Performance Management - Home - Salto Dee Fe Performance Management...Performance Results Score 2. Competencies Score Overall Score Will determine the employee’s career movement,

Salto Dee Fe Consulting Service

Performance Management

Rajan Kalia, Salto Dee Fe Consulting

Salto Dee Fe Consulting Service 2

Empower | Enable | Excel

About Us

Salto Dee Fe Consulting Service 3

Salto Dee Fe Consulting (SDF) – A Business Enabling Firm

We are a business enabling firm working at the intersection of Strategy,

Execution & Human Resources.

We partner with organizations to smoothly leapfrog their business to its next

phase of growth.

We focus on the two primary pillars in any organization - shareholders (with

focus on profits and governance) and employees (with focus on execution).

WHO WE ARE

OUR VISION

Excel at solving people problems for businesses to

enhance productivity & employee retention

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OUR CORE VALUES

4

OUR EXPERTISE

Talent

Management

Organizational

Transformation

Employee

Retention

Leadership Skills

Learning

OUR PRODUCTS

Retention Competencies Based

Assessment for Development

Tool

A 360 Behavior Change tool that is

Simple, Practical and Forward Looking


OUR PARTNERS

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We Also work with

Founded and lead by

Marc Effron, the author

of the #1 best selling

HR book, “One Page

Talent Management:

Eliminating

Complexities and

Adding Value” .

Our tie up with LIMRA-

LOMA would bring cutting

edge training, research &

consulting solutions to

India in Insurance

domain

Our technology partner for

offering cutting edge,

customized solutions for

sizeable volumes- e.g. 360

degree, assessment centers,

engagement surveys etc.


Let us talk…

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Where are we headed?

What role does HR play in PMS? What role should it play?

What will it take for us to succeed with PMS?

What do you gain from this?


● Performance management is viewed as an HR 'program' versus a ‘strategic

business tool’ used to drive success

● Balancing “What” & “How” & “Whom”

● Short Term Vs Long Term goals

● Who the h… Invented the Bell Curve?

● No one is penalized for not giving reviews, who is accountable?

● Employees have little to no involvement in the process (e.g., setting their own

objectives, leading the performance discussion).

● Both management and employees dread the process.

● How do I give difficult feedback to employees

● Any other?

Key Issues HR Managers Face


● What is our organisational philosophy on the system?

● Inter linkages of various performance measurement mechanisms

● Weaving the different systems together

● How do I implement the system?

● How do I communicate the system consistently across the company?

● Are the managers mature to handle this? What about First time managers?

● How do I deal with outages?

● How do I link the outcomes to rewards?

& Many More………………..

Key Questions to Answer


Let’s Assess Our “As Is” PMS FrameworkHow do your company’s practices compare to those that drive effective

performance management?


Start with the science

Performance management (PM) is the most powerful

process available to increase individual performance

•PM fails to deliver results in most companies for two reasons:

- Too many goals set without sufficient stretch

- Too little coaching for performance

•There’s conclusive science to guide the PM design process


Why have a Performance Management Program?

Performance management curve: The size of the circles indicates the number of U.S.

companies at that point on the curve by order of magnitude.

Source: PwC Research 2012


Operating Principles For PMS Design

Alignment – Individual Goals to Organizational Goals

Clarity – Measures of success, Expectations & Overall Process

Inclusive Meritocracy – Opportunity to all to earn rewards etc

Transparency – Clear communication on what, when & how?

Balance – Measure “What” & “How” (3600 View)

Any Other ?


MarchFebruary

JanuaryApril

May

June

July

AugustSeptember

October

December

November

* Manager to

discuss the

appraisal with

Customer and

2nd Level

Manger

Conceptual Framework


Conceptual Framework - Simplified• Operating Principles:

Alignment

Inclusive Meritocracy

Transparency

Balance (360 degree view)

• Overview of the System:

Planning

Tracking

Review

Thumb ruling / Calibration

Recognition / Reward

• Process:

Goal Setting

o What (Keeping all parameters in view e.g Stakeholders - Customers, Employees,

Agents, regulators, Public, Shareholders and Cost management & Competition)

o How – Process / Roadmap

Tracking – Monitoring / Review

Evaluation – Self / Manager / Two level review on Goals, Management Style, Potential

and Readiness for next level job

Recognition / Reward – Guaranteed / Variable / Others

FORMS PLATFORMS TOOLS


Build Performance Focus

Align line function and HR team to the system

Aggregation and analysis of company and unit-wide trends

Seamlessly integrate into other HR Systems

Minimize resources and effort to administer process

Achieving Stake-holder Delight...

Facilitate timeliness

Quick turnaround of process

Facilitate information aggregation from multiple sources

Facilitate review of remote workers

Process and status tracking

Enhance decision support and coaching capability

Employee PerspectiveManager Perspective

Process and assessment Transparency

Guidance on KRAs and competencies through templates

Timeliness prompts

Track mid-term changes

Quick turnaround and resolution of queries

Convenience / comfort through self service system

Organisation

Perspective

Communicate effectively

Central ownership of performance database

Conflict resolution tools

Consistency checks and communication toolkit

HR Administrator

Perspective


Performance & Potential Review

Goal

ReviewManagement

Review

Potential

Review

Readiness

Review

Setting ‘business

goals’ and converting

them to Departmental

& individual goals

through structured

processes and

measuring

achievement

objectively

Identification of

competencies and

assessment of an

individual on the

competencies

specified for the

position

Assessing an

individual’s abilities in

the light of higher

vertical and horizontal

responsibilities

Assessing an

individual for the

readiness to take up

the next higher level of

responsibilities

G M P R

WHAT

•Bonus

HOW

•Salary Increase

WHO

•Development Plan

•Long Term Incentives

WHEN

•Promotion•Succession

Linkages to

Rewards

Source:Max New York Life

Salto Dee Fe Consulting Services

PMS Process – Snake Chart (Sample)

Goal Setting

Individuals

Dept. Head Goals

Individual KRA

Sheet

Input

Output

HR

Review

G & M

ratings

Run the

process

Thumb

ruling

Reviewed

data by HR

Outcomes

Employee

Comm.

Final Ratings,

Appraisal Sheets,

CEO/Func. Head

letter

Accepted KRA

Sheet,

Consistent

messaging

Self

Appraisal

Refer to

employee

guide

Self

Rating

2nd Level

Review

First Hand

Insights,

Smoothening

aberrations

Individual

G&M

sheets and

rating

summary

Manager

Review

Self appraisal

against agreed

Measures Of

Success

Individual ratings

Source:Max New York Life


Performance Planning:

Goal Setting



Science of Goal Setting

• The Harder the Goal, the More it Motivates

• Goals Aligned with Self Interest Motivate the Most

• Specific Goals Create Higher Performance than urging “Do your

Best”

• Too Many Goals reduce the Effort on Each One


•All the goals set by a manager are Achievable & Realistic. Further, if a

goal is Specific, it will be Time-bound: ‘Task X by Date Y’.

•An “Important goal” is the one, which is “Relevant for the Company”

(To achieve results) & “Relevant for an Individual” (Self-interest).

•Thus Eliminating Complexity & Adding value, we have SIMple goals:

Specific, Important, Measurable.

Keep Goals ‘SIMple’

FOCUS ON A

VITAL FEW

Correct number of goals

are >1 & <5. The ideal

number of goals are 3.

DO NOT SPECIFY

ANY GOAL AS

‘STRETCH GOAL’

Every goal should have a

right balance of stretch &

achievability.

DO NOT INCLUDE

GOAL WEIGHTING

Simpler way is to list the

goals in the Order of

Importance.


Should Goal setting be a participative exercise or manager

driven?

Who sets the Goals?

Pros

•Higher Commitment to Goals

•Employees’ “buy in” to goals

•Promotes a socialistic

workplace view

Cons

•Research* indicates “no

difference in performance”

regardless who sets the goals

•Adds more complexity to the

process

•Other equally effective choices

available for gaining

commitment

Source: Application to Erez-Latham Dispute regarding participation in goal setting , Journal of Applied Psychology 73

What’s your view on this….does this really add value?


Aligning Individual Goals to Organizational Strategy?

Do all employees understand the

Organizational goals/strategy*?

How cascading goals down the levels

impact or build commitment?

• Define roles

• Assess position criticality

• Distribute responsibilities across workforce

• Help see the ‘Line of Sight’

• Explain connection b/w job & organization

• Translate organizational goals into day to day

execution

To build commitment, the organization should…

Source: CLC study on high performance culture


Cascading Goals – Is it the right way?

KPI 1 – Goal Target : 100%





Cascading Goals – Or is this the right way?


Should Behaviour Evaluation be part of PMS ?

Pros

•Balance ‘how things get

done’ with ‘what gets done’

•Reinforcing “right

behaviours” critical to

managers success

•Helps build accountability (Clear messaging on good

behaviors get you ahead, while

poor will hold you back)

Cons

•Lacks an objective way of

measurement

•Adds complexity –

Value/Complexity trade off

decisions

•Alternate choices available

to hold people accountable (Talent Review, Succession Plan,

IDP, Corporate Culture or 360

Degree)



Why Competencies?

Start with the science:

●Leadership Competencies can affect individual performance

●Leadership Competencies can affect organizational performance

●Competencies can be developed over time

●Competitive Advantage can occur when competencies are

consistently demonstrated across the organization


Competency Based Performance Management


Mixed Model – What & How

1. Performance Results Score

2. Competencies ScoreOverall Score

Will determine the employee’s career

movement, and also the reward to be

earned & other HR Linkages to

follow


Key Considerations in Evaluating Behaviors

Size and Complexity

What is the optimum number of competencies (along with behavioral

descriptors) an evaluation framework should have?

Measuring Behaviors

Is there any objective measurement tool?

Rewarding Behaviors

Will performance be a threshold for a rating/reward or will it be a cap?

Or will behaviors have no impact at all? If yes, then why include them?


Integrating Rating Scale into PMS

Do not use Numerical ratings, at least do

not communicate it to employees

Do not use Labels like ‘star performer’,

‘highly valued’ etc.

Do not obsess over the rating scale – three,

four or five point scale

• 3-7 points rating scale has similar level of scale and

rater reliability

• No evidence that behaviourally anchored scales are

more effective than numerical scales

• Managers tend to use only the higher ratings unless

you are forcing a distribution

Add

complexity

without adding

any value


Performance Monitoring &

Feedback



Informal Feedback Matters Most!

Source: CEB Improving Talent Management Outcomes


• If a person is committed to the goal, she’ll improve her

efforts incase they’re not leading to success.

• Feedback is a surefire to increase an employee’s

effort towards a goal.

• Frequent feedback leads to a shortened performance

improvement cycle as it provides opportunity to

course correct oneself

• The frequency of feedback dependent on the goal,

employee’s competence & performance.

Give Frequent Feedback on Progress


Performance Management Behavior (Transition Desired)

From To

Regular ongoing activity :

Communicating expectations on a regular basis

Providing feedback in real time whenever exceptional or poor performance is

observed

Helping employees develop expertise that maximizes their potential.


Feedback Guidelines


Reading: Try Feedforward

• What’s more common: Feedforward or feedback?

Why?

• What challenges does feedforward solve?

• In what situations might feedforward not be

effective?

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Feedforward exercise

• Identify one item (behavior, knowledge, skill, etc.) that you’d like

to improve over the next twelve months

• Describe this item to a classmate

• Ask for feedforward and listen

• Say “Thank You.” Don’t criticize, evaluate or rank their

suggestion

• Switch roles and repeat the exercise

• Talk to as many classmates as you can in 10 minutes

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Feedforward debrief

• This exercise was . . . . .

• What made it . . . . ?

• Was it difficult to coach? Why?

• Was it difficult to give feedforward? Why?


Coaching increases an individual’s performance

The Science

Feedback PLUS coaching can increase leadership effectiveness up to 60%

Coaching strongly increases an individual’s belief in his ability to succeed

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1A quasi-experimental study on management coaching effectiveness, Evers, Will J. G.; Brouwers, André; Tomic, Welko, Consulting

Psychology Journal: Practice and Research, Vol 58(3), 2006, 174-182

2 Elizabeth C. Thach, (2002) "The impact of executive coaching and 360 feedback on leadership effectiveness", Leadership &

Organization Development Journal, Vol. 23 Iss: 4, pp.205 - 214

Business Case For Coaching Talent


Forced Ranking & The

‘Vitality Curve’



Forced Ranking & The Vitality Curve

• The top 20% were considered the future leaders of the organization (A Player)

• The vital 70% were the solid worker-bee performers that could be counted on

day-in and day-out to consistently perform their jobs(B Player)

• The bottom 10% was fired(C Player)


Arguments For & Against

Pros

•Helps deal with “rater

inflation”

•Makes managers identify

high, average, and low

performers

•Ensures that compensation

increases reflect performance

differences among individuals

Cons

•Managers resist placing

people in the lowest or

highest groups.

•Explanation for placement

can be difficult.

•Performance may not follow

normal distribution.

•Managers may make false

distinctions between

employees.



ConclusionsYour Views?

Logic


Creating Transparency

Why? Employees feel fairly evaluated and thus are committed towards

achieving goals

How?

•Share Goal Sources and Linkages

How goals are cascaded down?

How the employees will be evaluated?

Who has a role to play in the evaluation?

•Share Rating Scales and Distribution

Will the employees be force ranked?

Where do they stand when compared with others in the

organization?


Creating Accountability

Why? Key driver of performance management success

How?

•Withholding a manager’s bonus until he completes every review

•Withholding the staff’s bonus until the manager completes

•Employee- driven Accountability

• Use ‘time-bomb communication’

• Involve employees in reminding manager to fulfill his

responsibilities, if he doesn’t- remind HR

•CEO-driven Accountability

• If he can do it despite his/her schedule, anybody can and should


Q & A


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Performance Management - Home - Salto Dee Fe Performance Management...Performance Results Score 2. Competencies Score Overall Score Will determine the employee’s career movement,