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The People Practices that Guarantee Mediocrity: Learning from what the “worst employers” do
Andrew Bell
2To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
*Source: Hewitt Associates Employee Engagement and Best Employer Database of approximately 1,500 companies (1999-2003).
How Engaged Are Your Employees?
*
DestructiveZone
Uncertainty Zone
Performance Zone(Avg.TSR = 24.2%)
25%
40% 60%
100%
$
Benchmark Averages*
*
0%
(Avg.TSR = -3.4%)
IndifferenceZone
(Avg.TSR =9.1%)
Best Employers (74%)High Performers (61%)Total Shareholder Return (TSR > 20% from 1999-2003)
Global Engagement (54%) $
3To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Research-based Points of View
4To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Our Topics Today – Practices that Guarantee Mediocrity
Leadership
Rhetoric v Reality
Talent Management
Performance Management
HR Stuck in the Middle
5To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
“Good is the enemy of great”
Jim Collins, Good to Great
6To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
The Strongest Organizations Make High Performance Practices a Competitive Differentiator
Execution Quality
Bu
sin
ess
Pay
-Bac
k
Activities and steps are in place…“We do that”
Commitment to manager capability—doing it so well it’s a competitive advantage
They Know Performance-Related Activities—Goal Setting, Coaching, Talent Deployment, etc.—Have a Strong Execution/Pay-Back Connection
8To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
The Leadership Data
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50%
60%
70%
80%
90%
100%
Senior leadership treats employees asthis organization's most valued asset
I trust our senior leadership toappropriately balance employee
interests with those of theorganization
Our senior leaders are excellent rolemodels of our organization's values
Senior leadership is worthy of mytrust
Our senior leaders fill me withexcitement for the future of this
organization
% E
mpl
oyee
s A
gree
and
Str
ongl
y A
gree
Best Employers Average Employers Worst Employers
9To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Real Conversations in Real Organisations
Leader A - I think HR are letting us downLeader B - How so?Leader A - They should come and tell us when someone on our team has done a good job so we can go and give that person recognition.Leader B - Great Idea. Except I don’t know who all our people are, so I wouldn’t know who to give the recognition to?Leader A - They could give you a map showing their cubicle and a picture of the personLeader B - I don’t think we have photos of all staffLeader A - Maybe if everyone wore name tagsLeader B - True, but some of our staff these days have such long names the tag would have to stick out past their shoulderLeader A - Maybe if we had really big tags and people hung them round their necks on a string ?
10To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Leaders Believing Their Own Rhetoric
“If our employees have told you that communication is a
problem here, they are seriously misinformed.”
Response to Focus Group findingsFrom Company Chief Operating Officer
11To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
EngagementEngagement
Work Tasks
Reputation
Organisation Purpose
Career Opportunities
Senior Leadership
Policies
Intrinsic Motivation
Valuing Employees
Communication
Patterns of Influence
= opportunity and threat = threat= opportunity = small opportunity and threat
13To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Quick Quiz—Guess the Organisation
RESPECTRESPECT—we treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here
INTEGRITYINTEGRITY—we work with customers and prospects openly, honestly and sincerely. When we say we will do something we will do it; when we say we cannot or will not do something, then we won’t do it
COMMUNICATIONCOMMUNICATION—we have an obligation to communicate. Here, we take the time to talk with one another … and to listen. We believe that information is meant to move and that information moves people
EXCELLENCEEXCELLENCE—we are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be
14To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Surprise?
15To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
It is Easy to Develop Attractive Employment Brands…
MetLife… where work meets life.
Our Key Beliefs - The Way We Will Always ActUncompromising Integrity Constant Respect for People
"Treating others the way you want to be treated"
Imagine, solve, build and lead
Kraft strives to instill values it believes will drive the business—focus, innovation, passion, trust and teamwork—and is continually investing in training, development and career management to steadily improve employees’ skills and opportunities.
… “We take care of our People so that they can deliver impeccable Service to our clients who will give us the Profit necessary for FedEx to be successful. This philosophy governs every FedEx activity.”
16To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
…but Much Harder to Deliver Those Brands
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30%
40%
50%
60%
70%
80%
Decision to Join Current Impression
17To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Our Employees see Through our Rhetoric
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100%
This organization delivers on the promises it makes to itsemployees
I am made to feel like a valued member of this organization This organization's policies create a positive work environmentfor me
% e
mpl
oyee
s ag
ree
& s
tron
gly
agre
e
Best Employers Average Employers Worst Employers
18To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
“They’re Just Employees…”
VeteransBaby
boomers Gen X Gen Y
Core Values:• Diversity• Thinking globally• Balance• Techno literacy• Fun• Informality• Self Reliance• Pragmatism
Core Values:• Optimism• Civic duty• Confidence• Achievement• Sociability• Morality• Street smarts• Diversity
Core Values:• Hard work• Duty before pleasure• Honour• Delayed reward• Patience• Law and order
Core Values:• Optimism• Team orientation• Health & wellness• Personal gratification• Involvement• Work• Youth
Job security
Rewards
Recognition
Autonomy
Meaningful work
19To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Toblerone and Hershey Kisses
21To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Brand Fulfillment in Careers and Development is Low
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
I can fulfill my career aspirations here In this organization we are promoting thepeople who are best equipped to meet the future
demands of our business
The organization provides learning anddevelopment opportunities to help me build
valuable skills
I have appropriate opportunities for personaland professional growth
% e
mpl
oyee
s ag
ree
& s
tron
gly
agre
e
Best Employers Average Employers Worst Employers
22To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Managing Opportunity is AboutFueling Company and Individual Growth
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Double Digit Growth Companies Single Digit Growth Companies
We Need to Allocate Talent Just Like Capital—and Ban “Random Acts of HR”
Rotational Assignments for Key Talent
0%
10%
20%
30%
40%
50%
60%
70%
80%
Double Digit Growth Companies Single Digit Growth Companies
Use Strategies that Define How to
Select, Deploy, and Reward Leaders
24To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Most Employees Don’t Know What’s Important
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
I completely support this organization's goals and objectives I have a good understanding of this organization's goals andobjectives
I know exactly what I need to do to help this organization meetits goals and objectives
% e
mpl
oyee
s ag
rre
& s
tron
gly
agre
e
Best Employers Average Employers Worst Employers
25To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Spotlighting the Major Disconnects Between What we Intend and What People Hear—One Company’s Analysis
What they really hear now from everything we’re doing:
What we need them to hear:
High Performers
We’re glad you’re here It’s a given that you’ll produce great
results every year We’ll reward you as much as the
system allows We depend on you to carry the rest
We need you to be glad you’re here! We deeply appreciate all you do Your rewards will keep pace with your
impact, period Here, high performance is rewarded
and underperformance is addressed
Solid Performers
You’re not a hi-po, but we still value you…though somewhat less
Do your job well and it’s not necessary to improve or grow
Performance matters as much as potential—both are ways to be a key player here
We all must keep stretching to stay ahead of our competitors—“it’s grow or go”
Your solid contribution is vital to us
Under Performers
“This too shall pass” (a new performance initiative)
There are ways around the new processes
Help’s available, but turning things around is up to you
Without real improvement, this likely isn’t the right place to be
Expectingimprovement,
offering support
We’ll increasingly need to
“re-recruit” these people with
everything we say and do
Recognizing Achievement is Fundamentalto High Performance—But It Isn’t Automatic
26To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
F D C B A• “Meets” feels to most people like they’re getting a “C” grade—it doesn’t say,
“you’re a winner!” Managers can be reluctant to give good performers this rating so we get rating (and pay) creep
• And having two levels above “Meets” can erode the message that goals should be set at a challenging level: If people set the aggressive targets we ask for, how likely is it they can achieve two levels more?
ImprovementRequired
Meets SomeExpectations
MeetsExpectations
ExceedsExpectations
Far ExceedsExpectations
And What About Our Rating Scales?
27To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
$$
It’s easy to send the wrong signals about what we value:
The Mediocre Reward Mediocrity
In this company, many people were rewarded more for caution than courage
High
Moderate
Low
Goal Difficulty
$$$
We say this performance is what matters…
…but reward this performance as much or more!
Missed Partially Met Fully Met Exceeded
28To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
HR is Stuck In The Middle …
… and Unable to Deliver on the CEO Agenda
29To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Being Stuck in the Middle Means Spending Too Much Time on the Wrong Activities
7% 10% 15% 13% 28% 15% 4%
2%
6%
Strategy (7%)
Program Design (10%)
Consultation (15%)
Delivery (13%)
Program Admin (28%)
Customer Service (15%)
Systems (4%)
Vendor Mgmt (2%)
HR Dept. Mgmt. (6%)
Source: HR Analyzer Benchmark Database. Hewitt Associates. 2004.
Strategic Tactical
Even as HR costs continue to rise, HR staff are spending 56% of time on program delivery and transactional activities.They are only spending about 32% of time on more value-added activities.
30To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
Top 4 Reasons HR is Still Stuck in the Middle
Reason #1: Unclear Vision
Reason #2: Poor Change Management and Execution
Reason #3: Right People Doing the Wrong Work
Reason #4: Inefficient Delivery
32To protect the confidential and proprietary information included in this material, it may not be disclosed or provided to any third parties without the approval of Hewitt Associates LLC. SCMP HR Conference June 2006
The Critical Path to a High Performance Workforce—Our Point of View
Across the Organization, We Have to Get Three Things Right
Powered by a management team clear about what’s at stake and capable of getting it done
Everyone working on what’s important, hitting targets, and playing by the rules
Opportunity Managed for Impact and Growth
Dual focus on best person and most learning in every assignment and job
The people we depend on feel appreciated and confident, ready to give their best
People Who Perform Know They’re Valued
Accountability for the Right Results