Getting Performance Management (PM) Right

TiE Institute, New Delhi

April 25th, 2014

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The Brief Given

1. How do I arrive at building the right scorecard for my organization?

2. How do I effectively define the goals and objectives using tools like MBO etc?

3. How do I build a high performance culture which incentivises and rewards high performers?

4. Using the performance management framework as a tool, how can I align resources, systems & employees to strategic objectives & priorities?

5. How do I share feedback more effectively with employees which can reinforce the right behaviors and enhances motivation.

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WHY?

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Purpose, Values & Culture1. Purpose of PM

a. Drive Desired Behaviours & Efforts Goal Attainment

2. Role of Valuesa. Compass / North Star / “Dhruv Tara”

3. Culture Living by the Valuesa. Governance Structures, Processes & Policiesb. Challenging Unacceptable Behaviours & / or Situations

i. Lead by Example Leadership is Management of Cultureii. Do, don’t just Say not just on Coffee Mugs & T-Shirts!iii. Build the Organisational Narrative Fables, Myths, Storiesiv. Identity & Recognise Desired Behaviours Recognition

Programs to Storify “Valued” BehavioursWhite Spaces - 2014

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Company’s Core ValuesSet One: Ad Agency1. Doing what you say2. Major & minor roles3. No titles around ideasSet Two: IT Services Company4. Challenge5. Move Fast6. Be open & straight-forward7. Teamwork for Results8. Take ResponsibilitySet Three :IT Product Company

1. Be an Owner2. Help Others

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Set 4 : Social Media Marketing Company1. Passion2. Team Player3. Humility & Integrity4. Curiosity5. Do good, & do right by each other

Set 5: Cloud-computing Company6. Trust7. Professionalism8. Grey Matter9. Fun

Set 6 : LinkedIn10. “No-Spin” Zone11. “Next Play”12. Don’t Hope13. Kiss a lot of frogs14. “Crush”

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What Shapes Culture?

1. Nature of, and Involvement in, Decision

Making

2. Process, or basis of Information Sharing

3. Organisational Response to Mistakes or

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WHAT?

What does Employee want?1. What am I expected to DO ?

Role Clarity2. What support / help can I expect ?

“Know How” “Show How”3. How will I know whether I am doing a good job ?

Goals Regular Reviews Feedback4. What can I expect if I perform?

Recognition Incentive Progression

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What’s “Balanced” Scorecard?

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Skills & Culture Development

Organisational Capabilities

Critical Processes

Customer Perception

Supplier Perception

Partner Perception

Revenue CostsValue

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Elements of a Scorecard1. Key Result Areas (KRA’s) : Outcomes Expected2. Weightages : Relative Importance to prioritise3. Key Performance Indicators (KPI’s): Measurement4. Actuals : Last Year (Reality Check!)5. Gates & Targets : Next Year (Ambition / Plan)6. Month-wise Break-up / Plan7. Scorecard Monthly Report Card Reviews

against Monthly Scorecard Course Correction8. Linkage to Pay : Marginal EBIDTA9. Incentive Payouts : Frequency & Capping

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Sample Scorecard - Business

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Actuals as on

Mar/13 Mar/14 Mar/13

i Shovelling Time / Shift Hours 5.25 6.50 25% 6.70 29.0

ii Lead Time for replenishment of "stock-outs" Days 37 25 5% 26 4.6

iiiReduction in "on-site" waste due to equipment positioning planning

Crore 18.32 10.00 10% 9.00 11.2

ivNumber of occasions "Standard" Spares get stocked out / month

# 19 5 5% 7 4.3

i Reduction in Equipment Downtime % 24% 10% 10% 12% 8.6

ii Adherence to Preventive Maintenance Schedule % 50% 95% 10% 92% 9.3

iii Reduction in Inventory Cost Crore 213 100 15% 123 11.9

i Adherence to Quality Management processes % 29% 70% 10% 59% 7.3

ii Maintenance Skills Training for all on-site personnel mandays / employee

0.3 1.5 5% 1.5 5.0

iii Retention of Top 20% performers % 70% 90% 5% 82% 3.0

Total 100%Score /

100 94.2

Year ending # Key Result

AreaKey Performance Indicator Unit

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2

3

Productivity Enhancement

Cost Improvement

Effective support processes

Perf Score

Wt age

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Sample Scorecard : Staff

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# Key Result AreaWt. age

Actuals for Q1

Gate Target

aPerformance Contracts (Roles, KRA's & KPI's) in place by May 15th - specific / generic as applicable

95% 100%

b Adherence to Quarterly Performance Review Calendar 85% 90%c Implement Performance-linked Incentive Payouts Q2 Q1a Engagement Score on of 4.0 or more, on a 5.0 scale 50% 70%

bImplementation of agreed Company-level Action Plans (No. of initiatives)

80% 90%

aManager feedback on Customer Service Orientation of GRO's (4.0 or more on a 5.0 point scale) after 30 to 90 days

75% 85%

bAdherence to Management Development Program Calendar for all people managers

90% 100%

4 Responsiveness in Hiring

15% 98.8% 97.5% 99.5%

5Enhance Employee Retention

10% 22.7% 20.0% 17.5%

100%

Key Performance Indicators

1Establish a strong Performance Culture

30%

2Enhanced Employee Engagement

20%

3Improve Training Effectiveness

25%

Hiring Cycle Time (Requisition to Joining) at Key Roles at Executive & below levels within 45 daysVoluntary Attrition Rate for Operational Departments (GRO's + FO + MRO)

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Scorecard Scenarios

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Positive Score Normal Score Negative Score

1Load Factor = Revenue Return Pax * Contracted Miles / Flying Hours / (Max Capacity (14) * Avg Speed (120))

40% % 61.8% 65.0% 66.0% 0.53 64.0% 0.28 63.0% 0.15

2Total Revenue Pax / Total Tourist Arrivals

30% % 37.1% 38.0% 37.7% 0.20 37.8% 0.23 37.3% 0.07

3Waiting Time (from Check-in to Door Closure) < 120 minutes for Arrival Passengers

20% % 85.0% 87.5% 88.0% 0.24 87.9% 0.23 86.0% 0.08

4Total Cost (Direct Operating Cost + Direct Fixed Cost + Overhead Cost + Capital Cost ~ Fuel Cost) / Flying Hour

10%$ / hr

$1,022 $1,081 $1,000 0.24 $1,050 0.15 1,090 0.08

100% 120% 89% 38%Performance Score =>

Key Performance Indicator (KPI)

# Scenario 1 Scenario 2 Scenario 3Target for 2014

ActualsUnitWt. age

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Change MORPH Alignment

1. Mission:• What’s My Mission at TAML? What do I take Ownership of?

2. Objectives • Top 3 I want to achieve this Quarter

3. Results• Metrics to measure achievement of Objectives at end of Quarter

4. People• What changes do we need to make to the Organisation to

achieve this? Hire people? Create New Teams? Change the Way a Team is Defined?

5. How did I do?• Review at the end of this Quarter

And, all this on one A4 page!White Spaces - 2014

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MORPH: Quarterly Review Format

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Hits Misses

Asks Outlook

HOW?

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Why is Performance Missing?

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Skill Gap

Motivation Gap

Won’t Do Can’t Do

Need HelpPeer Pressure

Progression, Rewards &

Incentive Structure

Structure, Systems & Procedures

Individual

Social

Organisation

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Why are People unhappy with PM?1. ~60% employees across the world (across levels)

rate their Company’s Performance Management System at “C Grade or below.”-WorldatWork, 2014

2. WHY??a. Human Beings are smarter than Systemsb. They can bastardise any System

3. What can you do to improve?a. Engine : System & Processesb. Lubricating Oil

i. Communication (One-Way)

ii. Dialogue (Two-Way), with Redressal Opportunity White Spaces - 2014

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High-Performing Managers1. Three Habits

a. Meet Regularly with employees

b. Take an interest in employees personally

c. Asking Questions, rather than providing answers

2. Three Types of Conversationsa. Task Conversations Daily / Weekly

b. Performance Conversations Monthly / Quarterly

c. Career Conversations Half Yearly / Annual

3. Three Types of Decisionsa. Dictatorial

b. Consensus

c. All discuss, I decide, all run in same direction, or get off the busWhite Spaces - 2014

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Top Performers vs. Poor Performers

Top Performers1. Ownership2. Builds Relationships3. Decisive4. Solution-Oriented5. Team Player6. Proactive7. Self-starter8. Energetic9. Visionary with follow-through10. Logical11. Consistent12. Multi-Tasker13. Politically tuned14. Passionate

Poor Performers1. Negative Attitude2. Lazy3. Toxic4. Unwilling to change5. Careless6. Indisciplined7. Selfish8. Indecisive9. Work shirker10. Looking for new job11. Blames Others

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Top Performance is about…

1. Behaviors / Mindsets / Work Values / AttitudesThese can be learned / applied from tomorrow

NOT

2. Talent / Intelligence / Qualifications / Job Knowledge or even Skills

In-born, or gained over the years

3. Behaviors distinguish the “Great” from the “Good”4. Good character is more to be praised than outstanding

talent. Most talents are, to some extent, a gift. Good character, by contrast, is not given to us. We have to build it, piece by piece - by thought, choice, courage , and determination. H. Jackson Brown

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Managing Difficult ConversationsWhy is the Conversation Difficult?

Due to Fear of Consequences

1. Dilemma: Avoid OR Confront

2. Is it possible to do this Diplomatically?

3. Difficult Conversations are a part of “Normal” life

a. Problem is not in our Actions; it’s in our Thinking

b. Shift from “Message Delivery Stance” “Mutual

Learning Stance”22White Spaces - 2014

There are Really 3 Conversations …

1. “What Happened?” Conversation a. Truth Assumption : Not what is True but What is Important

b. Intention Invention : Invisible, so we Invent

c. Blame Frame : Past Future

2. “Feelings” Conversationa. Even if we don’t talk or address it, feelings are at the Core

b. Understanding Talking Managing Feelings

3. “Identity” Conversationa. Are we “hilao-ed” or Off-Centre?

b. Keeping your Balance

“Message Delivery” “Learning Conversation”23White Spaces - 2014

Shift “What Happened”1. From “the Truth” Perceptions

What’s my story? What’s their story?

2. From Intentions Impacta.What assumptions am I making about their

intentions? b.What is the impact on me?

3. From Blame Contributiona. What have we each contributed to this

situation? b. How can we fix things going forward? 24White Spaces - 2014

Shifting to a Learning Stance1. Stop Arguing about Who is Right: Explore Each Other’s Story

a. We Think They are the Problemb. They Think We are the Problemc. Your Shoe & My Shoe

2. Why are our Stories Different?a. We have Different Informationb. We have Different Interpretations of same informationc. We apply Different implicit rulesd. Our Conclusions reflect our self-interest

3. Way Forwarda. Move from Certainty Curiosity

I am Right, why is (S)he in Denial?b. Embrace Both Stories : Or औरc. Disentangle Intent from Impactd. Move from Blame Contribution

Judging Understanding (“Help me understand ….”) Looking Backward Looking Forward (Ab kya karna chahiya?)

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Exploration Understanding Action

1. Exploration Understanding Confirm Understanding / Gaps Agreement , even agreeing to disagree

2. Feedbacka. Combine 3 Elements

i. Specify the Action, not Attribute Intent

ii. State Impact the Action had on you / others / Company

iii. Express Feeling / Emotion it created in you (choose dominant feeling/emotion)b. Framing Your Sentence

i. You did (not) / behaved / acted ____________; ii. This led to / caused / resulted in __________, and iii. I felt / feel ______________ (angry / frustrated / furious / helpless / let down /

disappointed / betrayed ….)

3. Feed Forwarda. I would encourage you to

i. <Action>ii. <Impact> on Company / Others / meiii. <Feeling / Emotion> in me

b. How would I feel? (reassured / confident / positive / happy / delighted …)

4. Agree Time Frame & Basis of Review 26White Spaces - 2014

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Any Questions?

- jyoti@whitespaces.in or +91 989 948 0006

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