Why Traditional Performance Management Can't Deliver Peak Performance

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Teks penuh

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Aryaduta Hotel-Jakarta, 14 August 2014 By Yunus Triyonggo

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Why Traditional

Performance Management

Can't Deliver Peak Performance

Daniel D. Elash, Ph.D. (2009)

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What is Traditional Performance

Management ?

Source : David D. Dubois & William J. Rothwell, 2004

Traditionally, performance management systems

concentrate on performance planning and

evaluation, rewards and discipline, according to the

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Reason #1

They are too slow

.

To be truly educational, feedback has to occur at

the speed of business circumstances.

It is most powerful when it follows directly on the

heels

of performance.

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Reason #2

They are too remote

Too often the voices of customers,

teammates and co-workers are

filtered

and delivered through the manager.

Managers can't effectively explain or clarify issues

and situations with which they aren't familiar

.

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Reason #3

They are too vague (samar-samar)

– Useful feedback is specific, focused,

actionable, and relevant to a particular situation or set of circumstances.

– This requires a level of explicitness that is seldom reached

with current performance management systems, which rely on annual, or bi-annual performance reviews.

– Evaluated dimensions are often broad behavioral

categories such as "responsible," "reliable" and

"industrious." Such terms open the door for heated

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Reason #4

They are too emotionally laden (sarat)

The mind

is best prepared to grasp new

information, think effectively and learn when it is

clear and focused.

Understanding, thinking and learning are more

complicated when a person is anxious,

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Reason #5

They are too focused on each individual alone

– Optimizing your own performance without regard to your

impact on others, or the synergies required for effective

teamwork, is insufficient today.

– A successful company isn't a collection of individuals

performing independently; it is a networked, interdependent

system that operates as an organic whole.

– Feedback has to relate to individuals, but within the context

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Challenges

However, according to a study by The Boston Consulting Group (BCG), business complexity has increased between 50 percent and 350 percent over the last 15 years.

Teams that focus on performance management have been shown to generate as much as 30 percent more revenue per full-time employee than average teams

Only 29 percent of companies create individual goals aligned to the organization

29% 71%

Company

Aligns Not Align

A full 52 percent of midlevel managers and 74 percent of lower-level employees perceive the linkage between individual goals and corporate goals as very weak

0% 50% 100%

Mid level Lower Level

52% 74%

48% 26%

Employees perceive the linkage between individual goals and corporate

goals

Strong

Weak

Up to 50 percent of employee time is spent working toward nonstrategicobjectives

50% 50%

Working spend

Strategic Non strategic

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What is a Competency?

Observable abilities, skills, knowledge, motivations or

traits defined in terms of the behaviors needed for

successful job performance.

Source : Human Resource Systems Group, 2012

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What is Competency-based Management?

An HR management approach that

standardizes and

integrates all HR activities based on competencies

that support organizational goals.

Source : Human Resource Systems Group, 2012

Basic

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Why competencies?

Competencies translate the strategic visions and goals for

the organization into behaviors

or actions employees must

display for the organization to

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(Source : Spencer, 2001)

63%

19%

12.5%

63% reduction in turnover due to increased employee satisfaction due to greater clarity

about performance expectations

12.5% increase in sales and profits due to Competency-based training programs

19% improvement in employee performance

The Benefits of

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The Benefits of better Employee competency

Improved leadership capacity

– Companies with highest rated leadership development

programs, compared to those with weak programs experienced:

600%

increase in overall business impact

640%

improvement in their leadership bench strength

480%

improvement in leader engagement and retention

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Superior Talent Management = Significant Advantages

26% higher revenue per employee

28% less likely to have downsized during 2008-2009

40% lower turnover among high performers

17% lower overall voluntary turnover

87% greater ability to “hire the best people”

92% greater ability to “respond to changing economic

conditions”

144% greater ability to “plan for

future workforce needs”

156% greater ability to “develop

great leaders”

The Benefits of better Employee competency

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Competency-based Performance Management

• Competencies define the behaviors necessary for goal achievement

• They facilitate a developmental approach to performance management

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How to integrate Competencies in the

Performance Management Process

Option #1 Option #2

By defining the competencies needed to perform each Performance Goal / Objective

The manager and employee identify the key competencies required to achieve each performance goal / objective (typically 1 to 3 competencies

per goal / objective)

At the end of the performance cycle, the

employee’s performance is

evaluated in relation to

the performance goals / objectives as well as the

key competencies

associated with each goal.

the competencies being assessed are entirely consistent with the

employee’s performance goals for

the performance review cycle.

Not all competencies within the competency profile for the

employee’s role / job will

necessarily be assessed within the cycle

By integrating the competencies for the

employee’s job into the PM process

The performance plan includes theperformance goals / objectives for the review period as well as the complete set of competencies from the

competency profile for the employee’s role / job

The performance goals / objectives address

“what” must be accomplished during the review period, and the competencies measure “how” the employee conducted him/herself to

accomplish their work

All competencies defined in the competency profile for

the employee’s role / job are

evaluated

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Integrated Performance Management System

Annual Base Salary Short Term Bonus Long Term Incentive

Multiple years of Performance creates basis for judgement of Sustained Performance

Level High, Medium, Low

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List of Competencies (example)

LEADERSHIP COMPETENCIES : 1. SHAPE THE FUTURE

2. REAL ACCOUNTABILITY 3. BUSINESS ACUMEN

CORE COMPETENCIES : 1. INTEGRITY

2. TEAMWORK 3. INNOVATION

4. ACHIEVEMENT ORIENTATION 5. CUSTOMER FOCUS

TECHNICAL COMPETENCIES : 1. FEED PROCESSING

2. FEED FORMULA

3. FEED WAREHOUSING

4. PROFIT & LOSS FEED BUSINESS 5. SERVICE LEVEL TO CUSTOMER

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Suggested Action Plans

Inconsistent in meeting agreed individual business targets

consistently exceeding agreed individual business targets

•Recognise and reward

•Provide feedback

•Mentor/coach to improve Leadership

•Acknowledge contribution

Recognise and reward

•Challenge/stretch

•Expose

•Coach

•Set clear Milestones

•Provide feedback

•Coach Monitor/track

•Decision to continue or end employment

•Reward

•Milestones

• Provide feedback

•Training

•Coach to improve delivery

•Specific goals & objectives

Consistently exceeding expectations Inconsistent in

meeting

expectations Potential

Capacity

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Competencies & living values

Potential discussion

Skills Experiences

Performance

PT

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26 11/13/2017

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