Managing smart


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Managing smart principles include formal policies and procedures and professional standards

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  • Please review the Managing Smart Survey and complete the survey. It will help you better understand some of the concepts and practices we will discuss during our session.
  • Now that you have listed your level, total the score and divide by 5. Based on your average score, with a show of hands – Who has an average equal to or greater than 4? Who has an average equal to or greater than 3 but equal to or less than 3.8? and Who has an average less than 3? Don’t worry, we will talk about how you can each make some improvements to this process.
  • I am reviewing information I presented during our Hiring Smart session to emphasize why we need a different approach to managing our workforce. Some time back I read about a study performed in 1978 the Stern School of Business at New York University of 5,000 of companies in the United States. This study identified that there was a 95% correlation between a company’s balance sheet and it’s business value – shares x stock price, . P&L = Company Value Simply put – in 1978 95% of a company’s value was reflected in it’s financial statements. That remaining 5% consisted of things not easily measured – the intangibles in the business. Hmmm, what might they be? Let’s look further.
  • In 2005 the Stern School redid the study with the same companies and found that there was now only a 28% correlation between the balance sheet and the business’ value. What makes up the remaining 72%? Today’s performance drivers include your - Intellectual Property, Strategy, Brand, Systems, Processes, Access to Capital, Off balance sheet items, Customer reputation, and the Executive Team We know that we are in a globally competitive and intellectual economy. We rely more in a KNOWLEDGE-BASED economy on these intangibles to increase company value. In other words, what a company is worth today is much more dependent on non-traditional assets and things not measured on the P&L and Balance Sheet. Obviously some things have changed behind what truly drives company value in today’s intellectual economy. To illustrate another way – how many of you would commit to stay with your current employer until retirement? What are the motivators for you to want to stay with a company? When we discussed this with the staff at one of my clients they indicated they cared more about being a part of the company growth process, they wanted more involvement in developing processes, serving customers better, and trying to reduce costs – was my client listening? The majority of a company's value is intangible.  Staff now devote the majority of their time to solving complex and routine problems through the application of their knowledge, collaboration, and leverage of organizational systems. Nearly 8 out of 10 employees are involved in producing services - expectations of value, rather than tangible products. The majority of tangible products are now bought primarily on the basis of brand, reputation, service, employee engagement, and other intangible factors. The full spectrum of intangible value - activities related to knowledge, collaboration, leverage of operational systems, and other associated activities have never been financially valued, or systematically analyzed. And this information is applicable across ALL industries!
  • In 2005 researchers at the Center for Advanced Human Resource Studies at Cornell University looked at this question with 250 small businesses – How do people contribute to the success of our business? They examined 3 areas – hiring, managing , and motivating, and found that if you could achieve workforce alignment – having all the dots connected – you would have a more productive and profitable company. Workforce alignment requires The right types of people, In the right places at the right times , Doing the right things right. A company with the right types of people has employees with the knowledge and skills necessary to help that company achieve its goals. Does that make sense?
  • When looking at employee management practices and workforce alignment, they found 4 strategies used to manage people – Formal Processes & Procedures – have job duties & descriptions so employees know their roles & responsibilities, & regular feedback through performance appraisals; (job descriptions are not well-written and performance appraisal systems are not effective in our experience, although this is beginning to change) Direct Monitoring – closely monitor day-to-day activities & tightly control pace & schedule at which work is completed; (this is considered the “old-fashioned, tried and true way to manage – Frederick Taylor’s school of Scientific Management) Professional Standards – great deal of discretion to monitor own performance & trust to get the job done right the first time without direct oversight; and (not in use that much, requires managers and owners to “let go,” Culture & Peer Pressure – expected to track each others work & effort & to provide feedback to each other about job performance. (hard to argue with this, but little tie into company goals, so how effective can it really be?) They found that businesses that managed with formal processes and procedures and had established professional standards created the best, long-term workforce alignment. Does it make sense then that it is better to define where we are going and what we need to do to get us there to create a more aligned and focused workforce?
  • In the past when I worked in corporate and client settings I found it remarkable that companies could even survive when there was no alignment. In one company I worked in we increased our performance 400% (from 10% to 40%) in 1 year; afterwards we inched up at a 10% to 20% performance improvement each and every year! How – I spoke to my fellow employees – I listened – I developed a plan that reflected THEM! After time, however, when we created and then maintained that alignment, I found that it took little effort to develop and even less effort to maintain – employees and management both saw the benefits and helped foster the improvements necessary over time.
  • One of the ways I work with clients to develop their company needs is to ask a series of pointed questions as part of a business planning process. In order to start the change process off right we need to ask and answer these questions – and it certainly helps if we engage our employees in this process. Who are you? What do you do? When do you do it? Where are you going? Why do you do it? How are you going to get there? and What resources do you need to get there?. Additionally, how did you engage your employees in the answers to these questions? How did you and do you continuously engage your employees in the implementation process? (allow for some questions – would anyone share an example of their process with us?)
  • Here are 6 steps to alignment of your management practice to manage people in the right places at the right times – The first one is needed because it is the basis for your formal procedures and your professional standards. The second one is needed – I will argue on a continual basis and in a variety of ways – so that the focus is and remains clear. The third practice is needed so that you build relevant pieces of your corporate strategy into each and every job position and function. When we work with clients on their temporary and permanent placement and executive recruitment needs it is important for us to understand the company’s strategy and plan for these very reasons.
  • The fourth step is important to maximize the performance of each employee. The fifth step now links each position’s requirements to your company goals, and The last step ensures that your employees have had the ability to help you ensure your success by participating in a meaningful way in the development of metrics and the appraisal mechanism.
  • A thorough job analysis of each employees’ position can be used to prepare and update job descriptions, identify job qualifications, develop criteria for appraising employee performance, define compensable factors for evaluating the relative worth of jobs, and redesign jobs to enhance job satisfaction and employee productivity. In the steps listed, the job analysis becomes the first step to ensure we have a company – position functions fit. I my experience I have written well over 1,500 job descriptions in a variety of businesses and would enjoy speaking with you about a process that is appropriate for your company.
  • When you develop a functional profile analysis you are able to identify the discrete decision attributes that are the source of person and job fit success If you have an interest in discussing this profile analysis for your company – let’s talk.
  • As job functions became more reliant on worker knowledge I found it important to develop a way to identify the thinking and decision-making patterns required for these different job functions. The information discussed now has helped a number of clients develop a better approach to employee selection, management, and motivation. This process was developed by Dr. Robert Hartman through the Attributes Index Profile. Think about it. The majority of your time, do you make decisions with your HEAD, HAND or your HEART? Story of 3 people – pure head, pure hand, and pure heart thinkers. Drop X in front of them, sees how they approach it. Head – understand situation, asks a lot of questions, and wants to think about it, put structure to it. Hand – picks it up, starts to play with it, wants to try and complete the task. They both start arguing with each other Heart – what’s it matter if you are both going to fight about it? Personal perspective – how will it be accepted by rest of team? Now that you understand these 3 dimensions of thought a little bit, how they would work together, trick is that none of us is pure in any one of these; we each have ability to think in all 3 of these ways within us. Question is – what is the ratio of these 3, because we each develop different levels of ability and preference for each. When you are hiring for a position have you thought about the dominant thinking patterns the position requires – and the attributes and strengths for the position? I believe you need to understand this information to help you develop a more effective alignment of the person to the position and to the company.
  • This step assumes you know the strengths (decision attributes) required of the position and you know the strengths of the employees performing in the position. It also assumes that you have the ability to reassign or realign certain position functions in order to make the job role more aligned with the employee’s strengths.
  • This step is rarely addressed, and is a major reason why employees are not connected strategically to a company’s focus and success. We know we need accountability but are often overlooking the simple steps that can establish the accountability – quite simply – we need to talk with our employees and ask them for their input and ideas. We need to value them better.
  • The 2 nd step in this alignment process is to identify and agree upon function based measures, The 3 rd step now looks to identify attribute or strength-based metrics such as – Diagnostic - information gathering, Analytical - forward, conceptual, & strategic thinking, Thoroughness, Decisiveness, Self-confidence, Stress management, Technical expertise, Interpersonal awareness, Managing performance, Managing change, & Personal credibility The 4 th step now looks to link company goals to the position – which ones, and to what degree can the employee in this function contribute? These discussions tend to provide a substantial amount of information between the parties and can lead to changes in goals, changes in functional responsibilities, amongst other changes.
  • There are several helpful performance appraisal designs that can be used. Let’s review the strengths of each of these.
  • This is the most common model. It works well, as long as both parties to the evaluation process are trained on process and expectations.
  • Another model, usually best in combination with either of the other 3. Should not be left to stand on its own, particularly where employees and supervisors are new to the process.
  • In a 360 appraisal the employee, co-workers, and supervisors participate in each employee’s appraisal.
  • This mechanism works well where there are well defined work units or teams and where each of the employees understands the work expectations and performance standards of the others. It would also assume that the members of the work unit developed standards of performance together and agreed upon the process to measure success. I am able to develop appraisal mechanisms that are appropriate for your company and can discuss this with you after the meeting.
  • You can do this with some focused effort and be prepared to transform the way you and your employees do business.
  • I am available to talk with each of you further about your needs.
  • Managing smart

    1. 1. Managing Smart – Cutting-Edge Employee Management Practices for the New Economy The Smart Guide to Human Resource and Management Seminars Presented by Warren J. Rutherford The Executive Suite
    2. 2. Program <ul><li>Managing Smart Survey </li></ul><ul><li>Our new economy – knowledge based </li></ul><ul><li>Company future strategies – planning </li></ul><ul><li>Formal Processes & Procedures </li></ul><ul><li>Professional Standards </li></ul><ul><li>Company Needs </li></ul><ul><li>Alignment of Processes, Procedures, & Standards </li></ul><ul><li>Position Description and Function Alignment </li></ul><ul><li>Performance Appraisal and Company Strategy Alignment </li></ul>
    3. 3. Managing Smart Survey Please rank on a scale of 1 to 5, 5 being the highest, your company’s score for each statement below. Statement Score Average Score = (Total/5) <ul><li>We trust employees to do the right things right. </li></ul><ul><li>We have written policies, procedures, and employee handbooks. </li></ul><ul><li>We have developed a compensation plan that is equitable and motivating to employees. </li></ul><ul><li>We have developed a plan for evaluating our employees’ performance regularly. </li></ul><ul><li>We have a formal organization chart with job descriptions and responsibilities for each position. </li></ul>
    4. 4. Managing Smart Survey <ul><li>Results - </li></ul><ul><ul><li>If your average score is 4 to 5, you are managing smart. </li></ul></ul><ul><ul><li>If your average score is 3 to 3.8, you are in the caution zone & need improvements to your management program. You can benefit from better alignment, making you much more productive & profitable. </li></ul></ul><ul><ul><li>If your average score is < 3, you are in the danger zone & are probably out of alignment, and much less productive & profitable than you could be. </li></ul></ul>
    5. 5. The Economy We Knew <ul><li>1978 NYU Stern School of Business Study (5,000 companies) </li></ul><ul><li>95% correlation between balance sheet and business value </li></ul>
    6. 6. The New Economy We Need to Know & Understand <ul><li>2005 NYU Stern School of Business Study </li></ul><ul><li>28% correlation between balance sheet and business value </li></ul><ul><li>Intangibles – the 72% </li></ul><ul><ul><li>Intellectual Property </li></ul></ul><ul><ul><li>Strategy </li></ul></ul><ul><ul><li>Brand </li></ul></ul><ul><ul><li>Systems </li></ul></ul><ul><ul><li>Processes </li></ul></ul><ul><ul><li>Access to Capital </li></ul></ul><ul><ul><li>Off balance sheet items </li></ul></ul><ul><ul><li>Customer reputation </li></ul></ul><ul><ul><li>Executive Team </li></ul></ul>
    7. 7. Why it is Important! <ul><li>Only 5% of a workforce understands their company’s strategy. </li></ul><ul><li>Only 15% of senior management spends more than 1 hour a month defining strategy and aligning operations to it. </li></ul><ul><li>Only 25% have their operations aligned to the strategy. </li></ul><ul><li>Only 40% align company from budget to strategy. </li></ul><ul><li>David Norton, Balanced Scorecard Report, Vol. 3, No. 5 (Sep/Oct 2001) </li></ul>
    8. 8. Strategies to Succeed <ul><li>How do people contribute to the success of our business? </li></ul><ul><li>Cornell Study – </li></ul><ul><ul><li>Workforce alignment requires - </li></ul></ul><ul><ul><ul><li>The right types of people, </li></ul></ul></ul><ul><ul><ul><li>In the right places at the right times, </li></ul></ul></ul><ul><ul><ul><li>Doing the right things right. </li></ul></ul></ul><ul><ul><ul><li>A company with the right types of people has employees with the knowledge and skills necessary to help that company achieve its goals. </li></ul></ul></ul>
    9. 9. Formal Processes & Procedures and Professional Standards <ul><li>4 management strategies used to manage people – </li></ul><ul><ul><li>Formal Processes & Procedures – have job duties & descriptions so employees know their roles & responsibilities, & regular feedback through performance appraisals; </li></ul></ul><ul><ul><li>Direct Monitoring – closely monitor day-to-day activities & tightly control pace & schedule at which work is completed; </li></ul></ul><ul><ul><li>Professional Standards – great deal of discretion to monitor own performance & trust to get the job done right the first time without direct oversight; and </li></ul></ul><ul><ul><li>Culture & Peer Pressure – expected to track each others work & effort & to provide feedback to each other about job performance. </li></ul></ul><ul><li>Formal processes & procedures and professional standards were found by the Cornell researchers as strongly and positively related to creating the best, long-term workforce alignment. </li></ul>
    10. 10. Alignment Enhances Productivity and Profit <ul><li>Doesn’t it make sense that - </li></ul><ul><ul><li>An aligned workforce increases productivity and profit, </li></ul></ul><ul><ul><li>We need to better understand our employees to further drive the success, growth, and performance of our business. </li></ul></ul><ul><li>A study of large publicly traded firms, found that companies using “ high performance ” human resource practices have market values that range from between $16,000 and $40,000 per employee higher than firms that do not use such practices. </li></ul>
    11. 11. Company Needs <ul><li>What is your company’s long-term company strategy and plan? Mission, vision, values, purpose. </li></ul><ul><li>Have you involved your employees in its development? What are some of the steps you used – retreat, questionnaire? </li></ul><ul><li>How are you communicating that strategy and plan to your employees, (in person, email, postings, meetings, interactive discussions); and </li></ul><ul><li>Are you using that strategy and plan in the design of your job descriptions, management practices, and performance appraisal processes so that you can - </li></ul><ul><ul><li>Enable your employees to understand what is needed for yours and their future success? </li></ul></ul>
    12. 12. Aligning Your Management Practices to Manage People in the Right Places at the Right Times Requires - <ul><li>A better understanding of company’s needs by defining and communicating your long-term company strategy and plan to your employees; </li></ul><ul><li>Communicating that strategy and plan as a management strategy – communicating what you want and need to do for your future success; </li></ul><ul><li>Defining (or refining) your job descriptions to better match your company strategy and plan so that they include the requisite essential functions and knowledge, skills, and abilities required to effectively perform the job; </li></ul>
    13. 13. Aligning Your Management Practices to Manage People in the Right Places at the Right Times Requires - <ul><li>Matching an employee’s strengths (their natural talents, potential and interests) to the position and minimizing the need to rely on an employee’s weakness to perform their functions; </li></ul><ul><li>Matching job functions to the accomplishment of company goals and objectives by establishing performance metrics and standards that accompany the functions so that they are job specific; and </li></ul><ul><li>Designing an appraisal process with the involvement of management & employees and providing effective training on implementation. </li></ul>
    14. 14. Developing a Smart Job Description <ul><li>Conduct a thorough job analysis to develop the following information – </li></ul><ul><ul><li>Information about the nature of the work (e.g. duties and responsibilities); </li></ul></ul><ul><ul><li>The level of the work (e.g., degree of responsibility or complexity); </li></ul></ul><ul><ul><li>Job requirements (e.g., the knowledge, skills, abilities and other characteristics needed to perform work effectively); </li></ul></ul><ul><ul><li>Job qualifications (e.g., years of education or experience needed for the position); and </li></ul></ul><ul><ul><li>Working conditions (e.g., the psychological, emotional, and physical demand placed on employees by the work environment). </li></ul></ul><ul><li>Identify how the nature of the work relates strategically to the accomplishment of certain company goals and objectives </li></ul>
    15. 15. Position Function Profile Analysis <ul><li>Identify primary and secondary position tasks </li></ul><ul><li>Aggregate tasks up to categories </li></ul><ul><ul><li>(e.g. management, sales, finance, marketing, process) </li></ul></ul><ul><li>Identify decision attributes for each category </li></ul><ul><li>Develop a position-specific profile to measure an employee’s match to the job profile as part of job description development process </li></ul><ul><li>Identify tasks or categories that could shift to other positions </li></ul>
    16. 16. Functional Assessment of Each Employee <ul><li>We know that there are 3 ways we can think about anything – </li></ul><ul><ul><li>Our head – systems & structure </li></ul></ul><ul><ul><li>Our hands – practical, let’s get it done </li></ul></ul><ul><ul><li>Our heart – empathy, the impact on others </li></ul></ul><ul><li>Each of us has a different balance of these 3 styles & explains why our decisions and actions are different. </li></ul><ul><li>The way we make decisions & how we use them are at the core of who we are. They are key to our preferences, our strengths, and our weaknesses. </li></ul><ul><li>What are the dominant thinking patterns required for people in each position? </li></ul><ul><li>How does knowing that help to ensure that the employee in the position will be more successful in achieving position objectives and be more able to accomplish the desired person-future fit? </li></ul><ul><li>Think Position-Person Alignment & Workforce Alignment. </li></ul>
    17. 17. Aligning Employee Strengths to the Position Function Profile <ul><li>Once an assessment of an employee’s strengths as well as their weaknesses has been performed – </li></ul><ul><ul><li>Identify which strength attributes match to the job description key attributes, </li></ul></ul><ul><ul><li>Identify whether the position requires the employee to utilize any of his attribute weaknesses, </li></ul></ul><ul><ul><li>Determine the possibility to reassign and realign certain position functions amongst employees in order to maximize the use of each of their natural talents, and </li></ul></ul><ul><ul><li>Modify position functions to accomplish the reassignment and the realignment. </li></ul></ul>
    18. 18. Creating Position Function & Position Appraisal Alignment <ul><li>Establish policy connection between company goals & employee goals – </li></ul><ul><ul><li>Improve communication between employee and manager, </li></ul></ul><ul><ul><li>Promote clarity around employee responsibilities, project priorities and their linkage to company strategy and plans, and </li></ul></ul><ul><ul><li>Provide a fair and consistent framework to recognize individual levels of performance. </li></ul></ul>
    19. 19. Creating Position Function & Position Appraisal Alignment <ul><li>Identify function-based measures </li></ul><ul><ul><li>E.g. – # of sales, # placements, etc. </li></ul></ul><ul><li>Identify attribute or strength-based measures </li></ul><ul><ul><li>E.g. – Decisiveness, Self-confidence, strategic thinking, following directions, etc. </li></ul></ul><ul><li>Identify company goals that directly link to specific position functions </li></ul><ul><ul><li>Sales increase from x to y, # repeat customers increase from a to b, etc. </li></ul></ul>
    20. 20. Creating Position Function & Position Appraisal Alignment <ul><li>Incorporate – </li></ul><ul><ul><li>Formal appraisal mechanism </li></ul></ul><ul><ul><li>Self-appraisal mechanism </li></ul></ul><ul><ul><li>360 ° appraisal mechanism </li></ul></ul><ul><ul><li>Team/work unit appraisal mechanism </li></ul></ul>
    21. 21. Formal Appraisal Mechanism <ul><li>Employee evaluated at established intervals (2x year). </li></ul><ul><li>Evaluator is a superior to supervisor. </li></ul><ul><li>Common to all models: </li></ul><ul><ul><li>Rating-based across different categories. </li></ul></ul><ul><ul><li>Each category may be point-scored and/or weighted. </li></ul></ul><ul><ul><li>Final result is numerical, tied to performance grid. </li></ul></ul>
    22. 22. Self Appraisal Mechanism <ul><li>Employee completes self-appraisal form requesting honest, objective assessment of performance during performance period. </li></ul><ul><li>Utilized most frequently as part of a formal, 360°, or team-based appraisal. </li></ul><ul><li>Enables employee to reflect on performance. </li></ul><ul><li>Enables superior to understand the employee’s point of reference. </li></ul>
    23. 23. 360° Appraisal Mechanism <ul><li>Employee performs self-evaluation AND is also evaluated by co-workers and superior(s). </li></ul><ul><li>May/may not be anonymous. </li></ul><ul><li>Emphasis on teamwork to overcome wounded egos. </li></ul><ul><li>Employee critically reviews evaluation comments, prepares performance improvement plan, discusses confidentially with superior(s). </li></ul>
    24. 24. Team/Work Unit Appraisal Mechanism <ul><li>Work Unit (department, division, section, team) evaluates performance for period under review. </li></ul><ul><li>Each member of work unit completes appraisal form that links to unit goals, objectives, strategies for performance period. </li></ul><ul><li>Unit performance results shared equally with all employees in unit. </li></ul>
    25. 25. Creating Alignment with Professional Standards <ul><li>Monitor and trust – If either or some of the appraisal mechanisms briefly described are utilized it then becomes important for ownership to establish regular review interviews (quarterly, semi-annually) and to trust and enable employees to execute AND to provide them to the tools to be successful. </li></ul><ul><li>Employees are often more rigorous in the standards they establish for themselves – if they know the they can be trusted . </li></ul><ul><li>Employees want to be trusted to be able to know how to get the job done right . </li></ul>
    26. 26. Creating Alignment with Professional Standards <ul><li>Employees want to be able to innovate, experiment, be creative – they want the standards to enable that capability to be more successful. </li></ul><ul><li>The standards employees adopt usually are self-enforcing. </li></ul><ul><li>Practical standards suggest that the employer and employees work together to create meaningful performance standards that help foster greater productivity. </li></ul>
    27. 27. Summary <ul><li>When there are formal processes and procedures, </li></ul><ul><li>When there are professional standards, and </li></ul><ul><li>When you work with employees to increase each others’ success - </li></ul><ul><li>You can have the two effective practices to Managing Smart. </li></ul>
    28. 28. Thank you! For more information - Warren J. Rutherford Owner The Executive Suite 129 Airport Road Hyannis, MA 02601 [email_address] 508-778-7700