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1、Executive Human Resource Program,The Promise of Performance Management Hay Group Boston,0109-9271-HAYG Lemaire,2,The Current Challenge of Performance Management,The HR process Is completely unrelated to other key business processes Is dreaded by managers and employees alike Does not result in any me
2、aningful feedback Does not differentiate performance or pay Is a focus for only one or two daysor hoursper year,0109-9271-HAYG Lemaire,3,The Promise of Performance Management,Imagine a system that could Increase the likelihood that your strategy is effectively executed Harness and direct the 1060 mi
3、nutes a day of discretionary effort that every one of your employees has Rationalize and focus the number of goals that anyone in your organization has Improve the decisive dialogue that occurs in your organization Reward performance in a way that it is motivating and engages people Differentiate pe
4、rformance in ways that make line managers feel good about their decisions,0109-9271-HAYG Lemaire,4,Performance,Number of Employees,Source: Hay/McBer,Optimizing the performance of your people will have a positive impact on business performance,Improving Performance Management Improves Business Result
5、s,0109-9271-HAYG Lemaire,5,Percentage of variation in change in company performance accounted for by managerial practices,Source: Sheffield Effectiveness Programme,Human Resource Management Practices Drive Profitability and Productivity,0109-9271-HAYG Lemaire,6,Highly Successful Companies are define
6、d as having 5-year sales growth = 17.5% per year 5-year profit growth = 10.8% per year Annual equity growth = 16.7% per year 5-year dividend growth = 13.4% per year,Source: D. Karvetz, The Human Resources Revolution,Clear Employee Goals,Participative Style,Attention to Development,Encourage Creativi
7、ty,Performance-Based Rewards,Highly SuccessfulCompanies,Less SuccessfulCompanies,80%,70%,67%,62%,86%,26%,4%,27%,10%,30%,High-performing companies are better at managing, motivating, and rewarding employees,Improving Performance Management Improves Business Results,0109-9271-HAYG Lemaire,7,Source: Ma
8、vrinac & Siesfield, Measuring Intangible Investment,Strategy Execution Matters to Shareholders,Thirty-five percent of an institutional investors valuation of a company is attributable to nonfinancial information that gauges the ability of the management team to deliver results: Strategy Execution: C
9、an 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 optimize value creation in a volatile, globalized, and connected economy? Innovativeness: How readily doe
10、s 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 experiences does the management team bring to the table? Compensation: Do compensation policies suppo
11、rt the firms strategic intent?,0109-9271-HAYG Lemaire,8,35% improvement in human-capital systems resulted in 10%20% gain in shareholder value,Alignment and Integration of HR System,Source: Huselid and Baker, 1995,Human Capital Systems Increase Shareholder Value,0109-9271-HAYG Lemaire,9,Improving Per
12、formance Management Improves Business Results,High-performance companies define Performance Management in its broadest sense: it is critical to executing and implementing strategy Performance Management is now widely recognized as delivering more returns and delivering more competitive advantages th
13、an other HR investments Performance Management is the key to “raising the bar” in an organization, for all levels of performance Organizations with a high-performance orientation and strong management capability have higher revenue, profits, and market valuations,0109-9271-HAYG Lemaire,10,Performanc
14、e Management,Performance Management is about improving business performance by improving team and individual performance, and ensuring that the companys strategy is executed and implemented. It is A process that ensures that people execute the strategy of the organization A process for establishing
15、a shared understanding of what is to be achieved and how A process for ensuring that decisive and constructive dialogue occurs A process of managing self and others so that people do achieve A process for ensuring that people are doing the right things in the most effective ways, to the best of thei
16、r ability,0109-9271-HAYG Lemaire,11,Performance Management Stages,Design Parameter,Performance Appraisal,Performance Management,Performance Ownership,Human Resources,“Check the box” compliance-oriented,Manage poor performers,Passive,Report card (retrospective),Managers and Human Resources,Evaluation
17、 reward emphasis,Manage the tails of bell curve,Joint ownership for goal-setting/review,Barometer of progress (periodic),Employees, managers, and leadership,Strategic clarity, coaching, dialogue,Raise performance of organization,Shared accountability for results,Dialogue (continual),Function,Role of
18、 Employee,Focus,Emphases,Ownership,0109-9271-HAYG Lemaire,12,Performance Appraisal,Performance Management,Managing Performance,High,Low,Low,High,Impact on Results,Level of Organizational Commitment,Improved business results require organizational commitment,Commitment to achieve company goals,Good s
19、etting and review,Merit increases efficiently allocated,Performance Management Stages this,0109-9271-HAYG Lemaire,13,The performance management model is not new, but the way in which leading organizations do it is very different,Best Practices,0109-9271-HAYG Lemaire,14,Best PracticesWhats Different?
20、,There are four differentiators of best practice: Clear Strategy Translation Process Integrated Performance Processes Culture of Dialogue Multiple and Differentiated Rewards,0109-9271-HAYG Lemaire,15,Strategy Translation Process,A Definition: “Early in the history of the company, while thinking abou
21、t how a company 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,0109-927
22、1-HAYG Lemaire,16,Strategy Translation Process,Checklist: 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 nee
23、d to do for the organization to be successful? Financial goals, operational goals, behaviors,0109-9271-HAYG Lemaire,17,Integrated Performance Processes,A Definition: “Leaders must see to it that the organizations social operating mechanismsthat is, the executive committee meetings, budget and strate
24、gy reviews, and other situations through which people do businesshave honest 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 4/2001,0109-9271-HA
25、YG Lemaire,18,Integrated Performance Processes,Checklist: Do the goals of the organization reflect interdepartmental 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 e
26、ffective?,0109-9271-HAYG Lemaire,19,Culture of Dialogue,A Definition: “A leader should be constructing his appraisal all year long and giving 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 wh
27、at you have to say, that is a failure of leadershipBy failing to provide honest feedback, leaders cheat their people by depriving them of the information that they need to improve.Critical feedback is the “heavy lifting” of leadership” EDSs Dick Brown,0109-9271-HAYG Lemaire,20,Typically a new employ
28、ees productivity curve increases quickly, then levels off,Without reinforcement and feedback the level stays the same or may fall off,Sporadic, inappropriate, or general feedback without reinforcement has a distinctive effect on motivation and performance,Consistent, specific feedback and dialogue b
29、uild self-esteem and performance,Feedback,Feedback,Feedback,Feedback,Culture of Dialogue,Performance Coaching/Feedback Is Critical,0109-9271-HAYG Lemaire,21,Culture of Dialogue,Checklist: Are managers (and employees) trained in and good at performance dialogue? Are managers selected and held account
30、able 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?,0109-9271-HAYG Lemaire,22,The better my performance, the better my total compensation will be,Multiple and Differentiated Rewards
31、,When most employees, even the stars, get the same pay, it reduces clarity about what good performance looks like,Source: Hay Group,0109-9271-HAYG Lemaire,23,Multiple and Differentiated Rewards,Approaches: Increase dialogue Use multiple currencies Review use of ratings Use forced rankings Find new w
32、ays to differentiate merit,0109-9271-HAYG Lemaire,24,Differentiated Rewards,Separate means from ends,0109-9271-HAYG Lemaire,25,Differentiated Rewards,Dont double-count!,0109-9271-HAYG Lemaire,26,In Summary: Two Examples,Performance Aligning Processes,Performance Coaching/Feedback,Differentiated Rewards,Significant emphasis on management processes on integrated talent management e.g., two
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