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PerformanceManagementAGuidetoConsultingJune2000DiscussionObjectivesProvideanoverviewofcurrentthinkingandtrendsDiscusswhatPMconsultingisallaboutReview“whatworksandwhatdoesn’t”ShareBestPracticesresearchReviewsomeofthebasicplanningandprojectstepsGroupDiscussionAnswerthefollowingquestions:1.Whatisperformancemanagement?Whydocompanieshavethisprocess?2.Whydoesn’titworksowell?Whatmakesitsodifficult?PerformanceManagementTranslatesbusinessvisionandstrategyinanactionablewaybycascadinggoalsthroughouttheorganizationMeasuresbothwhatisdoneandhowitisdoneAlignsDepartmentgoalswithstrategicbusinessobjectivesAlignsindividualswiththebroaderorganizational/teamcontextEnsurestheclosest“lineofsight”possibleSource:WatsonWyattBestPracticesinPerformanceManagementPerformanceConsulting1.TotalOrganizationCascadingandAlignmentStakeholderMetrics2.EmployeeReviewProcessEngagementandAccountabilityGrowthandAchievementsTwodimensions:PerformanceConsultingTotalOrganizationPerformanceCascadingandAlignmentStakeholderMetricsTheKeyQuestionsofBusinessPlanning=Whydoesthecompanyexist?=Whereisitgoing?SizeSalesMarketsLocationsProductsCompetitiveChallengesSBULinkages=Howwillitgetdone?ValuesandOperatingPrinciplesTechnologyResources=Whatmustthecompanybeverygoodatdoing?=Howwillprogressandsuccessbemeasured?ExpectationsofStakeholdersCompanyPerformanceMissionVisionofFutureStrategicOrganizationalGoalsCoreOrganizationalCapabilitiesBalancedScorecardBusinessPlansareDevelopedbytheBusinessUnitsResourceRequirementsIndustryLatinAmericaAsia(Europe)ObjectivesofthebusinessunitObjectivesoftheregionBottom-up-approach:Derivationofsegmentandcorporatestrategicplansandoperatingobjectivesfrombusinessunitgoals.Top-down-approach:DerivationofobjectivesfromcorporatestrategyObjectivesofdepartmentsandindividualsStrategyoftheCorporationObjectivesofthecorporation•People•Facilities•Technology•EquipmentandMachineryComponentsofaBalancedScorecard(withsamplemetrics)FINANCIALRESULTSCUSTOMERSATISFACTIONBUSINESSPROCESSESLEARNING&GROWTH•AFYP•ROI/ROA•SurplusGrowth•Newsales:newcustomers•Additionalpolicies:currentcustomers•Marketshare•Collectingpremiums•Calculatingsellingprice:newproduct•Newlicensing(Region&Corporate)•EstablishingtheBusinessCasefornewventures,newlocations•ProductDevelopment:#innovations•Competencygrowth•Additionalcountries•CorecapabilitiesgrowthCascadingStrategic&OperatingPlanGoalsCORPORATEORGANIZATIONMETRICSFinanceFinanceCustomerCustomerBusinessProcessBusinessProcessLearning&GrowthLearning&GrowthBUSINESSUNITTEAMS/INDIVIDUALSDEPARTMENTBalancedScorecardscanprovideorganizationalignmentandaccountability•5to7GOALS•“SMART”parameters•DirectlyalignedTypicalProjectTimeline&Milestones**8weekselapsedtimefromplanningsession2DaysClarifyCompanyStrategyanddeterminegoalsImplementationTrainingandRolloutbeginsImplementationPlanningWorkshopFormalAdvisoryGroupReviewSession&Follow-up1wk2wks1wk1wk1wk1wk1wkProjectPlanning,OrientationandKick-off1Day1DayInterviewFindings+DevelopMeasureRecommendations1DayWorkshoponTargetsFinalizeTargetRecommendationsImplementationPlanReviewReviewPlanforImplementationReviewTransitionStrategy2DaysFormalAdvisoryTeamReview1Day1Day1wk1DayExecutivePlanningSession(s)PerformanceConsultingTotalOrganizationPerformanceClients:CEO,COO,sometimestheVPHRFees:typicalprojectis$180-250KTimeframe:+/-4monthsPerformanceConsultingEmployeeReviewProcessEngagementandAccountabilityClearPerformanceExpectationsGrowthandAchievementsPerformanceManagementIs......theongoingprocessofsettingperformanceexpectations,providingfeedbackandcoachingtoreachthoseexpectations,andreviewingandrecognizingperformanceresults.TiePMtotheBusinessCycleReviewandPlanningPlanningFeedback&CoachingFeedback&CoachingMid-YearReviewNewYearPlanningYear-EndReviewBadtiming...“Idon’twanttoruinyourdayHerman,buttomorrowmorningyou’rescheduledtobeinmyofficeforyourannualperformancereview...”RememberTheKeyQuestions?=Whydoesthecompanyexist?=Whereisitgoing?SizeSalesMarketsLocationsProductsCompetitiveChallengesSBULinkages=Howwillitgetdone?ValuesandOperatingPrinciplesTechnologyResources=Whatmustthecompanybeverygoodatdoing?=Howwillprogressandsuccessbemeasured?ExpectationsofStakeholdersCompanyPerformanceMissionVisionofFutureStrategicOrganizationalGoalsCoreOrganizationalCapabilitiesBalancedScorecardOrganizationAlignmentleadstoEmployeeEngagementCOMPANYMISSIONVISIONStrategicObjectivesCoreCapabilitiesCompetencies•Leadership•FunctionalDepartmentScorecardSuccessProfilesEmployeePerformanceProcessIndividualGoalsEmployeeDevelopmentPlansBusinessUnitScorecardCascading:CriticalMetricsandCompetenciesChangerequiresabalancedValueExchangeEmployeeGivesEmployerGivesEnergyEffortCommitmentLearningOpportunityCareerBenefitsCompensationJobThePerformanceProcesscanprovidethekeystodevelopmentBasePayPromotionTrainingCareerdevelopmentSuccessionplanning89%77%56%51%32%Reductioninforce26%Variablepay34%CurrentUseofPerformanceManagementDataSource:WatsonWyattBestPracticesinPerformanceManagementPerformanceManagementEvolutionTraditionalRecent