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Lauren Dixon Associate Editor Talent Management magazine

Reframing Performance Management Conversa6ons: AIGs Transforma6on

Story

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Julia Smith Global Head of People Excellence AIG

Reframing Performance Management Conversa6ons: AIGs Transforma6on

Story

Partnering for Success Inspiring Great Performance at AIG

Our Journey How we got here

The Details How it works

Volunteer Community How our employees are leading the change

10 10

Speaker

Julia Smith Head of People Excellence, AIG

11 11

Contents

Our Journey How we got here

Details How it works

Volunteer Community How our employees are leading the change

12 12

Global financial crisis AIG under tremendous public scrutiny Urgent need to demonstrate to shareholders that we could differentiate

performance

Implemented a Relative Performance Ranking (RPR) system

Our story begins

The Good The Bad The Ugly Demonstrated to our shareholders our ability to differentiate pay by performance In some cases, it was the first time an employee got honest feedback on their performance

Focus on paper & process Lack of manager ownership (HR made me do it)

Enabled bad behavior by only measuring the what Negative impact on employee moral

13 13

Began by listening to employees Conducted virtual focus groups ThinkTank.net Employees at every level Employees in every location

Employees shared ideas on how to make AIG a better place to work Inspired to do their best work Real time feedback and constructive coaching Transformative development opportunities

A deep belief that there was a better way

14 14

Researched practices at hundreds of companies What are you doing? Why are you doing that? How is it working out for you?

Worked closely with Danny Kahneman Nobel Prize Winning Behavioral Economist Outside HR

Took what we learned and conducted a mid-year pilot on over 3,000 leaders to test our ideas

And finally, we refined and implemented across our global population, at all levels of the organization

We wanted to learn from the best and find the right solution for AIG

15 15

Over 90% of employees said useful for performing better 86% said useful for improving relationship with their manager

The results

16 16

Our solution is grounded in research & neuroscience

Two Distinct Areas of the Brain

17 17

Concept is simple

How can we identify and shut down all of the triggers of fight or flight so that we can open the door to

trust and collaboration

18 18

Holistic view of employee Multiple perspectives:

Employee Self Review Upward Feedback Matrix Manager Review Direct Manager Review

Evaluate both the what and the how

High level overview

19 19

The What

Employees given total freedom to shine.

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The What

Three additional questions:

Employees encouraged to share their accomplishments outside of specific goals.

21 21

The What

The manager evaluates the employee on TWO things: 1. The employees performance on his/her own goals 2. If the employee contributed to the achievement of goals outside his/her

own area of responsibility

Recognizes that the most important things that we accomplish at AIG; we accomplish as teams

Reward collaboration. Discourage competition.

Identified 18 Behaviors that Matter at AIG

22

The How

able to anticipate problems able to get things done in the organization an effective leader applied the right level of detail articulate and clear collaborative and helpful energetic and engaged focused in stressful situations focused on what matters most

generous in sharing credit good at building relationships open to new ways of doing things reliable in meeting commitments respected by clients supportive of diversity the source of many good ideas thoughtful and decisive willing to admit mistakes

1. Frame in the positive 2. Use everyday language 3. Reinforce AIG values 4. Let evolve

23

The How

Extreme rating scales make decisions easy

Step 1: Rate

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The How

Three simple decisions are much easier than one hard one (rate, review, prioritize)

Step 2: Review

Step 3: Prioritize

25

Its All About The Conversation

Conversation guide is generated by system to lead both manager and employee through forward looking, constructive conversation. Available in advance so employee has time to absorb the feedback and is ready for a collaborative dialog.

26

Its All About The Conversation

Conversational excellence training for both managers and employees

27 27

Volunteer Community

1,200 (and growing)

Use grassroots to spread the message

28 28

Volunteer Community

Let employees (and not HR) tell the story

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