Measuring and improving Employee Performance 365 Days a
- Slides: 44
Measuring (and improving) Employee Performance 365 Days a Year Josh Bersin Principal Analyst & CEO Bersin & Associates Copyright © 2011 Bersin & Associates. All rights reserved. Eric Mosley CEO Globoforce
About Us § Bersin & Associates The leading research and advisory services firm focused on enterprise learning and talent management • More than 5, 000 clients worldwide, including 70 of the Fortune 100 • § Research Practices • • • Learning & Development Leadership Development Talent Management Talent Acquisition Strategic Human Resources § Offerings Comprehensive best-practice, trend, and vendor research • Benchmarking data and detailed case studies • Talent management and L&D training for HR and business leaders • Advisory services and consulting • Copyright © 2011 Bersin & Associates. All rights reserved. Page 2
Copyright © 2011 Bersin & Associates. All rights reserved. Page 3
About Globoforce Copyright © 2011 Bersin & Associates. All rights reserved. Page 4
Agenda § The Current State of Performance Management (PM) • Challenges • Evolution § Three Keys For Measuring Employee Performance 365 Days a Year • Goal Setting & Revising • Coaching • Recognizing and Rewarding § How Recognition and Rewards Make a Difference • Why now? • How modern R&R work • The impact on critical outcomes • Examples of how they work § Key Takeaways and Q&A Copyright © 2011 Bersin & Associates. All rights reserved. Page 5
Copyright © 2011 Bersin & Associates. All rights reserved. Page 6
The Wisdom of Crowds Copyright © 2011 Bersin & Associates. All rights reserved. Page 7
What is Performance Management? Theoretically, performance management is a business process that helps managers and employees: § Establish measurable goals and objectives § Assess achievement and attainment of such objectives, and… § Use this information to improve performance through coaching, compensation, development and other means. Most importantly, performance management is management! Copyright © 2011 Bersin & Associates. All rights reserved. Page 8
In Reality, it is Far Different How well does your performance management drive business results in your organization? Source: Bersin & Associates High Impact Talent Management and High Impact Performance Management research, 2011 n=290+ Copyright © 2011 Bersin & Associates. All rights reserved. Page 9
More often, unfortunately, performance management… § Has been put in place to create equity and defensible compensation strategies around the company. . § Is used to force managers to differentiate performance and weed out low performers… § Is uncomfortable and unrewarding for both managers and employees… § Serves as an excuse for allowing managers to avoid ongoing feedback to their people… § Has been institutionalized and is often a sacred cow which people are afraid to change… Copyright © 2011 Bersin & Associates. All rights reserved. Page 10
The Performance Management Framework Bersin & Associates “at-a-glance” view of how PM fits together Performance Management Strategy Purpose of PM | PM Philosophy | PM Alignment to Strategy and Culture | Level of Senior Leader Ownership | PM Sustainability | Talent Management Integration Structures & Roles | Governance | Communication | Tools & Resources Organization & Governance Goal Setting & Revising Managing & Coaching Development Planning Recognizing & Rewarding Executive Goal Setting | Goal Cascading & Alignment | Employee Goal Setting | Goal Revision Work Plans | Management Responsibilities | Feedback | Coaching Individual Development Plans | Development Opportunities | Career Management Compensation Reviews | Financial Rewards | Non. Financial Rewards | Recognition Strategies & Programs Performance Appraisal HOW Quarterly, Semi-Annual and/or Annual Reviews | Multi-Rater Feedback | Self. Assessment | Manager Assessment | Distributions and Rankings | Performance Calibration | Performance Improvement Plans Multi-level Structure Performance WHAT Competencies/Behaviors | Goals | Job Responsibilities | Capabilities | Promotion Readiness Technology & Infrastructure Ongoing Performance Activities PM System | TM System Integration | Knowledge Sharing & Collaboration | Metrics & Analysis Audience Executives | Managers | Professionals | Hourly | Organized Labor | Contingent | Critical Talent Segments Management Outcomes Key Messages Focus on Driving Business Results | Empowered and Engaged Workforce | Foundational Knowledge of Talent Copyright © 2011 Bersin & Associates. All rights reserved. Page 11
The Manager is Key to Success Biggest challenges companies face Managers lack the skills to coach their employees (Manager Skill) Executives think the performance appraisal process is too time consuming (Executives) 5. 10 4. 95 Executives do not promote the performance management process (Executives) 4. 83 Executives do not understand the link between PM and organizational capability (Executives) 4. 83 Executives do not model PM activities (Executives) 4. 79 PM fails to remain relevant throughout the year (PM Process) 4. 76 Managers do not give sufficient development support to employees (Manager Activity) 4. 63 Managers do not give timely feedback on performance (Manager Activity) 4. 63 1. 001. 502. 002. 503. 003. 504. 004. 505. 005. 506. 006. 507. 00 Source: Bersin & Associates High Impact Performance Management research, Q 3 2011, n=214 Copyright © 2011 Bersin & Associates. All rights reserved. Page 12
Today’s Workforce and New Workplace “The Borderless Workplace” – Teams are Dynamic, Contingent, and Highly Connected Employee Partner Mentor Customer Candidate Peer Manager Copyright © 2011 Bersin & Associates. All rights reserved. Page 13
Which means… performance feedback must come from everyone Your employee’s manager Your employee’s team Everyone else Copyright © 2011 Bersin & Associates. All rights reserved. Page 14
The answer: move to a continuous process of performance management From Episodic… To Continuous… Goal Setting Rewarding Managing Assessing (ie. Google does this quarterly) Copyright © 2011 Bersin & Associates. All rights reserved. Page 15
Agile Performance Management § Continous goal setting “OKR – Objectives and Key Results” not cascading goals § Continuous feedback from all directions including bottom up § Daily or weekly “scrums” to review job and team performance § Managers continuously look for ways to remove bottlenecks § Delegate authority within guidelines § Make people successful with coaching and work simplification § Reward people with feedback and purpose Copyright © 2011 Bersin & Associates. All rights reserved. Page 16
Agenda § The Current State of Performance Management (PM) • Challenges • Evolution § Three Keys For Measuring Employee Performance 365 Days a Year • Goal Setting & Revising • Coaching • Recognizing and Rewarding § How Recognition and Rewards Make a Difference • Why now? • How modern R&R work • The impact on critical outcomes • Examples of how they work § Key Takeaways and Q&A Copyright © 2011 Bersin & Associates. All rights reserved. Page 17
The Three Keys By doing each of these regularly, the organization can give feedback and manage performance 365 days per year Goal Setting & Revising Coaching Recognition & Rewards Continuously updated and revised from teammates, peers, managers, and execs. Continuously received and given in small chunks so people are regularly gaining feedback and improvement. Continuously given in a form that is fun, valuable to the employee, and comes from peers, team members, and managers Copyright © 2011 Bersin & Associates. All rights reserved. Page 18
Question for the Group How frequently are business goals revised at your company? 1. 2. 3. 4. 5. Once per year (on a semi-annual basis) Twice per year Quarterly or more frequently We don’t revise goals Don’t know Copyright © 2011 Bersin & Associates. All rights reserved. Page 19
Ongoing Corporate Goal Setting 54% of organizations revise once per year or not at all How often does your organization revisit its business goals? We don't revise goals 10% Other 6% Ongoing 6% Monthly 3% Once per year (on a semiannual basis) 44% Quarterly 10% Twice per year 21% Source: Bersin & Associates High Impact Performance Management research, Q 4 2011, n=193 Copyright © 2011 Bersin & Associates. All rights reserved. Page 20
Value of Revisiting Business Goals Organizations that revise goals frequently deliver superior financial results Competitive cost structure Goals Revised Quarterly or More Often Goals Revised Once Per Year Competitive Financial Performance Goals Revised Quarterly or More Often Goals Revised Once Per Year 6% 33% 6% 57% 3%33% 10% 61% 37% 64% 47% 44% 0%10%20%30%40%50%60%70%80%90% 100% Source: Bersin & Associates High Impact Performance Management research, Q 4 2011, n=193 Percentage of Organizations Below Average Results Above Average Results Copyright © 2011 Bersin & Associates. All rights reserved. Page 21
Case in Point: Ongoing Alignment to Business Goals or Culture § To come from Globoforce – can use recognition to do this ongoing goal review § Example needs to highlight (as much as possible) how solution is frequent, collaborative and engaging § If Globoforce doesn’t have anything, we have some examples we can use POSSIBLY TO COME FROM GLOBOFORCE Copyright © 2011 Bersin & Associates. All rights reserved. Page 22
Question for the Group How supportive is your organization’s culture of coaching? 1. No or weak cultural support for coaching 2. Good cultural support for coaching 3. Excellent cultural support for coaching Copyright © 2011 Bersin & Associates. All rights reserved. Page 23
Coaching Cultures Drive Results Strong coaching cultures drive higher employee engagement, productivity and customer satisfaction 80% 76% 70% 60% 50% 40% 30% 29% 20% 10% 0% 43% No or Weak Cultural Support for Coaching 24% 35% Good Cultural Support for Coaching 28% Excellent Cultural Support for Coaching 5% 0% Below Average Above Average Employee Results Copyright © 2011 Bersin & Associates. All rights reserved. Page 24
Why Does Coaching Work? A coach empowers you to succeed These activities enable managers and employees to regularly assess and redirect performance Provides Targeted Feedback Focuses on Individual Needs Provides Nearly. Immediate Feedback Creates Accountability Encourages Employees to Find Right Answer Copyright © 2011 Bersin & Associates. All rights reserved. Page 25
Elements Necessary to Support Ongoing Coaching Senior leader support Training Easy access to employee information Copyright © 2011 Bersin & Associates. All rights reserved. Page 26
What are Recognition and Rewards? And how do they differ from each other and incentives? Incentives • • Rewards Recognition • Immediate appreciation • Given frequently • Unexpected • No financial element • Nearly immediate appreciation • Given frequently • Unexpected • Financial element ack edb e F nd ty a tivi c A n ee etw me B Delayed appreciation Given at certain times Expected Financial element Ti Copyright © 2011 Bersin & Associates. All rights reserved. Page 27
Old vs. New Next-generation recognition and rewards are collaborative, frequent and engaging Traditional R&R • Given based on specific timeline Modern R&R • Given on an ongoing basis • Awarded by management • Awarded by everyone • Little differentiation in value of award • Clear differentiation between recognition, rewards and their relative value • Nomination requires special processes • Aligned with tenure, values or special initiatives • Awards pre-selected for individuals (10 -15%) • Little tracking over time • Platforms make recognition process easily accessible • Aligned with tenure, values or special initiatives • Individuals select their own rewards • Advanced analytics Copyright © 2011 Bersin & Associates. All rights reserved. Page 28
Copyright © 2011 Bersin & Associates. All rights reserved. Page 29
Case in Point: § Perhaps show Globoforce’s network map tool here? I imagine this can be used to help managers identify HIPOs, HR to understand where coaching needs to happen, to reinforce the importance of interactions to senior leaders. TO COME FROM GLOBOFORCE Copyright © 2011 Bersin & Associates. All rights reserved. Page 30
Agenda § The Current State of Performance Management (PM) • Challenges • Evolution § Three Keys For Measuring Employee Performance 365 Days a Year • Goal Setting & Revising • Coaching • Recognizing and Rewarding § How Recognition and Rewards Make a Difference • Why now? • How modern R&R work • The impact on critical outcomes • Examples of how they work § Key Takeaways and Q&A Copyright © 2011 Bersin & Associates. All rights reserved. Page 31
Question for the Group How much do you think recognition declined for all employee groups over the course of the recession? 1. 2. 3. 4. 0 -3% 4 -7% 8 -11% 12% or more Copyright © 2010 Bersin & Associates. All rights reserved. Page 32
Recognition on the Decline Middle managers most affected Differences in Engagement Before and After Financial Crisis Engagement Indicators Senior Leaders Performance Management Middle Managers Change ‘ 07 -’ 09 3. 3 -8% -14% Recognition 3. 5 -5% People Manager Capabilities 3. 7 -5% 1 2 3 4 Team Members Change ‘ 07 -’ 09 3. 1 -14% -6% 3. 4 -10% 1 5 +7% 2 +3% 3 4 5 Score in 2009 Source: BCG, Creating a New Deal for Middle Managers: Empowering a Neglected but Critical Group, ” 2010. Scores range from 1 (very dissatisfied) to 5 (very satisfied). Copyright © 2011 Bersin & Associates. All rights reserved. Page 33
Recognition on the Decline Recognition only indicator that declined in all employee groups Differences in Engagement Before and After Financial Crisis Engagement Indicators Senior Leaders Performance Management Middle Managers Change ‘ 07 -’ 09 3. 3 -8% -14% Recognition 3. 5 -5% People Manager Capabilities 3. 7 -5% 1 2 3 4 Team Members Change ‘ 07 -’ 09 3. 1 -14% -6% 3. 4 -10% 1 5 +7% 2 +3% 3 4 5 Score in 2009 Source: BCG, Creating a New Deal for Middle Managers: Empowering a Neglected but Critical Group, ” 2010. Scores range from 1 (very dissatisfied) to 5 (very satisfied). Copyright © 2011 Bersin & Associates. All rights reserved. Page 34
What does Recognition Do for Employees? Recognition helps organizations balance of positive to negative feedback – it “conditions people” for input Negative Feedback Positive Feedback Employee Motivation Copyright © 2011 Bersin & Associates. All rights reserved. Page 35
How Ongoing Recognition & Rewards Work Four factors reinforce each other to benefit the enterprise Praises the right behaviors immediately Feeds need for appreciation Reinforces culture and goals Leverages power of social norms Copyright © 2011 Bersin & Associates. All rights reserved. Page 36
Many Organizations Recognize But far fewer reward Individual / Team Recognition 42% Provide Regular Individual or Team Recognition Formal Reward Program 36% Provide a formal rewards program Source: Bersin & Associates High Impact Performance Management research, Q 4 2011, n=193 Copyright © 2011 Bersin & Associates. All rights reserved. Page 37
The Value of Different Encouragements Relationship between recognition and rewards stronger than annual bonus when it comes to critical outcomes Reward Type Reward Activity Employee TM Results Business Results Incentives Merit increase to base pay Strong Annual bonus None Strong Medium Strong None Strong Strong Medium Semi-annual or quarterly bonus Formal reward program Rewards Individual / team Recognition recognition Source: Bersin & Associates High Impact Performance Management research, Q 4 2011, n=193 Copyright © 2011 Bersin & Associates. All rights reserved. Page 38
Case in Point: Example of R&R in action TO COME FROM GLOBOFORCE Copyright © 2011 Bersin & Associates. All rights reserved. Page 39
Key Takeaways § Continuous performance management provides employees more feedback and organizations more insight into day-to-day performance § Effective ongoing performance management relies on the frequent execution of three things: • Goal setting and revising • Coaching • Recognizing and rewarding § Modern recognition and rewards correlate with better employee, talent management and business results § If you implement these strategies, you will measure and improve your employees 365 days a year Copyright © 2011 Bersin & Associates. All rights reserved. Page 40
Questions? Copyright © 2011 Bersin & Associates. All rights reserved. Page 41
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APPENDIX Copyright © 2011 Bersin & Associates. All rights reserved. Page 43
Outcome Variables HIPM Tested Rate on a 1 -7 scale how effective / strong your organization is at… Employee Results Talent Management Results Business Results Employee productivity Hiring the best people Market share Employee engagement Developing great leaders Costs Customer satisfaction Developing employees Financial performance Retaining top performers Planning for our future talent needs Having the right people in the right jobs Copyright © 2011 Bersin & Associates. All rights reserved. Page 44
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