PAY-FOR-PERFORMANCE PROGRAM

PAY-FOR-PERFORMANCE PROGRAM

Pay-for-Performance Training for Supervisors

April 2008

Copyright ©2008 by The Segal Group, Inc., parent of The Segal Company and its Sibson Consulting Division. All Rights Reserved

Welcome and Overview

Pay-for-Performance Strategy

Performance Management Process

Linking Compensation to Performance

Closing

3

Our goal for today is to provide you with an understanding of the…


New Performance Management Model

Compensation Philosophy

Recommended Approaches for Linking Pay to Performance

4

Why are we here today?

Trinity leadership desires: To recognize and encourage excellence by rewarding

contributions in work performance which exceed established standards and expectations

To more closely align performance expectations with the priorities and goals of the institution

Administrative Staff desire: A more rigorous approach to Performance

Management as a means to better manage their own performance and careers

More meaningful supervisor-employee conversations about performance and development

Rewards that align with demonstrated performance levels

5

An Advisory Committee was formed to guide the Pay-for-Performance initiative

PAY-FOR-PERFORMANCE ADVISORY COMMITTEE MEMBERSHIP

Name Position

Paula Russo VP Planning and Administration

Kathi Boelhouwer VP Alumni Relations & Communications

John Langeland Director, IT

Tom Zaharevich Technical Services Librarian

Dave Robbins Associate Academic Dean

Terry Hosig Associate Registrar

Cary LeGeyt Associate Director, Financial Aid

Luca Pizzoferrato Network Administrator

Tom Downes Facilities Foreman

6

The Pay-for-Performance initiative was completed in five phases over the last six months

Project Timeline

Phase Oct Nov Dec Jan Feb Mar Apr

1. Discovery

2. Strategy and Pay Guidelines

3. Performance Management

4. Pay-for-Performance Linkage

5. Implementation and Training

7

Let’s take the next five minutes to reflect on our own experiences with performance conversations

Share your most memorable experience related to a performance review or feedback exchange





Closing

9

Simply stated…

… Pay-for-Performance is:

planning, coaching, and evaluating performance and aligning rewards

with performance outcomes

10

The Pay-for-Performance Strategy is composed of two major components: Performance Management and Compensation

Performance Management Compensation

PAY-FOR-PERFORMANCE

11

We will use the Pay-for-Performance Strategy to link performance evaluations to pay decisions

Institutional Alignment

Clear linkage between performance expectations and College and department goals

Program Model

Principles of performance management will be consistent throughout the College with flexibility to address the needs of different departments

Includes all administrative and positions under same program and policies, with appropriate tailoring of salary ranges to reflect market realities

Link to Performance

Individual salaries based on the salary range for the job and the demonstrated skills, expertise, and performance of the individual with opportunity for greater pay increases for higher levels of performance

Grounded in a strong, effective and reliable performance management system

Internal / External Valuation

Levels primarily based on market to ensure Trinity’s ability to attract a diverse workforce of high-caliber administrative staff

Consider relative contribution of internal role on the achievement of College and department goals

PAY-FOR-PERFORMANCE STRATEGY FOR TRINITY ADMINISTRATIVE STAFF

12

We will use the Pay-for-Performance Strategy to link performance evaluations to pay decisions continued

Comparison Markets

Comparison institutions reflect a combination of competitor, peer, and aspiration institutions

Variations of markets for specific job families or departments may be necessary

Pay Components

Primarily base salary, with the potential for alternative enhancements Lump-sum payments for employees over the maximum of the pay range

Management

Leadership sets broad strategy for the Pay-for-Performance program and ensures program supports Trinity’s mission

HR designs and administers the program, and serves as guide/advisor to supervisors and Division Heads

Managers/supervisors recommend pay actions, subject to Division Head approval

Communication Transparency of compensation philosophy / pay guidelines to ensure

understanding of pay and its relation to performance

PAY-FOR-PERFORMANCE STRATEGY FOR TRINITY ADMINISTRATIVE STAFF





Closing

14

The Performance Management Process for Trinity Administrative Staff has been enhanced to…

Serve as the basis for differentiated decision making, including promotion, development opportunities, recognition, and rewards

Provide requisite levels of consistency in performance evaluations throughout the institution

Assist supervisors in making performance evaluations as objective as possible

Ensure transparency of expectations, standards, and goals for staff members

Provide all employees with additional opportunities for growth and/or recognition

15

Research confirms that effective performance management can increase an institution’s overall performance

Study QuestionResults

(% Agree)

1. The effectiveness of our performance management program is below average 50%

2. The effectiveness of our performance management program is average 35

3. Our leaders do not view performance management as a critical business process 60

4. Our leadership’s own goals are aligned with the institutions(Perceptions drop to virtually no alignment at the middle-management and non-management levels)

25

5. Performance Management is not a contributor towards helping the institution achieve its strategic goals 70

6. There is no differentiation between performance ratings and corresponding pay actions 63

7. There is a strong tie between performance ratings and promotions 40

Based on a recent Performance Management study, Higher Education seems to have a lot of room for improvement:

16

Ongoing dialogue between supervisors and employees is the “backbone” of effective Performance Management

Realizing Your Potential 55Conversation

Evaluating Performance44 Conversation

Coaching for Improved Performance33Conversation

Establishing the Relationship11Conversation

Setting Expectations22Conversation

17

The Performance Management cycle includes three phases that will (re)occur on an annual basis

I. Purpose: To align institutional plans to individual performance and development plans

July through August Supervisors and employees meet to

review the College goals and develop an Annual Performance Plan

I. Performance Planning/Goal

Setting

III. Purpose: To assess annual performance through collection, review, and calibration of performance data in preparation for pay decisions

May through June Supervisors and

employees complete a formal Year-End Evaluation (Self Assessment and Supervisor Evaluation)

Supervisors make pay decisions based on performance evaluations

Supervisors within large departments conduct Department Review sessions to ensure consistency of standards and delivery of performance and development messages

III. End of Year Formal Evaluation II. Purpose: To exchange information that

can be used to improve performance and enhance development

August through Next May Supervisors provide ongoing feedback

related to day-to-day activities to improve performance

Supervisors and employees complete a formal Mid-Year Evaluation (Self Assessment and Supervisor Evaluation) to discuss performance to-date and (re)direct efforts for the remainder of the year

II. Ongoing Review and Feedback

18

Supervisors and employees have key roles in the Performance Management process

Supervisors

Clarify responsibilities, define annual goals in relation to department and College goals, identify competencies

Plan skill development and promote career growth

Provide constructive feedback

Track and monitor performance throughout the year to support the final evaluation

Spend the necessary time to write the evaluation(s) and prepare for meeting(s) with employees

Employees

Understand what is expected of you in terms of your job responsibilities, annual goals, and competencies

Participate in setting annual goals

Be open and honest about career goals and professional interests

Ask for suggestions and assistance to improve performance

Inform your supervisor about your progress and/or difficulties that may interfere with meeting your objectives

Complete your Self Assessment

19

The purpose of Phase 1 is to align institutional and individual performance plans


Setting

III. End of Year Formal Evaluation


20

Specific activities, tools, and resources related to Phase 1 are as follows…


Setting

Supervisors and employees meet to set expectations for the year using Conversation #2 (Setting Expectations) and develop an Annual Performance Plan

For new hires and recently promoted individuals, supervisors and employees meet and develop a New Hire/New Role Plan and Evaluation

Setting Expectation22Conversation

21

“What specific competencies (i.e., knowledge, skills, behaviors) will help me accomplish my job responsibilities and achieve my goals for this year?

“What do we need to accomplish this year in order to support the College’s goals and my department’s objectives?”

“What are the most critical tasks and activities I am responsible for in my day-to-day job to support departmental objectives?”

Annual Goals

“What is Done”

Competencies

“How it is done”

FocusContent Area

The Annual Performance Plans will include clear and mutually agreed-to expectations across three areas

INDIVIDUAL EXPECTATIONS

Job Responsibilities

“What is Done”


Setting

Successfully transition budget records from old to new tracking system by March 30, 2009

Assist department head in administration of department procedures and programs

Attention to Detail: The ability to accurately account for data related to the job

Examples

22

Job responsibilities should be derived from the job description


Setting

23

Annual Goals should reflect College and Division/Department needs

InstitutionCollege mission,

strategy and goals

Division/DepartmentDivision/Department goals, plans

and objectives in support of Institution objectives

Staff MemberAnnual goals linked to division/department goals:

Clearly articulate “what” to achieve (job responsibilities and goals)Clearly articulate how success will be measured (competencies)

Open and Clear Communication of Institutional Strategic Plan and its Impact on Division/ Department and Employee

Employee, Division/ Department and College-wide Plans Designed to Support Institutional Mission and Strategy


Setting

24

For example, annual goals for an Accounts PayableSpecialist may be derived as follows…


Setting

Goal: Ensure 100% accuracy and complete transparency of College financials

Goal: Ensure all financial procedures are up to date and provide the accurate and current financial data for leadership of Trinity to review

Institution

Division/Department

Employee

Job Responsibilities: Maintain accurate financials records Annual Goals: Review and update accounts payable procedures by May 30, 2009 Measure of Success: Procedures are accurate and available for use on June 1, 2009

25

In setting Annual Goals, supervisors and employees should follow these guidelines

Effective goal setting includes creating goals that are: Specific

Measurable

Achievable

Results-oriented

Time-bound

Supervisors should develop goals with employees to provide clear direction and clarify expectations to guide their activities throughout the year. Consider the following: What are Trinity’s goals for the performance year? My department’s goals? How can individual goals support the department’s goals? What am I expected to

accomplish and by when? How will I accomplish those goals and what resources do I need? How will I know

if I have successfully accomplished each goal?


Setting

26

Let’s review some of the helpful tips for avoiding common pitfalls when setting goals

Pitfall:Too many goals

Since goal setting is intended to focus your attention on the most important needs, limit the number of your annual goals to 3 – 5

Pitfall:Unclear accountability

Be sure to clarify who is accountable for achieving the goal This can be more complex for team members, or when work is

highly interrelated; indicate if accountability is shared

Pitfall:Unclear expected results or measures

Be clear about the qualities or measures of the expected results Without this clarity, you and your supervisor may think you agree

on goals only to later realize that you disagree on whether or not the goal has been achieved

Pitfall:A focus on activities rather than results

A goal should establish and describe intended results Activities and tasks are a means to an end – valuable only if they

get the desired results. Activities should never be the main focus in goal setting

Pitfall:Overly wordy goals

When goal statements are wordy, they obscure what the performance expectations really are

Wordy goals are confusing and may lead to disagreements as to expectations and whether the goal has been achieved

Tips


Setting

27

Competencies describe how work should be accomplished

Competencies are defined as the knowledge, skills, and abilities that should be demonstrated when a job is performed

A competency model was developed for all administrative staff at Trinity, consisting of 7 College-wide competencies Sample behavior indicators

While demonstration of each of these competencies will vary depending on the job, these are generally expected of all members of Trinity’s community


Setting

28

Let’s walk through an example using “Service Orientation”

Definition: The ability to provide timely and high quality support to others both within and outside of the department

Sample Behavior Indicators:

Demonstrates commitment to providing timely and high quality support to those both internal and external to one’s own department

Keeps the end-user/recipient in mind as work is conducted

Demonstrates a pleasant demeanor when working with others

Considers others’ feelings and the ramifications of one’s own actions and decisions


Setting

29

Conversation #2 will guide discussions related to developing the Annual Performance Plan

Clarify job responsibilities based on the job description and associated measures of success (What)

Discuss the core competencies and identify the most appropriate behavior indicators that demonstrate competence (How)

Define annual goals related to department and College goals and associated measures of success (What)

11

22

33

WHAT IS DISCUSSED IN AN EFFECTIVE CONVERSATION #2?

Review for understanding44


SettingSetting Expectations

30

Outcome: Develop working knowledge and skills required to set performance expectations

Conversation #2 Exercise: Practice setting expectations with a focus on goal setting

Sample Job: Office Assistant

The Situation

Read the scenario

Work together to determine the annual goals

Use the template to capture the goals

The Approach

Break into groups of four or five

Set Up

Setting Expectations


Setting

30 minutes

TIME

31

Let’s discuss what you’ve learned and some potential “watchouts” related to Phase 1


Setting

What was the most important thing you learned from the goal setting exercise?

How can you and your employee prepare for the goal setting conversation?

How should disagreements about job responsibilities or goals be handled?

How should you document the Annual Performance Plan if your employee works for others as well?

What tips for Phase 1 should you take away based on our discussion?

32

The purpose of Phase 2 is to provide feedback to guide performance and development


Setting



33

Coaching for Improved Performance33


Supervisors and employees meet and conduct Conversation #3 (Coaching for Improved Performance) during day-to-day activities

Supervisors and employees meet and conduct Conversation #4 (Evaluating Performance) and a Mid-Year Evaluation to discuss the performance to-date and (re)-direct efforts for the remainder of the year Self Assessment Supervisor Evaluation


Evaluating Performance

44Conversation

Conversation

34

Providing regular, on-going feedback has been shown to improve performance II. Ongoing

Review and Feedback

A study of higher education institutions and corporate organizations showed that managers in top performing organizations coach and give regular feedback more often than managers who work in lower performing organizations

This suggests that coaching and feedback really does matter – to both the employee and to the overall organization

So providing regular and helpful feedback to employees will help them perform better AND it will help Trinity better meet its goals!So providing regular and helpful feedback to employees will help them perform better AND it will help Trinity better meet its goals!

35

Conversation #3 Exercise: Practice Sharing Observations

Outcome: Develop working knowledge and skills required to share relevant observations that support an evaluation

Take a look at Karen’s scarf

The Approach


Set Up

Coaching

5 minutes

TIMEThe Situation

The SCARF exercise

36

Candid and supportive supervisor/employee dialogue is the key to effective performance management

Forms and ratings provide the framework, but the real action happens when a supervisor and employee talk about expectations, performance and consequences:

Employees often report getting only infrequent performance feedback

Many supervisors and employees do not have the skills to do this effectively

Premature assessment gets in the way of information

Expectations Observations

AssessmentsConsequences

FEEDBACK FRAMEWORK©


37

Expectations set the stage for delivering clear feedback

Mutual and clear understanding of expectations is the foundation for effective feedback

May be explicit or implicit

Changes over time are normal, and need to be communicated

ExpectationsDesired behaviors

and resultsObservations




38

Observations provide meaningful information that the supervisors and employees can use

Are exactly what was seen, heard, etc.

Are in the past and are completed actions

Are NOT assessments

Expectations

Observations Neutral facts or occurrences (behaviors and

results)




39

Assessments are the evaluations of the employees’ performance

Are interpretations based on observations and facts

Must be “owned” by the giver

Negative assessments often cause resistance

Often imply a sense of urgency for action


Assessments Personal

interpretations or evaluations of a set of

observations

Consequences



40

Consequences clarify what canbe expected based on the assessment

Should be consistent with annual performance assessment

Are “desired” and “undesired” depending upon assessment

Explicitly predefined or not

Affect your pay and working relations with others


Assessments

ConsequencesKnown or possible effects of continued

behavior



41

Let’s review some tips for avoiding common pitfalls when giving feedback

1. Don’t wait for the right time.

2. Soften how you deliver hard messages without losing accuracy and honesty.

3. Don’t deliver important feedback mixed with your emotions.

4. Don’t assume the message was received because it was given.

5. Don’t develop a strong (i.e., rigid) assessment before gathering the facts and the viewpoint of the receiver.

6. Respect the staff member’s privacy.

7. Be specific.

8. Demonstrate your support.


Tips

42

Let’s review some tips for avoiding common pitfalls when giving feedback continued

Helpful Tips Dealing with Emotional Responses to Feedback

In certain feedback scenarios, some people experience get upset as a result of the information. Often, we resist giving important information out of fear of “sharing” that experience. Some tips for dealing with this type of situation include:

1. Let people experience their emotions

2. Offer a postponement of the conversation

3. Dive into the facts and solicit the receiver’s perspective and other facts


43

The purpose of Phase 3 is to evaluate annual performance and develop a salary increase recommendation


Setting



44


Employee conducts an End-of-Year Self Assessment

Supervisor conducts End-of-Year Evaluation of the employee

Supervisor and employee meet and conduct Conversation #4 (Evaluating Performance) to review the employee’s Self Assessment and Supervisor Evaluation

Supervisors in large departments jointly conduct Department Review sessions to ensure consistency of standards and delivery of messages

III. Endof YearFormal Evaluation

Evaluating Performance

44 Conversation

45

The Annual Performance Evaluation is conducted more rigorously within top performing organizations

The study mentioned earlier showed that managers in top performing organizations conduct annual performance evaluations better than managers who work in lower performing organizations Managers are more likely to conduct evaluations thoroughly and on time

Managers are more likely to differentiate pay decisions based on performance outcomes

This suggests that annual performance evaluations really do matter – to both the employee and to the overall organization


It critical that you take the time to conduct a thorough evaluation and differentiate pay based on performance

outcomes!

It critical that you take the time to conduct a thorough evaluation and differentiate pay based on performance

outcomes!

46

Consider the following process in conducting your Self Assessment

1. Think about your performance for the whole year

2. Evaluate your performance against the measures of success in the three dimensions—Primary Job Responsibilities, Annual Goals, and Competencies that are defined as part of the Annual Performance Plan

3. Rate your performance in the Self Assessment portion of the End-of-Year Evaluation using the 4-point scale and criteria in the Performance Ratings Definitions

4. Compare your ratings with the Mid-Year Evaluation, and adjust your ratings, if needed

5. Summarize your Self Assessment in the Employee Comments box

6. Provide an Overall Assessment of your performance over the year


47

Review the Self Assessment with your supervisor

1. After completing the Self Assessment portion of the End-of-Year Evaluation, schedule time with your supervisor to meet and discuss your progress for the year

2. Send the End-of-Year Self Assessment to your supervisor prior to your meeting

3. Your supervisor will have completed the Supervisor Evaluation of your performance during the year prior to your meeting

4. Together you will discuss your results, finalize the performance ratings, complete and both sign the End-of-Year Evaluation

5. You and your supervisor will begin planning for next year

6. Final increase recommendations will be made by the supervisor to the department head and through Human Resources to the division head for approval


48

You may want to consider holding Review meetings in your department

What is a Department Review meeting? A meeting during which supervisors in the same group/department share

their perspectives about employee performance to calibrate evaluations

What are the benefits of conducting a Department Review meeting? Helps establish consistency of reviews and feedback across the

group/department Helps to ensure credibility and avoid “tough rater/easy rater” concerns Enables supervisors to get peer assistance in the annual review

Which departments should consider conducting Department Review meetings? More than 8–10 employees, many of whom perform a similar type of role Supervisors have first-hand experience with employees in the

group/department that don’t report to them


A sample agenda for a Department Review meeting is included in your materials.

A sample agenda for a Department Review meeting is included in your materials.

49

Conversation #3 and #4 Exercise: Practice Evaluating Performance

Outcome: Develop working knowledge and skills required to evaluate performance using the Feedback Framework©

Read the scenario Develop and deliver an

assessment using the Feedback Framework©

The Approach


Set Up

Coaching

25 minutes

TIME

The Situation

Sample Job: Office Assistant




50

Let’s review what we learned from the exercise and review additional tips for exchanging feedback

Preparing for the Conversation Conducting the Conversation


Take the appropriate time to gather specific information– Schedule conversations with those from whom you

want to seek feedback (if the employee worked with them)

– Make sure feedback is focused on specific, fact-based information

Review the information gathered and profile key strengths and development needs

Develop and script key messages. Use the feedback framework as a template

Formally schedule a time to have the feedback discussion and provide adequate time for dialogue

Schedule the discussion in an environment that is conducive to meaningful dialogue and exchange

Remember the purpose of the meeting: Feedback is not about “good or bad”—it’s about helping people understand and improve their performance

Ensure the dialogue is two-way (both supervisor and employee engage in the conversation)

Listen first to understand, then to respond

Focus discussions on work behaviors and results—not on the individual as a person

Solicit feedback on the quality of the discussion and what you both should do to further improve feedback discussions going forward

Tips for

Supervisors

Giving Feedback

51

Let’s review what we learned from the exercise and review additional tips for exchanging feedback continued

Receiving Feedback

Remember that feedback is hard, but it is a good thing

Remember that feedback received is always about past behavior—not current or future behavior. Also, receiving feedback offers the possibility of learning something valuable that can serve as a basis for future improvements

Following these steps can improve your ability to receive feedback: Listen carefully Try not to let defenses build or overreact Paraphrase what you think you heard Ask questions for clarification and request examples of any areas that are unclear or

in which disagreement exists Evaluate the accuracy and potential value of what you have heard Do not resist feedback Take time to think about how to incorporate feedback with

your performance


Tips for

Employees

52

Begin planning for the next year

The last step in the Reviewing Results phase begins the Setting Expectations phase for the coming year

Shortly after you’ve discussed performance for the current performance year, begin to plan and discuss your Annual Performance Plan for the next performance year, considering: Changes in current job responsibilities or projects Changes in staffing (new person in position) and

working environment Changes in institutional goals and departmental

needs

Use a new Annual Performance Form to start to document all relevant expectations regarding your performance for the next year


53

Consider the following questions before conducting the End-of-Year Evaluations

What if my employee disagrees with the ratings?

What if my employee performs work for more than one supervisor or department and gets different ratings for the similar job content?

What salary decisions should be made based on the End-of-Year Evaluation?






Closing

55

Trinity’s Compensation Philosophy has been defined as follows…

Our Compensation Philosophy is to provide a comprehensive compensation program which will support and advance the institutional mission through its ability to attract and retain a diverse workforce of high-caliber, community-oriented administrative staff who are dedicated to supporting the College’s mission and educational goals. The objectives we strive to achieve in support of this philosophy are: To provide fair and equitable pay, within the financial resources of the College To recognize the multiple markets within which Trinity must compete for talented

staff members To recognize individual contributions to the institution and reward accordingly To be transparent, clear, administratively streamlined, and understandable by the

community





Closing

57

The Pay-for-Performance Handbook includes the tools and resources you will need


Performance Management Model and Calendar

Performance Management Tools and Tips for Supervisors

5 Conversations Approach

5 Conversations Worksheets

58

There are a few immediate next steps that you will need to take

1. Complete End-of-Year Evaluation documentation on your employees based on any expectations that were set at the beginning of this performance year (by May 30). Use the new form and associated ratings with the understanding that not all of it will be complete for the first year

2. Make salary recommendations to your Department Head, as applicable, based on performance evaluation results

3. Determine whether your department will conduct a Department Review meeting to calibrate ratings

4. Department Head will submit evaluations and salary recommendations to HR who will summarize and provide results to the Division Head in order to ascertain that the 4% pool has been adhered to and final increase recommendations match documentation

5. Once final increase recommendations have been approved, conduct Performance Evaluation meetings with your employees and communicate annual increase

59

What did you learn today?

Which activities and/or conversations will be the most difficult for you to have with your employee? Why?

Is there anything else we can help you with regarding the Pay-for-Performance initiative?

PAY-FOR-PERFORMANCE PROGRAM

Business

Transcript of PAY-FOR-PERFORMANCE PROGRAM