enio velazco, ph.d., hr executive advisor september 29, 2016...help the world run better and improve...

Rethinking Performance ManagementEnio Velazco, Ph.D., HR Executive AdvisorSeptember 29, 2016

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© 2016 SAP SE or an SAP affiliate company. All rights reserved. 9© 2016 SAP SE or an SAP affiliate company. All rights reserved. This presentation and SAP‘s strategy and possible future developments are subject to change and may be changed by SAP at any time for any reason without notice. This document is provided without a warranty Customer 9of any kind, either express or implied, includingbut not limited to, the impliedwarranties of merchantability, fitness for a particularpurpose, or non-infringement

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Agenda

Basics

Feedback

TrendsContinuous

Performance Management

Starting with the Basics


What managers and employees say about PM

More than 60% of employees say performance review systems rarely or never lead to performance improvement.

2015 SHRM Conference


What are your top challenges when administering PM?

Managers: 36%

Employee Participation: 7%

Performance Management Process: 28%

Executive Engagement: 15%


The Root of the Problem

Managers: 36%

Employee Participation: 7%

Performance Management Process: 28%

Executive Engagement: 15%

Failure to See the Value!


Why do we do performance management?

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Source: Bersin & Associates High Impact Performance Management research, 2011, n=200+

To evaluate employee performance 44%

To align goals across the organization 34%

To improve organizational performance 24%

To fairly reward employees 22%

To identify employee development needs 18%

To support employees in meeting goals 17%

To improve employee performance 13%

To increase employee engagement 9%

To comply with regulatory requirements 8%

To identify people appropriate for talent pools 6%

To evaluate organizational performance 5%


Best Practices for Managing Millennials1

1. Provide Opportunities for Learning & Development

2. Offer a balance between personal and professional life

3. Money isn’t everything4. Make way for more movement5. Be mentors, not bosses6. Create a strong company culture7. Recognize their need for recognition8. Take the good with the bad9. Don’t disconnect the digital natives

1. Millennial Generation or Gen Y: Those born between 1980 – 20002. Source: “Nine Tips for Managing Millennials,” Fortune Magazine, September 08, 2016 (http://www.forbes.com/sites/iese/2016/09/08/managing-

millennials-nine-tips/#434516942171)


Careers have changed and so have people

Employees today are not looking for a career…they are looking for an experience.


Leaders and Employees Are Divided on Change Management

Leaders’ and Employees’ Perceptions of Involvement in Setting Change Strategy

Although most leaders believe theyeffectively involve employees inchange strategy decisions,employees feel differently— and thisdisconnect has several implicationsfor change management.

74%Agree

26%Neutral orDisagree 42%

Agree

58%Disagree

Percentage of Leaders Saying They InvolveEmployees in Creating Change Strategy

Percentage of Employees Saying They AreInvolved in Creating Change Strategy

n = 102.Source: CEB 2016 Change Management Head

of Function Survey.

n = 6,686.Source: CEB 2016 Workforce Change Survey.

Performance Management Trends


Accurate Employee Rating

• Rate employees according to their performance against the job with no limit to a specific rating (i.e., no more “you were exceptional but I can only give one person that rating”)

Eliminate Forced Ranking

• Eliminate the forced, distribution ranking process

• No Bell Curve• No one size

must fit all employees--somehow

21

3

No other area of HR is undergoing greater transformation than in the area of Performance Management. The following details the key evolving trends.

Current Trends in Performance Management

Frequent Feedback

Moving from an annual review to frequent feedback sessions with a focus on:• Performance against

goals• Future development • Focus on supporting

and positioning employees to perform better for the future (versus how they did in the past)

Simplify Goal Mgmt Process

• Moved from annual goals to either project based or quarterly goals

• Limit the number of goals to no more than 3-4 with short and realistic time frames

Multiple Inputs

Consider multiple ratings based on quarterly goals, development activities, etc.• Reduces an

annual one-time impact and empower employees with a multi-dimensional view on their contribution

Feedback


Barriers prevent employees from effectively receiving and processing feedback

In one ear... ...and out the other.

B A R R I E R 3Attention Density

Amount of attention

B A R R I E R 2Cognitive DissonanceConflicting information

Threat ResponseNegative emotions and experiences

A P P L I C AT I O N B A R R I E RB A R R I E R 1


Barrier 1: Thread Response

Source: Rock, David, “SCARF: a brain-based model for collaborating with and influencing others,” NeuroleadershipJournal, http://www.your-brain-at-work.com/fi les/NLJ_SCARFUS.pdf (2008).

BarrierThreat Response: W hen the brain recognizes a stimulus as leading to negative emotions orexperiences, the brain will disengage from the experience, shutting down resources available to thepre-frontal cortex.

?W hat It Means for Your EmployeesReceiving negative feedback can impair employees’ cognitive reasoning, leaving them less able toprocess the feedback and more likely to make mistakes.

How You Can Help Employees O vercome the BarrierUse the S CA RF model to decrease threat response.■ Status—Make people feel valued and appreciated■ C ertainty—Make people feel sure of themselves and what they know■ A utonomy—Give people responsibility and ownership of their actions■ Relatedness—Make people feel included and trusted■ Fairness—Judge people on an objective scale

http://www.your-brain-at-work.com/files/NLJ_SCARFUS.pdf


Barrier 2: Cognitive Dissonance

BarrierCognitive Dissonance: Excessive mental stress and discomfort occurs whenone is confronted by new information that conflicts with existing beliefs, ideas, orvalues.

? W hat It Means for Your EmployeesCognitive dissonance leads people to discredit or ignore feedback they receive thatconflicts with the self-image they have of themselves.

How You Can Help Employees O vercome the BarrierEncourage self-reflection during feedback sessions.■ As a giver of feedback, ask more probing questions starting with “how” and “why”■ Minimize mental stress by asking them to self reflect

Source: Jacobs, Charles, “Management Lessons from Neuroscience,” The Center for AssociationLeadership, http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=44068 (2009).

http://www.asaecenter.org/Resources/ANowDetail.cfm?ItemNumber=44068


Barrier 3: Attention Density

BarrierAttention Density: Attention density is the amount of attention we pay to something over a period of time.The Quantum Zeno effect application to neuroscience states that enough attention holds in place braincircuits associated with what is being focused on. This means that if you pay enough attention to a certain setof brain connections, it keeps that circuitry stable, which enables it to become a part of the brain’s wiring.

? W hat It Means for Your EmployeesThe unstructured and one-off nature of feedback limits employees’ ability to pay the right amount of attentionto the feedback to ensure that it becomes hard-wired in their brains and results in real behavior change.

How You Can Help Employees O vercome the BarrierCreate a formalized structure around feedback and focus attention on feedback.■ Set up formal feedback policies and structures■ Incorporate pre-feedback preparation and post-feedback reinforcements into the feedback process

■ Follow-up on feedback in an appropriate time frame

Source: Schwartz, Jeffrey, and David Rock, “A Brain-Based Approach to Coaching,” International Journal ofCoaching in Organizations, Print (2006) pp. 32-43.


BCBSMA Example – Delivering Feedback


BCBSMA Example – Managing Conflict

Continuous Performance Management


Growing momentum to eliminate performance ratings

Have Removed Ratings.

15%

Do Not Plan onRemoving Ratings

6%

Plan to RemoveRatings in Near Futurea

28%No Plans to RemoveRatings but WouldConsider

n = 296.Source: CEB 2016 HR A genda Poll.a Organizations who plan to remove ratings in the near future include several that have piloted the approach

and collected related results and/or feedback.

51%

Sample List of Organizations Who Have Publicly Announced Removing Ratings


What are performance ratings worth?

EmployeePerformancewith Ratings

EmployeePerformance

W ithout Ratings

n. = 9,686.Source: CEB 2016 Pay for Performance Employee Survey

Effect of Performance Ratings on Employee Performance

∆ = 10%

As organizations question the future of their performance processes, they are challenged to not lose sight of the most effective, everyday drivers of employee performance.


PROACTIVEThe Needs of your Business Drive the Process

Proactively address performance issues before

they become issuesEmployee Manager

Give early visibility into what they are working on

Provide timely guidance to align to goals and improve performance

Continuous Performance

Conversations


FLEXIBLECreate the Performance Management Process that Works for your Organization

Design a unique process that takes into account your culture, industry, region, size, management style, business model, workforce demographics, etc.

CONTINUOUSPERFORMANCE MANAGEMENT

PERFORMANCE ASSESSMENTS

GOAL MANAGEMENT

Cascade goals Employee-initiated goals Public goals Track Goal status and progress Weighted objectives Competency-based goals Quantitative vs. qualitative goals

Encourage performance check-ins Align work to objectives Non-evaluative and forward-looking

feedback Recommend set frequency for check-ins Drive employees to prioritize work

Quarterly vs. mid-year vs. annual reviews Accurately measure goal attainment Assess competencies Employee self-assessments Calibrate managers’ evaluations Additional Feedback from additional

sources Ratings/ no ratings

illustrative


Continuous Performance ManagementEnhancing and Simplifying the overall Performance Process

Assessment

Goals

Ratings / Rewards

Performance DocumentEmployee Goal Plan

Goal

Goal

Goal

Goal

Performance Achievements

Performance Goals

Define work activities

based on goals

Conduct ongoing meetings Update

activities

Log Achievements

Review Achievements

Ongoing goal and activity alignment, coaching, and feedback


Performance Management Strategies and their Impact

Regardless of performance ratings, the following strategies will lead to performance improvement.

Impact on Employee Performance

12%Provide Ongoing, Non Episodic, Periodic FeedbackIncreasing the frequency of informal performance conversations allows managers to provide more timely feedback to employees and to adjust expectations with employees based on organizational changes or past performance.

13%Make Performance Reviews Forward Looking, Not Backward LookingAssessing and discussing future performance provides managers and employees with a more accurate understanding of their abilities to meet future business needs and how to improve those abilities.

14%Include Peer, Not Just Manager, Feedback in Evaluating PerformanceCollecting feedback from peers who understand employees’ work helps managers more effectively assess and discuss employee performance in an environment where employees must increasingly work with peers to be effective.

n. = 23,339 (2012), 10,531 (2014)Source: CEB 2012 High Performance Survey; CEB 2014 Enterprise Contribution Workforce Survey

Performance Management Strategies


?

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

Thank You Enio Velazco, Ph.D.HR Executive AdvisorBusiness Transformation Advisory

: +1 617 893 3356: [email protected]

Refer presentation questions to:

And software inquiries to: Christine WilliamsAccount ExecutivePublic Sector & Higher Education

: +1 801 368 5968: [email protected]

enio velazco, ph.d., hr executive advisor september 29, 2016...help the world run better and improve...

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