PIHRA Woodland Hills presents . . .

Redesigning Your Performance Review

Template to Drive Individual and Organizational Change

Thursday, February 6, 2014

Presenter: Paul Falcone

www.PaulFalconeHR.com

Author of . . .

2600 Phrases for Effective Performance Reviews

2600 Phrases for Setting Effective Performance Goals

The Performance Appraisal Tool Kit: Redesigning Your Performance Review Template to Drive Individual and Organizational Change (new!)

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Paul’s Other Books

101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Corrective Action and Termination

101 Tough Conversations to Have with Employees: A Manager’s Guide to Addressing Performance, Conduct, and Discipline Challenges

96 Great Interview Questions to Ask Before You Hire

Outline of Today’s Presentation

Revised Performance Appraisal Grading Scale

Rater Definition Consistency Tool

Calibration Sessions

Reinventing the Appraisal Template’s Form and Content to Drive Future Results

The Value of Quantitative Metrics 4

Bell Curves vs. “Rising Strings”

A healthy bell curve might look like this:

≤ 5% Distinguished performance

30% Superior performance

50% Fully successful performance

10% Partially successful performance

≤ 5% Unsuccessful performance

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Healthy Bell Curve

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“Rising String” Syndrome

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Traditional Performance Appraisal Grading Scale

5—Superior

4—Exceeds Expectations

3—Meets Expectations

2—Partially Meets Expectations

1—Fails to Meet Expectations 8

A. Revised Grading Scale

5 - Distinguished Performance and Role Model: Clearly and consistently demonstrates extraordinary and exceptional accomplishment in all major areas of responsibility. Others rarely equal performance of this caliber in similar roles.

4 - Superior/Highly Effective Performance: Performance is continually and consistently superior and regularly goes beyond what is expected. Performance consistently exceeds expectations.

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Revised Grading Scale (cont.)

3 - Fully Successful/Effective Performance: Performance consistently meets the critical requirements of the position, and the individual continually performs at the level expected.

2 - Partially Successful Performance/Needs Improvement: Performance does not consistently meet or occasionally falls below what is required of the position; improvement in specific areas is required.

1 - Unsuccessful/Unacceptable Performance: Performance fails to meet minimum expectations for this role, and immediate and sustained improvement is mandatory.

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B. Rater Definition Consistency Tool

5 - Distinguished Performance (< 5%)

Role model status. Potential successor to immediate supervisor/highly promotable now/possibility of skipping two steps in career progression. Performed above and beyond under exceptional circumstances during the review period. Generally recognized #1 (Top 5%) ranking among peer group.

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Rater Consistency Tool (cont.)

4 - Superior Performance (30%)

Overall excellent performer and easy to work with—smart, dedicated, ambitious, and cooperative, but may not yet be ready to promote because there’s still a lot to learn in the current role.

May not have been exposed to exceptional circumstances or opportunities that would warrant a higher designation. However, definitely an exceptional contributor who exceeds people’s expectations in many ways and is a long-term “keeper”— just needs more time in current role to grow and develop and gain additional exposure.

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Rater Consistency Tool (cont.)

(3a) Consistently performs well and is reliable, courteous, and dedicated. Always tries hard and looks for ways of acquiring new skills but doesn’t necessarily perform with distinction. Works to live rather than lives to work. May not stand out as a rarity among peers but consistently contributes to dept’s efforts and is a valuable member of team.

(3b) Meets expectations overall but may be challenged in particular performance areas. May perform well because of tenure in role and familiarity with workload but does not appear ambitious about learning new things or expanding beyond his comfort zone. Conduct may at times be problematic / challenge of working well on a team.

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Rater Consistency Tool (cont.)

2 - Partially Successful Performance (10%)

Fails to meet minimum performance or conduct expectations in specific areas of responsibility. Is not able to demonstrate consistent improvement. May have received significant corrective action during review period. Lacks requisite technical skills or knowledge relating to particular aspects of role. May perform well but conduct is so problematic that the entire year’s performance review score may be invalidated. “PIP” required.

A partial merit increase or bonus may be awarded.14

Rater Consistency Tool (cont.)

1 - Unsuccessful Performance (< 5%)

Fails to meet minimum performance or conduct expectations for the role in general. The individual’s position is in immediate jeopardy of being lost. The performance review may be accompanied by corrective action documentation stating that failure to demonstrate immediate and sustained improvement will result in dismissal.

No merit increase or bonus should be awarded.

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C. Calibration Sessions

Call Center Rep Name

Proposed Overall Review Score

1.Smith 4—Superior performance

2. Jones 3—Fully successful performance

3. Kennedy 3—Fully successful performance

4. Taylor 3—Fully successful performance

5. Gutierrez 3—Fully successful performance

6. Napolitano 2—Partially successful performance

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Reinventing the Appraisal Template’s Form and Content

Traditional performance descriptor:

“Produces high-quality work on a timely basis. Meets deadlines and maintains accurate records.”

Enhanced performance descriptor:

“Sustains peak performance. Exhibits in-depth product knowledge and serves as a subject matter expert for others.”

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Communication (Traditional)

Communicates clearly and effectively at all levels. Produces easily understandable reports and presentations. Effectively deals with others, both internally and externally. Respects confidentiality. Provides timely feedback and follow-up and manages others’ expectations appropriately.

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Communication (Enhanced)

Cultivates a culture of openness in information sharing. Regularly solicits constructive feedback, builds consensus, and asks well-thought-out and well-prepared questions. Encourages open communication, cooperation, and the sharing of knowledge. Remains open-minded and willing to entertain others’ ideas. Builds trust through regular, open, and honest communication. Demonstrates candor and level-headedness in all business dealings. Listens actively and always responds in a respectful tone. Engages appropriately when in disagreement and pushes back respectfully and in a spirit of good-faith cooperation. Speaks persuasively and convincingly but is not afraid to say, “I don’t know” and then research an answer. Manages others’ expectations appropriately, and proactively communicates any potential problems or roadblocks. Effectively feeds information upward and rarely leaves others flying blind or unaware of important updates.

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Customer Satisfaction (Traditional)

Provides prompt, courteous, and professional customer communication. Provides timely and well-informed advice to customers. Demonstrates sufficient knowledge of company products and cross-selling skills to ensure a high level of customer satisfaction. Prioritizes workload based on customers’ needs. Regularly adheres to scripts and selling tips. Skillfully overcomes customer objections. Consistently gains necessary authorizations and approvals for one-off exceptions to policy.

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Customer Satisfaction (Enhanced)

Demonstrates total commitment to outstanding customer service. Provides knock-your-socks-off service that consistently exceeds client expectations. Consistently exhibits creativity and flexibility in resolving customer issues. Remains customer-oriented, flexible, and responsive to last-minute changes in plans. Regularly puts the human relationship above the transaction. Looks always to surprise customers with unanticipated benefits, including lower costs and shortened delivery timeframes. Effectively exceeds customer expectations by providing timely feedback and follow-up in an empathetic and caring way. Tactfully informs customers when their requests cannot be met and escalates matters for further review and approval as appropriate. Takes pride in building relationships with even the most challenging clients. Enjoys identifying “out-of-the-box” solutions for clients with special needs. Develops a loyal customer base as evidenced by a high rate of repeat business.

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Leadership (Traditional)

Leads effectively by providing appropriate feedback and direction to staff. Delegates and assigns work in a manner consistent with departmental workflow and company policy.

Listens openly and encourages feedback, while creating and maintaining an inclusive work environment.

Leadership (Enhanced)

Structures projects and assignments with clear goals and measurable outcomes so that team members can creatively individualize solutions. Empowers team members to embrace change opportunities. Inspires team members to take ownership of their own performance improvement and career development.

Constructively addresses minor impediments before the become major obstacles. Manages with a conscience and places integrity, ethics, and trust above all else.

Template Foundation

Performance review templates should be dynamic, not static!

If you’re not upgrading your template every few years, you’re missing the point of the exercise.

A typical organizational lifecycle includes the major stages of Startup, Growth, Maturity, and Decline. Your appraisal template should match your company’s current phase and then change over time to reflect your new expectations.

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Model Template 1: Startup

1. Creativity and Innovation

2. Strategic and Critical Thinking Skills

3. Culture and Values

4. Quality

5. Productivity and Volume

6. Problem-Solving Skills & Results Orientation

7. Job Knowledge

8. Teamwork25

Model Template 2: Growth

1. Customer Centricity

2. Professional and Technical Knowledge

3. Leadership and Communication

4. Adaptability and Flexibility

5. Efficiency and Effectiveness

6. Creativity/Innovation

7. Quality and Reliability

8. Professionalism and Teamwork 26

Model Template 3: Mature

1. Communication and Leadership

2. Policy Compliance

3. Process Improvement

4. Problem Solving/Innovation

5. Safety

6. Teamwork

7. Professional Development

8. Corporate Image27

Key Human Capital Metrics

Performance appraisal trends over time

Succession planning exercises, bench strength, and pipeline development

Voluntary vs. involuntary turnover, especially for high-performing talent (i.e., 4s and 5s)

ROI calculations that tie human capital performance to financial metrics

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Human Capital Metrics (cont.)

Premise

Performance reviews aren’t just built around individual workers—they’re even more critical at the enterprise level where that human capital muscle needs to be measured and managed.

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Year 1 (most recent)

Defining Challenges:

Integration of XYZ Company—systems, policies, and culture

Challenge of union organizing efforts in New York, Ohio, and Hawaii

Dashboard Development

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Year 2 (two years ago)

Defining Challenges:

Pending merger with and acquisition of XYZ Company after receiving FCC approval

Expansion into new green field operation in Canada—our first venture outside the U.S.

Outsourcing of back office operations to BPO (business process outsourcing) partner

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Dashboard Development (cont.)

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Year 3 (three years ago)

Defining Challenges:

Consideration (pre-deal) and due diligence stage of potential XYZ Merger

Budget cuts and layoff of 2 percent of workforce in light of economic downturn

Revamp of executive compensation/total deferred comp in light of cash flow challenges and tax changes

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Dashboard Development (cont.)

3636

Most Recent Performance Scores

(94), 1%(462), 6%

(3647), 47%(2844), 37%

(339), 4%(400), 5%

2009 West Region Performance Scores – Grand Total

Does Not Meet Expectations

Partially Meets Expectations

Successfully Meets

Exceeds Expectations

Exceptional

Too New To Rate

TOTAL Employees reviewed = 7,786

(60), 3%(185), 9%

(885), 45%(525), 26%

(123), 6%

(215), 11%

2009 Call Center Performance Scores

Does Not Meet Expectations

Partially Meets Expectations

Successfully Meets

Exceeds Expectations

Exceptional

Too New To Rate

TOTAL Employees reviewed = 1,993

(19), 1% (116), 4%

(1125), 42%(1183), 44%

(152), 6% (68), 3%

2009 Biz Ops Performance Scores

Does Not Meet Expectations

Partially Meets Expectations

Successfully Meets

Exceeds Expectations

Exceptional

Too New To Rate

TOTAL Employees reviewed = 2,663 (15), 1% (161), 5%

(1637), 52%

(1136), 36%

(64), 2% (117), 4%

2009 Tech Ops Performance Scores

Does Not Meet Expectations

Partially Meets Expectations

Successfully Meets

Exceeds Expectations

Exceptional

Too New To Rate

TOTAL Employees reviewed = 3,130

3737

April 2009 May 2009 June 2009 July 2009 August 2009

September 2009

October 2009

November 2009

December 2009

January 2010

February 2010

March 2010

April 2010 May 2010 June 20100

25

50

75

100

125

150

175

200

225

250

275

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

118

165

142153

220

134120

102117

133 136150 156

129

179

6353

76

51 58

8671

25 24

53

27 3341

5968

18 16

5

28

16 18

713

9 8 6 6

16 15

30

1 1 1 1 1 2 0 0 1 1 0 3 4 2 0

6.3%

7.4%7.1%

7.3%

9.3%

7.6%

6.2%

4.4%

4.8%

6.1%

5.3% 6.1%

6.8%6.5%

8.7%

Q2 2009 to Q2 2010 COMBINED CALL CENTERS CORRECTIVE ACTIONS

Attendance_Infraction Performance_Infraction Policy_Violation Other Q2 to Q2 %

CALL CENTER Q2 to Q2 CORRECTIVE ACTION TOTAL = 3171Corrective Actions - last 12 months = 2512

CO

UN

T

OVERALL Q2 to Q2% - Percentage of Infractions:Attendance Infraction = 67.9% (2154)Performance Infraction = 24.9% (788)Policy Violation = 6.7% (211)

TOTAL 2010 West Region Headcount ALL Call Centers Combined (Excluding Hawaii, San Diego, Desert Cities) = 1770Percentage of Population (last 12 months) = 141.9%

3838

April 2009 May 2009 June 2009 July 2009 August 2009

Sep-tember

2009

October 2009

November 2009

December 2009

January 2010

February 2010

March 2010

April 2010 May 2010 June 2010

0

5

10

15

20

25

30

0%

2%

4%

6%

8%

10%

12%

14%

4 5

15

24

17

14

9

12

5

11 12

57 7 89

2 1 2 1 24 5 6

2 2

5

1

7

43 2

68

3 2 3 3

22

6

35 6

2

5

0 0 0 01

0 0 01

01

3

0

3

0

5.4%

3.0%

7.4%

11.5%

7.4%

6.1%5.4%

6.8%

11.5%

6.4%6.1%

6.1%

4.7%

6.4%

5.7%

Q2 2009 to Q2 2010 Call Center COMBINED TERMS

Attendance_Infraction Performance_Infraction Policy_Violation Other Q2 to Q2 %

CALL CENTER Q2 2009 to Q2 2010 COMBINED TERMS TOTAL = 296Corrective Actions, Last 12 Months = 249

CO

UN

T

OVERALL Q2 to Q2% (Termination Activities)Attendance Infraction = 52.4% (155)Performance Infraction = 17.9% (53)Policy Violation = 26.7% (79)

TOTAL CC HEADCOUNT = 1770 % of each infraction against total population): Percentage of involuntary turnover (last 12 months) = 14.1%Attendance Infraction = (131) 7.4%Performance Infraction = (41) 2.3%Policy Violation = (68) 3.8%

3939

Biz Ops Voluntary = 48 (18.2%)Involuntary = 12 (4.5%)Biz Ops total population 06.30.10 = 2109 (33%)

Biz Ops % of 60 Terms:Voluntary = 48 (80%)

Involuntary = 12 (20%)Severance = 0 (0%)

Call Center Voluntary = 115

(43.6%)Involuntary = 42

(15.9%)Call Center total popu-lation 06.30.10 = 1770

(27.7%)

Call Center % of 154 Terms:

Voluntary = 115 (73.2%)

Involuntary = 42 (26.8%)

Severance = 0 (0%)

Tech OpsVoluntary = 27 (10.2%)Involuntary = 20 (7.6%)Tech Ops total popula-tion 06.30.10 = 2516

(39.3%)

Tech Ops % of 47 Terms:

Voluntary = 27 (57.4%)Involuntary = 20

(42.6%)Severance = 0 (0%)

0

20

40

60

80

100

120

140

4800.0%

80.0%

11500.0%

73.2%

2700.0%

57.4%

1200.0%

20.0%4200.0%

26.8%

2000.0%

42.6%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Q2 2010 Terminations - ALL Categories (L.A. Area Only)

Voluntary Involuntary Severence

Coun

t

Annualized TOTALS (and % against overall):Q2 annualized turnover (1056) = 16.5% (out of a population of 6395)Annualized Voluntary TO = 760 (72%)Annualized Involuntary TO = 296 (28%)Annualized Severance = 0 (0%)

Total combined Q2 2010 terminations = 264

Total quarterly turnover - Biz Ops = 22.7% (60) Total quarterly turnover - Call Center = 59.5% (157) Total quarterly turnover - Biz Ops = 17.8% (47)

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1 - 2 years 3 - 5 years 6 - 8 years 9 - 11 years 12 - 14 years 15 - 17 years 18 - up years

Biz Ops 3 21 6 11 11 4 12

Call Center 43 83 25 29 18 7 5

Tech Ops 4 16 8 8 6 3 14

5

15

25

35

45

55

65

75

85

3

21

611 11

4

12

43

83

2529

18

7 54

16

8 8 63

14

LA Specific - Years of ServiceCo

unt

40

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Off-Boarding Supervisor Ratings

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41

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54 4 7

4 5 6

Colorado Springs Call Center - Off Boarding Supervisor Rating (Sometimes/Never)**In order of the most negatives to the least amount of negatives

August 2, 2007 to January 14, 2010

Explained work responsibilities clearly Adequate feedback on my performance Proper training or coaching to do job Readily Recognized Good PerformanceEncouraged Staff to Contribute to the Dept Resolved Problems and ComplaintsCommunicated Well with Employees Developed CooperationDemonstrated Fair Treatment TOTAL EE's SURVEYED

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June 2010 July 2010

COUNT

Performance Appraisal Wisdom

“Performance review,” in its highest form, is an enterprise-wide assessment of the entire organization’s human capital muscle, the asset that drives all operations.

Yet many senior executives view performance appraisals as one-off assessments of individual employees’ performance, missing awareness of the critical link between individual contribution and enterprise results.

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Wisdom (cont.)

Senior leaders should look to the annual performance review “culmination” as a living, breathing snapshot of their organization’s human capital performance at a particular point in time.

A performance review can be used as a human capital balance sheet. At this point in time, and in light of the challenges our organization is facing, what percentage of our employees are meeting, exceeding, or falling below expectations? 

Wisdom (cont.)

Performance review metrics are a measure of the company’s assessment of its workforce muscle or “human capital asset”.

A strong performance management system will not only reflect your organization’s past performance—it will drive future change within your company by setting your strategic direction.

Your template holds the key to articulating and driving your organizational goals and values!

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Wisdom (cont.)

Companies will best be served by a living, breathing, changing human capital performance management and measurement system—not a static form or immutable program that denies the realities of change over time.

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Wisdom (cont.)

You’re the architect and designer for your company’s performance measurement system.

You create the descriptors that will drive heightened performance.

Ratcheting up expectations isn’t just a quantitative exercise: It’s also spelled out qualitatively in the language you use to define what’s acceptable vs. what what’s exceptional.

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Wisdom (cont.)

Performance management, it turns out—far from being a burden and onus on managers and staffers alike—may just be one of the “low-hanging fruits” that could catapult your career as an effective leader and marshal of human resources in their truest sense.

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Q&A

Presenter: Paul Falcone

(310) 691-3838

Paul@PaulFalconeHR.com

www.PaulFalconeHR.com

Coupon Code: PIHRA_WH

www.amacombooks.org/go/PerformanceAppraisal