The Future Of Performance Management In An Era Of Uncertainty - American Airlines - Michelle Collins-Rodrigues by sbonacorsi


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               March 27, 2012
        About American Airlines
Our People
  – ~ 70,000 employees
  – ~ 60,000 non-management
  – ~ 10,000 management/specialist
Our Company
  – Based in Fort Worth, Texas
  – Founded 80+ years ago
  – Over $22 Billion in annual revenue
  – Serve 260 airports in more than 50 countries
  – 3,300+ daily flights using a combined fleet of more 900+
  – Founding member of the oneworld® alliance

 Times Are Changing …

1930s AA Ad      2000s AA Ad
                               Change …
 Times are changing … not only for American Airlines, but also for
                    business, and for talent.

      To quote Gary Hamel, from his 2007 book, The Future of
                        Management :
Over the coming decades, an accelerating pace of change will test the resilience
of every society, organization and individual. Luckily, perturbations create
opportunities as well as challenges. But the balance of promise and peril
confronting any particular organization will depend on its capacity for
adaptation. Hence the most important question for any company is this:

           Are we changing as fast as the world around us?

    Performance Management @ AA
AA’s performance management basics:

 • Process has been around for decades
 • Evolved from a paper-based system to online format
 • Annual appraisals, ongoing feedback
 • Focus is on development, not merely the appraisal
 • Currently use Success Factors
 • Coverage for all management, specialists and support staff (front line performance handled separately)
 • Approximately 11,500 participants in the process
 • 11 leadership competencies – 6 business and 5 people competencies
 • Development planning tool w/tie-in to LMS
 • Employee biography

But our performance management system and tools pale in importance to the core of
performance management at AA – leaders who provide clear, ongoing, high quality feedback.

No easy task …

       Talent Management Cycle @ AA

Performance Management

                               Conduct Talent
   Assessment
   Identify Top
    Talent                                                    Commit to
   Calibration
   1-N List             Discuss Top Talent /          Strategic Development
   Adverse Impact        Emerging Talent
    Analysis             Critical Positions
   Appraisal
    Discussion           Retention Concerns
                         9-Box Matrix              Competency                      Execute
                         Successors                 Development/Training        Succession Plans
                         Development Plans         360 Degree Feedback
                                                    Targeted Coaching
                                                    Mentoring
                                                    Relationship Growth/       Maintain Successor Lists
                                                     Exposure                   Promote to Plan
                                                    Strategic Assignments      Monitor & Adjust
• Leaders “present” their employees to the next level
• Leverage employee biographies
• They share:
   –   Name/Position
   –   Performance Score
   –   Readiness Assessment
   –   Development Recommendations
   –   Successors Possibilities
   –   Critical Positions       If Applicable
   –   Retention Concerns

                 Talent Readiness
• Leaders assess their employees’ readiness to
assume higher level positions by considering the
performance score and employee’s ability,
aspiration and engagement to assume higher level
or critical positions.
 possess the
     •aspiration, and                                      29%
                                              Ability                Engagement
     to rise to and succeed in
     more senior, critical positions.
     (See next slide for details)
• Typically only 29% of top performers meet
          this criteria

                 Assessment Criteria
              A combination of the innate characteristics and learned skills
              that employees use to carry out their day-to-day work.
  ABILITY                Innate Characteristics
                         • Mental/cognitive agility • Emotional intelligence
                         Learned Skills
                         • Technical/functional skills • Interpersonal skills

              The extent to which an employee wants or desires the following:
                          • Prestige and recognition in the organization
                          • Advancement and influence
ASPIRATION                • Financial rewards
                          • Work–life balance (May or may not be present in higher level job)
                          • Overall job enjoyment

             Engagement consists of four elements:
                       • Emotional Commitment - The extent to which employees value, enjoy,
                         and believe in their organizations
ENGAGEMENT             • Rational Commitment - The extent to which employees believe that
                         staying with their organizations is in their self-interest
                       • Discretionary Effort - Employee willingness to go “above and beyond”
                         the call of duty
                       • Intent to Stay - Employee desire to stay with the organization
First, A Little About Performance
        Management @ AA

               A Work in Progress …
We provide myriad resources to AA leaders regarding performance management
and we spend countless hours consulting and coaching our leaders on the same

Our “system” works well, and we meet our goals in terms of leaders completing
their appraisals and having performance discussions with their people

Something was lacking …

Specifically, many of our leaders and their people found performance management
neither rewarding nor useful.

 The culprit was the performance discussion leaders had with their people every

        It’s All About The Discussion
Some of our leaders did a great job holding discussions with their people

 • The “annual appraisal discussion” was the culmination of ongoing feedback throughout the
   prior year
 • It was, for these leaders, a capstone discussion
 • So their people were rarely surprised with their ratings, readiness, or development areas
 • And their people appreciated the process and benefited from it

But not our leaders all did such

So the task became how do we get traction with a broader set of leaders
in holding high quality discussions throughout the year and at year’s end?

We’re not there yet, but the answer is in driving better discussions with
our people …
         5 Elements To Consider in
         Performance Discussions
1. In a time of uncertainty, assess criticality in
   performance management
2. Bridge performance discussions with a
   discussion of potential and leverage talent
   review insight
3. Good leaders always provide feedback
4. Have your leaders discuss “Keep, stop, &
5. Deadlines, reminders and targets are not a
   bother; they really matter
             1. Assessing Criticality
"Criticality" considers such questions as:
• Who has unique specialized skills or knowledge of procedures,
  processes, or systems that your organization cannot do without?
• Who, because of a combination of their skills and knowledge, their
  work performance, their ability to achieve results, and their dedication,
  do you consider to be indispensable to the success of your
• Who has critical relationships or a network that cannot be replaced or

Note: Very few people/jobs will be in this category

          … assessing criticality
• You have to be realistic in the analysis – who is
  really critical and who is not?
• Think about the business objectives – who helps
  your business accomplish its goals?
• Criticality is not shared in the discussion, but it
  should be the primary consideration in the
  leader’s mind
• That said, if someone is critical, you need to be in
  “sell mode” … keep them here!
• If someone is not critical, do not oversell

        2. The Bridge To Potential
• Bridge performance discussions with a discussion
  of potential and leverage talent review insight
• The discussion is not all about performance;
  instead it’s also about potential
   – For higher positions
   – For different lateral positions
• This is a discussion point … but be careful
   – Must make it clear that the employee is valued and
     has high potential
   – But not set up unrealistic expectations

3. Good Leaders … Give Feedback
• Don’t assume that all your leaders do not or
  cannot provide feedback in the “prescribed way”
• You probably have many leaders who are doing
  just what “HR Intends”
  – Watch how they provide feedback … they are best
    practices right in your own backyard!
  – So, identify these leaders and laud them
• Give leaders guidance on how to give feedback
• More on this, next …

            4. Keep, Stop, Start

• Effective performance discussions between
  leaders and their employees help create a
  workplace that values individual efforts, develops
  team members and fosters effective working
• It's a two-way conversation
• An approach we encourage at AA is for leaders to
  use a simple framework:
  – Keep
  – Stop
  – Start

                Keep …

  Goal:      • Describe and discuss positive behaviors, actions and

  For        • Let him or her know you value their efforts
             • Encourage him or her to continue their good work
   For       • Share successes
             • Examine how they were achieved
Employees:   • Identify what support you need to continue success

              Stop …

  Goal:      • Talk about behaviors or actions to avoid or

             • Provide real examples of what you observed and
               talked about during past year
  For        • Share specific actions negatively affecting the
               individual's work, customers, team dynamics,
managers:      etc.
             • Use Crucial Conversations to help discussions

   For       • Openly discuss the obstacles you encounter in
               your work
             • Work with manager to formulate a plan to
employees:     overcome these hurdles

              Start …

             • List new behaviors to boost performance and
  Goal:        career growth; map a course to achieve them

             • Be specific and mentor
  For        • Share your knowledge, network and resources

managers:    • Help team members achieve successful

             • Be open to feedback
   For       • Ask questions, seek information and gain
employees:   • Create Development Plan
             • Take action

           5. Deadlines Matter

• Leaders owe it to their employees to have an
  open, honest, and timely feedback session
• Ensuring those discussions are timely means
  there must be a schedule that is taken seriously
• In other words, deadlines do matter, especially to
  those on the receiving end of the discussion
• Ensuring leaders meet those deadline, however,
  does not mean that we should behave like the
  “HR Police” in enforcing such

• Finally, a word about consistency of
  discussions across managers …
• Make the most of calibration / talent review
• The talent review / calibration meeting among
  leaders that will inform and enhance the
  performance discussions with employees
  – To ensure people are rated in a consistent way
  – To vet possible discussion points with individuals

Thank You!

Strategic Performance & Change Management Conference
     November 13-15, 2012 in New Orleans, LA

         View the Strategic Performance
         & Change Management program

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