performance management – best practice process and principles
TRANSCRIPT
PERFORMANCE MANAGEMENT – BEST PRACTICE PROCESS AND PRINCIPLES
CHARLES COTTER
HACKLE BROOKE
5-7 APRIL 2017
www.slideshare.net/CharlesCotter
3-DAY, TRAINING PROGRAMME OVERVIEW
• Fundamentals of Performance Management
• Building a Balanced Scorecard – objectives, measures and targets
• Performance Management cycle/process
• Managing poor performance
• Incapacity Procedure (Poor Performance) - LRA
• Best practice guidelines for performance counseling
• Performance-based coaching – principles and process
• Case Study: Dealing with Poor Performance
INTRODUCTORY ACTIVITY
• Individual activity:
Complete the following statement by inserting one word only. Asa manager, in order to effectively manage employee performance,I need to/to be………………………………………………………
Jot this word down and find other learners who have writtendown the same word.
Write this word down on the flip-chart.
You’ll be given the opportunity to substantiate your choice ofword.
DEFINING THE FUNDAMENTAL, PERFORMANCE MANAGEMENT CONCEPTS
• Performance Management
• Key Performance Areas (KPA’s)
• Key Performance Indicators (KPI’s)
• (Applied) Competency
• The Balanced Scorecard (BSC)
DEFINING PERFORMANCE MANAGEMENT (PM)
• PM can be seen as a comprehensive management system aimed at constantlyimproving and monitoring the performance of others.
• PM concerns itself with improving productivity, delivering a better qualityservice/product and is aimed at achieving the goals of both the institution and theemployee.
• PM is a strategic and integrated approach to delivering sustained success toorganizations by improving the performance of people who work in them and bydeveloping the capabilities of teams and individual contributors.
• PM entails three (3) important components/dimensions, namely:
Evaluation (i.e. appraisal and measurement)
Development (i.e. improving performance through the acquisition of skills)
Relationships (between team leaders and team members)
KPA’s and KPI’s
• Key Performance Areas (KPA) may be defined as the primaryresponsibilities of an individual or the core area(s) which eachemployee is accountable.
• KPA’s originate from the organization’s mission and represent thespecific areas where the organization expects results.
• Key Performance Indicators (KPI’s) define unit of measure used toassess whether or not Key Performance Area have been achieved.
• KPI’s clarify how performance will be judged against each KPA.They provide the framework for generating targets, and are thecore of all performance management systems.
SUB-COMPONENTS OF COMPETENCE
COMPETENCE
• “Applied Competence is the union of practical, foundational and reflexivecompetence”
• Practical Competence - the demonstrated ability to perform a set of tasks in anauthentic context. A range of actions or possibilities is considered and decisionsare made about which actions to follow and to perform the chosen action.
• Foundational Competence - the demonstrated understanding of what the learneris doing and why. This underpins the practical competence and therefore theactions taken.
• Reflexive Competence - the learner demonstrates the ability to integrate orconnect performance with understanding so as to show that s/he is able to adaptto changed circumstances appropriately and responsibly, and to explain the reasonbehind an action.
• Thus competence is understood as including the individual’s learning,understanding and ability to transfer and apply learned skills and knowledgeacross a wide range of work contexts.
BALANCED SCORECARD
• The Balanced Scorecard (BSC) is a strategy performancemanagement tool - a semi-standard structured report,supported by design methods and automation tools thatcan be used by managers to keep track of the execution ofactivities by the staff within their control and to monitorthe consequences arising from these actions.
• The critical characteristics that define a Balanced Scorecard are:
Its focus on the strategic agenda of the organization concernedThe selection of a small number of data items to monitorA mix of financial and non-financial data items
BSC MEASURES
• The balanced scorecard suggests that we viewthe organization from four (4) perspectives, andto develop metrics, collect data and analyze itrelative to each of these perspectives:
Learning, Innovation and Growth
Business (Internal) Processes
Customer
Financial
BSC PERSPECTIVES/DIMENSIONS
ILLUSTRATION: BSC PERSPECTIVES/DIMENSIONS
• Strategic question:
“To achieve our vision, how will sustain our ability to change and improve?”
• Examples (measurable indicators):
Time to develop new generation of products Life cycle to product maturity Time to market versus competition Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities
• Value Outcome:
Organizational knowledge and growth capacity
LEARNING, INNOVATION AND GROWTH PERSPECTIVE
• Strategic question:
“To satisfy our shareholders and customers, what business processes must we excel at?”
• Examples (measurable indicators):
Cycle time Unit cost Yield New product introductions Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation
• Value Outcome:
Efficiency
BUSINESS (INTERNAL) PROCESS PERSPECTIVE
• Strategic question:
“To achieve our vision, how should we appear to our customers?”
• Examples (measurable indicators):
Percent of sales from new products On time delivery Share of important customers’ purchases Ranking by important customers Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate
• Value Outcome:
Customer satisfaction
CUSTOMER PERSPECTIVE
• Strategic question:
“To succeed financially, how should we appear to our shareholders?”
• Examples (measurable indicators):
Cash flow Sales growth Operating income Return on Equity (RoE) Return On Investment (ROI) Return on Capital Employed (RoCE) Financial Results (Quarterly/Yearly)
• Value Outcome:
Financial performance/profitability
FINANCIAL PERSPECTIVE
• Articulate the business's vision and strategy
• Identify the performance categories that best link the business's vision andstrategy to its results (e.g., financial performance, operations, innovation,employee performance)
• Establish objectives that support the business's vision and strategy
• Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets
• Ensure company-wide acceptance (ownership) of the measures
• Create appropriate budgeting, tracking, communication, and reward systems
• Collect and analyze performance data and compare actual results with desiredperformance
• Take action to close unfavourable gaps
PURPOSES OF THE BSC
ILLUSTRATION: HIERARCHY OF BALANCED SCORECARD COMPONENTS
THE 9-STEP BSC BUILDING AND IMPLEMENTING PROCESS
• The strategic elements developed in Steps oneand two are decomposed into StrategicObjectives, which are the basic building blocks ofstrategy and define the organization's strategicintent.
• Metrics must also be aligned with the company'sstrategic plan.
• The metrics set up also must be S-M-A-R-T
STEP 3: OBJECTIVES - STRATEGY ACTION COMPONENTS
S-M-A-R-T OBJECTIVES
• Leading and lagging measures are identified
Lagging indicators are typically “output” oriented, easy tomeasure but hard to improve or influence
Leading indicators are typically input oriented, hard tomeasure and easy to influence
• Expected targets and thresholds are established
• Baseline and benchmarking data is developed
• Key Performance Indicator (KPI) and PerformanceMeasure Development
STEP 5: PERFORMANCE MEASURES -MEASURES AND TARGETS
• Provide a way to see if our strategy is working
• Focus employees' attention on what matters most to success
• Allow measurement of accomplishments, not just of the work that is performed
• Provide a common language for communication
• Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value (targets), and thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
GOOD PERFORMANCE MEASURES
5 STEPS TO FIND THE RIGHT MEASURES
DEVELOPING KEY PERFORMANCE INDICATORS
• Developing KPI’s is a straightforward process.
• Simply translate KPA’s into measurable values.
• The values may be numerical or qualitative.
• Refer to examples of KPI’s, as set out in tables1-3
PERFORMANCE TARGETS
PERFORMANCE TARGETS
• Target setting is the key ingredient to success.
• Without target setting, huge amounts of energy can be lost,unharnessed, unused. By working consistently toward theattainment of certain clearly defined, specific targets, energy canbe tightly focused and the results astounding.
• Targets are set to steer the organization/team/individual during theshort-term.
• Targets are needed to drive performance and to measureperformance; to improve performance and to control performance.
• Refer to the standards for target setting (page 26)
LEARNING ACTIVITY 1
• Group discussion
• Apply the Balanced Scorecard terminology and approachto a defined organizational context. Develop thefollowing:
Objectives
Measures
Targets
• Provide feedback in the form of summary
PERFORMANCE MANAGEMENT (PM)
• Defining the fundamental concepts
• The need for PM
• Best Practice Criteria: PerformanceManagement
• The Performance Management process
• Refer to pages 29-30 in Learner Guide
• Critically evaluate your organization’s currentPerformance Management processes andsystems against the best practice criteria.
• Identify gaps and recommend improvementstrategies.
DIAGNOSTIC LEARNING ACTIVITY
STEP 1: PERFORMANCE MANAGEMENT CYCLE
STEP 1: PERFORMANCE PLANNING
• Clarifying expectations
• Setting of goal/objectives, performancestandards and criteria
• Action Planning
• Contracting Performance Agreements
AccentureMicrosoftAdobeDeloitteMedtronicGapGeneral Electric
• To date nearly 10% of Fortune 500 companies haveabolished their annual ratings, according to CliffStevenson, a senior research analyst for the Institute forCorporate Productivity, a research network that studiesmanagement practices.
WHAT DO FOLLOWING COMPANIES HAVE IN COMMON?
PERFORMANCE REVIEW/APPRAISAL
• Monitoring, Measuring/Evaluating performanceagainst the pre-determined performancegoals/objectives and standards and criteria.
PERFORMANCE FEEDBACK/INTERVIEW
• Conducting of the 8 step, Human Touchinterview/discussion – formally/informally andimplementing Positive and Corrective performancefeedback.
8-STEP HUMAN TOUCH PERFORMANCE INTERVIEW
• Step 1: Control the environment
• Step 2: State the purpose of the discussion
• Step 3: Ask for the employee’s opinion
• Step 4: Present your assessment
• Step 5: Build on employee’s strengths
• Step 6: Ask for employee’s reaction to your assessment
• Step 7: Set specific goals
• Step 8: Close the discussion
PERFORMANCE DEVELOPMENT
Implementing training and development and other people performance improvement initiatives
The adoption of the 5 pivotal roles of people development-focused managers (people
capitalism).
PERFORMANCE REWARD
• Offering of host of customized and personalized intrinsic and extrinsic performance reward options
and recognition. Ensure compliance with best practice principles
LEARNING ACTIVITY 2
• Group discussion
Review the efficiency and effectiveness of the currentperformance management process in yourorganization. Identify gaps and recommendimprovement strategies.
Also discuss the key managerial actions in the 5-stage,performance management cycle.
• Provide feedback in the form of summary
PERFORMANCE EQUATION
CAUSES OF POOR PERFORMANCE
Personal problems
Skills/competence
Lack of resources
Organizational factors
CAUSES OF POOR PERFORMANCE
• Refer to the reading article, “7 Causes of Poor Employee Performance - And How to Address Them” (Bernard Marr) on pages 42-44
PERFORMANCE MATRIX
LEARNING ACTIVITY 3
• Group discussion
Identify the most common causes of poorperformance in your organization. Develop pro-active strategies to prevent poor performance.
Apply performance management principles to thefour (4) quadrants of the Performance Matrix.
• Provide feedback in the form of summary
PERFORMANCE COUNSELING
• Defining performance counseling
• The purpose of performance counseling
• The benefits of performance counseling
• The characteristics of effective performancecounseling
• Characteristics of effective performance counselors
• Performance counseling process
THE CHARACTERISTICS OF EFFECTIVE PERFORMANCE COUNSELING
• Purpose
• Flexibility
• Respect
• Communication
• Support
CHARACTERISTICS OF EFFECTIVE PERFORMANCE COUNSELORS
• Shows compassion• Listens attentively and actively• Honest and Trustworthy• Knowledgeable – content and process• Patient• Knows their limits and restrictions• Knows when and where to refer employees e.g.
Employee wellness and/or Assistance programmes• Emotionally intelligent• Impartial and objective• Professional• Positive attitude and outlook
LEARNING ACTIVITY 4
• Group discussion
By referring to the purpose and value/benefits ofperformance counseling, build a business case for thevalue and impact thereof.
By referring to the characteristics of performancecounseling/counselor, develop a profile of an effectiveperformance counselor in your working environment.
• Provide feedback in the form of summary
PERFORMANCE COUNSELING PROCESS
• Preparing for a Performance Counseling session
• Conducting a Performance Counseling session(Interview)
• Performance Improvement Action Plan
• Monitor, review and evaluate the effectivenessof the Performance Improvement Action Plan
PREPARING FOR A PERFORMANCE COUNSELING SESSION
• Review the performance standards, jobdescription and operating manuals
• Consultation and engagement
• Start building a business case for employee poorperformance
• Schedule and notify the employee of thecounselling session
LEARNING ACTIVITY 5
• Group discussion
As part of your preparation for a performancecounseling session, develop a comprehensive checklistto ensure that you are adequate prepared.
By referring to this preparation check-list, identifysome of the common preparatorychallenges/constraints in your organization. For eachof these challenges, develop remediation strategies.
• Provide feedback in the form of summary
CONDUCTING A PERFORMANCE COUNSELING SESSION (INTERVIEW)
CONDUCTING A PERFORMANCE COUNSELING SESSION (INTERVIEW)
• Directing, managing and controlling the interview(Process)
• Jointly create and sign an FOSA agreement:
FactsObjectivesSolutionsActions
• Topics (Content) to include in a counseling session
• Post counselling actions
CONSTRUCTIVE FEEDBACK (B-E-E-R TECHNIQUE)
• BEHAVIOUR
• EFFECT
• EXPECTATION
• RESULT
LEARNING ACTIVITY 6
• Group discussion
• By referring to the process as well as the content,develop a set of best practice principles for conductingan effective performance counseling interview/session.
Process
Content
• Provide feedback in the form of summary
PERFORMANCE IMPROVEMENT ACTION PLAN
• Defining a Performance Improvement Plan
• The value of developing a PerformanceImprovement Plan
• Refer to the six items that a supervisor shouldreview with the employee when using thedocument
• Refer to the PIP template (pages 62-63)
MONITOR, REVIEW AND EVALUATE THE EFFECTIVENESS OF THE PERFORMANCE IMPROVEMENT ACTION PLAN
• After the session and throughout a sufficient timeperiod, managers should evaluate the worker'sprogress to ensure the problem has been solved.
• Managers need to decide on the following:
M&E tools and techniques
Frequency of review
Disciplinary actions as a result of continuance of poorperformance
Reward actions when performance improvement occurs
LEARNING ACTIVITY 7
• Role Play:
Pair up with a learning partner and conduct a 15-minuterole play scenario in which one learner plays the role of asupervisor and the other learner a poor performingsubordinate. Record the performance improvementagreement by using the provided PIP template.
Conduct a de-briefing session after the role play todetermine the efficiency and effectiveness of thecounseling process.
Discuss the monitoring and evaluation tools that managerscould use to periodically review employee performanceimprovement/s.
INCAPACITY PROCEDURE
• Differentiate between misconduct and poorperformance – relevant examples
• Schedule 8: Code of Good Practice (LRA):
Fair reasons for dismissal
Disciplinary measures short of dismissal
Incapacity: Poor work performance
INCAPACITY PROCEDURE: POOR PERFORMANCE
• Given the employee appropriate evaluation,instruction, training, guidance or counseling and
• After a reasonable period of time for improvement,the employee continues to perform unsatisfactorily
• Conducting an investigation
• The employee should have the right to be heardand to be assisted by a trade union representativeor a fellow employee.
GUIDELINES IN CASES OF DISMISSAL FOR POOR WORK PERFORMANCE
• Whether or not the employee failed to meet a performancestandard and
• If the employee did not meet a required performance standardwhether or not
• The employee was aware, or could reasonably be expected tohave been aware, of the required performance standard;
• The employee was given a fair opportunity to meet the requiredperformance standard; and
• Dismissal was an appropriate sanction for not meeting therequired performance standard
LEARNING ACTIVITY 8
• Group discussion:
By referring to Schedule 8 of the Code of GoodPractice: Dismissal as well as your organizationalpolicy and procedure, measure the current degreeof compliance when exercising and managing poorperformance.
Identify the areas of non-compliance and developremediation/improvement strategies for each ofthese areas.
THE PURPOSE AND VALUE OF COACHING
• Coaching often provides positive feedback about employee contributions.
• Regular coaching brings performance issues to an employee's attentionwhen they are minor, and assists the employee to correct them.
• The goal of coaching is to work with the employee to solve performanceproblems and improve the work of the employee, the team, and thedepartment.
• Coaching offers the vehicle to accelerate employee development towardsthe achievement of individual and organizational effectiveness.
• The core of coaching is building rapport, asking powerful questions andsetting goals.
DIFFERENTIATING BETWEEN MENTORING AND COACHING (CIPD)
Mentoring Coaching
Ongoing relationship that can last for a long period of time Relationship generally has a set duration
Can be more informal and meetings can take place as and
when the mentee needs some advice, guidance or support
Generally more structured in nature and meetings are scheduled
on a regular basis
More long-term and takes a broader view of the person Short-term (sometimes time-bounded) and focused on specific
development areas/issues
Mentor is usually more experienced and qualified than the
‘mentee’. Often a senior person in the organization who can
pass on knowledge, experience and open doors to otherwise
out-of-reach opportunities
Coaching is generally not performed on the basis that the coach
needs to have direct experience of their client’s formal
occupational role, unless the coaching is specific and skills-
focused
DIFFERENTIATING BETWEEN MENTORING AND COACHING (CIPD)
Mentoring Coaching
Focus is on career and personal development Focus is generally on development/issues at work
Agenda is set by the mentee, with the mentor providing
support and guidance to prepare them for future roles
The agenda is focused on achieving specific, immediate goals
Mentoring resolves more around developing the mentee
professional
Coaching revolves more around specific development
areas/issues
GUIDING PRINCIPLES OF EFFECTIVE COACHING
• Strengthen communication between you and theemployee
• Help the employee attain performance objectives
• Increase employee motivation and commitment
• Maintain and increase the employee's self-esteem
• Provide support
BEST PRACTICE COACHING BEHAVIOURS
• Focus on behaviour, not personality.
• Ask the employee for help in problemidentification and resolution. Use active listeningto show you understand.
• Set specific goals and maintain communication.
• Use reinforcement techniques to shapebehaviour.
ELEMENTS OF AN EFFECTIVE COACHING SESSION
ELEMENTS OF AN EFFECTIVE COACHING SESSION
• Coach when you want to focus attention on any specific aspect of the employee's performance.
• Observe the employee's work and solicit feedback from others.
• When performance is successful, take the time to understand why.
• Advise the employee ahead of time on issues to be discussed.
• Discuss alternative solutions.
• Agree on action to be taken.
• Schedule follow-up meeting(s) to measure results.
• Recognize successes and improvements.
• Document key elements of coaching session.
STEPS OF THE SKILLS/TASK-ORIENTED COACHING PROCESS
• Step 1: Needs/skills gap analysis
• Step 2: Task analysis and explanation of taskrequirements
• Step 3: Demonstrating/Presenting the task
• Step 4: Trying out performance
• Step 5: Assessment of learner’s competence
• Step 6: Self Evaluation
STEPS OF A PERFORMANCE-BASED COACHING SESSION (POSITIVE FEEDBACK)
• Describe the positive performance result or work habit using specific details.
• Solicit your employee's opinion of the same product or behaviour.
• Ask the employee to identify elements that contributed to success
• Discuss ways in which you and the employee can support continued positiveresults.
• Reinforce for the employee the value of the work and how it fits in with themission, vision, values and goals of the work unit or department.
• Show your appreciation of the positive results and your confidence that theemployee will continue to perform satisfactorily.
• Document your discussion for the employee's file, as you would all coaching andcounseling sessions, noting day, date, time and key elements.
STEPS OF A PERFORMANCE-BASED COACHING SESSION – CONDUCT AND CAPABILITY
STEPS OF A PERFORMANCE-BASED COACHING SESSION (CONDUCT)
• Describe in detail the poor work habit observed
• Say why it concerns you. Tie it to the performance standards andgoals.
• Ask why it occurred and listen non-judgmentally to theexplanation. Describe the need for change and ask for ideas.
• Discuss each idea and offer your help
• Agree on specific actions to be taken and set a specific follow-update
• Document results from the session
STEPS OF A PERFORMANCE-BASED COACHING SESSION (CAPABILITY)
• Describe the issue or problem, referring to specific behaviours
• Involve the employee in the problem-solving process
• Discuss causes of the problem
• Identify and write down possible solutions
• Decide on specific actions to be taken by each of you
• Agree on a follow-up date
• Document key elements of the session
LEARNING ACTIVITY 9
• Group discussion:
By referring to the best practice principles andguidelines, describe how you can apply coachingas a vehicle to performance improvement.
CASE STUDY ANALYSIS
• “Dealing with Poor Performance”
• Refer to pages 62-65
• Response to questions 1-5 (page 66)
• Provide feedback of answers
CASE STUDY: DEALING WITH POOR PERFORMANCE
• Questions
• 1. Critically evaluate the proposed approach/procedure recommended byElaine, the HR Manager, to David in addressing Carol’s poor performance.
• 2. What are the likely causes of Carol’s poor performance? Differentiatebetween capability and conduct-related causes. What is the actual cause of Carol’spoor performance?
• 3. Critically evaluate the performance counselling session conducted by David.
• 4. What are the benefits of the approach adopted and applied by David inmanaging Carol’s poor performance?
• 5. What post-counseling monitoring and evaluation measures has Davidproposed? Do you believe that these are effective? Motivate your answer.
CONCLUSION
• Key points
• Summary
• Questions
• Certification
CONTACT DETAILS
• Charles Cotter
• (+27) 84 562 9446
• Twitter: @Charles_Cotter
• http://www.slideshare.net/CharlesCotter