Presentation to: CELM. Strategic Performance Management
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1 Presentation to: CELM
2 Who Are Acelero? Acelero is a provider of performance management and related software. We are NOT consultants. However, we have a lot of experience in the real world. Acelero s sole purpose is to assist organisations achieve their strategic goals through optimising the performance of their people.
3 What is Performance Management? The process by which organisations ensure that their people: Are aligned to achievement of the organisation s overall goals; and Are meeting their performance goals
4 Why Do Performance Management? We always have. An MBA qualified guy said it was a good idea. Plenty of other companies are doing it, so it has to be good. HR recommended it, so it must be right.
5 The People Element to Success We firmly believe that increased people performance delivers better business performance. Put another way: Success = People + assets
6 Warm and Fuzzy vs Bottom Line Consider a company with 2000 employees and an annual wages bill of $120 mill and Profit Before Tax of $20m. A 1% productivity improvement equates to an additional pre tax profit of $1.2 m. The $1.2m represents a 6% increase in PBT.
7 Where do we Start? No matter how large the organisation, all performance begins with the individual. Individual performance then flows onto teams, divisions, business units and finally to the whole organisation. Hence, each individual needs to be Performance Managed.
8 Undertaking Performance Management Successful PM requires: A desire to achieve success through people. This must come from the top of the organisation. A Performance Management methodology. A Performance Management system.
9 Undertaking Performance Management (cont) Successful PM requires: Appropriate training to undertake the task. Follow up of the outcomes with real actions.
10 PM Methodology What to assess: Objectives Behaviours / Values Competencies Others Other: Rating system Frequency of review Assessment approach ( self/manager/agreed )
11 PM Methodology: What to Assess? Objectives: These are the Hard Edged components. Examples: Sales of X within 6 months at a specified average margin. Lost Time Injury Rates of X or less.
12 PM Methodology: What to Assess? Behaviours / Values: These are the How we do business in our organisation components. Examples: Importance of teamwork Demand for integrity The requirement to be innovative
13 PM Methodology: What to Assess? Competencies: These are the skills components. Examples: Can be technical competencies that are job specific. Managerial competencies such as leadership, flexibility, achievement motivation and communication skills.
14 Practical Tips Keep it simple and focussed: Resist the temptation to have too many obectives or other criteria in the PM process. Be very clear about the relative importance of each performance component being measured There is only a maximum of 100% of an employees time/effort available.
15 Practical Tips Ensure Objectives set at the beginning of the review period: Sounds obvious, but here are plenty of examples of where it just does not happen. Objectives should be assessed more than just once a year: What gets measured gets done!
16 Performance Management System
17 PM System The main types of systems are: Paper based Templates ( using Word, Excel or Notes ) On line In our view a Performance Management System should be On-line
18 Practical Tips The System Must be Easy to use: If it s not easy to use, it won t get done. Address all the Components: All elements of performance should be assessed including objectives, behaviours and competencies. There may be others specific to you.
19 Practical Tips (cont) Demand Consistent Outcomes: You need consistency and quality in the performance management process, ensuring that there is clarity of understanding for the people involved. Focus on Communications: The emphasis must be on facilitating the one-onone discussion between a person and their manager.
20 Practical Tips (cont) Conduct Frequent Reviews: The more often PM reviews are conducted, the more likely that the desired results are obtained Get Control over the Process: The PM process must be monitored to ensure that it is completed by the due date.
21 Practical Tips (cont) Ensure Strategic Alignment: Align employee objectives to company/business unit/ divisional strategies. Provide a Clear Focus: Objectives must be weighted so that the important things get done.
22 Practical Tips (cont) Obtain Actionable Outputs: Data must be released from its filing cabinet prison so that valuable information can be obtained. This covers both aggregated data as well as trended data Watch for data aggregation errors!
23 Practical Tips (cont) Ensure the System has Flexible Reporting: Information needs to be viewed at multiple levels which will help pinpoint trends and issues: Individual Division Business unit Group Function (finance, engineers etc)
24 Practical Tips (cont) Ensure that the System fits in with Your Culture: Use your own methodologies that are tailored for your needs. One size does not fit all! Get the System in as Fast as Possible: Rapid deployment of a PM system will mean that you will start to get bottom line results faster.
25 Considerable Payback via Alignment Performance Management results; Objectives aligned to strategic goals Greater frequency of review Greater compliance Meaningful measures A 1% move in the Bell Curve creates at least a 3% productivity gain which moves the Bell Curve
26 PM Training
27 Skills Required To get the best results from your PM process managers need to be capable in the following areas: Providing constructive feedback Dealing with negativity Resolving disagreements Motivating employees Setting SMART goals
28 PM Follow Up
29 Acting on the Information Taking action on the information from the PM system is critical. Use the information as input into an individual s development plan. Use the information to measure relative performance.
30 Example Report
31 Concluding Comment It s all too hard, so I will do nothing Result: Without a formal approach to Performance Management, people will make their own assessments of performance. They will do it in their own way and based on their values and priorities.
32 Presentation to: CELM
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