMarkets LocationsProducts Competitive ChallengesSBU Linkages=How will it get done?Values and Operating PrinciplesTechnology Resources=What must the company be very good at doing?=How will progress and success be measured?Expectations of StakeholdersCompany Perf
6、ormanceMissionVision of FutureStrategicOrganizational GoalsCore OrganizationalCapabilitiesBalanced ScorecardBusiness Plans are Developed by the Business UnitsResource RequirementsIndustryLatin AmericaAsia(Europe)Objectives ofthe business unitObjectives ofthe regionBottom-up-approach:Derivation of se
7、gment and corporate strategic plans and operating objectives from business unitgoals.Top-down-approach:Derivation of objectivesfrom corporate strategy Objectives of departmentsand individualsStrategy of the CorporationObjectives ofthe corporation People Facilities Technology Equipment and MachineryC
8、omponents of a Balanced Scorecard (with sample metrics)FINANCIAL RESULTSCUSTOMER SATISFACTION BUSINESS PROCESSES LEARNING & GROWTH AFYP ROI/ROA Surplus GrowthNew sales: new customersAdditional policies: current customersMarket shareCollecting premiumsCalculating selling price: new productNew licensi
9、ng (Region & Corporate)Establishing the Business Case for new ventures, new locations Product Development: # innovations Competency growth Additional countries Core capabilities growthCascading Strategic & Operating Plan GoalsCORPORATEORGANIZATIONMETRICSFinanceFinanceCustomerCustomerBusinessProcessB
10、usinessProcessLearning& GrowthLearning& GrowthBUSINESS UNITTEAMS/INDIVIDUALSDEPARTMENTBalanced Scorecardscan provide organization alignment and accountability 5 to 7 GOALS “SMART” parameters Directly alignedTypical Project Timeline & Milestones* 8 weeks elapsed time from planning session2 Days Clari
11、fy Company Strategy and determine goalsImplementationTraining and Roll out beginsImplementation PlanningWorkshopFormal AdvisoryGroup Review Session&Follow-up1 wk2 wks1 wk1 wk1 wk1 wk1 wkProjectPlanning, Orientationand Kick-off1 Day1 Day Interview Findings+Develop Measure Recommendations1 DayWorkshop
12、 on TargetsFinalize TargetRecommendationsImplementationPlan ReviewReview Plan forImplementation Review TransitionStrategy2 DaysFormal AdvisoryTeam Review1 Day1 Day1 wk1 DayExecutivePlanningSession(s)Performance ConsultingTotal Organization PerformanceClients: CEO, COO, sometimes the VPHRFees: typica
13、l project is $180 - 250KTimeframe: +/- 4 monthsPerformance ConsultingEmployee Review ProcessnEngagement and AccountabilitynClear Performance ExpectationsnGrowth and AchievementsPerformance Management Is.the ongoing process of setting performance expectations, providing feedback and coaching to reach
14、 those expectations, and reviewing and recognizing performance results.Tie PM to the Business CycleReview and PlanningPlanningFeedback & CoachingFeedback & CoachingMid-Year ReviewNew Year PlanningYear-End ReviewBad timing.“I dont want to ruin your day Herman, but tomorrow morning youre scheduled to
15、be in my office for your annual performance review.”Remember The Key Questions ?=Why does the company exist?=Where is it going?Size SalesMarkets LocationsProducts Competitive ChallengesSBU Linkages=How will it get done?Values and Operating PrinciplesTechnology Resources=What must the company be very
16、 good at doing?=How will progress and success be measured?Expectations of StakeholdersCompany PerformanceMissionVision of FutureStrategicOrganizational GoalsCore OrganizationalCapabilitiesBalanced ScorecardOrganization Alignment leads to Employee Engagement COMPANYMISSIONVISIONStrategic ObjectivesCo
17、re Capabilities CompetenciesLeadershipFunctional Department ScorecardSuccess ProfilesEmployee Performance ProcessIndividual GoalsEmployee Development PlansBusiness Unit Scorecard Cascading: Critical Metrics and Competencies Change requires a balanced Value ExchangeEmployee Gives Employer GivesEnergy
18、EffortCommitmentValue AddLearningTimeOpportunityCareerBenefitsCompensationJobThe Performance Process can provide the keys to developmentBase PayPromotionTrainingCareer developmentSuccession planning89%77%56%51%32%Reduction in force26%Variable pay34%Current Use of Performance Management DataSource: W
19、atson Wyatt Best Practices in Performance ManagementPerformance Management EvolutionTraditional Recent Emerging MeasuresTraits/OutcomesBehaviors/OutcomesTime/Quality/ValueEvaluatorBossSelf/PeersCustomersOutcomesMerit PayDevelopmentOrganization SuccessImplementationDistribute FormsTrain andCommunicat
20、eOngoing Education and involvementOwnershipHRDManagementEmployeesComplianceVoluntaryMandatoryMotivationFactors That Influence Process effectiveness Organization Supervisor PM Culture Skills Process The Organization Values that Support PM The Capability to Measure and Discuss Performance The Interact
21、ion Between the Employee and the Supervisor People Factors Technical Factors Performance Measures Rewards Delivery PM Forms Measures that Support the Organizations Goals and Values and are Possible to Accurately Measure How and Why Pay is Linked to Performance How the Design of the Form Supports the
22、 Process PerformanceManagementEffectivenessFeedback frommultiple sourcesCoaching and feedback are integralDe-emphasison a ratingDecentralizedcontrolGreater linkagebetween pay and performanceEffective measures- Competencies- Business strategies“Champions”sponsorshipEmployeeparticipationEmployeeinvolv
23、ement insystem designCommunication& trainingAlignment withbusiness objectives,strategy, customer needsOngoing monitoringof effectivenessof programBest PracticesElements of Successful ProgramsHigh Impact Performance ManagementKey elements found in all “best practices”nEmphasis on looking forwardnPlan
24、ning and developmentnJoint process with employee ownershipnCooperative goal settingnFeedback (continuous, multiple sources)nDevelopmental focusnPay and performance linkageSource: Watson Wyatt Best Practices in Performance ManagementUse of Key ElementsDevelopment PlanningMulti-source ratings14%65%81%
25、84%94%97%Goal SettingTeam standardsNo ratingsCompetencies/behaviorsSource: Watson Wyatt Best Practices in Performance ManagementEvolution of Performance FeedbackTop DownSelf-AppraisalPeer ReviewsUpward FeedbackInternal CustomersExternal Customers3600ReviewDoes it make a difference?Employees are elig
26、ible for stock plan programs1.8%Company terminates employeeswho perform unacceptably1.8%Company does a good job of helping poor performers improve1.5%Top performers get significantly more pay than average performers0.8%Company positions pay above market0.4%Employee performance appraisals used to set
27、 pay0.4%Employees participate in profit- sharing plan based on firms overall success0.6%Pay is linked to companys business strategyThe Performance MatrixOResults“what”Behaviors“how”Std =100% ofexpectedStd =100%alignmentNIHNIWFMEEKey:O = OutstandingEE = Exceeds ExpectationsM = Meets Expectations (80
28、- 90% of population)NIH = Needs Improvement on “HOW”NIW = Needs Improvement on “WHAT”F = FailingProject StepsProject Planning, Education and Assessment: ClientFirst, scope and timetable, design team education, PM design matrix, document review, interviewsDesign: Straw-man designs, implementation pla
29、nning and scheduleTesting and Approval: Presentation, senior management assessment, sign-off, editImplement: Communication rollout, modular training rollout, useReview/Revise: Gather feedback, test and revise12345Performance ConsultingEmployee Review ProcessClients: VPHR, Dir. Comp and/or ODFees: ty
30、pical project is $85 - 130KTimeframe: +/- 3 months (excludes implementation)Think “Implementation”nA successful process is 25% design and 75% implementation!“Its never to early to think about implementation. . .”Peter DruckerBest Practices in ImplementationnDetailed communications and training strat
31、egynPro-active problem identificationnBroad buy-innSenior management involvementnMeasurement of system effectivenessSource: Watson Wyatt Best Practices in Performance ManagementUtilize Best Practices in Change ManagementnVisible senior management supportnOngoing communicationnBest practices and stak
32、eholder researchnHigh involvement and broad buy-innCareful planning, rapid processnComprehensive approach to implementation and monitoringnTraining in intact work teamsSource: Watson Wyatt HR21 StudyUnderstanding Realize how“my work” is different because of the changeCommitment Believe in the system
33、 and process for change . . . in shared accountability for making it successfulAcceptanceAgree to value or merit of change. Recognize advantage of “future state”Action Adopt new behaviors = become engaged in the change process. Champion changes internallyBehavior Change ModelEFFORTAwarenessA Quick S
34、ummarynPerformance management continues to evolvenNO one perfect solutionnnot much magicnImpact: great if done rightnBest practices for ideasnThink implementation early and oftennUpdate and keep freshOngoing TrackingTimely Communication& Skills TrainingConnection between Rewards & PerformanceDirect
35、Link toInstitution MissionSenior Leadership InvolvementEmployee “Ownership”Objective Feedback& ReviewCritical Success Factors for an effectivePerformance Management processKey Human Resource LinkagesBase PayTrainingSuccession Planning/PromotionsCareer PlanningIncentive Pay100%97%95%85%80%Source: Wat
36、son Wyatt Best Practices in Performance ManagementHR StrategySuccessionPlanningRewardsWorkDesignSelection& StaffingPerformanceManagementTraining & DevelopmentIntegrate PM with HR StrategyPerformance Management TeamMethodology and ToolsnBrian Brown (Cleveland)nBrad Carter (San Francisco)nCassandra Frangos (Boston)*nDavid Gore (Toronto)nJim Stewart (Boston)* to Kaplan and Nortons Balanced Scorecard Collaborative Performance ManagementA Watson Wyatt Guide to ConsultingJune 2000
