Hay Group's six basic rules for managing performance in a downturn offer a positive alternative to going back to basics. Organizations that adopt a strategic approach to performance management achieve sustainable results in the short and long term. Clarity of direction maintains a motivated workforce and creates a balance between employee roles and performance.

1.
Managing
performance
in a downturn -
solving the
dilemma
Managing performance has become even more important during the current economic
context. Business leaders are being forced to drive their businesses harder; cut costs
whilst at the same time reassure and motivate employees so that they get the best from
the people they have in order to stay afloat.
Managing performance is known to be difficult to deal with
Even in more stable market conditions, executives often complain that the systems in place are
too complicated, too technical and just not clear about how individual performance matches the
business objectives. Furthermore, in difficult times, many organizations pursue short-term goals
at the expense of working towards longer-term strategic objectives into which performance
management would fall.
To thrive in these turbulent times, leaders should harness the power of their enterprise DNA (E-DNA)
to improve team and individual performance and deliver tangible results.
E-DNA is more than just culture or ‘the way we do things around here’
E-DNA is unique to each It is the sum total of an organization’s ability to execute strategy, take care of customers, maintain
organization. It is the confidence in leadership and engage employees. It underpins everything the organization does,
total of an organization’s how it defines itself and what the organization is. Executives who look closely will often find that
ability to execute their there is a clash between published policies and the way in which E-DNA affects key decisions about
performance, reward and recognition.
strategy, take care
of their customers,
A CEO who wants to drive the business strategy further and deliver results more quickly will take the
maintain confidence in time to assess the E-DNA; understand how it impacts their ability to drive performance, and harness
leadership and engage its power to support and re-enforce performance management and other people decisions. Using
employees. E-DNA in this way helps executives get the most out of performance management techniques in the
downturn and deliver better results.
©2009 Hay Group. All rights reserved 1

2. Managing performance in a downturn - solving the dilemma
The way forward
First, it is necessary to take a critical and realistic view of the shape your business is really in.
This simple exercise helps organizations identify where they stand in four different downturn
scenarios along the spectrum from survival to prosperity (illustrated below).
It is particularly those organizations that fall into either scenario one or two that need to use
performance management to help them survive in the current economic climate.
Scenario 1 Scenario 2 Scenario 3 Scenario 4
Stop bleeding Intensive care Recovery Sustain
You need to keep your You need to improve your You can, and want to, strengthen You are in good shape and
organization alive and adapt organization efficiency and your competitiveness: redesign it’s time to gain unrivalled
quickly to the economic situation refocus on core processes the way you operate competitiveness
Limit the development of risks Learn from the crisis and develop Create a real top leadership team Develop leaders who can
and liabilities throughout the effective risk management manage ambiguity
Gain market position during the
crisis capabilities
crisis Take advantage of competitors’
Preserve the foundations of Increase capability, get rid weaknesses
Become stronger, take measured
the business: clients, talent, key of deadwood and raise the
steps to expand your markets, Use strategic position to
assets, differentiated practices performance bar
customers and reach outperform the markets
Survive Adapt Shape
Follow these six simple rules:
Our six basic rules for managing performance in a downturn offer a positive alternative to going back
to basics. Organizations that adopt a strategic approach to performance management achieve
sustainable results in the short and long term. Clarity of direction maintains a motivated workforce
and creates a balance between employee roles and performance.
n Take a careful look at what really drives your business and be honest about what this really is
n Do not put at risk what made you successful - protect your E-DNA
n Develop new performance management ‘capabilities’ that address short-term down turn
imperatives without jeopardising long-term value creation
n Speed up the performance management cycle to help manage short term risks and opportunities
n Manage the emotional challenge leaders face in the downturn - be sensitive to people’s fears
and try to energize your organization
n Increase and improve communication – share your plans, the good and the bad news
Apply the rules
Hay Group offers effective, proven performance management practices. We not only design a
performance management plan for the downturn, but we can also help bring it to life.
For more information about how Hay Group can help, contact:
http://www.haygroup.com/ww/contact/Index.aspx
About Hay Group
Hay Group is a global management consulting firm that works with leaders to
transform strategy into reality. We develop talent, organize people to be more
effective and motivate them to perform at their best. Our focus is on making change
happen and helping people and organizations realize their potential.
www.haygroup.com
©2009 Hay Group. All rights reserved 2