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                              Performance Management
                              in the New World of Talent




IHRIM – Atlanta Chapter
Row Henson, HCM Fellow – Oracle Corporation
Molly Talanczuk, Manager, HR Technology - Cox Communications
 So Where is Talent Coming From and How Do We
 Motivate?
 Shrinking Workforce          Multiple Generations
3.0%
                     2.6%
2.5%

2.0%          1.7%
                            1.6%

1.5%                               1.2%
       1.1%

1.0%                                      0.8%

                                                 0.4%
0.5%                                                           0.3%
                                                        0.2%          0.2%   0.2%


0.0%
       1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s 2030s 2040s 2050s

                      Labour Force Growth (Population = 16-65)




Disengaged Employees                                                                Leadership Development
Strategy Execution gets a failing grade



 “Less than 10% of strategies effectively
  formulated are effectively executed”
The challenges to achieving a
high-performance workforce …
 Workforce Not Engaged with Objectives


• Employees don’t understand their impact
• Employees not fully engaged with
  enterprise objectives
• Managers don’t have line of sight into talent




           Outcome:
           Enterprise performance suffers
Performance Not Being Managed


• MBO process is unsuccessful
• Feedback is poorly articulated and delivered
• Employees not developed for success
• Fragmented process




           Outcome:
           Employee not leveraged or developed
Not Creating a Performance Driven Culture


• Not truly paying for performance
• Top performers are not rewarded or enticed
  to remain
• Can’t identify tomorrow’s leaders



           Outcome:
           • Rewards ineffective
           • Talent leaves
           • Jeopardizes organizational future
 Performance Management Drives Business Success


   Employee understands                                                   Employee understands
     company goals                                                       how to make a difference
                                                                      91%
    84%


               38% more engaged                                                        68% more engaged
               46%

                                                                                     23%



Understand     Do not                                          Understand          Do not
             understand                                                          understand


                     The Towers Perrin Talent Report 2001: New Realities in Today’s Workforce
                   The Premium for Talent




Source: Quantisoft, LLC
 Engage and Develop the Workforce
• Engage workers and reduce
 turnover by 10%                                                 Companies using Learning &
                                                                 Performance systems can
• Reduce training facility, travel &                             reduce admin support by
                                                                 30%, improve overall
 instructor costs by 15-30%
                                                                 productivity, and cut a wide
                                                                 variety of costs
• Reduce related Print, Copy and                                      -- CedarCrestone
 Mailing fees by 33%
 A typical organization with                       10,000     employees
 And revenue of                                     $2.0B     per year, results in potential benefits of
 Avoid staff replacement costs                      $4.5M     over a 5 year period
 Improved HR staff productivity                     $3.0M     over a 5 year period
 Reduced training travel, facility,
 and instructor costs                               $7.0M     over a 5 year period
 Reduced print/copy/mail fees                       $0.3M     over a 5 year period
 Resulting in savings of                           $14.8M     with Learning & Performance
Source: CedarCrestone (available at www.cedarcrestone.com/research)
    Help the Emerging Leader find a Path
WHAT’S NEW
     – Pulls together relevant data about an
       employee’s talent information. This
       includes performance objectives, training,
       certifications, competencies, academics,
       awards, succession plans, and appraisals.



RESULTS
• Analyze gaps between desired proficiency and
  current performance level
• Identify and enroll in training to close gaps
• Identify potential candidates based on
  employee interest lists and talent profiles
• Provide self service career tools to employees
  and managers
• Update proficiency levels based on
  performance evaluation
• Find “hidden talent” in your organization
• Assess “bench strength” for critical skill areas
               Keep the High Potentials Engaged
                    Competitive Advantage – a business with a
                      highly engaged workforce has many
                        advantages over its competitors


• On average, they rate 86% higher with their customers

• They have 70% more success in lowering employee turnover

• They are 70% more likely to have higher productivity

• They enjoy higher profitability, have better safety records and
  deliver greater earnings per share to their stockholders

Source: Work Force Analysis – a Business Reality Check – Profiles International, 2008
     Prepare for Change with Succession Planning
        “A people process that enables organizations to
         improve retention while mitigating risk factors to
         the business.”

     • A means of identifying critical management
       positions
     • Identification and assessment of key skills and
       competencies required for the positions
     • Ability to provide maximum flexibility in lateral
       and upward moves in the organization
     • Assessment and development of top
       performers for future responsibilities




13
      Why Talent Matters: Value and Money

 Value of Top Performers – Two, three times even 12 times the performance of average
  employees (Ulrich and Smallwood)

 Cost of Losing Talent – 1 ½ times burdened salary.              Cisco estimates losses of $250K
  for each talented engineer it loses. Bristol Meyers Squibb loses $500K for each senior leader lost
  (HCI). Bill Gates says the loss of one top engineer to a top competitor will cost Microsoft $1 billion
  over the course of that engineer’s career

 Cost of Poor Hire – $300K average impact in knowledge-economy firm (Sullivan)
 Impact of “bad fit” executive hires – 40% fail within the first 18 months (Charan)
 Cost per Day – $7000 avg per day for operating without a key player (Sullivan)
   Why Talent Matters: Productivity

 Engagement Levels – Only approximately 25% to 55% of employees are engaged
  (Watson Wyatt and CLC)

 Breakeven Point – 6.2 months for a manager to become productive in a new job
  (Watkins).

 Manager Ripple Impact – On average, a manager’s actions             impact 12.4
  people in a company (Watkins)

 Deployment – Only about 20% of employees do what they do best at work
  (Buckingham)

 Performance Expectations – Less than 50% of employees know what is
  expected of them at work (Stolovich)
 Performance Management – Employees that understand what is expected of
  them are 38% more productive than employees that don’t and employees who
  understand what is expected of them and how that contributes to the goals of the
  business are 68% more productive than employees that don’t. (Towers Perrin)

 Organizational Learning – Few organizations do a good job of sharing “what
  works”
    Business Intelligence

                                  Predictive Modeling


I                      Correlated Analytics
M
P                   Contextual Embedded
A                   Analytics
C
             Metrics Delivery
T
             (Dashboards)
     Information
     Distribution

                     COMPLEXITY
Reporting vs. OLAP vs. Data Mining


  Extraction of    Summaries,         Knowledge
  detailed and     trends and         discovery of
  roll up data     forecasts          hidden patterns


  “Information”   “Analysis”          “Insight &
                                      Prediction”


 Who left last    What is the          Who are the top
 month?           turnove trend for    performers at risk
                  the last 3 years?    of leaving?
     TM Metrics that Matter: Performance


                                                         Impact of perf
                                 Perf Mgmt /             mgmt on business
                                 Learning                results
IMPORTANCE




                                 linkage
                                                            Effectiveness
                  % of ees               Pay for
                                                            of perf mgmt
                  unreviewed             Performance
                  for > 2 yrs.           Alignment

                        Perf. ratings                     Perceived
                        distribution                      credibility of
                                            Efficiency of perf mgmt
             % employees reviewed
                                            perf mgmt
             Number of reviews              process
             completed on-time

                          COMPLEXITY
                                    18
                     Meeting The Challenge
Drive Business Results
  Clearly define and link individual performance to enterprise objectives
Process for Sustained Change
  Iterative and collaborative communication
Transfer Ownership to Users
  Planning/linking objectives, defining responsibilities, training plans, and
    career and succession planning
Increase Employee Success
  Improve quality & timeliness of feedback
  Enable performance driven development
Support End-to-End Talent Mgt.Business Processes
  Link the right rewards directly to performance
  Link feedback to development plans
  Integrate competencies across Talent lifecycle
  Understand that Performance Management cannot operate effectively
     in a silo

				
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