performance management 191213 - salto dee fe consulting management... · · 2017-06-24we focus on...

Salto Dee Fe Consulting Service

Performance Management

Rajan Kalia, Salto Dee Fe Consulting

People NEXT – SOIL

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Empower | Enable | Excel

About Us

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Salto Dee Fe Consulting (SDF) – A Business Enabling Firm

We are a business enabling firm working at the intersection of Strategy, Execution & Human Resources.""We partner with organizations to smoothly leapfrog their business to its next phase of growth.""We focus on the two primary pillars in any organization - shareholders (with focus on profits and governance) and employees (with focus on execution).

WHO WE ARE

OUR VISIONExcel at solving people problems for businesses to

enhance productivity & employee retention

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OUR CORE VALUES

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OUR EXPERTISE

Talent Management

Organizational Transformation

Employee Retention

Leadership Skills Learning

OUR PRODUCTSRetention Competencies Based Assessment for Development Tool

A 360 Behavior Change tool that is "Simple, Practical and Forward Looking


OUR PARTNERS

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We Also work with

Founded and lead by Marc Effron, the author of the #1 best selling HR book, “One Page Talent Management: Eliminating Complexities and Adding Value” .

Our tie up with LIMRA-LOMA would bring cutting edge training, research & consulting solutions to India in Insurance domain

Our technology partner for offering cutting edge, customized solutions for sizeable volumes- e.g. 360 degree, assessment centers, engagement surveys etc.


Let us talk…

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Where are we headed?""What role does HR play in PMS? What role should it play?""What will it take for us to succeed with PMS?""What do you gain from this?


● Performance management is viewed as an HR 'program' versus a ‘strategic business

tool’ used to drive success

● Balancing “What” & “How” & “Whom”

● Short Term Vs Long Term goals

●Who the h… Invented the Bell Curve?

● No one is penalized for not giving reviews, who is accountable?

● Employees have little to no involvement in the process (e.g., setting their own

objectives, leading the performance discussion).

● Both management and employees dread the process.

● How do I give difficult feedback to employees

● Any other?

Key Issues HR Managers Face


●What is our organisational philosophy on the system?

● Inter linkages of various performance measurement mechanisms

●Weaving the different systems together

●How do I implement the system?

●How do I communicate the system consistently across the company?

●Are the managers mature to handle this? What about First time managers?

●How do I deal with outages?

●How do I link the outcomes to rewards?

& Many More………………..

Key Questions to Answer


Let’s Assess Our “As Is” PMS FrameworkHow do your company’s practices compare to those that drive effective performance management? !"


Start with the science

Performance management (PM) is the most powerful process available to increase individual performance "•PM fails to deliver results in most companies for two reasons:

Too many goals set without sufficient stretch Too little coaching for performance

•There’s conclusive science to guide the PM design process


Why have a Performance Management Program?

Performance management curve: The size of the circles indicates the number of U.S. companies at " " that point on the curve by order of magnitude. "

Source: PwC Research 2012


Operating Principles For PMS Design

❑Alignment – Individual Goals to Organizational Goals

❑Clarity – Measures of success, Expectations & Overall Process

❑Inclusive Meritocracy – Opportunity to all to earn rewards etc

❑Transparency – Clear communication on what, when & how?

❑Balance – Measure “What” & “How” (3600 View)

❑Any Other ?


Organisational Goals shared

with employees and start

off the Goal Setting Process

MarchFebruary

January April

May

June

July

AugustSeptember

October

December

November

Prepara

tion f

or

Review

s

Review Process in

Action

Presentation of the

organizational performance

to Management Committee

Tracking

Tracking

Mid-year

review

Trackin

g

Trac

king

Trac

king

Coaching &

Feedback

Coaching & Feedback

Coac

hing

& F

eedb

ack

Coaching & Feedback

Bus

ines

s Pl

an P

repa

ratio

n

Fina

l Bus

iness

Plan

prese

ntati

ons

Tracking

Development Actions to

be implemented

Quarterly Review

Individual Goal & Dev Setting Forms in Place

Prepare for Mid-year review

Implementation of Dev. Plans

Kickin

g off s

elf

appra

isals

Discussions on one

on one

Com

pensation

Changes &

Dev Plans

Com

munication

Decisions on Bonuses

and Career Moves

Tracking

Quarte

rly R

eview

Discussions on one

on one. Fill in

Appraisal Form *

Compilation of Data

on Ratings

Tracking

Planning

Track

ing

Revie

w

* Manager to discuss the appraisal with Customer and 2nd Level Manger

Conceptual FrameworkManagament Development

Calendar tobe actioned

Impl

emen

tatio

n of

Dev

. Pla

ns


Conceptual Framework - Simplified• Operating Principles:!

✓ Alignment "✓ Inclusive Meritocracy"✓ Transparency"✓ Balance (360 degree view) "

• Overview of the System:!✓ Planning"✓ Tracking"✓ Review"✓ Thumb ruling / Calibration"✓ Recognition / Reward"

• Process:!✓ Goal Setting"

o What (Keeping all parameters in view e.g Stakeholders - Customers, Employees, Agents, regulators, Public, Shareholders and Cost management & Competition)"

o How – Process / Roadmap"✓ Tracking – Monitoring / Review"✓ Evaluation – Self / Manager / Two level review on Goals, Management Style, Potential

and Readiness for next level job"✓ Recognition / Reward – Guaranteed / Variable / Others

FORMS" " " PLATFORMS" " " TOOLS


● Build Performance Focus "● Align line function and HR

team to the system"● Aggregation and analysis of

company and unit-wide trends"

● Seamlessly integrate into other HR Systems"

● Minimize resources and effort to administer process

Achieving Stake-holder Delight...

● Facilitate timeliness"● Quick turnaround of

process"● Facilitate information

aggregation from multiple sources"

● Facilitate review of remote workers"

● Process and status tracking"● Enhance decision support

and coaching capability

Employee Perspective

Manager Perspective

● Process and assessment Transparency"

● Guidance on KRAs and competencies through templates"

● Timeliness prompts"● Track mid-term changes"● Quick turnaround and

resolution of queries"● Convenience / comfort

through self service system

Organisation Perspective

Communicate effectively "Central ownership of performance database"Conflict resolution tools"Consistency checks and communication toolkit

HR Administrator Perspective


Performance & Potential Review

Goal !Review

"Management !

Review Potential !Review

Readiness!Review

Setting ‘business goals’ and converting them to Departmental & individual goals through structured processes and measuring achievement objectively

Identification of competencies and assessment of an individual on the competencies specified for the position

Assessing an individual’s abilities in the light of higher vertical and horizontal responsibilities

Assessing an individual for the readiness to take up the next higher level of responsibilities

G M P R

WHAT!•Bonus"

HOW!•Salary Increase

WHO!•Development Plan"

•Long Term Incentives

WHEN!•Promotion"•Succession

Linkages to Rewards

Source:Max New York Life

Salto Dee Fe Consulting Services

PMS Process – Snake Chart (Sample)

Goal Setting Individuals

Dept. Head Goals

Individual KRA Sheet

Input

Output

HR Review

G & M ratings

Run the process

Thumb ruling

Reviewed data by HR

Outcomes

Employee Comm.

Final Ratings, Appraisal Sheets, CEO/Func. Head

letter

Accepted KRA Sheet,

Consistent messaging

Self Appraisal

Refer to employee guide

Self Rating

2nd Level Review

First Hand Insights,

Smoothening aberrations

Individual G&M sheets and rating summary

Manager Review

Self appraisal against agreed Measures Of

Success

Individual ratings

Source:Max New York Life


Performance Planning:Goal Setting



Science of Goal Setting

• The Harder the Goal, the More it Motivates""

• Goals Aligned with Self Interest Motivate the Most""

• Specific Goals Create Higher Performance than urging “Do your Best”""

• Too Many Goals reduce the Effort on Each One

Motivation

Easy Medium Hard

Motivation


"•All the goals set by a manager are Achievable & Realistic. Further, if a goal is Specific, it will be Time-bound: ‘Task X by Date Y’." "•An “Important goal” is the one, which is “Relevant for the Company” (To achieve results) & “Relevant for an Individual” (Self-interest).""•Thus Eliminating Complexity & Adding value, we have SIMple goals: Specific, Important, Measurable.

Keep Goals ‘SIMple’

FOCUS ON A VITAL FEW!

"Correct number of goals are >1 & <5. The ideal number of goals are 3.

DO NOT SPECIFY ANY GOAL AS

‘STRETCH GOAL’!"

Every goal should have a right balance of stretch &

achievability. "

DO NOT INCLUDE GOAL WEIGHTING!

"Simpler way is to list the

goals in the Order of Importance. "


"Should Goal setting be a participative exercise or manager

driven?!

Who sets the Goals?

Pros •Higher Commitment to Goals •Employees’ “buy in” to goals •Promotes a socialistic workplace view

Cons •Research* indicates “no difference in performance” regardless who sets the goals •Adds more complexity to the process •Other equally effective choices available for gaining commitment

Source: Application to Erez-Latham Dispute regarding participation in goal setting , Journal of Applied Psychology 73

What’s your view on this….does this really add value?


Aligning Individual Goals to Organizational Strategy?

Do all employees understand the Organizational goals/strategy*?

How cascading goals down the levels impact or build commitment?

• Define roles"• Assess position criticality"• Distribute responsibilities across workforce

• Help see the ‘Line of Sight’ "• Explain connection b/w job & organization

• Translate organizational goals into day to day execution

To build commitment, the organization should…

Source: CLC study on high performance culture


Cascading Goals – Is it the right way?

KPI 1 – Goal Target : 100%





Cascading Goals – Or is this the right way?


Should Behaviour Evaluation be part of PMS ?

Pros!•Balance ‘how things get done’ with ‘what gets done’"•Reinforcing “right behaviours” critical to managers success"•Helps build accountability (Clear messaging on good behaviors get you ahead, while poor will hold you back)!

Cons!•Lacks an objective way of measurement"•Adds complexity – Value/Complexity trade off decisions"•Alternate choices available to hold people accountable (Talent Review, Succession Plan, IDP, Corporate Culture or 360 Degree)



Why Competencies?

Start with the science: "● Leadership Competencies can affect individual performance

"● Leadership Competencies can affect organizational performance

"● Competencies can be developed over time "

● Competitive Advantage can occur when competencies are consistently demonstrated across the organization


Competency Based Performance Management


Mixed Model – What & How

1. Performance Results Score

2. Competencies Score

"Overall Score

Will determine the employee’s career movement, and also the

reward to be earned & other HR Linkages to follow


Key Considerations in Evaluating Behaviors

Size and Complexity!! What is the optimum number of competencies (along with behavioral descriptors) an evaluation framework should have?""Measuring Behaviors!! Is there any objective measurement tool?""Rewarding Behaviors!! Will performance be a threshold for a rating/reward or will it be a cap?"" Or will behaviors have no impact at all? If yes, then why include them?


Integrating Rating Scale into PMS

Do not use Numerical ratings, at least do not communicate it to employees!"Do not use Labels like ‘star performer’, ‘highly valued’ etc. !"Do not obsess over the rating scale – three, four or five point scale!"

• 3-7 points rating scale has similar level of scale and rater reliability"

• No evidence that behaviourally anchored scales are more effective than numerical scales"

• Managers tend to use only the higher ratings unless you are forcing a distribution

Add complexity

without adding any value


Performance Monitoring & Feedback



Informal Feedback Matters Most!

Source: CEB Improving Talent Management Outcomes


"• If a person is committed to the goal, she’ll improve her

efforts incase they’re not leading to success." "• Feedback is a surefire to increase an employee’s

effort towards a goal.""

• Frequent feedback leads to a shortened performance improvement cycle as it provides opportunity to course correct oneself!"

• The frequency of feedback dependent on the goal, employee’s competence & performance.

Give Frequent Feedback on Progress


Performance Management Behavior (Transition Desired)

From To

Regular ongoing activity :!"✓Communicating expectations on a regular basis""

✓Providing feedback in real time whenever exceptional or poor performance is observed""

✓Helping employees develop expertise that maximizes their potential.


Feedback Guidelines


Reading: Try Feedforward

• What’s more common: Feedforward or feedback? Why? • What challenges does feedforward solve? • In what situations might feedforward not be effective?

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Try Feedforward


Feedforward exercise

• Identify one item (behavior, knowledge, skill, etc.) that you’d like to improve over the next twelve months

• Describe this item to a classmate • Ask for feedforward and listen • Say “Thank You.” Don’t criticize, evaluate or rank their suggestion • Switch roles and repeat the exercise • Talk to as many classmates as you can in 10 minutes

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Feedforward debrief

• This exercise was . . . . . • What made it . . . . ? • Was it difficult to coach? Why? • Was it difficult to give feedforward? Why?


Coaching increases an individual’s performance "The Science "▪Feedback PLUS coaching can increase leadership effectiveness up to 60% ▪Coaching strongly increases an individual’s belief in his ability to succeed

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1A quasi-experimental study on management coaching effectiveness, Evers, Will J. G.; Brouwers, André; Tomic, Welko, Consulting Psychology Journal: Practice and Research, Vol 58(3), 2006, 174-182"2 Elizabeth C. Thach, (2002) "The impact of executive coaching and 360 feedback on leadership effectiveness", Leadership & Organization Development Journal, Vol. 23 Iss: 4, pp.205 - 214

Business Case For Coaching Talent


Forced Ranking & The ‘Vitality Curve’



Forced Ranking & The Vitality Curve

• The top 20% were considered the future leaders of the organization (A Player) • The vital 70% were the solid worker-bee performers that could be counted on

day-in and day-out to consistently perform their jobs(B Player) • The bottom 10% was fired(C Player)


Arguments For & Against

Pros "

•Helps deal with “rater inflation” •Makes managers identify high, average, and low performers •Ensures that compensation increases reflect performance differences among individuals

Cons "

•Managers resist placing people in the lowest or highest groups. •Explanation for placement can be difficult. •Performance may not follow normal distribution. •Managers may make false distinctions between employees.



ConclusionsYour Views?

Validity

Effect on behaviour

Logic

Fact: It was used for 7 years.

"Was it efficient?

Is it logical to reduce10% of your

employees every year?

Is it logical to have fixed

criteria for ranking? Is it logical to have a

strict policy?

Unsatisfied top performers due to inadequate distinction from high-level peers

Fluctuations in

employees’ moral

Constant stress Sabotage colleagues

Or

Cheating the system


Creating Transparency

Why? !Employees feel fairly evaluated and thus are committed towards achieving goals

How? !"•Share Goal Sources and Linkages!

How goals are cascaded down?"How the employees will be evaluated?"Who has a role to play in the evaluation?""

•Share Rating Scales and Distribution"Will the employees be force ranked?"Where do they stand when compared with others in the organization?"


Creating Accountability

Why? !Key driver of performance management success

How? !"•Withholding a manager’s bonus until he completes every review!•Withholding the staff’s bonus until the manager completes!•Employee- driven Accountability!

• Use ‘time-bomb communication’"• Involve employees in reminding manager to fulfill his

responsibilities, if he doesn’t- remind HR"•CEO-driven Accountability!

• If he can do it despite his/her schedule, anybody can and should"


Q & A


Mail me at – [email protected]

Visit our website – www.saltodeefe.com

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ADDRESS: "SALTO DEE FE CONSULTING C -‐ 220, Tower C, 2nd Floor, Nirvana Courtyard, Nirvana Country, South City IIGurgaon, Haryana 122018, India " +91 9811201696 +91 124 4288144 [email protected] www.saltodeefe.com

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CONTACT US

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performance management 191213 - salto dee fe consulting management... · · 2017-06-24we focus on...

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