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1、Executive Human Resource Program,The Promise of Performance ManagementHay GroupBoston,0109-9271-HAYG Lemaire,2,The Current Challenge of Performance Management,The HR processIs completely unrelated to other key business processesIs dreaded by managers and employees alikeDoes not result in any meaning
2、ful feedbackDoes not differentiate performance or payIs a focus for only one or two daysor hoursper year,0109-9271-HAYG Lemaire,3,The Promise of Performance Management,Imagine a system that couldIncrease the likelihood that your strategy is effectively executedHarness and direct the 1060 minutes a d
3、ay of discretionary effort that every one of your employees 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
4、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 Results,0109-9271-HA
5、YG 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 defined as having5-ye
6、ar sales growth=17.5%per year5-year profit growth=10.8%per yearAnnual equity growth=16.7%per year5-year dividend growth=13.4%per year,Source:D.Karvetz,The Human Resources Revolution,Clear Employee Goals,Participative Style,Attention to Development,Encourage Creativity,Performance-Based Rewards,Highl
7、y 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:Mavrinac&Siesfield,Measuring Intangible
8、 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:Can management make tough decisions and sei
9、ze 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 does this company adapt?Attracting and Retaining Tale
10、nt: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 support the firms strategic intent?,0109-9271-HAYG Lemaire,8,3
11、5%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 Performance Management Improves Business Results,High-performanc
12、e companies define Performance Management in its broadest sense:it is critical 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“ra
13、ising the bar”in an organization,for all levels of performanceOrganizations with a high-performance orientation and strong management capability have higher revenue,profits,and market valuations,0109-9271-HAYG Lemaire,10,Performance Management,Performance Management is about improving business perfo
14、rmance by improving team and individual performance,and ensuring that the companys strategy is 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 ens
15、uring that decisive and constructive dialogue occursA process of managing self and others so 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,0109-9271-HAYG Lemaire,11,Performance Management Stages,Design Para
16、meter,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 reward emphasis,Manage the tails of bell curve,Joint ownership for goal-settin
17、g/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 Employee,Focus,Emphases,Ownership,0109-9271-HAYG Lemaire,12,Performance Appraisal,Pe
18、rformance 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 setting and review,Merit increases efficiently allocated,Performance Management Stages
19、 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?,There are four differentiators of best practice:Clear Strategy Translation ProcessInt
20、egrated Performance ProcessesCulture of DialogueMultiple and Differentiated Rewards,0109-9271-HAYG Lemaire,15,Strategy Translation Process,A Definition:“Early in the history of the company,while thinking about how a company like this should be managed,I kept getting back to one concept:if we could s
21、imply 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,0109-9271-HAYG Lemaire,16,Strategy Translation Process,Checklist:Are all top team members unified and fo
22、cused 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?Financial goals,operational goals,behaviors,0109-9271-HAYG
23、 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 strategy reviews,and other situations through which people do businesshave honest dialogue at their center.These mec
24、hanisms 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-HAYG Lemaire,18,Integrated Performance Processes,Checklist:Do the goals of the organization reflect interdepartmental
25、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?,0109-9271-HAYG Lemaire,19,Culture of Dialogue,A Definition:“A leader should be constructing his appraisal all ye
26、ar 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 what you have to say,that is a failure of leadershipBy failing to provide honest feedback,leaders cheat their people by depriving t
27、hem 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 employees productivity curve increases quickly,then levels off,Without reinforcement and feedback the level stays the same or may fall off,S
28、poradic,inappropriate,or general feedback without reinforcement has a distinctive effect on motivation and performance,Consistent,specific feedback and dialogue build self-esteem and performance,Feedback,Feedback,Feedback,Feedback,Culture of Dialogue,Performance Coaching/Feedback Is Critical,0109-92
29、71-HAYG Lemaire,21,Culture of Dialogue,Checklist:Are managers(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 doe
30、s it provide closure?,0109-9271-HAYG Lemaire,22,The better my performance,the better my total compensation will be,Multiple and Differentiated Rewards,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
31、,23,Multiple and Differentiated Rewards,Approaches:Increase dialogueUse multiple currenciesReview use of ratingsUse forced rankingsFind new ways to differentiate merit,0109-9271-HAYG Lemaire,24,Differentiated Rewards,Separate means from ends,0109-9271-HAYG Lemaire,25,Differentiated Rewards,Dont doub
32、le-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 managemente.g.,two-day detailed evaluation of business with managers being color-coded,CEO
33、 models desired behaviorsTeaches/coachesMentors/counsels high performersSignificant investment in training/developing people to be good coaches,Businesses ranked at multiple levels and information is publicly sharedHeavy use of incentives(up to 50%,even for first-level managers),Strong financial and
34、 operational processesCECSession CS1/S2Significant movement of star talent,Open,candid dialogue that stretches individuals and organizationsFrequent conversations about performance and developmentSignificant investment in training/developing people to be good coaches,Performance measured at multiple
35、 levels20-70-10 plan launched in 1996Forced ranking systemTop 20%rewarded so likely few leaveBottom 10%given opportunity to improveApplies at all levels,The Prerequisites,Aspirational missionClear strategyHighly decentralized organizationEVP“Super jobs for super people”,Aspirational missionPortfolio strategyTough,stretch targetsHighly decentralized,PepsiCo,GE,Organi-zation,
