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ROMY FELIX – HEAD HRD 1 1 Corporate Performance Measurement and Management at M.P.S

1 ROMY FELIX – HEAD HRD 1 Corporate Performance Measurement and Management at M.P.S

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Page 1: 1 ROMY FELIX – HEAD HRD 1 Corporate Performance Measurement and Management at M.P.S

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1

CorporatePerformance

Measurement and Management

atM.P.S

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Agenda1. Introduction to Corporate Performance Management2. Individual Performance Management3. Definition: Competencies

Organisational and Individual Competencies Competency framework Why Develop a Competency Framework

4. Approaches to Competency Profiling Competency & Skill library features and Benefits Steps for implementing a Competency & Skills library Examples

5. Definition: Job Profiling Process for Creating a Job Profile Examples and Templates

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PerformancePerformanceMeasurementMeasurement

What gets measured gets done and … What gets measured becomes

important!

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Performance Management – the linking pin !•Starting with the ultimate goal and mission of the organisation.•Aligning the business units, teams and individuals

VisionStrategy

Processes

Systems

Results

Behavior and Actions

Performance Management

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What employees look for – the linking pin!

Vision

Strategy

Processes

Systems

Results

Behavior and Actions

Performance Management

•Understand what is expected form them•This will lead to aligning individuals towards achievement of organisational goals

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What does Performance Management Involve?What does Performance Management Involve? Achievement of strategic goals & objectives Allocation of KPI’s Facilitate employee personal development as part of a

integrated process Understanding true strengths and weaknesses at every

level of the organisation Transformation of people management into a result-driven,

strategic business function Alignment of employee goals and actions with corporate

strategy Retention of top performers and development of low

performers Increased quality and frequency of communication between

managers and employees

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CEO Questions CEO Questions Have I set the right organisation goals to achieve my strategy?

There must be a more systematic approach we could use for goal setting.

What kind of behaviors and skills and focus should I be directing my employees to have in order to achieve these goals?

Does anyone know what behaviors will most likely help to improve our financial performance or improve customer satisfaction?

Do the employees understand my vision and strategy? Have they been clearly communicated?

Do employees buy-in to these goals and do they understand and buy-in their role or their divisions role in meeting the strategy?

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CEO Questions Cont.,CEO Questions Cont.,

Is my company structured optimally to fulfill our Strategy?

Have we set up a performance incentive system that aligns with our organisation strategy? Does it include objectives that our staff care about?

Do I have the right tools, systems and processes in place, both formal and informal to support performance related communication?

Isn’t there some form of automation that can give me more detailed, relevant information.

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PerformancePerformanceManagementManagementMay the most agile win …May the most agile win …

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Measurement and Performance There are some questions that are relevant for business:

Do we attract and retain the right people with the right skills?Are we performing effectively in our operations to produce

and deliver to our stakeholders?Are we meeting or exceeding our stakeholders

expectations?How are we doing financially?

o Margins?o Costs? o Revenues?o New business revenues?

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Integrated and Balanced Management ApproachPerspective Strategic

ObjectivesMeasures Targets Owner/

Account-abilityInitiatives

Financial • Shareholder value

• Profit• New revenue

• Shareholder Equity• Operating

margin• Revenue from new

services

• R X million in 3 years• RPI + x% annually• 25% in three years

• Finance Dir.• CEO• Business Dev. Mgr

• Implement Economic Value Added

Customer • Differentiation• Strategic alliances• Customer service

• Value for money• Profits from alliances• Customer satisfaction

• Number one customer rating

• R x million in five years• Number one customer

rating

• Marketing Dir• Bus. Dev. Mgr.• Marketing Dir

• Create customer Segmentation model

• Redefine channel strategy

Business

Processes

• Productivity• New product devt.• Segmentation

• Revenue/work hour• Product development

cycle time• Number of initiatives

targeted at profitable segments

• Best-in-class within five years

• Reduced by 50% in two years

• 60% within one year

• COO• R&D Manager• Marketing Dir.

• Reengineering new product development process

Learning & Innovation

• People policy• Alliance Mngnt• Customer focus

• Management span of control

• Number of “learning partnerships”

• % management time interfacing with cust.

• Triple in three years• 10 in five years• 20% in two years

• Human Res. Dir.• Bus. Dev. Mgr.• CEO

• Develop new HR strategy

• Implement performance based compensation program

This prioritised set of initiatives defines the executive agenda and should support the planning and budgeting process. Conversely, senior management should call into question any initiatives inconsistent with the strategic objectives.

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So far so good …….. But …..

Is there any difference between organisational and individual performance management?

Where should management put more attention to when managing performance?

At the end …what is performance management?

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Defining Individual performance

Performance Management

Support and tools

Competencies, knowledge

and skills

Motivation

Performance: Those behaviours, that under the right conditions, lead to the expected

results

KNOWLEDGEI know how

to do it

CONTEXTI know what

to do

WILLINGNESS

I want to do it

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Value for clients, stakeholdersAnd employees

Organisational Strategies

Divisions, Sections, Programs Plans etc

Individual Action

Best Practices• In value based managed enterprises, individual employees understand how

processes and day-to-day activities contribute to value creation• They know what they have to do individually to contribute to value creating• This value creation focus becomes the basis for determining appropriate

performance measures and enables to differentiate between what could be measured and what should be measured (Business Balanced Scorecard Concept)

The need to cascading down to level n…

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Individual performance management infrastructure

Performance Management infrastructure

1. Roles & Responsibilities2. Annual objectives and

feedback3. Competencies model

Performance Management infrastructure

1. Roles & Responsibilities2. Annual objectives and

feedback3. Competencies model

Organisation Structure

Compensation & Incentives

Career Development

Training & Education

Recruiting & Selection

Integrated People Management Process

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Individual Goals

Team Goals

Corporate Goals

Individual Competency

Competency Mix

Core Capabilities & Key Competencies

GOAL MANAGEMENT COMPETENCY MANAGEMENT

PERFORMANCE MANAGEMENT

Performance Management System

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Competencies….

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What are competencies?

Competencies are a set of behaviours that encompass skills, knowledge, abilities, and personal attributes that, taken together, are critical to successful work accomplishment.

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Organisational and Individual Competencies

Organisational Competencies:Pinpoints the most critical competencies for

organisational success. These are an organisation’s core competencies.

Individual Competencies:Those competencies that each employee brings to his

or her function.

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What is a Competency Framework?

A Competency Framework is a map to display a set of competencies that are needed to achieve an organisation’s mission, vision, and strategic goals.

A Competency Framework is future-oriented, providing a master of core individual competencies required to develop the ideal future workforce.

The competencies that make up the framework will serve as the basis for future employee management, since they play a key role in decisions on recruiting, employee development, personal development, and performance management.

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Why a Competency Framework?

A Competency Framework will help to bridge the gap between where the organisation is now and where we want to be in the future.

This occurs in two ways.

Serves as a guide for management in making decisions, since it is based on the competencies that support the mission, vision, and goals of the organisation.

Serves as a map to guide employees towards achieving the mission of the organisation and their functional areas.

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Approaches to Competency Profiling

Two approaches to competency profiling:

Top-down approach: Generally involves picking, based on a strategic analysis of the

organization's performance objectives, an array of competencies from a dictionary of competencies and assessing those for a particular position or class of positions.

Bottom-up approach: Involves exploratory checklist surveys and subsequent

confirmatory interviews to derive the competencies from employees.

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Functional Competencies Administrative Knowledge Business Acumen Computer Filing Financial Health & Safety Knowledge and Skills Human Resources Industrial Relations Legal Knowledge Management Information Marketing/Sales Procurement Quality Knowledge and Skills Security Typing

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Task and Leadership Competencies

Analytical Ability Assertiveness Conflict Handling Customer Focus Decisiveness Flexibility Individual Leadership Initiative Judgement Leadership of change Negotiation Skills Oral Presentation Oral Persuasiveness Performance Orientation Persistence

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Task and Leadership Competencies

Planning/Organising/Control Self-development orientation Strategic and Global Perspective Team Leadership Values Verbal Communication Written Communication

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Competency & Skill Library Features & Benefits

Comprehensive LibraryNo need to “reinvent the wheel.” Allows a quick start. Completely customisable: Create new skill groups, skills, and sub-skills as needed

Create Common or Unique Performance LevelsDefine different levels of competence (for example, from beginner to expert) for each competency, or use one scale for all

Input Performance TargetsIdentify performance expectations for each competency/skill group for entry level up to senior management

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Competency & Skill Library Features & Benefits

Define Behavioural IndicatorsIf desired, enter behavioural examples/targets for competencies and skills

Continually Enhanced and Grows in ValueThe library is easily enhanced as a by-product of job profiling, performance planning, and employee development

Fully Integrated with Other HR FunctionsYour competency/skill library is used in every other function of HR, it ties them all together, and allows consistency throughout all of your performance management and developmental programs

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Steps for Implementing Competency & Skill Library Step 1: Review provided library; eliminate

competencies and skills that are irrelevant to the organisation

Step 2: Select core competencies based on organisational strategy and values

Step 3: Departments review list of competencies and skills for their function and add additional competencies and skills as they are needed

Step 4: Library grows naturally as new skill needs are identified while building job profiles, performance, development, or succession plans

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Example

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Example

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Example

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Example

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Example

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Competency AssessmentCompetencies Required

Level of Complexity [Refer to

Competency

Framework]

Employee’s

Rating

Actual Ratin

g

GAP Developmental Requirements

Business Acumen

4 3 3 -1 Work towards attaining required level. [Refer to Academy, or engage in formal training, e.g. Advanced Management Programme, UNISA]

Marketing/Sales 4 3 3 -1 Investigate marketing & sales activities in BU. Report back in 3 months for actions to be taken after discussion with Reviewer

Financial 4 3 3 -1 Requires training on financial modeling. Recommend that Academy module on Financial Modeling be taken.

Industrial Relations

3 3 3 0

Step 4: Assess Competency Level Achievement

Example of Competency Assessment Process

Example

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Job Profiling…

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What is Job Profiling

Job Profiling is a systematic procedure for identifying the Competencies critical for success in a particular job or a job role.

Job profiles can then be used for recruitment, selection, performance review, promotion, career development and succession planning.

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Job Profiling Procedure

Step 1: Obtain background information about the job to be profiled and how that job fits into the organisation.

Step 2: Develop an initial list of the tasks most relevant to the job being profiled.

Step 3: Meet with subject matter experts (SMEs)—incumbent workers or supervisors of the job being studied—who review and revise the list, adding, deleting, consolidating, or changing the wording of each task to make sure that the list of tasks accurately represents the job as it is performed in the organisation.

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Job Profiling Procedure

Step 4: Present detailed descriptions of each of the Analytix Competency Framework to the SMEs. The SMEs decide, as a group, which competencies are relevant to the job and which skill levels are necessary for entry into the job and effective performance in the job.

Step 5: The final product of the profiling procedure is a report listing the most critical tasks an individual in that job must perform and, for each relevant Analytix competency, the skill level required to perform the job.

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Example

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Operational objectives

Executive Role Represent Finance & Funding and provide strategic input and value add at EXCO, ABCC Board Meetings, Board Committee Meetings, External Boards, Divisional Merit Committee Meetings, and facilitate the implementation of Executive/Board decisions.

Leadership Effectively provide leadership in the Finance & Funding Division and participate in executive decision-making and leading of division and SBU’s:

Effective PM Enhance performance culture in Division and SBU’s by successfully implementing the enhancements of the ABCC Star Performance Management Project:

Long-term strategic objectives

Financial Mngmnt

Effectively manage and monitor all activities that may have a financial impact on the IDC: Ensure timely and accurate budgeting and financial reporting on all the IDC’s financial matters, including the subsidiaries Enhance financial reporting functionality at SBU level to include Profit & Loss and Balance Sheet reports There is adherence to the PFMA and other regulatory reporting requirements Company and external auditors are satisfied that proper treatment of transactions were made (including tax)

Strategic Initiatives

Ensure the ABC’s ability to fund all financing activities through effective utilisation of cash resources (including borrowings) as determined by it’s mandate through provision of loan finances, leased buildings, suspensive sales, plant leases, guarantees and the provision of ordinary preference share capital

ABC’s Credit Rating Ensure that the Moody’s rating of the ABC, to be obtained by June 2003, is at least maintained or improved to ensure IDC access to

competitive fundingLiquidity Establish and implement programs to protect the IDC’s capital in place through management and realisation of the Mature Holdings

to enable the Corporation to remain within it’s limit, and to ensure a ready income stream, and a debt: equity ratio below 60%Attractive Longer term funding Enable IDC access to attractive priced longer term funding by developing and maintaining relationships with a number of

international development finance institutions, including European Investment Bank, DEG, Proparco, and Japan Bank for international Co-operation relationships with leading DFI’s.

Example

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Department

Programme

Team objectivesPersonal development needs and

aspirations

Individual objectives

AttendedImprove capabilities in client service by attending course by end Q4 2001

Survey set up

Improve client satisfaction feedback by setting up an appropriate survey by Q3 2001

6%10%Grow net new money excluding market growth by the end of Q4 2001

34220%

44440%

33440%

Objectives

Self Manager

Target Result Weighting Assess Assess Final

% 1 – 5 1 – 5 1 - 5

Example of Individual Target Setting

Step 3: Set Measurable Targets for Individuals

Example

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Parameter Performance Standard Measurement Weight

Executive Role Represent Finance& Funding and provide strategic input and value add at Board, EXCO, Board Committee Meetings, External Boards, Audit and Merit Committee Meetings, and facilitate the implementation of Executive/Board decisions.

Divisional Merit Committee Evaluation 20%

Divisional Leadership Effectively provide leadership and guidance to SBU Heads in policy and operations, and implementation of strategy and business plans and participate in executive decision-making

Subordinates Evaluation 20%

Effective Performance Management

Enhance performance culture in Service Sector Division and SBU’s by successfully implementing the enhancements of the IDC Star Performance Management Project by June 2003.

VP Human Resources Evaluation 20%

Financials and Compliance

Ensure accurate and timely quarterly, 6 monthly, and annual budgeting and reporting

Chairman of Board Audit Committee Evaluation

10%

ATG and EXIM Ensure Division’s contribution to successful roll-out of ATG and successful implementation of EXIM project by June 2003

CIO Evaluation 10%

Corporate Support Effectively manage the corporate support function, including maintenance of buildings and infrastructure, Infrastructure, secretarial division, dematerialisation of shares

Sample VP and SBU Head satisfaction survey

10%

Moody’s Rating Successfully manage the IDC’s application in obtaining a Moody credit rating by June 2003

CEO Evaluation 10%

100%

Example

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Example

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Example

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Example

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Thank youThank you