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1、Performance ManagementA Guide to ConsultingJune 2000Discussion ObjectivesnProvide an overview of current thinking and trendsnDiscuss what PM consulting is all aboutnReview“what works and what doesnt”nShare Best Practices researchnReview some of the basic planning and project steps Group DiscussionAn
2、swer the following questions:1.What is performance management?Why do companies have this process?2.Why doesnt it work so well?What makes it so difficult?Performance ManagementnTranslates business vision and strategy in an actionable way by cascading goals throughout the organizationnMeasures both wh
3、at is done and how it is donenAligns nDepartment goals with strategic business objectivesnAligns individuals with the broader organizational/team contextnEnsures the closest“line of sight”possibleSource:Watson Wyatt Best Practices in Performance ManagementPerformance Consulting1.Total OrganizationnC
4、ascading and AlignmentnStakeholder Metrics2.Employee Review ProcessnEngagement and AccountabilitynGrowth and AchievementsTwo dimensions:Performance ConsultingTotal Organization PerformancenCascading and AlignmentnStakeholder MetricsThe Key Questions of Business Planning=Why does the company exist?=W
5、here is it going?Size SalesMarkets LocationsProducts Competitive ChallengesSBU Linkages=How will it get done?Values and Operating PrinciplesTechnology Resources=What must the company be very good at doing?=How will progress and success be measured?Expectations of StakeholdersCompany PerformanceMissi
6、onVision of FutureStrategicOrganizational GoalsCore OrganizationalCapabilitiesBalanced ScorecardBusiness Plans are Developed by the Business UnitsResource RequirementsIndustryLatin AmericaAsia(Europe)Objectives ofthe business unitObjectives ofthe regionBottom-up-approach:Derivation of segment and co
7、rporate strategic plans and operating objectives from business unitgoals.Top-down-approach:Derivation of objectivesfrom corporate strategy Objectives of departmentsand individualsStrategy of the CorporationObjectives ofthe corporation People Facilities Technology Equipment and MachineryComponents of
8、 a Balanced Scorecard (with sample metrics)FINANCIAL RESULTSCUSTOMER SATISFACTION BUSINESS PROCESSES LEARNING&GROWTH AFYP ROI/ROA Surplus GrowthNew sales:new customersAdditional policies:current customersMarket shareCollecting premiumsCalculating selling price:new productNew licensing(Region&Corpora
9、te)Establishing the Business Case for new ventures,new locations Product Development:#innovations Competency growth Additional countries Core capabilities growthCascading Strategic&Operating Plan GoalsCORPORATEORGANIZATIONMETRICSFinanceFinanceCustomerCustomerBusinessProcessBusinessProcessLearning&Gr
10、owthLearning&GrowthBUSINESS UNITTEAMS/INDIVIDUALSDEPARTMENTBalanced Scorecardscan provide organization alignment and accountability 5 to 7 GOALS “SMART”parameters Directly alignedTypical Project Timeline&Milestones*8 weeks elapsed time from planning session2 Days Clarify Company Strategy and determi
11、ne goalsImplementationTraining and Roll out beginsImplementation PlanningWorkshopFormal AdvisoryGroup Review Session&Follow-up1 wk2 wks1 wk1 wk1 wk1 wk1 wkProjectPlanning,Orientationand Kick-off1 Day1 Day Interview Findings+Develop Measure Recommendations1 DayWorkshop on TargetsFinalize TargetRecomm
12、endationsImplementationPlan ReviewReview Plan forImplementation Review TransitionStrategy2 DaysFormal AdvisoryTeam Review1 Day1 Day1 wk1 DayExecutivePlanningSession(s)Performance ConsultingTotal Organization PerformanceClients:CEO,COO,sometimes the VPHRFees:typical project is$180-250KTimeframe:+/-4
13、monthsPerformance ConsultingEmployee Review ProcessnEngagement and AccountabilitynClear Performance ExpectationsnGrowth and AchievementsPerformance Management Is.the ongoing process of setting performance expectations,providing feedback and coaching to reach those expectations,and reviewing and reco
14、gnizing performance results.Tie PM to the Business CycleReview and PlanningPlanningFeedback&CoachingFeedback&CoachingMid-Year ReviewNew Year PlanningYear-End ReviewBad timing.“I dont want to ruin your day Herman,but tomorrow morning youre scheduled to be in my office for your annual performance revi
15、ew.”Remember The Key Questions?=Why does the company exist?=Where is it going?Size SalesMarkets LocationsProducts Competitive ChallengesSBU Linkages=How will it get done?Values and Operating PrinciplesTechnology Resources=What must the company be very good at doing?=How will progress and success be
16、measured?Expectations of StakeholdersCompany PerformanceMissionVision of FutureStrategicOrganizational GoalsCore OrganizationalCapabilitiesBalanced ScorecardOrganization Alignment leads to Employee Engagement COMPANYMISSIONVISIONStrategic ObjectivesCore Capabilities CompetenciesLeadershipFunctional
17、Department ScorecardSuccess ProfilesEmployee Performance ProcessIndividual GoalsEmployee Development PlansBusiness Unit Scorecard Cascading:Critical Metrics and Competencies Change requires a balanced Value ExchangeEmployee Gives Employer GivesEnergyEffortCommitmentValue AddLearningTimeOpportunityCa
18、reerBenefitsCompensationJobThe Performance Process can provide the keys to developmentBase PayPromotionTrainingCareer developmentSuccession planning89%77%56%51%32%Reduction in force26%Variable pay34%Current Use of Performance Management DataSource:Watson Wyatt Best Practices in Performance Managemen
19、tPerformance Management EvolutionTraditional Recent Emerging MeasuresTraits/OutcomesBehaviors/OutcomesTime/Quality/ValueEvaluatorBossSelf/PeersCustomersOutcomesMerit PayDevelopmentOrganization SuccessImplementationDistribute FormsTrain andCommunicateOngoing Education and involvementOwnershipHRDManag
20、ementEmployeesComplianceVoluntaryMandatoryMotivationFactors That Influence Process effectiveness Organization Supervisor PM Culture Skills Process The Organization Values that Support PM The Capability to Measure and Discuss Performance The Interaction Between the Employee and the Supervisor People
21、Factors Technical Factors Performance Measures Rewards Delivery PM Forms Measures that Support the Organizations Goals and Values and are Possible to Accurately Measure How and Why Pay is Linked to Performance How the Design of the Form Supports the Process PerformanceManagementEffectivenessFeedback
22、 frommultiple sourcesCoaching and feedback are integralDe-emphasison a ratingDecentralizedcontrolGreater linkagebetween pay and performanceEffective measures-Competencies-Business strategies“Champions”sponsorshipEmployeeparticipationEmployeeinvolvement insystem designCommunication&trainingAlignment
23、withbusiness objectives,strategy,customer needsOngoing monitoringof effectivenessof programBest PracticesElements of Successful ProgramsHigh Impact Performance ManagementKey elements found in all“best practices”nEmphasis on looking forwardnPlanning and developmentnJoint process with employee ownersh
24、ipnCooperative goal settingnFeedback(continuous,multiple sources)nDevelopmental focusnPay and performance linkageSource:Watson Wyatt Best Practices in Performance ManagementUse of Key ElementsDevelopment PlanningMulti-source ratings14%65%81%84%94%97%Goal SettingTeam standardsNo ratingsCompetencies/b
25、ehaviorsSource:Watson Wyatt Best Practices in Performance ManagementEvolution of Performance FeedbackTop DownSelf-AppraisalPeer ReviewsUpward FeedbackInternal CustomersExternal Customers3600ReviewDoes it make a difference?Employees are eligible for stock plan programs1.8%Company terminates employees
26、who perform unacceptably1.8%Company does a good job of helping poor performers improve1.5%Top performers get significantly more pay than average performers0.8%Company positions pay above market0.4%Employee performance appraisals used to set pay0.4%Employees participate in profit-sharing plan based o
27、n firms overall success0.6%Pay is linked to companys business strategyThe Performance MatrixOResults“what”Behaviors“how”Std=100%ofexpectedStd=100%alignmentNIHNIWFMEEKey:O=OutstandingEE=Exceeds ExpectationsM=Meets Expectations (80-90%of population)NIH=Needs Improvement on“HOW”NIW=Needs Improvement on
28、“WHAT”F=FailingProject StepsProject Planning,Education and Assessment:ClientFirst,scope and timetable,design team education,PM design matrix,document review,interviewsDesign:Straw-man designs,implementation planning and scheduleTesting and Approval:Presentation,senior management assessment,sign-off,
29、editImplement:Communication rollout,modular training rollout,useReview/Revise:Gather feedback,test and revise12345Performance ConsultingEmployee Review ProcessClients:VPHR,Dir.Comp and/or ODFees:typical project is$85-130KTimeframe:+/-3 months(excludes implementation)Think“Implementation”nA successfu
30、l process is 25%design and 75%implementation!“Its never to early to think about implementation.”Peter DruckerBest Practices in ImplementationnDetailed communications and training strategynPro-active problem identificationnBroad buy-innSenior management involvementnMeasurement of system effectiveness
31、Source:Watson Wyatt Best Practices in Performance ManagementUtilize Best Practices in Change ManagementnVisible senior management supportnOngoing communicationnBest practices and stakeholder researchnHigh involvement and broad buy-innCareful planning,rapid processnComprehensive approach to implement
32、ation and monitoringnTraining in intact work teamsSource:Watson Wyatt HR21 StudyUnderstanding Realize how“my work”is different because of the changeCommitment Believe in the system and process for change.in shared accountability for making it successfulAcceptanceAgree to value or merit of change.Rec
33、ognize advantage of“future state”Action Adopt new behaviors=become engaged in the change process.Champion changes internallyBehavior Change ModelEFFORTAwarenessA Quick SummarynPerformance management continues to evolvenNO one perfect solutionnnot much magicnImpact:great if done rightnBest practices
34、for ideasnThink implementation early and oftennUpdate and keep freshOngoing TrackingTimely Communication&Skills TrainingConnection between Rewards&PerformanceDirect Link toInstitution MissionSenior Leadership InvolvementEmployee“Ownership”Objective Feedback&ReviewCritical Success Factors for an effe
35、ctivePerformance Management processKey Human Resource LinkagesBase PayTrainingSuccession Planning/PromotionsCareer PlanningIncentive Pay100%97%95%85%80%Source:Watson Wyatt Best Practices in Performance ManagementHR StrategySuccessionPlanningRewardsWorkDesignSelection&StaffingPerformanceManagementTra
36、ining&DevelopmentIntegrate PM with HR StrategyPerformance Management TeamMethodology and ToolsnBrian Brown(Cleveland)nBrad Carter(San Francisco)nCassandra Frangos(Boston)*nDavid Gore(Toronto)nJim Stewart(Boston)*to Kaplan and Nortons Balanced Scorecard Collaborative Performance ManagementA Watson Wyatt Guide to ConsultingJune 2000