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R EADERSHIP I NSTITUTE Media Management Center, Northwestern University PEOPLE MANAGEMENT PRACTICES: Displays to Accompany Survey Findings July, 2000 PEOPLE.

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Presentation on theme: "R EADERSHIP I NSTITUTE Media Management Center, Northwestern University PEOPLE MANAGEMENT PRACTICES: Displays to Accompany Survey Findings July, 2000 PEOPLE."— Presentation transcript:

1 R EADERSHIP I NSTITUTE Media Management Center, Northwestern University PEOPLE MANAGEMENT PRACTICES: Displays to Accompany Survey Findings July, 2000 PEOPLE MANAGEMENT PRACTICES: Displays to Accompany Survey Findings July, 2000

2 1 © 2001 Readership Institute Todays Objectives Understand the business case for people managementUnderstand the business case for people management Examine newspaper survey results I 3Examine newspaper survey results I 3 -I nform (findings and patterns) -I nsight -I mplications Build your confidence, conviction and capability to inform othersBuild your confidence, conviction and capability to inform others Ensure that you know how to read the various reportsEnsure that you know how to read the various reports Address some of your most important questionsAddress some of your most important questions Provide a near-term path for moving forwardProvide a near-term path for moving forward

3 2 © 2001 Readership InstitutePremise Our employees are our most valuable resource… and therefore, the management of people makes a significant difference to company performance. Challenge Prove it, or else stop talking about it! The Mega-Study

4 3 © 2001 Readership Institute Overall Business Impact People Factors Core drivers High-impact practices Specific actions Constructive culture People Factors Core drivers High-impact practices Specific actions Constructive culture Economic Factors Relative market share Company size Industry profitability Economic Factors Relative market share Company size Industry profitability 67% 33%

5 4 © 2001 Readership Institute Business Case Was Built in Two Ways Correlational Studies Determine what organizations should do Real World Applications Describe what world-class companies do and how they do it

6 5 © 2001 Readership Institute Empirical Validity Strength of Practice- Performance Relationship* SelectionSelection CompensationCompensation Performance Management 5001,0001,5002,0002,500 3,000 Number of Organizational Units Included in Research Total number of organizational units: 21,304 Very Strong Creativity & Innovation LeadershipLeadership ChangeManagementChangeManagement CultureCulture Employee Satisfaction & Retention Customer Satisfaction & Retention DevelopmentDevelopment © 2001 Readership Institute

7 6 People Management Model Returns to Shareholders Profitability Growth Productivity READERSHIP? Selection Development Performance Management Performance Management Compensation 1 2 Creativity & Innovation Creativity & Innovation Knowledge Management Knowledge Management Change Management Change Management Leadership Customer Satisfaction and Retention Employee Satisfaction and Retention 3 CULTURE © 2001 Readership Institute

8 7 Five Strata Examined Strata I II III IV V Circulation Ranges 0 – 25,000 25,001 – 50,000 50,001 – 100, ,001 – 200, ,001+ © 2001 Readership Institute

9 8 Three Levels of Analysis Level 1 DRIVERS (4 + 1 sections of the survey) Level 1 DRIVERS (4 + 1 sections of the survey) What to focus on Level 2 HIGH IMPACT PRACTICES (17 Best Practices Derived from Mega-Study) Level 2 HIGH IMPACT PRACTICES (17 Best Practices Derived from Mega-Study) What you should strive to achieve Level 3 SPECIFIC ACTIONS (90 Survey Questions) Level 3 SPECIFIC ACTIONS (90 Survey Questions) What you can do © 2001 Readership Institute

10 9 Overview Level 1 and Level 2 * Note: Employee Retention is an Intermediate Outcome. Drivers (Level 1) High-Impact Practices (Level 2) Selection Selection criteria and processes have consistent structure Selection skills are a key leadership attribute Seek to fill positions internally Pre-Reading Pages Development Promote integration and corporate glue Significant leadership responsibility Commitment is balanced between organization and individual Effective succession planning and talent pool processes Performance Management Clear mutual expectations Stretch objectives with meaningful measures Ongoing coaching and feedback Compensation Market-based compensation Performance-driven rewards and recognition Alignment of employee and shareholder interests Employee Retention * Latitude and authority for determining how best to execute job accountabilities, particularly to meet customer needs Quality and sustainability of highly effective leadership, particularly employees immediate supervisor Extent to which employees possess the knowledge and skills to contribute – plus – the opportunity to grow and advance Customer satisfaction is a high priority and is balanced with making the numbersplusrewards are provided for contributions 33 © 2001 Readership Institute

11 10 © 2001 Readership Institute Newspaper ResultsEmerging Themes Very low scores!Very low scores! Performance management highestPerformance management highest Development lowestDevelopment lowest Amazingly flat!Amazingly flat! More effective at and inclined to manage vertically versus horizontallyMore effective at and inclined to manage vertically versus horizontally

12 11 © 2001 Readership Institute Emerging Theme #1: Very Low Scores! Strongly Agree plus Agree Disagree plus Strongly Disagree 82% 87% 71% 91% 69% 18% 13% 29% 9% 31% Strongly Agree Agree Disagree Strongly Disagree All Newspaper RespondentsBest Practices Are in Effect LEVEL 1 ANALYSIS 100% 80% 60% 40% 20% © 2001 Readership Institute

13 12 © 2001 Readership Institute Emerging Theme #1: Very Low Scores! All Newspaper RespondentsBest Practices Are in Effect Strongly Agree plus Agree Disagree plus Strongly Disagree Selection Strongly Agree Agree DevelopmentPerformance Management CompensationEmployee Retention Relevant Page in Consolidated Report LEVEL 2 ANALYSIS Disagree Strongly Disagree X1denotes the Drivers High-Impact Practice in the order it appears in your reports 100% 80% 60% 40% 20% © 2001 Readership Institute

14 13 © 2001 Readership Institute Emerging Theme #1: Very Low Scores May reflect the newspaper industrys historical oligopolistic structure and behavior of the industryMay reflect the newspaper industrys historical oligopolistic structure and behavior of the industry Newspaper industry might be inwardly not externally focusedNewspaper industry might be inwardly not externally focused Newspaper industry, on average, is likely stuck in the Ingredients Era of people management practicesNewspaper industry, on average, is likely stuck in the Ingredients Era of people management practices Why?

15 14 © 2001 Readership Institute Eras of People Management Practices People were thought of as part of the machinery Cogs People management activities are: Discrete Inconsistent Contradictory Not aligned IngredientsEnablers People management activities are: Systematic Consistent Aligned Integrated Differentiators People management activities are: Core to business strategy Key to differentiation Source of competitive advantage © 2001 Readership Institute

16 15 © 2001 Readership Institute Performance Management is highest! Typically the most advanced Driver in stable or static industries that have undergone little change Other Drivers are characteristically brought into play more strongly as companies and industries are confronted by major change Typically the most advanced Driver in stable or static industries that have undergone little change Other Drivers are characteristically brought into play more strongly as companies and industries are confronted by major change Newspaper Results Findings Insights & Implications Development is lowest!* Typically viewed to be the softest Driver Is the most complex Driver of all Typically viewed to be the softest Driver Is the most complex Driver of all *Assuming we ignore Compensation

17 16 © 2001 Readership Institute Emerging Theme #4: Amazingly Flat Results LEVEL 1 ANALYSIS Disagree plus Strongly Disagree Performance Management Employee Retention SelectionDevelopmentCompensation © 2001 Readership Institute

18 17 © 2001 Readership Institute LEVEL 2 ANALYSISBy Department Emerging Theme #4: Amazingly Flat Results © 2001 Readership Institute

19 18 © 2001 Readership Institute Emerging Theme #4: Amazingly Flat Results LEVEL 2 ANALYSISBy Circulation Strata © 2001 Readership Institute

20 19 © 2001 Readership Institute Emerging Theme #4: Amazingly Flat Results LEVEL 2 ANALYSISBy Strata by Department © 2001 Readership Institute

21 20 © 2001 Readership Institute Emerging Theme #4: Amazingly Flat Results LEVEL 3 ANALYSISSelection Relative Strength Relative Weakness © 2001 Readership Institute

22 21 © 2001 Readership Institute Emerging Theme #4: Amazingly Flat Results! Industry has very homogeneous practicesIndustry has very homogeneous practices May be implied or accepted standardsMay be implied or accepted standards External changes may not have yet stimulated aggressive adoptionExternal changes may not have yet stimulated aggressive adoption Newspaper industry may be currently trapped in transformational no mans landNewspaper industry may be currently trapped in transformational no mans land Why?

23 22 © 2001 Readership Institute Industry Transformation Performance Time Low High Today Change unrecognized or not acted upon Successful Change Newspapers? Triggers: Competitors Changing needs Technology Economics Demographics © 2001 Readership Institute

24 23 © 2001 Readership Institute Emerging Theme #5: Newspapers are more effective at and inclined to manage vertically versus horizontally The standards we use for selecting internal candidates for open positions are set at relatively high levels The selection standards we use for outside hires are set at relatively high levels Selection of qualified people for position vacancies is a top priority of our newspaper's leaders We encourage self-nomination to open positions Our selection process is efficient (i.e. provides us with qualified people quickly) When we consider candidates from outside the newspaper to fill job openings, the size and quality of our external applicant pool is strong (i.e., we consistently choose among many qualified candidates) Our leaders are held accountable for attracting and selecting high-caliber candidates from outside the industry Driver Top Strengths Greatest Weaknesses Selection Our newspaper's leaders place a high priority on developing people Managers generally help their subordinates meet their career aspirations Qualified employees generally demonstrate sufficient initiative in developing their own skills Our newspaper possesses and continuously updates a newspaper-wide database that keeps track of competencies and skills individuals need to succeed in their positions Attending training programs for at least 35 hours a year is strongly encouraged by our newspaper Our organization systematically and regularly reviews its talent pools frequently (i.e. at least twice a year) We believe that one of the primary purposes of performance management in our newspaper is to support the execution of our business strategy Performance evaluations entail a discussion of an employee's performance, including the manager's own perspective on the employee's performance Performance evaluation discussions focus both on recent performance and identifying development needs Our strategies and strategic plans are regularly communicated so that all employees understand how their performance expectations are linked to them Each person's performance evaluation incorporates input from people within the company who are impacted by their work Performance evaluations incorporate input from the employee's peers/ team Development Performance Management © 2001 Readership Institute

25 24 © 2001 Readership Institute Emerging Theme #5: Newspapers are more effective at and inclined to manage vertically versus horizontally On average, our employees exhibit a high level of attendance on the job Employees possess a clear understanding of the limits within which they are permitted to act Achieving high levels of customer satisfaction is a high priority with my superior Employees possess a clear sense of how they personally contribute to meeting customer needs Employees are energized by the newspaper's culture and work environment Our managers spend unusually large amounts of time coaching and developing their subordinates Employees receive appropriate recognition and rewards for their contributions Driver Top Strengths Greatest Weaknesses Compensation Employee Retention Performance is the key determinant in establishing variable compensation (i.e., incentive) levels Our newspaper effectively recognizes (formally and informally) performance that supports our goal Change in overall job accountabilities is a key determinant in reviewing fixed (i.e., base salary) levels Our newspaper's compensation programs enable us to attract and retain required talent Change in external market pay levels is a key determinant in reviewing fixed ( base salary) levels Our compensation programs support the philosophy of providing superior rewards for superior performance Share-based compensation (e.g., employee share ownership plans, profit-sharing) for employees is a means of providing a single shared objective that binds together the various entities across our newspaper Employee share ownership is encouraged in our newspaper through our compensation plans © 2001 Readership Institute

26 25 © 2001 Readership Institute Why Should I Really Care About This People Stuff? High Levels of Employee Satisfaction & Retention Are Associated with Greater Customer Satisfaction & Retention... …which create a powerful way to move the needle 1 Extremely Dissatisfied 2 Somewhat Dissatisfied 3 Slightly Dissatisfied 4 Satisfied 5 Very Satisfied Customer Satisfaction Measure 100% 80% 60% 40% 20% Customer Retention Source: Harvard Business School; Heskett, et. al.Source: RNW Research 48% defected! Satisfied Loyal Customer Satisfaction & Retention High Low High Employee Satisfaction & Retention The Zone of Affection The Royalty of Loyalty © 2001 Readership Institute

27 26 © 2001 Readership Institute Latitude36.6%Latitude36.6% Authority 19.2% 14.6%14.6% 14.0%14.0% 13.6%13.6% % Explanatory Power* Leadership and Culture Capability and Development Recognition, Rewards and Focus on Customer Satisfaction * Represents the proportion of the total R 2 explained by each determinant. 55.8% 70.4% 84.4% 98.0% 36.6% Four Key Factors of Employee Retention © 2001 Readership Institute

28 27 © 2001 Readership Institute Real Effect of Employee Retention Employee Satisfaction & Retention Agent tenure 200% longer than industry average Agent productivity 150% higher than industry average 7% employee turnover rate Two-thirds lower than industry average Most productive organization reflected by home office cost per $1,000 of face value premiums sold Customer Satisfaction & Retention 93% customer retention 98% customer retention in auto 95% customer retention Company State Farm USAA Northwestern Mutual Life © 2001 Readership Institute

29 28 © 2001 Readership Institute So, what can/should you... Do Not do …when you return home? © 2001 Readership Institute

30 29 © 2001 Readership Institute Between Now and Our Next Meeting Guiding Principles Ready, aim, fire! Dont jump in and fix itgo slow to go fast For now, ask more questions than give answers Take the time to really create understanding and insight Then…create strong alignment in terms of your desired end state Set expectations carefully This is a technical and a political challenge; i.e., a formidable change management challenge Objectives Get under the survey to gain clarity and commitment to the real issue(s) and their root causes Come back in October with the issues and their root causes the data that is ready then will help you set priorities and begin to act © 2001 Readership Institute

31 30 © 2001 Readership Institute Between Now and Our Next Meeting High-powered committed team and create a charter Set expectations for objectives and time commitment Provide clear directional guidance for what you really want to discover. Describe specific outcomes and deliverables that you want them to produce Strive for insight and understanding What specific factors have resulted in our current situation? Why? Build understanding through focus groups and one-on-one interviews. What has been (is still) the impact on our organization? How do we know? What is our desired future state? Why? If we are successful, what specific differences/impacts would we expect to see become visible? What decisions must we make and what actions must we take, to close gaps? Who needs to be involved in making the above happenbased on expertise, political considerations and the need for the change? © 2001 Readership Institute


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