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Performance Management: Then and Now
 

Performance Management: Then and Now

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    Performance Management: Then and Now Performance Management: Then and Now Presentation Transcript

    • Performance Management: Then and Now Kim Lamoureux Principal Analyst September 15th 2009 Copyright © 2009 Bersin & Associates. All rights reserved.
    • Welcome to today’s Saba webcast: Performance Management: Then and Now Kim Lamoureux Principal Analyst, Bersin & Associates Yvette Cameron Vice President, Product Strategy, Saba © 2009 Saba Software, Inc. All rights reserved
    • About Us  Who We Are • Bersin & Associates is an industry research and advisory services company dedicated to helping organizations implement enterprise learning and talent management strategies for business performance improvement.  Research Areas • Enterprise Learning • Leadership Development • Performance Management • Career and Succession Management • Workforce Planning • Talent Management Systems  Offerings • In-Depth Studies and Reports • Research Memberships • Advisory Consulting • Benchmarking • Workshops Copyright © 2009 Bersin & Associates. All rights reserved. Page 3
    • What we’ll cover…  The business context for employee performance management  The key drivers for making changes to employee performance management practices  The evolution of employee performance management from an administrative exercise to a strategic business improvement tool.  The highest impact changes  How employee performance management practices vary across organizations today Copyright © 2009 Bersin & Associates. All rights reserved. Page 4
    • Agenda  Business of Talent  Performance Management • Maturity Model • Key Practices • Evolution • Models  Performance Management Systems  Talent Management Integration Copyright © 2009 Bersin & Associates. All rights reserved. Page 5
    • Top Business Challenges Tremendous cost-cutting and reduction in growth targets What Are Your Organization’s Top Business Challenges for 2009? +2x +3x +2.5x January 2009 -2.5x November 2008 © Bersin & Associates, Corporate TalentWatch® Research, Senior HR and Business Executives, 2/09 Copyright © 2009 Bersin & Associates. All rights reserved. Page 6
    • Changing L&D and HR Priorities Leadership, employee management and rewards, restructuring Top HR and L&D Priorities – Coming Quarter (February, 2009) 3X © Bersin & Associates, Corporate TalentWatch® Research, Senior HR and Business Executives, 6/09 Copyright © 2009 Bersin & Associates. All rights reserved. Page 7
    • Top Talent Challenges Leadership, Focus on performance, Filling Critical Skills Gaps What Are Your Organization’s Top Talent Challenges for 2009? +20% +2.3x January 2009 Data October 2008 High © Bersin & Associates, Corporate TalentWatch® Research, Senior HR and Business Executives, 2/09 Copyright © 2009 Bersin & Associates. All rights reserved. Page 8
    • Today’s Environment  Business Focus: cost reduction and restructuring  Talent Focus: improve leadership and workforce performance  Talent Readiness: weak at entry and managerial levels  Strategy: desire for integrated systems and alignment  Need: integrated career management programs Goal Deploy talent management strategies which will solve immediate problems quickly yet position the organization for longer term growth and flexibility Copyright © 2009 Bersin & Associates. All rights reserved. Page 9
    • Defining Employee Performance Management EPM is a set of management practices that establish measurable goals and objectives for Coaching employees, assess achievement and attainment of such objectives, and then use this information to improve performance through coaching, compensation, Coaching development, and other means. Copyright © 2009 Bersin & Associates. All rights reserved. Page 10
    • Current Processes Often Flawed  32% of managers do not clearly understand the role between pay and performance in their organizations  85% of organizations do not have clearly defined competencies which define success  35% of managers and employees do not feel the process is implemented consistently  Only 14% of organizations use any form of peer-assessment  Only 21% of organization have training tied to development goals  Only 29% of organizations create goals which are aligned to the organization  Only 13% of organizations have coaching programs tied to their performance management process  Only 36% of organizations feel they adequately tie compensation to the performance management process Copyright © 2009 Bersin & Associates. All rights reserved. Page 11
    • Challenges with EPM Managers do not effectively differentiate between high and low 45% performers. The practices are not implemented consistently across the 45% organization. The practices are too time consuming. 42% There are no consequences for non-compliance. 41% The link between performance and pay is not clear. 30% Managers do not feel equipped to provide feedback or coaching. 30% Senior executives do not support or model performance 25% management practices There are no incentives. 21% © Bersin & Associates, High Impact Performance Management research conducted 8/2008, n=716 Copyright © 2009 Bersin & Associates. All rights reserved. Page 12
    • Top Business Drivers for Change Building a high-performance culture 47% Increasing organizational performance 40% Ensuring consistency with performance management practices across the organization 36% Improving satisfaction with the performance management practices 23% Filling gaps in the leadership pipeline 18% © Bersin & Associates, High Impact Performance Management research conducted 8/2008, n=716 Copyright © 2009 Bersin & Associates. All rights reserved. Page 13
    • Employee Performance Management Maturity Model™ Copyright © 2009 Bersin & Associates. All rights reserved. Page 14
    • Survey Question  At what level of maturity would you assess your company’s performance management? • Level 1 - Inconsistent Performance Planning and Appraisal • Level 2 – Enterprise-wide Performance Management • Level 3 – Integrated Performance Management • Level 4 – Tailored Performance Management Copyright © 2009 Bersin & Associates. All rights reserved. Page 15
    • Adoption of EPM Practices Today Copyright © 2009 Bersin & Associates. All rights reserved. Page 16
    • EPM is Changing Copyright © 2009 Bersin & Associates. All rights reserved. Page 17
    • EPM Models A “competitive assessment” A “coaching and development” model model Coaching Performance Evaluation Development Development Performance Appraisal Coaching Alignment Alignment (Goals) (Goals) 60% of 40% of Organizations Organizations Copyright © 2009 Bersin & Associates. All rights reserved. Page 18
    • Process First – System Second Make sure the System Meets the needs of Your Process! Competitive Coaching and Evaluation Development Most Organizations And Slowly Start Here Move Here One Page Competency Strict Goal Peer Development Appraisal based Alignment Assessment Planning Form Assessment Coaching & Bonus-based Calibration Succession Mentoring Comp. Sessions Management Programs Copyright © 2009 Bersin & Associates. All rights reserved. Page 19
    • How do you fairly and consistently assess people? Both Bill and Bob achieved Performance Is Joe a better goals, which should get the Rating manager than Bill? higher raise and why? Should I promote Compensation Bill or Sue? How do I avoid giving Promotion everyone the same to Leadership If I give Bob a low rating, rating? how do I explain it so he can improve? ? Why is Sue so good at Forced Ranking one thing but not others? Employee Step 1: Look at a Defined Competency for this position Satisfaction Step 2: Observe Specific Behaviors which describe the competencies Step 3: Assess Gaps, Areas to Improve, and Potential against competencies Copyright © 2009 Bersin & Associates. All rights reserved. Page 20
    • Competency Use Drives Performance Organizations with excellent use of competencies are 4X more likely to have a performance-driven culture 50% 46% 45% 40% performance-driven % of Organizations with outstanding 35% 30% culture 25% 20% 12% 15% 9% 10% 6% 5% 0% Excellent Good Fair Poor Effectiveness of Competencies in Performance Mgt. Copyright © 2009 Bersin & Associates. All rights reserved. Page 21
    • Survey Question  Select the following statement that most closely describes the current state of competencies in your organization. 1. We do not have any defined competencies 2. We have global set of competencies defined 3. We have a defined competencies for each role 4. We have competencies and job profiles defined for each role Copyright © 2009 Bersin & Associates. All rights reserved. Page 22
    • Use of Competencies in PM Only 36% of organizations with PM processes use competencies well How well are your competencies used for performance assessment and review? Well Implemented, Execellend-World 31% Class, 5% Fair - Needs Poor - Needs Improvement, 42% Revamping, 22% Copyright © 2009 Bersin & Associates. All rights reserved. Page 23
    • Highest Impact Changes Driving Efficiencies with Technology Integrating with other Talent Practices Copyright © 2009 Bersin & Associates. All rights reserved. Page 24
    • Business Drivers for Buying Copyright © 2009 Bersin & Associates. All rights reserved. Page 25
    • Survey Question  Describe how your performance management process is implemented? • No solution in place • Paper-based • In-house developed solution • Vendor-provided solutions Copyright © 2009 Bersin & Associates. All rights reserved. Page 26
    • EPM Automation Today Vendor solutions are growing rapidly 42% of the respondent organizations have more than one performance management solution © Bersin & Associates, High Impact Performance Management, October 2008 , 716 global respondents Copyright © 2009 Bersin & Associates. All rights reserved. Page 27
    • HR Systems The Evolution of Talent Management Systems Predictive Platform Most Organizations Integrated Strategic Talent Planning System “Smart Talent” Decisions Comprehensive Profiles Talent Management Suite Web-based Process Improvement Application Process Enablement ATS Unification of Data LMS Compensation PC-based Performance Management Form Automation MS Word & Excel Self-Service Email Disconnected Surveys Business Impact Compliance Copyright © 2009 Bersin & Associates. All rights reserved. Page 28
    • EPM Features and Capabilities Core EPM Feature Sets Advanced EPM Feature Sets • PM planning and review cycle • Performance Calibration management Support • Goals Management • Pay for Performance • Competency Management • High Potential / Talent • Performance Planning Identification • Development Planning • Job Profile Management • Performance Reviews • Talent Profile Management • Career and Succession Management • Talent Analytics • Global Capabilities Copyright © 2009 Bersin & Associates. All rights reserved. Page 29
    • High-Impact Talent Management Framework Talent Business Strategy Alignment Planning & Strategy HR Organization Governance & Management Critical Role Identification Talent Strategy & Planning Talent Segmentation Talent Process & Solution Design Talent Systems Strategy Talent Measures and Targets Profiles Competencies Capability & Competency Management Experience Skills Talent Analytics Talent Performance Career & Leadership Management Succession Development Acquisition Management Formal Programs Sourcing Goal Setting Capabilities/Strength Assessments Stretch Assignments Candidate Pools Assessments Talent Profiles Executive Education Assessment Development Planning Talent Pool Management Coaching Employer Brand Competency Assessment Talent Reviews Mentoring Recruiting Performance-Based Pay High Potential Identification Job Rotation Selection Career Plans Onboarding Programs Management Leadership Coaching/Mentoring Training Curricula Programs Content Development Learning and Development Operational & Delivery Training Certification Role-based Developmental Programs Curricula Assignments Workforce Planning Talent Acquisition Talent Systems Learning Management Compensation Management Performance, Career and Succession Management Learning Culture Copyright © 2009 Bersin & Associates. All rights reserved. Page 30
    • How do you enable a performance-driven culture? At Saba, we observe that only blended formal/informal approaches work © 2009 Saba Software, Inc. All rights reserved
    • Formal Component: Performance Review Wizard • Unification of information from entire talent management lifecycle into a performance review wizard • Real-time reviews • Decision support lifecycle based on performance results • Pay-for-performance enablement © 2009 Saba Software, Inc. All rights reserved
    • Bridging Formal & Informal Components: Gap Closure Activities Granting/Proposing • Enroll in a course • Launch Saba Centra Competencies: • Join a community recording • View a wiki • Launch a file • View topics within • Launch website discussion threads © 2009 Saba Software, Inc. All rights reserved
    • What makes a performance review valid? • Real time • My community assesses me • Linkage to formal process Better accuracy More value © 2009 Saba Software, Inc. All rights reserved
    • Improved Review Validity: a sum of formal and informal components • Real time • My community assesses me • Linkage to formal process Better accuracy More value © 2009 Saba Software, Inc. All rights reserved
    • The Formal / Informal Process Boundary Learning Management for Performance reviews and Plan future workforce needs Pay for potential, certifications, channel goals and objectives for and succession strategies performance and criticality. readiness, and courseware aligned organization • Capture the 70% of • Evaluate contribution, not • Share knowledge across • Compensation for informal learning that is informal just objective achievement workforce generations contributions • Communities around • Locate experts • Fuel succession • Intrinsic satisfaction from existing curricula • Fuel performance • Identify experts & mentors sense of community • Social Rewards © 2009 Saba Software, Inc. All rights reserved
    • What Leaders Can Do • Create a Strategic People Strategy • Proactively Create a Performance Driven Culture • Foster Collaboration Across the Extended Enterprise • Rapidly and Effectively Consolidate Systems 37 | Saba Confidential © 2009 Saba Software, Inc. All rights reserved
    • Q&A Kim Lamoureux Principal Analyst kim.lamoureux@bersin.com Yvette Cameron VP Product Strategy ycameron@saba.com © 2009 Saba Software, Inc. All rights reserved
    • Performance Management The Essential Guide 1. Research members • Go to the research center www.bersin.com 2. Purchase the reports • Go to the research store www.bersin.com/store 3. Join our research program • Go to our website to learn more about membership www.bersin.com/services Copyright © 2009 Bersin & Associates. All rights reserved. Page 39
    • IMPACT 2010: April 6-8 http://impact.bersin.com/ Join us! Copyright © 2009 Bersin & Associates. All rights reserved. Page 40
    •  October 19-22, 2009 – The Fairmont San Francisco, CA  Saba’s largest user event of the year - more than 600 attendees expected  75+ sessions offered, hands-on training, and unique networking activities planned  Event information and Registration at www.sabapeople.com 41 | Saba Confidential Copyright © 2009 Bersin & Associates. All rights reserved. Page 41
    • Thank you! Copyright © 2009 Bersin & Associates. All rights reserved.