brandon hall group: a new approach to managing talent

The New Approach to Managing PerformanceFrom Appraising Past Performance to Developing Future Potential

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Today’s Presenter


Laci LoewBrandon Hall Group

@LaciLoew

Today’s AgendaTHE NEW APPROACH TO MANAGING PERFORMANCE

The Stories: How are organizations leveraging leading practices to improve performance & accelerate business results?

©2015 Brandon Hall Group, Inc.

The Context: What it is and isn’t? What its challenges are and why we do it? Is what we do, working?

The Research: Why is it faltering and how do we fix it? What is the new philosophy and how does that impact the performance management process and its practices? How does today’s performance management look different from traditional performance management? What business difference will it really make if we embark on the transformation effort?

5

PARTICIPANT POLL 1: Let’s Hear From YouWHAT IS YOUR APPROACH TO PERFORMANCE

MANAGEMENT?


What is your approach to performance management?

__Coach employees to improve their performance

__Evaluate employees’ performance and focus on results

__Neither; We ____________________________________.

__I’m not sure.

The ContextWHAT IS PERFORMANCE MANAGEMENT?


Brandon Hall Group defines Performance Management as:

An ongoing management process aimed at

continuously improving employee performance for

purposes of accelerating business results; Optimization is

accomplished via communicating expectations,

coaching for success, and recognizing results.

Source: 2014 Brandon Hall Group


Not an obligatory annual

performance appraisal.

Not an HR responsibility.

Not an evaluation of employees’

weaknesses.

Not about formal and structured

feedback sessions.


DISPELLING MISCONCEPTIONS OF PERFORMANCE MANAGEMENT.

The ContextWHAT ISN’T PERFORMANCE

MANAGEMENT?

Infrequent feedback

focused on weaknesses

Goals not regularly updated

Rank and stack

reduces engagement

Reward system ignores

individuality

The ContextWHAT ARE COMMON CHALLENGES OF PERFORMANCE

MANAGEMENT?



The ContextWHY DO WE DO PERFORMANCE MANAGEMENT?


What are your drivers for performance management?

Improving business performance

Enhancing employee engagement

Improving managers ability to coach employees for improved performance

Identifying future leaders

Setting measurable goals

Measuring employee productivity and quality of work performance

Identifying low performers for skill development and termination

Making pay decisions

Source: 2014 Brandon Hall Group Performance Management Study (n-223)

The ContextIS PERFORMANCE MANAGEMENT WORKING?


To what extent do you agree that your performance management activities are effective in accelerating achievement of business results?

Strongly AgreeIt Is Working As Is

Strongly DisagreeIt Needs Improvement

Provides business value 26.2% 73.8%

Managers coach for development 8.2% 56.5%

Business and performance goals aligned 12.8% 54.4%

Performance expectations communicated 11.4% 41.6%

Exemplary behavior recognized & rewarded 19.5% 30.9%

PERFORMANCE MANAGEMENT IS SIGNIFICANTLY UNDERPERFORMING.


The ResearchHIGH-PERFORMANCE PERFORMANCE MANAGEMENT

REQUIRES A NEW PURSUIT



Today’s organizations are still burdened with broken performance management.

The highest performing organizations are transforming their approach from evaluating past performance and attempting to fix weaknesses to developing future potential and growing employees’ capacity to optimize individual and organizational performance—it requires a new philosophy, a new process, and new practices.

The ResearchHOW DO WE FIX PERFORMANCE MANAGEMENT?


Action Item% of Organizations Who Agree or Strongly Agree

Increase alignment of performance goals with business goals

74%

Focus on coaching for development, not fixing weaknesses 64%

Improve managers’ ability to be development coaches 64%

Improve managers’ ability to give in-the-moment, informal feedback

64%

Integrate performance feedback from multiple sources 29%

Integrate social platforms for peer and collaborative feedback

11%

Use mobile devices to support managers in giving feedback 8%

Use mobile devices to support development opportunities 6%

What actions are most critical in the next year to improve the business impact of your performance management?


The ResearchAT WHAT LEVEL OF PERFORMANCE MANAGEMENT

IMPACT DO MOST ORGANIZATIONS RESIDE?



The ResearchWHAT IS THE NEW PHILOSOPHY OF PERFORMANCE

MANAGEMENT?



Theory of Evaluation Theory of Continuous Improvement

Source: www.rewardhealth.com

FROM A THEORY OF EVALUATION AND ‘WEEDING OUT THE POOR PERFORMERS’ TO A THEORY OF DEVELOPMENT AND ‘CONTINUOUSLY IMPROVING PERFORMANCE.’

The ResearchWHAT DOES THE NEW PROCESS OF PERFORMANCE MANAGEMENT

LOOK LIKE?


Star of Year (Months 1 -2)

1.Set goals

Mid-Year

(Months 3-9)

2. Review goal progress

End of Year

(Months 10-12)

3. Annual Performance

appraisal meeting


An Annual“Performance Appraisal”

Event

A Continuous Process

in-the-moment ongoing feedback

FROM A SERIES OF DISCRETE ACTIVITIES CULMINATING IN AN ANNUAL PERFORMANCE APPRAISAL MEETING TO A CONTINUOUS PROCESS THAT CHARACTERIZES HOW WE DO WORK EVERY DAY.

Source: www.mercurirval.com

Create a performance strategy in alignment with a development philosophy and ensuring a continuous process

Ensure performance goals are mapped to business goals and reviewed/revised frequently to stay aligned

Engage peers, subordinates, team members, customers and others in providing in-the-moment feedback regularly

Engage executives in the process and migrate ownership of PM from HR to the C suite and other senior business leaders

Decouple performance discussions from compensation conversations

Execute on strengths-based development plans

Leverage technology to automate the process and integrate PM data with other talent data

The ResearchWHAT ARE THE NEW PRACTICES OF TODAY’S

PERFORMANCE MANAGEMENT?



The Research7 LEADING PRACTICES:

#1 REVISE TRADITIONAL PM STRATEGY



Few have an effective strategy

Many have a strategy

88% OF ORGANIZATIONS HAVE A PERFORMANCE MANAGEMENT STRATEGY,YET 71% RATE IT INEFFECTIVE OR HIGHLY INEFFECTIVE

EMPLOYEE GOALS REVIEWED AND REVISED AS FREQUENTLY AS BUSINESS UNIT AND ORGANIZATIONAL GOALS.


#2 ENSURE GOAL ALIGNMENT AND REVISION



Organizational Goals

Business Unit Goals

Employee Goals

revi

ew

revise


#3 ENGAGE PEERS AND OTHERS IN REGULAR IN-THE-MOMENT FEEDBACK




#4 ENGAGE EXECUTIVES AND OTHER SENIOR BUSINESS LEADERS IN OWNERSHIP


Source: 2014 Brandon Hall Group, executive interviews

87%

7%6%

Executive Engagement

Critical to effective PM

Not critical to effective PM

Unsure of its criticality toeffective PM


#5 SEPARATE PERFORMANCE & COMPENSATION

CONVERSATIONS



Source: www.dilbert.com


#6 EXECUTE ON STRENGTHS-BASED DEVELOPMENT PLAN


Greatest Challenges to Improving Performance Management Effectiveness



#7 LEVERAGE TECHNOLOGY TO IMPROVE PROCESS EFFICIENCY,

INTEGRATE PERFORMANCE DATA WITH OTHER TALENT DATA,

AND GATHER PERFORMANCE ANALYTICS


Percentage of Organizations Integrating PM Data With Other Talent Process Data


The ResearchWHAT DOES THE NEW APPROACH LOOK LIKE?


Low-Performance Organizations Characterized by Yesterday’s Approach

High-Performance Organizations Characterize by Tomorrow’s Approach

Led by HR and Talent Leaders Led by CEO and Business Leaders

Focus on the administering the process Focus on developing the employee

An annual performance appraisal with event-based activities (e.g. goal setting, goal review, performance appraisal)

A continuous process with employee goals regularly reviewed and revised to stay aligned with with changing business goals

Paper-based deployed locally Automated and deployed enterprise-wide to improve efficiency and performance analytics capture

PM data separate from other talent processes PM data integrated with other talent processes

A look back A focus forward

Evaluative relying on ranking systems and forced distribution Developmental expecting managers to be effective strengthsdevelopment coaches

Pay for performance Pay for strengths scarcity and expertise

Pay increases are discussed at same time as performance feedback given

Pay increases are discussed at a separate time from performance feedback opportunities

Development planning focused on senior leaders Development planning focused on all

Flat budgets Growing budgets

One time annual performance appraisal On-going, in-the-moment feedback


The ResearchWHAT ARE THE TYPICAL OUTCOMES OF TRADITIONAL

VS HIGH-PERFORMANCE PERFORMANCE MANAGEMENT?


Typical Outcomes of Traditional, Annual Appraisal-Based PM

Typical Outcomes of Developmental, Continuous-Improvement Based PM

Misdirected bonuses and pay increases Communication improves

Painful and emotionally charged Job responsibilities and expectations are clear

Unclear expectations Employee capability is continuously improved

Poor execution and reporting Managers and employees are accountable for a high-performance culture

Subjective manager opinion Engagement and other business results are impressive

Performance not aligned to promotions Employees are motivated with recognition of results and appropriate behaviors

Poor development opportunities Development is occurring


The ResearchWHAT IS THE PROCESS FOR DEPLOYING TODAY’S

PERFORMANCE MANAGEMENT LEADING PRACTICES?


HIGH-PERFORMING

PERFORMANCE MANAGEMENT


The ResearchWHAT ARE THE ENABLERS OF

HIGH-PERFORMANCE PERFORMANCE MANAGEMENT?



HIGH-PERFORMING


The ResearchIN ADDITION TO LEADING PRACTICES AND ENABLERS,

WHAT SUCCESS LEVERS ARE ESSENTIAL FOR HIGH-PERFORMANCE PERFORMANCE MANAGEMENT?


Source: 2014 Brandon Hall

Group Performance Management Study (n-223)

HIGH-PERFORMING


The ResearchWHY DOES HIGH-PERFORMANCE

PERFORMANCE MANAGEMENT MATTER?



Business MetricLevel 4

High-Performance Organizations

Level 3 Level 2Level 1

Low-Performance Organizations

Organizations transforming performance management in alignment with today’s leading practices get better business results.

The StoriesTRAINING MANAGERS AS DEVELOPMENT COACHES AT

GAP, INC.


Industry: RetailerEmployees: 150,000+

Challenge: Turnover in critical talent segments and key job roles creating severe wane in employee performance and productivity

Solution: Out with annual performance appraisals; out with forced distributions; out with top-down only feedback. Replacing those dated practices was a single heads-down effort to return employee performance to what it once was and in with training all managers to be effective development coaches

Impact: Not yet disclosed from an empirical perspective but anecdotally nothing but happy employees and happy customers

Source: http://www.cengage.com/management/webtutor/ireland3e/cases/gap.pdf, 2012.

The StoriesELIMINATING PERFORMANCE RATINGS AT

ADOBE


Industry: TechnologyEmployees: 150,000+

Challenge: increase in employee turnover

Solution: In 2012, Donna Morris, SVP Global People Services, abolished performance ratings and rank and stack approach and replaced with a ‘check in’ system that better fits with Adobe’s culture of collaboration allowing frequent discussions between managers and employees to acknowledge great behaviors and performance and tweak mid-course if necessary before it’s too late

Impact: Since the dump of the rating process:• Stocks up 68%• Revenues up 4.4%• Voluntary attrition rate significantly

down

Source: http://blogs.adobe.com/adobelife/adobe-life-magazine/v1/check-in/

The StoriesELIMINATING THE RATING SYSTEM AT

MOTOROLA SOLUTIONS


Industry: TelecommunicationsEmployees: 15,000

Challenge: Poor engagement and unfair pay raises due to forced rating

Solution: Last year, Motorola eliminated the forced rating system and institutionalized expectations regarding managerial coaching and regular feedback

Impact: • Reduced administrative time spent on

PM by 50-70%• Anecdotally, managers and employees

sharing positive input about improved engagement, morale, and motivation

Source: http://www.chicagobusiness.com/article/20131102/ISSUE01/311029980/the-end-of-valued-performers-at-motorola

The StoriesIMPROVING GOAL ALIGNMENT AT

PAYCHEX


Industry: BenefitsEmployees: 12,000

Challenge: To step up to organizational growth initiatives, needed to improve the cascade process between business goals and employee goals and keep employee goals reviewed to ensure continual alignment with changing business goals

Solution: VP of HR and OD, Laurie Zaucha, implemented a goal alignment and cascade process in August 2011. It improved employees’ understanding of performance expectations and allowed for regular modifications to employee goals to suit changing business goals

Impact: Managers and employees report:• Improved productivity• Improved motivation and engagement• Improved employee and customer

satisfaction

Source: http://www.benefitspro.com/2011/08/31/aligning-company-goals-with-performance-management

The StoriesAUTOMATING PERFORMANCE MANAGEMENT AT

GUITAR CENTER

PAYCHEX


Industry: Specialty RetailEmployees: 11,000

Challenge: Inconsistent and unlinked approach to managing performance and related talent processes including learning and succession management

Solution: Acquired and deployed a holistic talent management system (Saba) to enable the consistent deployment and integration of performance management, learning and development, and succession management across the enterprise

Impact: Managers and employees report:• Improved productivity• Higher collaboration• Improved engagement

Source: http://saba.com

The StoriesENGAGING EXECUTIVES IN PERFORMANCE

MANAGEMENT AT A GLOBAL PHARMACEUTICAL

FIRMKIMBERLY-CLARK, CORP.

PAYCHEX


Industry: PharmaceuticalEmployees: 90,000

Challenge: No accountability among the leadership team to drive a high-performance culture

Solution: Implemented governance and oversight of the performance management process by the CEO and heads of each business unit

Impact: • Engagement increased 10%• Revenue increased 5%• Turnover in critical talent segments

decreased 17%

Source: Brandon Hall Group executive interview April 2015

PARTICIPANT POLL 2: Let’s Hear From YouWHICH ONE OF THE THREE P’S WILL BE YOUR

GREATEST CHALLENGE IN TRANSFORMING TO HIGH-PERFORMANCE PERFORMANCE MANAGEMENT?


Which one of the three P’s (philosophy, process, practices) will be your greatest challenge in

transforming to high-performance performance management?

__ (Changing our philosophy) Reducing/eliminating our focus on evaluating employees’ past

performance and focus on developing their strengths

__(Changing our approach to process - driven) Moving our approach from a series of event-based

activities (goal setting, goal cascading, goal review, mid-year check-in, end of year performance

appraisal) to a continuous process of managing performance

__(Implementing leading practices) Creating a performance strategy that keeps employee goals well

aligned with business goals by continuously reviewing/revising them, expecting managers to be offer

effective strengths-based developing coaching and offer in the-moment feedback regularly, separate

performance feedback discussions from pay raise discussions and automate the process to ensure

performance requirements forecasting ability and integration of performance data with other talent data.

__ None! We have high-performance performance management now!

__I’m not sure.

The DiscussionALL OF YOU WITH ALL OF ME!

Laci LoewBrandon Hall Group

@LaciLoewAll of You!


Thank You for Reading

brandon hall group: a new approach to managing talent

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