Managing Smart with Cutting Edge Practices

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

Program
 Managing Smart Survey
 Our new economy – knowledge based
 Company future strategies – planning
 Formal Processes & Procedures
 Professional Standards
 Company Needs
 Alignment of Processes, Procedures, & Standards
 Position Description and Function Alignment
 Performance Appraisal and Company Strategy
Alignment

© theexecutivesuite.com 2009 2

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
1. We have a formal organization chart with job
descriptions and responsibilities for each position.
2. We have developed a plan for evaluating our
employees’ performance regularly.
3. We have developed a compensation plan that is
equitable and motivating to employees.
4. We have written policies, procedures, and
employee handbooks.
5. We trust employees to do the right things right.

Average Score = (Total/5)


Managing Smart Survey
 Results -
 If your average score is 4 to 5,
you are managing smart.
 If your average score is 3 to
3.8, you are in the caution
zone & need improvements to
your managing program. You
can benefit from better
alignment, making you much
more productive & profitable.
 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.


The Economy We Knew
 1978 NYU Stern
School of Business
Study (5,000
companies) Balance Sheet

Intangible
 95% correlation
between balance
sheet and business
value


The New Economy We Need to
Know & Understand
 2005 NYU Stern School of
Business Study
 28% correlation between balance
sheet and business value
 Intangibles – the 72% Balance Sheet
 Intellectual Property
Intangible
 Strategy
 Brand
 Systems
 Processes
 Access to Capital
 Off balance sheet items
 Customer reputation
 Executive Team


Why it is Important!
 Only 5% of a workforce understands their
company’s strategy.
 Only 15% of senior management spends more
than 1 hour a month defining strategy and
aligning operations to it.
 Only 25% have their operations aligned to the
strategy.
 Only 40% align company from budget to
strategy.
David Norton, Balanced Scorecard Report, Vol. 3, No. 5 (Sep/Oct 2001)


Strategies to Succeed
 How do people contribute to the success
of our business?
 Cornell Study –
 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.


Formal Processes & Procedures
and Professional Standards
 4 management strategies used to manage people –
 Formal Processes & Procedures – have job duties & descriptions so
employees know their roles & responsibilities, & regular feedback
through performance appraisals;
 Direct Monitoring – closely monitor day-to-day activities & tightly
control pace & schedule at which work is completed;
 Professional Standards – great deal of discretion to monitor own
performance & trust to get the job done right the first time without direct
oversight; and
 Culture & Peer Pressure – expected to track each others work & effort
& to provide feedback to each other about job performance.
 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.


Alignment Enhances Productivity
and Profit
 Doesn’t it make sense that -
 An aligned workforce increases productivity and
profit,
 We need to better understand our employees to
further drive the success, growth, and performance of
our business.
 A study of large publicly traded firms, found that
companies using “high performance” human
performance
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.


Company Needs
 What is your company’s long-term company strategy and
plan? Mission, vision, values, purpose.
 Have you involved your employees in its development? What
are some of the steps you used – retreat, questionnaire?
 How are you communicating that strategy and plan to your
employees, (in person, email, postings, meetings, interactive
discussions); and
 Are you using that strategy and plan in the design of your job
descriptions, management practices, and performance
appraisal processes so that you can -
 Enable your employees to understand what is needed for yours
and their future success?


Aligning Your Management Practices to
Manage People in the Right Places at
the Right Times Requires -
1. A better understanding of company’s needs by defining
and communicating your long-term company strategy
and plan to your employees;
2. Communicating that strategy and plan as a
management strategy – communicating what you want
and need to do for your future success;
3. 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;


Aligning Your Management Practices to
Manage People in the Right Places at
the Right Times Requires -
4. 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;
5. 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
6. Designing an appraisal process with the involvement
of management & employees and providing effective
training on implementation.


Developing a Smart Job
Description
 Conduct a thorough job analysis to develop the following
information –
 Information about the nature of the work (e.g. duties and
responsibilities);
 The level of the work (e.g., degree of responsibility or
complexity);
 Job requirements (e.g., the knowledge, skills, abilities and
other characteristics needed to perform work effectively);
 Job qualifications (e.g., years of education or experience
needed for the position); and
 Working conditions (e.g., the psychological, emotional, and
physical demand placed on employees by the work
environment).
 Identify how the nature of the work relates strategically to the
accomplishment of certain company goals and objectives

Position Function Profile Analysis
 Identify primary and secondary position tasks
 Aggregate tasks up to categories
 (e.g.management, sales, finance, marketing,
process)
 Identify decision attributes for each category
 Develop a position-specific profile to measure an
employee’s match to the job profile as part of job
description development process
 Identify tasks or categories that could shift to
other positions


Functional Assessment of Each
Employee
 We know that there are 3 ways we can think about anything –
 Our head – systems & structure
 Our hands – practical, let’s get it done
 Our heart – empathy, the impact on others
 Each of us has a different balance of these 3 styles & explains why
our decisions and actions are different.
 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.
 What are the dominant thinking patterns required for people in
each position?
 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?
 Think Position-Person Alignment & Workforce Alignment.


Aligning Employee Strengths to the
Position Function Profile
 Once an assessment of an employee’s strengths as well
as their weaknesses has been performed –
 Identify which strength attributes match to the job
description key attributes,
 Identify whether the position requires the employee to
utilize any of his attribute weaknesses,
 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
 Modify position functions to accomplish the reassignment
and the realignment.


Creating Position Function &
Position Appraisal Alignment
1. Establish policy connection between company
goals & employee goals –
a. Improve communication between employee and
manager,
b. Promote clarity around employee responsibilities,
project priorities and their linkage to company
strategy and plans, and
c. Provide a fair and consistent framework to recognize
individual levels of performance.


2. Identify function-based measures
a. E.g. – # of sales, # placements, etc.
3. Identify attribute or strength-based measures
a. E.g. – Decisiveness, Self-confidence, strategic
thinking, following directions, etc.
4. Identify company goals that directly link to
specific position functions
a. Sales increase from x to y, # repeat customers
increase from a to b, etc.


 Incorporate –
 Formal appraisal mechanism
 Self-appraisal mechanism
 360° appraisal mechanism
 Team/work unit appraisal mechanism


Formal Appraisal Mechanism
 Employee evaluated at established intervals (2x
year).
 Evaluator is a superior to supervisor.
 Common to all models:
 Rating-based across different categories.
 Each category may be point-scored and/or weighted.
 Final result is numerical, tied to performance grid.


Self Appraisal Mechanism
 Employee completes self-appraisal form
requesting honest, objective assessment of
performance during performance period.
 Utilized most frequently as part of a formal,
360°, or team-based appraisal.
 Enables employee to reflect on performance.
 Enables superior to understand the employee’s
point of reference.


360° Appraisal Mechanism
 Employee performs self-evaluation AND is also
evaluated by co-workers and superior(s).
 May/may not be anonymous.
 Emphasis on teamwork to overcome wounded
egos.
 Employee critically reviews evaluation
comments, prepares performance improvement
plan, discusses confidentially with superior(s).


Team/Work Unit Appraisal
Mechanism
 Work Unit (department, division, section, team)
evaluates performance for period under review.
 Each member of work unit completes appraisal
form that links to unit goals, objectives,
strategies for performance period.
 Unit performance results shared equally with all
employees in unit.


Creating Alignment with
Professional Standards
 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.
 Employees are often more rigorous in the standards they
establish for themselves – if they know the they can be
trusted.
trusted
 Employees want to be trusted to be able to know how to
get the job done right.
right


Creating Alignment with
Professional Standards
 Employees want to be able to innovate,
experiment, be creative – they want the
standards to enable that capability to be more
successful.
 The standards employees adopt usually are self-
enforcing.
 Practical standards suggest that the employer
and employees work together to create
meaningful performance standards that help
foster greater productivity.


Summary
 When there are formal processes and
procedures,
 When there are professional standards, and
 When you work with employees to increase
each others’ success -
 You can have the two effective practices to
Managing Smart.


Thank you!
For more information -

Warren J. Rutherford
Owner
The Executive Suite
129 Airport Road
Hyannis, MA 02601
wjr@theexecutivesuite.com
www.theexecutivesuite.com
508-778-7700


Managing Smart with Cutting Edge Practices

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