Management Performance & Reward Program

State System of Higher Education

Todays Agenda
Introduction
Overview of the Program Performance Management Process

BREAK
Performance ManagementTechnically Speaking Evaluating Performance Wrap-Up and Adjourn

Presentation Development Team

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
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Introduction

Why youre 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:

Ask questions Offer suggestions and ideas Take breaks during designated time only

Questions

Overview of Management Performance and Reward Program

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

Convergence Report Where are we now?

Integrated Action Plan Where do we want to be?

Systemic Change Initiative Implementation

Performance and Outcomes Plans How we will get there?

Management Performance Assessment Merit Salary

Performance Results

Presidential Leadership Assessment Merit Salary and Contract Extensions

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Background: the projects purpose

Alignment

Work Culture System Strategy

How we think and act to support the strategy

Rewards & Recognition/ Performance Management

Systems Desired Results

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Why 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

(contd)

Provide competitive compensation that accurately reflects the value of positions

Reward superior performance

Support Systems performance and reward philosophy

Provide a consistent process for measuring and rewarding performance

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The development process

Current Practice Strategy Work Culture

Questions
Sources - Organizational Data - Sr. Leadership - Employees - Theory/ Best Practice Methods - Interviews - Focus Groups - Survey Tools - Campus-based Work Group Teams

Data Collection

Data Synthesis Board of Governors Review Performance & Reward Philosophy

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The Systems performance and reward philosophy

(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 Systems 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 Systems performance and reward philosophy (contd)

(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 Systems Mission, Vision, and Goals
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The Systems performance and reward philosophy (contd)

(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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The Systems performance and reward philosophy (contd)

(as adopted by the Board of Governors)

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

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A 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...

Where we are

Where we need to be

Launching Program Training

Management Performance Excellence

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Crossing the bridge...

Performance and Reward Program

Where we are Where we need to be

Launching Program Training

Management Performance Excellence

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Three program components

Performance Management
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Developing the compensation structure

A Continual Balancing Act
External Factors Internal Equity External Competitiveness

Fiscal Realities Performance & Reward Philosophy System Strategy

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Classifying jobsthree factors

Relative Value

Know How

Problem Solving

Impact/ Accountability

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 Classification 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 contribution

Executive Leadership

Strategic Leadership
Tactical Leadership/Senior Professional Operational Leadership/Professional Management Support Staff
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The new Grade Structure

Level of contribution Executive Leadership Strategic Leadership Tactical Leadership/ Senior Professional Operational Leadership/ Professional Management Support Staff Title examples Chancellor, Presidents, Vice Chancellors Provosts, Vice Presidents, Academic Deans Controller, Director of Admissions, Development Officer Manager of Campus Services, Systems Analyst, Printing Manager Executive Secretary/ Staff Assistant Grade 270 260 a, b, c 250 a, b 240, 230, 220 210, 200, 190

180, 170, 160 150, 140

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 Pay 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 tools

Merit increase poolperformance-based awards driven by achievement of goals and core competencies Special performance awardsperformancebased awards for superior individual or team contribution One-time parity adjustmentrecognize performance and achieve parity between positions
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 Performance management results

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 does for you...

Supervisor

Management Employee

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What performance management 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 reward philosophy

The Performance and Reward Program is critical to supporting the Systems 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

Individual Results

Individual Competencies

University Performance Success

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The Performance Management Process

Where performance management fits

How can I help?

How are we doing? What is our job? Does anybody care? How am I doing? What is my job?
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In this section

Performance management steps Roles Tools to use

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The performance management steps

I. PLANNING Link to System/University Strategic Plans/Goals Establish Performance Expectations & Development Plan Gain Commitment

IV. REWARDING Link Performance To Compensation Recognize Superior Performance

Pursuing Performance Excellence

II. COACHING Track Coach Reinforce

III. REVIEWING Compare Actual To Expected

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The 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
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The management employee and supervisor take joint accountability for the performance management process.

The Performance Management Process

I. Planning

IV. Rewarding

II. Coaching

III. Reviewing
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The performance management steps

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

Planning

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The performance management steps

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
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II. Coaching

Coaching

What to coach
What Current Performance How Goals Results Outcomes Behaviors Competencies

Development

Building future capability Improving personal skills

Career

Preparing for potential future assignments Using capabilities to chart a future course Understanding career realities
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The performance management steps

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

Reviewing

III. Reviewing

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The performance management steps

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
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IV. Rewarding Rewarding

Performance Management Technically Speaking

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 equation

What Work Is Done

How the Work is Done

Performance Outcomes

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Using the performance equation

WHAT HOW

RESULTS

COMPETENCIES

Core Performance Results

Job-Specific Performance Results

Core Competencies

Job-Specific Competencies
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WHAT

RESULTS

(5-8 objectives)

Core Performance Results

Job-Specific Performance Results

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Core performance areas

A goal in each area

WHAT

Driven by System/University goals

Health of the University Customers and Stakeholders Continuous Improvement

Financial Health

Quality and Value

Operational Efficiency and Improvement

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Core performance areas

WHAT

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
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Cascading goals and objectives

Results reflect the mission, vision, and goals of the University/ System.
Performance Results Measures

State System
University
Department Results

Health of the University University Objective Department Objective

Customers/ Stakeholders

CI

Other

Work Unit Results

Individual Results

Work Unit Objective Individual Objective 52

Job specific performance areas

WHAT

A goal in up to five additional areas Driven by Division/Department goals

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Setting goals
Goals should be as SMART as possible:

WHAT

S pecific

M easurable
A ttainable

R elevant
T ime-Based
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Tools to use
Management Performance Appraisal and Development Form

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Sample form

Purchasing Director

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SMART Goals exercise!

WHAT

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

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Goal #1

WHAT

Health of the University

P Changes process to realize increase in purchase discounts by year end

P
Maximize vendor discounts

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Goal #2
Customers and Stakeholders

WHAT

P Rewrite purchasing process, guidelines, and requirements

P
Improve customer understanding of purchasing process and procedures

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Goal #3

WHAT

Continuous Improvement

P Identify and explore procurement practices by midyear

P
Reduce procurement cycle time

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Goal #4

WHAT

P Keep high-volume users informed of order status

Collaborate with high volume users and improve communication

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Goal #5

WHAT

Improve procurement capabilities of subordinate staff

P Develop more knowledgeable staff capable of handling higher-level purchasing functions as needed and/or in back-up roles

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HOW

COMPETENCIES (5-8 behaviors)

HOW

Core Competencies

Job-Specific Competencies

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Questions

HOW

What distinguishes an average waiter/waitress from an outstanding waiter/waitress? Whats distinguishes an average high school teacher from an outstanding high school teacher?
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Measuring behavior

HOW

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.

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Top performers do things differently

Initiative
5 4 3
Outstanding Performer

HOW

Behavioral 2 Level Complexity

1 0 -1

Average Performer

Never Frequency

Always 66

Core competencies
Target Culture

HOW

All Participants

Treating employees fairly and consistently Using limited resources effectively

Continuous improvement
Customer service orientation Valuing diversity Teamwork and collaboration Results orientation
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Encouraging teamwork
Maximizing customer satisfaction Delivering reliably on commitments to customers Being flexible and adaptive in thinking and approach Continuously improving operations

Rewarding superior performance Providing employees with resources to satisfy customers Attracting top talent Demonstrating understanding of the customers point of view Capitalizing on creativity and innovation

Continuous improvement

HOW

Taking a new or unique approach to how work is done and striving to continuously improve processes and quality.
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
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Customer service orientation

HOW

Focusing ones efforts on discovering and meeting the customers needs. (Customers can include associates, peers, colleagues, students, community members, faculty, etc.)
Examples:

Matching customers needs to available resources

Correcting problems promptly and undefensively
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Valuing diversity

HOW

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.
Examples:

Appreciating and looking for ways to gain new knowledge of other groups Respecting the practices of other individuals or groups

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Teamwork and collaboration

HOW

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.)
Examples:

Supporting team decisions and doing your share of the work Valuing the input and expertise of others

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Results orientation

HOW

A concern for holding yourself and others accountable for achieving results or for surpassing a standard of excellence.
Examples:

Keeping track of and measuring outcomes

Setting out to achieve increased standards
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Job Specific Competencies

HOW HOW

Additional behaviors that drive effective performance:

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
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Tools to use
The Competency Dictionary

HOW

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Sample form

Purchasing Director

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Competencies exercise!

HOW HOW

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
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Results Orientation

HOW

Expected Behavioral Level:

Address deficiencies in work methods through specific changes

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Customer Service Orientation

Expected Behavioral Level:

HOW

Determine and pinpoint causes to current pockets of dissatisfaction

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Valuing Diversity

HOW

Expected Behavioral Level:

Actively promote the value of diversity in vendor contracts/relationships

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Continuous Improvement
Expected Behavioral Level:

HOW HOW

Develop and promote new procurement process management techniques

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Teamwork and Collaboration

Expected Behavioral Level:

HOW

Make concerted effort to capture subordinate and customer ideas and needs

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Development 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
Raising the Bar 3 Significantly Exceeds Expectations (20-30%) 2 At or Above Expectations (60-75%) 1 Below Expectations (5-10%)

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The 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 rating

In the first year of the Program, RESULTS should be the basis for the overall rating, though it may be adjustedupward or downwardby how well competencies are demonstrated.

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Evaluating performance

Why evaluate 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 performance success

Direct observation Review of documentation Third-party reports Self-report

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Guidelines for giving feedback

Recipient must understand it Be specific Provide a recent example Be descriptive Feedback must be both honest and helpful Ensure balance: refer to successful as well as less successful behavior Ensure recipient is not preoccupied Provide for discussion of the feedback Recipient must be able to do something about it Relate feedback to behaviors that can be changed Identify alternative positive behaviors 89

Recipient must be able to accept it

Remember the cycle (its ongoing)

I. Planning
IV. Rewarding II. Coaching

III. Reviewing
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Heres the timeline

2000-2001
2000
Oct/mid-Nov: Training Oct/Nov: Set Goals Jan/Feb: Mid-year review

2001
June: Performance review

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Next 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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Questions

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Pursuing Performance Excellence

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