four steps to transform employee performance final · ©thehofstettergroup 2016 1 four steps to...

©TheHofstetterGroup2016

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Four Steps to Transform Employee Performance (WHILE GROWING YOUR BUSINESS)

1-617-512-4141 [email protected] www.TheHofstetterGroup.com


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Table of Contents Introduction .................................................................................................................................................. 3

The solution ................................................................................................................................................. 6

The current model ....................................................................................................................................... 7

The new model .......................................................................................................................................... 10

Wrap up ..................................................................................................................................................... 15


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INTRODUCTION Business leaders wear so many hats and have so many issues to deal with, it can cause stress and a lack of focus on what’s important. You have the best laid plans to work on the important issues each day and then it happens, life, in the form of interruptions, people needing you to make a decision, resolve an issue and last minute meetings. The next thing you know it’s the end of the day and your goals will have to wait until tomorrow. If there is one thing that is certain in business, it is that every business needs to be focused on growth and efficiencies. Like many other leaders, you are looking for that competitive advantage of how to do more with less and how to stay focused. You may be struggling with what to do next. You want to continue to grow and succeed but how are you going to manage it all?

"Growth is never by mere chance; it is the result of forces

working together." — James Cash Penney, founder, JC Penney


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Where are you currently? Here are two exercises to complete to identify if you’re stressed and what is causing the stress? � Are you happy? � Are you focused? � Are you stressed? � Are you achieving your goals?

Identify which issue(s) are keeping you at night? Which are you struggling with?... � How to increase profits � How to decrease costs � Your workforce � Non-engaged employees � High turnover costs � Worrying about losing high performers � Trouble hiring good employees � Spending too much time on low performers � Keeping your managers flexible and responsive to changing needs � Tracking data aligned to your strategic goals � Communication, accountability and ownership of strategic goals


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Are you and your team, Ducks? Ducks look calm on the surface but just under the surface, their feet are moving a million miles

a minute just to stay afloat.

At the same time, you need to look like you are in complete control, or are you and your team all ducks?

If you are stressed and your business feels like it’s trapped in a duck’s world, don’t fret!

Your results will show one of two findings.

Finding #1: Your business is unruffled. Finding #2: You may find you have some work to do!

Meaning your underwater duck is just as calm as your surface duck. In which case, you can rest easy.

You want to be a calm looking duck, but maybe you need a little help. In which case, read on for assistance in achieving #1 above…


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THE SOLUTION It’s time to take back control of your business by implementing or updating your Performance Management Program. Performance Management Performance Management is an ongoing process of providing communication, feedback, and accountability from the executive level down to the employees, in support of the strategic goals and objectives of the organization. In other words, it’s getting everyone to work toward the same goals and objectives and to be held accountable for the results.


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THE CURRENT MODEL While many people consider Performance Management as the annual performance review, it should be much more than that. This is about impacting your business results, engaging your employees and exceeding your goals and objectives. Performance Management can be used either in place of annual reviews or in addition to them. If you use an annual performance management program (annual review), what is the payback for the annual appraisal process? How does it drive your business forward? Are you reaching goals and objectives due to this process? Can you afford to continue a process that isn’t a high value activity? How many hours are you spending on something that doesn’t drive your business performance? You have to begin wondering why you do it that way. You need a better reason other than you’ve always done it that way. 3 reasons to change Three reasons why the way you’re doing it now is not the best way.

1. Financial 2. Stress 3. Subjectivity


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Financial What is your current process costing you? Fill in the table below to see how much you are spending on the process you currently have.

1. Fill in the average wage of the managers, number of hours to prepare and conduct appraisals and the total number of employees

2. Multiply those 3 numbers for the total cost of your appraisal process 3. Add the total cost of the managers and employees for a total cost

Average Hourly Wage (Including Benefits)

Number of Hours to Prepare and Conduct appraisals

Total Number of Employees Total Cost

Managers Employees

Surprised? It’s worth asking again, what does this process buy you? What is the value in it?


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Stress There is so much research around how ineffective the annual appraisal process can be that it may surprise you. According to Dr. David Rock of the NeuroLeadership Institute, “labeling people with any form of numerical rating or ranking automatically generates an overwhelming “fight or flight” response that impairs good judgment.” There is also research by Carol Dweck, the Lewis and Virginia Eaton Professor of Psychology at Stanford University, which found that people will typically strive to avoid difficult challenges. Any stretch goal or strategic imperative, no matter how worthy, will be seen as an invitation to fail. Subjectivity Currently, in many cases, the process involves a subjective conclusion on many of the data points. The manager will project their views, biases and opinions on the employee. This can have impacts similar to the stress outcomes on the employee. In addition, many people are uncomfortable giving difficult feedback to employees. This adds to the concern of knowing how to provide good feedback. The goal is to move to an objective, data based system. The current way of thinking is a check list mentality and is costing you more than you think!


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THE NEW MODEL It’s time to replace perceived efficiency with effectiveness! Here is a model of Performance Management that removes the financial burden, the stress of the managers, builds interpersonal skills and achieves strategic goals. It not only reduces or eliminates the biggest shortcomings of the old method of performance management, but will actually drive an increase to the organizational strategies. In other words, more profitability, better outcomes on the organizational goals, more employee accountability and ownership of results. This program is best initiated by the top level of the organization and cascaded down. Everyone from the CEO down to part time employees should be included in this methodology. The process includes 4 steps:

1. Set Goals and Outcomes 2. Provide Feedback 3. Offer Development Opportunities 4. Deliver Rewards and Recognition

Each component can stand on their own but imagine the power when they are incorporated into one integrated organizational system that is ongoing and not simply once per year?

©The Hofstetter Group 2016


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Step 1. Setting Goals and Outcomes The first step in this process is to establish organizational goals. The purpose of Step 1 is to establish the strategic goals for the organization that can then be cascaded throughout the organization. Goals typically come out of a strategic planning session. This planning session will help determine the operating plan and budget for the upcoming year and beyond. There are many methods for setting goals. Two of the main methodologies are:

• SMART Goals – Specific, Measureable, Attainable, Realistic, Time Certain

• BHAG – Big Hairy Audacious Goal – This was identified by Jim Collins and Jerry Porras. The idea around this type of goal setting is to choose a visionary, strategic and compelling goal. In other words, something big that is a stretch for your organization to reach

Once your goals are set, you want to break them down to the department level. What has to happen in each related department in order to achieve that goal. Research is now showing us that goals that are broken down into manageable components and allow for people to learn as they meet them will provide for a different outcome and a better chance of success. When the department goals are set based on the organizational goal, break it down again to the employee level. What does the employee need to own and accomplish in order to help reach the department goal? Everyone throughout the organization has ownership of that goal. You should be setting organizational goals which will impact all of the departments within the organization. Keep in mind not to set goals for the sake of setting goals, pick your top priorities to focus on. The topics needed for this step are Strategic planning, goal setting, data analysis.

“When it is obvious that the goals cannot be reached, don't adjust the goals, adjust the action steps.”

Confucius


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Step 2 – Provide Feedback This is the step that occurs on a regular basis and provides the employee with feedback on how they are moving towards the goals and objectives. The purpose of this step is for transparency, honest and open two-way communication which will eliminate any surprises down the road on the employee’s performance. This is the opportunity to provide feedback on how the employee, the department and the organization are doing towards meeting the goals. Feedback sessions can happen as often as possible which will depend on how often you collect data for the goals you have set. We typically recommend having these meetings monthly, but there will be times that data can only be gathered on a quarterly basis. The topics needed for this step are providing feedback, communication, understanding data and ideally, coaching skills.

“Communication – the human connection – is the key to personal and career

success.” – Paul J. Meyer


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Step 3 – Offer Development Opportunities The results of Step 2 will be key in this step. Depending on how the feedback or coaching session went, there may be skills or behaviors identified that need to be addressed. The purpose for this step is offer employees opportunities for development in support of reaching the goals. If you have a Learning and Development department you will rely on them to help identify and develop the skills needed for improvement. If you do not have learning capabilities, there are many resources available for small businesses to use such as; consultants, online programs, seminars, workshops and many other options. In many cases, once this process is in place, you will find employees asking for development opportunities, prior to the feedback session, if they know they are not meeting the goals. In some cases, people who are meeting the goals will ask for development opportunities, as they want to take their skills to a new level. This all comes about by being open, transparent, and the employees knowing they are being held accountable and where they stand on a monthly basis. If they have access to the data throughout the month, they will check their status. That is ownership and engagement! The topics needed for this step are behavioral and skills training programs.

The only thing worse than training your employees and having them leave is not training them and having them stay.

— Henry Ford, Founder, Ford Motor Company


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Step 4 – Deliver Rewards and Recognition This step needs serious thought and a well-organized plan. If your organization currently has a reward and recognition program, determine how it fits into this new model. The purpose of Step 4 is to offer recognition when goals are met or when milestones are reached for long term goals. If you currently tie bonuses or increased compensation in the yearly review process, you will want to rethink that. Recognition for meeting goals cannot wait for a once a year reward. Of course, you could implement a recognition program throughout the year and then still apply bonuses and compensation increases yearly. You will want to think about the system of how you determine what percentage increase is given. It should be based on the goals that were achieved during the year. Recognition does not have to be big it simply needs to happen. It can be as simple as a handwritten note, lunch with the boss, or recognition at a staff meeting. Each person has their own preferences of what they like for recognition. Make sure your managers know what motivates their employees and accommodate the reward or recognition for that person. In other words, customize the program. It doesn’t have to be that involved it can be as simple as knowing if someone doesn’t want public recognition then recognize them in another way. Another point to keep in mind is to mix up how you recognize people, it can become old after a while. Get creative with this. Topics included in this step are creating a reward and recognition program.

"People work for money but go the extra mile for recognition, praise and rewards." --Dale Carnegie, Leadership Training Guru


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WRAP UP Now you have the four steps to transform performance in your organization. This information will help to begin to change your culture to be more open, transparent, and engaged with employees. Think about what that will look like. Think about the cost savings, the hours your managers will gain, the money saved and more importantly, the goals you can now plan and execute. What will that do for your business this year? These four steps will transform your business in ways you can only imagine today. It’s time to empower your employees to help you grow your business.

“Research indicates that workers have three prime needs: Interesting work, recognition for doing a good job, and being let in on things that are going on in the

company.” – Zig Ziglar


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The Hofstetter Group is a coaching and advising firm helping businesses like yours to implement performance management programs that grow your business and your people! Contact us today to help with any of the following:

• Analysis of your current performance program for efficiencies • Implement a full performance management program • Implement any of the steps to compliment what you already offer • Strategic planning • Goal setting • Goal Cascading • Data analysis • Communication skills • Coaching skills • Learning and development programs and departments • Reward and Recognition program

You can reach David Hofstetter at:

1-617-512-4141 [email protected] www.TheHofstetterGroup.com

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