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1、Executive Human Resource ProgramThe Promise of Performance ManagementHay GroupBoston .The Current Challenge of Performance ManagementThe HR processIs completely unrelated to other key business processesIs dreaded by managers and employees alikeDoes not result in any meaningful feedbackDoes not diffe

2、rentiate performance or payIs a focus for only one or two daysor hoursper year.The Promise of Performance ManagementImagine a system that couldIncrease the likelihood that your strategy is effectively executedHarness and direct the 1060 minutes a day of discretionary effort that every one of your em

3、ployees hasRationalize and focus the number of goals that anyone in your organization hasImprove the decisive dialogue that occurs in your organizationReward performance in a way that it is motivating and engages peopleDifferentiate performance in ways that make line managers feel good about their d

4、ecisions.PerformanceNumber of EmployeesSource: Hay/McBerOptimizing the performance of your people will have a positive impact on business performanceImproving Performance Management Improves Business Results.Percentage of variation in change in company performance accounted for by managerial practic

5、esSource: Sheffield Effectiveness ProgrammeHuman Resource Management Practices Drive Profitability and Productivity.Highly Successful Companies are defined as having5-year sales growth = 17.5% per year5-year profit growth = 10.8% per yearAnnual equity growth = 16.7% per year5-year dividend growth =

6、13.4% per yearSource: D. Karvetz, The Human Resources RevolutionClear Employee GoalsParticipative StyleAttention to DevelopmentEncourage CreativityPerformance-Based RewardsHighly SuccessfulCompaniesLess SuccessfulCompanies80%70%67%62%86%26%4%27%10%30%High-performing companies are better at managing,

7、 motivating, and rewarding employeesImproving Performance Management Improves Business Results.Source: Mavrinac & Siesfield, Measuring Intangible InvestmentStrategy Execution Matters to ShareholdersThirty-five percent of an institutional investors valuation of a company is attributable to nonfinanci

8、al information that gauges the ability of the management team to deliver results:Strategy Execution: Can management make tough decisions and seize opportunities quickly?Management Credibility: Does the company keep its commitments?Strategy Quality: Is managements vision of the future likely to optim

9、ize value creation in a volatile, globalized, and connected economy?Innovativeness: How readily does this company adapt?Attracting and Retaining Talent: Is turnover higher or lower than key competitors? Do new hires surpass leavers in skills and experience?Management Experience: What skills and expe

10、riences does the management team bring to the table?Compensation: Do compensation policies support the firms strategic intent?.35% improvement in human-capital systems resulted in 10%20% gain in shareholder valueAlignment and Integration of HR System“Human Capital Enhancements29031033035037039002040

11、6080100Quintile Improvements in Strategic Market Value per Employee (000)Source: Huselid and Baker, 1995Human Capital Systems Increase Shareholder Value.Improving Performance Management Improves Business ResultsHigh-performance companies define Performance Management in its broadest sense: it is cri

12、tical to executing and implementing strategyPerformance Management is now widely recognized as delivering more returns and delivering more competitive advantages than other HR investments Performance Management is the key to “raising the bar in an organization, for all levels of performanceOrganizat

13、ions with a high-performance orientation and strong management capability have higher revenue, profits, and market valuations .Performance ManagementPerformance Management is about improving business performance by improving team and individual performance, and ensuring that the companys strategy is

14、 executed and implemented. It isA process that ensures that people execute the strategy of the organizationA process for establishing a shared understanding of what is to be achieved and howA process for ensuring that decisive and constructive dialogue occursA process of managing self and others so

15、that people do achieveA process for ensuring that people are doing the right things in the most effective ways, to the best of their ability.Performance Management StagesDesign ParameterPerformance AppraisalPerformance ManagementPerformance OwnershipHuman Resources“Check the boxcompliance-orientedMa

16、nage poor performersPassiveReport card(retrospective)Managers and Human ResourcesEvaluation reward emphasisManage the tails of bell curveJoint ownership for goal-setting/reviewBarometer of progress (periodic)Employees, managers, and leadershipStrategic clarity, coaching, dialogueRaise performance of

17、 organizationShared accountability for resultsDialogue (continual)FunctionRole of EmployeeFocusEmphasesOwnership.Performance AppraisalPerformance ManagementManaging PerformanceHighLowLowHighImpact on ResultsLevel of Organizational CommitmentImproved business results require organizational commitment

18、Commitment to achieve company goalsGood setting and reviewMerit increases efficiently allocatedPerformance Management Stages this.The performance management model is not new, but the way in which leading organizations do it is very different&DialogueDialogueDialogueDialogueBest Practices.Best Practi

19、cesWhats Different?There are four differentiators of best practice:Clear Strategy Translation ProcessIntegrated Performance ProcessesCulture of DialogueMultiple and Differentiated Rewards .Strategy Translation ProcessA Definition:“Early in the history of the company, while thinking about how a compa

20、ny like this should be managed, I kept getting back to one concept: if we could simply get everyone to agree on what our objectives were and to understand what we are trying to do, then we could turn everybody loose and they would move along in a common direction. Dave Packard.Strategy Translation P

21、rocessChecklist:Are all top team members unified and focused on the “must-win battles of the organization?Are the interdependencies clear between the top-team members?Are the middle managers clear on the “must-win battles?Do employees know what they need to do for the organization to be successful?F

22、inancial goals, operational goals, behaviors.Integrated Performance ProcessesA Definition:“Leaders must see to it that the organizations social operating mechanismsthat is, the executive committee meetings, budget and strategy reviews, and other situations through which people do businesshave honest

23、 dialogue at their center. These mechanisms set the stage. Tightly linked and consistently practiced, they establish clear lines of accountability for making decisions and executing them. Ram Charam, HBR 4/2001.Integrated Performance ProcessesChecklist:Do the goals of the organization reflect interd

24、epartmental objectives?Are the financial, operational, and people processes integrated?Is the information from these processes used to make business decisions?Are the processes efficient and effective?.Culture of DialogueA Definition:“A leader should be constructing his appraisal all year long and g

25、iving his appraisal all year long. You have 20, 30, 60 opportunities a year to share your observations. If, at the end of the year, someone is truly surprised by what you have to say, that is a failure of leadershipBy failing to provide honest feedback, leaders cheat their people by depriving them o

26、f the information that they need to improve.Critical feedback is the “heavy lifting of leadership EDSs Dick Brown.Typically a new employees productivity curve increases quickly, then levels offWithout reinforcement and feedback the level stays the same or may fall offSporadic, inappropriate, or gene

27、ral feedback without reinforcement has a distinctive effect on motivation and performanceConsistent, specific feedback and dialogue build self-esteem and performanceFeedbackFeedbackFeedbackFeedbackCulture of DialoguePerformance Coaching/Feedback Is Critical.Culture of DialogueChecklist:Are managers

28、(and employees) trained in and good at performance dialogue?Are managers selected and held accountable for performance coaching?Are coaching behaviors “lived by the leaders of the organization?Is the dialogue open, informal, and candid, and does it provide closure?.The better my performance, the bet

29、ter my total compensation will beMultiple and Differentiated RewardsWhen most employees, even the stars, get the same pay, it reduces clarity about what good performance looks likeSource: Hay Group.Multiple and Differentiated RewardsApproaches:Increase dialogueUse multiple currenciesReview use of ra

30、tingsUse forced rankingsFind new ways to differentiate merit.Differentiated RewardsSeparate means from endsTactics/StrategiesBehaviorsTrainingTrainingTrainingTrainingTactics/StrategiesBehaviorsTrainingTrainingObjectivesEnablersConduct analysis of why OT is so high; develop strategy to reduce OT; imp

31、lement strategyImplement 3 programs aimed at increasing customer satisfaction: begin training programs; upgrade call center software; establish a monitoring programSet high goals for yourself and for the team: try to reduce from 50 to 30 per month; communicate to team what needs to be done; “own thi

32、s processIdentify customer issues: think about and act on opportunities to address these issues; act as a role model to subordinatesshow them how to work with customers; improve call-center software systemTrainingTrainingTactics/StrategiesBehaviorsDevelop a plan to meet with each of your subordinate

33、s and get the “pulse on how they are doing (re: jobs, projects, expectations); develop career-pathing plans with each of your subordinates; develop ideas around nonmonetary rewardsCoach consistently: deliver timely and constructive feedback; address issues immediately; make sure others contribute an

34、d have what they need to do the jobTactics/StrategiesBehaviorsBusiness ObjectivesCareer Development ObjectivesImprove consistency of customers delivery (evidenced by 98% customer satisfaction)Goals set for yearImprove employee retention in department by 50%Goals set for next 8 monthsReduce overtime

35、from 150 to 50 hours/month (cost not to exceed $12,000)Goals set for year.Extent ofDifferentiation1.Company wide success measuresCompany revenueProfit ability measuresNoneNone2.Business unit success measuresUnit revenueProfitability measuresOther measuresAnnual incentiveSome, based on individual con

36、tribution3.Success measurescurrent roleContribution to unit/company measuresSalary increaseLittle4.Requirementscurrent roleMeet “current job descriptionLive the valuesNoneNone5.Success measuresfuture rolesDemonstration of success competencies/behaviorsAchievement of development goalsFuture earningsS

37、alaryAnnual incentiveLong-term incentiveRecognitionSignificant, based on potentialMeasuresFirst-Level ManagersRewardLinkage1.Company-wide success measuresCompany revenueProfitability measuresLong-term incentiveAnnual incentiveSome, based on roleSome, based on role2.Business unit success measuresUnit

38、 revenueProfitability measuresOther measuresAnnual incentiveSignificant, based on unit performance3.Success measurescurrent roleContribution to unit/company measuresAnnual incentiveSome discretionarycomponent4.Requirementscurrent roleMeet current job descriptionLive the valuesNoneNone5.Success measuresfuture rolesDemonstration of success competencies/behaviorsAchievement of development goalsFuture earningsSalaryAnnual incentiveLong-term incentiveRecognitionSignificant, based on potentialSalary increase tied to market movementLittleMeasuresExecutivesRewardLinkageExtent ofDifferentiatio

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