People Management Practices: PowerPoint Presentation

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PEOPLE PEOPLE MANAGEMENT MANAGEMENT

PRACTICES:PRACTICES:

Displays to AccompanyDisplays to AccompanySurvey FindingsSurvey Findings

July, 2000July, 2000

2© 2001 Readership Institute

Today’s ObjectivesToday’s Objectives

• Understand the business case for people managementUnderstand the business case for people management

• Examine newspaper survey results—Examine newspaper survey results—II33

- IInform (findings and patterns)nform (findings and patterns)

- IInsightnsight

- IImplicationsmplications

• Build your confidence, conviction and capability to inform othersBuild your confidence, conviction and capability to inform others

• Ensure that you know how to “read” the various reportsEnsure that you know how to “read” the various reports

• Address some of your most important questionsAddress some of your most important questions

• Provide a near-term path for moving forwardProvide a near-term path for moving forward


PremisePremise

“Our employees are our“Our employees are ourmost valuable resource…most valuable resource…and therefore, the managementand therefore, the managementof people makes a significantof people makes a significantdifference to companydifference to companyperformance.”performance.”

ChallengeChallenge

“Prove it,“Prove it,or else stopor else stop

talking about it!”talking about it!”

The Mega-StudyThe Mega-Study


Overall Business ImpactOverall Business Impact

People Factors

• Core drivers

• High-impact practices

• Specific actions

• Constructive culture

People Factors

• Core drivers

• High-impact practices

• Specific actions

• Constructive culture

Economic Factors

• Relative market share

• Company size

• Industry profitability

Economic Factors

• Relative market share

• Company size

• Industry profitability

67%67%

33%33%


Business Case Was Built in Two WaysBusiness Case Was Built in Two Ways

Correlational Correlational StudiesStudies

Correlational Correlational StudiesStudies

Determine Determine “what”“what” organizations organizations

should doshould do

Determine Determine “what”“what” organizations organizations

should doshould do

Real World Real World ApplicationsApplicationsReal World Real World

ApplicationsApplications

Describe “what” Describe “what” world-class world-class

companies do and companies do and “how”“how” they do it they do it

Describe “what” Describe “what” world-class world-class

companies do and companies do and “how”“how” they do it they do it


Empirical Validity

Strength of Practice-

Performance Relationship*

SelectionSelectionSelectionSelection

CompensationCompensationCompensationCompensation

PerformancePerformanceManagementManagementPerformancePerformanceManagementManagement

500 1,000 1,500 2,000 2,500 3,000

Number of Organizational Units Included in Research

Total number of organizational units: 21,304

VeryStrong

Strong

Creativity &Creativity &InnovationInnovation


LeadershipLeadershipLeadershipLeadershipChangeChange

ManagementManagementChangeChange

ManagementManagement

CultureCultureCultureCulture

EmployeeEmployeeSatisfactionSatisfaction& Retention& Retention

EmployeeEmployeeSatisfactionSatisfaction& Retention& Retention

CustomerCustomerSatisfactionSatisfaction& Retention& Retention

CustomerCustomerSatisfactionSatisfaction& Retention& Retention

DevelopmentDevelopmentDevelopmentDevelopment

© 2001 Readership Institute


People Management Model

Returns to Shareholders • Profitability • Growth • Productivity

READERSHIP?

SelectionSelection

DevelopmentDevelopment

PerformancePerformanceManagementManagementCompensationCompensation

1

2


KnowledgeKnowledgeManagementManagement

ChangeChangeManagementManagement

LeadershipLeadership

Customer Satisfactionand Retention

Employee Satisfactionand Retention

3

CULTURECULTURE

CU

LTU

RE

CU

LTU

RE C

ULTU

RE

CU

LTUR

E

CULTURECULTURE



Five Strata Examined

Strata

I

II

III

IV

V

Circulation Ranges

0 – 25,000

25,001 – 50,000

50,001 – 100,000

100,001 – 200,000

200,001+



Three Levels of Analysis

Level 1

DRIVERS(4 + 1 sections of the survey)

Level 1

DRIVERS(4 + 1 sections of the survey)

“What to focus on”“What to focus on”

Level 2

HIGH IMPACT PRACTICES (17 Best Practices Derived from Mega-Study)

Level 2

HIGH IMPACT PRACTICES (17 Best Practices Derived from Mega-Study)

“What you should strive to achieve”“What you should strive to achieve”

Level 3

SPECIFIC ACTIONS(90 Survey Questions)

Level 3

SPECIFIC ACTIONS(90 Survey Questions)

“What you can do”“What you can do”



Overview Level 1 and Level 2

* Note: Employee Retention is an Intermediate Outcome.

Drivers (Level 1) High-Impact Practices (Level 2)

Selection Selection criteria and processes have consistent structure Selection skills are a key leadership attribute Seek to fill positions internally

18-20

Pre-Reading Pages

Development Promote integration and corporate glue Significant leadership responsibility Commitment is balanced between organization and individual Effective succession planning and talent pool processes

22-25

Performance Management

Clear mutual expectations Stretch objectives with meaningful measures Ongoing coaching and feedback

26-27

Compensation Market-based compensation Performance-driven rewards and recognition Alignment of employee and shareholder interests

28-30

Employee Retention*

Latitude and authority for determining how best to execute job accountabilities, particularly to meet customer needs

Quality and sustainability of highly effective leadership, particularly employee’s immediate supervisor

Extent to which employees possess the knowledge and skills to contribute – plus – the opportunity to grow and advance

• Customer satisfaction is a high priority and is balanced with “making the numbers”—plus—rewards are provided for contributions

33



Newspaper Results—Emerging ThemesNewspaper Results—Emerging Themes

• VeryVery low scores! low scores!

• Performance management “highest”Performance management “highest”

• Development “lowest”Development “lowest”

• Amazingly flat!Amazingly flat!

• More effective at and inclined to manage More effective at and inclined to manage “vertically” versus “ horizontally”“vertically” versus “ horizontally”


-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

Selection Development PerformanceManagement

Compensation EmployeeRetention

Emerging Theme #1: Very Low Scores!S

tron

gly

Agr

ee

plus

Agr

eeD

isag

ree

plus

S

tron

gly

Dis

agre

e

82% 87%

71%

91%

69%

18%13%

29%

9%

31%

Strongly Agree

Agree

Disagree

Strongly Disagree

All Newspaper Respondents—“Best Practices Are in Effect”LEVEL 1 ANALYSIS

100%

80%

60%

40%

20%



-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

S1 S2 S3 D1 D2 D3 D4 P1 P2 P3 C1 C2 C3 R1 R2 R3 R4

Emerging Theme #1: Very Low Scores!All Newspaper Respondents—“Best Practices Are in Effect”

Str

ong

ly A

gree

pl

us A

gree

Dis

agr

ee p

lus

Str

ong

ly D

isa

gree

Selection

Strongly AgreeAgree

88

39 41

83

6973

90

56

85

55

81 8265

5145

76

35

64

1824

5549

2318

45

14

44

10

2731

17

5961

12

Development Performance Management

Compensation Employee Retention

Relevant Page in “Consolidated” Report

8 17 28 37 46

LEVEL 2 ANALYSIS

DisagreeStrongly Disagree

“X1” denotes the Driver’s High-Impact Practice in the order it appears in your reports

100%

80%

60%

40%

20%



Emerging Theme #1: Very Low ScoresEmerging Theme #1: Very Low Scores

• May reflect the newspaper industry’s May reflect the newspaper industry’s historical “oligopolistic” structure and historical “oligopolistic” structure and behavior of the industrybehavior of the industry

• Newspaper industry might be inwardly Newspaper industry might be inwardly not externally focusednot externally focused

• Newspaper industry, on average, is likely Newspaper industry, on average, is likely stuck in the “Ingredients Era” of people stuck in the “Ingredients Era” of people management practicesmanagement practices

Why?Why?


Eras of People Management Practices

People werethought of

as part of themachinery

“Cogs”

People management activities are:

• Discrete

• Inconsistent

• Contradictory

• Not aligned

“Ingredients” “Enablers”


• Systematic

• Consistent

• Aligned

• Integrated

“Differentiators”


• Core to business strategy

• Key to differentiation

• Source of competitive advantage



Performance Performance Management Management

is highest!is highest!

Performance Performance Management Management

is highest!is highest!

• Typically the most advanced Driver in “stable” or “static” industries that have undergone little change

• Other Drivers are characteristically brought into play more strongly as companies and industries are confronted by major change

• Typically the most advanced Driver in “stable” or “static” industries that have undergone little change

• Other Drivers are characteristically brought into play more strongly as companies and industries are confronted by major change

Newspaper ResultsNewspaper Results

FindingsFindings Insights & ImplicationsInsights & Implications

Development Development is lowest!*is lowest!*

Development Development is lowest!*is lowest!*

• Typically viewed to be the “softest” Driver

• Is the most complex Driver of all

• Typically viewed to be the “softest” Driver

• Is the most complex Driver of all

*Assuming we ignore Compensation*Assuming we ignore Compensation


Emerging Theme #4: Amazingly Flat ResultsLEVEL 1 ANALYSIS

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.0

Dis

agr

ee p

lus

Str

ong

ly D

isa

gree


Employee Retention

Selection Development Compensation



LEVEL 2 ANALYSIS—By Department

Emerging Theme #4: Amazingly Flat Results



Emerging Theme #4: Amazingly Flat ResultsLEVEL 2 ANALYSIS—By Circulation Strata



Emerging Theme #4: Amazingly Flat ResultsLEVEL 2 ANALYSIS—By Strata by Department



Emerging Theme #4: Amazingly Flat ResultsLEVEL 3 ANALYSIS—Selection

Relative Strength

Relative Weakness



Emerging Theme #4: Amazingly Flat Results!Emerging Theme #4: Amazingly Flat Results!

• Industry has very homogeneous practicesIndustry has very homogeneous practices

• May be “implied or accepted standards” May be “implied or accepted standards”

• External changes may not have yet External changes may not have yet stimulated aggressive adoptionstimulated aggressive adoption

• Newspaper industry may be currently trapped Newspaper industry may be currently trapped in “transformational no man’s land”in “transformational no man’s land”

Why?Why?


Industry TransformationPe

rfor

man

ce

Time

Low

High

“Today”

Change unrecognized or not acted upon

Successful Change

Newspapers?Newspapers?

“Triggers”:• Competitors• Changing needs• Technology• Economics• Demographics



Emerging Theme #5: Newspapers are more effective at and inclined to manage “vertically” versus “horizontally”

• The standards we use for selecting internal candidates for open positions are set at relatively high levels

• The selection standards we use for outside hires are set at relatively high levels

• Selection of qualified people for position vacancies is a top priority of our newspaper's leaders

• We encourage self-nomination to open positions

• Our selection process is efficient (i.e. provides us with qualified people quickly)

• When we consider candidates from outside the newspaper to fill job openings, the size and quality of our external applicant pool is strong (i.e., we consistently choose among many qualified candidates)

• Our leaders are held accountable for attracting and selecting high-caliber candidates from outside the industry

DriverDriver ““Top Strengths”Top Strengths” ““Greatest Weaknesses”Greatest Weaknesses”

Selection

• Our newspaper's leaders place a high priority on developing people

• Managers generally help their subordinates meet their career aspirations

• Qualified employees generally demonstrate sufficient initiative in developing their own skills

• Our newspaper possesses and continuously updates a newspaper-wide database that keeps track of competencies and skills individuals need to succeed in their positions

• Attending training programs for at least 35 hours a year is strongly encouraged by our newspaper

• Our organization systematically and regularly reviews its talent pools frequently (i.e. at least twice a year)

• We believe that one of the primary purposes of performance management in our newspaper is to support the execution of our business strategy

• Performance evaluations entail a discussion of an employee's performance, including the manager's own perspective on the employee's performance

• Performance evaluation discussions focus both on recent performance and identifying development needs

• Our strategies and strategic plans are regularly communicated so that all employees understand how their performance expectations are linked to them

• Each person's performance evaluation incorporates input from people within the company who are impacted by their work

• Performance evaluations incorporate input from the employee's peers/ team

Development




Emerging Theme #5: Newspapers are more effective at and inclined to manage “vertically” versus “horizontally”

• On average, our employees exhibit a high level of attendance on the job

• Employees possess a clear understanding of the limits within which they are permitted to act

• Achieving high levels of customer satisfaction is a high priority with my superior

• Employees possess a clear sense of how they personally contribute to meeting customer needs

• Employees are energized by the newspaper's culture and work environment

• Our managers spend unusually large amounts of time coaching and developing their subordinates

• Employees receive appropriate recognition and rewards for their contributions

DriverDriver ““Top Strengths”Top Strengths” ““Greatest Weaknesses”Greatest Weaknesses”

Compensation

Employee Retention

• Performance is the key determinant in establishing variable compensation (i.e., incentive) levels

• Our newspaper effectively recognizes (formally and informally) performance that supports our goal

• Change in overall job accountabilities is a key determinant in reviewing fixed (i.e., base salary) levels

• Our newspaper's compensation programs enable us to attract and retain required talent

• Change in external market pay levels is a key determinant in reviewing fixed ( base salary) levels

• Our compensation programs support the philosophy of providing superior rewards for superior performance

• Share-based compensation (e.g., employee share ownership plans, profit-sharing) for employees is a means of providing a single shared objective that binds together the various entities across our newspaper

• Employee share ownership is encouraged in our newspaper through our compensation plans



Why Should I Really Care About This People Stuff?

High Levels of Employee Satisfaction & Retention Are Associated with Greater Customer Satisfaction & Retention...

…which create a powerful way to move the needle

•

•

• •• • •

• • •• •

••

•••••

1Extremely

Dissatisfied

2Somewhat

Dissatisfied

3Slightly

Dissatisfied

4Satisfied

5Very

Satisfied

Customer Satisfaction Measure

100%

80%

60%

40%

20%

Cu

sto

mer

Ret

enti

on

Source: Harvard Business School; Heskett, et. al.Source: RNW Research

•• •

••

••••

••

•

•

• 48% defected!

• Satisfied ≠ Loyal

Cu

sto

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S

atis

fact

ion

&

Ret

enti

on

High

Low

Low HighEmployee Satisfaction & Retention

3.0 4.0

“The Zone of Affection”“The Royalty of Loyalty”



LatitudeLatitude36.6%36.6%

LatitudeLatitude36.6%36.6%

Authority Authority 19.2%19.2%

Authority Authority 19.2%19.2%

14.6%14.6%14.6%14.6%

14.0%14.0%14.0%14.0%

13.6%13.6%13.6%13.6%

0

10

20

30

40

50

60

70

80

90

100%

Expl

anat

ory

Pow

er*

Leadershipand Culture

Capability and Development

Recognition, Rewards and Focus on

Customer Satisfaction*Represents the proportion of the total R2 explained by each determinant.

55.8%

70.4%

84.4%

98.0%

36.6%

Four Key Factors of Employee Retention



Real Effect of Employee Retention

Employee Satisfaction & Retention

• Agent tenure 200% longer than industry average

• Agent productivity 150% higher than industry average

• 7% employee turnover rate

• Two-thirds lower than industry average

• Most productive organization reflected by home office cost per $1,000 of face value premiums sold

Customer Satisfaction & Retention

93% customer retention

98% customer retention in auto

95% customer retention

Company

State Farm

USAA

Northwestern Mutual Life



So, what can/should you...

•Do

•Not do

…when you return home?



Between Now and Our Next Meeting

Guiding Guiding PrinciplesPrinciples

Ready, aim, fire!

Don’t jump in and fix it—go slow to go fast

For now, ask more questions than give answers

Take the time to really create understanding and insight

Then…create strong alignment in terms of your desired end state

Set expectations carefully

This is a technical and a political challenge; i.e., a formidable change management challenge

ObjectivesObjectives

Get under the survey to gain clarity and commitment to the real issue(s) and their root causes

Come back in October with the issues and their root causes—the data that is ready then will help you set priorities and begin to act



Between Now and Our Next Meeting

High-powered High-powered committed team committed team

and create a and create a “charter”“charter”

Set expectations for objectives and time commitment Provide clear directional guidance for what you really want

to discover. Describe specific outcomes and deliverables that you want

them to produce

Strive forStrive forinsight and insight and

understandingunderstanding

What specific factors have resulted in our current situation? Why? Build understanding through focus groups and one-on-one

interviews. What has been (is still) the impact on our organization?

How do we know? What is our desired future state? Why? If we are successful, what specific differences/impacts would we

expect to see become visible? What decisions must we make and what actions must we take,

to close gaps? Who needs to be involved in making the above happen—based on

expertise, political considerations and the need for the change?


People Management Practices: PowerPoint Presentation

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