Aryaduta Hotel-Jakarta, 14 August 2014 By Yunus Triyonggo HR Practitioner

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1 Aryaduta Hotel-Jakarta, 14 August 2014 By Yunus Triyonggo HR Practitioner

2 5 Reasons Why Traditional Performance Management Can't Deliver Peak Performance Daniel D. Elash, Ph.D. (2009)

3 What is Traditional Performance Management? Traditionally, performance management systems concentrate on performance planning and evaluation, rewards and discipline, according to the 2000 Performance Management Survey (2000) Source : David D. Dubois & William J. Rothwell, 2004

4 They are too slow. Reason #1 To be truly educational, feedback has to occur at the speed of business circumstances. It is most powerful when it follows directly on the heels of performance. When feedback is fresh it can be more deeply discussed, considered, and incorporated in a timely fashion.

5 Reason #2 They are too remote Too often the voices of customers, teammates and co-workers are filtered and delivered through the manager. Managers can't effectively explain or clarify issues and situations with which they aren't familiar. Placing the manager between teammates often reduces the ability of teammates to talk directly to each other

6 Reason #3 They are too vague (samar-samar) Useful feedback is specific, focused, actionable, and relevant to a particular situation or set of circumstances. This requires a level of explicitness that is seldom reached with current performance management systems, which rely on annual, or bi-annual performance reviews. Evaluated dimensions are often broad behavioral categories such as "responsible," "reliable" and "industrious." Such terms open the door for heated debates about their exact meanings in specific situations.

7 Reason #4 They are too emotionally laden (sarat) The mind is best prepared to grasp new information, think effectively and learn when it is clear and focused. Understanding, thinking and learning are more complicated when a person is anxious, selfconscious, angry or defensive.

8 Reason #5 They are too focused on each individual alone Optimizing your own performance without regard to your impact on others, or the synergies required for effective teamwork, is insufficient today. A successful company isn't a collection of individuals performing independently; it is a networked, interdependent system that operates as an organic whole. Feedback has to relate to individuals, but within the context of the whole interdependent system.

9 Challenges Complexity Revenue Company 400% 29% 300% 200% % 100% 50 0% year 1 year 2 Aligns Not Align However, according to a study by The Boston Consulting Group (BCG), business complexity has increased between 50 percent and 350 percent over the last 15 years. Teams that focus on performance management have been shown to generate as much as 30 percent more revenue per full-time employee than average teams Only 29 percent of companies create individual goals aligned to the organization Employees perceive the linkage between individual goals and corporate goals Working spend 100% 50% 48% 52% 26% 74% Strong Weak 50% 50% Strategic Non strategic 0% Mid level Lower Level A full 52 percent of midlevel managers and 74 percent of lower-level employees perceive the linkage between individual goals and corporate goals as very weak Up to 50 percent of employee time is spent working toward nonstrategic objectives An Oracle White Paper, June 2012

10 Are we capable?

11 YES We have to!!

12 The Answer is

13 What is a Competency? Observable abilities, skills, knowledge, motivations or traits defined in terms of the behaviors needed for successful job performance. The Iceberg as an Analogy Source : Human Resource Systems Group, 2012

14 What is Competency-based Management? An HR management approach that standardizes and integrates all HR activities based on competencies that support organizational goals. Basic Competency Architecture Source : Human Resource Systems Group, 2012

15 Why competencies? Competencies translate the strategic visions and goals for the organization into behaviors or actions employees must display for the organization to be successful.

16 The Benefits of better Employee competency 63% 19% 12.5% 63% reduction in turnover due to increased employee satisfaction due to greater clarity about performance expectations 19% improvement in employee performance 12.5% increase in sales and profits due to Competency-based training programs (Source : Spencer, 2001)

17 The Benefits of better Employee competency Improved leadership capacity Companies with highest rated leadership development programs, compared to those with weak programs experienced: 600% increase in overall business impact 640% improvement in their leadership bench strength 480% improvement in leader engagement and retention (Source : Bersin, 2007)

18 The Benefits of better Employee competency Superior Talent Management = Significant Advantages 26% higher revenue per employee 28% less likely to have downsized during % lower turnover among high performers 17% lower overall voluntary turnover 87% greater ability to hire the best people 92% greater ability to respond to changing economic conditions 144% greater ability to plan for future workforce needs 156% greater ability to develop great leaders (Source : Bersin, 2010)

19 Competency-based Performance Management Competencies define the behaviors necessary for goal achievement They facilitate a developmental approach to performance management Three Stages of Performance Management

20 How to integrate Competencies in the Performance Management Process Option #1 Option #2 By defining the competencies needed to perform each Performance Goal / Objective By integrating the competencies for the employee s job into the PM process The manager and employee identify the key competencies required to achieve each performance goal / objective (typically 1 to 3 competencies per goal / objective) At the end of the performance cycle, the employee s performance is evaluated in relation to the performance goals / objectives as well as the key competencies associated with each goal. The performance plan includes the performance goals / objectives for the review period as well as the complete set of competencies from the competency profile for the employee s role / job The performance goals / objectives address what must be accomplished during the review period, and the competencies measure how the employee conducted him/herself to accomplish their work the competencies being assessed are entirely consistent with the employee s performance goals for the performance review cycle. Not all competencies within the competency profile for the employee s role / job will necessarily be assessed within the cycle All competencies defined in the competency profile for the employee s role / job are evaluated Source : David D. Dubois & William J. Rothwell, 2004 key competencies for the effective performance during the review cycle, but not included in the competency profile, will not be assessed

21 Integrated Performance Management System Succession Planning Year end Review Dec-Feb Goal Setting Jan-Feb Interim Review Jun-Aug Multiple years of Performance creates basis for judgement of Sustained Performance Level High, Medium, Low Performance Review Dec-Jan Talent Day Nov Annual Base Salary Short Term Bonus Long Term Incentive

22 List of Competencies (example) CORE COMPETENCIES : 1. INTEGRITY 2. TEAMWORK 3. INNOVATION 4. ACHIEVEMENT ORIENTATION 5. CUSTOMER FOCUS TECHNICAL COMPETENCIES : 1. FEED PROCESSING 2. FEED FORMULA 3. FEED WAREHOUSING 4. PROFIT & LOSS FEED BUSINESS 5. SERVICE LEVEL TO CUSTOMER 6. ETC LEADERSHIP COMPETENCIES : 1. SHAPE THE FUTURE 2. REAL ACCOUNTABILITY 3. BUSINESS ACUMEN

23 Kesinambungan Kinerja (Apa dan Bagaimana) Matriks Kategori Talent (MKT) Tinggi Sumber Daya (1/3) Potensi Tinggi (2/3) Bintang Sumber daya (1/2) Sumber Daya (2/2) Potensi Tinggi (3/2) Rendah Perlu Perhatian (1/1) Rendah Perlu Perhatian (2/1) Berpotensi (3/1) Tinggi Potensi Talent

24 Suggested Action Plans consistently exceeding agreed individual business targets WHAT Inconsistent in meeting agreed individual business targets Recognise and reward Provide feedback Mentor/coach to improve Leadership Acknowledge contribution Specific goals & objectives Set clear Milestones Provide feedback Coach Monitor/track Decision to continue or end employment Recognise and reward Challenge/stretch Expose Coach Reward Milestones Provide feedback Training Coach to improve delivery Inconsistent in meeting expectations Potential Capacity Consistently exceeding expectations

25 Potential discussion Put real evidences objectively Skills Performance Experiences Competencies & living values PT

26 Talent Development 11/13/

27 Succession Plan 27

28 Contoh Template

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