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February 8, 2005 Is Employee Performance Management Performing? Exploring the Latest Findings from the Field February 8, 2005.

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Presentation on theme: "February 8, 2005 Is Employee Performance Management Performing? Exploring the Latest Findings from the Field February 8, 2005."— Presentation transcript:

1 February 8, 2005 Is Employee Performance Management Performing? Exploring the Latest Findings from the Field February 8, 2005

2 February 8, 2005 Mr. Clinton Wingrove Head of International R&D Performance Management CEO and Principal Consultant Pilat (North America) Inc. Dr. Katherine Jones Research Director Enterprise Applications AberdeenGroup Presenters

3 February 8, 2005 Duration: 60 minutes Dr. Katherine Jones – Research from the Field Mr. Clinton Wingrove – Real World Experience Questions & Answers Download Slide Presentation Agenda

4 The Destination of Choice for Actionable Research Grandstand Performance Management: Managing Employees for the Performance-Driven Enterprise Dr. Katherine Jones Research Director

5 © 2004 AberdeenGroup 5 Agenda Key Issues in EPM Today: The HR Exec’s Agenda Challenges for Improvement Moving to Best in Class in EPM Next Steps for an Performance-Driven Enterprise

6 © 2004 AberdeenGroup 6 The HR Executive’s Agenda on EPM What Keeps Them Up at Night 1 2 3

7 © 2004 AberdeenGroup 7 Prioritized Prioritized Pressures Strategies Align individual behavior and work with corporate goals or scorecards (83%) Increase ability to improve an employee’s skill levels and career path within the organization (82%) Link payouts with employee performance (80%) More accurate record keeping on employees, their skills, and their performance (79%) Ultimately measure the degree of alignment between the workforce and overall corporate performance (75%) Link payouts to total company revenue acquisition (70%) Communication of core business objectives across the company (89%) Implement a culture of continuous improvement (89%) Alignment of employee and department behavior with corporate goals or scorecards (86%) Improve employee morale and retention (85%) Improve reward structure to retain top performers (84%) Delivery of competitive services to better retain employees (65%)

8 © 2004 AberdeenGroup 8 Impediments to be Overcome

9 © 2004 AberdeenGroup 9 What Research Tells Us: Status Today 90% of the respondents see improved employee performance management as a key to gaining competitive advantage. 82% percent say that their employees’ work objectives are tied to corporate goals. 64% think employee achievement should be tied to demonstrable revenue outcomes. 73% of the respondents feel it is important that employees can articulate the corporate goals that their on-the-job behavior or their role at work influences. –Fewer, however, used the corporate goals to define individual work objectives.

10 © 2004 AberdeenGroup 10 Methods and Frequency of Employee Assessment

11 © 2004 AberdeenGroup 11 Issues Identified: Managerial Training Training managers to conduct performance evaluations and the ability to tie employee objectives to corporate goals are seen as the biggest issues in managing employee performance. Training managers how to coach employees better was the highest rated priority (79%)

12 © 2004 AberdeenGroup 12 Report Card: Room for Improvement 52% are locked into paper-based evaluations that are conducted yearly and rarely reviewed again. 40% report that internally they are not ready to evaluate performance beyond its demonstration at the departmental level. Over a quarter felt that revisiting an employee’s progress toward his or her goals more than once a year is unimportant. Almost a quarter reported insufficient awareness of the value potential of aligned goals to merit further attention to the matter 11% thought that the employee’s ability to explain his or her job’s relationship to corporate goals was not at all important.

13 © 2004 AberdeenGroup 13 Top of the Wish List A new electronic performance management system (32%) Investment in an electronic system to better articulate and manage employee’s individual goals and their achievement (35%) 22% of companies participating have budgets in place for new or enhanced employee evaluation practices, procedures, or management systems within this calendar year.

14 © 2004 AberdeenGroup 14 Aberdeen Comparative Framework The Deans‘ List Laggards Best in Class Industry Norm

15 © 2004 AberdeenGroup 15 What Do We Learn from Best in Class Companies? Best-in-class companies consider employee evaluation as on-going, with at least monthly discussions between employee and manager. Best-in-class companies see employee evaluation as an opportunity to foster employee growth Best-in-class companies are more likely to use automation as part of their employee management initiatives

16 © 2004 AberdeenGroup 16 Frequency of Employee Evaluation By Competitive Framework

17 © 2004 AberdeenGroup 17 Best in Class

18 © 2004 AberdeenGroup 18 Comparisons Between Best in Class and Laggards: Perceived Barriers to a Performance-Driven Organization

19 © 2004 AberdeenGroup 19 Best in Class Companies Employ Automation in EPM

20 © 2004 AberdeenGroup 20 Distinctions in Leaders and Laggards Over half of the Best in Class companies use technology in managing their workforce to enable both timeliness and consistency Best in Class companies exceed the others in viewing employee evaluation as an ongoing process rather than a once a year, one-shot deal.

21 © 2004 AberdeenGroup 21 And the Laggards…. Only laggards conducted no measurement of their workforce whatsoever Laggards exceeded the industry norm in viewing performance management as the bastion of HR Both laggards and the industry average far exceeded best in class companies in using employee evaluation solely for yearly budgeting, tied to raises and merit increases.

22 © 2004 AberdeenGroup 22 Best in Class Companies in EPM Outperform Peers

23 © 2004 AberdeenGroup 23 Determining Best in Class Best in class, average and laggard companies were determined by the organizational processes that companies are using to manage Employee Performance. Companies were given a score based on a weighted average of the self assessment answers that the companies provided across the following areas: –Overall processes –Organizational structure and strategy –Data and Knowledge management –Technology utilized to support EPM We then examined a company’s overall maturity and placed them in a particular subgroup based on the following: –Top 20% of companies = Best in Class –Middle 60% of companies = Average –Bottom 20% of companies = Laggard We then examined additional aspects of EPM (metrics, performance, pressures, etc.) based on these sub-groupings.

24 © 2004 AberdeenGroup 24 Key Take-Aways for the Less than Best: Steps for Laggards Know why you want to measure an individual’s performance. –If you see no reason to evaluate performance, then don’t bother. If you do nothing whatsoever with a performance review and it does not influence a worker’s job performance or effect compliance, you may as well not go through the motions at all. Proactively articulate a plan for a performance-driven culture. –Assuming improving the workforce is indeed a priority, enlist top management behind a move to improve employee performance by defining what it should be. Begin communicating with your workforce. –Moving to a performance-driven environment is an exercise in change-management. Prepare for it early; a change in how or why an employee is to be evaluated is frightening.

25 © 2004 AberdeenGroup 25 Key Take-Aways for the Less than Best: Steps for the Average Companies Put your money where your mouth is. –Create a culture where on-going evaluation is part of corporate life; and managerial time is allotted to and rewarded for that endeavor. Train managers who are responsible for performance evaluation. –Evaluation of performance and the follow-on coaching to improve it both require training. In addition, managers report discomfort at discussing performance with employees, especially that which needs improvement. A performance-driven culture requires open discussion of individual performance from the top down – and that requires training at all levels. Evaluate automated performance tools. –Eliminate manual, paper-based processes, and consider automated solutions that employ sharable planning worksheets, workflow, electronic record retention, Web-based record access, e-mail, and corporate-wide goal alignment.

26 © 2004 AberdeenGroup 26 Key Take-Aways for the Best: There is Always Room for Improvement View performance management as a business process worthy of investment. –Foster a corporate culture and business processes oriented around high performance. This takes an ongoing commitment to enterprise-wide communication. Create valid measures for employees’ performance. –Articulate distinctions between the A, B, and C players. Ensure that these are quantifiable and that rewards based on performance distinguish between the results of these performers. Remember that you need to retain the B players as well as the super-stars! Drive toward corporate goal alignment. –Measure performance based on proximity to achieving corporate business goals while remaining realistic about what employees actually have within their power to achieve and accomplish. An individual cannot be held accountable for goals he or she is powerless to successfully impact. Evaluating and improving workforce performance requires ongoing attention to managerial training. –Increase managerial training on employee management, evaluation, coaching, and mentoring. This is not a one-shot event; it is an ongoing business process of managerial growth in itself.

27 © 2004 AberdeenGroup 27 Aberdeen Conclusions It is hard to improve what you cannot measure; it is impossible to measure outcomes if you cannot articulate not only the outcomes desired but the degree of quality required for those outcomes as well. Performance management can only be a good as the manager’s ability to set objectives clearly, articulate goals and their relative value, define the levels of performance expected and explain how the employee is to achieve those levels. This requires training and commitment. The success of a corporation’s workforce management endeavors will not be determined solely by technology: this research demonstrates that commitment of top executives to a performance-driven enterprise and the requisite interest, training, and dedication by middle level managers to the effort is paramount.


29 Unlocking individual and organisational potential PERFORMANCE, TALENT and DEVELOPMENT MANAGEMENT · COMPENSATION · ORGANIZATIONAL MEASUREMENT · STAFFING Clinton Wingrove, Head Of International R&D – Performance Management CEO and Principal Consultant, Pilat (North America) Inc. 800.338.9701 Clinton Wingrove, Head Of International R&D – Performance Management CEO and Principal Consultant, ____________ Pilat (North America) Inc. ____________ 800.338.9701 © 2005 Pilat (North America), Inc.

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32 Talent Management Performance Management Development Management Organizational Surveys & Research Auditing & Benchmarking Employee Surveys Data Analysis 360º Feedback Qualitative & Quantitative Research Action Planning and Follow Through Process design, training and implementation ASP services Goal Setting Goal Alignment Competencies 360º Feedback Performance Review and Appraisal Development Management Process design, training and implementation In-House/ASP services Succession Planning Talent Management Development Management Resumes Executive Assessment Risk Management Process design, training and implementation In-House/ASP services Development Planning Development Tracking and Review Competencies Coaching Management Teambuilding Interactive e-Learning Executive Assessment Executive Coaching Process design, training and implementation In-House/ASP services Pilat HR Solutions Compensation - Staffing

33 Our unique blend of in-depth experience: - Our own software house with over 20 yrs experience in Rapid Application Development - HR process design – a consulting house of international repute working with governments, Fortune 500 and military clients -HR data analysis/literacy – 25 years experience applying sophisticated statistical techniques to improve and make sense of HR data. HR Pulse ® a unique Rapid Application Development toolkit built specifically to meet the ever evolving demands and changing circumstances of HR. PASRAS Our unique ‘Process and System Review and Specification’ workshop. Our Differentiators

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43 February 8, 2005 Questions & Answers Thank you for your participation.

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