step september 29, 2005

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STEP September 29, 2005 Performance Alignment Review (PAR) Wayne Hays Shirley Dickson

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STEP September 29, 2005. Performance Alignment Review (PAR) Wayne Hays Shirley Dickson. Agenda. Brief Solectron Background Performance Management Overview Highlights Form Overview Rating Calibration Lessons Learned. Solectron History. Solectron was founded to - PowerPoint PPT Presentation

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Page 1: STEP September 29, 2005

STEPSeptember 29, 2005

Performance Alignment Review (PAR)

Wayne Hays

Shirley Dickson

Page 2: STEP September 29, 2005

Agenda

• Brief Solectron Background

• Performance Management Overview

• Highlights– Form Overview

– Rating Calibration

• Lessons Learned

Page 3: STEP September 29, 2005

Solectron History

• Solectron was founded to

– Take advantage of the growing need for Electronics Manufacturing Services (EMS)

– Accommodate the overflow from manufacturing operations of Original Equipment Manufacturers (OEMs)

Page 4: STEP September 29, 2005

From a single manufacturing location (1977)...

Milpitas, California

Page 5: STEP September 29, 2005

To a presence in more than 20 countries...

Asia/PacificAustraliaChinaIndiaIndonesiaJapanMalaysiaSingaporeTaiwan

AmericasBrazil Canada Mexico United States

EuropeBelgium France Germany Hungary Netherlands Romania Scotland Sweden Turkey United Kingdom

United StatesCalifornia Kentucky Massachusetts

Michigan North Carolina Oregon

Puerto Rico South Carolina Tennessee

Texas

Page 6: STEP September 29, 2005

Our Service Offerings

Collaborative Design

Lean Manufacturingand Fulfillment

Post-ManufacturingGlobal Services

• Product Design

• Design for Six Sigma and Manufacturability

• Product Launch

• Product Life Extension

• Sustaining Engineering

• PCBA and Subsystem Manufacturing

• Systems Assembly and Test

• Responsive Supplier Network

• Product Fulfillment and Logistics

• Global Network for Lowest Landed Cost

• Repair

• Product Logistics

• End-of-Life Support

• Process Loops for Design and Manufacturing Improvement

Page 7: STEP September 29, 2005

Customers

• Brocade

• CISCO Systems

• Dell

• Ericsson

• Hewlett-Packard

• IBM

• Lucent

• Microsoft

• Motorola

• Marconi

• Nortel Networks

• Samsung

• Sony

• Sun

• TiVo

Page 8: STEP September 29, 2005

Recognition

Awarded the Malcolm Baldrige National Quality Award for manufacturing in 1991. In 1997, after waiting the required five years, Solectron reapplied for the award and became the first company to win the Award twice in the history of the program.

“For more than 25 years, Solectron has received more than 450 customer, quality and community awards.”

Page 9: STEP September 29, 2005

Performance Alignment Review (PAR)

Page 10: STEP September 29, 2005

The Case for Change

“At Solectron, we are undergoing a major transformation designed to help us better serve our customers, simplify how we do business and improve our financial performance. Instituting standards for aligning and measuring individual performance is a key part of the larger transformation underway.”

“Ultimately, our success can be traced back to how we answer two fundamental questions: Do we as a company have the right goals and vision to move forward? And, just as importantly, do each of us – personally and through our teams – understand what we must accomplish and which behaviors we must model to make Solectron’s vision a reality. It is about individual performance and collective progress. It is about building a One Solectron culture that simply outperforms the competition.”

Kevin O’Connor EVP, Human Resources

Michael R. CannonPresident and CEO

Page 11: STEP September 29, 2005

What We Found...

• Dozens of processes, forms, cycles, approaches used across the corporation

• Anecdotal feedback from employees and HR indicating the lack of any performance feedback from managers

• Linkage to other critical HR processes weak (compensation, stock awards, promotions, succession, executive selection, etc.)

• Behavioral and cultural expectations unclear

Page 12: STEP September 29, 2005

Performance Management Goals

• Create a common performance culture

• Enhance individual, team and organizational effectiveness

• Align individual performance with business goals

• Create a culture of on-going feedback and development

• Create a consistent methodology to assess employee contribution

• Provide information to help determine

– Compensation decisions

– Promotions

– Rewards & Recognition

– Developmental Opportunities

Page 13: STEP September 29, 2005

Performance Cycle

Corporate GoalSetting & Alignment

Goals Flow Down

SettingExpectations

Mid-YearReview

Final Review

Rewards$

Ratings CalibrationMeeting

OrganizationGoals, Priorities,

Imperatives, Behaviors

Perform, Monitor,Feedback

Next Level Mgr

HRMgr

Mgr Mgr

Development Process

Page 14: STEP September 29, 2005

Performance Review Tempo

Q4 Q1 Q2 Q3 Q4Sept-Nov Dec-Feb Mar-May Jn-AugJn-Aug

Goal setting & alignment

Perform, monitor, feedback

Mid-year review

Final review

Sept-Oct

Page 15: STEP September 29, 2005

One Solectron Behaviors

Sustained Profitability: Reduce operating expenses; strengthen balance sheet; eliminate duplicate structures; improve effectiveness and efficiency

Asset Velocity: Increase inventory turns; improve cash-to-cash cycle

Execution Excellence: Reduce complexity; common repeatable processes; improve overall quality and responsiveness; collaborate better with each other; streamline our organization

Revenue Growth: Continue to win new business; secure follow-on business

Restore Employee Morale: Themes include change; flexibility; creating an environment of open & honest feedback; learning quickly; accepting new challenges

• Integrity

• Team Player

• Champion Change

• Coach Others

• Continuously Learn

To accomplish our Business Priorities…We must create a “One Solectron”culture through demonstration of the right behaviors…

OrganizationGoals, Priorities,

Imperatives, Behaviors

Page 16: STEP September 29, 2005

Business Priorities & Behaviors

Integrity

Team Player

Coach Others

Champion Change

Continuously

Learn

BehaviorsHow work is

accomplished

ResultsWhat work is accomplished

Performance to

Expectations

Business Contributions

Equal Emphasis on Results & Behaviors

Page 17: STEP September 29, 2005

Sample Behavioral Description

Individual Contributor Manager of Others Executive

• Asks for & offers help to others when needed.

• Understands team & organizational goals.

• Places team & organizational goals before personal goals.

• Shares best practices with others.

• Stays involved; actively participates.

• Treats others with dignity and respect

• Set expectations for cross functional; cross business cooperation

• Promote the use of own and others’ capabilities to other functions

• Proactively share information across organizational boundaries

• Promote a team culture, recognizing the contributions of all team members

• Share best practices across organizational boundaries

• Treat others with dignity and respect

• Address behavior in others that may damage constructive relationships

• Remove organizational barriers to collaboration and teamwork

• Share best practices across organizational boundaries

• Achieve business results through collaboration with others; place higher priority on Solectron goals than own personal goals

• Offer resources, even when it hurts, when it will help others achieve company goals

• Treat others with dignity and respect

• Actively engage with community and/or charitable organizations

Team Player

Work effectively and cooperatively with others; establish and maintain good working relationships; cultivate an active network of relationships; identify opportunities and take action to build strategic relationships.

Page 18: STEP September 29, 2005

Performance Concept

A00-04050117

Behaviors

Pe

rfo

rma

nc

e

Didn’t Meet Meet

Did

n’t

Me

etM

eet Behavior IssueBehavior Issue BalanceBalance

Results & Results & Behavior IssueBehavior Issue

Results IssueResults Issue

Page 19: STEP September 29, 2005

Performance = 5

Behaviors = 1

Performance = 5

Behaviors = 2

Performance = 5

Behaviors = 3

Performance = 5

Behaviors = 4

Performance = 5

Behaviors = 5

Performance = 4

Behaviors = 1

Performance = 4

Behaviors = 2

Performance = 4

Behaviors = 3

Performance = 4

Behaviors = 4

Performance = 4

Behaviors = 5

Performance = 3

Behaviors = 1

Performance = 3

Behaviors = 2

Performance = 3

Behaviors = 3

Performance = 3

Behaviors = 4

Performance = 3

Behaviors = 5

Performance = 2

Behaviors = 1

Performance = 2

Behaviors = 2

Performance = 2

Behaviors = 3

Performance = 2

Behaviors = 4

Performance = 2

Behaviors = 5

Performance = 1

Behaviors = 1

Performance = 1

Behaviors = 2

Performance = 1

Behaviors = 3

Performance = 1

Behaviors = 4

Performance = 1

Behaviors = 5

5

4

3

2

1

Behaviors

Per

form

ance

Overall Rating Guide

1 2 3 4 5

Exceptional

Commendable

Fully Effective

Needs Improvement

Unacceptable

Page 20: STEP September 29, 2005

Rating Distribution

• Managers have the flexibility to adjust distributions within guidance. Total distribution must equal 100%.

• Distribution is to be applied when population sizes reach 100 or more. Small departments are not expected to meet the distribution.

• Managers can include employees that have been managed out of the organization during the review period. These situations are limited to performance issues – not employees who have left in good standing.

From To Rules

5 Exceptional 10% 0-10% 5 cannot exceed 10%; together

cannot exceed 30%4 Commendable 20% 20-30%

3 Fully Effective 60% 50-60% Can be adjusted up or down

2 Needs Improvement 5%10% + Cannot be less

than 10%1 Unacceptable 5%

Page 21: STEP September 29, 2005

Form Demonstration

Page 22: STEP September 29, 2005

Rating Calibration

Page 23: STEP September 29, 2005

Calibration Concept

• The purpose is to create a review process that establishes a more consistent, equitable, and accurate performance evaluation and feedback environment across manager groups within functions.

• The process facilitates a common understanding and method to arrive at final ratings

• Distribution of ratings is not the goal

Page 24: STEP September 29, 2005

Meeting Participation

EVP

VP

Director

Supervisor

Individual Contributor

Manager

• Next Level Review• All “manager of managers”

participate with their direct manager (peer group)

• Matrix reporting relationships not included, only direct reporting relationships

• Organization structure will drive number of meetings required

• Sequence of meetings not important (e.g., “top down” vs. “bottom up”)

Page 25: STEP September 29, 2005

Participation Example

Function Leader

Direct Report

Direct Report

Direct Report

Next Level Leader

Direct Report

Direct Report

Direct Report

Calibration Meeting

Calibration Meeting

Etc…

Important: Functional reviews; not site or region!

Page 26: STEP September 29, 2005

Rating Profiles – Optional Resource

1 = Unacceptable

EXCEPTIONAL

• Top 10% of performers. Clearly stands out from others; exceeds all expectations, measures and targets against established objectives and/or standards

• Self starter who takes initiative and works independently with minimum supervision; produces high quality products with very little rework required; always delivers on commitments

• Proactively assumes additional responsibilities; willingly works outside of job scope for the good of Solectron; consistently surprises with level of effort, quality work, improvement suggestions

• Proactive problem solver; looks for improvement opportunities with customers and/or process; recognizes what needs to be done and generates creative solutions

• Clearly understands and supports organization strategy and priorities; understands how own work contributes to the success of Solectron

• Recognized expertise; others seek out this person for guidance and counsel

• Works across functions and organization boundaries to build strategic relationships; valued team player who builds effective partnerships

• Considered a change champion; always open to new ideas and stimulates others to embrace change; model of flexibility, accepts changes and redirection as improvement opportunities

• Openly shares information with others for the good of Solectron

• Builds trusting relationships; provides constructive and honest feedback to help others succeed; accepts feedback from others and acts on the feedback for self-improvement

• Willingly takes on new challenges; stretches current capabilities; seeks new learning opportunities

2 = Needs Improvement

3 = Fully Effective

4 = Commendable

5 = Exceptional

Page 27: STEP September 29, 2005

Rating Calibration Tool – Data Entry

Empl ID

Comdef Site

(Optional) Last Name First NameJob Grade (Optional)

Status (T for

Termed)Comdef

SiteEmpl

ID Last Name First Name Objectives Behaviors Final NP Scores

Manager A Employee 1 3 3 3

Manager A Employee 2 4 4 4

Manager A Employee 3 3 3 3

Manager A Employee 4 3 3 3

Manager A Employee 5 3 3 3

Manager A Employee 6 3 3 3

Manager B Employee 1 5 4 5

Manager B T Employee 2 3 2 2

Manager B Employee 3 4 3 3

Manager B Employee 4 4 4 4

Manager B Employee 5 3 3 3

Manager B Employee 6 3 3 3

Manager B Employee 7 4 4 4

Manager B Employee 8 4 3 3

Manager B Employee 9 5 5 5

Manager B Employee 10 4 4 4

Manager C Employee 1 3 3 3

Manager C T Employee 2 3 2 2

Manager C Employee 3 3 3 3

Manager C Employee 4 3 3 3

Manager Employee Ratings

Page 28: STEP September 29, 2005

Rating Calibration Tool – Distribution

Ratings Distribution - Numbers

0

2

12

4

2

0

2

4

6

8

10

12

14

1 2 3 4 5

Rating

Nu

mb

er

of

Em

plo

ye

es

Ratings Distribution - Percentages

0%

10%

60%

20%

10%

0%

10%

20%

30%

40%

50%

60%

70%

1 2 3 4 5

Rating

Per

cen

tag

e o

f E

mp

loye

es

Page 29: STEP September 29, 2005

Lessons Learned

• Change management is under rated

• There is no such thing as over communicating

• Sweat the small stuff

• Intensive “boot camp” for HR field partners