Calibrating Manager Ratings

Transcription

1 WHITE PAPER Calibrating Manager Ratings In a Culture of High Performance The NII Holdings Success Story Julio Balestrini VP Talent Management NII Holding 3D Results

2 Calibrating Manager Ratings in a Culture of High Performance The NII Holdings Success Story Summary Learn how 3D Results assisted NII Holdings, a premier provider of telecommunications in Latin American markets, in effectively improving their performance management ratings method for their 15,000 employees. The result was a significant realignment of ratings accomplished quickly and effectively in a series of learning and calibration sessions supported by SuccessFactors Performance Management software. NII was able to help managers provide an accurate and unified approach to ratings in an organization where high performance is the norm while creating a positive impact on the NII culture. Introduction Executive leaders and talent management professionals are challenged to enable managers to rate their direct reports across their organizations with consistency and fairness. Without a process of rating orientation and calibration, most managers have a natural tendency to be lineate in their ratings of their direct reports resulting in an overall positively skewed organizational ratings distribution. While a subset of managers can be overly conservative with ratings these may be excessively stringent relative to the norm and therefore no more accurate or fair to the incumbent. Variations in toughness of ratings that result from individual managerial style or tendency can result in significant inconsistencies in merit pay and de-motivate high performers. Julio Balestrini, Vice President, Talent Development, HR at NII Holdings, led a successful effort to implement a consistent performance management system across the NII Corporate structure and several country market organizations. While the newly created performance management module provided a consistent process for the entire organization, Julio and his team found initial ratings in the process to be highly skewed in a positive direction. It made sense that NII leaders would provide high performance ratings. NII Holdings had enjoyed significant success in both revenues and growth and had continued high expectations for the organization s overall performance in the marketplace. Why would employees who produced exceptional results not receive exceptional ratings? The challenge came from the results of an NII engagement survey which indicated that employees wanted more consistency and standards in the performance management process, which was highly desirable to senior management as well.

3 The Solution It was clear that the top leadership of the organization recognized the outstanding work of their upper level managers and wanted to award them with 4 and 5 (the top two level ratings). These leaders were making the comparison of their direct reports relative to managers in general and the outstanding organizational results, not relative to the high performance expectations within the organization and across the other markets within NII. Helping these leaders appropriately differentiate performance within this high performance context drove the need to engage them in a more sophisticated intervention. The organization considered a forced distribution model, but decided that this approach would be overly directive and constraining for the NII culture and may have produced significant resistance in the markets organizations. 3D Results advised and Julio opted instead for a common set of guidelines and training program for senior leaders and a process that included high levels of participation from the markets. In addition, an approach concentrating on the NII upper level of managers where an inflated performance distribution relative to the rest of the organization was most apparent was recommended. 3D results theorized that engaging senior leaders throughout the organization on their direct reports would have the greatest return on effort. The result was a significant improvement in consistency and a movement toward the desired distribution for this target level and the organization as a whole, and a wellreceived new process applauded by NII Leadership. The Power of Rating Calibration Julio chose to use the calibration module from the SuccessFactors Business Execution Suite to engage his leadership in structured, group sessions to review individual ratings. 3D Results helped define the structured process and roll out guidelines and training for facilitators. The final solution was a series of calibration sessions conducted separately by each of the six corporate functions and each of NII s country market organizations. Vice Presidents from each business area participated in calibration process for all of their direct reports (254 managers), the level of management with the most positively skewed rating distribution. In the calibration sessions, each manager has the opportunity to review each of their direct reports as part of a group exercise. Ratings on performance, potential, and readiness relative to specific promotions were discussed openly. The process allowed all members of each leadership team to validate their assumptions based on feedback from their peers and their business unit or functional leader.

4 Shift in Performance Ratings: 2010, 2011, vs. Guideline As shown in the graph above, the result was a significant improvement in the consistency and a movement from 2010 to 2011 ratings toward the desired Guideline distribution for the organization as a whole. The results of the sessions were clear. Senior leaders developed a consistent understanding of the purpose, outcomes, dynamics, and expectations of the NII performance management process. As a result of the sessions, 26% of the performance ratings of those direct reports reviewed in the sessions were changed. The overall rating distribution was much more in line with the expected distribution where a 3 or middle score represented the high level of performance expected within that culture and participants developed a common and unified understanding of these expectations. Setting the Performance Expectations for the Entire Company Julio and his team had originally considered rolling out the calibration process for the next level within his organization, a daunting task impacting 1,400 employees in six countries. That next step would require significantly more time and resources to engage this additional level within the organization. Based on the success of the calibration sessions at the top levels of the organization, 3D Results recommended and NII concluded that mid-level managers would understand how top managers calibrated their performance reviews effectively and that this shift in performance expectations would naturally find its expression throughout the organization and positively affect the NII culture.

5 3D Results Whitepaper Assessing Potential Julio expects continued improvements and consistency as the performance management process moves forward and the organization becomes unified in its understanding of performance expectations at NII. The performance distribution curve will follow and gravitate closer to expectations. The NII story captures how a systematic, focused process of training and calibration was implemented to ensure that the performance management system was doing what it was designed to do: To differentiate performance in a way that truly recognizes and rewards outstanding behavior and sets the bar for high performance as the norm. Once these expectations become uniformly understood and are integrated and implemented by senior leadership, they become part of the culture and will be extended throughout the organization based on the example set and maintained by senior leadership. This is an example of NII developing a common understanding and approach to defining performance standards and adding a rigorous discipline to their journey of creating a Culture on Purpose. Conclusion: Consider Your Culture Developing a common understanding of your performance standards can be foundational on your journey to developing a Culture on Purpose. Investing the time and energy to understand the change management dynamics of your performance management approach creates a healthy performance distribution that can pay dividends. Using an engaging process to calibrate performance across the organizational structure can be cost effective. Software applications can make this process highly efficient allowing the real value of the discussion to move to the forefront. NII was able to institute a new rigorous discipline calibrating less than 400 individuals yet positively impacting their organization of nearly 15,000. Let 3D Results use our Process on Purpose approach to move your organization to the next level.

6 About NII Holdings NII Holdings is a provider of fully-integrated mobile communication services, focused on providing businesses and high value consumers in Latin America with differentiated products, excellent customer service and an expanding network footprint. NII was first launched as the international business unit of Nextel Communications, Inc. Following the establishment of operations in Sao Paulo, Brazil in 1997, the company expanded to Buenos Aires, Argentina; Mexico City, Mexico; Santiago, Chile; and Lima, Peru. Our company now employs more than 15,000 people and operates in the major business centers and related transportation corridors of these countries. Our corporate headquarters are located in Reston, Virginia. About 3D Results 3D Results provides strategic consulting solutions to help organizations create Culture on Purpose : the deployment of rigorous disciplines that align values, behavior, and processes to achieve strategy. As a trusted SuccessFactors partner, 3D Results offers solutions for new and existing customers including strategic process design, project management, change management and a host of talent management offerings that seamlessly integrate with the Success Factors Business Execution Suite.