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Management Management Performance & Reward Performance & Reward Program Program State System of Higher Education State System of Higher Education
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Management Management Performance & Reward ProgramPerformance & Reward Program
State System of Higher EducationState System of Higher Education
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Today’s AgendaToday’s Agenda
Introduction
Overview of the Program
Performance Management Process
BREAK
Performance Management—Technically Speaking
Evaluating Performance
Wrap-Up and Adjourn
3
Presentation Development Presentation Development TeamTeam
State System of Higher Education
William M. Mercer,Incorporated
Pamela Brand
Tim Clapham
Tim Fogarty
Lynne Motyl
Dave Topper
Mike McAllister
Erin Ward
Hay Group
Rob Colenbaugh
IntroductionIntroduction
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Why you’re hereWhy you’re here
Understand what the new Program is and why the System is implementing it
Learn how the Program works
Have your questions answered
Practice using the Program
Receive materials for implementing the Program
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Please:Please:
Ask questions
Offer suggestions and ideas
Take breaks during designated time only
QuestionsQuestions
Overview of Overview of Management Performance Management Performance
and Reward Programand Reward Program
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In this section...In this section...
Why the Program was developed
How it supports the performance and reward philosophy
What the Program is
What it can do for you as a manager
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Integrated Action PlanWhere do we want to
be?
Convergence ReportWhere are we now?
Performance and Outcomes PlansHow we will get there?
PerformanceResults
Management Performance Assessment – Merit Salary
Presidential Leadership Assessment – Merit Salary and Contract Extensions
Systemic Change Initiative
Implementation
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Background: the project’s purpose Background: the project’s purpose
System’sDesiredResults
SystemStrategy
Rewards &Recognition/PerformanceManagement
Work Culture
How we think and act to support the
strategy
Alignment
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Why the Program was developedWhy the Program was developed
Link employee performance measures to System/University goals
Establish clear, measurable, and accountable performance goals
Define a common set of behavioral expectations to drive performance excellence
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Why the program was developed Why the program was developed ((cont’dcont’d))
Provide competitive compensation that accurately reflects the value of positions
Reward superior performance
Support System’s performance and reward philosophy
Provide a consistent process for measuring and rewarding performance
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The development processThe development process
Questions
Data Collection
Data Synthesis
Board of Governors’ Review
Performance & Reward Philosophy
Sources- Organizational Data- Sr. Leadership- Employees- Theory/ Best Practice
Methods- Interviews- Focus Groups- Survey Tools- Campus-based Work Group Teams
CurrentPractice
WorkCulture
Strategy
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The System’s performance andThe System’s performance andreward philosophy reward philosophy (as adopted by the Board of Governors)(as adopted by the Board of Governors)
Refocus the performance assessment as a management process designed to achieve System goals, drive necessary organizational change, and directly link each System’s managers objectives to System/University goals
Establish clear and measurable performance goals and objectives against which accountability will be established and performance assessments will be conducted
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The System’s performance andThe System’s performance andreward philosophy reward philosophy (cont’d)(cont’d) (as adopted by the Board of Governors)(as adopted by the Board of Governors)
Define a common set of behavioral expectations that are linked to System values and support the achievement of System/University goals and objectives
Attract, retain, and motivate high quality management employees who along with faculty and staff are critical to the overall achievement of the System’s Mission, Vision, and Goals
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The System’s performance andThe System’s performance andreward philosophy reward philosophy (cont’d)(cont’d)(as adopted by the Board of Governors)(as adopted by the Board of Governors)
Provide compensation levels that accurately reflect the relative value of positions within the System
Provide externally competitive compensation relative to appropriate national and regional labor markets
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Reward superior individual and/or team performance measured by organizational results, the demonstration of desired behaviors, and the achievement of personal/team goals
Be clearly and consistently communicated to all management employees
Be administered through a common framework with flexibility for local administration
The System’s performance andThe System’s performance andreward philosophy reward philosophy (cont’d)(cont’d)(as adopted by the Board of Governors)(as adopted by the Board of Governors)
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A final noteA final note
In applying these guidelines, the System strives to be fair and consistent in plan design and application while recognizing the importance of maintaining flexibility to quickly react to changes in a highly competitive operating environment.
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The challenge...The challenge...
Wherewe are
Wherewe need
to be
Launching Launching Program Program TrainingTraining
ManagementManagementPerformance Performance ExcellenceExcellence
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Crossing the bridge...Crossing the bridge...
Wherewe are
Wherewe need
to be
Launching Launching Program Program TrainingTraining
Management Management PerformancePerformanceExcellenceExcellence
Performance and Reward ProgramPerformance and Reward Program
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Three program componentsThree program components
Performance ManagementPerformance Management
Job Classification
Job Classification
Pay
Del
iver
y
Pay
Del
iver
y
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Developing the compensation structureDeveloping the compensation structure
A Continual Balancing ActA Continual Balancing Act
External Factors
ExternalCompetitiveness
InternalEquity
Fiscal Realities
Performance & Reward Philosophy
System Strategy
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Classifying jobs—three factorsClassifying jobs—three factors
Job
Content
RelativeRelativeValueValue
Know HowProblemSolving
Impact/Accountability
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Classification review resultsClassification review results
Expanded grade levels to match breadth of work within the System
Revised classification categories to better distinguish types of work performed
Ensured job categories reflect levels of contribution to the System
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Levels of contributionLevels of contribution
Executive Leadership
Strategic Leadership
Tactical Leadership/Senior Professional
Operational Leadership/Professional
Management Support Staff
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The new Grade StructureThe new Grade Structure
Level of contribution Title examples Grade
Executive LeadershipChancellor, Presidents,
Vice Chancellors270
260 a, b, c
Strategic LeadershipProvosts, Vice Presidents,
Academic Deans250 a, b
240, 230, 220
Tactical Leadership/Senior Professional
Controller, Director ofAdmissions, Development
Officer210, 200, 190
Operational Leadership/Professional
Manager of Campus Services,Systems Analyst, Printing
Manager180, 170, 160
Management Support StaffExecutive Secretary/
Staff Assistant 150, 140
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Pay delivery resultsPay delivery results
Internally consistent and externally competitive compensation structure
Salary increases based on performance
The ability to better recognize superior performance
The ability to better achieve parity
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Pay delivery toolsPay delivery tools
Merit increase pool—performance-based awards driven by achievement of goals and core competencies
Special performance awards—performance-based awards for superior individual or team contribution
One-time parity adjustment—recognize performance and achieve parity between positions
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Performance management Performance management resultsresults
Management process to link System/University and employee performance goals
Measure performance based on System/University goals, individual results, and competencies
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What performance management What performance management does for you...does for you...
SupervisorManagement
Employee
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What performance management What performance management does for you...does for you...
Promotes two-way communication and participation
Provides a mechanism for determining and establishing goals critical to the organization
Focuses on desired results and the processes to achieve them
Emphasizes individual contribution to success and establishes rewards for superior performance
Helps identify employee development needs
Promotes individual and organizational success
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Supporting the performance and Supporting the performance and reward philosophyreward philosophy
The Performance and Reward Program is critical to supporting the System’s philosophy, while providing a collaborative and accountable process that integrates individual success and the Performance and Outcomes Plan of the University.
University Performance
and Outcomes Plan
IndividualResults
Individual Competencies
University Performance
Success
The Performance The Performance Management ProcessManagement Process
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Where performance management “fits”Where performance management “fits”
What is my job?
How am I doing?
Does anybody care?
What is our job?
How are we doing?
How canI help?
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In this section…In this section…
Performance management steps
Roles
Tools to use
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The performance management stepsThe performance management stepsI. PLANNING• Link to System/University
Strategic Plans/Goals• Establish Performance
Expectations & Development Plan• Gain Commitment
III. REVIEWING• Compare Actual To Expected
II. COACHING• Track• Coach• Reinforce
IV. REWARDING• Link Performance To Compensation• Recognize Superior Performance
PursuingPerformanceExcellence
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The roles of all managersThe roles of all managers
Take an active role in the process
Support the process throughout the rating period
Set realistic, appropriate goals aligned with the University strategy
Measure results objectively
Identify needs and resources for employee development
The management employee and supervisor take joint accountability for the performance management process.
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The Performance Management ProcessThe Performance Management Process
I. Planning
II. Coaching
III. Reviewing
IV. Rewarding
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The performance management stepsThe performance management steps
Planning
Executive/Strategic Leadership reviews System/University goals and works with Division/Department Managers to set goals
Division/Department Managers communicate goals
Management employee develops drafts of individual goals and expected results
Supervisor and management employee participate in planning discussion:
- agree on goals and expected results- discuss competencies applicable to job- establish expected behavioral levels- discuss developmental opportunities- discuss meaning of ratings
I. Planning
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The performance management stepsThe performance management steps
Coaching
Supervisor tracks individual/team performance and reinforces/coaches
Management employee tracks individual/team performance
Management employee asks for feedback
Management employee tells supervisor about any successes/barriers to success
Management employee and supervisor assess ongoing relevance of goals/make modifications
Supervisor or management employee initiates interim review meetings
II. Coaching
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What to coachWhat to coach
CurrentPerformance
“What”
“How”
• Goals• Results• Outcomes
• Behaviors• Competencies
Career• Preparing for potential future assignments• Using capabilities to chart a future course• Understanding “career” realities
Development
• Building future capability• Improving personal skills
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The performance management stepsThe performance management steps
Reviewing
Management employee provides information on actual results to Supervisor
Supervisor completes Actual Results column, assigning ratings and providing comments
Supervisor completes Competencies sections and assigns ratings
Supervisor completes the Accomplishment section of Development Plan
Supervisor completes Overall Performance Summary and assigns Overall Performance Rating
Supervisor shares draft form with reviewing officer
Management employee and supervisor meet to discuss and finalize performance appraisal
III. Reviewing
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The performance management stepsThe performance management steps
Rewarding
Throughout the year, supervisor uses non-cash recognition to reward/reinforce performance
Supervisor uses pay guidelines to provide input regarding merit increases based on performance results
Leadership recognizes employee performance with merit increase
Leadership recognizes management employees/teams for Special Performance Awards
IV. Rewarding
Performance Performance Management—Management—
Technically SpeakingTechnically Speaking
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In this section...In this section...
Using the performance equation
Understanding Core Performance Results
Listing Job Specific Performance Results
Understanding System Core Competencies
Listing Job Specific Competencies
Designing Developmental Plans
Setting performance expectations
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The performance equationThe performance equation
“What” Work Is
Done
“How” the
Work is
Donex = Performance
Outcomes
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Using the performance equationUsing the performance equation
RESULTS
Job-Specific Competencies
Core Performance
Results
Job-Specific Performance
Results
Core Competencies
COMPETENCIES
WHAT HOW
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RESULTS(5-8 objectives)
Core Performance
Results
Job-Specific Performance
Results
WHAT
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Core performance areasCore performance areas
Customers and Customers and StakeholdersStakeholders
Health of the Health of the UniversityUniversity
Continuous Continuous ImprovementImprovement
Financial Financial HealthHealth
Quality Quality and Valueand Value
Operational Operational Efficiency and Efficiency and ImprovementImprovement
A goal in each area
Driven by System/University goals
WHATWHAT
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Core performance areasCore performance areas
Health of the University- Revenues, productivity, costs, asset utilization,
budgetary flexibility, financial audits
Customers and Stakeholders- Market share, retention, enrollment quality, student
diversity, student and alumni satisfaction, stakeholder surveys
Continuous Improvement- Core processes, organization learning and growth,
program review, accreditations
WHATWHAT
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Results reflect the mission, vision, and goals of the University/ System.
State SystemUniversity
CIHealth of
the UniversityCustomers/Stakeholders Other
UniversityObjective
DepartmentObjective
Work UnitObjective
IndividualObjective
DepartmentDepartment ResultsResults
IndividualIndividual ResultsResults
Work UnitWork Unit ResultsResults
Performance Results Measures
““Cascading” goals and objectivesCascading” goals and objectives
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Job specific performance areasJob specific performance areas
A goal in up to five additional areas
Driven by Division/Department goals
WHATWHAT
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Setting goalsSetting goals
Goals should be as SMART as possible:
S
M
A
R
T
pecific
easurable
ttainable
elevant
ime-Based
WHATWHAT
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Tools to useTools to use
Management Performance Appraisal and Development Form
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Sample formSample form
Purchasing Director
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SMART Goals exercise!SMART Goals exercise!
Take your assigned goal
Evaluate it against SMART Goal criteria
Explain what “significantly exceeds expectations” would look like
Appoint a spokesperson
Report your findings
10 minutes discussion, 10 minutes reporting
WHATWHAT
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Goal #1Goal #1
Health of the University
Maximize vendordiscounts
Changes process to realize increase in purchase discounts by year end
P
P
WHATWHAT
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Goal #2Goal #2
Customers andStakeholders
Improve customer understanding of purchasing process and procedures
Rewrite purchasing process, guidelines, and requirements
P
P
WHATWHAT
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Goal #3Goal #3
Continuous Improvement
Reduce procurementcycle time
Identify and explore procurement practices by mid- year
P
P
WHATWHAT
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Goal #4Goal #4
Collaborate with high volume users and improve communication
Keep high-volume users informed of order status
P P
WHATWHAT
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Goal #5Goal #5
Improve procurement capabilities of subordinate staff
Develop more knowledgeable staff capable of handling higher-level purchasing functions as needed and/or in back-up roles
P P
WHATWHAT
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HOW
Job-Specific Competencies
Core Competencies
COMPETENCIES(5-8 behaviors)
HOW
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QuestionsQuestions
What distinguishes an average waiter/waitress from an outstanding waiter/waitress?
What’s distinguishes an average high school teacher from an outstanding high school teacher?
HOWHOW
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Measuring behaviorMeasuring behavior
“A competency is an underlying characteristic of an individual that causes or predicts effective and/or superior performance in a job or situation.”
David C. McClelland, Ph.D.
HOWHOW
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Top performers do things Top performers do things differentlydifferently
5
4
3
2
1
0
-1
Initiative
AveragePerformer
OutstandingPerformer
Never AlwaysFrequency
Behavioral Level
Complexity
HOWHOW
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Core competenciesCore competenciesTarget Culture
All Participants
Using limited resources effectively
Encouraging teamwork
Maximizing customer satisfaction
Delivering reliably on commitments to
customers
Being flexible and adaptive in thinking
and approach
Continuously improving operations
Treating employees fairly and consistently
Rewarding superior performance
Providing employees with resources to satisfy customers
Attracting top talent
Demonstrating understanding of the
customer’s point of view
Capitalizing on creativity and
innovation
Continuous improvement
Customer service orientation
Valuing diversity
Teamwork and collaboration
Results orientation
HOWHOW
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Continuous Continuous improvementimprovement
Examples:
Recognizing the need for a new approach and looking at doing it differently to be more effective
Thinking “outside the box” to find new solutions
Taking a new or unique approach to how work is done and striving to continuously improve processes and quality.
HOWHOW
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Customer service Customer service orientationorientation
Examples:
Matching customers’ needs to available resources
Correcting problems promptly and undefensively
Focusing one’s efforts on discovering and meeting the customer’s needs. (Customers can include associates, peers, colleagues, students, community members, faculty, etc.)
HOWHOW
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Valuing diversityValuing diversity
Examples:
Appreciating and looking for ways to gain new knowledge of other groups
Respecting the practices of other individuals or groups
The ability to understand and respect the practices, customs, and norms of other individuals, groups, and cultures. Includes the ability to respect and value different points of view.
HOWHOW
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Teamwork and Teamwork and collaborationcollaboration
Examples:
Supporting team decisions and doing your share of the work
Valuing the input and expertise of others
The intention to work cooperatively with others, to be part of a team, to work together, as opposed to working separately or competitively. (“Team” is defined as any task- or process-oriented group of individuals.)
HOWHOW
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Results orientationResults orientation
Examples:
Keeping track of and measuring outcomes
Setting out to achieve increased standards
A concern for holding yourself and others accountable for achieving results or for surpassing a standard of excellence.
HOWHOW
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Job Specific Job Specific CompetenciesCompetencies
Analytical thinking*
Change leadership**
Conceptual thinking
Developing self and others*
Flexibility/adaptability
Impact and influence*
Initiative*
Interpersonal understanding
Organization awareness
Relationship building
Self-confidence
Strategic orientation**
System thinking**
Team leadership*
* May be more critical for supervisory roles** May be more critical for Strategic Leadership level positions
Additional behaviors that drive effective performance:
HOWHOWHOW
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Tools to useTools to use
The Competency Dictionary
HOWHOW
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Sample formSample form
Purchasing Director
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Competencies exercise!Competencies exercise!
Take your assigned core competency
Use your Competency Dictionary
Evaluate the “expected behavioral level”
Identify how the behavior could be demonstrated
Appoint a spokesperson
Report your findings
10 minutes discussion, 10 minutes reporting
HOWHOWHOW
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Expected Behavioral Level:
Address deficiencies in work methods through specific changes
Results OrientationResults Orientation HOWHOW
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Customer Service Customer Service OrientationOrientation
Expected Behavioral Level:
Determine and pinpoint causes to current pockets of dissatisfaction
HOWHOW
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Valuing DiversityValuing Diversity
Expected Behavioral Level:
Actively promote the value of diversity in vendor contracts/relationships
HOWHOW
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Continuous Continuous ImprovementImprovement
Expected Behavioral Level:
Develop and promote new procurement process management techniques
HOWHOWHOW
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Teamwork and Teamwork and CollaborationCollaboration
Expected Behavioral Level:
Make concerted effort to capture subordinate and customer ideas and needs
HOWHOW
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Development PlanDevelopment Plan
During preparation phase, development plan goals are identified:
- Results-based goals
- Competency-based goals
- Training and education needs
During evaluation phase, accomplishments are noted
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Rating Scale Rating Scale
3 Significantly Exceeds Expectations (20-30%)
2 At or Above Expectations (60-75%)
1 Below Expectations (5-10%)
“Raising the Bar”
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The overall performance ratingThe overall performance rating
Reflects relative importance of goals Not necessarily a mathematical average Can be a fraction Universities should ensure consistent
application Should be indicated by individual ratings
and the importance (weight) of ratings in different performance areas
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The overall performance ratingThe overall performance rating
In the first year of the Program, RESULTS should be the basis for the overall rating, though it may be adjusted—upward or downward—by how well competencies are demonstrated.
Evaluating Evaluating performanceperformance
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Why evaluate Why evaluate performance?performance?
Compare actual performance to expected performance
Identify trends in performance
Pinpoint development needs and goals
Provide basis for reward decisions
Encourage discussion
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How to measure How to measure performance successperformance success
Direct observation
Review of documentation
Third-party reports
Self-report
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Guidelines for giving feedbackGuidelines for giving feedback
Be specific
Provide a recent example
Be descriptive
Ensure balance: refer to successful as well as less successful behavior
Ensure recipient is not preoccupied
Provide for discussion of the feedback
Relate feedback to behaviors that can be changed
Identify alternative positive behaviors
Feedbackmust bebothhonestandhelpful
Recipient mustunderstand it
Recipient must beable to accept it
Recipient must beable to do somethingabout it
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I. Planning
II. Coaching
III. Reviewing
IV. Rewarding
Remember the cycle (it’s ongoing)Remember the cycle (it’s ongoing)
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Here’s the timelineHere’s the timeline
2000-2001
Oct/mid-Nov: Training
Jan/Feb: Mid-year review
June: Performance
review
2000 2001
Oct/Nov: Set Goals
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Next stepsNext steps
Complete the development of individual/team goals
Complete the preparation portion of the Management Performance Appraisal and Development Form
Seek clarification regarding the program through your University human resources office
Provide suggestions for improvement (process, forms) through your University Human Resources Director
Stay focused on the ongoing process and its requirements
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QuestionsQuestions
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PursuingPerformanceExcellence
