last class: open discussion
DESCRIPTION
Performance Evaluation (8:00AM – 8:30AM) Variable Pay ( 8:30AM – 9:00AM ) Generational Values Differences (9:00AM – 9:30AM ) Managing Derailing Employees (9:45AM – 10:15AM ) Essential Management Skills ( if time allows ) Team-Based Leadership ( if time allows ). - PowerPoint PPT PresentationTRANSCRIPT
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LAST CLASS:OPEN DISCUSSIONEMBA 60616 September 28, 2012
Performance Evaluation (8:00AM – 8:30AM)Variable Pay (8:30AM – 9:00AM)Generational Values Differences (9:00AM – 9:30AM)Managing Derailing Employees (9:45AM – 10:15AM)Essential Management Skills (if time allows)Team-Based Leadership (if time allows)
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Performance Evaluation What are the advantages and
disadvantages of forced ranking performance evaluation systems? What does the research literature say? Who in the class has experience with forced
ranking systems? What are the benefits of forced ranking
systems? Why are they used in your company or others’
companies? What are the costs of forced ranking
systems? Why aren’t they used in your company or
others’ companies?
See Stewart, Gruys, and Storm (2010) review, posted on website
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Performance EvaluationNot removing that bottom 10% early in their careers is not only a management failure, but false kindness as well—a form of cruelty—because inevitably a new leader will come into a business and take out that bottom 10% right away, leaving them—sometimes midway through a career—stranded and having to start over somewhere else. Removing marginal performers early in their careers is doing the right thing for them; leaving them in place to settle into a career that will inevitably be terminated is not. GE leaders must not only understand the necessity to encourage, inspire and reward that top 20% and be sure that the high-performance 70% is always energized to improve and move upward; they must develop the determination to change out, always humanely, that bottom 10% and do it every year. That is how real meritocracies are created and thrive.
– Jack Welch
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Performance Evaluation A quarter of Fortune 500 companies use some
type of forced ranking system Little study of forced ranking (“rank and
yank”) systems Advantages
Eliminates rater errors/biases (severity/leniency) Before Ford implemented its system, 98% of managers
were rated ‘fully meeting expectations’ Process for eliminating “sick cats” – thus
productivity Helps identify (and thus reward) peak performers
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Performance Evaluation Advantages (continued)
Fosters more candidate communication How an employee’s performance compares to others
doing similar work; thus provides impetus for change Short-term motivational benefits
Disadvantages Ignores objective performance differences (GPA-SAT) Difficult to sustain (10% Y1; 10% Y2; 10% Y3…) Undermines teamwork (Survivor mentality) Disliked by employees Lawsuits (Microsoft, Ford, Goodyear, Conoco sued)
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Performance Evaluation What are the advantages and
disadvantages of forced ranking performance evaluation systems? What does the research literature say? Who in the class has experience with forced
ranking systems? What are the benefits of forced ranking
systems? Why are they used in your company or others’
companies? What are the costs of forced ranking
systems? Why aren’t they used in your company or
others’ companies?
See Stewart, Gruys, and Storm (2010) review, posted on website
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Variable Pay How well do variable pay (bonus)
systems work? What does the research literature say? Who in the class has experience with bonus
plans? What are the benefits of variable pay?
Why are they used in your company or others’ companies?
What are the costs of variable pay? Why aren’t they used in your company or
others’ companies? How does variable pay
encourage/discourage risk-taking?
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Variable Pay Unions generally oppose variable (performance-
based) pay Literature: Variable pay plans are effective Merit pay is most common variable pay plan BUT, is merit pay the most effective method VP
plan? Bonus Gainsharing Profit-sharing Stock (executive compensation is a different issue) Do these work equally well?
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Variable Pay
Moneta
ry In
cent
ives
Goal S
ettin
g
Job En
richm
ent
Parti
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on0%5%
10%15%20%25%30%
30%16% 9%
1%
Perc
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se in
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ce
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Variable Pay
0%20%40%60%
48.8
0%
40.7
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50.3
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43.7
0%
Increases in Productivity Following Incentive Implementation
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Variable Pay What is the problem with merit pay?
Given accrual over time, dollar increases may reflect seniority as much as recent performance
Bonus plans are underutilized and effective Literature on gainsharing is mixed Literature on profit-sharing and stock
options is not particularly positive Any of these plans are better than no
variable pay plan and each has merits
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Variable Pay How well do variable pay (bonus)
systems work? What does the research literature say? Who in the class has experience with bonus
plans? What are the benefits of variable pay?
Why are they used in your company or others’ companies?
What are the costs of variable pay? Why aren’t they used in your company or
others’ companies? How does variable pay
encourage/discourage risk-taking?
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Generational Values Differences
Do values really differ across generations? What does your experience suggest? What does the research literature say? What are the implications for managing? Are there other age-based differences that
are important to managing and leading?
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Generational Values Differences Boomers: 1943-1961 Gen X: 1961-1981 Gen Y: 1982-1999 (Millennials) The data analyzed here suggest that the
popular view of Millennials as more caring, community oriented, and politically engaged than previous generations is largely incorrect
There are increases in individualistic traits and declines in civic engagement over time
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Generational Values Differences
ExtrinsicIntrinsic Status Altruism Social Freedom2.50
3.00
3.50
4.00
4.50
5.00
BoomersGen XGen Y
Extrinsic job security, salary Altruism making a contribution to societyIntrinsic intellectual simulation, challenge Social good relationships with othersStatus influence, recognition, advancement Freedom work-life balance, working hours
Source: Cennamo & Gardner (2008)
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Generational Values Differences
Finding purpose and meaning in my life
Being a leader in my community
Being able to find steady work
Having strong friendships
Having a good marriage and family life
Having lots of money
Working to correct social/economic inequalities
Discovering new ways to experience things
Being successful in my line of work
0.00 0.20 0.40 0.60 0.80 1.00Gen Y Gen X Boomers
Source: Twenge et al. (2012)
Note: Individuals weresurveyed whenin high school
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Generational Values Differences
Source: Jin & Rounds (2011)
Change for Work Values across AgesChange for Work Values across Generations
Although work values evidenced small changes in rank-order stability, showing that individuals generally maintained their positions within a group across the life span, the results of mean-level change showed that for the whole population, the levels of importance attached to different work values underwent fairly dramatic increases or decreases at different age periods.
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Generational Values Differences Do values really differ across
generations? What does your experience suggest? What does the research literature say? What are the implications for managing? Are there other age-based differences that
are important to managing and leading?
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Managing Derailing Employees What does the term derailed/derailing
mean? What percentage of your employees are
derailed/derailing? How do you manage these employees?
In your experience, can it be fixed? How? What else is there to be done? What does the research literature say about
performance management for derailing employees?
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Managing Derailing Employees One of biggest problems with derailing
employees is distorted self-perceptions
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Managing Derailing Employees
Clarification of Goals and ObjectivesUpward Communication
Orderly Work PlanningOrganizational Expertise
Facilitating the Work of OthersPerformance Feedback
Time EmphasisControl of Details
Goal PressureDelegation/Permissiveness
Recognition for Good Performance
-0.5 -0.25 0 0.25 0.5 0.75 1
High potential managers Derailing managersSource: Shipper & Dillard (2000)
Notes: Sample=1,035 middle managersRating scale: 1=extremely low extent; 7=extremely high extent
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Managing Derailing Employees What does the term derailed/derailing
mean? What percent of your employees are
derailed/derailing? How do you manage these employees?
In your experience, can it be fixed? How? What else is there to be done? What does the research literature say about
performance management for derailing employees?
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Essential Management Skills What management skills matter most?
AKA: Management competencies, social skills, interpersonal skills
What does the research literature say about performance management for derailing employees? Surprisingly little data on this issue! However, several themes: FHIP
Feedback High standards/goals Ideas/insights Planning
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PerformancePotential
Predictors of current job performance anddesignation of high potential of 1,100managers in 21 countries
Source: Spreitzer, McCall, & Mahoney
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Essential Management Skills
Clarification of Goals and ObjectivesUpward Communication
Orderly Work PlanningOrganizational Expertise
Facilitating the Work of OthersPerformance Feedback
Time EmphasisControl of Details
Goal PressureDelegation/Permissiveness
Recognition for Good Performance
2.5 3 3.5 4 4.5 5
High potential managers Derailing managersSource: Shipper & Dillard (2000)
Notes: Sample=1,035 middle managersRating scale: 1=extremely low extent; 7=extremely high extent
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Essential Management Skills
Clarification of Goals and Objectives
Orderly Work Planning
Facilitating the Work of Others
Time Emphasis
Goal Pressure
Recognition for Good Performance
0 0.25 0.5 0.75 1
Difference Between High Potential and Derailing Managers
Source: Shipper & Dillard (2000)
Performance feedback Ability to provide immediate guidance on the accomplishment of goalsOrderly Work Planning Ability to organize work flowClarification of Goals/Objectives Ability to communicate what needs to be accomplished and why
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Essential Management Skills What management skills matter most?
AKA: Management competencies, social skills, interpersonal skills
What does the research literature say about performance management for derailing employees? Surprisingly little data on this issue! However, several themes: FHIP
Feedback High standards/goals Ideas/insights Planning
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Team-Based Leadership How team-based is the work in your
organization? _____ Total (nearly everything is done in teams) _____ Extensive (most work products are produced by teams) _____ Occasional (some work in teams, some independent) _____ Little (most independent ‘free agents’) Does effective leadership vary based on your answer
to above question? Why or why not? What does the research literature say?
Just how pervasive is teamwork in organizations? Do models of effective leadership differ for team contexts?
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IT’S BEEN A PLEASUREAND AN HONOR:
KEEP IN TOUCH!
EMBA 60616 September 28, 2012