Your SlideShare is downloading. ×
Webcast: Performance Management: Moving from Scorecard to ...
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Webcast: Performance Management: Moving from Scorecard to ...

797

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
797
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
44
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • 441 mid-level and senior line managers 115 HR professionals The majority of companies had 100+ employees and $10,000,000+ in revenue. Industries most frequently represented: Education Financial Services Government/Military Healthcare/Medical Insurance Manufacturing Pharmaceuticals Retail
  • Despite the vast amount of information available, performance management is often a source of frustration for both human resources professionals and line managers alike. The good news it that 75% of managers surveyed believe it is possible to develop a PM system that accurately measures employee contribution to business results. PM started as a business tool; MBO. It evolved into a HRM tool and devolved into an administrative task. Too often, performance management is seen as extra work, verses the work, and an administrative “scorecard” rather than a useful tool. Its deteriorated into a one a year activity, that’s not seen as having much value. A surprising 23% of respondents revealed that they don’t know the intended objective(s) of their organization’s performance management system.
  • All of this dissatisfaction tends to drive organizations to tinker with their PM systems in a quest to make them better, more valuable to the business. In fact, 60% of the participants in our study report that their performance management systems have been changed in at least one way over the past three years . Yet, these efforts do not appear to be having the desired impact. Change does not necessarily translate to success. The changes and updates reported most commonly are revising the rating scale and adopting new forms. While these are important components of any performance management system, these changes do not directly address the primary causes of dissatisfaction or the success factors.
  • Three factors tend to earn a system the “fairness & accuracy label”: The system helps employees build their skills and competencies. The system is applied consistently across the company (e.g., managers set goals with employees, there is a shared picture of the criteria used to evaluate performance, etc.). The rating scale enables managers to accurately differentiate levels of performance during the annual reviews. These are directly related to leader behavior and how they apply the system There are three additional factors that not only impact the perception of fairness and accuracy but also impact the perception of overall business value, leading employees to believe the system is worth the time invested: It helps to build a high-performance culture. It provides useful data that is used for succession planning. It provides useful data that drives leadership development initiatives. These are a reflection of how well PM is linked to other HRM systems. Is the input used to inform other HR decisions and actions?
  • Despite the impact of these six factors, our research found that in many organizations these factors are not in place. As you can see, all six items were rated favorably (that’s the green bar) by only 45% or fewer respondents.
  • The changes and updates that respondents reported most commonly are directed toward revising the rating scale and adopting new forms. While these are important components of any performance management system, these changes do not directly address the primary obstacles of clarifying the link between pay and performance, increasing managers’ commitment to developing people and enhancing their skills, and ensuring consistency in application across the organization. Nor do they impact success factors like helping employees build skills and providing useful data for other HRM systems.
  • What does it take to make performance management work? Our research identified three factors that are prerequisites for success. These elements help ensure that performance management facilitates strategy execution and are critical in both technology-enabled and paper-based systems. Mindset —Performance management is seen as a tool to drive results, not as an administrative task. Both managers and employees should understand the performance management system’s purpose, including how it supports broader organizational goals. It is critical that managers understand how it supports strategy execution and why it warrants their attention. Competence —Managers are competent at performance coaching, goal setting, development planning, and appraisal. Manager skill in these areas is essential for success, and technology is not a substitute. “In companies that report successful technology-enabled performance management systems, 90% say that managers have these requisite skills—compared to only 28% in companies where technology-enabled solutions are not adding value,” says Forgie. Many companies report that they provide managers with training to conduct effective performance evaluations, yet far fewer provide skill training related to setting goals, performance coaching, and development planning. Reinforcement —Managers meet periodically with direct reports to formally review progress. This is a defining characteristic of the best performance management systems, because it ensures that performance coaching, feedback, and monitoring of goals regularly take place. Yet, fewer than half of the companies surveyed report that periodic check-in meetings are required or encouraged as part of their performance management process.
  • So what does this mean for you and what can you do to get the most out of your company’s PM system—whatever it might look like? Here are some tips. We discussed the importance of viewing PM as a tool to help you get the most out of your team The next point is interesting – technology does not guarantee success. Don’t rely on technology to do PM for you—your skill and focus on setting goals and coaching is what will make or break PM from an employee’s perspective and will enable you to deal with performance issues. Interestingly, in our study, 36% of the companies with the worst performance management systems use software-enabled systems. And more than one-third of the companies with the most effective performance management systems use a paper-based approach. Goals should be revisited regularly – avoid the trap of setting goals at the beginning of the year, then dusting them off at year end during the performance review. Goals are dynamic – as changes in the business occur, so should goals. For performance issues, it is particularly impt to review goals regularly to monitor progress and provide ongoing coaching and FB. Don’t ignore development planning--Too often, development planning is viewed as a sidebar or afterthought in performance management. Development planning is essential for building employees’ skills and competence, and for supporting organizational training and development initiatives. Research has shown the perceptions of fairness and accuracy of reviews often come down to quality of conversation – so spend time preparing for that—what points will you emphasize, examples to provide – rather than checking boxes. Lastly, ask for feedback on your use of the key skills – this is valuable and by doing this you model the behavior of FB and set an example of open communication. Now we will bring these guidelines to life through a case study of RNDC….
  • In 2006, two leading adult beverage wholesalers, Republic Beverage Company and National Distributing Company, merged to form a new company, Republic National Distributing Company. During the merger, RBC was still involved with many acquisitions. So, there were many new companies coming together at the same time. With two companies and several smaller organizations coming together, the HR practices were very different in the new RNDC. For example, one company used a 3-point performance rating scale while another used a 5-point scale. In some cases, the smaller acquisitions were not doing formal performance management at all. The HR processes were decentralized in some areas meaning the local market had discretion whether to do a certain practice and to use their own process. Overall, there was inconsistency in how HR was executed. It was a tactical approach with different stages of the talent management cycle missing. For example, selection processes were good, but we failed at a good onboarding process and professional development process. The performance management process was executed, but had no meaning to succession planning. Our first priority was to elevate the role of strategic HR at RNDC. Why? It was clear that HR Needed a roadmap as a function. In addition, HR needed to identify their role with the new Company. Our next priority was to conduct a HR SWOT on existing practices related to HR processes. We asked many questions, but it really came down to three key points: What happens from “hire to retire” with an associate? What HR practices or processes are they subjected to? What should they be subjected to? How do these key touch points impact the organization and the associate in a positive way. Where were the gaps? We knew that it started with recruitment and selection and ended with succession planning and development, but it was a continuous cycle. At the same time, we had to take into consideration different cultures of the new businesses. Once we knew the gaps, we began to implement an integrated talent management program that supported each key touch point. [It began with development of the LCM]. Lastly, we asked ourselves: “How will HR add value?” We heard loudly from the organization that these HR practices needed to add value and not be another program. We incorporated and enlisted key leaders during the implementation process. We also included lengthy follow-up surveys and discussions after the execution of each process. We continue to follow this same blueprint. If it doesn’t add value, don’t waste the time. We are now at the stage of truly measuring the results through a HR scorecard.
  • Our first priority was to sell to the leaders that HR was a value-added function and a strategic business partner. We had to move HR from the shadows and into the spotlight. As a function, we understood the new Company’s vision . . . “To be the national distributor of choice of beverage alcohol producers who value the three tier system, building branded products and profitability for all parties involved, and serving the needs of our associates, suppliers, customers and community.” The owners identified 5 success factors and specific behaviors of those success factors. Those success factors were the blueprint to develop the final competency models. Those success factors leadership and performance requirements are: 1. Maximize Shareholder Value . . . . Increase efficiencies . . . Continuously improve . . . Drive productivity . . . Make good decisions 2. Expand Supplier Relationships . . . Be a reliable and proactive business partner to suppliers and add value . . . Demonstrates a deep understanding of supplier business and marketplace . . . Deliver customer satisfaction in the market . . . Increase efficiencies and drive productivity 3. Attract Develop, and Retain Talent . . . Invest in people’s careers . . . Put talented people in the right roles . . . Identify career paths and support career advancement of high potentials . . . Make people feel involved and part of company success . . . Lead with integrity 4. Execute Competently . . . Service the customer in a quality yet profitable way . . . Provide training and resources . . . Share best practices . . . Deliver accurate and timely information . . . Create individual accountability for performance 5. Become an Extraordinarily Professional Organization . . . Treat people correctly . . . Reward on the basis of performance . . . Act professionally
  • Step #2 – Conducting a HR SWOT We needed to understand the role of HR at the new company. Because of the different ways HR was represented before the merger, it was important to understand our strengths and vulnerabilities as a function and as a service provider to the organization. Over a 90 day period, we conducted an in-depth SWOT that includes multi-rater feedback from the Company. Here are a few key learnings: 1. Our strength was evident in the human capital of the organization. We were a growing company as evidenced by the merger. 2. We were weak in the area of strategic HR especially in terms of a structured Talent Management program. We had significant barriers to overcome from a technology standpoint. Lastly, the role of HR was not visible and certainly not considered a “business partner”. 3. We had a great opportunity to bring HR into the forefront by simply implementing common HR practices. The challenge would be identification of the “best practices” and making those practices connect with each other. 4. In this industry, talent theft is common. It’s a three tier business: the supplier – the wholesaler – the end consumer (restaurants, bars, groceries). We knew we needed to really create a hallmark program that would ATTRACT TALENT – DEVELOP TALENT – and RETAIN TALENT.
  • In summary, the HR SWOT revealed the strategic path that HR needed to take in order to meet the needs of the organization. We were not surprised at some of the results. For example, it was evident that we lacked a strategic direction. However, it was encouraging to discover the culture in both legacy organizations was people-oriented and passionate about their job and the industry. Three years later, we can confirm that strength was key in HR leading the execution of a strategic talent management plan. What did the HR SWOT reveal? RNDC was a growing organization with naturally strong human capital. We had the opportunity to implement a strategic human capital management plan which could offset the threat of competitive intrusion and help us in future growth. The right strategic human capital management plan could also address and solve the business challenges: Attract, Develop, and Retain the Best Talent Execute Competently Become an Extraordinarily Professional Organization Overall, the HR SWOT helped us prepare and present the business case for a structured and strategic talent management plan. We were READY TO SELL!
  • We knew we had our work cut out for us as HR professionals: We were faced with a new company with different cultures. HR practices were inconsistent and different. At best, we could rate ourselves at a “C” for quality and execution. HR was not perceived as a value-add proposition. We were the traditional personnel administrators of yesteryear. However, we had some unique opportunities that we leveraged: A vision to become the best wholesale distributor which meant that our people had to be the best in the industry. HR stepped up to the plate very quickly to show how we could help line management make that vision come true. Senior leaders who were passionate about getting the right talent in the right jobs. A HR Team excited about moving out of the shadows and into a more strategic, business partner role. As a result, our #1 objective as a joint team was to create a strategic three year talent management plan that would deliver “A” results.
  • We knew our plan was aggressive and would need to be changed along the way. Remember, part of our commitment was to execute follow-up after each milestone event. If a practice did not add value, we had to fix it before moving on. So, we took a practical approach in our implementation of a formal talent management program. Phase 1: Introduction of a Talent Management Program using a leadership competency based foundation Phase 2: Launch an automated, integrated, and web-based Talent Management Program t o connect and standardize all the talent practices . . . We implemented a standard way to selection the best talent. We implemented a standard way to execute performance management which included IDPs. We just completed our first year of talent reviews (succession planning) across the company. Phase 3: Execute and establish best practices and processes through education and use of technology . Today, we believe we have positioned ourselves in this industry with some of best practices and execution is consistent. We are constantly evaluating the processes and streamlining the practices to ensure high quality and results. Phase 4: REPEAT PERFORMANCE OF BEST PRACTICES AND EVALUATION OF HUMAN CAPITAL MANAGEMENT (ROI). We are at Phase 4 today. We have implemented 90% of the objectives we set forth to do. If we had to rate ourselves today it would be at a strong “B”. What needs to happen to get us to an “A”? We still believe we have some gaps to address in training and development. As such, our focus will now drill down into how we can launch a LMS as part of our overall strategy. The final objective is to launch a balanced scorecard. We are piloting the HR scorecard today with the plan to implement a national HR scorecard in 2010 with 2011 as the target to launch an all-inclusive scorecard to include metrics related to financial, operational, and customer in addition to the human capital metrics.
  • The process to develop our leadership competency models took over six months and started with our owners establishing a vision statement – “To be the national distributor of choice of beverage alcohol producers who value the three tier system, building branded products and profitability for all parties involved, and serving the needs of our associates, suppliers, customers, and community.” How to achieve that vision required the owners and the top leadership to identify the business challenges. These challenges are: Create shareholder value. A shareholder includes owners, suppliers, customers, and our entire workforce. Expand supplier relationships and brands. Attract, select, and retain talent. Execute competently. Become an extraordinarily professional organization.
  • As moved into phase one, we had to CLARIFY THE STARTING POINT IN THE STRATEGY. What was the starting point? Executive buy-in and sponsorship for a competency-based talent management program. Education on the value and necessity of competencies and the integration to: Recruitment and Selection Performance Management Training and Development Succession Planning Retention of Talent through Culture Human Capital Management (metrics for ROI) The Three Year Talent Management Strategy was comprised of many different project plans. There were different phases and components that really made up the overall strategy. The first project that was foundational to everything we did was to create the leadership competency model.
  • The process to develop our leadership competency models took over six months and started with our owners establishing a vision statement. We began in May 2007 by creating an executive steering committee with leaders from the legacy companies that included all functions. During the summer, we did focus groups, surveys and analysis on what defined an “A” associate in terms of behaviors and competencies. By November, we developed 9 LCMs which covered three (3) functions of the organization [sales, administration, and operations] and three (3) levels [executive, management, and individual contributor]. By January 2008, we began our communication cascade and education efforts on the introduction of the leadership competency models. Shortly afterwards and parallel to this implementation, we began to create and update all the HR talent management processes to incorporate the LCM. Step #1. Senior leaders identified a leadership steering committee with members from both legacy companies and each function Step #2. TalentQuest facilitated an executive brainstorming session on competency-based talent management systems Step #3. Outcome was alignment on an action plan to create the RNDC LCMs from the point of research to implementation
  • Step # 4. The next step after identification of the business challenges was for our top leaders to identify the leadership and performance requirements to achieve success. These success factors were specific and validated through in-depth interviews with our best performers. We talked to over 70 of our best performers, in all functions and positions, and at every level of the organization - from the driver who delivers the product, to the receptionist who answers our phones, to the sales rep who represents us in the marketplace, to the accounting clerks who process our financial statements, to the top managers and leaders of each division and department. The interviews provided specific examples around the necessary actions that needed to be demonstrated in order to be considered a successful top performer at RNDC. As a result, we were able to identify and define the competencies and their associated behaviors. This research provided over 3,500 behaviors which became the foundation for the third step of the development process. The final step was to translate the research around the success factors to specific competencies and behaviors. Thus, it is important to understand, in more detail, what specifically are the success factors. Step # 5. This step of the development of the leadership competency model was to ask each RNDC associate to participate in a survey using SurveyMonkey.com. Over 3,500 behaviors were taken from the interviews and sorted into three functions: Sales, Operations, and Administrative. These behaviors were sorted once again into three levels of leadership – executive, manager, and individual contributor. The survey asked for each person to select the top behaviors for specific competencies related to their job function. Additionally, managers and executives were asked to rate the top behaviors for the teams they were responsible for leading. As a result, the survey provided us with a clearer understanding of the necessary leadership competencies for each function and level of leaders. Step # 6. The final step was to have the research analyzed by a senior team created specifically to endorse and sponsor the RNDC talent management strategy. The Talent Management Steering Committee represents Sales, Operations, and Administrative functions. The team identified the final leadership competency models which were reviewed and endorsed by the top leaders in the Operating Committee.
  • After months of research within our organization, RNDC developed a leadership competency model that is unique and specific to our industry. It is unique , because it reflects the best traits of leaders at all levels and functions. It is specific , because it reflects the leadership skills necessary in our industry. Lastly, the leadership competencies are reflective of the organizational cultures across 18 states which are strong in values like integrity, teamwork, and accountability. Another feature of the leadership competency model is its application for every associate. We have identified the leadership competencies for positions like a warehouse clerk, a payroll supervisor, an operations manager, a sales representative and all executives. Therefore, when we recruit talent, we know what leadership skills are necessary for the job. The leadership competencies also provide a framework for other people practices like training, performance management, and talent management. Training courses will focus on leadership skills. Performance evaluations rate leadership skills. And, talent management means individual development plans that develop your leadership skills for your current and future position at RNDC. Thus, leadership skills become a core component of all our people practices as well as our culture.
  • Step # 7 was about the communication cascade to the workforce: The key message about the LCM was: Established new standards and expectations for the newly merged company Served as unified models to train and develop people Set groundwork for performance appraisals Built by the voice of the employees Create a message of unity So, what? We immediately test-drove the LCMs with the first formal performance management process as the new RNDC.
  • Step #8 was the step dealing with “continuous improvement”. Following the first performance appraisal process, we asked the Field two questions in regards to the performance management process. We kept it simple. However, the feedback was overwhelming on both questions. What did you appreciate about the process? Consistent and relevant to the job Use of technology versus paper What could make the process more effective? Reduce the number of leadership competencies Incorporate specific performance objectives
  • The final step in the LCM Development . . . #9, Our Current Model We believe there are many benefits to having a defined leadership competency model for every person at RNDC. Those benefits are: Differentiate RNDC as a leader in the beverage alcohol industry. Create a common company culture and language. Align individuals with the business strategy which includes initiatives like (1) improving our profitability, (2) maximizing sales force productivity with better technology, and (3) managing our most valuable asset – our people. Define workforce expectations and behavioral standards of excellence. Create accountability and improve performance. Improve our ability to attract and retain top talent. Increase the effectiveness of our talent management programs by linking them to success criteria – the competencies and behaviors. When suppliers, customers, and we talk about RNDC, we will be known as leaders, at every level, who execute to attain results , develop talent , deliver customer and supplier satisfaction , and demonstrate professionalism . Thus, our vision “ to be the national distributor of choice ” becomes a reality. Competency Models were revised, as follows: Individual Contributor . . . 7 vs. 8 competencies Manager . . . 8 vs. 13 competencies Executive . . . 8 vs. 13 competencies
  • Phase II – Years 2007 and 2008 The goal was to launch an integrated and web-based Talent Management Program to connect and standardize all talent practices.
  • Our first step was to integrate the LCM into what we believed were the core HR practices of Talent Management at RNDC.
  • Example – SELECTION Leadership Competency Model was incorporated into talent selection: Job Descriptions Job Postings Selection Assessments Structured Interview Guides Selection Training The example shown is a page from the Manager, Sales Structured Interview Guide. It includes a series of probing questions on the eight (8) leadership competencies of the Manager. While subjective, the interviewer rates the responses for a final rating. The final rating is calculated to determine if the candidate is a good match to the job and the culture of RNDC.
  • EXAMPLE: PERFORMANCE MANAGEMENT Performance Management was the first talent management process we launched as a new company using the newly-minted LCMs. A lot of work went in the front end of the project. Here is a brief recap of some key points of the process over a two year period. Note: Performance Evaluation Form Performance Goals (5 Objectives set in January and linked to business objectives) Leadership Competencies & Behaviors Comments Rating Summary Coaching Tips and Developmental Resources Development Plan
  • EXAMPLE- FIRST-TIME MANAGER TRAINING PROGRAM After year two, we used the metrics from the performance management process to analyze our weaknesses in the Manager group. While this analysis has been done for all groups, our purpose in this group was to create a First-Time Manager Training Program. The PA Metrics drove the training topics which were connected to the LCM on the front and back-end. Like our other initiatives, there was a detailed project plan which included field involvement in the development, pilots of the programs, and review for continuous improvement.
  • EXAMPLE – SUCCESSION PLANNING In 2008, we launched the formal succession planning process. Top talent (or “ A” talent) standards were established. Because this process was a legacy practice (at RBC), the framework was in place and simply updated with the new LCM and inclusion of the new performance management criteria. “ A” Talent Assessment Process – 7 Requirements Job Mastery - Time in position Training : Completed for current position. Job Performance Evaluation : “Meets Expectation” (3) or better. Advancement Potential : two progressive positions. Sponsorship : Immediate and Second-level Supervisor. Business Results : Top 20%. Leadership Competencies : Consistently demonstrates RNDC’s key skills and competencies for success as identified in the appropriate functional and level competency model.
  • EXAMPLE – SUCCESSION PLANNING An assessment is done on the individual’s demonstration of the leadership competencies to determine if they meet our standards for high performance. FYI: Future goal is to lift this information out of the PA document and use it as part of the high-potential talent assessment process. Internal Information 60 behaviors Rating Scale 1-2-3-4-5 to match performance evaluation rating scale with 3 as “meets expectations. Maximum Score Potential = 5 points x 38 behaviors = 190 Year One “Pass” Score = 65% of max points or 124 pts. (plus pass the 6 other factors)
  • EXAMPLE – SUCCESSION PLANNING The final outcome of the formal succession planning process is an Individual Development Plan based on the assessment of leadership competencies. We focus on 2 to 3 leadership competencies over as 12 month period and assign training and/or development tactics to improve those areas. The IDP on top talent is discussed and reviewed once a quarter. Parallel to this more formal process, each associate has a Development Plan based on their LCM. The Plan is a component of the annual Performance Evaluation. We also encourage quarterly discussions and updates.
  • Phase 3 in 2009 Goal was to execute and establish best practices and processes through education and use of technology.
  • The Core Talent Management Practices Today Company and industry-specific LCM Recruitment and Employment Branding Message Recruitment and Selection Tools Comprehensive College Recruitment Program Onboarding, Assimilation, and Transition Process for Key Positions & Managers Objectives Management connected to . . . Performance Management Basic Management Training Program (based on PM metrics) Succession Planning . . . Talent Assessment Process with IDPs and Formal Talent Reviews. 90% Promote-from-Within Rate. Development Plans for Every Associate – performance management program and/or succession planning 360 Feedback Process Executive Coaches focused on hipo talent Created a formal women’s professional development initiative
  • As important as the TM processes and practices is the action that made it happen: Execution Standpoint of HR Practices Supported by top leaders and managers . . . and understood by general workforce Consistent and standardized Subject to continuous improvement Training and communication happens with every process, every time Perceived and real improvements with HR technology solutions Most importantly, linked to other TM disciplines and it’s part of the RNDC culture
  • Phase 4 – 2009 into 2010 Repeat performance of best practices and evaluation of human capital management (ROI)
  • We are in the final phase of our Three Year Plan In-progress evaluation of: Human capital metrics through a HR scorecard (pilot) HR Technology (integration) Improved Management Training Curriculum 2010 HR processes – just do it better! Preparing for the next 3 years . . . Execute a similar process starting with a HR SWOT
  • Pilot HR Scorecard for 2009 – a work in progress . Our next steps include : HR meeting with the CFO to really gain top leader alignment on the metrics. This begins our conversation into developing a total BALANCED SCORECARD. Launch the HR Scorecard on a national basis. HR Function’s 2010 objectives will be tied to the HR Scorecard Metrics will speak for themselves as we gather “historical” information. This will help us identify outliers for outlier management. As well, we can begin to drill down on what talent management practices are working or not working. There are numerous other benefits to using HR metrics which we hope to realize in 2010.
  • It’s Three Years Later – What Worked! Senior Leader buy-in, engagement, & accountability. Include the end-user every step of the way. Full workforce education – no secrets! Formal training on every single process starting with HR. Articulated the connection of each process to the cycle of talent management – we told the why. Executed with discipline and listened with care. Fixed the problems. And, raised the bar. Stuck with the game plan and flexed, as needed.
  • Three Years Later – Watch outs! Competing priorities in an ever-changing business environment in the industry. Unplanned surprises like the economy (impacts growth and financial investment in people) Technology scares Managers – continue to emphasize the advantages. If you stop talking about talent, talent stops talking to you!
  • In Conclusion What did the HR SWOT reveal? RNDC was a growing organization with naturally strong human capital. We had the opportunity to implement a strategic human capital management plan which could offset the threat of competitive intrusion and help us in future growth. WE ARE STILL A GROWING ORGANIZATION WITH GREAT PEOPLE AND POTENTIAL! The right strategic human capital management plan ABSOLUTELY DID address and solve the business challenges: Attract, Develop, and Retain the Best Talent Execute Competently Become an Extraordinarily Professional Organization
  • Transcript

    • 1. Performance Management: Moving from Scorecard to Strategic Tool October 20, 2009
    • 2. Defining the What and The ‘Why’
      • What is Talent Management?
      • Managing our highest incurred cost of doing business – our people . . .
        • Recruitment
        • Selection
        • Training
        • Performance Management
        • Professional Development
        • Succession Planning
        • Retention of Talent
    • 3. Why Performance Management?
      • Functions as core of all other TM processes and creates a holistic approach
      • Impacts the entire employee lifecycle and provides purpose for each stage of the employee’s individual experience
      • Provides metrics for individual accountability, goal alignment and business objectives integration
      • Enriches the employees through coaching and individual development planning
    • 4.
      • OnPoint Consulting: Research Analysis
    • 5. Questions We Set Out to Answer
      • What are the obstacles that prevent performance management systems from achieving their intended objectives?
      • What impacts the perception that a performance management system is fair and accurate?
      • What factors determine if a performance management system delivers value to the business?
      • What characteristics differentiate the best performance management systems from those that are less effective?
      • Which changes are likely to have the greatest impact on improving a performance management system? And which may not be worth the effort?
    • 6. Sample of Responding Companies
      • AT&T
      • Caterpillar Inc.
      • Church & Dwight Company, Inc.
      • EDO Corporation
      • Erie Insurance Group
      • FedEx Kinko’s
      • Fujifilm USA
      • Johnson & Johnson
      • JPMorgan Chase & Co.
      • Lockheed Martin
      • Pitney Bowes
      • Playtex Products, Inc.
      • Praxair, Inc.
      • Raytheon Electronics Corporation
      • Reliant Pharmaceuticals
      • Siemens Medical Solutions
      • United Technologies Corporation
      • Verizon
      • Wyeth Biotech
    • 7. PM: Scorecard or Strategic Tool?
      • Only 44% of line managers and 45% of HR professionals believe their current performance management systems deliver value.
      • Only 43% of line managers and 46% of HR professionals believe the time spent on their performance management systems is worth the investment.
      • Only 30% believe that their performance management systems achieve their intended objectives.
      • The good news? 75% believe it is possible to create a fair and accurate system.
    • 8. Why Are People Dissatisfied?
      • Managers do not apply it consistently
      • Managers lack the skills required
      • Leadership is not committed to developing people
      • Managers do not address poor performance
      • There are no consequences for not using the system and developing people
    • 9. Dissatisfaction Leads to Changes, Yet…
      • Despite the wide range and high frequency of reported improvement efforts, only 24% believe the changes have actually improved their systems.
      • Most commonly reported changes directed toward revising the rating scale, updating competencies, and adopting new forms.
    • 10. Six Critical Factors of a Solid PM System
      • What contributes to the perception of fairness, accuracy, and overall value to the business?
      • The system helps employees build their skills and competencies.
      • The system is applied consistently across the company (e.g., managers set goals with employees, there is a shared picture of the criteria used to evaluate performance, etc.).
      • The rating scale enables managers to accurately differentiate levels of performance during the annual reviews.
      • The system helps to build a high-performance culture.
      • The system provides useful data that is used for succession planning.
      • The system provides useful data that drives leadership development i nitiatives.
    • 11. Six Critical Factors Are Often Not in Place Helps employees build their skills and competencies Consistent application across the company Rating scale enables managers to differentiate levels of performance accurately Helps to build a high-performance culture Provides useful data for succession planning Provides useful data that drives leadership development initiatives Note: Ratings of “Agree” or “Strongly Agree” are labeled as favorable, and “Disagree” or “Strongly Disagree” as unfavorable.
    • 12. The Issue: No Connectivity FOCUS OF IMPROVEMENT EFFORTS OBSTACLES SUCCESS FACTORS
    • 13. Three Prerequisites for Success
      • Mindset : Performance management is seen as a tool to drive results , not as an administrative task.
      • Competence : Managers are skilled at goal setting, coaching, development planning, and appraisal.
      • Reinforcement : Managers meet periodically with direct reports to formally review progress.
    • 14. Guidelines to Enhance Your PM System
      • Choose an approach and stay with it
      • Clarify the purpose of your PM system
      • Improve consistency
        • Provide descriptions of “what good looks like”
        • Require evidence to support ratings
        • Provide managers with skill training
      • Ensure performance management system data is linked to other talent management systems
      • Hold managers accountable
      • Emphasize setting clear and measurable goals and providing ongoing coaching and feedback
      • Prioritize development planning
    • 15. RNDC: Setting the Stage
      • 2007 Merger: Republic Beverage Company & National Distributing Company
      • HR processes were different, decentralized, tactical, and inconsistently executed across 2 companies
      • First priority . . . position HR as a strategic function and business partner at RNDC
        • Why? HR needed a roadmap in order to meet the business challenges
        • How? Conduct a HR SWOT on the HR function and the business in order to present a fact-based business case and strategic people plan for RNDC
    • 16. The Owners State the Business Challenges . . .
      • Maximize Shareholder Value
      • Expand Supplier Relationships
      • Attract, Develop, and Retain the Best Talent
      • Execute Competently
      • Become an Extraordinarily Professional Organization
      “ To be the national distributor of choice of beverage alcohol producers who value the three tier system, building branded products and profitability for all parties involved, and serving the needs of our associates, suppliers, customers and community.” Step #1: Understand the Business Challenges and Vision (May 2007)
    • 17. Step #2: Understand HR at the New Company - HR SWOT (June – Sept 2007)
      • STRENGTHS
      • What are the internal strengths?
      • Market position . . . positioned for growth
      • Focused on service and operational excellence as our business strategy
      • Great reputation as a distributor and employer
      • In touch with marketplace (niche departments – Hispanic Marketing, State Wine, National Accounts)
      • Flexibility to a changing marketplace
      • Time to market
      • Focused approach to growing the business
      • Intellectual capital in seasoned industry leaders
      • Collective experience of tenured experts
      • Passion in general workforce
      • Strong culture – message of family and fun
      • Socially responsible at the community level
      • WEAKNESSES
      • What are the internal weaknesses?
      • Lack of HR leadership presence in field and marketplace (role of HR)
      • HR viewed as “ personnel ” versus a strategic business partner and consultant
      • Lack of strategic planning [ to set direction:
      • Do we have a clear mission statement, vision, and values that ties to a HR strategy and compensation philosophy?
      • What is the state of our human capital management plan? * Workforce Planning * Acquiring Talent*Developing Talent * Deploying Talent *Retaining Talent * Evaluating Human Capital (metrics)
      • Inconsistent HR practices and processes across the markets . . . reactive vs. proactive
      • HR Technology (HRIS)
      • Communication processes
      • Recognition: formal programs and informal rewards
      • HR organizational structure: headcount, deployment, functional expertise
      • OPPORTUNITIES
      • What external opportunities might move the organization forward?
      • Implementation of consistent HR practices across all markets
      • Implementation of a HR “ shared services ” platform for recruitment, benefits, compensation, employment practices, training (reduced costs; consistent practices)
      • Lack of a total benefit strategy and not leveraging the “ power of one ”
      • Performance optimization of employees through a structured and integrated training program
      • Management of third-party contractors . . . outsourcing and ROI on current outsourcing
      • THREATS
      • What external threats might hold the organization back?
      • Competitive intrusion . . . talent theft and market share
      • Lack of internal talent for future acquisitions and mergers
      • HR Technology (HRIS) . . . too much administration
      • Economical factors that impact compensation (gas prices; competitor ’ s wages)
      • Rising healthcare costs
      • Organized labor threats
      • Employment and labor law compliance
      • Corporate responsibility . . . do our corporate citizenship programs strengthen our reputation, increase employee morale, and support our communities?
    • 18. HR SWOT Revealed a Strategic Role for HR and a Need for a Talent Management Program
      • What did the HR SWOT reveal?
        • RNDC was a growing organization with naturally strong human capital. We had the opportunity to implement a strategic human capital management plan which could offset the threat of competitive intrusion and help us in future growth.
        • The right strategic human capital management plan could also address and solve the business challenges:
          • Attract, Develop, and Retain the Best Talent
          • Execute Competently
          • Become an Extraordinarily Professional Organization
    • 19. Overarching, #1 Objective Post-Merger
      • “ Implement and Execute a Three-Year
      • Talent Management Plan that
      • . . . delivers an “A” in
      • Talent Management”
    • 20. Prioritize a Practical Approach
      • Phase 1 (2007) : Introduction of a Talent Management Program with a leadership competency based foundation
      • Phase 2 (2007 - 2008) : Launch an integrated and web-based Talent Management Program t o connect and standardize all the talent practices
      • Phase 3 (2008-2009) : Execute and establish best practices and processes through education and use of technology .
      • Phase 4 (2009 – 2010) : Repeat performance of best practices and evaluation of human capital management (ROI)
    • 21.
      • Phase 1: Creating the Framework – Leadership Competency Model and Communicating the Criticality
      2007
    • 22. The Beginning Phase . . .
      • What was the starting point? Senior leader buy-in and sponsorship for a competency-based talent management system and its integration to :
          • Recruitment and Selection
          • Performance Management
          • Training and Development
          • Succession Planning
          • Retention of Talent by Creating a RNDC Culture
          • Human Capital Management (metrics for ROI)
    • 23. Steps in the LCM Development
      • Senior leaders identified a leadership steering committee with members from both legacy companies and each function
      • TalentQuest facilitated an executive brainstorming session on competency-based talent management systems
      • Outcome was alignment on an action plan to create the RNDC LCMs from the point of research to implementation
    • 24. Steps in the LCM Development
      • Identified and interviewed top talent “subject matter experts” inside RNDC to evaluate success-driving behaviors
      • Surveyed the entire Company to rank competencies and behaviors for (1) their job and (2) their supervisor’s job
      • Steering Committee reviewed survey results and proposed the RNDC LCMs to senior leaders and Owners
    • 25. RNDC Leadership Competency Models (9)
        • Manager (all Positions)
        • Implement Continuous Improvement
        • Think Critically
        • Focus on Profitability
        • Manage Execution
        • Collaborate Broadly
        • Establish Priorities
        • Attract, Coach, and Promote Talent
        • Motivate Others
        • Communicate Effectively
        • Negotiate Conflict
        • Demonstrate Professionalism
        • Create Customer Satisfaction
        • Build Supplier Satisfaction
      Sales Operations Administration Individual Contributor Individual Contributor Individual Contributor Manager Manager Manager Executive Executive Executive
    • 26. Steps in the LCM Development
      • Began a communication cascade to the Company on the new RNDC LCMs and their importance to the business strategy and talent management
        • Started with Managers and functional leaders and ended with Individual Contributors
        • Immediately “test-drove” the LCMs with a formal performance management program – our first TM process at the new company
    • 27. Steps in the LCM Development
      • After the first performance appraisal process, we asked the field 2 questions on performance management.
        • What did you appreciate about the process?
          • Consistent and relevant to the job
          • Use of technology versus paper
        • What could make the process more effective?
          • Reduce the number of leadership competencies
          • Incorporate specific performance objectives
    • 28. Steps in the LCM Development
      • Streamlined the LCM for each position . . . continued to use the Steering Committee as calibration.
        • Manager (All Positions)
        • Implement Continuous Improvement
        • Negotiate Conflict Through Collaboration
        • Manage Execution to Attain Results
        • Focus on Profitability
        • Attract, Coach, and Promote Talent
        • Demonstrate Professionalism
        • Create Customer Satisfaction
        • Build Supplier Satisfaction (Sales & Ops)
        • Think Critically (Admin)
    • 29.
      • Phase 2: Launch an integrated and web-based Talent Management Program to connect and standardize all the talent practices
      2007 - 2008
    • 30. Integration of LCM into Core Talent Management Practices at RNDC
      • Launched Technology
        • Taleo ATS
        • TalentQuest TMS
          • Selection Assessments
          • Objectives Management
          • Performance Management
          • 360 Process
          • Development Resource Library
          • Culture Engagement Surveys (2010)
        • LMS (2010)
      • Recruitment Tools & Branding Message
      • Selection Tools
      • Job Descriptions
      • Training Programs
      • Succession Planning
      • Professional Development Programs
      • Corporate Communications
      • Supplier Contract Negotiations as a point of differentiation
    • 31. Example: Selection
      • Leadership Competency Model was incorporated into talent selection:
      • Job Descriptions
      • Job Postings
      • Selection Assessments
      • Structured Interview Guides
      • Selection Training
    • 32. Example: Performance Management
      • 2007 - 2008
      • Executive Steering Committee involved
      • LCM introduced
      • HR Technology introduced
      • Common practice introduced
      • IDPs introduced for all
      • Extensive workforce communication and training
      • Full diagnosis after the process for quality improvement
      • 2008 - 2009
      • Simplified LCM launched
      • HR Technology improved and simplified
      • Objectives Management introduced and incorporated
      • Metric analysis introduced and used to develop Basic Management Training Program
      • Elevated communication on process connection to the TM strategy
      • Pay-for-Performance introduced
      • Full diagnosis after the process for continual improvement
    • 33. Example: First-Time Manager Training Program Driven by PA Metrics and Connected to LCM Manager Competency Ranking Based on Year 2 PA Metrics (-) Focus on Profitability (-) Negotiate Conflict Through Collaboration (-) Attract, Coach, & Develop Talent (-) Manage Execution to Attain Results (+) Implement Continuous Improvement (+) Build Supplier Satisfaction (+) Demonstrate Professionalism (+) Create Customer Satisfaction Training Program Topics Connected to Manager LCM 1. New Leader On-boarding Program Implement Continuous Improvement 2. Basic Finance 101 Focus on Profitability 3. Communication Skills Negotiate Conflict Through Collaboration 4. Conflict Resolution Skills Negotiate Conflict Through Collaboration 5. Performance Management Attract, Coach, & Promote Talent 6. Coaching Attract, Coach, & Promote Talent 7. Talent Management Attract, Coach, & Promote Talent 8. Meeting Management Manage Execution to Attain Results 9. Change Management Implement Continuous Improvement 10. Presentation Skills Create Customer Satisfaction
    • 34. Example: Succession Planning
      • “ A” Talent (high-potential) standards were established and incorporated both the Leadership Competencies and Performance Management disciplines in order to assess and develop top talent.
    • 35. Example: Succession Planning
      • Leadership Competency Model behaviors are part of the Talent Assessment process.
      • Manager evaluates leadership behaviors (60) of each competency (8) for a total rating.
      • Total rating must be 65%* of max points (*year 1 with bar raised each year).
    • 36. Example: Succession Planning
      • If all 7 requirements are met, a formal
      • Development Plan is prepared for “A”
      • (and strong B) talent.
      • Focus on leadership competencies that need further development for the current position or the next position.
      • Professional development and/or training is generally connected to building competency levels.
      • Individual Development still happens
      • as part of the formal Performance
      • Management process with all
      • associates.
    • 37.
      • Phase 3: Execute and establish best practices and processes through education and use of technology
      2009
    • 38. RNDC Core Talent Management Practices Today
      • Company and industry-specific LCM
      • Recruitment and Employment Branding Message
      • Recruitment and Selection Tools
      • Comprehensive College Recruitment Program
      • Onboarding, Assimilation, and Transition Process for Key Positions & Managers
      • Objectives Management connected to . . . Performance Management
      • Basic Management Training Program (based on PM metrics)
      • Succession Planning . . . Talent Assessment Process with IDPs and Formal Talent Reviews. 90% Promote-from-Within Rate.
      • Development Plans for Every Associate – performance management program and/or succession planning
      • 360 Feedback Process
      • Executive Coaches focused on hipo talent
      • Created a formal women’s professional development initiative
    • 39. RNDC Core Talent Management Practices Today
      • Execution Standpoint of HR Practices
        • Supported by top leaders and managers . . . and understood by general workforce
        • Consistent and standardized
        • Subject to continuous improvement
        • Training and communication happens with every process, every time
        • Perceived and real improvements with HR technology solutions
        • Most importantly, linked to other TM disciplines and it’s part of the RNDC culture
    • 40.
      • Phase 4: Repeat performance of best practices and evaluation of human capital management (ROI)
      2009 into 2010
    • 41. Final Phases of Original Plan
      • In-progress evaluation of:
        • Human capital metrics through a HR scorecard (pilot)
        • HR Technology (integration)
        • Improved Management Training Curriculum
        • 2010 HR processes – just do it better!
      • Preparing for the next 3 years . . . Execute a similar process starting with a HR SWOT
    • 42.  
    • 43. 3 Years Later – What Worked!
      • Senior Leader buy-in, engagement, & accountability.
      • Include the end-user every step of the way.
      • Full workforce education – no secrets!
      • Formal training on every single process starting with HR.
      • Articulated the connection of each process to the cycle of talent management – we told the why.
      • Executed with discipline and listened with care.
      • Fixed the problems. And, raised the bar.
      • Stuck with the game plan and flexed, as needed.
    • 44. 3 Years Later – Watch outs!
      • Competing priorities in an ever-changing business environment in the industry.
      • Unplanned surprises like the economy (impacts growth and financial investment in people)
      • Technology scares Managers – continue to emphasize the advantages.
      • If you stop talking about talent, talent stops talking to you!
    • 45. In Conclusion: Realizing the Strategic Role for HR and its Need for a Talent Management Program
      • What did the HR SWOT reveal?
        • RNDC was a growing organization with naturally strong human capital. We had the opportunity to implement a strategic human capital management plan which could offset the threat of competitive intrusion and help us in future growth.
        • The right strategic human capital management plan ABSOLUTELY DID address and solve the business challenges:
          • Attract, Develop, and Retain the Best Talent
          • Execute Competently
          • Become an Extraordinarily Professional Organization
    • 46.
      • Questions?
    • 47. Appendix Slides
    • 48. The RNDC Competency Model Fuels Talent Management
      • RNDC Employment Branding . . . Who We Are
      • Taleo Applicant Tracking System (automates hiring processes)
      • RNDC Career Web Site
      • Internal Job Posting Processes
      • TQ Assessments and SIGs
      • RNDC Selection Toolkit
      • New Hire Orientation
      • Progressive Training Programs
      • - - Onboarding Transition Process
      • - - New Supervisor Training
      • - - New Manager Training
      • [Management Academy]
      • Functional Training
      • - - Sales
      • - - Operations
      • - - Administration
      • TQ Performance Appraisals (integrated
      • with objective management)
      • Coaching Performance Issues
      • TQ 360 Survey Tool
      • Individual Development Plans
      • Leadership Programs (external)
      • Future Leadership University (internal)
      • TQ Learning Center
      • TQ Succession Planning Module
      • Formal CDP Events
      • Local Bench Planning
      • TQ Strategic Planning Objectives Integration
      • To Performance Management
      • Measuring HR Effectiveness (turnover,
      • Retention, time to fill jobs, cost per hire).
      2007 2007-2008 2007-2008 2007-2008 2008-2009 2008-2009 2008-2009 2008-2009 2008-2009 TQ = TalentQuest Technology
      • TQ Survey Module
      • Culture Action Plans
      • RNDC Talent Management ~ the ability to attract, develop, and retain talent.
      • Key business challenge.
      • Core Competency Requirement.
      Human Capital Metrics Employee Culture Surveys Succession Planning Leadership Development Performance Management Training Selection Recruitment Leadership Competency Model
    • 49. RNDC Execution: Best Practices
      • Build a calendar of succession events to ensure coordination across company processes
      • Pilot in a Region/State/Several Houses
      • Provide toolkits and rollout support resources, making roles and responsibilities clear
      • Identify a high potential pool in addition to identifying levels of readiness
      • Solicit feedback and improve the system in Y2

    ×