(upbeat music)
Chelsea: Good afternoon, everyone.
Sibson Consulting would like to welcome you
to today's online presentation
New Trends in Performance Management.
Now I will turn the call over to Sally Reed,
the CUPA-HR, Maryland Chapter President.
Sally: Hi, thank you, Chelsea.
Thank you to our CUPA members for joining us today.
I actually am happy to share
with you and with our entire board right now
we had a board meeting today to plan out the year ahead.
So this was really good timing for us.
If any of you on the call are not familiar
with Sibson, Sibson is the firm of choice for colleges
and universities seeking a partner to create dynamic
and comprehensive human resources, benefits
and organizational development strategies
to support their institutional goals and objectives.
Andrea Averill who be our presenter today
is a senior consultant in the performance and rewards
in higher education practice in the New York office.
She's been with Sibson consulting for nine years
and consulting in higher education, the not-for-profit
and for-profit sector for over 20 years.
She works with higher ed clients
in the areas of compensation and performance management
and is the service leader for performance management.
So today Sibson will share their insights
on what they're seeing
as recent trends of performance management
linking what they have seen with their clients,
both inside and outside of higher ed
in response to those trends
and how your organization can best react to stay current.
So thank you for joining us today
and I'm happy to turn it over to Andrea.
Andrea: Yes, well good afternoon.
And thank you for joining us today.
We look forward to discussing some new trends
in performance management,
and we're seeing that there are many different ways
organizations are approaching performance management today
and that many are frustrated with programs
that are not adding value to the institution.
And in some cases, even causing some unintended consequences
in morale and engagement.
So today we'll explore these trends
and we'd like to start with a few questions for the group.
So the first question is around how effective
is your institution performance management program
for non-academic staff?
So in the choices would be why even bother
or it can be improved or we'd love it.
Or we don't have a performance management program.
So what we're seeing is that many are saying,
"Why do we even bother?"
So they're not pleased with their current program
and many others do agree that it could be improved.
So we do see that quite a bit from several organizations
and but we do see that really no organization would consider
it perfect and it also looks like
everyone does have a performance management program
or system currently in place.
So that's helpful.
So just moving on to the next question for the group
is around the what do you wish your performance management
program did a better job of?
And so in looking at this question, we have some options
of whether it's to strengthen a desired culture
to provide a basis for differentiating compensation
and rewards, identifying those high and low performers
and then supporting promotions
and career professional development,
facilitating goal alignment and achievement
across the institution, improving employee engagement
or perhaps if you didn't have a performance management
program we have that option as well.
We're seeing from many institutions
that they're looking for enhanced performance,
improved planning, dialogue and feedback,
stronger alignment with goals and objectives.
They wanna be able to reward, retain and encourage
those top performers.
And also look for a process to identify the strugglers
and provide an opportunity to begin
to do some performance intervention as well
for those that might be struggling.
And then also some other objectives might include
continuous development for growth of the workforce
and also increasing that support
and trust between employees and supervisors.
So it looks like the poll has ended now,
and it looks like our top response
is strengthening the desired culture,
followed by facilitate goal alignment.
And then some of the other choices
where we're seeing a little less prevalent
around supporting promotion and career development
and providing a basis for differentiating rewards.
And so we'll be talking about each one of these aspects
and how you can accomplish that
with some revisions to the performance management programs
and what some organizations are doing
to achieve these goals.
So as far as our topics today that we wanted to cover,
we wanted to highlight the disruptions and trends
in performance management.
Established the business case for improvement.
Define the unique role
with feedback and coaching between employees and managers.
Outline the important characteristics
and steps you can take
in designing a successful performance development program.
And we'll define that further what we mean
by performance development versus performance management.
And identify ways to overcome challenges
and then review some effective linkages
between performance management and rewards.
So we've all seen the headlines things like why bother
with performance reviews, organization removing the rating,
scrapping formalized feedback and scoring methods
and breaking from the tunnel vision of an annual site goal.
A lot of the common threads in these stories
is that the proof was in their HR data
in terms of it being a very time-consuming process.
And there's turnover risks that they're experiencing.
And the fact is that they need a system that is more agile
to support the work that they do.
And they're generally tired
of a meaningless and ineffective program.
And then faced with some changing demographics
as we have the millennials and generation Z entering
and as higher ed begins to compete for millennial
and not too far generation C talent
is important to think of the value proposition to present
to them as they start their careers in higher ed.
And we see this next generation of the workforce
looking for more opportunities for coaching
and career progression that is clear.
They wanna be recognized for performance.
They want to have a less rigid response
to good performance.
They don't wanna wait till the end of the year
to hear how they're doing.
They want the chance to grow in a creative manner
and the desire for the opportunity to perhaps even rotate
in the organization and gain experience in different areas.
So, traditional performance management
has been focused on annual reviews,
but we're seeing some significant shifts
in terms of the cyclical nature,
the changing workforce that demands more real time
future-focused coaching, the notable examples
of some of those larger organizations making changes,
access now to the use of data and talent analytics,
media attention and then the millennials
and Gen Z expectations for career growth.
Some of the trends that we're seeing
in performance management is organizations moving
from ratings and rankings to no ratings and ranking.
From a focus on the past to more of a focus on the future.
And then from a historic performance compliance
to more growth and development.
From annual evaluations to more ongoing,
continuous feedback throughout the process.
So instead of just one or two conversations
with my manager in a given year,
it's ongoing continuous feedback throughout the year.
From it being manager led to employee driven.
So for employees to have a larger role in seeking feedback
and taking more ownership for their development.
From word and PDF forms and spreadsheets
that can be very hard to administer
to more programs that are now supported
by tools and technology to help ease that administration.
From programs that are a one size fits all,
to more flexible and individualized programs.
So in those kinds of situations where you may have
certain areas where you can use goals
but maybe in other areas it's not as applicable.
And then also for competencies
there may be certain competencies that apply
to certain job families differently
than it would be for other job families.
So there's that opportunity to do things at a
at a more flexible level, but based on the needs
of the areas within the institution.
And then also feedback on negative occurrences.
So from that to something that's more related to guidance
and coaching, so it has more of a growth mindset
a developmental tone to the feedback.
And we're recognizing that many contemporary programs
they need to do this to be able to retain employees
and develop them to deliver that ongoing performance
feedback in order to support the innovation improvement
and to create stronger channels of communication
to deliver better service.
We're seeing those as being some of the major trends
in performance management.
So we'd like to ask a question as a group.
So where does your institution fall in these categories?
Are they more traditional or are they more
on the contemporary side or in the middle?
And we see some institutions starting to break the cycle
of using ratings and focusing more on development.
And we're also seeing
that many organizations are starting to have more training
on how to have quality tough conversations
not only for managers, but for employees to receive training
on how to ask for feedback and start the process.
That we're seeing more movement to employee ownership
for development, and also flexibility in the standards
whether there's goals or no goals
for some areas in different competencies
for different job families and a focus on improvement.
So it looks like the results are in
and we're seeing that many institutions
feel that they fall on the side of the traditional.
And then just a few indicating that there's a mix
of some of those elements on the contemporary side.
Okay, so we'll go a little bit deeper on the side of
these contemporary programs and trends
and share with you what it begins to look like.
So for the performance management continuum
we see many organizations falling at different points
for their program design.
And so it may be institutional wide
or it may be more job specific.
They are maybe use of technology or not.
It may have no link to technology.
Their feedback may be more limited or sometimes annual,
semi-annual or quarterly or very frequent.
The focus could be more on compliance
or then also more focused on growth and development.
There can be more single source feedback
that is coming through or multi-source.
And in that situation, the single source is more
from just between the manager and the employee
and where a multi-source would include
other knowledgeable raters within the organization
that can provide performance observations about performance.
So it may be reaching out to other areas within
other departments that can then provide
some performance observations
and comment about your performance.
So the burden isn't just so heavy on the manager
to be aware of the individual's performance,
but also have other individuals provide
some additional information.
So that can help with kind of the accuracy of it.
And also the messages that can be sent
to the individual about development.
So we see individual organizations
at different points of the spectrum.
They may either have no program
or a standalone annual, semi-annual program.
They may have some elements
of goal setting and ongoing feedback.
They may have it tied
to short term or talent management decisions.
And then for some organizations,
they might be at a point of really
using more data-driven metrics
focus on longterm talent development.
So that would be on the far right of the spectrum.
And so, but the goal is to have a program
that makes a meaningful difference to employees
and the institution,
and that true change in performance management takes time
and often several years.
And it requires a cultural shift
in the mindset of staff, the managers and leaders.
And so it can evolve over time
and it should be looked at frequently to make sure
that it's meeting the needs of the institution.
And so it's not the type
of program that you wanna develop once
and not look at it for 10 years.
So you wanna keep it aligned with the needs
of the institution and revisit it
and continue to tweak it in order to make sure
that it's meeting the needs of your workforce.
So there's a spectrum of performance program,
design options.
So will you see more traditional performance management
off on the far left?
There could be paper forms.
They may be linked to merit pay.
Then we're seeing other organizations
start to become more paperless,
but still having many of those traditional performance
management processes,
then using merit pay as well.
And then some organizations will begin to move to
a more automated process, have more focus on development
with traditional process and better training and tools.
And then off to the far, right
you start to see organizations
maybe not using any kind of rating or forms
but they're really tracking more of the outcomes.
So engaging employees in different surveys to see
how are you having frequent conversations
with your managers?
Do you feel that the merit increases are appropriate?
So they're really tracking things more
at the end of this as a process
and tracking those outcomes rather than through the ratings.
So another approach really the far end is where you have
some institutions that may have no performance appraisals.
They may be investing in the culture and development,
no pay for performance.
And so some examples of that might be like a Mayo clinic.
And so we do see the spectrum
of institutions and organizations being at different points
and using performance management in different ways.
So it's helpful to take a step back and really think
about what is performance management, why do we do it?
And what ways is it management managing performance
and how does it relate to performance?
And in what way is it related to strategy
and how or why is it valuable to employees?
I'd like to ask another question of the group.
So how effective is performance management
in your organization
at enhancing communication between supervisors
and employees and supporting development?
And the choices are strongly effective,
moderately effective, somewhat effective and effective
and then an option for those that don't have the program.
We really see that this is where performance management has
the most value is when there are quality conversations
between managers and employees.
And so we see much more emphasis
around increasing the frequency of conversations
and increasing the quality of those conversations,
having the training in place
for employees and managers to do that.
So as we look at the survey results
it looks like many would say somewhat effective,
followed by ineffective and then only moderately effective.
So we do that is a common occurrence
that we see within organizations is that
they may have a design in place,
but yet the execution of it is not really yielding
the results that they want in terms of managers
and employees having good conversations.
So when we talk about the difference between
performance management versus performance development,
we're talking about creating a culture of clarity, growth,
and development.
So too many organizations believe
that there are performance reviews equate to
performance management
and traditional performance management
has been review focused.
It's been an annual event, but we observed
that there's been some significant shifts
as organizations seek to improve employee performance,
development and engagement which then we know
with improved engagement
then the organization just has more success.
And so in terms of what a performance development program
looks like, performance development is a clear,
continuous and engaging experience
that helps employees succeed and provide growth and rewards.
So the employees can say that it's clear
from end to end that the methods, the system is transparent
and simple and intuitive, that there's continuous feedback.
The dialogue with my leader never ends
rather it changes focus throughout the year
and keeps pace with my goals and development
and career focus, there's engagement, alignment,
and employee fulfillment.
I understand how my efforts align
with the institution's mission and strategy.
I feel motivated to achieve my goals
because they're aligned with the sense of purpose
and personal fulfillment.
I feel that there's growth.
I have the ability to build my skillset
and career by following through on my skill growth
and development plans and there's rewards and outcomes.
The recognition, the praise, the promotion, the job change
and the other potential financial awards I received
such as salary increases a bonus or a spot awards.
Those are directly related to my contribution and results.
So in terms of some of the factors
in developing a performance development program
it's really a balanced effort.
So we see this pyramid here
in terms of the different components or triangles
and we would consider these factors
in developing an effective program.
And so strategy and leadership is
at the top and then program designed
to the right and execution to the left.
And we see many organizations spending a great deal
of effort on the program design
in terms of the process requirements,
the calendar, the rating.
Sometimes they'll put technology in
and think that that will really solve all the issues.
So we see a lot of organizations
focusing their efforts there
but what we find where the greatest impact is having
clearly articulated strategy and objectives
and having leadership support of the program
for them to really be champions
of feedback with a growth mindset.
And then also on the execution side
for it to provide the training in order
for individuals to be able to have quality conversations
ongoing feedback conversations
and then having that accountability
at all levels within the institution
and also having calibration as being part of that.
So looking at the ratings
and having a process for having,
looking at perhaps maybe the easy graders
and the hard graders
and having a process for (indistinct) evening those out
and having some standard performance levels.
And so we see those being the key factors in really
designing an effective performance management program.
So in terms of those conversations
we see that there are typically five key quality
conversations that build trust
between managers and employees.
So the first is around establishing the relationship,
recognizing priorities, goals, and styles
and agreeing on relationship norms and roles
and then setting expectations,
setting expectations for the year,
and then third exchanging feedback,
identifying those challenges and planning for success.
And then there's coaching identifying those opportunities,
actively engaging in coaching on a regular basis,
and then planning for career.
In terms of a multi-source feedback.
And we touched on this earlier
just briefly about this opportunity to go
from a manager and employee only kind of feedback process
but opening up to other individuals that can also
provide some performance observation,
such as after major projects or deliverables
after a positive or negative experience with an employee.
And so those are opportunities to have other individuals
provide those performance observations that can help
with that individual's development
and also help the manager as well be informed
of what some of those developmental opportunities are.
And just to talk a little bit more about calibration
as was mentioned in terms of the key factors
for effective performance management.
Calibration is a element that we see
within many organizations where instead
of just having the manager assign the rating
that there's an opportunity to look at those ratings
across a given area and have other individuals review
those ratings and have some transparency
around the performance standards that are
set for each one of those.
So you can help balance out some
of the easy graders from the hard graders
and have some common standards for performance.
So what are some of the opportunities to begin
to establish the business case for change?
Some of the things that you can do to start
to track are the time to sell positions,
turnover, both voluntary and involuntary
because both are very costly.
Progress on goals and objectives, program effectiveness
and employee engagement and fulfillment.
So performance development sets the foundation
for many other talent management components, as we see here.
So employee engagement, a culture of accountability,
recognition and rewards, succession planning
and career growth and advancement opportunities.
And so some typical steps
in the redesign process are to gather information
on the current state, meet with key stakeholders
to understand the desired outcomes.
And this can be with executives,
employee focus, groups, surveys.
There's a whole scale approach
that we've used where we use technology
to have managers come into a session,
maybe 200 or so managers and begin to discuss
what their desired state is for performance management.
So it really is an opportunity to gain a perspective
from a large group and then gathering that initial feedback
and looking at design elements that would then
be more appropriate for the organization,
working with key stakeholders to design that process
in terms of the performance standards
and whether that includes job performance, goals,
competencies, developing the feedback process,
that methods for gathering feedback,
the tools and templates and frameworks
to facilitate that process.
The timeline would all be part of that.
And then the delivery and roll out,
the communications of any new designs.
The training, the outcome tracking,
piloting for new processes can also be very helpful.
We see organizations doing that starting
with a small group to be able to pilot the program
and test it and refine it before it goes out to
the broader population and just continuing to modify
and refine those processes over time.
So some of the outcomes of a well-designed
and executed performance development program
is enhanced performance and employee engagement,
improved planning, and dialogue and feedback,
alignment with goals and objectives,
retention and encouragement of solid and top performers,
attraction of top talent,
early identification of those strugglers
and performance intervention, continuous development
and growth of workforce and increase support
and trust between employees and supervisors.
We have another question for the group.
So how effective is the link
between performance and rewards in your organization?
Would you consider it strongly effective
moderately effective, somewhat effective, ineffective
or perhaps you don't have a performance management program?
We've seen many organizations thinking about this
in terms of they may be having no link currently,
others may be considering putting in a link
between pay and performance
and others may have a merit increase in process.
They may be using them and that merit increase
or increase amount is tied to performance.
So that are with higher ratings, there are higher increases.
But as the different funding for salary increases
has declined, then organizations are looking at
different ways that they can still reward for performance.
And so some may be using across the board type of increase,
but then using more of a performance cash bonus,
taking that funding and being able to provide
rewards those top performers
through more of a cash bonus mechanism.
So as the results are in, we're seeing that
many would consider it ineffective
and that there are some that consider it somewhat effective.
And then very few that would consider it
either moderately or strongly effective.
And what we recognize is that all of this
tends to work together in terms of the rewards
for performance.
Linkages between Performance Management and Rewards.
So we see that there are several methods of
pay for performance, but that,
with the decline of salary increased budgets
that we're seeing that it is putting more pressure
on that link between pay and performance.
And many of these systems,
the traditional pay for performance system
started many years ago in the 1970s
but yet so many organizations continue to apply
these same processes.
So if we think about,
when you look at this picture of the phone
and the typewriter, I mean nobody's office
looks like that anymore but yet we still tend to be using
a lot of the same program and processes as then.
And this is an interesting article
by Harvard business review that laid out this tug of war
between accountability and development over the decades.
And so you can see how it started
with this focus on accountability.
And we know that we'll be providing you these slides.
So you can take more time
to take a look at these if you're interested, but this shift
of tug of war between accountability and development.
And then we see in like the 1960s
more of a opportunity to begin to split the appraisals
into separate discussions between accountability and growth.
And then further on in the 1980s and 2000 timeframe
more of a focus on accountability,
then a shift more towards development.
And then that third way that we're seeing that came
from a lot of the articles from Deloitte and PWC
that were trying to go numberless
and kind of re and even in some cases restating
the performance ratings putting them back in place
because of some of the concerns that they've had.
So we do see these shifts that organizations are taking
in terms of performance management.
And a lot of times this is leading
to some very undesirable consequences
of the lower salary, increased budgets
putting pressure on the system where
performance conversations are being more process-driven
and lacking any real value that the feedback
is too infrequent,
that managers are reverse engineering the ratings.
So they're in order to get the increases that they want
for their employees are kind of backing into the ratings,
which is really counterproductive
that there's minimal upward movement within the pay bands.
As a result of the lower increases
that some of the key talent budgets are not
robust enough to reward appropriately.
So the amount becomes so small
that it's considered very small
or barely pays for your cup of coffee.
And there's a huge time commitment to,
there's a huge time investment
and universal dissatisfaction with the program.
So in terms of looking at it more holistically,
though we would suggest
looking for your particular institution
at each one of the different components
of the employee value proposition,
what your organization communicates
in terms of its employees affiliation to the organization
what it has to offer there in terms of work content
and having challenging work opportunities and feedback
having career opportunities and opportunities
for personal growth, and then compensation and benefits
and really looking at each one of these elements
and how they can work together to really
communicate the value proposition for your institution.
And also for think a compensation it's important to start
with the basics.
So what role does Base Pay have?
What else should be awarded
and looking at Base Pay Adjustments
and how those adjustments should be used?
What are we really trying to achieve
and how do we effectively budget
for pay and performance giving limited resources?
So there may be opportunities where
if the budget is a little smaller,
but you can provide more of a performance cash bonus
for those high performers and high contributors.
So there are many different ways that you can address this.
So some of the that we see and hear from institutions
in terms of performance management programs,
are that managers may not have the skills
but there is opportunities to address that through training
and active coaching, that it's just a time burden
but ways to develop that would be to keep it simple
that there some may consider it to be a waste of time
but you can't let it be it's important.
It's important for managers to manage
and for to spend that time developing employees
and then leaders who may not support it
there are ways to show the dollar impact
of having an effective performance management program
and having an ineffective program.
So some steps that you can take to improve your program
are to share successes of
good performance management examples in your organization.
So some may come to mind right away
of managers that do a great job
of having good conversations and developing their employees.
So it's an opportunity to have some of those individuals
be kind of spokes people for the program
and having a Lunch and Learn,
or opportunity a coffee hour,
to bring in some of those managers
to talk to other managers about what they're doing
and how they have their conversations.
Encourage real time performance discussions,
empower employees to manage the system
so that they don't have to wait for their managers
to have conversations with them
but for them to initiate the conversation about feedback.
Loosen restrictive documentation and timing
and ask the right questions to start the change
and take charge of your performance culture
and make goals matter
and turn managers into performance coaches.
So in terms of some key takeaways.
We're seeing that the workforce is changing
and many organizations are changing the way they
approach performance management to increase engagement
and performance.
Many are developing an effective
performance development program
can offer institutions a competitive and economic advantage.
Performance development is more than a process of reform
and that organizations can fall
at different points in the spectrum
of performance management versus performance development.
And getting performance development right is critical
as it forms the foundation for so many other elements
of talent management.
And it's also continuous process to ensure that performance
development is supporting the needs of the institution.
Well, thank you very much for your time this afternoon.
And if you have any follow-up questions
please feel free to email or give me a call.
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