Is Employee Performance Management Performing?

1,235 views
1,211 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,235
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
55
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Is Employee Performance Management Performing?

  1. 1. Is Employee Performance Management Performing? Exploring the Latest Findings from the Field February 8, 2005 February 8, 2005 Presenters Dr. Katherine Jones Mr. Clinton Wingrove Research Director Head of International R&D Enterprise Applications Performance Management CEO and Principal Consultant AberdeenGroup Pilat (North America) Inc. February 8, 2005 AberdeenGroup • 1
  2. 2. Agenda • Duration: 60 minutes • Dr. Katherine Jones – Research from the Field • Mr. Clinton Wingrove – Real World Experience • Questions & Answers • Download Slide Presentation February 8, 2005 Grandstand Performance Management: Managing Employees for the Performance-Driven Enterprise Dr. Katherine Jones Research Director The Destination of Choice for Actionable Research AberdeenGroup • 2
  3. 3. Agenda • Key Issues in EPM Today: The HR Exec’s Agenda • Challenges for Improvement • Moving to Best in Class in EPM • Next Steps for an Performance-Driven Enterprise © 2004 AberdeenGroup • 5 The HR Executive’s Agenda on EPM What Keeps Them Up Link payouts to total company revenue acquisition at Night Link payouts with employee performance 3 Ultimately measure the degree of alignment between the workforce and overall corporate performance Align individual behavior and work with corporate goals or scorecards 1 Compare employees to their peers for ascertaining raises and bonus distribution Improved ability to improve an employee’s skill 2 levels and career path within the organization More accurate record keeping on employees, their skills and their performance Improve data collection in case we ever had a performance issue leading to the need to terminate an employee 0 20 40 60 80 100 120 Percentages © 2004 AberdeenGroup • 6 AberdeenGroup • 3
  4. 4. Prioritized Prioritized Pressures Strategies • Align individual behavior and work • Communication of core business with corporate goals or scorecards objectives across the company (89%) (83%) • Implement a culture of continuous • Increase ability to improve an improvement (89%) employee’s skill levels and career path within the organization (82%) • Alignment of employee and department behavior with corporate • Link payouts with employee goals or scorecards (86%) performance (80%) • Improve employee morale and • More accurate record keeping on retention (85%) employees, their skills, and their performance (79%) • Improve reward structure to retain top performers (84%) • Ultimately measure the degree of alignment between the workforce and • Delivery of competitive services to overall corporate performance (75%) better retain employees (65%) • Link payouts to total company revenue acquisition (70%) © 2004 AberdeenGroup • 7 The required organization or potential process change is not warranted by the expected benefits Impediments Internally we are not ready for evaluating performance beyond its to be demonstration at the department level Overcome Not considered a strategic initiative or a top business priority Insufficient awareness of the value potential of aligned goals to go forward No compelling business value proposition has been developed to support this 0 10 20 30 40 50 Percentages © 2004 AberdeenGroup • 8 AberdeenGroup • 4
  5. 5. What Research Tells Us: Status Today • 90% of the respondents see improved employee performance management as a key to gaining competitive advantage. • 82% percent say that their employees’ work objectives are tied to corporate goals. • 64% think employee achievement should be tied to demonstrable revenue outcomes. • 73% of the respondents feel it is important that employees can articulate the corporate goals that their on-the-job behavior or their role at work influences. – Fewer, however, used the corporate goals to define individual work objectives. © 2004 AberdeenGroup • 9 Methods and Frequency of Employee Assessment Cascading goals from the CEO down to all employees Objectives linked to corporate goals or balanced scorecard Once a year Online measurement/record keeping Multiple times a year Multirater/360 On an ongoing basis Self-assessment Paper forms/interviews 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% © 2004 AberdeenGroup • 10 AberdeenGroup • 5
  6. 6. Issues Identified: Managerial Training • Training managers to conduct performance evaluations and the ability to tie employee objectives to corporate goals are seen as the biggest issues in managing employee performance. • Training managers how to coach employees better was the highest rated priority (79%) © 2004 AberdeenGroup • 11 Report Card: Room for Improvement • 52% are locked into paper-based evaluations that are conducted yearly and rarely reviewed again. • 40% report that internally they are not ready to evaluate performance beyond its demonstration at the departmental level. • Over a quarter felt that revisiting an employee’s progress toward his or her goals more than once a year is unimportant. • Almost a quarter reported insufficient awareness of the value potential of aligned goals to merit further attention to the matter • 11% thought that the employee’s ability to explain his or her job’s relationship to corporate goals was not at all important. © 2004 AberdeenGroup • 12 AberdeenGroup • 6
  7. 7. Top of the Wish List • A new electronic performance management system (32%) • Investment in an electronic system to better articulate and manage employee’s individual goals and their achievement (35%) • 22% of companies participating have budgets in place for new or enhanced employee evaluation practices, procedures, or management systems within this calendar year. © 2004 AberdeenGroup • 13 Aberdeen Comparative Framework The Best Deans‘ in List Class Industry Norm Laggards © 2004 AberdeenGroup • 14 AberdeenGroup • 7
  8. 8. What Do We Learn from Best in Class Companies? • Best-in-class companies consider employee evaluation as on-going, with at least monthly discussions between employee and manager. • Best-in-class companies see employee evaluation as an opportunity to foster employee growth • Best-in-class companies are more likely to use automation as part of their employee management initiatives © 2004 AberdeenGroup • 15 Frequency of Employee Evaluation By Competitive Framework 80% 70% 60% 50% BIC 40% Average 30% Laggard 20% 10% 0% Never Once a Multiple Ongoing Year Times a Basis Year © 2004 AberdeenGroup • 16 AberdeenGroup • 8
  9. 9. 50% 45% 40% 35% 30% BIC Best 25% Norm Laggard in 20% Class 15% 10% 5% 0% No compelling Insufficient Not considered a Internally we are not The required business value awareness of the strategic initiative or ready for evaluating organization or proposition has value potential of a top business performance beyond potential process been developed to aligned goals to go priority its demonstration at change is not support this forward the department level warranted by the expected benefits Perceived Barriers © 2004 AberdeenGroup • 17 Comparisons Between Best in Class and Laggards: Perceived Barriers to a Performance-Driven Organization 70% 60% 50% 40% BIC Average 30% Laggards 20% 10% 0% Budget Lack of active Lack of a Lack of Employee Not feasible Constraints executive compelling technology performance for a company support business case maturity or management is our size or the benefits functionality to seen as an HR of a support such initiative performance- an endeavor based environment are unclear © 2004 AberdeenGroup • 18 AberdeenGroup • 9
  10. 10. Best in Class Companies Employ Automation in EPM Automated (online) performance measurement tools 26% 36% Automated performance management record keeping A performance management program with 38% cascading goals from the CEO down to all employees © 2004 AberdeenGroup • 19 Distinctions in Leaders and Laggards • Over half of the Best in Class companies use technology in managing their workforce to enable both timeliness and consistency • Best in Class companies exceed the others in viewing employee evaluation as an ongoing process rather than a once a year, one-shot deal. © 2004 AberdeenGroup • 20 AberdeenGroup • 10
  11. 11. And the Laggards…. • Only laggards conducted no measurement of their workforce whatsoever • Laggards exceeded the industry norm in viewing performance management as the bastion of HR • Both laggards and the industry average far exceeded best in class companies in using employee evaluation solely for yearly budgeting, tied to raises and merit increases. © 2004 AberdeenGroup • 21 Best in Class Companies in EPM Outperform Peers 90% BIC 80% Average Laggards 70% 60% 50% 40% 30% 20% 10% 0% Productivity Attitude toward Job Revenue Employee Retention work and the satisfaction generation satisfaction with corporation company in general © 2004 AberdeenGroup • 22 AberdeenGroup • 11
  12. 12. Determining Best in Class • Best in class, average and laggard companies were determined by the organizational processes that companies are using to manage Employee Performance. Companies were given a score based on a weighted average of the self assessment answers that the companies provided across the following areas: – Overall processes – Organizational structure and strategy – Data and Knowledge management – Technology utilized to support EPM • We then examined a company’s overall maturity and placed them in a particular subgroup based on the following: – Top 20% of companies = Best in Class – Middle 60% of companies = Average – Bottom 20% of companies = Laggard • We then examined additional aspects of EPM (metrics, performance, pressures, etc.) based on these sub-groupings. © 2004 AberdeenGroup • 23 Key Take-Aways for the Less than Best: Steps for Laggards • Know why you want to measure an individual’s performance. – If you see no reason to evaluate performance, then don’t bother. If you do nothing whatsoever with a performance review and it does not influence a worker’s job performance or effect compliance, you may as well not go through the motions at all. • Proactively articulate a plan for a performance-driven culture. – Assuming improving the workforce is indeed a priority, enlist top management behind a move to improve employee performance by defining what it should be. • Begin communicating with your workforce. – Moving to a performance-driven environment is an exercise in change-management. Prepare for it early; a change in how or why an employee is to be evaluated is frightening. © 2004 AberdeenGroup • 24 AberdeenGroup • 12
  13. 13. Key Take-Aways for the Less than Best: Steps for the Average Companies • Put your money where your mouth is. – Create a culture where on-going evaluation is part of corporate life; and managerial time is allotted to and rewarded for that endeavor. • Train managers who are responsible for performance evaluation. – Evaluation of performance and the follow-on coaching to improve it both require training. In addition, managers report discomfort at discussing performance with employees, especially that which needs improvement. A performance-driven culture requires open discussion of individual performance from the top down – and that requires training at all levels. • Evaluate automated performance tools. – Eliminate manual, paper-based processes, and consider automated solutions that employ sharable planning worksheets, workflow, electronic record retention, Web-based record access, e-mail, and corporate-wide goal alignment. © 2004 AberdeenGroup • 25 Key Take-Aways for the Best: There is Always Room for Improvement • View performance management as a business process worthy of investment. – Foster a corporate culture and business processes oriented around high performance. This takes an ongoing commitment to enterprise-wide communication. • Create valid measures for employees’ performance. – Articulate distinctions between the A, B, and C players. Ensure that these are quantifiable and that rewards based on performance distinguish between the results of these performers. Remember that you need to retain the B players as well as the super-stars! • Drive toward corporate goal alignment. – Measure performance based on proximity to achieving corporate business goals while remaining realistic about what employees actually have within their power to achieve and accomplish. An individual cannot be held accountable for goals he or she is powerless to successfully impact. • Evaluating and improving workforce performance requires ongoing attention to managerial training. – Increase managerial training on employee management, evaluation, coaching, and mentoring. This is not a one-shot event; it is an ongoing business process of managerial growth in itself. © 2004 AberdeenGroup • 26 AberdeenGroup • 13
  14. 14. Aberdeen Conclusions • It is hard to improve what you cannot measure; it is impossible to measure outcomes if you cannot articulate not only the outcomes desired but the degree of quality required for those outcomes as well. • Performance management can only be a good as the manager’s ability to set objectives clearly, articulate goals and their relative value, define the levels of performance expected and explain how the employee is to achieve those levels. This requires training and commitment. • The success of a corporation’s workforce management endeavors will not be determined solely by technology: this research demonstrates that commitment of top executives to a performance-driven enterprise and the requisite interest, training, and dedication by middle level managers to the effort is paramount. © 2004 AberdeenGroup • 27 www.aberdeen.com AberdeenGroup • 14
  15. 15. Clinton Wingrove, Head Of International R&D – Performance Management CEO and Principal Consultant, ____________ Pilat (North America) Inc. ____________ 800.338.9701 www.pilat - nai.com © 2005 Pilat (North America), Inc. Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Who We Are… • Pilat is a leading global Human Resources Consultancy, Software-house and Services Company, founded in 1974 • Global client base extends to Hong Kong, Switzerland, Saudi Arabia, Germany, Russia, Netherlands, Poland, etc.… • ~150 professional staff based primarily in USA, Europe and Israel: Occupational Psychologists – understand people and their behavior Statisticians – understand data and what it really tells us Information Technologists – understand the behavioral engineering power of technology Experienced Managers – understand the bottom line needs 30 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 15
  16. 16. Our Vision & Mission… VISION • To be the leading supplier of data centric, HR Talent Management and Performance Improvement solutions MISSION • To help our clients maximize human performance and realize human potential by: – optimizing HR Processes that are proven to underpin superior personal performance and development – employing the behavioral engineering power of Contemporary Technology, and – enhancing the quality of decisions through rigorous Data Collection, Analysis, Interpretation, Management, and Usage Powering Performance & Potential TM 31 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Pilat HR Solutions Performance Talent Development Organizational Surveys & Management Management Management Research • Goal Setting • Succession Planning • Development Planning • Auditing & Benchmarking • Goal Alignment • Talent Management • Development Tracking • Employee Surveys and Review • Competencies • Development • Data Analysis Management • Competencies • 360º Feedback • 360º Feedback • Resumes • Coaching Management • Performance Review • Qualitative & Quantitative and Appraisal • Executive Assessment • Teambuilding Research • Development • Risk Management • Interactive e-Learning • Action Planning and Management Follow Through • Executive Assessment • Executive Coaching • Process design, training • Process design, training • Process design, training • Process design, training and implementation and implementation and implementation and implementation • In-House/ASP services • In-House/ASP services • In-House/ASP services • ASP services 32 Compensation - Staffing Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 16
  17. 17. Our Differentiators Our unique blend of in-depth experience: - Our own software house with over 20 yrs experience in Rapid Application Development - HR process design – a consulting house of international repute working with governments, Fortune 500 and military clients - HR data analysis/literacy – 25 years experience applying sophisticated statistical techniques to improve and make sense of HR data. HR Pulse® a unique Rapid Application Development toolkit built specifically to meet the ever evolving demands and changing circumstances of HR. PASRAS Our unique ‘Process and System Review and Specification’ workshop. 33 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Performance Management – A Typical Cycle Typically given LEAD high priority PLAN & ALIGN ASSESS INFLUENCE Typically given low priority 34 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 17
  18. 18. From Performance Appraisal To Performance Management In our own dealings, we are seeing Enterprise Performance Management technology used to: - Increase the effectiveness of performance planning - Engineer behavior / enhance performance - Increase data quality - Make useful data more accessible - Manage compliance - Keep processes alive ... but, without effective process design and robust implementation, results fall short of expectations. 35 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Increasing The Effectiveness Of Performance Planning Supporting different planning processes: - push down cascade – manager issues objectives, directions, etc - pull down cascade – individuals take the lead from managers e.g. look at or copy their managers’ goals - individual creation – individual creates own objectives and feeds upwards - matrix management – matrix managers engages in the process - “Spider Planning” – (project teams, service roles) 1-to-1 contracting Managing holistic performance plans: - WHAT (Goals/objectives that will be achieved) - HOW (Competencies that will be deployed, and how) - GROWTH (Learning/development to support on-job performance or preparation for future roles) Managing alignment of goals/objectives: - links to Vision, Mission and Strategy - links to Corporate, Divisional, Departmental, and other higher goals - links between Goals, Competencies, and Development Validating plans 36 - referring plans for approval Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 18
  19. 19. Engineer Behavior / Enhance Performance Technology is now a behavioral engineering tool: – Triggering desired critical behavior through timely e-mails (new and reminders) – Triggering desired behavior through alerts and advisories – Guiding process behavior through conditional Help & Information, Tutorials and system responses (e.g. “Based on this input you need to speak with <name>”) – Reinforcing behavior using responses and enabling access to new features – Engaging ‘significant others’ to approve, guide or reinforce total performance (What, How and Growth): e.g. Direct Reports - “How was it for you?” surveys) e.g. Coaches – to engage with the individual re development – Integrating processes such as performance planning, development and career/succession planning 37 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Increase Data Quality HR and Managers need data that is: – valid – reliable – differentiating – useful Technology can help to increase data quality by: - delivering conditional training and tutorials e.g. based on bio- data, access history, or actions taken - validating input using pick lists or validation rules - referring input for validation/approval - providing real-time feedback e.g. rater feedback - providing aggregate feedback e.g. average ratings by division - computing de-biased indices 38 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 19
  20. 20. Make Useful Data Accessible Support mass user access and involvement - Employees, managers, executives, coaches, HR, etc. Provide search tools - Individuals meeting certain criteria - Plans meeting certain criteria - Assessments meeting certain criteria Provide analysis and reporting tools - Performance dashboards / scorecards - Process compliance - Aggregate analyses e.g. rating distributions - Engagement / activity levels - Data quality - Individual data / profiles - Indices e.g. “Probability of Success” - Trend analyses 39 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Keep Processes Alive Any system is likely to work the first time – the project team make sure, the vendor makes sure but, typically, the energy and excitement wane after implementation For processes and systems to be kept alive, they must: – Cater for changing individual demands and circumstances (e.g. process for changing employees’ objectives) – Adapt to changing organizational demands (e.g. new acquisition, new process for part of the organization) – Provide for increasing process integration (e.g. integration with Recruitment, Succession/Talent Management, Development Management, Feedback) – Increase in sophistication as the organization learns (e.g. provision of aggregate feedback, more comprehensive development management tools) – Promote increased usage through applied motivation theory (e.g. extended Maslow’s hierarchy of needs, and Herzberg’s Hygiene and Motivator factors) 40 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 20
  21. 21. Manage Compliance Involve the people for whom the process was designed – Great processes only add value if implemented by those who need to follow them yet, typically: – “The keen do”, and – “Those who need the processes avoid them” Technology can: - detect non compliance - escalate continued non-compliance - report aggregate compliance / non-compliance - identify non-compliance cause and effect relationships - report aggregate non-compliance consequences 41 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING The Real Challenge HR is responsible for ensuring that the Performance Management processes and systems provided for Line Management to use are: - the best available - the most appropriate for the organization at any point in time, taking account of, for example line input, management commitment, and organizational readiness - regularly and frequently re-evaluated Line Management is responsible for: - providing input into the design and evaluation - implementation / compliance HR and Managers need to demonstrate courage: - HR to fight for what is needed; to insist that processes are either followed or scrapped; but not ignored - Managers to ensure that employees have truly challenging performance plans, and that objective assessments and feedback are provided - Managers and HR to provide realistic and differentiating reward and recognition to those who deserve it; not diminishing it for fear of the effect on the less-than- good performers 42 - HR and Managers to manage and ensure compliance – it is OK to do so! Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING AberdeenGroup • 21
  22. 22. Questions & Answers Webinar.Questions@Pilat-nai.com Thank you for your participation. February 8, 2005 AberdeenGroup • 22

×