1 connecting people, pay and performance building a culture of goal setting presented by: chris...

1CONNECTING PEOPLE, PAY AND PERFORMANCE

Building A Culture of Goal Setting

Presented by: Chris Bergeron - Director, Consulting Services, Salary.com

July 23, 2010


Learning Objectives

Defining the goal setting process and how it fits with other processes and programs

Reviewing tactics for making goal setting relevant, consistent and impactful

Discussing how to get started


Agenda

Start with the Strategic Plan

Define Structure and Process

Get Beyond Finance Measures

Highlight the Manager/Employee Conversation

Questions

“Organizational” (Executive Team)

“Individual”(Manager/Employee)

Q/A


Annual Planning Meeting



Define Overall Goal Setting Program Objectives and Guiding Principles

Help Facilitate the Annual Planning Meeting

Set the Timeline for Goal Setting and Related Processes

Work with the Executive Team to Create a Goal Setting Framework that is Broad and Diverse


An integrated approach should be provided for goal setting, development planning, mid-year and end-of-year reviews with separate, weighted performance criteria for goals and competencies.

Single Combined Process

Single Combined Process

Expanded Goal Setting Capabilities

Expanded Goal Setting Capabilities

The process should emphasize both “results” as well as “contributing” goals. HR should be a facilitator and enabler for helping to build organizational capability, maintaining standards and managing this process.

Collaborative Coaching

Conversations

Collaborative Coaching

Conversations

Executive and manager focused training for engaging in a goal setting as well as development planning and review discussions needs to be provided. Supporting tools and techniques for guiding collaborative goal setting and management should also be made available.

Simple, Clear Guidelines for Compensation

Simple, Clear Guidelines for Compensation

The organization should have a consistent approach to incentive pay where the assessment of goals drives the bonus, and the assessment of competencies drives base pay increases.

Drive performance thru the integration of “What” and “How”

Drive performance thru the integration of “What” and “How”

Enhance strategic alignment and

planning

Enhance strategic alignment and

planning

Require dialogue to reinforce individual

alignment and development

Require dialogue to reinforce individual

alignment and development

Consider both business results and impact on areas of

direct control

Consider both business results and impact on areas of

direct control

Define Guiding Principles - Example


Get Involved and Set the Timeline - Example

Performance Management Process

Goal Setting Process

Succession Process

Nov

Year End Reviews (Goals and Competencies)

Goal Cascade

Succession Meetings

Merit and Bonus Determinations

Performance and Development Planning Mid- Year Review and Discussion

Compensation

Payouts and Salary Actions

Year End Results

Revisit Goal

Strategic Planning for New Year

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct


Define a Framework that Fits Your Objectives

Financial

• Revenue

• Cost

• Return/Margin

Operational

• Quality

• Timeliness

• Agility

People

• Engagement

• Alignment

• Competency

Customer

• Satisfaction

• Referencability

• Retention

Planning----Execution----Improvement

Adapted from The Balanced Scorecard and related works by David Norton and Robert Kaplan


Agenda





Questions





Define goal setting terms

Set process guidelines

Determine rewards and consequences


Attributes of a Goal

Owner

Category

Linked Goal

Statement, Description and Activities

Target

Weight


Owner – Individual to be reviewed on the goal

Category – Goal alignment to strategy

Linked Goal – Impacted higher level goal

Statement, Description and Activities – Detail of what will be done and what the result or outcome will look like

Target – Measurement and target or target date

Weight – Weight for the goal on their performance review of the owner

Attributes of a Goal (Cont.)


Goals Are NOT Activities or Job Responsibilities

Goals should be defined at a level above the isolated activity or job responsibilities (for example, “taking a training class” or “completing monthly reporting on time” do not constitute a goal).

Goals are intended to produce positive change Managers are responsible to test that each goal goes beyond job responsibilities and truly constitutes an effort to creating an improvement or produce a positive change.


Set Process Guidelines:Goal Numbers, Linking and Weighting Examples

Managers and employees should focus on the “critical few” goals that are most important in contributing to the desired results and outcomes

As general guidance, goal plans should include from 3 to 7 individual goals for the year

Individual goals should be linked to higher level goals

Managers should be the ultimate decision makers regarding the number, linking and weighting of goals for their organization and director reports

Q/A


What Type of Goal Setting Process

Approximately 75 webinar participants, May 2010.


Set Guidelines for Cascading a Goal: Marketing Examples

Manager Goal Statement and Supporting Activities

Application of Key Principles

Direct Report Goal Statement and Supporting Activities

Application of Key Principles

Not Cascaded:Improves COGS versus 2008, by achieving Program spend of 10% of Sales

Director report has no control over outcome

Not Cascaded:Not applicable, except for coaching discussion about how his/her goals support or otherwise interact.

Individual should be aware of how to support manager’s goals and about how own goals interact with non-cascaded goals.

Fully Cascaded:Achieves market share at 22.4% in fiscal year 2010, by completion of the following initiatives: Implementation of 16 selling classes, 8 Boot Camps.

Manager needs to clarify rationale for fully cascaded goals and how supporting activities will change for that individual.

Fully Cascaded:Achieves market share at 22.4% in fiscal year 2010, by completion of the following initiatives: Implementation of 16 selling classes, 8 Boot Camps.

Even full cascading requires clear documentation of changes in “supporting activities” for implementation.

Partially Cascaded:Implementation of 16 selling classes, 8 Boot Camps.

Manager focuses on the key contributing activity of the direct report

Partially Cascaded:Delivers 16 selling classes with participant satisfaction ratings of more that 90% and new leads generated 10 % higher than last fiscal year quarterly.

Cascaded goal most often represents subset of manager’s goal related to one or more key activities

Added for Individual:Facilitating the completion of the various initiatives that improve brand image.

Manager focus on the unique functional contribution beyond the manager goals that supports the result.

Added for Individual:Specifies 3 new classes or dealer learning initiatives during the first 2 quarters of the year that gain approval for implementation by the strategy team.

Personal goals are most often related to either functional support activities or personal development goals.


PERFORMANCE“WHAT”

(Achievement of KPI and Objectives during the

period)

PERFORMANCE“WHAT”

(Achievement of KPI and Objectives during the

period)

COMPETENCY“HOW”

(Demonstration of Knowledge, Skill and

Ability consistent with high performance)

COMPETENCY“HOW”

(Demonstration of Knowledge, Skill and

Ability consistent with high performance)

Ratings (and Comments)

Ratings (and Comments)

Evaluation Process

Base Pay Adjustments

Short Term Incentives

Compensation and Development

Training & Development

Employee Ranking (for succession purposes, not to be communicated)

Linking Goals to Compensation and Development

Long Term IncentivesOverall Rating


Agenda





Questions




A Balanced Approach to Goal Setting

Communicate that both results and contributing goals are expected

Provide coaching and training for managers

Highlight the best plans as examples

Adapted from The Balanced Scorecard and related works by David Norton and Robert Kaplan and Path-Goal Theory by Robert House.


Results and Contributing Measures

Focus Area Contributors Results

Sales/Marketing Marketing campaign implementation completion level

New product sales

Sales Customer visits/leads Sales revenue

Safety Compliance with safety standards

Accident rate

Manufacturing Preventive maintenance schedule compliance

Manufacturing line “up time”

Customer Service Customer complaint responses

Product returns

Talent Management

Key developmental experiences completed

Competency change accomplished

Coaching Number/quality of coaching conversations

Employee retention/motivation level


Measurement Approaches

Quality• Error rate• Customer/client feedback/satisfaction –

interviews, surveys, etc.• Employee satisfaction• Conformance to requirements or specifications• Compliments or complaints• Brand/product recognition

Quantity• Usually expressed as the amount of work

completed within a time period such as units per day, calls per hour or shipments per quarter

• Skills level/acquisition• Expenditures• Sales achieved• Services provided• New products introduced• New customers acquired• Sales activity• Market share• Margins

Cost

• Budgetary guidelines met or exceeded

• Overtime costs incurred

• Dollars spent or saved

• Cost of good/material

Timeliness

• Schedules met

• Deadlines met

• Specific timeframes met

Efficiency

• Reduction in cycle time

• Elimination of waste

• Elimination of unnecessary steps


Agenda





Questions




The Manager/Employee Conversation

Clearly define roles and responsibilities

Build the process around the goal setting conversation

Emphasize ownership and (authorship)


People Manager Employee

• Present and discusses organizational goal

• Work with direct reports to define relevant goals for the coming year, related to the organizational goals

• Document goal progress observed throughout the year and provide timely feedback

• Coordinates mid-year review discussion

• Completes mid-year review

• Adjusts objectives as necessary for the reminder of the year

• Coordinate end-of-year review discussion

• Complete end-of-year review

• Coach and re-directs behavior as required for the coming year

• Meet with manager to discuss individual goals for the coming year

• Help develop appropriate supporting goals and activities

• Coordinate mid-year review discussion with manager

• Complete mid-year self assessment

• Meet with manager for mid-year follow-up discussion

• Coordinate end-of-year review discussions with manager

• Complete end-of-year self assessment

• Meet with manager for end of year review

Goa

l Set

ting

Mid

-Yea

rE

nd-o

f-Y

ear

“Set direction for goal setting, and define areas of emphasis”

“Define specific goals, activities and tasks”

Define Roles and Responsibilities


Collaboration Discussion

Manager’s Agenda for Goal Setting Discussion: Review organizational strategy Review higher level goals Propose or review (if completed by the employee) individual

goals for the employee Confirm alignment to higher level goals Propose or review (if completed by the employee) weighting Reinforce that goal achievement should be consistent with the

Values and Behaviors of the organization (e.g. defining both the “what” and the “how”)

Confirm times for periodic review of progress

Q/A


Standards of Goal Quality, Going Beyond the “Critical Few”

Optimum number - Focus on the critical few factors that enable realistic prediction of performance.

Balances contributions and results - Balance measures for predicting the future and analyzing past actions.

Balanced level of precision - Value generated is precise enough to define information that can lead to productive actions.

Ease - Easy to measure in terms of effort and simplicity. Right level of accuracy - Provides reliable, valid data for tracking business

performance and making decisions. Consistency - Provides consistent data that can be interpreted for each measurement. Cost effectiveness - Is not too costly to gather and analyze, and aligned with business

requirements. Right frequency - Balance timing for data collection that provides meaningful

information in a timely manner.


Do You Use Quality Standards Today?



What Would be Useful in the Future?



Specific – the goal includes exactly what you will do

Measurable – the goal can be measured, for example number of errors or rejects or percentage of cost savings

Attainable – the goal can be accomplished; it is not too difficult

Relevant – the goal supports the overall objectives of the department and division

Time-bound – the goal includes a specific period of time for completion

SMART Goals are…

SMART Goals

Q


Implementation Change Phases for Goal Setting

Change Phase

OrganizationImpact Area

Building a Foundation

(Year 1)

Creating Sustainable Practices (Year 2)

Leveraging Human Capital Systemically

(Year 3)

Goal setting mastery

Clarification of goal setting approach for indviduals (SMART)

Development of methods for linking individual and organizational goals

Development and implementation of the consistent goal cascading approach

Development of mastery around key principles and practices of goal setting (mix of leading/ lagging indicators; creation and application of goal types/pick list)

Process mastery Establishment of common approach and process for whole organization

Demonstrated ability to follow process consistently

Managers and team members providing positive suggestions for improving the process and practices

End user acceptance

Key stakeholders enrolled in approach

End user groups fully understanding approach and impact on them

Managers demonstrating ability to take charge of the process

Team members actively participating in process

End users acknowledging individual and team benefit of the approach

Coaching conversation capabilities

Clarification of coaching guidelines

Communication and training for conducting the process delivered

Consistent coaching conversations delivered

Ongoing feedback provided

Fully-engaged, collaborative conversations provided throughout year


Agenda





Questions




Thank You for Joining Today

Chris Bergeron

Director, Consulting Services

Salary.com

(781) 851-8302

(904) 994-9072

[email protected]

1 connecting people, pay and performance building a culture of goal setting presented by: chris...

Documents

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goal setting framework

connecting people

goal setting capabilities

culture of goal setting

performance agenda

drive performance

weighted performance