Bridge Knowle "YEAR END PERFORMANCE APPRAISAL" Workshop
November, KL
• Know the Importance of planning, preparing, and structuring the performance appraisal
• Learn how to listen, question and give clear and specific feedback
• Handle performance problems and sensitive issues effectively
• Review performance objectives so you can provide specific feedback describing the gap between expected and actual performance
• Avoid common pitfalls when conducting the appraisal
• Create Individual Development Plans with your staff
• Monitor and review progress of objectives and development plans between review meetings
• Develop your feedback skills to motivate staff between appraisal meetings
17. What’s In Between Planning and Execution? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model
18. What is the OBJECTIVE? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning BSC and KPIs Strategy Business Model Business Strategy Execution Talent Management
40. What is Performance Appraisal used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.my www.OOBEY.com No wonder our employees are confused!
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42. What is the OBJECTIVE? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model Business Plan Implementation Talent Management www.myCNI.com.my www.OOBEY.com
43. What is Performance Measurement used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.my www.OOBEY.com
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45. Which system should we use? Behavior-based Knowledge/Skill based Results-based Trait-based Managing Performance = Managing Expectations What’s YOUR expectation? Activity based Refer: Which Performance Management System should we use?
57. District Engineer, TNB Duties and Responsibilities If stated as Accountabilities then the job must produce : Control, operate and maintain the District Distribution System Ensure uninterrupted supply to consumers in the district by operating the District Distribution System. Manage major supply projects to customers in the district. Ensure satisfaction of the major customers in the district by managing supply and Distribution. Supervise all technical staff in the district. Ensure high performance and Productivity of technical staff by adopting proper human resource management methods on selection, training, coaching, counselling and motivation. Plan and design the High voltage system Ensure availability of adequate supply for future needs of industries in the district by planning and designing the High voltage System
66. Cause and Effect Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Competencies Information Systems Motivation, empowerment, alignment Satisfaction
67. Cause and Effect: An Example Financial Learning & Growth Internal Process Customers / Distributors Revenue Growth Productivity Market Value Department Operations Supplier & Alliances External Involvement Target Markets Products/ Services Channel Strategies Human Resources Technology Information & Intelligence Systems & Processes
68. Example: 1 st Level BSC & KPIs Financial Learning & Growth Internal Process Customers / Distributors Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow Customer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. Distributor Rank Achievement. No. of Active Distributor. No. DC/Regional Sales. Distributor with commission Customer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Sponsoring Program. On Time Delivery. No. of Effective Training. Number of Effective A&P % of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to strategic information. Q12 Index. % staff evaluated on Culture alignment
73. Cause & Effect: Strategy Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” Internal Process “ To satisfy our customers, in which internal business processes must we excel?" Customer “ Who are our target customers? What is our value proposition?” Learning & Growth “ What capabilities and tools do our employees require to help them execute our strategy?
74. Top Performers and the ‘No Contribution’ Problem Historical, Outcome, Results, 1 st Level, Usually Financial or tangible, Quarterly and Annually Current, Indicators, Drivers, 2 nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly Lagging Leading
75. Developing ‘Driver’ KPIs Customer Retention % Lagging, 1 st Level Customer Satisfaction Index Leading, 2 nd Level On time delivery Time to market for new products TNA % Defect levels, warranty claims Leading, 3 rd Level onwards
83. MBO Standards A Excellent B Good C Average Good D Poor E Useless
84. MBO Standards A Excellent Excellent B Good Very Good C Average Good D Poor Not Good E Useless Commit Suicide
85. MBO Standards Refer: Priority, Targets and Standards A Excellent Consistently achieved 4 for 3 quarters B Very Good Higher than planned results C Good Achieved Planned Results D Not Good Did not fully meet planned results E Commit Suicide Unacceptable performance
88. E3 – Department BSC Financial Perspective Goals Measures Targets CAPEX OPEX Quality Innovation On Time Delivery
89. Individual Performance 1.0 Key Results Area (Max 6) 2.0 Goals and Targets for Q1 3.0 Achievements and Efforts for Q1 4.0 Merit* 5.0 Rating (Merit x Weight) 6.0 Appraiser Overall Comments/ Feedback
90. Cascading Customer Perspective Goals Strategies Targets Direct Indirect Base Retention Mkt Share Gain Mkt New Business BD
91. E3 – Department BSC Customer Perspective – Marketing Department Budgeting Goals Strategies Targets CAPEX OPEX Base Retention Share Gain
92. Individual MBO Employee A – Marketing Executive Re: Base Retention KRAs Action Plans Targets Weight (%) Score Class A Customer Retention Class B Customer Retention Competition Crossovers
104. Competency Standards 3 Meets behavioral standards consistently . Is a good role model for others. 2 Meets behavioral standards some of the time. Needs improvement. 1 Does not meet behavioral standards. Require counseling or disciplinary actions.
175. The Motive Profile shown below has been constructed using a non-conscious response instrument (Picture Story Exercise - McClelland) The typical superior performing manager profile: Person Job Person High Med Low Ach Aff Pow
176. Profile Mismatches Mentoring, coaching and counselling helps people consciously develop job related responses. M L M L Engineer in Managerial job Ach Aff Pow H M L Teacher in Managerial Job Ach Aff Pow H M L Ach Aff Pow Managerial job H Ach Aff Pow Engineer H
211. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
212. Strategy: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
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215. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution)
216. Alignment & Consistency Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) HP well-balanced portfolio, mass customization Acer super lean cost structure, aggressive pricing Apple powerful products, premium pricing, limited range Still Doing well in 2009/2010
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220. Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/
Notes de l'éditeur
Example of successful customer loyalty strategy focusing on Operational Excellence and Product Leadership while maintaining market standard on Customer Service without indulging in it
Many people go around setting up PMS without clear understanding of Business Directions… (sometimes its hidden from lower management & consultants)… End up HR and FAC getting beat up by Management by now implementing PMS ‘properly’ Sometimes the Business itself is unclear, in this case, do not put in a PMS – it will worsen the situation.
Exercise: Complaints about Performance Appraisals Group them into Root Causes – Process, Form, People
*No Linkage – cannot see how their performance matters to higher order results
*Especially with a 5 or 10 pt rating scale
*This will cause the “I lower your score because we do not have budget” problem
Refer to Handout 5: 1. Coaching Self Assessment – to determine the core Coaching Skills required to properly manage performance
Performance Management System is first and foremost a ‘SYSTEM’ – meaning we have Input, Process and a predictable Output Firstly. Performance means ‘Results’. Business Performance = Business Results. If your PM System is merely to reward/punish employees, you are missing the point If your PM System does no provide a predictable Output (i.e. Results), it is not a system Secondly, everything within the system must be Controllable – no excuse if performance does not happen. This means that Cause-and-Effect principles must be built into the PM System
PMS does not equate to Performance Evaluation process entire eco-system to ensure performance PMS = Business Plan Implementation system The PM System is the only process in any organization to execute the Business Strategy. There are no other process or system that can do that. Treat it with care Why? PM System is the only thing that can link Business Strategy with the People executing it Secondly… without a strong PMS, we cannot Differentiate employees properly. If we cannot Differentiate, we cannot define and manage Talent. Link between PMS/TM/Succession Planning? Business Continuity = perpetual business performance (in Asia = Legacy) Can only be done if the right Talents are in place (bench strength) Making sure the right Talents are spotted = PMS
So… are we in business for Retention or Performance?
Moral 2: Never forget that the goal of business is BUSINESS, not PERFORMANCE management or BSC! Do not just buy a book on ‘best practice KPIs’ and start implementing them. Understand the ‘real’ business first. E.g.
*Strategy means concentrating all energy and all aspects of the organization for the purpose of Talent Management. In fact, it’s a mistake to call it “Talent Management” program. Very un-business like So… let’s call it “ Business Continuity Plan ” or “ Business Opportunity Planning ”?
Performance The ability of a person to meet current expectations Key Words: Results, Targets, KPIs, Achievement, Expectations, Training, Job Concentrates on the Past i.e. what the person has done Potential The capacity of a person to meet future expectations Key Words: Competencies, Learning, Fit, Adversity, Failure rate, Development, Career Concentrates of the Future
Group 1: High Potential, High Performance (Talent) Staff this category will automatically be placed in the company’s Succession Plans. Be the first priority to be considered for any promotions or upgrading exercises. Career Acceleration + Specialist Career Paths. Group 2: Average Potential, High Performance (Leadership Issues) Leadership, motivational and cultural development would be given to these staff while they perform in their current positions. Group 3: High Potential, Average Performance (Potential) Should not be given career advancement unless performance improves. Good targets for transfers or job rotations to departments that require urgent manpower. Group 4: Average Potential, Low Performance (Issues) Staff in this group should be monitored closely by HR. They should be eventually moved out of their current work function, department or even the company entirely.
Exercise: What is Performance Appraisal GENERALLY used for? What does your company use it for?
Refer to Handout and Exercise : 1. Which Performance Management System should we use.doc Managing expectations = e.g. from Finance Department and Credit Control
Resources happen to be ONE part of the alignment process in an organization. Resource allocation will very much depend on the other variables illustrated here. Resources must follow the Business Model: USP, Profit Model, Market Discipline
CNI:
Resources happen to be ONE part of the alignment process in an organization. Resource allocation will very much depend on the other variables illustrated here.
BSC (Balanced Scorecard) is one of the PMS we can use. Whatever makes sense for your company. Remember: Usually we should not adopt the entire system. Adapt the key features for your company.
Note: This is the Year 2004 version of CNI’s BSC. This was done AFTER we have determined the correct Market Discipline and the ‘real’ business
This is mostly for ‘Business’ entities. For Government and Non-Profits , the starting point would be ‘Mission’ -> Customer, followed by Financial & Internal Processes, then L&G. Why did we choose BSC as a guideline? Cause and Effect (easier to influence longer-term results) Balanced (short- and long-term views, outside the Sales & Marketing mindset)
Example: What do you mean by Good? A, B, or C? Achieve 5 tasks, what is your rating? You mean if I achieve all, I only get AVERAGE? You must be crazy
This looks better for the ‘achieved all’ category But… the ratings still look ambiguous, right?
This looks better for the ‘achieved all’ category But… the ratings still look ambiguous, right?
Example: Define ‘Initiative’ How do rate Initiative on a 10-pt scale?
Example: Define ‘Initiative’ How do rate Initiative on a 10-pt scale? Exercise: Determine 1 core Competency/Values you want to evaluate Create a list of 5 ‘observable’ behaviors of that competency
Refer to Handout 5: 1. Coaching Self Assessment – to determine the core Coaching Skills required to properly manage performance
Three Steps to Assertive Communication: 1. Describe the situation or idea as clearly and specifically as you can. 2. Express how you feel about the situation. (Note: Use "I" or "My" statements to refer to how you are feeling and what you are thinking.) 3. Specify what you want. Include a specific deadline.
Active Listening Techniques 1 Attending: using non-verbal indicators such as leaning forward, nodding your head, sitting in an open, receptive posture 2) Paraphrasing: repeating in your own words what the other person has said; the restatement should not judge in any way 3) Speaking from the self: using "I" statements, rather than speaking for others (we all think) or speaking in the passive tense. Do not make assumptions about others, their opinions, and feelings. 4) Clarifying: asking for further clarification or an example to illustrate often helps find clarity in the meaning. 5) Asking: probing questions; identify and explore options and alternatives e.g., use probes - short, open questions to dig deeper into issues. May be non-verbal such as a look that asks "Then what/ How?” Silence can be used to encourage the speaker to continue. 6) Encouraging: asking person to “tell me more about” or give them a supportive comment like “good idea” or “I like that approach”. 7) Reflecting: playing back the communication as you hear and feel it, e.g., “you seem to feel very strongly about that” 8) Summarizing : giving back a review or summary of what you heard. This helps make sure the communication is
Refer to Handout 2: Beating a Dead Horse Moral: If a staff is not performing, make sure you know what you doing to correct the situation
Refer Handout 3 : Mager and Pipe Diagram It is easy to measure non-performance. It is very difficult to correct it. This depends on the PMS you are using. The Root Cause for non-performance can be MANY. Be sure that you are attacking the right one. A good performance management system should be able to measure and manage all the possible root causes. <refer Handout 7: Performance Management Worksheet >
PEOPLE is only one part to get Performance. We focus it here, but have to note of the rest. This is also another reason why TRAINING and INCENTIVES (the two most popular methods, do not work)
Group 1: High Potential, High Performance (Talent) Staff this category will automatically be placed in the company’s Succession Plans. Be the first priority to be considered for any promotions or upgrading exercises. Career Acceleration + Specialist Career Paths. Group 2: Average Potential, High Performance (Leadership Issues) Leadership, motivational and cultural development would be given to these staff while they perform in their current positions. Group 3: High Potential, Average Performance (Potential) Should not be given career advancement unless performance improves. Good targets for transfers or job rotations to departments that require urgent manpower. Group 4: Average Potential, Low Performance (Issues) Staff in this group should be monitored closely by HR. They should be eventually moved out of their current work function, department or even the company entirely.
The Business Model is made up of three components – Unique Selling Proposition, Profit Model and Market Discispline Each business is unique depending on how the Business Model is configured Each organization’s PMS has to follow the Business Model If your Business Model is wrong (or inferior), a better PMS cannot help you. Change your Business Model first Example: Google vs Yahoo USP – Simplicity, Search-focused, Free! Profit Model – Ad revenue MKt Discipline – Operational Excellence Example: Tata Nano vs. GM (Proton vs. Kia, Hyundai, Cherry) USP – Cheap (below USD2,500), no-frills Profit Model – Motorcycle (as opposed to Automobile manufacturing model)
How does the Customer define “Great Experience”? - It depends on their own perceptions. Problem is…this differs depending on the Customer! If you are very good in something that the Customer does not value, it will not improve the Experience. Example: Air Asia vs. Malaysia Airlines (or Ryanair vs. Luthansa) USP – Budget Profit Model – Lowest Cost, Maximum Seats Mkt Discipline – Operational Excellence
To Excel – Must be a Leader in ONE of the disciplines but the other two must be at least at industry standard
A leading business organization can only afford to focus on ONE, at the most TWO of the disciplines If you try to accomplish all three at once, you will end up with: an average business confused employees mixed up product lines too many KPIs wasted funds To Excel – Must be a Leader in ONE of the disciplines but the other two must be at least at industry standard
To Excel – Must be a Leader in ONE of the disciplines but the other two must be at least at industry standard