performance management: then and now

Copyright © 2009 Bersin & Associates. All rights reserved.

Performance Management:

Then and Now

Kim Lamoureux

Principal Analyst

September 15th 2009

http://www.saba.com/index.htm

© 2009 Saba Software, Inc. All rights reserved

Welcome to today’s Saba webcast:

Kim Lamoureux

Principal Analyst, Bersin & Associates

Yvette Cameron

Vice President, Product Strategy, Saba

Performance Management: Then and Now


About Us Who We Are

• Bersin & Associates is an industry research

and advisory services company dedicated to

helping organizations implement enterprise

learning and talent management strategies

for business performance improvement.

Research Areas

• Enterprise Learning

• Leadership Development

• Performance Management

• Career and Succession Management

• Workforce Planning

• Talent Management Systems

Offerings

• In-Depth Studies and Reports

• Research Memberships

• Advisory Consulting

• Benchmarking

• Workshops


What we’ll cover…

The business context for employee performance

management

The key drivers for making changes to employee

performance management practices

The evolution of employee performance management

from an administrative exercise to a strategic business

improvement tool.

The highest impact changes

How employee performance management practices vary

across organizations today


Agenda

Business of Talent

Performance Management

• Maturity Model

• Key Practices

• Evolution

• Models

Performance Management Systems

Talent Management Integration


Top Business ChallengesTremendous cost-cutting and reduction in growth targets

What Are Your Organization’s Top Business Challenges for 2009?

+2x

+3x

+2.5x

November 2008

January 2009

© Bersin & Associates, Corporate TalentWatch® Research, Senior HR and Business Executives, 2/09

-2.5x


Changing L&D and HR PrioritiesLeadership, employee management and rewards, restructuring

Top HR and L&D Priorities – Coming Quarter (February, 2009)


3X


Top Talent ChallengesLeadership, Focus on performance, Filling Critical Skills Gaps

What Are Your Organization’s Top Talent Challenges for 2009?

October 2008

January 2009 Data

+20%


+2.3x

High


Today’s Environment

Business Focus: cost reduction and restructuring

Talent Focus: improve leadership and workforce performance

Talent Readiness: weak at entry and managerial levels

Strategy: desire for integrated systems and alignment

Need: integrated career management programs

Goal

Deploy talent management strategies which will solveimmediate problems quickly yet position the organization for

longer term growth and flexibility


Coaching

Coaching

EPM is a set of management practices that establish measurable goals and objectives for employees, assess achievement and attainment of such objectives, and then use this information to improve performance through coaching, compensation, development, and other means.

Defining Employee Performance

Management


Current Processes Often Flawed

32% of managers do not clearly understand the role between pay and

performance in their organizations

85% of organizations do not have clearly defined competencies which define

success

35% of managers and employees do not feel the process is implemented

consistently

Only 14% of organizations use any form of peer-assessment

Only 21% of organization have training tied to development goals

Only 29% of organizations create goals which are aligned to the organization

Only 13% of organizations have coaching programs tied to their performance

management process

Only 36% of organizations feel they adequately tie compensation to the

performance management process


Challenges with EPM

21%

25%

30%

30%

41%

42%

45%

45%

There are no incentives.

Senior executives do not support or model performance management practices

Managers do not feel equipped to provide feedback or coaching.

The link between performance and pay is not clear.

There are no consequences for non-compliance.

The practices are too time consuming.

The practices are not implemented consistently across the organization.

Managers do not effectively differentiate between high and low performers.

© Bersin & Associates, High Impact Performance Management research

conducted 8/2008, n=716


Top Business Drivers for Change

18%

23%

36%

40%

47%

Filling gaps in the leadership pipeline

Improving satisfaction with the performance management practices

Ensuring consistency with performance management practices across the organization

Increasing organizational performance

Building a high-performance culture

© Bersin & Associates, High Impact Performance Management research

conducted 8/2008, n=716


Employee Performance Management Maturity Model™


Survey Question

At what level of maturity would you assess your

company’s performance management?

• Level 1 - Inconsistent Performance Planning and Appraisal

• Level 2 – Enterprise-wide Performance Management

• Level 3 – Integrated Performance Management

• Level 4 – Tailored Performance Management


Adoption of EPM Practices Today


EPM is Changing


PerformanceEvaluation

Coaching

Development Development

EPM Models

CoachingPerformance

Appraisal

Alignment(Goals)

Alignment(Goals)

A “competitive assessment”

model

A “coaching and development”

model

60% of Organizations

40% of Organizations


Process First – System SecondMake sure the System Meets the needs of Your Process!

Competitive

Evaluation

Coaching and

Development

One Page

Appraisal

Form

Strict Goal

Alignment

Competency

based

Assessment

Peer

Assessment

Development

Planning

Calibration

Sessions

Succession

Management

Bonus-based

Comp.

Coaching &

Mentoring

Programs

Most Organizations

Start Here

And Slowly

Move Here


How do you fairly and consistently assess people?

PerformanceRating

?

Compensation

Promotion

to Leadership

Forced

Ranking

Is Joe a better

manager than Bill?

Why is Sue so good at

one thing but not others?

Should I promote

Bill or Sue?

Both Bill and Bob achieved

goals, which should get the

higher raise and why?

How do I avoid giving

everyone the same

rating?If I give Bob a low rating,

how do I explain it so

he can improve?

Employee

SatisfactionStep 1: Look at a Defined Competency for this position

Step 2: Observe Specific Behaviors which describe the competencies

Step 3: Assess Gaps, Areas to Improve, and Potential against competencies


Competency Use Drives PerformanceOrganizations with excellent use of competencies are 4X more likely to

have a performance-driven culture

46%

12%

9%6%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Excellent Good Fair Poor

% o

f O

rganiz

ations

with o

uts

tandin

g

perf

orm

ance

-driven

culture

Effectiveness of Competencies in Performance Mgt.


Survey Question

Select the following statement that most closely describes

the current state of competencies in your organization.

1. We do not have any defined competencies

2. We have global set of competencies defined

3. We have a defined competencies for each role

4. We have competencies and job profiles defined for each role


Execellend-World Class, 5%

Well Implemented, 31%

Fair - Needs Improvement, 42%Poor - Needs

Revamping, 22%

How well are your competencies used for performance assessment and review?

Use of Competencies in PMOnly 36% of organizations with PM processes use competencies well


Highest Impact Changes

Driving Efficiencies with Technology

Integrating with other Talent Practices


Business Drivers for Buying


Survey Question

Describe how your performance management process is

implemented?

• No solution in place

• Paper-based

• In-house developed solution

• Vendor-provided solutions


EPM Automation Today

© Bersin & Associates, High ImpactPerformance Management, October 2008 , 716 global respondents

Vendor solutions are growing

rapidly

42% of the respondent organizations have more

than one performance management solution


ATS

LMS

Compensation

Performance Management

Automation Self-Service

Talent Management Suite

Process Improvement

Process Enablement

Unification of Data

The Evolution of Talent Management

Systems

Web-based

Application

Integrated

System

Predictive

Platform

Strategic Talent Planning

“Smart Talent” Decisions

Comprehensive Profiles

Business Impact

PC-based

Form

MS Word & Excel

Email

Disconnected Surveys

Compliance

Most Organizations

HR Systems


EPM Features and Capabilities

Core EPM Feature Sets

• PM planning and review cycle

management

• Goals Management

• Competency Management

• Performance Planning

• Development Planning

• Performance Reviews

Advanced EPM Feature Sets

• Performance Calibration

Support

• Pay for Performance

• High Potential / Talent

Identification

• Job Profile Management

• Talent Profile Management

• Career and Succession

Management

• Talent Analytics

• Global Capabilities


High-Impact Talent Management Framework

Talent Planning & Strategy

PerformanceManagement

Talent Acquisition

Career & Succession

Management

LeadershipDevelopment

Capability & Competency Management

Learning and Development

Learning Culture

Talent Systems

Talent Strategy & Planning

Sourcing

Candidate Pools

Assessment

Employer Brand

Recruiting

Selection

Goal Setting

Assessments

Development Planning

Competency Assessment

Performance-Based Pay

Capabilities/Strength Assessments

Talent Profiles

Talent Pool Management

Talent Reviews

High Potential Identification

Career Plans

Formal Programs

Stretch Assignments

Executive Education

Coaching

Mentoring

Job Rotation

Onboarding Programs ManagementTraining

LeadershipCurricula

Coaching/Mentoring

Programs

Role-basedCurricula

Certification

Programs

Operational

Training DevelopmentalAssignments

Content Development

& Delivery

Profiles Experience SkillsCompetencies

Talent Acquisition

Performance, Career and Succession Management

Learning Management Compensation ManagementWorkforce Planning

Business Strategy Alignment

HR

Org

aniz

atio

n G

ove

rnan

ce &

Man

age

me

nt

Critical Role Identification

Talent Process & Solution Design Talent Systems Strategy

Talen

t An

alytics

Talent Segmentation

Talent Measures and Targets


At Saba, we observe that only blended formal/informal approaches work

How do you enable a performance-driven culture?


Formal Component:

Performance Review Wizard

• Unification of information from entire talent management lifecycle into a performance review wizard

• Real-time reviews

• Decision support lifecycle based on performance results

• Pay-for-performance enablement


Bridging Formal & Informal Components:

Gap Closure Activities

• Enroll in a course

• Join a community

• View a wiki

• View topics within discussion threads

Granting/Proposing Competencies:

• Launch Saba Centrarecording

• Launch a file

• Launch website


What makes a performance review

valid?

• Real time

• My community assesses me

• Linkage to formal process

Better accuracy

More value


Improved Review Validity:

a sum of formal and informal components

• Real time

• My community assesses me

• Linkage to formal process

Better accuracy

More value


The Formal / Informal Process Boundary

Learning Management for certifications, channel

readiness, and courseware

Performance reviews and goals and objectives for

aligned organization

Plan future workforce needs and succession strategies

Pay for potential, performance and criticality.

• Capture the 70% of learning that is informal

• Communities around existing curricula

• Evaluate contribution, not just objective achievement

• Locate experts

• Fuel performance

• Share knowledge across workforce generations

• Fuel succession

• Identify experts & mentors

• Compensation for informal contributions

• Intrinsic satisfaction from sense of community

• Social Rewards


What Leaders Can Do

• Create a Strategic People

Strategy

• Proactively Create a

Performance Driven

Culture

• Foster Collaboration

Across the Extended

Enterprise

• Rapidly and Effectively

Consolidate Systems

37 | Saba Confidential


Q & A

Kim Lamoureux

Principal Analyst

[email protected]

Yvette Cameron

VP Product Strategy

[email protected]

mailto:[email protected]

mailto:[email protected]


Performance ManagementThe Essential Guide

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• Go to the research center

www.bersin.com

2. Purchase the reports

• Go to the research store

www.bersin.com/store

3. Join our research program

• Go to our website to learn

more about membership

www.bersin.com/services

http://www.bersin.com/

http://www.bersin.com/store

http://www.bersin.com/services


IMPACT 2010: April 6-8Join us!

http://impact.bersin.com/

http://impact.bersin.com/


October 19-22, 2009 – The Fairmont San Francisco, CA

Saba’s largest user event of the year - more than 600

attendees expected

75+ sessions offered, hands-on training, and unique

networking activities planned

Event information and Registration at www.sabapeople.com

41 | Saba Confidential

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Thank you!