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Premium member Presentation Transcript Strategic Links: Aligning Organizational Culture, Business Strategies and Performance Management : Strategic Links: Aligning Organizational Culture, Business Strategies and Performance Management Idealist.org National Nonprofit Human Resources Conference Portland, Oregon June 4, 2004 10:30 a.m. to 12:00 noon Why Implement Performance Evaluations? : 2 Why Implement Performance Evaluations? They’ve been used at every organization I’ve ever worked. To substantiate differences in pay increases and/or personnel actions. To promote behaviors that are aligned with our organizational values and culture. To establish, monitor and assess achievement of work activities that support our strategic plan. All or several of the above. What Results Are You Getting From Performance Evaluations? : 3 What Results Are You Getting From Performance Evaluations? “We’ve gone through the annual ‘torture-fest’ – all for a lousy 3% raise!” “My boss must be getting ready to fire me – all she talked about was every little mistake I made this year.” “I had a really productive discussion with my boss about the things I do well, some new projects I’ll take on and some training to help build my technical ability.” Objectives of An EffectivePerformance Management System : 4 Objectives of An EffectivePerformance Management System Stimulates productivity by establishing clear performance standards and priorities at the beginning of the performance cycle Promotes good employee relations by providing opportunities for timely feedback Strengthens supervisors’ ability to manage staff by giving a rational, “objective” basis for evaluating performance and encouraging them to identify ways to improve future performance Performance Management System Model : 5 Performance Management System Model Performance Planning Establish and define Key responsibilities Objectives Expected outcomes Priorities Behavioral factors Performance Monitoring Timely, relevant feedback Maintain log Mid-Year review Refine responsibilities/objectives Revisit priorities Performance Appraisal Compile/review data Request self-appraisal Prepare draft appraisal Review with next-level supervisor Finalize appraisal Meet with employee Development & Follow Up Identify interests and needs to enhance performance Establish training plan Review job description Identify new challenges Essential Design Considerations : 6 Essential Design Considerations What does your organization do? What goods or services are produced? What kinds of people do you hire? Can/Do you measure progress or achievement? What does your organization value? Individual contributions to the strategic plan? Quality of internal interactions? Nature and quality of external interactions? What is level of organizational commitment? Do Revenue Streams Matter? : 7 Do Revenue Streams Matter? Fixed funding sources – government contracts, grants, fees-for-service Charitable contributions – individual donations, corporate underwriting, events Provision of goods and/or services – program delivery, educational services, memberships, etc. Varied sources – combinations of the above Slide 8: 8 Timing of Annual Reviews Anniversary Date Each employee reviewed around anniversary of employment/promotion Common Review Date All employees reviewed after year-end program and financial results are in Slide 9: 9 Anniversary Date Advantages Each employee’s performance is reviewed on an individual basis Supervisor better able to focus on individual accomplishments and development needs Payroll increases are spread out over the year, reducing the impact of a single jump in salaries on cash flow Disadvantages Ratings may be influenced by temporary up- or downswings in program or fiscal results May not establish clear link between individual and organizational performance Slide 10: 10 Common Review Date Advantages All employees evaluated on overall achievement of program, operational or fiscal results Provides consistent basis for comparing contributions of individual employees in relation to others Less of an administrative burden on managers and HR, and increases can be based on year-end fiscal results Disadvantages Time required of supervisors to complete several appraisals at the same time Individualized coaching or development opportunity may be “lost in shuffle” Cash flow impact can be significant when all increases occur simultaneously Slide 11: 11 Weighting Goals Provides employee and supervisor with common understanding of which are most important to success Helps in monitoring activities that are critical to organizational goals Priorities may change during course of the year Slide 12: 12 How Many Rating Levels To Use Four (or More) Focus more on tangible results produced Supervisors are comfortable using consistent, clearly-defined criteria to note variances in employee performance. Fewer than Four Focus on behavioral factors and interactions; “soft” results. Supervisors have difficulty identifying criteria for noting variances in performance among employees. The number of ratings you use can vary, depending on your organization’s culture and the kinds of performance you evaluate. Slide 13: 13 Numeric Rating Levels Generally used to calculate points scored for each activity or behavior Often uses numeric “weight” to establish relative priority Establishes range of points associated with overall performance ratings Slide 14: 14 Example Slide 15: 15 Lettered Rating Levels Uses letter(s) to denote rating level for each area of performance evaluated Priority or “weight” can be described as percentage or by narrative descriptor Supervisor counts up ratings given to each activity and behavior factor and determines “average” overall rating. Slide 16: 16 Example Sample Organization #1 : 17 Sample Organization #1 Small social service agency Employs primarily caseworkers and administrative staff Revenues generated primarily by government funding and limited fees-for-service Success measured by quality of interactions and numbers of clients served Culture is egalitarian – ‘we’re all in this together’ Everyone gets common annual increase Sample Construct #1 : 18 Sample Construct #1 Job Description Provides basis for establishing activities Agency Values Provides basis for determining desired behaviors Performance Plan Establishes expectations for performance throughout the year Provides qualitative basis for annual performance appraisal Sample Construct #1 (Continued) : 19 Sample Construct #1 (Continued) Annual Appraisal Design Will Include Assessment of quality of activities and desired behaviors Summary of strengths and areas to be enhanced 3 rating levels: Usually exceeds expectations Fully meets expectations Partially meets expectations Common annual increase, if performance is at “meets expectations” level or better Slide 20: 20 Sample Organization #2 Mid-sized educational service organization Employs varied staff: curriculum developers, trainers/ program delivery staff, marketers, customer support representatives and administrative/operational staff Revenues generated by combinations of government contracts, foundation/corporate funding and sales of services – with emphasis on expanding sales revenue Success measured by quality of programs, increased numbers of programs delivered, sales revenue and client development and retention Culture is results-oriented, with all departments having clear understanding of how they support achievement Annual increases based on individual performance Slide 21: 21 Sample Construct #2 Job Description Provides basis for establishing activities Agency Values Provides basis for determining desired behaviors Performance Plan Establishes expectations for individual results that result from activities and behaviors throughout the year Encourages ongoing discussion of organizational progress – more inclusive “line of sight” Provides quantitative and qualitative basis for annual performance appraisal Strategic Plan Provides basis for establishing results goals Slide 22: 22 Sample Construct #2 (Continued) Annual Appraisal Design Will Include Quantitative evaluation of results; qualitative assessment of activities and desired behaviors Summary of strengths and areas to be enhanced Uses 1 to 10 rating scale: 10 = Exceptional performance 5 = Expected performance 1 = Unsatisfactory performance Gradations allow more discussion of relative contribution and opportunities for development. Greater pay opportunities for high-performing staff Slide 23: 23 Employee Self-Appraisal Engages employee as partner in managing performance Alerts supervisors to differences in how performance is viewed Provides source of information about organizational or operational issues that influence performance Slide 24: 24 Professional Development Plan While growth opportunities may be limited, it is important to develop staff skills and provide experiences that will enrich their professional lives Development goes beyond formal training courses: may include cross-training, temporary project assignments, on-the-job training and mentoring Should include timetable for learning skill and how it will apply in the employee’s job May include indicator of priority Does “One Size Fit All”? : 25 Does “One Size Fit All”? Consider if one evaluation form should/can be used for all employees, or if separate forms should be used, based on: Staff level Nature of work performed Business unit Union/non-union status Other Issues : 26 Other Issues Include upward/360o feedback? Ensure management buy-in and participation Determine level of staff involvement in developing and testing the system Provide adequate training and opportunities for ongoing discussion of system Review evaluations to ensure they reflect: Consistent approach to establishing performance expectations Common understanding of rating levels Assess system effectiveness and revise as necessary Questions & Answers : 27 Questions & Answers ? Contact: Larry Beers James E. Rocco Associates, Inc. 914-925-3412 LFBeers@JERoccoAssociates.com You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.