1. THE FUTURE OF PERFORMANCE MANAGEMENT IN
AN ERA OF UNCERTAINTY
March 27, 2012
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2. About American Airlines
Our People
– ~ 70,000 employees
– ~ 60,000 non-management
– ~ 10,000 management/specialist
Our Company
– Based in Fort Worth, Texas
– Founded 80+ years ago
– Over $22 Billion in annual revenue
– Serve 260 airports in more than 50 countries
– 3,300+ daily flights using a combined fleet of more 900+
aircraft
– Founding member of the oneworld® alliance
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3. Times Are Changing …
1930s AA Ad 2000s AA Ad
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4. Change …
Times are changing … not only for American Airlines, but also for
business, and for talent.
To quote Gary Hamel, from his 2007 book, The Future of
Management :
Over the coming decades, an accelerating pace of change will test the resilience
of every society, organization and individual. Luckily, perturbations create
opportunities as well as challenges. But the balance of promise and peril
confronting any particular organization will depend on its capacity for
adaptation. Hence the most important question for any company is this:
Are we changing as fast as the world around us?
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5. Performance Management @ AA
AA’s performance management basics:
• Process has been around for decades
• Evolved from a paper-based system to online format
• Annual appraisals, ongoing feedback
• Focus is on development, not merely the appraisal
• Currently use Success Factors
• Coverage for all management, specialists and support staff (front line performance handled separately)
• Approximately 11,500 participants in the process
• 11 leadership competencies – 6 business and 5 people competencies
• Development planning tool w/tie-in to LMS
• Employee biography
But our performance management system and tools pale in importance to the core of
performance management at AA – leaders who provide clear, ongoing, high quality feedback.
No easy task …
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6. Talent Management Cycle @ AA
Complete
Performance Management
Conduct Talent
Reviews
 Assessment
 Identify Top
Talent/Emerging
Talent Commit to
 Calibration
 1-N List  Discuss Top Talent / Strategic Development
 Adverse Impact Emerging Talent
Analysis  Critical Positions
 Appraisal
Discussion  Retention Concerns
 9-Box Matrix  Competency Execute
 Successors Development/Training Succession Plans
 Development Plans  360 Degree Feedback
 Targeted Coaching
 Mentoring
 Relationship Growth/  Maintain Successor Lists
Exposure  Promote to Plan
 Strategic Assignments  Monitor & Adjust
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7. TALENT REVIEW PROCESS
• Leaders “present” their employees to the next level
• Leverage employee biographies
• They share:
– Name/Position
– Performance Score
– Readiness Assessment
– Development Recommendations
– Successors Possibilities
– Critical Positions If Applicable
– Retention Concerns
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8. Talent Readiness
• Leaders assess their employees’ readiness to
assume higher level positions by considering the
performance score and employee’s ability,
aspiration and engagement to assume higher level
or critical positions.
Aspiration
•TOP OR EMERGING TALENT
possess the
•ability,
•aspiration, and 29%
•engagement
Ability Engagement
to rise to and succeed in
more senior, critical positions.
(See next slide for details)
• Typically only 29% of top performers meet
this criteria
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9. Assessment Criteria
A combination of the innate characteristics and learned skills
that employees use to carry out their day-to-day work.
ABILITY Innate Characteristics
• Mental/cognitive agility • Emotional intelligence
Learned Skills
• Technical/functional skills • Interpersonal skills
The extent to which an employee wants or desires the following:
• Prestige and recognition in the organization
• Advancement and influence
ASPIRATION • Financial rewards
• Work–life balance (May or may not be present in higher level job)
• Overall job enjoyment
Engagement consists of four elements:
• Emotional Commitment - The extent to which employees value, enjoy,
and believe in their organizations
ENGAGEMENT • Rational Commitment - The extent to which employees believe that
staying with their organizations is in their self-interest
• Discretionary Effort - Employee willingness to go “above and beyond”
the call of duty
• Intent to Stay - Employee desire to stay with the organization
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10. First, A Little About Performance
Management @ AA
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11. A Work in Progress …
We provide myriad resources to AA leaders regarding performance management
and we spend countless hours consulting and coaching our leaders on the same
Our “system” works well, and we meet our goals in terms of leaders completing
their appraisals and having performance discussions with their people
Something was lacking …
Specifically, many of our leaders and their people found performance management
neither rewarding nor useful.
The culprit was the performance discussion leaders had with their people every
year
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12. It’s All About The Discussion
Some of our leaders did a great job holding discussions with their people
• The “annual appraisal discussion” was the culmination of ongoing feedback throughout the
prior year
• It was, for these leaders, a capstone discussion
• So their people were rarely surprised with their ratings, readiness, or development areas
• And their people appreciated the process and benefited from it
But not our leaders all did such
So the task became how do we get traction with a broader set of leaders
in holding high quality discussions throughout the year and at year’s end?
We’re not there yet, but the answer is in driving better discussions with
our people …
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13. 5 Elements To Consider in
Performance Discussions
1. In a time of uncertainty, assess criticality in
performance management
2. Bridge performance discussions with a
discussion of potential and leverage talent
review insight
3. Good leaders always provide feedback
4. Have your leaders discuss “Keep, stop, &
start”
5. Deadlines, reminders and targets are not a
bother; they really matter
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14. 1. Assessing Criticality
"Criticality" considers such questions as:
• Who has unique specialized skills or knowledge of procedures,
processes, or systems that your organization cannot do without?
• Who, because of a combination of their skills and knowledge, their
work performance, their ability to achieve results, and their dedication,
do you consider to be indispensable to the success of your
organization?
• Who has critical relationships or a network that cannot be replaced or
replicated?
Note: Very few people/jobs will be in this category
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15. … assessing criticality
• You have to be realistic in the analysis – who is
really critical and who is not?
• Think about the business objectives – who helps
your business accomplish its goals?
• Criticality is not shared in the discussion, but it
should be the primary consideration in the
leader’s mind
• That said, if someone is critical, you need to be in
“sell mode” … keep them here!
• If someone is not critical, do not oversell
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16. 2. The Bridge To Potential
• Bridge performance discussions with a discussion
of potential and leverage talent review insight
• The discussion is not all about performance;
instead it’s also about potential
– For higher positions
– For different lateral positions
• This is a discussion point … but be careful
– Must make it clear that the employee is valued and
has high potential
– But not set up unrealistic expectations
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17. 3. Good Leaders … Give Feedback
• Don’t assume that all your leaders do not or
cannot provide feedback in the “prescribed way”
• You probably have many leaders who are doing
just what “HR Intends”
– Watch how they provide feedback … they are best
practices right in your own backyard!
– So, identify these leaders and laud them
• Give leaders guidance on how to give feedback
• More on this, next …
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18. 4. Keep, Stop, Start
• Effective performance discussions between
leaders and their employees help create a
workplace that values individual efforts, develops
team members and fosters effective working
relationships
• It's a two-way conversation
• An approach we encourage at AA is for leaders to
use a simple framework:
– Keep
– Stop
– Start
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19. Keep …
Goal: • Describe and discuss positive behaviors, actions and
skills
For • Let him or her know you value their efforts
• Encourage him or her to continue their good work
Managers:
For • Share successes
• Examine how they were achieved
Employees: • Identify what support you need to continue success
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20. Stop …
Goal: • Talk about behaviors or actions to avoid or
improve
• Provide real examples of what you observed and
talked about during past year
For • Share specific actions negatively affecting the
individual's work, customers, team dynamics,
managers: etc.
• Use Crucial Conversations to help discussions
For • Openly discuss the obstacles you encounter in
your work
• Work with manager to formulate a plan to
employees: overcome these hurdles
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21. Start …
• List new behaviors to boost performance and
Goal: career growth; map a course to achieve them
• Be specific and mentor
For • Share your knowledge, network and resources
managers: • Help team members achieve successful
outcomes
• Be open to feedback
For • Ask questions, seek information and gain
understanding
employees: • Create Development Plan
• Take action
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22. 5. Deadlines Matter
• Leaders owe it to their employees to have an
open, honest, and timely feedback session
• Ensuring those discussions are timely means
there must be a schedule that is taken seriously
• In other words, deadlines do matter, especially to
those on the receiving end of the discussion
• Ensuring leaders meet those deadline, however,
does not mean that we should behave like the
“HR Police” in enforcing such
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23. Consistency
• Finally, a word about consistency of
discussions across managers …
• Make the most of calibration / talent review
sessions
• The talent review / calibration meeting among
leaders that will inform and enhance the
performance discussions with employees
– To ensure people are rated in a consistent way
– To vet possible discussion points with individuals
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24. Thank You!
Questions?
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25. Strategic Performance & Change Management Conference
November 13-15, 2012 in New Orleans, LA
View the Strategic Performance
& Change Management program
here: http://tinyurl.com/8wxywgc
If you would like to receive the free IQPC brochure
directly email taryn.soltysiak@iqpc.com