Driving Performance Excellence using Performance Management System

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Driving Performance Excellence using
Performance Management System Tools
Raghubar Jha
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Lucents Challenges
Productivity
Expense Management
Productivity Measurement
Headcounts
Expense
No. of People
Spent
140,000
Lucent
Co B
Co D
Co C
Time
Time
Co A
Lucents productivity lags high-tech companies.
Expense management remains an issue.
Involuntary Exit Rate
Retention
Involuntary Exit
? Retention of top talent has become a critical
issue.
Exit
? Exits often require costly packages.
Lucent
Co A
Co B
Co C
Co D
Involuntary exit rate of least effective
performers has lagged high performance companies.
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Performance Management Practices in High
Performance Companies

• Set very ambitious goals create fast paced, high
  -pressure -to -perform environment
• Use pay aggressively to send messages about
  performance
• Target the least effective 10 - 20 for
  improvement or attrition
• Actually manage out least effective employees
  quickly

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5 Key Principles of Performance Management Process

• Colleagues understand what is expected of them
  and how they are measured and evaluated.
• Colleagues will know where they stand because
  they will be provided with on going coaching and
  feedback on their performance throughout the
  year.
• Colleagues will be given the opportunity to
  develop and enhance skills for their current
  position and for the future
• Coaches will be held accountable for
  demonstrating effective leadership (people
  management) behaviors.
• Rewards and consequences will be clearly aligned
  with performance.

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Global Performance Platform (GPP)
(Feedback, coaching)
(Objective-Setting)
(Review and Evaluation)
(Recognition, Reward)
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1. Accountability - Objective setting

• Key Result Areas
• KRAs are the critical accountabilities for a
  position in support of the business goals.
• Answer the question what does my organizations
  business plan require from my job function?
• Example Expense Management, Market share,
  Product Development
• Goals/Objectives
• Goals / objectives identify specific results to
  be achieved within each Key Result Area for a
  given period of time.
• Example Reduce costs and lower overall
  expense by 10 by September 30, 2001

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S.M.A.R.T. Objectives
- Specific - Measurable - Agreed Upon -
Realistic - Time Bound
S M A R T
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How SMART are you ? Try this statement

• Improve departmental bottom line by instituting
  a system for overseeing purchases from outside
  vendor by July 11.
• Specific
• Measurable
• Time Bound
• Performance Objective
• Development Objective

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Types of Objectives

• There are two types of objectives
• Performance objectives
• Development objectives

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Lucents Performance Objectives

• Lucent evaluates performance, based not only on
  what is achieved (Business Result), but also on
  how it is achieved (behavior).
• Hence in Lucent, Performance objectives include
• - Operational / Business Objectives
• - Stretch / Breakthrough Objectives
• - GROWS Behaviors
• - Leadership Profile Characteristics
  

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Performance Objectives

• Performance Objectives
• What is to be done
• Degree of accomplishment
• Given time period
• How results are to be achieved
• Purpose
• Measuring business / operation results
• Measuring behaviors against Lucent values
• An Example

Achieve 100 compliance in applying the
Performance Management System for the Asia
Pacific Region by 31st December 2000. This will
be achieved through roll-down for all
countries.
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Development Objectives

• Colleagues will have the opportunity to learn,
  develop and grow in their current job and for
  the future
• Development Objectives
• What is to be done
• Degree of accomplishment
• Given time period
• How results are to be achieved
• Purpose
• Increasing skill and knowledge
• Present job or anticipated future opportunities
• An Example

Complete and certified for Health and Safety
Program with a minimum grade of B by 1st
October 2000
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Assessing Development Needs Flow Chart
Current Job What is your current job? Training
Specialist
Critical Skills What are the critical
skills? Facilitation skills, writing skills,
coaching skills, Handling questions and
objections
Key Skills What are the key skills? Problem
solving, Training Needs Analysis, Training
Evaluation Skills

• Strengths
• What are your strengths?
• Lively, Enthusiastic, Able to involve
  participants
• Enjoy Delivery

Development Need What are your development
needs? A three-prong approach to coaching,
problem solving, handling objections as they are
crucial to your success in your next-level

• Further Use of Strengths
• How to further use your strengths?
• Continue Training delivery
• Engineer opportunities to train more senior
  managers
• To work on Management Development

• Critical Success Factor
• What do you need to consider to
• ensure success?
• Time Availability
• Need to be more focused, be a logical thinker

Action Plan What specific actions do you need
to address development needs and by
when? (Example Specific Learning and Development
Plan) Goal Develop TNA skill to complement
Deliveryskills by Sept 30, 2000
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Development Alternatives

• Development by
• Training
• ____________
• ____________
• ____________
• ____________

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Questions to Consider When Setting Objectives

• What key Lucent Strategies are influencing my
  organization?
• What are my key customers strategies and
  priorities?
• How does the established direction of my BU/CC
  influence my
• organization?
• What Lucent financial, growth and productivity
  goals should I
• consider to drive business success?
• What do I want to accomplish?
• What personal feedback have I received that I
  have to act on?
• What am I looking for in terms of my own
  personal growth,
• learning, and development?
• If I am coaching a team, what do I need to do to
  grow and develop
• team members? How can I improve my personal
  coaching
• and leadership skills?

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Objective Setting Worksheet
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Writing SMART Objectives

• Business/Operational
• Successfully transition IPAY system to SAP with
  0 errors by May 2000
• Breakthrough/Stretch
• By September 30, lead and implement culture
  change interventions creating significant value
  and savings of management consultant fees
  (elimination of non-value add work, working
  cross-silo and GROWS action plans)
• Coaching/Leadership/People Development
• Achieve diversity targets in fiscal 2000
• 100 of the colleagues in my organization have
  set objectives, including professional
• development plans
• Attend executive education course on finance
  before year end 2000.

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Breakthrough Objectives

• Stretch / Breakthrough Objectives are SMART
  Objectives.
• SMART Is about mindset
• How stretching are your goals and objectives is
  dependent on how willing you are to go beyond
  your comfort zone
• The style of writing SMART Objectives is no
  different from SMART objectives. They must be
  Specific, Measurable, Agreed Upon, Realistic
  (I.e. it is not building castle in the air), and
  Time Bound.
• It can be innovative, and is certainly more
  aggressive than operational goals.

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Breakthrough Objectives
Reduce operating expenses by 10 within 1 year.
Examples
Reduce operating expenses by 10 within 2
months Reduce operating expenses by 40 within 1
year.
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Sequence of Events forObjective-setting
Discussion

• Pre-discussion Communication
• Prepare Objectives
• Conduct Objective-Setting Discussion

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The Objective Performance Review Form
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The Objective Performance Review Form
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Learning Development Action Plan
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2. Engagement - Feedback, Coaching

• Coaching
• Develop supportive work environment
• Guide employees toward accomplishing objectives
• Feedback Positive or developmental comments
  about quality of work
• From coaches
• From customers/clients
• From colleagues
• Recognition Special Feedback Celebrating an
  achievement
• Record results examples on Objectives
  Appraisal form

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3. Appraisal - Review and Evaluation

• Assess completion of objectives and sustained
  performance
• Assess improved behavior/performance as a result
  of development plan initiatives
• Record results examples on Objectives
  Appraisal form

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Performance Appraisal Matrix - Common Language
around performance
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Performance Appraisal - Quick Guide for
Assessment
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4.Awards - Recognition and Awards

• Awards can include
• Sales Incentive/Technical Performance based
  on individual/team performance
• Unit Award based on unit performance, may be
  paid out at management discretion
• Salary Increase recognizes sustained individual
  performance, determined during end-of-fiscal-year
  appraisal

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How is performance linked to pay ?Some examples
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Performance Appraisal Matrix
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Performance Management Cycle

• SMI (Pay) Recommendation
• Objective Setting
• Development Planning

Mid-Year Review
Employee Accomplishment



Nov Jan Mar May July
Sept


Oct Dec Feb Apr
June Aug
Mid-Year Review
SMI effected LD Action Plan

• Preliminary Rating
• Final Appraisal
• Year-end Performance Review
• Sessions

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Interventions to Address Ineffective Performance

• 1.New Employee Unacceptable Performance
• 3 months for FESCO employees
• 6 months for WOFE employees
• Confirm with HR

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Interventions to Address Ineffective Performance

• 2. Unacceptable Year-Long Performance

• All of the following
• Objective defined
• Coaching/Feedback
• throughout the year
• Development
• Opportunities
• available
• Key objectives
• were missed

• One of the following
• Sales Results Report
• Software Test Results
• Unacceptable CSS
• Unacceptable
• Financial Report
• Unacceptable
• Performance
• Appraisal

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Interventions to Address Ineffective Performance

• 2. Unacceptable Year-Long Performance

• Terminate employment
• Reassign to match abilities
• Demote to match abilities

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Interventions to Address Ineffective Performance

• 3.Performance Improvement Process (PIP)
• Eligibility
• Employees who expose unsatisfactory performance
  to the required level at any time during the
  fiscal year.
• Employees in probation or demonstrating
  unsatisfactory performance by the end of fiscal
  year are not appropriate in this situation

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Interventions to Address Ineffective Performance

• 3.Performance Improvement Process (PIP)
• Others
• 30-60 days
• Standard maintained
• No transfer, No SMI, No Significant training
• Once in two years

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Interventions to Address Ineffective Performance

• 3.Performance Improvement Process (PIP)
• Consequences (in line with Labor Law)
• Successful completion go back to Objectives
• Unsuccessful completion
• Reassignment to match abilities
• Demotion to match abilities
• Termination within 30 days
• Refusal Immediate dismissal