ExecutiveHumanResourceProgram ThePromiseofPerformanceManagementHayGroupBoston 0109 9271 HAYGLemaire 2 TheCurrentChallengeofPerformanceManagement TheHRprocess IscompletelyunrelatedtootherkeybusinessprocessesIsdreadedbymanagersandemployeesalikeDoesnotresultinanymeaningfulfeedbackDoesnotdifferentiateperformanceorpayIsafocusforonlyoneortwodays orhours peryear 0109 9271 HAYGLemaire 3 ThePromiseofPerformanceManagement Imagineasystemthatcould IncreasethelikelihoodthatyourstrategyiseffectivelyexecutedHarnessanddirectthe10 60minutesadayofdiscretionaryeffortthateveryoneofyouremployeeshasRationalizeandfocusthenumberofgoalsthatanyoneinyourorganizationhasImprovethedecisivedialoguethatoccursinyourorganizationRewardperformanceinawaythatitismotivatingandengagespeopleDifferentiateperformanceinwaysthatmakelinemanagersfeelgoodabouttheirdecisions 0109 9271 HAYGLemaire 4 Performance NumberofEmployees Source Hay McBer Optimizingtheperformanceofyourpeoplewillhaveapositiveimpactonbusinessperformance ImprovingPerformanceManagementImprovesBusinessResults 0109 9271 HAYGLemaire 5 Percentageofvariationinchangeincompanyperformanceaccountedforbymanagerialpractices Source SheffieldEffectivenessProgramme HumanResourceManagementPracticesDriveProfitabilityandProductivity 0109 9271 HAYGLemaire 6 HighlySuccessfulCompaniesaredefinedashaving 5 yearsalesgrowth 17 5 peryear5 yearprofitgrowth 10 8 peryearAnnualequitygrowth 16 7 peryear5 yeardividendgrowth 13 4 peryear Source D Karvetz TheHumanResourcesRevolution ClearEmployeeGoals ParticipativeStyle AttentiontoDevelopment EncourageCreativity Performance BasedRewards HighlySuccessfulCompanies LessSuccessfulCompanies 80 70 67 62 86 26 4 27 10 30 High performingcompaniesarebetteratmanaging motivating andrewardingemployees ImprovingPerformanceManagementImprovesBusinessResults 0109 9271 HAYGLemaire 7 Source Mavrinac Siesfield MeasuringIntangibleInvestment StrategyExecutionMatterstoShareholders Thirty fivepercentofaninstitutionalinvestor svaluationofacompanyisattributabletononfinancialinformationthatgaugestheabilityofthemanagementteamtodeliverresults StrategyExecution Canmanagementmaketoughdecisionsandseizeopportunitiesquickly ManagementCredibility Doesthecompanykeepitscommitments StrategyQuality Ismanagement svisionofthefuturelikelytooptimizevaluecreationinavolatile globalized andconnectedeconomy Innovativeness Howreadilydoesthiscompanyadapt AttractingandRetainingTalent Isturnoverhigherorlowerthankeycompetitors Donewhiressurpassleaversinskillsandexperience ManagementExperience Whatskillsandexperiencesdoesthemanagementteambringtothetable Compensation Docompensationpoliciessupportthefirm sstrategicintent 0109 9271 HAYGLemaire 8 35 improvementinhuman capitalsystemsresultedin10 20 gaininshareholdervalue AlignmentandIntegrationofHRSystem Source HuselidandBaker 1995 HumanCapitalSystemsIncreaseShareholderValue 0109 9271 HAYGLemaire 9 ImprovingPerformanceManagementImprovesBusinessResults High performancecompaniesdefinePerformanceManagementinitsbroadestsense itiscriticaltoexecutingandimplementingstrategyPerformanceManagementisnowwidelyrecognizedasdeliveringmorereturnsanddeliveringmorecompetitiveadvantagesthanotherHRinvestmentsPerformanceManagementisthekeyto raisingthebar inanorganization foralllevelsofperformanceOrganizationswithahigh performanceorientationandstrongmanagementcapabilityhavehigherrevenue profits andmarketvaluations 0109 9271 HAYGLemaire 10 PerformanceManagement PerformanceManagementisaboutimprovingbusinessperformancebyimprovingteamandindividualperformance andensuringthatthecompany sstrategyisexecutedandimplemented Itis AprocessthatensuresthatpeopleexecutethestrategyoftheorganizationAprocessforestablishingasharedunderstandingofwhatistobeachievedandhowAprocessforensuringthatdecisiveandconstructivedialogueoccursAprocessofmanagingselfandotherssothatpeopledoachieveAprocessforensuringthatpeoplearedoingtherightthingsinthemosteffectiveways tothebestoftheirability 0109 9271 HAYGLemaire 11 PerformanceManagementStages DesignParameter PerformanceAppraisal PerformanceManagement PerformanceOwnership HumanResources Checkthebox compliance oriented Managepoorperformers Passive Reportcard retrospective ManagersandHumanResources Evaluationrewardemphasis Managethetailsofbellcurve Jointownershipforgoal setting review Barometerofprogress periodic Employees managers andleadership Strategicclarity coaching dialogue Raiseperformanceoforganization Sharedaccountabilityforresults Dialogue continual Function RoleofEmployee Focus Emphases Ownership 0109 9271 HAYGLemaire 12 PerformanceAppraisal PerformanceManagement ManagingPerformance High Low Low High ImpactonResults LevelofOrganizationalCommitment Improvedbusinessresultsrequireorganizationalcommitment Commitmenttoachievecompanygoals Goodsettingandreview Meritincreasesefficientlyallocated PerformanceManagementStagesthis 0109 9271 HAYGLemaire 13 Theperformancemanagementmodelisnotnew butthewayinwhichleadingorganizationsdoitisverydifferent BestPractices 0109 9271 HAYGLemaire 14