Transcript People Management Practices

Media Management Center, Northwestern University
READERSHIP INSTITUTE
PEOPLE
MANAGEMENT
PRACTICES:
Displays to Accompany
Survey Findings
July, 2000
Today’s Objectives
• Understand the business case for people management
I
• Examine newspaper survey results— 3
- Inform (findings and patterns)
- Insight
- Implications
• Build your confidence, conviction and capability to inform others
• Ensure that you know how to “read” the various reports
• Address some of your most important questions
• Provide a near-term path for moving forward
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© 2001 Readership Institute
The Mega-Study
Premise
Challenge
“Our employees are our
most valuable resource…
and therefore, the management
of people makes a significant
difference to company
performance.”
“Prove it,
or else stop
talking about it!”
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© 2001 Readership Institute
Overall Business Impact
Economic Factors
• Relative market share
• Company size
• Industry profitability
People Factors
• Core drivers
• High-impact practices
• Specific actions
• Constructive culture
33%
67%
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© 2001 Readership Institute
Business Case Was Built in Two Ways
Correlational
Studies
Real World
Applications
Determine “what”
organizations
should do
Describe “what”
world-class
companies do and
“how” they do it
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© 2001 Readership Institute
Empirical Validity
Very
Strong
Customer
Satisfaction
& Retention
Leadership
Strength of
PracticePerformance
Relationship*
Selection
Compensation
Change
Management
Creativity &
Innovation
Culture
Development
Employee
Satisfaction
& Retention
Performance
Management
Total number of organizational units:  21,304
Strong
500
1,000
1,500
2,000
2,500
3,000
Number of Organizational Units Included in Research
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People Management Model
Returns to Shareholders • Profitability • Growth • Productivity
READERSHIP?
Customer Satisfaction
and Retention
3
Employee Satisfaction
and Retention
CULTURE
Selection
Creativity &
Innovation
2
Performance
Management
Compensation
1
Knowledge
Management
CULTURE
CULTURE
Change
Management
Development
Leadership
CULTURE
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Five Strata Examined
Strata
Circulation Ranges
I
0 – 25,000
II
25,001 – 50,000
III
50,001 – 100,000
IV
100,001 – 200,000
V
200,001+
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Three Levels of Analysis
Level 1
DRIVERS
“What to focus on”
(4 + 1 sections
of the survey)
Level 2
HIGH IMPACT
PRACTICES
“What you should
strive to achieve”
(17 Best Practices
Derived from Mega-Study)
Level 3
SPECIFIC
ACTIONS
“What you can do”
(90 Survey Questions)
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Overview Level 1 and Level 2
Drivers
(Level 1)
High-Impact Practices (Level 2)
Pre-Reading
Pages
Selection
 Selection criteria and processes have consistent structure
 Selection skills are a key leadership attribute
 Seek to fill positions internally
18-20
Development




22-25
Promote integration and corporate glue
Significant leadership responsibility
Commitment is balanced between organization and individual
Effective succession planning and talent pool processes
Performance
Management
 Clear mutual expectations
 Stretch objectives with meaningful measures
 Ongoing coaching and feedback
26-27
Compensation
 Market-based compensation
 Performance-driven rewards and recognition
 Alignment of employee and shareholder interests
28-30
Employee
Retention*
 Latitude and authority for determining how best to execute job
accountabilities, particularly to meet customer needs
 Quality and sustainability of highly effective leadership, particularly
employee’s immediate supervisor
 Extent to which employees possess the knowledge and skills to contribute –
plus – the opportunity to grow and advance
• Customer satisfaction is a high priority and is balanced with “making the
numbers”—plus—rewards are provided for contributions
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* Note: Employee Retention is an Intermediate Outcome.
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Newspaper Results—Emerging Themes
• Very low scores!
• Performance management “highest”
• Development “lowest”
• Amazingly flat!
• More effective at and inclined to manage
“vertically” versus “ horizontally”
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© 2001 Readership Institute
Emerging Theme #1: Very Low Scores!
All Newspaper Respondents—“Best Practices Are in Effect”
LEVEL 1 ANALYSIS
Strongly Agree
plus Agree
100%
80%
60%
Strongly Agree
Agree
Disagree
Strongly Disagree
40%
20%
31%
29%
18%
13%
9%
Disagree plus
Strongly Disagree
0%
-20%
20%
-40%
40%
-60%
60%
69%
71%
-80%
80%
82%
87%
Selection
Development
-100%
100%
91%
Performance
Management
Compensation
Employee
Retention
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Emerging Theme #1: Very Low Scores!
All Newspaper Respondents—“Best Practices Are in Effect”
LEVEL 2 ANALYSIS
Strongly Agree
plus Agree
100%
“X1” denotes the Driver’s High-Impact Practice
Disagree
in the order it appears in your reports
Strongly Disagree
Strongly Agree
Agree
80%
61
60%
64
59
45
44
40%
20%
31
27
17
12
49
18
14
10
18
55
23
24
Disagree plus
Strongly Disagree
0%
-20%
20%
-40%
40%
39
35
41
-60%
60%
69
73
83
88
S1
85
90
-100%
100%
Relevant Page in
“Consolidated” Report
55
56
-80%
80%
S2
S3
D1
51
D2
D3
D4
P1
P2
P3
81
82
C1
C2
45
76
65
C3
R1
R2
R3
Selection
Development
Performance
Management
Compensation
Employee
Retention
8
17
28
37
46
R4
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Emerging Theme #1: Very Low Scores
Why?
• May reflect the newspaper industry’s
historical “oligopolistic” structure and
behavior of the industry
• Newspaper industry might be inwardly
not externally focused
• Newspaper industry, on average, is likely
stuck in the “Ingredients Era” of people
management practices
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© 2001 Readership Institute
Eras of People Management Practices
“Cogs”
“Ingredients”
“Enablers”
“Differentiators”
People were
thought of
as part of the
machinery
People management
activities are:
People management
activities are:
People management
activities are:
• Discrete
• Systematic
• Inconsistent
• Consistent
• Core to business
strategy
• Contradictory
• Aligned
• Not aligned
• Integrated
• Key to differentiation
• Source of competitive
advantage
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Newspaper Results
Findings
Performance
Management
is highest!
Development
is lowest!*
Insights & Implications
• Typically the most advanced Driver in
“stable” or “static” industries that have
undergone little change
• Other Drivers are characteristically brought
into play more strongly as companies and
industries are confronted by major change
• Typically viewed to be the “softest” Driver
• Is the most complex Driver of all
*Assuming we ignore Compensation
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© 2001 Readership Institute
Emerging Theme #4: Amazingly Flat Results
LEVEL 1 ANALYSIS
3.0
2.9
2.8
2.7
Disagree plus
Strongly Disagree
2.6
2.5
2.4
2.3
2.2
Selection
Development
Performance
Management
Compensation
Employee
Retention
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Emerging Theme #4: Amazingly Flat Results
LEVEL 2 ANALYSIS—By Department
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Emerging Theme #4: Amazingly Flat Results
LEVEL 2 ANALYSIS—By Circulation Strata
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Emerging Theme #4: Amazingly Flat Results
LEVEL 2 ANALYSIS—By Strata by Department
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Emerging Theme #4: Amazingly Flat Results
LEVEL 3 ANALYSIS—Selection
Relative Strength
Relative Weakness
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Emerging Theme #4: Amazingly Flat Results!
Why?
• Industry has very homogeneous practices
• May be “implied or accepted standards”
• External changes may not have yet stimulated
aggressive adoption
• Newspaper industry may be currently trapped
in “transformational no man’s land”
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© 2001 Readership Institute
Industry Transformation
High
Successful Change
Performance
“Today”
Newspapers?
“Triggers”:
• Competitors
• Changing needs
• Technology
• Economics
• Demographics
Change unrecognized
or not acted upon
Low
Time
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Emerging Theme #5: Newspapers are more effective at and
inclined to manage “vertically” versus “horizontally”
Driver
Selection
“Top Strengths”
“Greatest Weaknesses”
• The standards we use for selecting internal
candidates for open positions are set at relatively
high levels
• The selection standards we use for outside hires are
set at relatively high levels
• Selection of qualified people for position vacancies is
a top priority of our newspaper's leaders
Development
• Our selection process is efficient (i.e. provides us with
qualified people quickly)
• When we consider candidates from outside the
newspaper to fill job openings, the size and quality of
our external applicant pool is strong (i.e., we
consistently choose among many qualified
candidates)
• We encourage self-nomination to open positions
• Our leaders are held accountable for attracting and
selecting high-caliber candidates from outside the
industry
• Our newspaper's leaders place a high priority on
developing people
• Managers generally help their subordinates meet
their career aspirations
• Our newspaper possesses and continuously updates
a newspaper-wide database that keeps track of
competencies and skills individuals need to succeed
in their positions
• Qualified employees generally demonstrate sufficient
initiative in developing their own skills
• Attending training programs for at least 35 hours a
year is strongly encouraged by our newspaper
• Our organization systematically and regularly reviews
its talent pools frequently (i.e. at least twice a year)
Performance
Management
• We believe that one of the primary purposes of
performance management in our newspaper is to
support the execution of our business strategy
• Our strategies and strategic plans are regularly
communicated so that all employees understand how
their performance expectations are linked to them
• Performance evaluations entail a discussion of an
employee's performance, including the manager's
own perspective on the employee's performance
• Each person's performance evaluation incorporates
input from people within the company who are
impacted by their work
• Performance evaluation discussions focus both on
recent performance and identifying development
needs
• Performance evaluations incorporate input from the
employee's peers/ team
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Emerging Theme #5: Newspapers are more effective at and
inclined to manage “vertically” versus “horizontally”
Driver
Compensation
“Top Strengths”
“Greatest Weaknesses”
• Performance is the key determinant in establishing
variable compensation (i.e., incentive) levels
• Our newspaper's compensation programs enable us
to attract and retain required talent
• Our newspaper effectively recognizes (formally and
informally) performance that supports our goal
• Change in external market pay levels is a key
determinant in reviewing fixed ( base salary) levels
• Change in overall job accountabilities is a key
determinant in reviewing fixed (i.e., base salary)
levels
• Our compensation programs support the philosophy
of providing superior rewards for superior
performance
• Share-based compensation (e.g., employee share
ownership plans, profit-sharing) for employees is a
means of providing a single shared objective that
binds together the various entities across our
newspaper
• Employee share ownership is encouraged in our
newspaper through our compensation plans
Employee
Retention
• On average, our employees exhibit a high level of
attendance on the job
• Employees are energized by the newspaper's culture
and work environment
• Employees possess a clear understanding of the
limits within which they are permitted to act
• Our managers spend unusually large amounts of time
coaching and developing their subordinates
• Achieving high levels of customer satisfaction is a
high priority with my superior
• Employees receive appropriate recognition and
rewards for their contributions
• Employees possess a clear sense of how they
personally contribute to meeting customer needs
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Why Should I Really Care About This People Stuff?
High Levels of Employee Satisfaction &
Retention Are Associated with Greater
Customer Satisfaction & Retention...
…which create a powerful
way to move the needle
“The Zone of Affection”
“The Royalty of Loyalty”
100%
Low
•
3.0
Low
•
• •
• •• • • • • •
•
• •
•
•
•
•
•
•• • •
• •
Customer Retention
Customer
Satisfaction
& Retention
High
••
• •• •
• 48%
defected!
• Satisfied
≠ Loyal
80%
60%
40%
20%
4.0
Employee Satisfaction & Retention
High
1
Extremely
Dissatisfied
2
Somewhat
Dissatisfied
3
Slightly
Dissatisfied
4
Satisfied
5
Very
Satisfied
Customer Satisfaction Measure
Source: RNW Research
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Source: Harvard Business School; Heskett, et. al.
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Four Key Factors of Employee Retention
98.0%
100%
90
84.4%
80
Explanatory Power*
60
55.8%
50
Authority
19.2%
40
14.0%
70.4%
70
36.6%
13.6%
14.6%
30
20
Latitude
36.6%
10
0
Leadership
and Culture
Capability and
Development
Recognition, Rewards
and Focus on
Customer Satisfaction
*Represents the proportion of the total R2 explained by each determinant.
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Real Effect of Employee Retention
Company
State Farm
Employee Satisfaction & Retention
• Agent tenure 200% longer than
industry average
Customer Satisfaction & Retention
93% customer retention
• Agent productivity 150% higher than
industry average
USAA
• 7% employee turnover rate
• Two-thirds lower than industry
average
Northwestern
Mutual Life
• Most productive organization
reflected by home office cost per
$1,000 of face value premiums sold
98% customer
retention in auto
95% customer retention
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So, what can/should you...
•Do
•Not do
…when you return home?
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Between Now and Our Next Meeting
 Ready, aim, fire!
 Don’t jump in and fix it—go slow to go fast
 For now, ask more questions than give answers
Guiding
Principles
 Take the time to really create understanding and insight
 Then…create strong alignment in terms of your desired
end state
 Set expectations carefully
 This is a technical and a political challenge; i.e., a formidable
change management challenge
Objectives
 Get under the survey to gain clarity and commitment to the real
issue(s) and their root causes
 Come back in October with the issues and their root causes—
the data that is ready then will help you set priorities and begin
to act
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Between Now and Our Next Meeting
High-powered
committed team
and create a
“charter”
 Set expectations for objectives and time commitment
 Provide clear directional guidance for what you really want
to discover.
 Describe specific outcomes and deliverables that you want
them to produce
 What specific factors have resulted in our current situation? Why?
 Build understanding through focus groups and one-on-one
interviews.
Strive for
insight and
understanding
 What has been (is still) the impact on our organization?
How do we know?
 What is our desired future state? Why?
 If we are successful, what specific differences/impacts would we
expect to see become visible?
 What decisions must we make and what actions must we take,
to close gaps?
 Who needs to be involved in making the above happen—based on
expertise, political considerations and the need for the change?
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