Alligning Organizational Culture

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					Strategic Links:
Aligning Organizational Culture,
Business Strategies and
Performance Management
National Nonprofit Human Resources Conference
Portland, Oregon
June 4, 2004
10:30 a.m. to 12:00 noon
Why Implement
Performance Evaluations?
   They‟ve been used at every organization I‟ve
    ever worked.
   To substantiate differences in pay increases
    and/or personnel actions.
   To promote behaviors that are aligned with our
    organizational values and culture.
   To establish, monitor and assess achievement
    of work activities that support our strategic plan.
   All or several of the above.

What Results Are You Getting
From Performance Evaluations?

   “We‟ve gone through the annual „torture-fest‟ –
    all for a lousy 3% raise!”
   “My boss must be getting ready to fire me – all
    she talked about was every little mistake I made
    this year.”
   “I had a really productive discussion with my
    boss about the things I do well, some new
    projects I‟ll take on and some training to help
    build my technical ability.”

Objectives of An Effective
Performance Management System

   Stimulates productivity by establishing clear
    performance standards and priorities at the
    beginning of the performance cycle
   Promotes good employee relations by providing
    opportunities for timely feedback
   Strengthens supervisors‟ ability to manage staff
    by giving a rational, “objective” basis for
    evaluating performance and encouraging them
    to identify ways to improve future performance

            Performance Management
            System Model
                                      Performance Planning
                             Establish and define
                              Key responsibilities
                              Objectives
                              Expected outcomes
                              Priorities
                              Behavioral factors

    Development & Follow Up                                         Performance Monitoring
 Identify interests and needs to                              Timely, relevant feedback
  enhance performance                                           Maintain log
 Establish training plan                                       Mid-Year review
 Review job description                                        Refine responsibilities/objectives
 Identify new challenges                                       Revisit priorities

                                    Performance Appraisal
                               Compile/review data
                               Request self-appraisal
                               Prepare draft appraisal
                               Review with next-level supervisor
                               Finalize appraisal
                               Meet with employee5
Essential Design Considerations

   What does your organization do?
       What goods or services are produced?
       What kinds of people do you hire?
       Can/Do you measure progress or achievement?

   What does your organization value?
       Individual contributions to the strategic plan?
       Quality of internal interactions?
       Nature and quality of external interactions?

   What is level of organizational commitment?

Do Revenue Streams Matter?

   Fixed funding sources – government contracts,
    grants, fees-for-service
   Charitable contributions – individual donations,
    corporate underwriting, events
   Provision of goods and/or services – program
    delivery, educational services, memberships,
   Varied sources – combinations of the above

Timing of Annual Reviews

 Anniversary Date
 Each employee reviewed around
  anniversary of employment/promotion

 Common Review Date
 All employees reviewed after year-end
  program and financial results are in

    Anniversary Date
   Each employee‟s performance is reviewed on an individual
   Supervisor better able to focus on individual accomplishments
    and development needs
   Payroll increases are spread out over the year, reducing the
    impact of a single jump in salaries on cash flow

   Ratings may be influenced by temporary up- or downswings in
    program or fiscal results
   May not establish clear link between individual and
    organizational performance

Common Review Date
   All employees evaluated on overall achievement of program, operational or
    fiscal results
   Provides consistent basis for comparing contributions of individual employees
    in relation to others
   Less of an administrative burden on managers and HR, and increases can be
    based on year-end fiscal results

   Time required of supervisors to complete several appraisals at the same time
   Individualized coaching or development opportunity may be “lost in shuffle”
   Cash flow impact can be significant when all increases occur simultaneously

Weighting Goals

 Provides employee and supervisor
  with common understanding of which
  are most important to success
 Helps in monitoring activities that are
  critical to organizational goals
 Priorities may change during course
  of the year

 How Many Rating Levels To Use

The number of ratings you use can vary, depending on your
organization‟s culture and the kinds of performance you evaluate.

          Four (or More)                    Fewer than Four
    Focus more on tangible            Focus on behavioral factors
     results produced                   and interactions; “soft”
    Supervisors are comfortable        results.
     using consistent, clearly-        Supervisors have difficulty
     defined criteria to note           identifying criteria for noting
     variances in employee              variances in performance
     performance.                       among employees.

Numeric Rating Levels

 Generally used to calculate points
  scored for each activity or behavior
 Often uses numeric “weight” to
  establish relative priority
 Establishes range of points associated
  with overall performance ratings

         Key                              Expected        Weighted   Rating   Total    Comments
         Responsibility/Performance       Outcome          Factor             Points
         Develop materials            Produce flyers,
         needed to promote            local newspaper
         events and adapt             ads and             10%          3      30
         existing information         community
         materials to assure they     bulletin board
         accurately reflect           materials for
         community information.       individual

                       Rating Level
                          0 to 189 = Partially Meets Goals
                       190 to 349 = Consistently Meets Goals
                       350 to 549 = Frequently Exceeds Goals
                       550 to 600 = Exceeds All Goals

Lettered Rating Levels

   Uses letter(s) to denote rating level for
    each area of performance evaluated
   Priority or “weight” can be described as
    percentage or by narrative descriptor
   Supervisor counts up ratings given to
    each activity and behavior factor and
    determines “average” overall rating.

PERFORMANCE GOAL                                               RATING

Develop materials           Produce flyers,
needed to promote           local newspaper
                                                Important      CM
events and adapt            ads and
existing information        community
materials to assure         bulletin board
they accurately             materials for
reflect community           individual
information.                events.

             Rating Level
             Partially Meets Goals (PM)                     
             Consistently Meets Goals (CM)                  X
             Frequently Exceeds Goals (FE)                  

Sample Organization #1
   Small social service agency
   Employs primarily caseworkers and
    administrative staff
   Revenues generated primarily by government
    funding and limited fees-for-service
   Success measured by quality of interactions
    and numbers of clients served
   Culture is egalitarian – „we‟re all in this together‟
   Everyone gets common annual increase

Sample Construct #1
  Job Description                       Agency Values
  Provides basis for                  Provides basis for
  establishing                        determining desired
  activities                          behaviors

                   Performance Plan
             • Establishes expectations for
               performance throughout the
             • Provides qualitative basis for
               annual performance appraisal

Sample Construct #1 (Continued)

         Annual Appraisal Design Will Include
   Assessment of quality of activities and desired behaviors
   Summary of strengths and areas to be enhanced
   3 rating levels:
        Usually exceeds expectations
        Fully meets expectations
        Partially meets expectations
   Common annual increase, if performance is at “meets
    expectations” level or better

Sample Organization #2
   Mid-sized educational service organization
   Employs varied staff: curriculum developers, trainers/
    program delivery staff, marketers, customer support
    representatives and administrative/operational staff
   Revenues generated by combinations of government
    contracts, foundation/corporate funding and sales of
    services – with emphasis on expanding sales revenue
   Success measured by quality of programs, increased
    numbers of programs delivered, sales revenue and client
    development and retention
   Culture is results-oriented, with all departments having clear
    understanding of how they support achievement
   Annual increases based on individual performance

    Sample Construct #2
 Strategic Plan         Job Description           Agency Values
Provides basis for      Provides basis for     Provides basis for
establishing            establishing           determining desired
results goals           activities             behaviors

                         Performance Plan
          • Establishes expectations for individual results
            that result from activities and behaviors
            throughout the year
          • Encourages ongoing discussion of
            organizational progress – more inclusive “line
            of sight”
          • Provides quantitative and qualitative basis for
            annual performance appraisal
Sample Construct #2 (Continued)

          Annual Appraisal Design Will Include
   Quantitative evaluation of results; qualitative assessment
    of activities and desired behaviors
   Summary of strengths and areas to be enhanced
   Uses 1 to 10 rating scale:
        10 = Exceptional performance
        5 = Expected performance
        1 = Unsatisfactory performance
         Gradations allow more discussion of relative
         contribution and opportunities for development.
   Greater pay opportunities for high-performing staff

Employee Self-Appraisal

   Engages employee as partner in managing
   Alerts supervisors to differences in how
    performance is viewed
   Provides source of information about
    organizational or operational issues that
    influence performance

Professional Development Plan

   While growth opportunities may be limited, it is
    important to develop staff skills and provide
    experiences that will enrich their professional lives
   Development goes beyond formal training courses:
    may include cross-training, temporary project
    assignments, on-the-job training and mentoring
   Should include timetable for learning skill and how it
    will apply in the employee‟s job
   May include indicator of priority

Does “One Size Fit All”?

 Consider if one evaluation form
 should/can be used for all employees,
 or if separate forms should be used,
 based on:
   Staff level
   Nature of work performed
   Business unit
   Union/non-union status

Other Issues

   Include upward/360o feedback?
   Ensure management buy-in and participation
   Determine level of staff involvement in developing and
    testing the system
   Provide adequate training and opportunities for ongoing
    discussion of system
   Review evaluations to ensure they reflect:
        Consistent approach to establishing performance
        Common understanding of rating levels
   Assess system effectiveness and revise as necessary

Questions & Answers

Contact:   Larry Beers
           James E. Rocco Associates, Inc.


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