INNOVATION IN PERFORMANCE

lapclassManagement

Nov 6, 2013 (3 years and 7 months ago)

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INNOVATION IN PERFORMANCE
MANAGEMENT

June 25, 2011

1

Discussion



Innovation as key to enhance performance


What is
innovation


Need for innovation, performance management as an enabler



Performance Management
-

Context:


What is performance management. Need for performance management system


Distinction between performance appraisal and performance management



Issues and perceptions about performance management
system


Perception of performance management


Understanding gaps



Key drivers in effective performance management system


Aligning employee performance to organizational goals


Role of motivation, metrics, culture and employee development in performance
management



Summing up:


Practical aspects in making performance management work resulting in high employee
performance


2

Innovation


Innovation


new ways of thinking and doing things



From Industrial age to information age to innovation age


Innovation

-
Predictable outlook

-
Customers have limited choices

-
Long life cycles

-
High entry costs to markets

-
Physical resources drive value

-
Innovative in internal


-
Unpredictable outlook

-
Customers have multiple choices

-
Short life cycles

-
Low entry costs

-
Intangible resources drive value

-
Innovation is collaborative


1980

1990

2000

2010


2030

Steady, continuous change

Unpredictable, discontinuous change

INDUSTRIAL AGE

INNOVATION AGE

INFORMATION AGE

(Jeremy Hope: Performance Management in the innovation age: An introduction)

3

Need for Innovation


Innovation as a necessity:



Change in market demands new ways of response



Apple, Microsoft, Google, Cisco, GE etc.,


Airbus and Boeing. Airbus’s A380 as response to Boeing’s 747



Need for speed and rapid response for threats and opportunities


Boeing’s change in policies and practices in execution of 787
dream liner








Innovation

4

What is Performance Management

Context

-
Creates
direction

for the organization by aligning
employee
expectations with organizational needs


-
Clarity on employee
deliverables, rewards
and
roadmap for employee
development
.


-
Facilitates continuous
dialogue

among manager,
employee and the organization


Performance Management is a continuous process of driving employee
effectiveness and facilitating his / her development thereby resulting in
organizational success

Need for Performance Management

5

Context


Performance appraisal is a
subset

of performance
management process.



While performance appraisal concentrates on setting /
reviewing and rating of goals, performance management is a
continuous process

by linking other HR systems like rewards,
career planning / development



Emphasis of performance appraisal is on performance aspect
of employee while performance management concentrates
on
performance,

social and motivational aspects

and the
impact they have on the organization

Performance Appraisal and Performance Management

6

Perception of Performance Management

Perception


Another HR driven
activity forced
upon managers. Tedious forms and
templates with no concrete value outcomes.



A process which is often top down and has limited correlation to rewards
and development



Outdated, mere formality and usually results in more heartburn. A
process that creates rift within teams as it force
-
fits employee
performance and does not account for emotions


Lack of alignment of what employee perceives / values against
organizational realties / goals.




Performance management as a stand alone process without pre
-
requisite
and integrating aspects like
organization culture
,
employee motivation
,
behaviors

etc.,

Understanding Gaps

7

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

8

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

9

Quality of Performance Appraisal


Alignment of employee goals with organizational objectives



Clarity of performance expectations and deliverables.
Distinction between goals and activities



Continuous dialogue between manager and subordinate as
against bi
-
annual formality





Drivers

10

Goal Alignment: Top Down approach

Drivers

Organization
Goals

Unit Level
Goals

Unit Level
Goals

Team level
goals

Team level
goals

Individual
Goals

Individual
Goals

Individual
Goals

Individual
Goals

Team level
goals

Individual
Goals

Individual
Goals

Team level
goals


Organization dictates
goals. A set strategy is
translated into actions



What is good for
organization is good for
employee



What to do is already
decided. Managers are only
expected to implement



Not the best model for
creativity and innovation


11

Performance
goal
setting


Collaborative approach

Organization
Goals

Unit Level
Goals

Unit Level
Goals

Team level
goals

Team level
goals

Individual
Goals

Individual
Goals

Individual
Goals

Individual
Goals

Team level
goals

Individual
Goals

Individual
Goals

Team level
goals


Employee has a say, give
and take approach



Alignment of personal
goals with broader
objectives



Enhanced ownership
and accountability



Facilitates participation
in organization building


Drivers

12

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Employee
Development

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

Motivation and
Rewards

13

Motivation and Rewards


Motivation as a key element of Performance Management
system. Employee satisfaction and commitment affect
performance



Workplace system where employees have greater discretion
to think, act and contribute to overall work. (Theory Y)



Inviting people to play bigger and important roles and
explaining to subordinates “why something must be done”
acts as motivating factor to enhance performance

(Linda Hill, Harvard Business School)



Employees must believe that their effort will lead to overall
success and in turn will lead to valued personal outcomes
(Vroom’s Expectancy theory)




Drivers

14

Motivation and Rewards


Role of intrinsic and extrinsic rewards in effective
performance management system



Intrinsic Rewards as superior motivating tool


Growth


Recognition


Quality of work


Sense of achievement

(Frederick Herzberg, “One more time: How do you motivate employees?” (HBR
classic), Harvard Business Review, January 2003.)





Drivers

15

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Organizational
C
ulture

Performance
Metrics and
Accountability

Managerial
Capability

16

Managerial Capability


Being a “
right”
manager more important than being
“nice”
manager



Ability of manager in having
“continuous dialogue”

is critical
for success of performance management process



Manager as a
“coach”

rather than as
“command


control”
authority


Telling versus exploring


Directing versus facilitating


Authority versus Partnership

(Performance Management: Measure and improve effectiveness of your employees:
Harvard Business Essentials)





Drivers

17

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

Employee
Development

18

Employee Development


The concept of “Necessary and Sufficient conditions” in employee develop
interventions


Traditional Training approach versus “decision science”

(John W. Boudreau and Peter M. Ramstad, Tapping the full potential of HRIS: Shifting the HR
paradigm from Service Delivery to a Talent Decision Science”)



Individual development results in higher motivation, leading to enhanced performance
resulting in overall organizational effectiveness



Necessary and sufficient conditions for individual development


Drivers

Development Conditions

in learners

Learners must

Insight

Know what they need to develop

Motivation

Be willing to invest the time and energy required to develop
themselves

New Knowledge

Know how to acquire the new capabilities

required

Real world

practice

Receive

and use opportunities to try new skills at work

Accountability

Internalize

new capabilities to improve performance and
results

Mary Dee Hicks and David B. Peterson, “The Development Pipeline,” Knowledge Management
Review July – Aug 1999

19

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

20

Performance Metrics and Accountability


Lack of transparency, inconsistency in rakings / ratings major
source of demotivation



Measure what is “
critical”

and not what is “
easy to measure”



Ex: Bottom line performance as a goal but compromising integrity as a value?



Measure
those which have maximum impact and effectiveness on
performance
rather than generic measures


Ex: Turnover metrics. Importance of turnover of experienced and critical
role holders against overall turnover



Importance of
“means to achieve the goals”
in addition to
“end
objective”



Critical qualitative metrics for consideration


Behaviors and competencies


Values of the Organization


Nurturing performers and creating leaders for the future




Drivers

21

Drivers for effective Performance Management

Drivers

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Managerial
Capability

Performance
Metrics and
Accountability

Organizational
Culture

22

Organizational Culture


Culture as “taken for granted, shared, tacit ways of perceiving,
thinking and reacting” (Edgar Schein)



Culture as
“building block”

to organizational performance and
includes
norms, values, beliefs, assumptions and behavior

pattern of employees



Culture as enabling factor for performance


Empowerment as against command and control


Means as important as outcomes


Team versus individual focus


Customer centric as against internal focus









Drivers

23

First Steps in making Performance Management Work

Summing up

PERFORMANCE
MANAGEMENT

Quality of
Performance
Appraisal

Motivation and
Rewards

Employee
Development

Organizational
C
ulture

Managerial
Capability

Performance
Metrics and
Accountability

Encourage regular conversations and
dialogue between manager and
employee

Focus on intrinsic aspects of
employee motivation and create
individual plans in partnership with
line manager

Be a coach to line manager. Make
them accountable for “people
management” outcomes. Nurture
leadership

Understand which programs have
maximum impact on performance
and measure its impact

Champion culture of trust and
empowerment with clarity on
deliverables and accountabilities

24

THANK YOU

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