strategic planning and measurement where are you going? how do you know you’re there?

Strategic Planning and Measurement

Where are you going?How do you know you’re there?

2

Introduction

Housekeeping items–Restroom locations–Breaks–Lunch–Cell phone use

– Questions welcome– Balance between

content and sharing – “Parking lot” for

ideas

Introduction

• Name

• Organization

• One concept from Course I that you did or will apply

Introduction

Learning Objectives:– Assess current recognition initiatives– Align recognition strategies to business

objectives and culture– Identify goals to support plan– Create baseline measurements– Measure and track plan– Link Best Practices to future plan

Introduction

CRP Background– One of four certification courses– Facilitator led– Pass exam– Set common standards– Acquire skills and knowledge

Introduction

Agenda (2 breaks & lunch)

– Setting the Stage– Assessment– Strategy– Implementation– Review– Summary– Testing

Introduction

Materials:– Models, – Worksheets,– Best Practices examples,– Article excerpts,– Progress Checks,– Reference and resource suggestions, and– Course evaluation (start NOW)

Setting the Stage

Section Learning Objectives– Distinguish between incentives, awards, rewards,

and recognition– List the five key Recognition Strategy components– Describe how recognition contributes to Unique

People Practices– Describe how recognition fits into a Total Rewards

structure– Identify how recognition can reduce turnover

Setting the Stage

NAER Definitions1. _________ Item to commemorate specified achievement

(Non-$)

2. _________ Item for meeting pre-determined goal (Sometimes $)

3. _________ After-the-fact appreciation for desired behavior, effort, result that supports goals and values

4. _________ Contingent reward based on achievement of pre-determined results within specific time.

Setting the Stage

Descriptor Answers1. Informal

2. Formal

3. Day-to-day

Setting the Stage

• Best Practices Standards Provide Guidance

• Give us a benchmark to strive for

• Can be used to improve current programs

Setting the Stage

Recognition Strategy Components– Link strategy to vision, mission, values– Provide 3-dimensional approach– Document procedures– Define objectives– Build in continuous improvement

A systematic plan to reach a desired future outcome

Setting the Stage

Strategic Alignment

Setting the Stage

Cascading Linkages:– Companywide– Business unit– Site/location– Functional– Departmental

Setting the Stage

Concepts from SRPS– Job satisfaction– Pay and promotion– Trust– Maslow

• Recruiting, hiring and orientation• Development and learning• Work environment• Rewards and recognition• Health and well being• Work/life programs• Financial security• Organizational structure• Unique people practices

Setting the Stage

Unique people practices

•Flexible work schedules•Family oriented work environments•Employee involvement teams•Special employee celebrations•Recognition bonuses•Concierge services •Weekend retreats•All expense paid trips•Point systems redeemable for awards, prizes, etc.

Setting the Stage

Setting the Stage

Reprinted by permission WorldatWork©2006

Setting the Stage

Total Rewards Context– Recognition is one aspect of Total

Rewards– Separate from compensation (bonuses)– Separate from benefits

Maslow’s Traditional Pyramid

Physiological

Safety

Organizational Pyramid

Social

Esteem

Self-Actualization

Acceptance and Involvement

Recognition

Advancement and Growth

Location and Working Conditions

Compensationand Benefits

Setting the Stage

Activity– Write the corresponding Total Rewards

letter(s) to the right of the organizational pyramid.

– There may be more than one letter per level

Setting the Stage

Push Factors• Low Salary• Inadequate benefits• Job insecurity• Convenience• Immediate manager

• Better future picture• Family issues• Desire different location• Former manager “nabs”• Offer can’t refuse

Pull Factors

Setting the Stage

Turnover is EXPENSIVE– Direct– Indirect– From 50% + of annual wage/salary

Between $25,000 - $37,500

for $50,000 salary

Setting the Stage

Summary– Turnover– Productivity and Profitability–

–

– Retain top performers

Setting the Stage

Progress Check– See what YOU think is important!– Assigned pages by group– Come up with 1 question– Be ready to present question to rest of

group

Assessment and Strategy

Section Learning Objectives– Conduct an initial inventory– Align to goals and culture– Name four SWOT quadrants– Identify benchmarking strategy


Four Strategic Planning Phases

Simplified chart


Assessment Where we are (Current State, Baseline)

Strategy

Implementation

Review


Assessment ConsiderationsPrograms?

• Name as many as you can in left-hand column

Type?• Incentives or recognition?

Dimension• Day-to-day, informal, formal?

Include?• Seven Best Practices Standards• Objectives in alignment• Feedback


Current State Inventory - Worksheet

Activity – pages 21-23 (overall sheet)– Check and tally for each Component

• Type• Dimension• Standards• Feedback


Results?– What’s the mix?– What are you over using?– What’s missing?– What will stay/go?

Strengths Weaknesses

Opportunities Threats



SWOT Analysis– Strengths (what keep)– Weaknesses (what eliminate/revise)– Opportunities (enhance, fill gap)– Threats (what’s getting in the way)


SWOT in a Nutshell– Be realistic– Distinguish between today and future– Specific– Short and simple

Subjective


Exercise– Review your Current State organizational

worksheet– Transfer 2-3 conclusions for each part of

the SWOT diagram


Benchmarking – Assessment– If want to enhance, create, develop a

benchmarking strategy– Within, external, best practices– Identify goals

www.recognition.org

http://www.recognition.org/


Benchmarking Considerations– Resources – process analysis, research, change

management– Discovery phase

• Data collection plan• List• Tracking plan• Gap analysis• Final Report• Recommendations


Benchmarking Considerations (cont.)

KIND COOP RELEV BRKTH

Internal H H L

Ext. – Competitive L H M

Ext. – Industry M M H

Ext. – Generic M L H

Combined M M VH


Possible metrics– External

• National nurse turnover = 18%• Industry-wide turnover = 15%• Job satisfaction norm from NEED TO CHECK• Retirement award cost = $500

– Internal• Turnover by department or function• Employee satisfaction• Participation rate• Attendance


Best Practices White Paper– Read the excerpt– Notations about

• Kind of recognition• 3 Dimensions• Other


Assessment to Strategy

insert model


ExerciseBased on the Westfield Group excerpt, draw some conclusions about their Desired State:

1.

2.

3.


Westfield Group Strategy:– Recognize those who exemplify core

competencies– Program features:

• Flexible and fast• Easy administration• Real-time tracking and reporting• On-line budget management and training• Easy entry• Easy award selection


Exercise– Review your Current State organizational

worksheet and SWOT– Map out your Desired State and possible

goals


Westfield Goals

Assessment– Negative Feedback– Paper-based– Unwieldy data– Prep time– Un-timely recognition

Strategy– Increase EE Sat.– Automated– On-line– Real-time– Reduced turnaround– Reduced subjectivity– Increase consistency– Tie to core competencies


Airline Goals

Assessment– No link to strategy– Manual process– Limited participation– Inconsistent application– Limited award choices

2000-2003 - $24M

Strategy– Linked to behaviors– Technology– Accessible system– Tailored programs– Multiple choices

$750K start-up – 2004

$1.1M + $300K - 2005


Budgeting• .005 - 3% of payroll* (1/2 of 1%)

• Amount per FTE ($100 - $150)**• Previous year’s budget• Benchmark• Other?

*NAER/World at Work Survey 2004**NAER Best Practice Applications


ANNUAL ON-THE-SPOT AWARDS

$0- 24 20%

$25-$49 13.8%

$50-$74 6.9%

$75-$99 6.2%

$100-$124 6.2%

$125+ 13.1%

No Budget 33.8%


FORMAL BUDGET

$50,000-$99,999 15.4%

$100,000-$249,999 16%

$250,000-$999,999 19.2%

$1 million + 14.7%


Benchmarking and BudgetingPossibilities:

– Service anniversary award costs– Service anniversary intervals– Average budget– Budget basis– Administrative costs– What else?


Checklist• Communications pieces• Technology upgrades• Training development and

delivery• Supplier administrative fees• Inventory costs• Administrative fees• Postage• Celebrations• Airfare

• Petty cash• Staff costs• Video production• Photo processing• Award purchases• Gift certificates• Printing costs• Decorations• Food• Office supplies• Tax Gross-up• Others?


Other Budgeting Considerations:– Use the previous year’s budget and add a

multiplier– Benchmark with other organizations your

size and/or within your industry– Benchmark internally with other business

units– Other?


Benchmarking AND Budgeting– Service anniversary award costs– Interval of service anniversaries– Average budget– How set budget– Internal vs. external administration– Administrative costs– Other?


Budgeting Checklist – Activity– Read through the items on page 41– Circle the items you don’t currently include– What other items could be added to this

list?


Progress Check

True or False1. The assessment phase begins with Current

State.

2. SWOT is comprehensive and objective.

3. Beneficial to tie to strategies.

Multiple Choice1. “O” in SWOT stands for:

2. Most critical budget consideration is:


Progress Check AnswersTrue or False

1. The assessment phase begins with Current State. = T

2. SWOT is comprehensive and objective. = F3. Beneficial to distinguish tie to strategies - T

Multiple Choice1. “O” in SWOT stands for: Opportunities2. Most critical budget consideration is: Support

Objectives

Strategy to Implementation

Section Learning Objectives– Name four evaluation levels– Determine baseline measurements– Measure and track– Select possible ROI criteria– Use scorecard approach


Until you start measuring . . .

everything else is just practice


Baseline Measurements

Strategy Baseline

Increase EE Satisfaction From ____% or ranking

Reduce turnaround From ____ to ____

Automate From what to what?


YOUR Baseline Ideas

Strategy Baseline

Increase From

Reduce From


Goals include– Measurement AND– Timeframe

S pecific

M easurable

A ction-oriented,

Attainable

R esults-oriented,

Realistic

T ime-based, trackable, tangible


Goals and Kirkpatrick’s Levels

LEVEL TITLE EXPLANATION1 Reaction How FEEL

2 Learning Increase in knowledge

3 Behavior Tools used

4 Results Impact on business

Implementation and Review

Exercise– On page 48, define some:

• Level 2 indicators• Level 3 indicators


Insert model here for focus


Now You’re Working the Plan!


Balanced Measurement

Systems

Financial Nonfinancial Customer-related In-process

Implementation to Review

Insert model here


Beginning Process – back to:– Strategy– Goals– Project plan– Milestones– Feedback– Other?


Balanced Scorecard OverviewFOCUS – what really matters (1-2 items)

VALIDITY – outcome-based, drive success

CONNECTIVITY – front-line alignment

INTEGRATION – performance and developmental integration


Scorecard– Step #1

• Strategic area for focus• Few objectives• Key indicators for connectivity & validity• Targets for measurements

– Step #2• Strategic area and targets• Track actuals and variance

Measurement


ROI

Power of Praise and Recognition – Gallup

– Increased Productivity– Increased engagement– More likely to stay– Higher loyalty and

satisfaction scores– Better safety records

Disengaged employees =– $250-300 billion

productivity loss– Injury, illness, turnover,

absences, fraud = $1 trillion

R O I

Return

Benefits

Program Results

Tracking Measurements

Investment

Costs

From Desired State

Program Plans/ Goals

Implied



Phillips ROI Methodology1. Reaction and Planned Action

2. Learning

3. Application and Implementation

4. Business Impact

5. Return on Investment


Calculating ROI1. Include ROI calculations in budget (3-5%)

2. Select projects (10%)

3. Intangibles important/hard to calculate

Net benefits

Program costs X 100


Formula– $750,000 savings– Subtract costs of $435,000 =– Net gain of $315,000– Net gain divided by costs, multiplied by 100

= ROI

What do you come up with?


Value Analysis Calculator for MDR Total Rewards Programs and Systems

Q1 Q2 Q3 Q4

BENEFITS

Increased revenue $0 $0 $0 $0

Increased productivity $0

Increased employee satisfaction $0 $0 $0 $0

Increased customer satisfaction $0 $0 $0 $0

Increased compliance - Processes $0 $0 $0 $0

Reduced costs - Operations $0

Reduced costs - Turnover $0 $0 $0 $0

Reduced costs - Other 0 0 0 0

Avoided costs - Manual Program Management 0 0 0 0

Quarterly total $0 $0 $0 $0

Cumulative value $0 $0 $0 $0

INVESTMENTS

One time investment - System Set Up

One time investment - Training

One time investment - Consulting Services - Program Design

One time investment - Program Launch Communications & Materials

One time investment - System Customization (if any)

Ongoing investment - System Licensing

Ongoing investment - Cost of Rewards

Ongoing investment - Customer Service


Cumulative investment $0 $0 $0 $0

NET VALUE


Cumulative total $0 $0 $0 $0

1st year net return $0

Breakeven point 1st Quarter

ROI (1st year) #DIV/0!

O.C. Tanner & Jackson Company Research Study

• Return On Equity

• Return On Assets

• Operating Margin

26,000 Employees Surveyed

Respondent answers tabulated with Corporate Performance Indicators

O.C. Tanner & Jackson Company Research Study Return on Equity

O.C. Tanner & Jackson Company Research Study Return on Assets

O.C. Tanner & Jackson Company Research Study Operating Margin


Best Practices White Paper– Read the excerpt– Notations about measurements


General Measurement Tools– Scorecard– Benchmarking– Progress reviews– Audits– Surveys– Feedback– Baldrige– 100 Best Companies


Progress CheckWrite Philips ROI Levels in OrderTrue or False

1. Balanced scorecard only part of the Review Phase2. ROI calculation-divide net benefits by costs and multiply

by 100.3. Connectivity important to balanced scorecard.

Multiple Choice1. “R” in ROI also stand for:2. NOT part of balanced scorecard


Progress CheckReaction, Learning, Application, Results, ROITrue or False

1. Balanced scorecard; Review Phase. = F2. ROI calculation-divide net benefits by costs and multiply

by 100. = T3. Connectivity important to balanced scorecard. = T

Multiple Choice1. “R” in ROI also stand for: A2. NOT part of balanced scorecard C

Summary

Four Phases1. Assessment

2. Strategy

3. Implementation

4. Review

Summary

Recognition Strategy– Linkage– 3-dimensional– Documented procedures– Documented objectives– Continuous Improvement

Summary

Program Measurement– Indicators or tools– Qualitative and quantitative– Documents participation– Documents satisfaction

Summary

Model

September 2006 2006 by the National Association for Employee Recognition

STRATEGIC PLANNING AND MEASUREMENT PROCESS

Pre-Program Level 1 In-Process Level 2, 3 <Post -Program Level 4>S

tate

Sta

teT

ask

sT

ask

sM

easu

res

Mea

sure

s

CURRENT STATE

KIND

BEST PRACTICE

STANDARDS

SWOT

FEEDBACK

BASELINE MEASURES

DESIRED STATE

GOALS

BENCHMARKING

BUDGET

“REALITY”

PROJECT PLAN

GOALS TIMELINE

INTERIM SCORECARD

FINAL SCORECARD

ROI

Summary

Review

Overall Summary