The document discusses the Xeipion framework for establishing a performance-based culture in organizations. It argues that an organization's sustainable advantage lies in the collective performance of its people. Xeipion measures individual employee performance based on role-specific metrics and benchmarks employees relatively against one another, eliminating abstract standards. This facilitates the customization of compensation, training, and development based on individual performance profiles to continuously improve performance across the organization.

1. Copyright © 2003-2009 Richard W. Burke All Rights Reserved

2. Framework of Presentation Why Xeipion Exists… Establish a Performance-Based-Culture… How Xeipion Works… How Xeipion Works—Summary … Xeipion… Stronger People, Better Performance Source List… Further Reading Copyright © 2003-2009 Richard W. Burke All Rights Reserved

3. Why Xeipion Exists Products and processes can be duplicated. Hence, a company’s only sustainable competitive advantage is the collective performance of its people. Establish a Performance-Based-Culture “ Culture reflects a firm’s fundamental assumptions and values about what behaviors are appropriate throughout the organization, and it is critical that a firm have a workforce that is both high performance and strategic.” 1 “ A high performance culture requires that high performers and low performers be identified and both levels of performance be managed effectively.” 2 “ Simply think of what it would mean to your firm’s overall performance if you could improve the extent to which the workforce had the skills, motivation, and focus necessary to execute your strategy by 25 percent or more… The problem is how to get ‘from here to there’ and how to measure that progress.” 3 Copyright © 2003-2009 Richard W. Burke All Rights Reserved

4. Establish a Performance-Based-Culture Equity Versus Equality “ The harsh reality of managing people is that differentiation must occur, with some employees more equal than others. We have suggested that managers focus on equity, not equality. Equity means that those who give more will get more; equality means that all will be treated equally. Equity works when managers know what people should give and are confident that they have the measures that track their ability to give.” 4 Differentiation “ Larry Bossidy and Ram Charan describe differentiation as ‘the mother’s milk of building a performance culture.” 5 “ In most firms there is simply too little differentiation between high performers and low performers. The result is that the high-performance talent is undermotivated and more likely to leave , while the less productive talent is overcompensated and less likely to leave.” 6 Measure an Individual’s Contribution to the Success (Strategy) of the Company “ If seniority and job level explain 90 percent of the variation in pay in your organization, you probably need to take another look at how jobs are valued in your firm.” 7 “ The basic premise is simple: You need to change people’s behavior so that they produce results . First you tell people clearly what results you're looking for. Then you discuss how to get those results, as a key element of the coaching process. Then you reward people for producing the results. If they come up short, you provide additional coaching, withdraw rewards, give them other jobs, or let them go . When you do these things, you create a culture of getting things done.” 8 Copyright © 2003-2009 Richard W. Burke All Rights Reserved

5. How Xeipion Works Xeipion uses data Based on a set of performance attributes In role-specific performance measurement, the art is in the design of performance metrics for each role. This design is based on a detailed understanding of the talents and behaviors that should be exhibited by outstanding practitioners in those roles.” 9 The model can be populated with quantitative data, qualitative data, or both “ The simplest rule to remember is that measures are answers to questions.” 10 Xeipion measures performance relatively Eliminates abstract or contrived standards; the best performance of any employee becomes the de-facto standard “ In other words, you need role models, and you want to motivate these role models to exhibit the behaviors and to develop and demonstrate their talents. Once people know what ‘superior’ performance looks like, they can try to model it themselves.” 11 Eliminates the need for external benchmarking “ Benchmarking, by its very nature, focuses on commonality, implicitly taking the industry standard as the appropriate measure of success.” 12 Renders forced ranking unnecessary, as a by-product of the measurement yields a distributed performance “ In any normal population, the performance range between the best and the worst is usually very large. In most firms today, however, performance ratings and compensation for a given role usually do not reflect these differences.” 13 Copyright © 2003-2009 Richard W. Burke All Rights Reserved

6. How Xeipion Works Xeipion measures employees individually Much like how a FICO score seeks to communicate the credit worthiness of an applicant, or a beta coefficient seeks to convey how variable a single stock is with respect to the stock market overall, or a Customer Satisfaction Information score seeks to capture and communicate a customer’s buying experience; Xeipion seeks to communicate an employee’s overall job performance in a number. However, it is the by-product of the measurement that provides the real value; the insight and information necessary to develop people Individual measurement results in the creation of an individual performance profile for each employee Over time certain individual performance profiles will be more highly correlated with “success” in a given position, hence, becoming predictive The individual performance profile is the basis for the individual performance plan The plan focuses and rewards employees to develop in areas that will most benefit them and the company, collectively elevating performance Copyright © 2003-2009 Richard W. Burke All Rights Reserved

7. How Xeipion Works—Summary Establish a performance based culture Identify exceptional behavior & model it Identify individual strengths and weaknesses Facilitate the customization of personnel services. Individualize compensation, training, development, incentives, and so forth. As each employee’s performance improves, the organization will get stronger. Copyright © 2003-2009 Richard W. Burke All Rights Reserved

8. Xeipion… PERFORMANCE RAISED TO THE POWER OF PEOPLE Stronger People, Better Performance Copyright © 2003-2009 Richard W. Burke All Rights Reserved

9. Source List “In business, results are your only real credential.” Jack Welch “If you make your numbers, you don’t have to talk. But if you don’t make your numbers, you can’t talk enough.” Bob Nardelli The Workforce Scorecard; Managing Human Capital to Execute Strategy by Mark A. Huselid, Brian E. Becker, and Richard W. Beatty Mobilizing Minds; Creating Wealth from Talent in the 21 st— Century Organization by Lowell L. Bryan and Claudia I. Joyce Topgrading; How Leading Companies Win by Hiring, Coaching, and Keeping the Best People by Bradford D. Smart, Ph.D. Forced Ranking; Making Performance Management Work by Dick Grote Competing on Analytics; The New Science of Winning by Thomas H. Davenport and Jeanne G. Harris Moneyball by Michael Lewis Super Crunchers; Why Thinking-By-Numbers is the New Way to be Smart by Ian Ayres Strategic Human Resource Management by Jeffrey A. Mello Change to Strange by Daniel M. Cable Beyond HR; The New Science of Human Capital by John W. Boudreau and Peter M. Ramstad Human Sigma; Managing the Employee – Customer Encounter by John H. Fleming and Jim Asplund References 1-8, 10, 12: The Workforce Scorecard; Managing Human Capital to Execute Strategy Reference 9,11,13: Mobilizing Minds; Creating Wealth from Talent in the 21 st —Century Organization Copyright © 2003-2009 Richard W. Burke All Rights Reserved