Transcript Broad-Based Black Economic Empowerment: Legislation and

Performance
Management
Andre O’Callaghan
October 2008
Introduction
• Since my last report, this employee has
reached rock bottom and shows signs of
starting to dig.
• I would not allow this employee to breed.
• Works well under constant supervision and
cornered like a rat in a trap.
Introduction
• He sets low personal standards and then
consistently fails to achieve them.
• This associate is really not so much of a hasbeen, but more of a definitely won’t be.
Some Perspectives
•
•
•
•
85% have a PMS
95% have strong commitment of the CEO
94% have a formal communication strategy
51% believe employees & managers are
adequately educated & trained in PMS
Some Perspectives
• 37% use the balanced scorecard methodology
• 86% allows joint target setting
• 91% have clear PMS policies, procedures and
systems
• Most companies measure performance using
hard and soft measures
• 2001 Deloitte & Touche HCC Survey
Define Performance Management
• What is Performance Management?
If 85% of companies apply it, what do they
actually do?
• Group Discussion
Define Performance Management
• The process of ensuring individual and team
effort support the organisational objectives
and to realise key stakeholder expectations
and wealth creation in all the identified value
drivers of the organisation.
Define Performance Management
• Planning is crucial
• Stakeholder expectations are key drivers
• Management and employee buy-in and
involvement are paramount
• Must be linked to and alignment with strategy
Process
•
•
•
•
Planning Performance
Maintaining Performance
Reviewing Performance
Rewarding of Performance
A Model
Reward Performance:
- Link to pay
- Results = performance
Planning Performance:
- Setting objectives
- Outlining development plans
- Getting commitment
PERFORMANCE
MANAGEMENT
PROCESS
Reviewing Performance:
- Formal reviews
- Assess against objectives
Maintaining Performance:
- Monitoring performance
- Coaching
- Feedback
Business strategy, stakeholders, key economic wealth drivers
Planning
• 80% of the process
• Includes:
–
–
–
–
–
Identifying key value drivers of stakeholders
Defining Key Performance Areas (KPA’s)
Defining Objectives
Defining Targets
Develop a training and development plan
The Challenge of Alignment
• With no harbour, no wind will be the right
wind.
• Between 92 to 97% of companies have a
vision and some strategy statement.
• Only between 3-7% of staff know and work
by it.
A Model for Establishing/ Building an
Aligned Performance Management Process
ORGANISATIONAL LEVEL
INDIVIDUAL LEVEL
Deriving key value drivers from
Strategic direction and KPA’S
Determining and assigning KPA’s
Determining organisational objectives
Determining and assigning individual
objectives
Execution
Measuring & Evaluating performance
against organisational objectives
Measuring, evaluating and rewarding
Performance against individual
objectives
Reassessing and adjusting business
strategy
Reassessing KPA’s and adjusting
Objectives to reinforce strategy
Review
Setting Objectives
•
•
•
•
•
S = Specific
M = Measurable
A = Agreed/Attainable
R = Realistic / Relevant
T = Time-bound
Setting Objectives
• A measurable component with a beginning
and an end
• Starts with a VERB
• Not in isolation
The Measurement
• Use a good-practice rating scale
• Evidence-based
• Both managers and employees - active
participants
• Mutually agreed
• Usually – bell curve
Benefits
•
•
•
•
•
•
Integration
Open Communication
Improved Performance
Training and Development
Clarity of Standards/Requirements
Placement of Individuals
Benefits
•
•
•
•
Increased Objectivity
Remuneration
Promotability
Career planning
Success Factors Implementation
• If you are not managing performance, what
are you managing?
• Some key building blocks
Feedback
Reward &
Compensation
Competencies
Training
Review Process
Goal Setting
Process Design
Strategy Focus
Success Factors Implementation
•
•
•
•
•
•
•
Relevance
Reliability
Discriminability
Freedom from contamination
Practicality
Acceptability
Legal compliance
Coaching
• Coaching & mentoring are crucial components
of the Maintaining of Performance Phase
Planning Performance:
- Setting objectives
- Outlining development plans
- Getting commitment
Reward Performance:
- Link to pay
- Results = performance
PERFORMANCE
MANAGEMENT
PROCESS
Reviewing Performance:
- Formal reviews
- Assess against objectives
Maintaining Performance:
- Monitoring performance
- Coaching
- Feedback
Business strategy, stakeholders, key economic wealth drivers
Coaching
Coaching is a formal process:
- A day- to-day process
- To improve performance and capabilities
Coaching = Give a man a fish a day, and you
fed him for a day; teach him to fish, and you feed
him for life.
Confucius
Coaching
•
•
•
•
Give feedback
Ask for ideas and suggestions
Discuss
Coaching provides immediate feedback on
performance
Coaching
Coaching vs Mentoring vs
Counselling vs Discipline?
Why do Managers Fail to Give
Feedback?
Group Discussion
Why do Managers Fail to Give
Feedback?
•
•
•
•
•
Lack of confidence
Avoiding confrontation
Do not have time
Lacking internal support
Others?
A Model for Performance
THE BECKS MODEL
• Behaviour
• Environment
• Clarity
• Knowledge/Skills
Good feedback is …
•
•
•
•
•
Descriptive and specific
About something that can be changed
Timeous
Tactful
Confirmed
Childhood and Feedback
• What will other people think?
• If you cannot say anything nice, do not say
anything.
Impact on Feedback
Maximum Impact of Informal Performance Feedback on Employee
Performance
50
40
30
20
10
0
Fairness and
accuracy
M anager
kno wledgable
abo ut emplo yee
perfo rmance
Feedback
abo ut ho w to
do jo b better
Emphasis o n
strengths
M anager
vo lunteers
info rmal
feedback
% change in performance
Detailed and
specific
feedback
Immediate
feedback
Feedback and Generations
Traditionalists
Baby Boomers
Generation X
Millennials
The ECC Model for Feedback
Example
Effect
Change
Continue
behaviour)
Be specific and give actual examples
Explain the impact/effect (positive or
negative)
Suggest what should change (to improve performance)
Recognise good performance
(reinforce positive
Good Performance Feedback –
An Example
Example
During the last two weeks you made a significant contribution to the customer
service targets – you had no complaints and your turn-around time is 6%
above target.
On Friday you also made a good suggestion to improve customer service in
the front-office
area.
Effect
We are doing great and we had very positive
area because of your inputs and efforts.
customer feedback in your
Continue
excellence.
ideas around service
To focus on customer service and to share
Good Performance Feedback –
An Example
Example
During the last two weeks you had 5 serious
complaints from 3
important customers regarding
follow-ups. You also did not meet the required 5 hour-turnaround time on queries.
Effect
We are under pressure from 3 major clients who represent a substantial
revenue base. Your area
is not meeting the required service standard. Your
team members are frustrated, because they meet target, but overall the
team is below target.
Change
You will have to focus more on service and
customer satisfaction and
need to achieve an overall target of
X% customer satisfaction for the next three
months in order to meet target at the
end of the quarter.
A Good Review
Welcome
Check expectations & concerns
Give feedback and use Facts
Get a Response
Ensure buy-in and understanding
Discuss and plan the next period
Identify training requirements
Express confidence
Performance Audits Key Topics
•
•
•
What do you audit?
How do you audit Performance Management?
What can you expect?
Performance and Reward
Measures give rewards relevance,
and rewards give measures meaning
TB Wilson
Performance and Reward
•
•
•
•
What gets measured gets done
What gets rewarded is sustained
The majority of workers want recognition for
achievement
Rewards have a high retention value for
talent
Drivers Attraction & Retention
of Talent
Performance and Reward
Dilemma’s in reward:
• Objectivity
• Transparency
• Affordability
• Baggage
Link to Pay
Why does it often fail?
• Lack of objective and quantitative measures
• Poor link between pay and performance (no
immediate reinforcement)
• The aspects that get rewarded are not linked
to strategy
• Poor communication re objectives, benefits
and procedures
Link to Pay
Why does it often fail?
• Level of reward not proportionate to effort
• Resistance to change
• Union perceptions and involvement
Performance and Reward
A Reward Matrix
Rating
25th Percentile
50th percentile
75th Percentile
5
17%
15%
10%
4
15%
12%
8%
3
12%
10%
6%
2
0
0
0
1
0
0
0
•
Guaranteed Package
•
Short-Term Incentives
•
Long-Term Incentives
X
X
X
X
Skills
X
Performance
Retain
REMUNERATION
COMPONENT:
Attract
Performance and Reward
X
X
X
The Psychology of Incentives
KEY
IMPACT
Fixed
Package
Variable
Package
Hygiene
Factors
Motivational
KEY
OBJECTIVE
SECONDARY
OBJECTIVES
• Internal
Equity
Competitive
• Cost
in Market
Management
• Flexibility
Drive
Behaviour
• Return on
Bottom Line
• Reward
specific
behaviour/
results
What is Talent?
Talented individuals are mobile monopolies
with global passports
Ridderstrale & Nordstrom
What is Talent?
•
Expected to produce superior performance
•
Talent apply knowledge, skills and creativity
•
Focus on personal growth
•
Challenge: To spot talent
Why is it important?
PERFORMANCE
PROFIT
PASSION
POTENTIAL
Key Elements
Review
Link to Training & Development
Desired performance
Measurement
Actual performance
Development
Vision
Mission
Strategy
Value Drivers
SMMEs
Key Challenges:
• Strategy not always clear, defined or
formalised
• Decisions are not taken to lower levels
(“family business” syndrome)
SMMEs
Key Challenges:
• There often are:
– Little time
– Few resources and finances
– Little support
– Not adequate skills
– The “we do fine” syndrome
Balanced Scorecards (BS)
Challenges organisation’s face
Challenges Faced by Organisations
Making a Case for a Balanced Approach
Vision Barrier
Only 5-10% of the work force
understand the strategy
People Barrier
Only 25% of managers have
incentives linked to strategy
9 out of 10
companies fail to
execute and track
strategy
60% of organisations don’t
link budgets to strategy
Resource Barrier
Management Barrier
85% of executive teams spend
less than one hour/month
discussing strategy
What is Balanced Scorecard?
At the highest conceptual level, the
Balanced Scorecard is a framework that
helps organisations translate strategy into
Operational objectives that drive both
behaviour and performance.
Four Perspectives of a BS
VISION,
MISSION &
VALUES
Profitability,
Growth, Sales
& Cash Flow
FINANCIAL FOCUS
CUSTOMER FOCUS
EXTERNAL
INTERNAL PROCESSES
PEOPLE FOCUS
INTERNAL
Retention,
Market Share,
Service, Etc
Response time,
Costs, Effecient,
Productivity
Skills, Learning,
Development,
Sustainability
The Balanced
Scorecard converts
strategy into an
Integrated System
defined across Four
Business
Perspectives
Reasons: Scorecard Approach
•
•
•
•
Scorecards drive performance at all levels
Scorecards facilitates strategy
Scorecards focus on the right measures
Scorecards encourage balanced
performance
Reasons: Scorecard Approach
• Scorecards point out what’s missing
• Scorecards encourage good management
• Scorecards communicate - they tell the story
The Balanced Scorecard
• “Balances” people, performance and
processes
• Links historical, current and future objectives
• Brings intangibles into the performance
equation
• Enhances focus on strategy and
performance culture
An Example of a BS
Customer
Value Drivers:
Price, Customer Care, Reliability
Objectives:
Market-related pricing, Customer
liaison (stakeholder engagement),
Appropriate Customer services,
Instilling a customer care culture
Targets:
Surveys, Quality and frequency of
contact, Identify and address
customer needs
Financial: Shareholder
Objectives:
Realise stakeholder expectations/ liaison,
Pricing, Resource utilisation, Optimise business
opportunities: Optimise existing revenue sources
Targets:
Dividends, Sustained/contained tariffs,
Benchmarks, Managed costs (resource utilisation)
Vision &
Strategy
Learning & Growth
Value Drivers: Salary & Benefits, Training
Objectives:
Control and manage top management, Aligned HR
strategy to Business Strategy, Benchmarking and
best practice, Policies & procedures in place,
Attraction of suitable skills
Targets:
Established Performance Management, Potential
assessment and development
Plans, Skills Development Plan, Succession and
Career Planning
Processes
Value Drivers:
Sustainability and Growth
Objectives:
Optimise operational processes,
Market segmentation, Identify new
business opportunities in ports,
Develop and grow infrastructure
Targets:
Benchmarked/best practice,
Improvement, Worth of industries
in Ports and Syncrolift
Competencies
A Competency:
Skills
Knowledge
Traits/Behaviours
Foundational
Practical
Reflexive
Skills Audit
Competencies
•
•
•
Define competencies and a rating scale
Make it part of the PM process and
procedure (360o?)
Reward and recognise the desired
competencies
Challenges
Challenge 1:
No alignment and a paper-driven exercise
Challenge 2:
Inadequate links between pay and performance
Challenges
Challenge 3:
Link consequence management and
performance
Challenge 4:
Managerial capacity and capability
Thank You
Questions