Workforce Performance Management Much More Than Performance ...


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Workforce Performance Management Much More Than Performance ...

  1. 1. Workforce Performance Management Much More Than Performance Appraisals! Aileen MacMillan, Research Analyst, December 2004
  2. 2. About Who we are: I Committed to making your life easier! I Connecting you to information, resources, experts, research I 135,000 HR and Training professionals What we provide: I Articles, online learning seminars I Interviews with Thought Leaders I Industry research reports I Conferences I New for 2005 – Executive Councils – communities of peers networking and sharing best practices Copyright 2004 2
  3. 3. Agenda I Trends I Performance Management continuum I Benefits & ROI I Marketplace and vendor offerings I What do we want to achieve? I Planning to avoid pitfalls I Case studies I The future? Copyright 2004 3
  4. 4. Employee Performance Management-Overview I A variety of performance management philosophies results in a variety of practices I The role of technology – it’s not just about the system, it is about how it is used “ Most people aim at nothing and hit it with amazing accuracy” Dr. Tony Allesandra Copyright 2004 4
  5. 5. Definition of Workforce Performance Management I Continuous process I Goal is to improve business results I Achieved by improving performance of the workforce of an organization Copyright 2004 5
  6. 6. Current Trends I One of the top five trends for senior HR professionals I WPM solutions can significantly drive employee performance and corporate results I Traditionally, still a very manual process, annual event, disjointed I Focus on accountability and visibility I Trend towards integration I Increasing interest in pay for performance processes and succession planning Copyright 2004 6
  7. 7.  WorkUSA2004 Study I Surveyed 1,191 employees across all industries I 90% reported being involved in a performance management program WorkUSA® 2004 Felt performance management process 30% helped improve performance Felt their system established clear Less than 40% performance goals, included honest feedback and capitalized on technology Understood how their job fit with the 39% company’s overall goals Feel their company sets high 54% performance standards Feel workers are held accountable for 44% their performance WorkUSA® 2004 Copyright 2004 7
  8. 8. Watson Wyatt Study Results Watson Wyatt’s Human Capital Index®2001/2002 and Work Canada®2002 and 2004 Practice Effect on Shareholder Value Company promotes the most Increase competent employees Top performers are paid better Increase than average performers Company helps poor performers Increase improve Company terminates poor Increase performers whose performance does not improve Copyright 2004 8
  9. 9. Trends in WPM implementation- Cedar 2004 Workforce Technologies Survey 7th Annual Edition I Cedar 2004 Workforce Technologies Survey 7th Annual Edition. I Copyright 2004 9
  10. 10. Employee Performance Management Maturity Model 4. Orchestrating • Enterprise-wide alignment with financial and operational processes • Driven from the top 3. Anticipating • Clear alignment and visibility • Focus on performance and behaviors • Driven by HR, lives in LOB 2. Coping • Cross-functional metrics • Consistent tools and This is where most large methodology This is where most large organizations are today. organizations are today. • Project managed by HR 1. Reacting I Departmental metrics I Paper or Word/Excel files I Manual and/or e-mail Source: AMR Research, 2003 Copyright 2004 10
  11. 11. Components of WPM I Components: I Appraisal and assessment I Support and coaching I Alignment of goals I Development planning I Skill identification I Identification of training needs including certification I Succession planning I Tracking and reporting Copyright 2004 11
  12. 12. Return on Investment I “Among the specific drivers of high sales vs. targets that ISR’s analysis uncovered was communication, including communication of objectives and performance against those objectives.” ISR Case Study “Bottom Line is Better by Engaging Employees” 2003 Organizations with culture aligned with business strategy outperform those that are not aligned “The New Corporate Cultures” Deal and Kennedy Watson Wyatt and WorkCanada study summarized key elements they identified important to the effective implementation of WPM. -linking: pm and business strategy : leadership and accountability : appraisal results and reward and recognition : performance and development planning Watson Wyatt’s Human Capital Index®2001/2002 and Work Canada®2002 and 2004Copyright 2004 12
  13. 13. DDI Study “The most effective performance management systems are characterized by their consistent use throughout the organization, their integration with other systems, senior management involvement, employee involvement, and their links to organizational strategy” DDI “Managing Performance: Building Accountability for Organizational Success, Executive Summary” Copyright 2004 13
  14. 14. Strategic Benefits I Increased efficiency I Consistency of process I Improved quality of reviews I Maintain and track accountability I Documentation to reduce disputes I Increased alignment I Ability to identify and keep top performers, identify training needs and accurately link performance to compensation I Improved productivity and bottom line results Copyright 2004 14
  15. 15. Copyright 2004 15
  16. 16. Overview of the WPM Marketplace I Larger players, including ERP and HRIS vendors I Niche or Best of Breed players I Single solution I Suite of integrated modules I Build your own solutions Copyright 2004 16
  17. 17. Reward Performance Monitoring Performance Goal Setting Feedback Appraisal Coaching Development Planning Classic HR Performance Management System Copyright 2004 17
  18. 18. Capabilities I Cascading and linked goals I Competencies I Central dashboard I Configurable workflow I Appraisal preparation support I Manager support/coaching tips I Extensive reporting options I 360° feedback or multi rater feedback I Links to other systems or full integration Copyright 2004 18
  19. 19. Change Management Copyright 2004 19
  20. 20. Avoiding Pitfalls I Ensure support from the top of the organization I Develop a strategic plan I Update job descriptions, performance management processes I Build in accountability I Transparency and trust I Provide appropriate training I Link individual goals with organizational goals Copyright 2004 20
  21. 21. Copyright 2004 21
  22. 22. Case Study – City Public Service I City Public Service (CPS), one of the nation’s largest municipally- owned energy companies, located in San Antonio, TX I Just over 4,000 employees I Strong commitment to encouraging employee performance I Purchase of an WPM software solution seen as a key initiative to support the performance management process Copyright 2004 22
  23. 23. Guiding Principles I To move from a paper-based to a paperless system I Decrease administrative time I Allow tracking and alignment of goals I Ensure quality evaluations I Increase feedback related to competencies I Provide effective performance management data I To move from an anniversary date appraisal completion process to a common completion date Copyright 2004 23
  24. 24. Steps Taken I Only 45 days from purchase to the “go live” date I A variety of levels of computer literacy amongst employees Steps taken: I Began with sound performance management processes in place I Customization of solution to fit specifications I Formation of an implementation team I Development of a detailed implementation plan I Utilization of train the trainer program I Designation of software support representatives I Clarification of roles and responsibilities Copyright 2004 24
  25. 25. Results I Completion of 1,983 salaried employees annual appraisals in a period of 60 days I Annual merit increases awarded approximately one month later I Eliminated work load of approximately four different personnel allowing them to focus on other HR functions I Improved on time completion rates I Increased consistency of process I Reduction in need for storage space I Substantial reduction in future administrative time Copyright 2004 25
  26. 26. Case Study – Sears, Roebuck and Co. I Employs about 220,000 Associates, in over 3000 locations I Performance Management is a daily process I Formal reviews are conducted for all Associates once a year I Performance review process is tied to the calculation of merit and incentive payments I Review process tied to Talent Management Process I Custom developed web tool Copyright 2004 26
  27. 27. Guiding Principles Fundamental belief rewards are tied to performance Streamlined way to manage process Consistent communication to Associates Reporting and management of performance initiatives Accurate calculation of pay Copyright 2004 27
  28. 28. Steps Taken I Strong performance management process and communication system in place I Identification of personal goals, performance goals and competencies I Safeguards to ensure fairness and consistency of pay for performance I Gradual implementation of change Copyright 2004 28
  29. 29. Steps Taken-RACI Process I System to identify accountabilities and responsibilities by process I R = Responsible I A = Accountable I C = Consulted I I = Informed Copyright 2004 29
  30. 30. Results I Identification and refinement of key performance measures I Greater understanding of employee skill level I Increased accountability and personal responsibility I Increased clarity around performance scores I Improved consistency amongst performance expectations I Fairness of pay for performance Copyright 2004 30
  31. 31. Common Elements Support from the top of the organization Development of a strategic plan Accountability built in Linked individual goals with organizational goals Provided appropriate training Updated data and processes **Ongoing communication, value and trust** Copyright 2004 31
  32. 32. Tips From Current Users I Ensure sound performance management practices are in place: “a software solution will not replace proper supervision” I Roll out the process step by step I Thoroughly research before making a buying decision “go in with your eyes open – have clear expectations and ask questions up front” I Consider your future needs I Get to know your vendor Copyright 2004 32
  33. 33. Future of WPM Software I Trend towards consolidation I More integration with financial data I “EPM software market will demonstrate at least a 15% compound annual growth rate through 2008” Gartner, 2004 EPM MarketScope I Approximately 30% using WPM, approximately another 20% budgeting for this in next 12 months, and approximately another 20% of participants are budgeting for this within 3 years. Cedar 2004 Survey Copyright 2004 33
  34. 34. Contact Information Aileen MacMillan Copyright 2004 34