Aryaduta Hotel-Jakarta, 14 August 2014By Yunus Triyonggo

HR Practitioner

Why Traditional Performance Management Can't Deliver Peak Performance

Daniel D. Elash, Ph.D. (2009)

5 Reasons

What is Traditional Performance Management ?

Source : David D. Dubois & William J. Rothwell, 2004

Traditionally, performance management systems

concentrate on performance planning and

evaluation, rewards and discipline, according to the

2000 Performance Management Survey (2000)

Reason #1

• They are too slow.

– To be truly educational, feedback has to occur at the speed of business circumstances.

– It is most powerful when it follows directly on the heels of performance.

– When feedback is fresh it can be more deeply discussed, considered, and incorporated in a timely fashion.

Reason #2

They are too remote

– Too often the voices of customers,

teammates and co-workers are

filtered and delivered through the manager.

– Managers can't effectively explain or clarify issues and situations with which they aren't familiar.

– Placing the manager between teammates often reduces the ability of teammates to talk directly to each other

Reason #3

They are too vague (samar-samar)– Useful feedback is specific, focused,

actionable, and relevant to a particular

situation or set of circumstances.

– This requires a level of explicitness that is seldom reached with current performance management systems, which rely on annual, or bi-annual performance reviews.

– Evaluated dimensions are often broad behavioral categories such as "responsible," "reliable" and "industrious." Such terms open the door for heated debates about their exact meanings in specific situations.

Reason #4They are too emotionally laden (sarat)

– The mind is best prepared to grasp new information, think effectively and learn when it is clear and focused.

– Understanding, thinking and learning are more complicated when a person is anxious, self-conscious, angry or defensive.

Reason #5

They are too focused on each individual alone

– Optimizing your own performance without regard to your impact on others, or the synergies required for effective teamwork, is insufficient today.

– A successful company isn't a collection of individuals performing independently; it is a networked, interdependent system that operates as an organic whole.

– Feedback has to relate to individuals, but within the context of the whole interdependent system.

Challenges

0%

100%

200%

300%

400%

1997 2012

Complexity

However, according to a study by The Boston Consulting Group (BCG), business complexity has increased between 50 percent and 350

percent over the last 15 years.

Teams that focus on performance management have been shown to generate as much as 30 percent more revenue per full-time employee than average teams

0

50

100

150

year 1 year 2

Revenue

Only 29 percent of companies create individual goals aligned to the organization

29%

71%

Company

Aligns Not Align

A full 52 percent of midlevel managers and 74 percent of lower-level employees perceive the linkage between individual goals and corporate goals as very weak

0%

50%

100%

Mid level Lower Level

52%74%

48%26%

Employees perceive the linkage between individual goals and corporate

goals

Strong

Weak

Up to 50 percent of employee time is spent working toward nonstrategic objectives

50%50%

Working spend

Strategic

Non strategic

An Oracle White Paper, June 2012

Are we capable?

YES We have to !!

The Answer is…

What is a Competency?

Observable abilities, skills, knowledge, motivations or traits defined in terms of the behaviors needed for successful job performance.

Source : Human Resource Systems Group, 2012

The Iceberg as an Analogy

What is Competency-based Management?

An HR management approach that standardizes and integrates all HR activities based on competencies that support organizational goals.

Source : Human Resource Systems Group, 2012

Basic Competency Architecture

Why competencies?

Competencies translate the

strategic visions and goals for

the organization into behaviors

or actions employees must

display for the organization to

be successful.

(Source : Spencer, 2001)

63%

19%

12.5%

63% reduction in turnover due to increased employee satisfaction – due to greater clarity

about performance expectations

12.5% increase in sales and profits due to Competency-based training programs

19% improvement in employee performance

The Benefits of better Employee competency

The Benefits of better Employee competency

Improved leadership capacity– Companies with highest rated leadership development

programs, compared to those with weak programs experienced:

• 600% increase in overall business impact

• 640% improvement in their leadership bench strength

• 480% improvement in leader engagement and retention

(Source : Bersin, 2007)

Superior Talent Management = Significant Advantages

– 26% higher revenue per employee

– 28% less likely to have downsized during 2008-2009

– 40% lower turnover among high performers

– 17% lower overall voluntary turnover

– 87% greater ability to “hire the best people”

– 92% greater ability to “respond to changing economic

conditions”

– 144% greater ability to “plan for

future workforce needs”

– 156% greater ability to “develop

great leaders”

The Benefits of better Employee competency

(Source : Bersin, 2010)

Competency-based Performance Management

• Competencies define the behaviors necessary for goal achievement

• They facilitate a developmental approach to performance management

• Three Stages of Performance Management

How to integrate Competencies in the Performance Management ProcessOption #1 Option #2

By defining the competencies needed to perform each Performance Goal / Objective

The manager and employee identify the key competencies required to achieve each performance goal / objective (typically 1 to 3 competencies per goal / objective)

At the end of the performance cycle, the employee’s performance is evaluated in relation to the performance goals / objectives as well as the key competencies associated with each goal.

the competencies being assessed are entirely consistent with the employee’s performance goals for the performance review cycle.

Not all competencies within the competency profile for the employee’s role / job will necessarily be assessed within the cycle

By integrating the competencies for the employee’s job into the PM process

The performance plan includes the performance goals / objectives for the review period as well as the complete set of competencies from the competency profile for the employee’s role / job

The performance goals / objectives address “what” must be accomplished during the review period, and the competencies measure “how” the employee conducted him/herself to accomplish their work

All competencies defined in the competency profile for the employee’s role / job are evaluated

key competencies for the effective performance during the review cycle, but not included in the competency profile, will not be assessedSource : David D. Dubois & William J. Rothwell, 2004

Integrated Performance Management System

Goal Setting

Interim Review

Talent DayPerformance

Review

Year end Review

Jan-Feb

Jun-Aug

NovDec-Jan

Dec-Feb

Annual Base SalaryShort Term Bonus

Long Term Incentive

Multiple years of Performance creates basis

for judgement of Sustained PerformanceLevel High, Medium, Low

Succession Planning

List of Competencies (example)

LEADERSHIP COMPETENCIES :

1. SHAPE THE FUTURE

2. REAL ACCOUNTABILITY

3. BUSINESS ACUMEN

CORE COMPETENCIES :

1. INTEGRITY

2. TEAMWORK

3. INNOVATION

4. ACHIEVEMENT ORIENTATION

5. CUSTOMER FOCUS

TECHNICAL COMPETENCIES :

1. FEED PROCESSING2. FEED FORMULA 3. FEED WAREHOUSING4. PROFIT & LOSS FEED BUSINESS5. SERVICE LEVEL TO CUSTOMER 6. ETC…

Matriks Kategori Talent (MKT)

Berpotensi(3/1)

Sumber Daya(1/3)

Potensi Tinggi(2/3)

Bintang

Potensi Tinggi(3/2)

Sumber Daya(2/2)

Sumber daya(1/2)

Perlu Perhatian(2/1)

Perlu Perhatian(1/1)

----------------- Potensi Talent ----------------

Rendah Tinggi

Kes

inam

bu

nga

n K

ine

rja

(Ap

a d

an B

agai

man

a)

Rendah

Tinggi

Suggested Action Plans

Inconsistent in meeting

agreed individual

business targets

consistently exceeding

agreed individual

business targets

•Recognise and reward

•Provide feedback

•Mentor/coach to improve

Leadership

•Acknowledge contribution

Recognise and reward

•Challenge/stretch

•Expose

•Coach

•Set clear Milestones

•Provide feedback

•Coach Monitor/track

•Decision to continue

or end employment

•Reward

•Milestones

• Provide feedback

•Training

•Coach to improve

delivery

•Specific goals &

objectives

Consistently

exceeding

expectations

Inconsistent in

meeting

expectationsPotentialCapacity

WHAT

Competencies

& living values

Potential discussion

Skills ExperiencesPerformance

PT

Put real evidences

objectively

2611/13/2017

Talent Development

27

Succession Plan

Contoh Template