NYC CUPA-HR CHAPTER FALL MEETING BEYOND THE REPORT CARD UNLEASHING THE POWER OF PERFORMANCE MANAGEMENT

Transcription

1 NYC CUPA-HR CHAPTER FALL MEETING BEYOND THE REPORT CARD UNLEASHING THE POWER OF PERFORMANCE MANAGEMENT OCTOBER 29, 2014 Karen Hutcheson Partner Ilene Siscovick Partner This document presents an overview of Mercer s presentation. The actual presentation and discussion contains more details and information; if you would like a copy of the full presentation after the session, just let us know and we ll it to you

2 Agenda Welcome! Introductions Context the Changing Landscape of Academia Effective Performance Management Practices What the Research Tells Us What Our Experiences Tell Us Unleashing the Power of Performance Management Driving Incentives, Career Progression, Succession Planning 1

3 Presenter Information 1166 Avenue of the Americas, New York, NY Karen Hutcheson, Partner Ilene Siscovick, Partner

4 Context Setting 3

5 Changing Landscape of Academia Financial pressures Focus on operational efficiency and effectiveness Increasing regulatory and compliance requirements Changing student (and parent) expectations Changing workforce expectations Attracting and retaining critical talent and high performers Strategic succession planning balance stability with fresh ideas Wide reaching impact of technology Sustainability, physical plant upgrades and the beat goes on...

6 Multiple Perspectives and Needs on Your Campuses Wants to value their own contributions New approaches to recruitment Values informal workplaces, volunteer opportunities and flexibility Career advancement opportunities, mentor access Further education Access to social networks & high-tech tools Wants employer to value their individual contributions Balancing work & family/personal life Flexible work hours Career advancement, including leadership opportunities Saving for a child s education Planning for retirement Works hard to be valued Saving for a child s education Planning for retirement Dealing with the stress of balancing work and family/ personal life Taking care of an older parent Wants expertise/ experience to be valued Planning for retirement/retiring Having employersponsored health care options available during retirement Access to flexible job opportunities that support simultaneous needs for education, work, volunteering, and/or leisure Dependent care is an issue for about 1/3 of mature workers Reduced physical demands Saving for a home 5

7 Aligning Rewards With the Future Workforce Younger employees value career opportunities and job mobility while older employees seek recognition and autonomy 100 Importance Score and younger 26 to to to 50 over 50 0 Profit Profit sharing Recognition PTO Training Career Job Job mobility Supporting Supporting manager Autonomy Respect Respect and & dignity TeamworkInnovation Sharing Mobility Manager Dignity 6

8 Aligning Performance Management with the Future Workforce Build your design around these goals. OWNERSHIP w VOICES w GOALS w STRUCTURE w EMPLOYEES w SOLUTIONS w Manager to Employee Fewer to Many Individual to Team Hierarchy to Flat & Fluid Stable Career to Mobility General to Customized Mercer s 2013 Global Performance Management Survey 7

9 Global Employers - More Similarities Than Differences Design Characteristics 100% Performance Expectations Year-end Process 80% 95% 85% 82% 89% 89% 60% 40% 57% 20% Set individual goals Use competencies Selfassessment Overall performance rating Use 5-point rating scale Link performance & pay 8

10 What Elements Have the Most Impact on Overall Success? Driver Analysis Management Skills Executive Commitment Calibration Technology 9

11 What Elements Have the Most Impact on Overall Success? Driver Analysis Management Skills Executive Commitment Calibration Technology HAVING CANDID DIALOG LINKING PERFORMANCE TO DEVELOPMENT PLANNING SETTING SMART GOALS Perceived Positive Impact on Organization Actual Driver of Impact Moderately skilled managers Highly skilled managers What do you think has the most positive value? What did the survey tell us? 10

12 Driving Growth and Development What has the greatest impact on growth and development? Adapted from research by M.M. Lombardo and R.W. Eichinger for the Center for Creative Leadership 11

13 A Question of Balance LEARNING ORIENTATION PERFORMANCE ORIENTATION Focus: Improving and learning. Implication: Mistakes viewed as a part of the learning process and therefore not bad Focus: Achievement and getting ahead Implication: Mistakes viewed as failures and to be avoided 1 Adapted from Dweck, D.S., & Leggett, E.L. (1988), A Social-Cognitive Approach to Motivation and Personality. Psychological Review, Volume 95, No 2 pp

14 What Elements Have the Most Impact on Overall Success? Driver Analysis Management Skills Executive Commitment Calibration Technology Highly committed executives 90% 75% 25 0 Provide regular coaching Discuss PM as core to business 13

15 Calibration Increases Accuracy of Evaluations Driver Analysis Management Skills Who is reviewed? Executive Commitment 54% Calibration 56% 27% Technology How do you think higher ed compared? 0 All employees Leaders (or subset) 14

16 Calibration Increases Accuracy of Evaluations Driver Analysis Management Skills Executive Commitment Calibration Technology What is reviewed? % 75 How do you think higher ed compared? % 31% 29% 26% 0 Performance ratings Potential ratings Compensation decisions Succession decisions Learning & Development 15

17 Calibration Increases Accuracy of Evaluations Driver Analysis Management Skills Executive Commitment Calibration Technology Introductions and ground rules Review performance expectations Discuss Exceeds Fully meets Partially meets Below Summarize agreements and action items 16

18 Technology Is Less Prevalent Than Expected Driver Analysis Management Skills Executive Commitment Calibration Technology 53% 1. Develop 2. Train 3. Technology Use technology to measure and report on actual practices what gets measured, gets done! 17

19 What s New in Performance Management 18

20 What Are Some High Performing Companies Doing Differently? Practical Applications Eliminate annual ratings Eliminate forced distribution Build better managers Focused on uuuuuuu Accelerating individual, team, and business performance Aligning individuals and teams to the quarterly business cycle Timely, high-quality conversations about deliverables, results, and behaviors to help grow and develop people Focused on uuuuuuu Eliminating traditional ratings and preset achievement targets Consistent calibration through relative laddering and alignment with internal peer group, with manager discretion in compensation Twice a year Conversation Day: Career w Capabilities w Connections w Contributions w Compensation Focused on uuuuuuu Data-driven model of top eight attributes of effective people managers with #1 rule: Be a good coach Biannual upward feedback, tracking mgr. performance vs. norms Performance reviews with ratings based on self-assessment and peer reviews of contributions, strengths, areas of improvement 19

21 What Are Some High Performing Companies Doing Differently? Practical Applications, Continued Eliminate annual process Focused on uuuuuuu Instilling stronger accountability throughout the company Eliminate burdensome process that required 80,000 hours of time annually (equivalent of 40 full time managers) and dip in employee engagement after the reviews Regular check-ins designed to provide targeted coaching, advice and managerial authority over compensation decisions Eliminate annual reviews Focused on uuuuuuu Hiring and keeping only A players and setting them up for success Timely, simple and honest manager-employee conversations Informal 360 reviews: focused on what a colleague should stop, start, or continue doing Eliminate annual reviews Focused on uuuuuuu Regular discussions between managers and employees focused on performance coaching Increase in employee engagement and demand for development tools A quarterly survey to all employees asking a singe question Have you had a meaningful performance-related discussion with your manager in the last quarter? 20

22 Eliminating Performance Ratings Not for Everyone! Mercer s experience No Ratings Minimal Ratings or 9-Box 5-Point Rating Scale Forced Ranking Advantages Desire to improve engagement Focus on employee development Seen as consistent with neuroscience (David Rock); avoids flight or fight response May fit gen Y preference, improve retention Aligns with focus on feedback -- crowdsourcing, use of 360 Can be (positively) disruptive; answer for criticism of performance management Makes a clean break (vs. fewer ratings or softer rating labels) Perceived as effective by some early adopters Disadvantages Requires manager training and significant commitment, and different calibration process May be harder to identify top talent, stars May turn off some top performers who want the rating recognition May reduce differentiation; managers may offer peanut butter raises/incentive pay Loses historical performance trends Weakens connection between performance ratings and business results May weaken performance counseling process Too soon to tell if it really helps; still early days 21

23 Performance Management Assessment Did you do what we agreed you would do? More? Less? Planning What will you be focusing on in the upcoming year? Development How can we build upon your strengths and enhance areas for improvement? What is required for future growth? Rewards What are the appropriate rewards for your performance pay, recognition, progression, other? 22

24 Planning Succession 23

25 On October 29 th, we will introduce important processes and steps for building a robust succession planning process 24

26 Rewarding the Workforce 25

27 Variable Pay Design Framework: Plan Design Requires Addressing a Variety of Key Elements Eligibility Frequency and performance period Pay level/ opportunity Plan objectives Variable Pay Plan Design Performance measures and goal setting Communication Pay and performance relationship Link to overall organization & department performance

28 Optimizing Careers 27

29 The Future of Work 28

30 Issues From the Employer Perspective There is too much ad hoc and discretionary deal making in our compensation system leading to manager angst and employee mistrust. It s too expensive to recruit Development professionals. We need to build our talent from within by identifying the right skills, creating career paths, and training managers to provide guidance. Employees know they can stay at the University, but they want to grow here as well. They are asking for clarity on expectations at each step of their career journey. 29

31 Issues From the Employee Perspective I wish our internal job site was more developed so I could find opportunities. I like my University but I don t know how to navigate future possibilities starting from where I am now. I don t see any clear path to progress at the College and my boss isn t going anywhere. I guess the only way up is out. I just moved into another school within the University thinking it was an advancement opportunity. But now I find that there is no consistency in job level or pay, making me question whether I made the right decision. 30

32 Employees Want to Explore Opportunities to Move Vertically and Horizontally FUTURE OPPORTUNITIES DEVELOP- MENT HR FINANCE STUDENT AFAIRS IT SECURITY FACILITIES MARKETING ROLE PROFILE CURRENT ROLE ROLE PROFILE ROLE PROFILE 31

33 Career Frameworks Are Increasingly a Best Practice Higher education is embracing career frameworks 65% of employers with a career framework are planning modifications 68% of employers without a career framework plan to implement one HAVE A CAREER FRAMEWORK Plan to implement a new framework Do not plan any modifications DO NOT HAVE A CAREER FRAMEWORK Plan to implement a career framework Plan to modify existing framework, including linking additional talent management or rewards programs Do not plan to implement a career framework Source: Mercer Career Framework Survey. 297 US and Canadian organizations 32

34 Skill Development and Career Navigation Tools Where can I move? What are the expectations of roles I m interested in? How am I doing now? How do I get to where I want to go? 33

35 Communications 34

36 Join us for an interesting example of communicating the career framework to your employees 35

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