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Making Performance Management Work Uncommon Commonsense Insights
 

Making Performance Management Work Uncommon Commonsense Insights

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It’s that dreaded time of year — performance reviews. If people hate performance reviews, why do we keep doing them? The answer is because they are a crucial component to the success of any ...

It’s that dreaded time of year — performance reviews. If people hate performance reviews, why do we keep doing them? The answer is because they are a crucial component to the success of any business. The problem is most companies don’t do them well. Fortunately, this is finally starting to change. Dr. Steven Hunt, an expert with more than 20 years of experience designing performance and goal management systems for thousands of companies, will discuss how technology is enabling far more effective performance management methods. He will discuss:

What makes performance management difficult.
Critical design features for performance management.
How to effectively define, evaluate and calibrate performance.
How to effectively deploy performance management processes.

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    Making Performance Management Work Uncommon Commonsense Insights Making Performance Management Work Uncommon Commonsense Insights Presentation Transcript

    • #WFwebinar Speaker: Steven T. Hunt, Ph.D., SPHR Vice President, Customer Research SuccessFactors, an SAP company Moderator: Max Mihelich Associate Editor Workforce magazine Making Performance Management Work: Uncommon Commonsense Insights
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    • #WFwebinar Max Mihelich Associate Editor Workforce magazine Making Performance Management Work: Uncommon Commonsense Insights
    • #WFwebinar Steven T. Hunt, Ph.D., SPHR Vice President, Customer Research SuccessFactors, an SAP company Making Performance Management Work: Uncommon Commonsense Insights
    • Making performance management work: Uncommon commonsense insights Steven T. Hunt, Ph.D., SPHR Vice President, Customer Research E-mail: shunt@successfactors.com
    • 10 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. If people hate performance reviews why do we keep doing them?
    • 11 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Why we do performance management Increase productivity by ensuring employees are given feedback to learn from experience and incentives to increase their effectiveness. Address counterproductive employee behaviors that limit or damage organizational productivity and drain organizational resources Attract and retain high performing employees through encouraging, recognizing and rewarding performance contributions. Provide a consistent and defensible set of standards for making decisions that impact employee welfare such as pay and termination. Comply with legal requirements and cultural expectations related to fair and consistent evaluation of employee contributions. Because “hire, pay & pray” is a lousy method for running a business
    • 12 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Myth: Performance management doesn’t work Reality: Effective performance management is central to creating a high performance organization “Researchers have begun to try to determine the return on investment of… using better selection methods, better training and development, and better performance management applications…at this time, the order from most to least is rigorous performance management, then training and development, then selection” Eichinger, Lombardo & Ulrich, 2006 “the tracking of performance of individuals, reviewing performance (e.g., through regular appraisals and job plans), and consequence management (e.g., making sure that plans are kept and appropriate sanctions and rewards are in place)… are strongly associated with superior firm performance in terms of productivity, profitability, Tobin’s Q, sales growth, and survival” Bloom & Van Reenen, 2007
    • 13 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Myth: Employees don’t like performance management Reality: Employees want good performance management 25% of the “Gallup 12” engagement questions tie to Performance Management • “Do I know what is expected of me at work?” • “Have I received recognition and praise for doing good work?” • “Are my co-workers committed to doing quality work?” Buckingham & Coffman, page 28 Well defined, consistent evaluations directly impact employee fairness • “To improve both distributive and procedural justice…set clear rules that are applied consistently by all supevisors” Aguinis, page 17
    • 14 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Myth: Social technology can replace traditional performance management Reality: We need to integrate new social techniques like crowd-sourcing with more traditional methods like annual reviews
    • 15 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. What makes performance management difficult Used to allocate limited resources (pay, jobs) About accurate data Requires comparing performance of employees Used to provide coaching and feedback About dialogue Focuses on relative strengths and weaknesses within each employee Evaluating employee contributions Guiding employee development
    • The Total Performance Management Cycle Career Development Performance Coaching Performance Coaching Performance Review Performance Coaching Performance Coaching Performance Evaluation Goal Setting Goal Review Goal Review Goal Review Goal Review Performance Improvement What have employees contributed? Where should employees focus development energy? What do people need to accomplish? Learning & Development Investments Succession Planning How are employees doing? (if needed) What must employees start or stop doing to keep their job? How can employees be more effective? Staffing Decisions Compensation Workforce Planning Legend Business Operations Employee Effectiveness Workforce Resources How should the company utilize its workforce resources? Workforce Budgeting
    • Good performance management starts with good goal setting
    • 18 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Performance Management Critical Design Questions 1. What are the primary objectives of your performance management process? 2. How do you define effective performance? 3. How will you evaluate performance? 4. How will you calibrate performance? 5. What is the relationship between performance management data, pay, promotions, development, & workforce strategies? 6. How frequently do you measure performance? How does performance management fit into the business cycle? 7. What training do managers, employees and human resources personnel need to effectively utilize your performance management process?
    • 19 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. 1. What are the primary objectives of performance management? •Development & Dialogue •Standards & Decisions •Differentiation & Reward •Documentation & Compliance Comply with legal or contractual requirements Motivate & attract high performing employees Increase productivity through feedback Guide pay, promotion & termination actions Measurement
    • 20 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. 2. How do you define effective performance? 20 Overall Performance Skills & Experiences “What you know” Competencies “How you apply your knowledge” Goals “What you are trying to achieve”
    • 3. How will you evaluate performance? a) Integrate Objective Data b) Employee Self-Assessment c) Co-worker & Customer Input d) Manager’s Initial Assessment e) Manager & Employee Review f) Manager’s Overall Assessment g) Manager’s Manager Review h) Process Administrator Review i) Talent Review Sessions j) Final Assessment k) Providing Employee Feedback l) Communicate pay & staffing decisions m) Performance improvement plan (if needed) Follow on actions tied to staffing, succession, etc. Legend Necessary steps Commonly used steps Less common steps
    • 4. How will you calibrate performance? • Recognize and reward high performers • Address under performance • Invest more resources in those who contribute more to the organization Not everyone performs at the same level • Base performance appraisals on employee actions, not manager attitudes • Create consensus through conversation Not all managers evaluate employees the same may • Provide information to managers that will help them coach employees • Create transparency on the definition of high performance Clear feedback on gaps between current and top level performance drives growth Fundamental Calibration Assumptions
    • 5. How is performance data used? Career Development Performance Coaching Performance Coaching Performance Review Performance Coaching Performance Coaching Performance Evaluation Goal Setting Goal Review Goal Review Goal Review Goal Review Performance Improvement What have employees contributed? Where should employees focus development energy? What do people need to accomplish? Learning & Development Investments Succession Planning How are employees doing? (if needed) What must I start or stop doing to keep my job? How can employees be more effective? Staffing Decisions Compensation Workforce Planning Legend Business Operations Employee Effectiveness Workforce Resources How should the company utilize its workforce resources? Workforce Budgeting
    • 24 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. 6. How frequently do you measure performance? Set strategy & budget Workforce Planning & Org Design Communicate performance expectations Assigning goals Coaching Peer reviews and feedback Mentoring and Learning Formal performance evaluation Training & Development Compensatio n decisions Staffing Decisions Performance management should fit into the rhythm of defining business strategies, allocating resources, & evaluating progress
    • 25 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. 7. What training do managers, employees, senior leaders & human resources need to use performance management? But I try to avoid these difficult conversations! 25
    • 26 SuccessFactors Proprietary and Confidential © 2014 SuccessFactors, An SAP Company. All rights reserved. Thank You Steven T. Hunt, Ph.D., SPHR Vice President, Customer Research E-mail: shunt@successfactors.com
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