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ExecutiveHumanResourceProgram ThePromiseofPerformanceManagementHayGroupBoston 0109 9271 HAYGLemaire 2 TheCurrentChallengeofPerformanceManagement TheHRprocess IscompletelyunrelatedtootherkeybusinessprocessesIsdreadedbymanagersandemployeesalikeDoesnotresultinanymeaningfulfeedbackDoesnotdifferentiateperformanceorpayIsafocusforonlyoneortwodays orhours peryear 0109 9271 HAYGLemaire 3 ThePromiseofPerformanceManagement Imagineasystemthatcould IncreasethelikelihoodthatyourstrategyiseffectivelyexecutedHarnessanddirectthe10 60minutesadayofdiscretionaryeffortthateveryoneofyouremployeeshasRationalizeandfocusthenumberofgoalsthatanyoneinyourorganizationhasImprovethedecisivedialoguethatoccursinyourorganizationRewardperformanceinawaythatitismotivatingandengagespeopleDifferentiateperformanceinwaysthatmakelinemanagersfeelgoodabouttheirdecisions 0109 9271 HAYGLemaire 4 Performance NumberofEmployees Source Hay McBer Optimizingtheperformanceofyourpeoplewillhaveapositiveimpactonbusinessperformance ImprovingPerformanceManagementImprovesBusinessResults 0109 9271 HAYGLemaire 5 Percentageofvariationinchangeincompanyperformanceaccountedforbymanagerialpractices Source SheffieldEffectivenessProgramme HumanResourceManagementPracticesDriveProfitabilityandProductivity 0109 9271 HAYGLemaire 6 HighlySuccessfulCompaniesaredefinedashaving 5 yearsalesgrowth 17 5 peryear5 yearprofitgrowth 10 8 peryearAnnualequitygrowth 16 7 peryear5 yeardividendgrowth 13 4 peryear Source D Karvetz TheHumanResourcesRevolution ClearEmployeeGoals ParticipativeStyle AttentiontoDevelopment EncourageCreativity Performance BasedRewards HighlySuccessfulCompanies LessSuccessfulCompanies 80 70 67 62 86 26 4 27 10 30 High performingcompaniesarebetteratmanaging motivating andrewardingemployees ImprovingPerformanceManagementImprovesBusinessResults 0109 9271 HAYGLemaire 7 Source Mavrinac Siesfield MeasuringIntangibleInvestment StrategyExecutionMatterstoShareholders Thirty fivepercentofaninstitutionalinvestor svaluationofacompanyisattributabletononfinancialinformationthatgaugestheabilityofthemanagementteamtodeliverresults StrategyExecution Canmanagementmaketoughdecisionsandseizeopportunitiesquickly ManagementCredibility Doesthecompanykeepitscommitments StrategyQuality Ismanagement svisionofthefuturelikelytooptimizevaluecreationinavolatile globalized andconnectedeconomy Innovativeness Howreadilydoesthiscompanyadapt AttractingandRetainingTalent Isturnoverhigherorlowerthankeycompetitors Donewhiressurpassleaversinskillsandexperience ManagementExperience Whatskillsandexperiencesdoesthemanagementteambringtothetable Compensation Docompensationpoliciessupportthefirm sstrategicintent 0109 9271 HAYGLemaire 8 35 improvementinhuman capitalsystemsresultedin10 20 gaininshareholdervalue AlignmentandIntegrationofHRSystem Source HuselidandBaker 1995 HumanCapitalSystemsIncreaseShareholderValue 0109 9271 HAYGLemaire 9 ImprovingPerformanceManagementImprovesBusinessResults High performancecompaniesdefinePerformanceManagementinitsbroadestsense itiscriticaltoexecutingandimplementingstrategyPerformanceManagementisnowwidelyrecognizedasdeliveringmorereturnsanddeliveringmorecompetitiveadvantagesthanotherHRinvestmentsPerformanceManagementisthekeyto raisingthebar inanorganization foralllevelsofperformanceOrganizationswithahigh performanceorientationandstrongmanagementcapabilityhavehigherrevenue profits andmarketvaluations 0109 9271 HAYGLemaire 10 PerformanceManagement PerformanceManagementisaboutimprovingbusinessperformancebyimprovingteamandindividualperformance andensuringthatthecompany sstrategyisexecutedandimplemented Itis AprocessthatensuresthatpeopleexecutethestrategyoftheorganizationAprocessforestablishingasharedunderstandingofwhatistobeachievedandhowAprocessforensuringthatdecisiveandconstructivedialogueoccursAprocessofmanagingselfandotherssothatpeopledoachieveAprocessforensuringthatpeoplearedoingtherightthingsinthemosteffectiveways tothebestoftheirability 0109 9271 HAYGLemaire 11 PerformanceManagementStages DesignParameter PerformanceAppraisal PerformanceManagement PerformanceOwnership HumanResources Checkthebox compliance oriented Managepoorperformers Passive Reportcard retrospective ManagersandHumanResources Evaluationrewardemphasis Managethetailsofbellcurve Jointownershipforgoal setting review Barometerofprogress periodic Employees managers andleadership Strategicclarity coaching dialogue Raiseperformanceoforganization Sharedaccountabilityforresults Dialogue continual Function RoleofEmployee Focus Emphases Ownership 0109 9271 HAYGLemaire 12 PerformanceAppraisal PerformanceManagement ManagingPerformance High Low Low High ImpactonResults LevelofOrganizationalCommitment Improvedbusinessresultsrequireorganizationalcommitment Commitmenttoachievecompanygoals Goodsettingandreview Meritincreasesefficientlyallocated PerformanceManagementStagesthis 0109 9271 HAYGLemaire 13 Theperformancemanagementmodelisnotnew butthewayinwhichleadingorganizationsdoitisverydifferent BestPractices 0109 9271 HAYGLemaire 14 BestPractices What sDifferent Therearefourdifferentiatorsofbestpractice ClearStrategyTranslationProcessIntegratedPerformanceProcessesCultureofDialogueMultipleandDifferentiatedRewards 0109 9271 HAYGLemaire 15 StrategyTranslationProcess ADefinition Earlyinthehistoryofthecompany whilethinkingabouthowacompanylikethisshouldbemanaged Ikeptgettingbacktooneconcept ifwecouldsimplygeteveryonetoagreeonwhatourobjectiveswereandtounderstandwhatwearetryingtodo thenwecouldturneverybodylooseandtheywouldmovealonginacommondirection DavePackard 0109 9271 HAYGLemaire 16 StrategyTranslationProcess Checklist Arealltopteammembersunifiedandfocusedonthe must win battlesoftheorganization Aretheinterdependenciesclearbetweenthetop teammembers Arethemiddlemanagersclearonthe must win battles Doemployeesknowwhattheyneedtodofortheorganizationtobesuccessful Financialgoals operationalgoals behaviors 0109 9271 HAYGLemaire 17 IntegratedPerformanceProcesses ADefinition Leadersmustseetoitthattheorganization s socialoperatingmechanisms thatis theexecutivecommitteemeetings budgetandstrategyreviews andothersituationsthroughwhichpeopledobusiness havehonestdialogueattheircenter Thesemechanismssetthestage Tightlylinkedandconsistentlypracticed theyestablishclearlinesofaccountabilityformakingdecisionsandexecutingthem RamCharam HBR4 2001 0109 9271 HAYGLemaire 18 IntegratedPerformanceProcesses Checklist Dothegoalsoftheorganizationreflectinterdepartmentalobjectives Arethefinancial operational andpeopleprocessesintegrated Istheinformationfromtheseprocessesusedtomakebusinessdecisions Aretheprocessesefficientandeffective 0109 9271 HAYGLemaire 19 CultureofDialogue ADefinition Aleadershouldbeconstructinghisappraisalallyearlongandgivinghisappraisalallyearlong Youhave20 30 60opportunitiesayeartoshareyourobservations If attheendoftheyear someoneistrulysurprisedbywhatyouhavetosay thatisafailureofleadership Byfailingtoprovidehonestfeedback leaderscheattheirpeoplebydeprivingthemoftheinformationthattheyneedtoimprove Criticalfeedbackisthe heavylifting ofleadership EDS sDickBrown 0109 9271 HAYGLemaire 20 Typicallyanewemployee sproductivitycurveincreasesquickly thenlevelsoff Withoutreinforcementandfeedbackthelevelstaysthesameormayfalloff Sporadic inappropriate orgeneralfeedbackwithoutreinforcementhasadistinctiveeffectonmotivationandperformance Consistent specificfeedbackanddialoguebuildself esteemandperformance Feedback Feedback Feedback Feedback CultureofDialogue PerformanceCoaching FeedbackIsCritical 0109 9271 HAYGLemaire 21 CultureofDialogue Checklist Aremanagers andemployees trainedinandgoodatperformancedialogue Aremanagersselectedandheldaccountableforperformancecoaching Arecoachingbehaviors lived bytheleadersoftheorganization Isthedialogueopen informal andcandid anddoesitprovideclosure 0109 9271 HAYGLemaire 22 Thebettermyperformance thebettermytotalcompensationwillbe MultipleandDifferentiatedRewards Whenmostemployees eventhestars getthesamepay itreducesclarityaboutwhatgoodperformancelookslike Source HayGroup 0109 9271 HAYGLemaire 23 MultipleandDifferentiatedRewards Approaches IncreasedialogueUsemultiplecurrenciesReviewuseofratingsUseforcedrankingsFindnewwaystodifferentiatemerit 0109 9271 HAYGLemaire 24 DifferentiatedRewards Separatemeansfromends 0109 9271 HAYGLemaire 25 DifferentiatedRewards Don tdouble count 0109 9271 HAYGLemaire 26 InSummary TwoExamples PerformanceAligningProcesses PerformanceCoaching Feedback DifferentiatedRewards Significantemphasisonmanagementprocessesonintegratedtalentmanagemente g tw