Performance MGMT

Blueprints
Performance Management:
Maturity Level 3
Blueprints Maturity Level 3: Performance Management
OVERVIEW
WHAT IS A BLUEPRINT?
It is a workbook that provides clear guidance and tangible actions based on your current needs and goals for a specific HR process, such
as succession management or leadership development. Your Blueprint will advance your function’s maturity and effectiveness with best
practices and implementation support.
HOW DOES A BLUEPRINT HELP YOUR ORGANIZATION?
Provides Tailored Implementation Support

The resources in your Blueprint have been tailored to the level of maturity your company plans to reach in the coming year. The
resources included in your Blueprint are based on statements that you indicated best describe your organization’s desired approach to
a specific HR process.
Understand the Varying Maturity Levels Within and Between HR Processes

You will find that your HR function has varying levels of maturity across the various parts of a single process as well as between different
HR processes. It is important for your function to determine the optimal maturity level for various HR processes based on your priorities
and strategic goals.
Execute Goals
Blueprints can help you execute effectively at your current maturity level and advance toward the maturity level you want to attain. Your
Blueprint will provide you with the implementation support and change management guidance you need to become more effective
while your maturity progresses to the next level.
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© 2014 CEB. All rights reserved. CLC143864PRINT
HOW TO USE YOUR BLUEPRINT
USING THE RESOURCES IN YOUR BLUEPRINT
The following resources are included in your Blueprint, as well as guidance for using them. Be sure to read the cover pages for each
resource. These pages help you get up to speed and consume each resource quickly and easily.
Make the Case: Business Case

Use this business case and its corresponding talking points to explain the value of a specific HR process to business leaders and
other stakeholders whose support and buy-in you need.
Follow the Steps: Activities Checklist

Follow step-by-step guidance to prepare for, execute, and track the HR process you are working on.
How Others Did It: Best Practices for Your Level

Learn from your peers with a case study showing how another organization executed a similar process specific to your desired
level. Pages from selected best practices are included in your Blueprint. You can access the full study from which these practices
originated by clicking on the link in the cover page for the tactic.
Get It Done: Interactive Resources

Customize and use these interactive resources (e.g., templates, tools, guides, calculators) to implement and accomplish specific
activities recommended for your desired maturity level. Because many of these resources are interactive, your Blueprint must be
saved to and accessed from your computer to use the link.
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Maturity Level Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 4
Actions to Get You to the Next Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 5
Make the Case: Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 6
Part 1: Define Performance Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 19
Part 2: Support the Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 43
Part 3: Evaluate Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 75
Part 4: Connect to Talent Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 86
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MATURITY LEVEL OVERVIEW

PART 1 PART 2 PART 3 PART 4
Maturity Define Performance Support Evaluate Connect to
Level Expectations the Process Performance Talent Strategy
We allow managers to create We hold managers accountable We provide managers with We report the results of
Level
1
their own approach to setting for having performance general guidance for assessing performance assessment
expectations for employee conversations with employees their employees’ performance. back to the individual and the
performance. at least once per year. business.
We provide managers We require managers to We manage a formal, centrally We inform operational

Level
2
with guidance for setting regularly provide their defined system for performance decisions, such as pay and
performance expectations employees with feedback management. promotions, with performance
for their employees. on their job performance. data.
We set performance standards We support managers We enable consistent We connect our performance
Level
3
and expectations that link to in providing high-quality performance evaluation management process to other
organizational strategy and feedback and differentiating and monitoring. talent processes.
goals. and managing individual
performance.
We balance expectations We enable employees to seek We evaluate indicators of future We use data from our
Level
4
between driving individual performance feedback from and network performance, not performance management
and network performance. their managers and peers. just past individual performance. process to identify organization-
wide talent risks and
opportunities.
We flex performance We streamline performance We foster a culture of evaluation We measure collaboration at the
Level
5
expectations as business management to create a and recognition throughout the enterprise level to inform talent
priorities change. culture of ongoing, everyday enterprise, regardless of the decisions and determine where
performance feedback and source. collaboration best supports
dialogue. business needs.
Maturity: Measured on a scale ranging from 1 (low) to 5 (high), maturity measures how advanced an organization’s development is in a functional activity relative to our best
practice research. Maturity scores are refined with a (+) or (-) to indicate intermediate levels of maturity.
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ACTIONS TO GET YOU TO THE NEXT LEVEL
Notes
Maturity Actions to Get
Level You to the Next Level _________________________________________________________________________
_________________________________________________________________________
Level
1
_________________________________________________________________________
_________________________________________________________________________
Provide Managers with Clear _________________________________________________________________________

Guidance and Expectations
Level on Managing Performance _________________________________________________________________________
2 _________________________________________________________________________
Apply a Consistent Approach _________________________________________________________________________

to Performance Management
Level Across the Enterprise _________________________________________________________________________
3 _________________________________________________________________________
Recognize Both Individual

_________________________________________________________________________
Contributions and
_________________________________________________________________________
Network Performance
Level
4 _________________________________________________________________________
_________________________________________________________________________
Cultivate a Culture of
Ongoing Performance _________________________________________________________________________
Level Management That Drives
_________________________________________________________________________
5
Business Results
_________________________________________________________________________
_________________________________________________________________________
5
BUSINESS CASE
Why Build a Business Case? MAKE THE CASE
Show others the importance Take Advantage of Windows of Opportunity

of performance management Use current business conditions to your advantage when building the case for performance management.
as a priority for your company Potential windows of opportunity include:
by reviewing a short business ■■ A shift in the organization’s strategy
case before any conversation
on the topic. Use the business ■■ When high dissatisfaction exists with the current PM process
case to obtain feedback from
important stakeholders around
■■ When performance gains are needed
the company. ■■ When engagement gains are needed
Demonstrate the Risks

Prove that now is the right time for your organization to improve performance management efforts with
internal data that demonstrates the risks facing your organization. Examples of common data sources and
calculations can be found on pages 10–12.
Illustrate the Path

■■ Demonstrate where your company is on the journey to best practice.
■■ Highlight proposed changes that will improve your maturity with the example on page 15.
Convince Others with Externally Focused Talking Points

■■ Identify externally focused talking points from CEB that drive urgency for performance management at
your organization. Source other talking points from third party sources such as recent business journals
or news articles. CEB talking points are included on pages 17–18.
Note on Increasing in Maturity

Increasing maturity is not always
a purely additive process.
Higher maturity levels may
require doing different activities,
not more activities.
6
EXECUTIVE SUMMARY: UPDATING PERFORMANCE MANAGEMENT

FOR THE NEW WORK ENVIRONMENT
■■ The work environment today looks substantially different than it did just a few years ago, and those changes are putting new
demands on performance management systems.
–– A more geographically dispersed workforce means that more work is being conducted across distance and boundaries—which
can make it more difficult—and more important to be able to set clear expectations.
–– More work is being done horizontally rather than vertically—and in matrixed structures. That interdependence on others,
especially peers, has significant implications for performance management processes when the manager can’t be the sole
source of feedback. We need to be able to gather input from across the broader network.
–– The performance management system needs to be more agile with expectations and goals that are able to flex with the
changing requirements of our business.
–– Employees are demanding meaningful work and continuous opportunities for growth and learning—especially Millennials.
The implication for performance management is that we need to find ways to respond to these requirements to retain talent.
■■ According to CEB, 9 out of 10 heads of HR say that they can’t trust the information generated by their performance management
systems.
■■ Within our own company1:
–– We have heard that X% of our managers are dissatisfied with their performance management system today.
–– Nearly X in 10 of our employees feel like performance reviews are a waste of time.
1
Fill in your organization’s information in this section.
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EXECUTIVE SUMMARY: UPDATING PERFORMANCE MANAGEMENT

FOR THE NEW WORK ENVIRONMENT (CONTINUED)
■■ We need to refocus our current performance management, which is characterized by intermittent and overly prescribed steps
that result in peaks of intense activity, to one that is always integrated into the workflow of employees.
■■ The best companies today are focusing on four objectives to better drive engagement and performance via performance
management:
–– Inspire—Connect each individual to the organization’s mission and its success.
–– Adapt—Set shorter-term goals and expectations that flex with changing situations.
–– Align—Give and receive informal feedback to praise and course-correct in real time.
–– Grow—Leverage work experiences and others’ expertise to develop day-to-day.
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BUSINESS CASE GUIDE
Demonstrate
Illustrate Progress Talking Points
the Risks
Step One:
Identify the internal data
that shows the performance
management risks facing
your organization.
9
PERFORMANCE MANAGEMENT METRICS: EFFECTIVENESS
Set the Scene Sample Performance Management Metrics
Employee Rating of Value of Performance Feedback

■■ Establish common ground
and the current state of the This metric indicates the value employees perceive from performance feedback or performance review
process, but do not overstate conversations given by their manager.
the opportunity.
Metric
■■ Average employee rating of value of performance feedback or performance review conversations when
■■ Scope the issue, including
employees are asked “How strongly do you agree with the statement: The performance feedback I receive from
the risk and/or potential
my manager (or the performance review conversations I have with my manager) is valuable?”
upside.
This metric provides a view into employee sentiment of the value and quality of performance feedback delivered by
■■ Do not assume that all managers, whether informally or in formal performance review conversations. Organizations may track this metric
audience members share the over time or segment it by manager or employee populations. Organizations may also ask more specific questions
same perspective. indicating the value and quality of performance feedback related to:
■■ Relevance—“The performance feedback I receive from my manager (or the performance review conversations I
have with my manager) helped me understand how my work relates to my organization’s objectives.”
■■ Clarity—“The performance feedback I receive from my manager (or the performance review conversations I have
with my manager) clearly emphasizes my performance strengths/clearly identifies my areas for improvement.”
■■ Actionability—“The performance feedback I receive from my manager (or the performance review conversations I
have with my manager) helps me understand specific actions I need to take to improve my performance.”
Percentages
To present a ratio or rate as a
Manager Satisfaction with the Value of Performance Management
percent move the decimal point
two places to the right. This metric indicates the value of performance management in driving employee performance according to managers.
Example: Metric
Ready Now ■■ Average manager rating of the value of performance management in driving employee performance when
Candidates Successor
managers are asked “How strongly do you agree with the statement: Performance management is effective at
= Pool
Succession Target improving the performance of my direct reports”?
Coverage
Positions
This metric demonstrates manager sentiment of the overall value and effectiveness of performance management.
10 Organizations may track this metric over time or segment it by manager population. Organizations may also ask more
= .1 = 10% specific questions of managers about the relevance of performance management, for example.
100
10
PERFORMANCE MANAGEMENT METRICS: PROCESS
Tell a Story Sample Performance Management Metrics
Employee Rating of ROI of Time Spent on Performance Management

■■ Outline the argument
before developing the final This metric estimates the ROI of time spent on performance management related activities.
deliverables.
Metric
■■ Total number of employees who strongly disagree, disagree, or neither agree nor disagree, when asked “How
■■ Construct the logical
strongly do you agree or disagree with the statement: The time I spend on performance management activities
argument around one overall
is valuable.”
message.
This metric will provide a view into employee sentiment of current performance management activities.
■■ Focus data usage on metrics Those who disagree with the statement do not see the time they spend on performance management
and analysis that support activities as a valuable use of time.
your story.
Manager and/or Employee Rating of Ease of Performance Management Process
■■ Segment talent data by This metric indicates the ease of the performance management process according to managers and/or employees.
relevant workforce segments.
Metric
■■ Do not include data points ■■ Average manager or employee rating of the ease of use of the performance management process when
that do not add to the story. managers and employees are asked “How strongly do you agree with the statement: The performance
management process was simple and straightforward?”
■■ Use research rather than
“folklore” or “common This metric indicates ease of the performance management process, which influences the quality of
sense.” managers’ and employees’ performance management activities and their likelihood to perform those
activities.
■■ Preview assumptions
with key members to test
connections.
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PERFORMANCE MANAGEMENT METRICS: COMPLIANCE
Draw Logical Conclusions Sample Performance Management Metrics
Performance Review Completion Rate by Managers and/or Employees

■■ Help leaders understand the
implications of talent insights This metric indicates the percentage of employees with performance reviews completed by their managers and/or
for business decisions. the percentage of employees completing self reviews.
Metric
■■ Suggest clear next steps that ■■ To determine the completion rate by managers, divide the total number of downward performance reviews
are supported by your story.
completed by managers by the total number of employees.
■■ Succinctly communicate key

■■ To determine self review completion rates by employees, divide the total number of completed self reviews
findings. by the total number of employees.
This metric demonstrates compliance—by both managers and employees—with the critical performance
■■ Begin the presentation management activity of completing downward and self reviews. The metric is typically only applied to
or conversation with the formal performance reviews, and is typically captured by the performance management system.
primary conclusion.
Formal Performance Review Conversation Rate
■■ Do not assume that your
This metric indicates the percentage of employees having formal performance review conversations with their
audience will agree with your
managers during the performance review cycle.
conclusions.
Metric
■■ Divide the total number of employee-manager performance review conversations that occurred by the total
number of employees. The rate may be determined by surveying employees to ask if they had a conversation
with their managers about their performance during the cycle.
This metric is typically tracked during each formal performance review cycle (e.g., annually, biannually), and
is an indicator of compliance with the critical activity of conducting performance conversations based on
the formal performance review.
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BUSINESS CASE GUIDE
Demonstrate
the Risks
Step Two:
Show others your
organization’s current
state of maturity and how
proposed changes would
improve outcomes.
13
FOLLOWING BEST PRACTICE
Maturity
Measured on a scale ranging from 1 (low) to 5 (high), maturity measures how advanced an organization’s development is in
a functional activity relative to CEB’s best practice research.
CEB uses maturity to show the journey organizations are on to increase effectiveness. This allows organizations to show progress
and benchmark current practices.
Organizations make decisions about the right level of maturity for their organization based on internal conversations, but usually
do not plan to be best practice in every HR process. They instead prioritize their investments on select areas.
When building the case for support on any initiative you, should expect to answer questions about why investment is needed
now. Address these concerns before they arise by first showing how mature your company is currently, and how any proposed
advancement relates to real organization benefit, and also supports eventual best practice.
Use the matrix on the next page to help show where your organization is.
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MATURITY LEVEL OVERVIEW

Level
1

Level
2
Level
3
performance.
Level
4
opportunities.
Level
5
15
BUSINESS CASE GUIDE
Demonstrate
the Risks
Step Three:
Identify talking points from
external sources to support
your case. These pages will
act as a primary source.
16
THE NEW WORK ENVIRONMENT REQUIRES EFFECTIVE

PERFORMANCE MANAGEMENT
REALITIES IMPLICATIONS
Geographically ■■ Need clear expectations across distance

Dispersed Workforces and boundaries
Greater Interdependence ■■ Need more effective and regular feedback

and More Matrixed Work among all team members
Frequent Change ■■ Need agile expectations and goals
Requirements for Meaningful ■■ Need continuous learning to retain talent

Work and Growth
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SATISFACTION WITH PERFORMANCE MANAGEMENT

IS AT AN ALL TIME LOW
95% of managers are dissatisfied with their performance

management systems.
“Am I getting what I need from my

performance management system?”
59% of employees feel performance reviews are

perfunctory and amount to wasted time.
90% of HR heads report that their systems generate

inaccurate information.
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Part 1: Define Performance

Expectations
We set performance standards What is the value of completing Level 3?

Level
3
and expectations that link to Employees see how their work helps to drive the
organizational strategy and goals. organization’s strategy and goals.
We balance expectations between Why should your organization move to the next level?
Level
4
driving individual and network
performance. At Level 4, you provide employees with performance
expectations that drive both individual performance
and network performance.
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CHECKLIST
ACTIVITIES
1 Define In Preparation
Performance Expectations
Familiarize yourself with the current organizational strategy and pull any important documents related to business
2 Support
strategy and objectives that you may need to reference.
Prepare your business case for organization-wide alignment in performance management to get buy-in and support
the Process
from senior leadership.
Execution
3 Evaluate Partner with business unit and functional leaders to translate organizational strategy into key performance
Performance expectations for each part of the business.
Create and communicate business-relevant competency models for leadership, key functions, and roles.
4 Connect Help senior business leaders customize organization-wide competencies to the needs and challenges of their business,
to Talent Strategy function, or geography.
Communicate performance expectations (in the form of competencies and associated behaviors, objectives, rating
scales, etc.) and the business rationale for these expectations to employees.
Test a random sample of employee MBOs (e.g., from different business units, functions, geographies, and levels)
to ensure they remain aligned to business strategy as they are cascaded down and across the organization.
Provide managers and leaders with opportunities to raise questions, discuss the criteria, and build their confidence in
communicating expectations to their employees.
Track
Monitor the process: e.g., completion of competency development for roles across the organization; manager
Allow some degree attendance at meetings to discuss performance expectations; submission of individuals’ expectations into the system.
of flexibility when Monitor effectiveness: e.g., employee satisfaction with performance expectations; alignment of performance criteria
defining performance with business impact.
criteria to ensure relevance
to different business units,
CHANGE MANAGEMENT TIPS
functions, job roles, geographies,
etc. While performance
■■ Hold managers and senior leaders accountable—Demonstrate the importance of performance management for
expectations require organizational success and hold managers and leaders accountable for improving talent outcomes.
consistency, organizations must ■■ Align leader and employee goals—Cascade goals from senior levels to individual employees so there is transparency
also recognize that employees and a clear connection between individual and leader expectations.
support organizational strategy ■■ Ensure clear, consistent communication—Keep it simple to help employees understand the performance standards
in unique ways.
that they are evaluated against.
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SEE HOW OTHERS DID IT
SEAGATE’S GOAL ALIGNMENT CASCADE—CASE STUDY

1 Define Overview of Seagate’s Goal Alignment Cascade for Maturity Level 3
2 Support Page 25
See page 25 for a high-level overview
Pages 29
Seagate’s approach relies on a phased
Page 36-41
The appendices feature detailed
the Process
of Seagate’s approach to goal roll-out, which allows for level-by- examples of how Seagate executes
alignment—which includes executive level alignment, starting with the this process, including sample forms,
3 Evaluate collaboration on goal setting,
transparent and flexible goals, and
organizational unit, and cascading
down to individual employees. This
reports, and plans for workshops and
meetings.
Performance
goal setting at every level of the ensures that goals and expectations
organization. are connected back to the
4 Connect organization’s strategy.
to Talent Strategy
Context for Implementing This Tactic:
■■ Effective communication and alignment of goals helps to ensure that individual employees’ goals support the
organization’s strategy.
■■ This case profiles Seagate’s best practice for aligning goals up, down, and across the organization.
■■ The case demonstrates how Seagate ensures ongoing goal alignment by enabling the adjustment or recalibration of
goals in response to evolving business needs.
Expected Outcomes and Deliverables:
■■ Enhanced processes and guidance for aligning goals at all levels.
■■ Goals and expectations are connected back to the organization’s strategy.
Are goals effectively aligned and cascaded at your organization? Assess your goal setting process using Seagate’s Goal
Alignment Checklist.
Note: This case study can be found online here.
21
Seagate’s Goal
Alignment Cascade
June 2010
22
A FRAMEWORK FOR MEMBER CONVERSATIONS
The mission of The Corporate Executive Board Company (CEB) and its affiliates is to unlock the potential of organizations and leaders by advancing the science and practice of
management. When we bring leaders together, it is crucial that our discussions neither restrict competition nor improperly share inside information. All other conversations are welcomed
and encouraged.
CONFIDENTIALITY AND INTELLECTUAL PROPERTY

These materials have been prepared by CEB for the exclusive and individual use of our member companies. These materials contain valuable confidential and proprietary information
belonging to CEB, and they may not be shared with any third party (including independent contractors and consultants) without the prior approval of CEB. CEB retains any and all
intellectual property rights in these materials and requires retention of the copyright mark on all pages reproduced.
LEGAL CAVEAT
CEB is not able to guarantee the accuracy of the information or analysis contained in these materials. Furthermore, CEB is not engaged in rendering legal, accounting, or any other
professional services. CEB specifically disclaims liability for any damages, claims, or losses that may arise from a) any errors or omissions in these materials, whether caused by CEB or
its sources, or b) reliance upon any recommendation made by CEB.
GOAL MISALIGNMENT HAMPERS ACHIEVEMENT OF

BUSINESS GOALS
Uncoordinated, static goal- Obtaining Goal Alignment
setting processes make it
Challenge #1: Failure to Identify Conflicts and Shared Challenge #2: Failure to Link Individual Goals to
difficult to obtain and maintain
Opportunities Managerial, Functional, and Corporate Goals
goal alignment, hampering
achievement of business goals. Asia–Pacific EMEA Americas R&D Operations CEO Goals
EVP Goals
■■ Siloed geographies,
functions, and businesses VP Goals
and a general disconnect
X X
among goals at different Manager Goals
employee levels often
prevent organizations from Team Goals
obtaining goal alignment. Siloed geographies Siloed functions
Individual Goals
■■ Don’t know why my goal matters
■■ Further, once organization- ■■ Don’t understand my goal
wide alignment is obtained, Duplicated Efforts and Contradictory Goals ■■ Am going to keep doing what
static goal systems make it I was doing last year
challenging for organizations
to maintain alignment as Maintaining Goal Alignment
conditions and needs change Challenge #3: Goals Remain Static or Change Unevenly in Response to External Changes
over time.
Impact of Changes in Dow Jones Industrial Average
Illustrative
External Change
Functional,
managerial, and
13,000 individual goals
Internal
Adjustment no longer aligned
DJIA
9,500
6,000
April July October January April
Source: Seagate; CEB analysis.
MAINTAINING
CHALLENGE OVERVIEW OBTAINING ALIGNMENT RESULTS
ALIGNMENT
24
SEAGATE’S APPROACH TO GOAL ALIGNMENT
Seagate facilitates goal Seagate’s Solution

alignment so that the
organization works cohesively, Obtaining Goal
Collective Assessment of Executives’ Goals
even during times of change, Alignment
Executives refine their individual goals together and ensure
to achieve business objectives. that all corporate goals are adequately supported by
existing executive goals.
■■ Seagate created a goal
Goal Transparency
alignment cascade
Full upwards and downwards goal visibility demonstrates
in 2002 to address pervasive
the link between individual and corporate goals, ensuring
goal misalignment.
employees understand how their goals support and align
with corporate goals.
■■ Since establishing a process
to achieve and maintain goal
Supported Goal Setting at All Levels
alignment requires extensive
Self-service support facilitates effective goal setting at all
up-front investment, many
levels, preventing goal dilution as goals are communicated
of the changes Seagate has
downwards and ensuring that the link between individual
made are a result of the
and organizational goals remains clear.
process maturing.
Maintaining
Liberal Goal Adjustment
■■ Look for Implementation Goal Alignment
Liberal goal adjustment for all employees enables the
Tip at the bottom of
workforce to refine goals in-the-moment as changes occur,
the following pages for
speeding the organization’s response to change.
suggestions on how to
implement Seagate’s
process.
Goal Alignment Recalibration
Visible goal tracking, real-time goal reporting, and periodic
goal reviews facilitate appropriate goal adjustments and
help recalibrate goal alignment post-adjustments.
MAINTAINING
ALIGNMENT
25
GOAL ALIGNMENT BEGINS WITH CORPORATE GOALS TO

PROVIDE COMMON DIRECTION
The Executive Committee Executive Goal-Setting and Alignment Process
begins the goal-setting
process, providing firm
Corporate Goal Setting Executive Homework Goal Alignment Workshop
direction on corporate goals
and System Entry
to ensure an effective cascade.
Key Activities Key Activities Key Activities
■■ Seagate’s Executive Council

(EC) meets in March to
determine annual corporate March April May
goals.
■■ The Executive Council (EC), ■■ In early April, the CMC meets ■■ The CMC, workshop facilitators,
■■ Corporate goals are composed of the CEO and top for a pre-workshop briefing and executive coaches gather
communicated to the EVPs, meets to discuss Seagate’s to learn the year’s corporate for the annual Goal Alignment
Corporate Management vision and mission and determine goals and review key learnings Workshop, hosted by the CEO,
Committee (CMC) in early annual corporate goals from the previous goal alignment to ensure goal quality and assess
April so CMC members can cascade cycle alignment
develop individual goals
■■ Corporate goals are
aligned to corporate goals. communicated to the Corporate ■■ CMC members conduct ■■ Senior executives refine
Management Committee (CMC), “homework” by collecting measurements and targets and
composed of all employees who bottom-up feedback on corporate add new goals, as needed, based
■■ The EC and CMC convene for
are SVPs or above goals and creating corresponding on feedback from the workshop
a goal alignment workshop
individual goals (See page 6)
in May to test and improve ■■ All SVPs and above
the strength and quality of ■■ The CMC reconvenes in late April (approximately 20 employees)
all executives’ goals. to review “homework” and further enter their goals online
prepare for the workshop by early June
Implementation Tip—HR should be heavily involved in facilitating and supporting the executive goal alignment process
initially, but aim to step back as the process evolves; HR originally spurred and heavily supported the executive
goal-setting process at Seagate, helping facilitate the EC-level discussion and running the workshop, but it has now
become more of a business-facilitated process.
MAINTAINING
ALIGNMENT
26
GOAL-SETTING “HOMEWORK” PREPARES EXECUTIVES TO TEST

GOALS IN WORKSHOP
Prior to the workshop, senior Corporate Goals and Pre-Workshop Goal Alignment Template
executives collect bottom- Illustrative
up input to surface potential
conflicts and create accurate Seagate’s Corporate Goals Executive Goal Alignment Template (to be completed prior to workshop)
personal and functional goals. ■■ Maximize profitability Executive’s Name: Lynne Johnson
■■ Deliver industry-leading
■■ Executives utilize team products Corporate Your Aligned
Goal Description Measures of Success
feedback and input to create and technology Goal Goal
clear goals and measures ■■ Optimize revenue Strategically Engage and Cultivate a diverse, 1. Ninety-five percent
that reflect how value is position retain a team high-performance of direct reports
■■ Strategically position Seagate and of high-performing team environment have SMART goals
added to the organization.
Seagate and our people our people employees that attracts, and development
for future growth for future develops, plans entered in
■■ This “homework” prepares growth recognizes, iMAP
executives to make better and retains by September 18
the best people 2. Ten percent or less
use of workshop time, as
voluntary turnover
all participants begin with of (non-operator)
clearly written, well-vetted employees
individual goals. Deliver Improve reliability New interface test 1. MTBP—Top six
industry- and predictability deployment along customer charts
■■ The emphasis on collecting leading with improved to align with our
bottom-up feedback also products and compatibility
reliability project
technology strategy using new
ensures that there is broad test suites will enable
participation in the goal- us to make better
setting process—and, thus, predictions
investment in achieving
goals.
Executives create personal goals and measures

based on input and feedback gathered from
their teams and direct reports.

Note: See Appendix D for other tools Seagate provides to help executives fine-tune goals and identify and resolve alignment problems.
MAINTAINING
ALIGNMENT
27
WORKSHOP ENSURES COLLECTIVE ALIGNMENT TO AND

SUPPORT OF CORPORATE GOALS
Senior executives convene for In-Depth Goal Alignment Workshop Model
the Goal Alignment Workshop
to assess goal quality and 1 Goal Posting and Voting (2.5 hours) 2 Goal Evaluation (1.5 hours)
ensure that all corporate goals Objective
Support
are fully supported by aligned Goal Goal Move
individual executive goals. Goal Goal
Clarify
Goal Goal
■■ After sharing individual ■■ Executives post individual goals beneath relevant corporate goal
goals, teams of executives ■■ Small groups ‘vote’ on goals using color-coded Post-Its™: ■■ A small break-out team is assigned to each corporate goal to assess
ensure that each corporate –– 10 green notes—Goals with greatest impact; must be fully for clear and comprehensive alignment with individual goals
supported ■■ The team first responds to green notes on goal impact, then yellow
goal is adequately supported
–– Five red notes—Goals that belong under a different objective notes on clarity, and, finally, red notes on realignment
by existing individual goals –– Five yellow notes—Goals that are unclear
and recommend revisions as
needed. Goal Refinement and Finalization (1.5 hours) Goal Presentation (2.5 hours)
Corporate Goal
■■ Executives’ goals are clearly 3 4
articulated and well-aligned
Additional
Goal
coming out of the workshop, Goal
Goal Needed
ensuring that the top-level
Goal (Revision
goals used as the basis of Goal
Suggested)
the cascade are SMART.
■■ Each break-out team finalizes wording for its assigned corporate ■■ Each team presents the final wording of its corporate goal and the
■■ Once executives have goal corresponding executive goals and metrics
■■ Team determines if additional executive goals are needed to fully ■■ As a whole, the group discusses failure risks and identifies next
developed excellent goal- support the corporate goal or if existing executive goals aligned steps
setting skills through to the assigned corporate goal need revisions
repeated participation in the
■■ If revisions are necessary, new goals are reviewed by the original
owner
in-depth workshop, Seagate
streamlines the workshop. 1
Implementation Tip—Expect that the workshop will take longer the first year or two. More time will be needed initially
to familiarize participants with the process and surface perennial conflicts, which can then be resolved for good,
enabling a more streamlined process for future cycles. 1
“The most important Source: Seagate; CEB analysis.
thing in a goal alignment 1
See Appendix B for an overview of Seagate’s streamlined workshop.
process is the quality
that goes into it at the beginning.” MAINTAINING
ALIGNMENT
SVP HR, Seagate Technology
28
PHASED ROLLOUT FACILITATES LEVEL-BY-LEVEL ALIGNMENT
Goals are cascaded through Outline of the Goal Cascade Rollout

the organization level by
level for all of Seagate’s Late June to Early July
Organizational
professional employees, Employees VP-level and above attend half-day Goal
Unit Seagate’s fiscal year
embedding organizational Alignment Workshops to review corporate and senior
EVP executive goals and ensure alignment of their own goals. begins in July
strategy in individual goals.
They then enter individual goals, measures, and targets into
VP VP VP the online system.
■■ After corporate goals are set
and executives have entered July
their workshop-created goals Groups
The VP-level team leader leads this level of the cascade
into the system, at his/her own discretion, often conducting two-hour goal
VP HR recommends—but
the goal cascade begins. alignment workshops for line leaders. Directors view EVP does not require—the
and VP goals to create their own goals, measures, and use of particular
Dir. Dir. Dir.
■■ Responsibility for goal targets. resources and methods
setting and alignment rests for the goal cascade;
the actual process
with the individual; managers
August varies by business unit
act as “checks and balances” Teams
At each additional level down, employees can view their and manager according
and agree to direct reports’ to what fits best
Dir.
managers’, directors’, VPs’, and EVPs’ goals. Individuals
goals to ensure alignment is for each situation.
create their own aligned goals, measures, and targets and
obtained.
Mgr. Mgr. Mgr. enter them in the system.
Individuals
Mgr.
Employees
Implementation Tip—Have HRBPs work with client groups to help cascade goals, ensure alignment, and utilize
provided tools and resources. As business leaders and managers build skills in goal alignment and cascading over time,
HRBPs can scale back their involvement.
MAINTAINING
ALIGNMENT
29
TRANSPARENCY ILLUSTRATES INDIVIDUAL-ORGANIZATION

LINK AND DRIVES ALIGNMENT
Seagate’s online goal Visibility Provided Through the Integrated Maximizing Alignment and
application provides upwards Performance (iMAP) Application
and downwards goal
transparency for employees,
illustrating the link between
corporate and individual goals. [President and CEO]
■■ While employees at most

President
companies understand and CEO
the connection between
individual and manager
goals, iMAP enables Vice President A
subordinates to view their Vice President B

superiors’ goals all the way Vice President A
to the CEO, demonstrating Vice President A
how individual goals connect Vice President C
to corporate goals.
■■ This transparency helps

employees tangibly
understand how individual
actions contribute
to the achievement of larger iMAP enables visibility into both upwards
goals, while also providing and downwards aligned goals, illustrating the
employees with examples link between individual and corporate goals.
that help them set effective
and aligned individual goals. Note: Seagate worked with Softscape to create this application.
■■ Employees can also search

and navigate through
iMAP to see how other
departments, functions,
or teams aligned with
corporate goals.
MAINTAINING
ALIGNMENT
30
WIDELY ACCESSIBLE SUPPORT PREVENTS RESIDUAL

GOAL DILUTION
Seagate prevents goal dilution Individual Goal-Setting Resources Prevent Goal Dilution
by providing employees at all Increased Goal Dilution Risk and Weaker Key Resources to Mitigate Risk
levels with the information and Individual-Organization Link with Each Cascade Level
tools needed to set effective
goals, helping maintain the Suggested Goal-Setting Team Meeting Agenda—
link between individual and This document guides managers in conducting
corporate goals. effective goal-setting team meetings for their direct
reports during the cascade. While managers are not
required to conduct this team meeting, this agenda
■■ Even with the executive helps replicate the executive-level process.
workshop and iMAP in place,
Seagate experienced residual
goal dilution, which weakened
Goal-Setting Process E-Learning—Seagate’s “Virtual
the individual-organization goal
Coacha” includes a short e-learning module (less than
link. This District Manager holds an
ineffective goal alignment meeting three minutes) to guide employees through the goal-
with his direct reports… setting process. Virtual Coach provides more than 30
■■ Recognizing that the kind other e-learning modules, including the Performance
of support provided in the …so this manager’s goals Evaluation Process and Writing SMART Goals.
workshop was not scalable— are misaligned…
especially with a lean HR
team—Seagate empowers …and this employee
doesn’t understand her
employees with direct access place in the organization.
Customized Calendar of Key HR Dates—Each
to a suite of self-service Seagate employee’s HR Portal page, customized by
resources that guide them his/her role and location, provides an overview of
in setting effective, aligned key dates and deadlines to help the employee create,
goals. align, and enter his/her goals on time.
Implementation Tip—Do not over focus on self-service resources at the expense of a thorough and effective executive
“With these resources goal alignment process; top-level goals provide the foundation for the whole cascade and are, thus, the most
we’re trying to help important to get right first.
replicate what happens Source: Seagate; CEB analysis.
at the top level [in the executive Note: Appendix E provides Seagate’s Goal Setting Team Meeting Agenda.
goal alignment workshop] for all a
Seagate’s Virtual Coach is an informal learning environment that offers direct access to practical resources, aligned to
performance tools and processes, to use on the job right now.
employees.”
Global Performance Management
MAINTAINING
Operations Manager CHALLENGE OVERVIEW OBTAINING ALIGNMENT RESULTS
ALIGNMENT
Seagate Technology
31
LIBERAL GOAL ADJUSTMENT ENABLES

RAPID RESPONSE TO CHANGE
Seagate facilitates rapid In-the-Moment Goal Adjustment
organizational adjustment Illustrative
to change by enabling all
employees to liberally adapt
individual goals as needed.
LYNN JOHNSON: My Goal Alignment
Corporate Goal: Optimize Revenue
■■ Dynamic goal adjustment Goal #1 Start Date: 5 Sept. End Date: 1 Nov. Status: Achieved
speeds the organization’s Goal #2 Start Date: 5 Sept. End Date: 25 May Status: In Progress Goal Adjustment—iMAP is open
response time to external for changes until performance
Corporate Goal: Strategically Position Seagate and Our People for Future Growth review time, so employees are
changes, enabling the
Goal #3 Start Date: 5 Sept. End Date: N/A Status: Closed able to easily and immediately
workforce to refine goals adjust targets, add new goals,
in-the-moment as changes Action: Add Goal
or alter measurements as
occur. needed. This enables employees
Goal #4 Start Date: 30 Nov. End Date: 23 June Status: In Progress
to remain aligned to corporate
Goal Details goals despite market changes or
■■ Employees can close, defer,
adjustments in corporate goals.
or add goals and change Goal Description Added for Status In Progress
targets and measurements alignment to new/
changed corporate
for existing goals as needed goals, targets, and Security Public
measures
to remain aligned to Start Date 30 Nov.
Goal: Strengthen
corporate goals. existing client
relationships End Date 23 June
through
Importance 3–Important
“These processes helped

us respond to
marketplace changes
quickly as an organization and
prevent the kind of strategy
confusion and goal misalignment
that hinders so many other
organizations.”
MAINTAINING
HR Employee, CHALLENGE OVERVIEW OBTAINING ALIGNMENT RESULTS
ALIGNMENT
Seagate Technology
32
GOAL STATUS VISIBILITY FACILITATES APPROPRIATE

GOAL ADJUSTMENT
Visibly tracking goal status Advantages of Goal Status Visibility
ensures that employees Illustrative
do not change their goals
unnecessarily and helps 1 Guards Against Abuse of Goal Adjustments
them understand when and
Goals are marked as deferred, achieved, closed, on
how to make individual goal track, or in progress, rather than deleted, and changes
adjustments. are publicly visible—ensuring that employees adjust
Direct Manager
goals appropriately and do not misuse the capability.
■■ Seagate’s goal status
tracking makes individual
goal adjustments visible Goal Alignment for Lynn Johnson
to an employee’s manager,
peers, and direct reports, Corporate Goal: Optimize Revenue
ensuring that he or she Goal 1 Start Date: 5 Sept. End Date: 1 Nov. Status: Achieved
does not misuse the goal Goal 2 Start Date: 5 Sept. End Date: 25 May Status: In Progress
adjustment capability.
Corporate Goal: Strategically Position Seagate and Our People for Future Growth Peer
■■ The ability to see when and
how supervisors and peers Goal 3 Start Date: 5 Sept. End Date: N/A Status: Closed
adjust their goals, provides Goal 4 Start Date: 30 Nov. End Date: 23 June Status: In Progress
employees with concrete
examples to help them
determine which goals to
adjust and when.
2 Helps Employees Understand How to Adjust
Individual Goals
Goal status visibility shows employees how and when
Direct Report their managers and peers respond to change, helping
them determine when they should deprioritize, close
out, or adjust their own goals.
MAINTAINING
ALIGNMENT
33
RECALIBRATION ENSURES ONGOING GOAL ALIGNMENT
Real-time goal reports and Real-Time Team Goal Reports

periodic goal reviews help Illustrative
recalibrate alignment, ensuring Misalignment Targeted
Team Goal Report Identification Alignment Support
that adjustments do not
impede alignment. 30 November Direct reports lack From: rpotts
My Direct Reports’ Goal Alignment Report
aligned goals to To: ljohnson; emaher
Goal Status Aligned to “deliver industry- Subject: Strategic
■■ iMAP’s team goal reports Employee Lynn Johnson leading products Positioning, 7th
floor conference
aid managers’ oversight by and technology”
Goal 1 Achieved Optimize revenue room
providing an in-the-moment
Goal 3 In Progress Maximize profitability Recent goal
overview of direct reports’ Join us for a conversation
Goal 4 Closed Strategically position Seagate adjustments for
goal alignment and execution. and our people for future growth with Jordan Douglas, VP,
“strategically
Marketing: Strategically
Goal 5 In Progress Strategically position Seagate position Seagate
positioning Seagate and
■■ In times of change, team goal and our people for future growth and our people
our people for future
reports allow managers to Missing Goal for Deliver Industry-Leading Products and for future growth”
growth.
Technology
spot-check the speed and
Employee Erik Maher
quality of employees’ goal
realignment, helping them Goal 1 In Progress Optimize revenue
identify issues so they know Goal 2 In Progress Maximize profitability
where targeted support may Goal 3 Deferred Strategically position Seagate

and our people for future growth
be needed.
Missing Goal for Deliver Industry-Leading Products and
Technology
■■ Periodic goal reviews
between managers and their
Periodic, One-on-One Goal Reviews
direct reports help ensure
Illustrative
continuous organization-wide
alignment by guaranteeing One-on-One Goal Review
that each employee discusses ■■ Explain any changes in corporate goals or associated targets/metrics
goal adjustments with the ■■ Review any changes in functional/team-level goals and discuss implications
support and guidance of her ■■ Review and approve direct report’s recent goal adjustments
■■ Discuss employee’s progress against goals

direct manager.

■■ Employees and managers are Note: Appendix F provides more information regarding real-time team performance reports.
expected to meet quarterly
to review progress against
goals and development plans. CHALLENGE OVERVIEW OBTAINING ALIGNMENT
MAINTAINING
RESULTS
ALIGNMENT
34
EMPLOYEE ROLE CLARITY AND WIDESPREAD ADOPTION

DEMONSTRATE SUCCESS
Seagate’s well-utilized Employees Retain Role Clarity Despite Rapid Changes
goal alignment cascade Percentage of Employees Agreeing with Statement (2008)
has resulted in widespread
employee role clarity, driving
employee engagement and I clearly understand how my job supports Seagate’s corporate goals
business results.
8%
No CEB research indicates
■■ While the downturn created that connection between
confusion about job work and organizational
expectations and objectives, strategy is the largest driver
of discretionary effort and,
data from Seagate’s thus, employee performance.
employee engagement
survey indicated that 92%
of Seagate employees had 92%
a clear understanding of Yes
how their job supported
corporate goals despite
many changes.
iMAP Utilization Rates
iMAP Utilization and Participation Rates
Number of iMAP users (FY10) 16,100
Percentage of Employees with Goals (June–September FY 2010) 97%
Percentage of Employees Acknowledging their Evaluation (FY2009) 94%

“Launching the [goal
alignment cascade] Percentage of Employees Completing Self-Evaluations (FY2009) 96%
process was challenging,
but every year since we’ve seen
improvements and added benefits.”
MAINTAINING
Karen Hanlon, SVP HR CHALLENGE OVERVIEW OBTAINING ALIGNMENT RESULTS
ALIGNMENT
Seagate Technology
35
APPENDIX A: KEY CHANGES SINCE ORIGINAL IMPLEMENTATION
Since initiating its goal Three Key Changes in the Goal Alignment Cascade Process
alignment cascade, Seagate
has altered the process in
three primary ways: Challenge Change Benefit
Rapid Change
1. Goal adaptability for all
1. External changes such as the Goal Adaptability for All Seagate can adjust corporate
employees
economic downturn, scramble Employees goals to remain competitive
2. Increased self-service organizational goals and threaten Seagate enables in-the-moment in the face of change, and can
resources for employees of organizational alignment and ability goal adaptability for do so with confidence that
all levels to achieve objectives. all employees and puts the organization will align
3. New streamlined workshop guardrails in place to ensure with and execute against said
model1 appropriate ongoing alignment. adjustments.
Lean HR Team
2. While lower-level employees need Increased Self-Service Resources These resources provide all
help creating and cascading goals for Employees of All Levels employees with access to the
to prevent residual goal dilution Seagate provides self-service information and support needed
and the weakening of the information, resources, and for high-quality goal creation,
individual-organization link, tools, to improve creation of alignment, and communication,
Seagate’s lean HR team is unable aligned goals throughout the ensuring that the individual-
to offer the hands-on support organization. organization link remains clear
provided in the executive as goals are cascaded.
workshop.
Process Redundancy
3. The in-depth workshop is a New Streamlined Workshop The streamlined model ensures
cumbersome time commitment Model that executives’ goals are
for seasoned executives who Seagate creates a streamlined aligned to corporate goals, using
developed strong goal-setting Executive Goal Alignment a process that requires less time,
skills during multiple cycles of the Workshop model. 1 but realizes the same benefits of
process. the in-depth workshop.

1
Appendix B provides more information on the streamlined workshop model.
36
APPENDIX B: ENHANCED GOAL-SETTING SKILLS ENABLE

STREAMLINED WORKSHOP
Seagate streamlines the Streamlined Goal Alignment Workshop Model
workshop in recognition that
executives developed excellent
goal-setting skills through
repeated participation in the
in-depth workshop. The streamlined model
Streamlined Executive Goal Alignment Workshop Agenda
relies upon executives’
independent goal-
All participants are expected to bring their individual goals,
■■ Executives utilize their skills setting skills, developed
already evaluated and refined by team members and direct
and awareness of common at Seagate through
reports to the workshop.
alignment issues to do more participation in multiple
pre-work for the streamlined cycles of the in-depth
9:00 a.m.–11:15 a.m. Informal Presentations
model, eliminating the need workshop, and should
for some of the in-depth goal only be considered
Executives informally present their top-level goals and
refinement activities. under the following
aligned metrics, highlighting potential conflicts between
conditions:
their goals and other executives’ goals.
■■ Business unit leaders still ■■ Mature goal
utilize the in-depth model alignment cascade 12:15 p.m.–2:30 p.m. Goal Finalization
on a case-to-case basis
if leaders are new to the
■■ Seasoned executives
familiar with The group discusses and resolves goal conflicts and creates
process, lack goal-setting
the process an action plan to address missing targets. Then, they finalize
skills, or are part of a newly
goals, ensuring that each corporate goal is adequately
formed team. ■■ Relatively stable
supported by existing executive goals, and revalidate
organizational
Seagate’s mission and vision.
■■ The streamlined model must structure
be preceded by the in-depth
model, as the success of the Source: Seagate; CEB analysis.
streamlined model depends

on the skills and knowledge
executives gain through
the in-depth workshop.
37
APPENDIX C: PERSONAL INVESTMENT IN GOAL ACHIEVEMENT
Seagate directly inserts Example of the Role Employee-Created Goals Play in Performance Reviews and Compensation
employee-created goals into Illustrative
the performance review and
reward process, instilling
Seagate Performance Review Date, Year
personal investment in goal
achievement. Employee Name
Goals Competencies
Goal Type Goal Description Results
■■ An employee’s performance
against individual goals Financial Recommended for all X% 1. Vision and Strategy X%
determines 70% of his or her Performance employees who manage
total performance rating, projects or programs with
which is used in bonus budget
calculation. Performance Recommended for all X% 2. Organizational X%
Management/ employees Alignment
■■ Seagate provides the Talent
following recommendations Functional Two to five functional goals X% 3. Delegation of X%
for the composition of are recommended for all Decision Making
employees’ goals: employees
–– One financial performance Functional Goal B X% 4. Talent Development X%
goal (when appropriate) Functional Goal C Total: X% 5. Results Management Total: X%
–– One performance
management/talent goal
+ =
–– Two to five functional
goals 70% Goal Rating 30% Competency Rating Total
Performance
Rating
“My words go directly
into my performance
evaluations; I’m
eventually evaluated based on
performance against the goals I $
create, so I’m personally invested Compensation
in the goal-setting process.”
HR Employee
Seagate Technology
38
APPENDIX D: GOAL-ALIGNMENT AND REFINEMENT CHECKLISTS
The Goal Alignment and Sample Goal Alignment and Refinement Checklists
Refinement Checklists provide
lists of common alignment Seagate Goal-Alignment Checklist
problems to aid executives Instructions: Review the companywide goals. Determine if the goals in your organization include any of the common issues/
Seagate Goal-Refinement
problems listed in the template, and use the guidance below to improve the alignment of those goals and measures. Checklist
in problem identification and
Issue/Problem Examples How to Improve
Instructions: Evaluate and refine your goals/measures using this checklist. Determine if your goals include any of these common
resolution. issues/problems, and use the questions below to improve your goals and measures.
There are too A review of the executive Creating reports for all of the possible goals will likely cost more than
First Checkpoint: Are these four to seven goals truly my highest priority goals for the upcoming fiscal year in adding value to the
many measures goals aligning with the data is worth, and will dilute the focus of Seagate employees.
corporate objectives? Are my time and resources really focused on these priorities? Am I running my part of the business, and myself,
for the same “Employer of Choice” Select one or two measures to use across the executives who report
based on these priorities? Or is there a different list of goals and priorities that I use for my day-to-day work?
corporate uncovers 20+ unique to you:
■■ These checklists outline objective potential measures. • Which of the possible measures best captures what Seagate wants
Issue/Problem Examples How to Improve
to achieve?
common issues or problems, • Which of the measures will be practical to track?
The goal is activity- Activity: Train three black belts. This goal describes what actions are to be taken or what tasks
provide practical and • Will it be worth it to create a new tracking system for a new
based rather than Result: Remove three calendar are to be done, but not the value-added result of these actions:
measure?
concrete examples, and results-based weeks from the work process.
Activity: Complete order entry
• Who is the customer of these actions?
• What does the customer need from these actions?
suggest viable solutions. There are
gaps in
One EVP has written
goals that align to five
The cascading process appears to have broken down, resulting in
software installation by Q2.
corporate goals that are not being worked on by parts of Seagate.
• If the actions are done well, what is left behind?
Result: Reduce direct labor for • Why are the actions being done?
measurement of the seven corporate Decide if the goals should remain “missing” or create new goals to
order entry while reducing order- • If this task/project is successful, how will Seagate/the
objectives. The VPs fill the gaps:
processing cycle time by 25%. customer benefit?
■■ Click here to access reporting to this EVP have • Should the EVP be aligning to all the corporate goals he is aligning
written goals aligning to?
Seagate’s complete Goal- to only three corporate
The goal is Vague: Ramp up production more
• Should additional goals be created at the SVP or VP level to
There is no way to tell if this goal has been achieved or if
too vague and quickly. progress is being made toward the goal:
objectives. support the EVP’s contribution to the corporate objectives?
Alignment Checklist and a therefore not Measurable Increase: Number of
• What is the unique value-add contribution of the SVPs or VPs to
• What result are you trying to produce?
measurable or units shipped. • What is important about the result? (how many, how well,
corresponding template. This the EVP’s goals?
verifiable cost, when completed)
Vague: Improve teamwork through
checklist helps executives There is a lack An SVP creates a goal Any goal requiring significant cooperation acrossmeetings.
skip-level departments
• What number would you track to evaluate this factor?
• What level of performance would be good enough?
of agreement that will require an HR needs to appear on all parties’ priority lists for budgeting,
Verifiable: staffing
prioritize goals and ensure with another employee survey to resources, etc.
Roles and
responsibilities are defined with If you cannot measure the goal with a number, describe good
that they are clear, results- department measure the results, plus • Do any of your goals require significant resources
no gaps from another
and overlaps between performance:
that supports significant IT resources department? the two teams. Customers do not • What would we see about the result that means it was done
based, and measurable, with your goals to implement the goal. • Have you discussed the goal with theexperience
department and reached
last-minute rework due well?
Neither HR nor IT has the agreement that they have the necessary resources?
to product plans not agreed to. • How would things be better if this effort was successful?
appropriate targets. resources or budget • If they do not have the resources required, what will are
Team members be done to
not complaining • What would we hear people saying about the result that
to support this goal. obtain the resources? about each other to the director means it was produced well?
but are able to work out differences
■■ Click here to access Timelines and/ Department A plans to If one department meets its deadline (or without
qualitymanager
criteria), intervention.
the other
or quality finish installing a new department will miss theirs. Align the goals so both can succeed.
Seagate’s complete Goal- criteria are computerized process in The goal is written EVP Goal that should be a VP’s These are goals you will delegate to someone in your
misaligned Q2. Department B (who at the wrong level goal: Release product XYZ to organization.
Refinement Checklist and a will use the software) has for the organization manufacturing by Q3. • Is this worth measuring at your level?
corresponding template. This set its goals assuming (manager versus EVP Goal: Assure workflow • What unique value do you add?
that the software will be subordinate level) processes are improved to improve • What is the result you contribute to the effort?
checklist helps executives operational in Q1. time to market for all new products.
prioritize goals and ensure There is A production department Resources are being duplicated
A measure Measure
that could
is listed only:deployed
be better Improve against
high There is a measure for this goal but no specific target to be
that they are clear, results- redundant or has staff working on unique work. Eliminate
but therethe
areoverlapping
no or redundant
performer work. rate.
turnover achieved:
overlapping design work just in case targets Measure + specific target: High • How many or what percent do we need to achieve to consider
based, and measurable, with work the design department is performer turnover rate of ≤ 5–7%. this a success?
late with their work.
appropriate targets. The cost (time Review of the measures for Questions to consider to refine the goal:
and resources) “Employer of Choice” shows • Will an existing tracking system be “good enough” to use?
of tracking the 25 different possible measures. • Will the value of the data from a new tracking system be
measures will Creating reports for all of them worth the cost of collecting the data?
exceed the value will likely cost more than the data
of the data is worth.
39
APPENDIX E: GOAL SETTING TEAM MEETING AGENDA
Seagate provides a meeting Seagate’s Recommended Goal Setting Team Meeting Agenda
agenda to guide managers in
cascading goals to their direct
1. Review Organization Goals—Review your organization’s goals and objectives for the coming year. Begin drafting SMART goals with your team using the Goal-Setting
reports. Worksheet. Draft 4–7 SMART goals. It is recommended that you have one financial performance goal, one performance management goal, and two to five functional
performance goals.
2. Share and Discuss the Drafted Goals—Ensure employees understand how their goals are related to strategic objectives.
■■ This Goal Setting Team Checklist to Assess Drafted Goal Yes No
Meeting Agenda has five Are the goals relevant to the business?
main steps: Is the scope of the goal appropriate?

Are there too few or too many measures?
1. Review organizational goals Are the goals coordinated with others’ goals?
Are the goals results-based and measurable?
2. Share and discuss the
Are measures of success set at the right level?
drafted goals
Are goals practical and achievable?
3. Evaluate individual Is achievement of goals under the employee’s control?
contributions Does the employee have the skills necessary to achieve goals?
Is the goal truly a goal or is it a competency?
4. Evaluate the effectiveness Is the due date/time frame for completing the goal appropriate?
of the drafted goal
If you answered “No” to any of the above questions, review the resource for Writing SMART Goals.
5. Repeat the process 3. Evaluate Individual Contributions—Give team members the opportunity to consider how they each can support the team goal. This includes identifying key projects
and duties. Discuss each contribution to see where it might fit in supporting the goal. Be sure to record their contributions as they give them.
■■ Links to additional, more 4. Evaluate the Effectiveness of the Drafted Goal—Answer the following questions to ensure your goals are effective:
specific resources are Is your goal SMART? Yes No
embedded in the meeting Specific: Does the goal answer the questions: who, what, when, which, and why?
agenda for easy access. Measurable: Can you measure the goal using either quantitative or qualitative assessments?
Achievable/Attainable: Can you achieve the goal given the resources that are at your disposal?
Relevant/Realistic: Is the goal in alignment with the goals of your manager, department, and the organization as a whole?
Time bound: Do you have a clear start and end date for your goal?
If you answered “No” to any of the above questions, review the resource for Writing SMART Goals.
Utilize the Tips for Resolving Common Goal Creation Issues to identify common issues/problems that you may be experiencing when writing your goals, and ways to resolve them.
5. Repeat the Process—Repeat the process until your team has drafted approximately four to seven goals. Refer to the resource Create Goals in iMAP for instructions
on entering your goals into the iMAP system.
Source: Harvard Business School Publishing; Seagate; CEB analysis.
40
APPENDIX F: REAL-TIME iMAP GOAL REPORTS
Customized goal reports Goal Reports Available from iMAP Workforce Analysis
provide managers with in-
the-moment analysis of direct
reports’ goal alignment,
execution, compliance, and
development.
■■ iMAP can also provide

employees with reports
detailing their own goal
alignment and development.
41
INTERACTIVE RESOURCE
CONNECT EMPLOYEE TO THE ORGANIZATION—MANAGER GUIDE

1 Define What Is It? A guide that managers can use to communicate with employees about how their roles connect to and drive
the organization’s strategy.
2 Support Format: PowerPoint
the Process Benefit: A clear connection between individual employees’ work and organizational strategy is the #1 driver of
discretionary effort. Managers who can successfully communicate this link to employees will help drive both individual
3 Evaluate and organizational performance.
Performance Time Required: 1–2 hours for managers to prepare for and conduct conversations depending on the accessibility of
information about organizational strategy
4 Connect Hyperlink to Interactive Resource: Connect Employee to the Organization—Manager Guide
to Talent Strategy
HOW TO GET STARTED
Preparation
■■ Review this one-page guide to determine if you want to add or edit the content to make it more relevant to your
organization, including referencing sources of information about organizational strategy.
■■ Determine your strategy for sharing the guide with managers in your organization—Who should receive it? How will
you share it?
Implementation
■■ Distribute the guide to the appropriate audiences (e.g., all managers, managers at certain levels) in a way that will be
most effective in your organization. This might include building it into a training program, posting it on a manager
portal, or relying on HR business partners to share the document with managers.
■■ Provide managers with guidance for using the tool effectively—such as when to have these conversations with staff
members and how to solicit input from staff.
42
Part 2: Support
the Process
What is the value of completing Level 3?

We support managers in providing
Level Employees use managers’ frequent, constructive
3
high-quality feedback and
feedback tailored to their needs and level of
differentiating and managing
performance to increase their performance and
individual performance.
develop their skills.
Why should your organization move to the next level?

We enable employees to seek
Level
At Level 4, you enable managers and employees to
4
performance feedback from their
managers and peers. demonstrate both strong individual performance and
enterprise contributions.
43
CHECKLIST
ACTIVITIES
Identify a cadre of managers with a reputation for effectively managing performance and providing frequent, high-
2 Support quality feedback that helps their teams develop and improve.
Interview these managers to learn specific practices and actions that contribute to their effectiveness. Use their
the Process
examples and insights to inform internal best practice.
Execution
3 Evaluate Develop support tools and guidance to help managers have effective performance conversations. Specifically, ensure
Performance managers can identify opportunities to provide timely feedback, and can deliver feedback that is:
■■ Relevant and evidence-based
4 Connect ■■ Future-focused
to Talent Strategy ■■ Constructive
Hold managers accountable for managing employee performance effectively by incorporating talent MBOs in your
regular goal-setting process. Provide examples of high quality talent-related MBOs to help managers create impactful
talent MBOs.
Support HR business partner communication with line managers around the importance of providing high quality
feedback to employees and setting effective talent MBOs, and introduce guidance, tools, and support.
Ensure leaders have conversations with their managers to ensure they are aware of, understand, and are comfortable
using the support resources around feedback, as well as delivering performance reviews.
Track
Monitor the process: e.g., employee satisfaction with the feedback they receive (both frequency and quality).
Monitor impact: e.g., link manager effectiveness at feedback to employee engagement and performance, aggregate
manager scores against talent MBOs.

■■ Enable peer learning—Share best practices across the organization with practical guidance and insight for managers
to learn from each other.
■■ Provide clear guidance—Set managers up for success by providing guidance that is explicit in terms of both the
expectations of managers and what success looks like.
■■ Encourage dialogue—Ensure that leaders and managers are supporting junior managers so they understand their own
strengths and development areas in supporting their employees.
44
GENERAL MOTORS’ OBJECTIVE FEEDBACK CERTIFICATION—CASE STUDY

1 Define Overview of General Motors’ Objective Feedback Certification for Maturity Level 3
2 Support Page 50
See page 50 for a high-level overview
Pages 51–55
GM’s online Rater-Calibration
Page 56
See the impact that GM’s Rater-
the Process
of GM’s performance management Training tool upskills managers in Calibration Training had on the
process, which improves managers’ 5 key steps: 1) ensuring employees quality and distribution of 360-
3 Evaluate ability to effectively evaluate
employee performance and provide
understand the performance culture
2) clarifying differences on the rating
degree scores. Not only did they see
improvements in the scoring, but
Performance
feedback. scale 3) building awareness of rating course participants also indicated
tendencies 4) improving the quality of great satisfaction with the format of
4 Connect feedback, and 5) testing abilities for
certification.
the training.
to Talent Strategy

■■ General Motors found that many managers have difficulty with three core performance management tasks: conducting
employee assessments, providing differentiated feedback, and initiating corrective actions.
■■ General Motors developed an online “Rater-Calibration Training” course that educates employees in how to assess
performance and deliver feedback—all employees involved in delivering 360-degree feedback must complete and past
the training course.
■■ The interactivity of the training ensures that raters internalize the cultural priorities for the company, and translate the
behaviors they observe into points on the company’s rating scale.
■■ Enhanced accuracy in rating employees during performance reviews.
Note: This case study is part of our study titled Closing the Performance Gap: Driving Business Results Through
Performance Management.
45
Upskilling Managers at
Performance Improvement
Objective Feedback Certification
46
PROVIDING MANAGERS WITH TARGETED TOOLS AND TRAINING

Root Causes of Manager Difficulty with Performance Management
Key Manager Skill Gaps in Managers Not Effective at Performance

Performance Management Management Activities
CEB research indicates a clear consensus
among HR professionals that managers’
1 2 3 lack of skill in conducting the activities
Assessment Feedback Corrective Action most important to performance
Managers find it difficult Managers struggle with Managers are uncertain improvement often prevents
to evaluate employee delivering the “right” how to improve suboptimal organizations from making performance
performance. message. performance. management a high priority. Through a
combination of factors (time constraints,
lack of training, or lack of knowledge
as to how to support employee
performance), many managers have
difficulty with three core performance
management tasks: conducting employee
assessments, providing differentiated
Poor Understanding of feedback, and initiating corrective
Misunderstanding of Uncertainty as to actions.
Critical Organizational
Performance Standards When to Intervene
Behaviors
Enable Manager Effectiveness at
Performance-Driving Activities
Tendency Toward Managers can benefit from focused

Lack of Tools to Assess Inability to Select the Most training in performance management
Undifferentiated but
Comparative Performance Appropriate Intervention activities that provide a high return.
“Safe” Feedback
Poor or Unconstructive
Communication
of Feedback
Source: General Motors Company; CEB analysis.
47
OBJECTIVE FEEDBACK CERTIFICATION
OVERVIEW
GM’s online “Rater-Calibration Training” course educates employees in how to assess performance and deliver feedback.
All employees involved in delivering 360-degree feedback must complete and pass the training course.
The goal is to improve employees’ ability to effectively evaluate performance, differentiate between performance levels,
and deliver feedback. In particular, the company wants to correct a tendency toward “clustered” ratings that provide
executives and the company with little direction as to development needs.
KEY DIFFERENTIATING FEATURES
This practice differs from standard performance management training courses in three ways. First, the
training program provides a unique, holistic curriculum by educating those who are selected to provide
feedback (raters) about the company’s cultural priorities, the exact meaning of the rating scale, and generic
rating tendencies or “pitfalls.” Second, the high level of interactivity incorporated into the online training
modules through a series of exercises enables raters to evaluate their aptitude at providing 360-degree
assessments and feedback. Interactivity further ensures that raters truly internalize the company’s
cultural priorities and are able to translate observed behaviors into points on the company’s rating scale.
Finally, recognizing the critical importance of informal feedbacka to performance, GM requires that all
360-degree raters be “certified” to give feedback.
RESULT
The enhanced performance management process helps leaders ensure that objectives are aligned with GM’s business
priorities across and down the organization, and the 360-degree feedback process affirms those cultural priorities that
the CEO wants the organization to focus on. The enhanced system also provides data to show where additional energy
needs to be spent.
COMPANY SNAPSHOT
General Motors Company

Industry: Automotive Founded in 1908, General Motors (NYSE: GM), the world’s largest vehicle
manufacturer, designs, builds, and markets vehicles worldwide and has been the
global automotive sales leader since 1931. GM has manufacturing operations in
more than 30 countries, and its vehicles are sold in about 200 countries.
a
For evidence on the importance of informal feedback, please refer to Building the High-Performance Workforce (Corporate Leadership Council, 2002).
48
BUILDING A PERFORMANCE-DRIVEN ORGANIZATION
Although GM’s mandate to

GM’s High-Performance Culture
build a high-performance
Guiding Principles:
organization comes from
the very top, and although ■■ Performance = Results × Behaviors
HR develops clear principles
to frame the new high-
■■ Results are driven by clear, measurable
objectives
performance organization, the
performance management ■■ Behaviors are driven by actions outlined in
system itself presents some four cultural priorities
significant challenges. ■■ Performance drives pay
■■ Leaders are accountable for differentiating
performance and pay
Practice Driver
■■ Leaders must dedicate time to the process
In 1998, senior leadership to do it right
at GM identifies building a
performance-driven culture as a Source: General Motors Company; CEB analysis.
top priority for the company and
requests that HR should provide
tools to enable GM to focus on
the behaviors and results that
would support such a culture.
However, the results from the “Rick Wagoner, GM’s CEO, asked us to put the 360-degree feedback process in place.
first cycle of the 360-degree
feedback process show
But a year later, after he had seen the clustered distribution of rankings, he didn’t
clustered ratings and minimal think this gave leaders enough specific guidance on how to effectively and accurately
written comments, providing
undifferentiated feedback to rate talent to accelerate development and enhance job performance. He wanted to
employees. Conscious of the
resources involved in conducting explore a way to calibrate the ratings so feedback was more meaningful and showed
”
360-degree reviews, GM’s HR
department seeks a strategy
differentiation.
for improving the quality of the
Donnee Ramelli
feedback from the 360-degree
President, GM University
process in order to maximize
its impact on individual
performance.
49
HIGH-PERFORMANCE PROCESSES AND TOOLS
Rater-Calibration Training GM’s Performance Management Process

is designed to support and First Quarter
improve the 360-degree
feedback process that forms Phase 1: Objective Setting:
■■ Identifying five to six high-impact objectives with
a key part of GM’s high-
performance management metrics and timing for the year
process.
Individual Development Planning
■■ Discussion between manager and employees
■■ Online construction of development plan
Third Quarter
Phase 2: Mid-Year Review:

■■ Self assessment
360-Degree Feedback Process
Practice in Context ■■ Helps leaders to determine if they exhibit
■■ Leader’s assessment on progress
To improve the 360-degree ■■ Mid-year development discussion
leadership behaviors aligned with the four
feedback element, GM cultural priorities
University designs Rater- ■■ Improves the executive’s job performance
Calibration Training for all 360-Degree Review by providing feedback on his/her

■■ All executives receive a 360-degree feedback
employees who will be providing behavior
feedback to executives. The assessment every other year to measure their
Rater-Calibration Training is alignment with the company’s leadership behaviors and
conducted online and aims values embedded in the four cultural priorities
Rater-Calibration Training
to provide employees with
All raters must take a short interactive online
a precise understanding of
course before giving feedback to executives.
the 360-degree process in Fourth Quarter
Training aims to increase the benefit that
the context of the company’s
360-degree feedback can provide by
cultural priorities. The second Phase 3: Annual Review:
focusing on:
key aim is to raise employees’ ■■ Similar in form to mid-year review
■■ Differentiated and accurate ratings of
awareness of some of the ■■ Includes additional 360-degree data
behaviors
common errors in providing ■■ Greater awareness of common rating
ratings and written comments
Reward tendencies
and to improve their ability ■■ Annual review rating feeds into compensation system ■■ More constructive written comments
to provide high-quality, high-
impact feedback. Source: General Motors Company; CEB analysis.
50
LINKING PERFORMANCE BEHAVIORS TO CULTURAL PRIORITIES
GM’s online training tool tests

employees’ understanding of
the linkage between corporate
values and demonstrated
performance behaviors.
1
Defining Behaviors
Against Cultural
Priorities
Online training
tool offers precise
definitions of corporate
Step 1: Confirm Employees’ cultural priorities and
the behaviors that
Understanding of the contribute to the values.
Performance Culture
The first module of GM’s
online Rater-Calibration
Training focuses on improving
employees’ understanding
of the organization’s core
“cultural priorities.” In this 2
section, employees must Testing Understanding of the Link Between Cultural Priorities and Behaviors
choose from a list of behavioral Online training tool produces a list of behavior descriptions that employees must “click and
descriptions and “click and drag” toward the cultural priority they believe corresponds with that behavior. Incorrect
drag” the descriptions to the matches require the employee to perform the exercise again until the correct response is
identified.
cultural priority reflected by the
behavior. The system provides Source: General Motors Company; CEB analysis.
employees with immediate
feedback if their answer is
wrong and explains why and
how the behavioral descriptor
fits another cultural priority.
51
FROM “GUT FEEL” TO A NUMBER
After exploring the exact

definition of the seven
points on GM’s rating
scale, employees test their
comprehension of the
meaning of each number
by translating qualitative
statements into ratings.
Step 2: Clarify the Difference Employees can point at

each rating to view GM’s
Between Points on the Rating
definition of that rating.
Scale
The second module of the
aims to improve employees’
understanding of these ratings 1 2 3
The system generates an
and their definitions. Similar Employees read the qualitative …and must translate it into the immediate explanation of
to the previous section, this performance statement… correct rating. whether the selection was
module also ends with a test correct or incorrect, and why.
in which employees must
match generic statements Statement 1a: Jim excels in 3 “You are incorrect. Jim performs
describing observed behaviors this priority and exceeds 4 better than this rating indicates.
to a particular ratings number. Statement 1 a
expectations. 5 Please try again.”a
The aim here is to encourage 6
employees to use the entire
scale to provide detailed a
Hypothetical statement and rating attribution.
development direction.
52
RATING PATTERNS
GM recognizes that there are

discrete “types” of raters, and
provides employees with the
skills to recognize such trends
and improve the quality of
their rating assessments.
Step 3: Educate Employees

About Rating Tendencies
The third module of GM’s GM drives toward variation and
distributed ratings. GM’s goal is
online training course educates
to ensure that employees give
employees about common executives a clear sense of their
rating tendencies which strengths and developmental
diminish rating effectiveness. opportunities.
GM defines six common rating
tendencies, including a tendency
toward median-focused ratings
(“Central Tendency”) or a
tendency to rate only recent
weeks’ performance (“Recency
Tendency”). The training Ratings Tendencies Identified by GM
program instructs employees There are six common rating tendencies:
on how to identify these ■■ Halo: high ratings given to an individual based on a few areas, which influences the rating across assessment
tendencies in their own ratings. categories
The module also asks employees ■■ Leniency: majority of individuals rated at high end versus using the full rating scale
to apply their learning by
■■ Severity: opposite of leniency; ratings at the low end of the scale
identifying rating tendencies
■■ Central: majority of individuals rated in the middle, avoiding either end of the rating scale
present in a series of examples,
■■ Recency: ratings reflect only the most recent observations of an individual’s behavior
providing instant feedback on
the accuracy of their tendency ■■ Primacy: ratings reflect only initial observations of an individual’s behavior versus behavior across time
identification.
53
SPECIFIC, BEHAVIORAL, ACTION-ORIENTED
Recognizing an opportunity
to improve the quality
of written feedback to
supplement numerical ratings,
GM provides clear guidance
on constructing balanced,
clear, and actionable written
feedback.
Employees review a series

of feedback statements
that they must assess for
clarity.
Step 4: Improve the Quality of

Written Feedback
The course highlights
GM recognizes that many the potentially differing
employees need additional skills quality of comments and
to provide written feedback reveals common “vague”
that is specific, balanced, and or imprecise formulations.
provides constructive guidance.
The fourth module of the
training focuses on guiding
employees in writing specific,
behavioral, and action-oriented
written comments. Employees
are asked to critique a series
of poorly-worded written
statements with the aim of
raising employees’ awareness
of their own delivery of written
feedback.
54
CERTIFIED RATERS
At the end of the Rater-

Calibration Training,
employees undertake a
certification exercise that
they must successfully
pass in order to conduct an Rater Certification
executive’s assessment. Certification presents a set of
12 assessment scenarios that
employees must assimilate,
evaluate, and accurately pair with
a rating.
Step 5: Certify Employees’

Rating and Assessment Ability
The final section of the online
program tests employees’ ability
to deliver high-quality feedback. Outcome
The system provides employees
with detailed assessment
scenarios for which they must
select the appropriate rating. Pass Fail
Employees must be certified Employee provides Employee receives
before delivering 360-degree 360-degree assessments. dedicated coaching.
feedback to executives.
Individuals who do not meet the
criteria are further coached on
delivering effective feedback.
55
A CLEAR PICTURE OF PERFORMANCE
HR finds that the Rater- Distribution of 360-Degree Scores at GM Before and with Rater-Calibration Training
Calibration Training
generates a better spread of Before Rater-Calibration Training
performance ratings and the
With Rater-Calibration Training
feedback from employees is
favorable.
Rater-Calibration Training Statistics, 2001
Number of Occurrences
■■ Hundred percent of participants successfully
completed rater-certification process.
■■ In 2001, average ratings lower by at least 0.5
on all cultural priorities when compared to 2000
average ratings.
After the first year, GM reviews ■■ Ratings-certified employees showed greater
the impact of the Rater- differentiation in ratings among the four cultural
Calibration Training and finds priorities than those not trained.
1 2 3 4 5 6 7
that the program has improved
Rating Points
the quality of 360-degree
feedback. Average performance
evaluation ratings are better
distributed, suggesting that
employees are applying the
knowledge from the Rater- Selected Feedback from Rater-Calibration Training Participants, 2001
Calibration Training to more
clearly differentiate the ratings
they provide to executives.
■■ Eighty percent of employees responding to a “Rater-Calibration Training” feedback exercise felt training helped
Course participants provide them make better assessments and were confident their ratings accurately reflected performance.
more balanced and specific ■■ Seventy-eight percent of respondents had a favorable opinion about the Rater-Calibration Training and
written comments than course Certification.
nonparticipants. Finally, course ■■ Comments given by those trained versus those not trained showed more balance in written feedback. Trained
participants indicate great
employees’ comments were more constructive toward enhancing performance. Untrained employees had either
satisfaction with the format
positive comments only or no comments at all.
of the Rater-Calibration
Training—80 percent believe
that the course has helped them
make better assessments of
performance.
56
COUNCIL ASSESSMENT: OBJECTIVE FEEDBACK CERTIFICATION
Key Differentiating Features
This practice differs from standard performance management training courses in three ways.
■■ First, the training program provides a unique, holistic curriculum by educating those who are selected to provide feedback (raters)
about the company’s cultural priorities, the exact meaning of the rating scale, and generic rating tendencies or “pitfalls.”
■■ Second, the high level of interactivity incorporated into the online training modules through a series of exercises enables raters to
evaluate their aptitude at providing 360‑degree assessments and feedback. Interactivity further ensures that raters truly internalize
the company’s cultural priorities and are able to translate observed behaviors into points on the company’s rating scale.
■■ Finally, recognizing the critical importance of informal feedbacka to performance, GM requires that all 360-degree raters be
“certified” to give feedback.
Caveat
■■ Risk of Rating Tendency Recurrence Over Time—Although the course makes a substantial contribution to raising raters’ awareness
of the likely pitfalls in providing feedback, it is possible that raters’ vigilance to such pitfalls will relax over time.
Implementation Tips
■■ Develop Interactive Course Content—Regular tests or exercises in the flow of performance management courses cement
participants’ knowledge and ensure that individuals link theoretical instruction with the practical activities that employees conduct
in a performance management system.
■■ Provide Follow-Up Support Structures—Organizations must ensure that support structures are in place to offer employees further
guidance and support if they fail the online course. This support should be closely coordinated with course participation so that
learning is deeply internalized and immediately applied.
■■ Mandate “Refresher” Courses—Given the fast pace of change in many business environments and many organizations, the Council
recommends regular updates to a “Rater Calibration Training” program. In order to keep employees’ understanding of the company’s
performance culture and performance management tools current, companies should mandate that employees re-take updated
courses as necessary to “re‑certify” themselves in the assessment and provision of feedback.
a
For evidence on the importance of informal feedback, please refer to Building the High-Performance Workforce.
57
BURGER KING: PERSONALIZED PEOPLE MBOS—CASE STUDY

1 Define Overview of Burger King’s Special Practice for Maturity Level 3
2 Support Pages 60–62

See pages 60–62 for an overview of
Pages 63–70
Burger King holds leaders
Page 71–72
By holding leaders accountable for
the Process
Burger King’s practice for creating accountable for talent by linking talent outcomes and supporting the
effective people MBOs. These pages one-third of their performance to creation and execution of people
3 Evaluate also detail common challenges with
people-related MBOs, such as limited
people results. HR helps leaders select
relevant people MBOs, reviews them
MBOs, Burger King saw an increase
in positions filled internally and a
Performance
relevance and poor alignment with for quality, and helps leaders achieve decrease in turnover rates for frontline
business outcomes. people MBOs. and corporate staff.
4 Connect
to Talent Strategy Context for Implementing This Tactic:
■■ Business leaders are often not held accountable for talent-related results (primarily just business results) or struggle to
set effective talent-related MBOs when the are held accountable for such results.
■■ Burger King established a process for setting people MBOs that:
–– Enables leaders to select relevant people-related MBOs,
–– Assesses the quality of people MBOs, and
–– Provides leaders with tools to achieve their people MBOs.
■■ Leaders prioritize talent and improve the quality of their talent given dedicated, high-quality people MBOs and support
from HR.
Note: This case study can be found online here. See also our accompanying Business Leader “People MBO” Selection
Tool (Excel document) to help leaders select relevant, impactful people MBOs.
58
Personalized People MBOs

Burger King Corporation
A people-focused MBO–setting process for leaders to ensure personal relevance

and create urgency for improving talent outcomes
59
PERSONALIZED PEOPLE MBOs
SITUATION
Burger King had a well-established people strategy but determined people-related goals for business leaders were
critical to fully executing that strategy. To implement people goals, Burger King would have to address the three critical
reasons these goals typically fail:
■■ Lack of Individually Relevant People Goals.
■■ Lack of Alignment with Desired Business Outcomes.
■■ Poor Execution of People Goals.
ACTION
Burger King overcomes barriers to people-related objectives through an MBO—setting process that enables officers and
directors (approximately 200 people worldwide) to select individually relevant people-related MBOs, ensures quality
assessment of the objectives, and provides leaders with tools to support implementation of their talent management
objectives.
KEY STEPS
Step 1: Guide Leaders to Select Individually Relevant People Objectives

Step 2: Review People Objectives for Quality and Business Alignment
Step 3: Enable Leader Execution of Personal People Objectives
RESULTS
■■ Increased internal fill rate in 2008 to 41%, up from 34% in 2007 and 29% in 2006.
■■ Decreased turnover rates for frontline staff in 2008 to 131%, down from 140% in 2007 and 161% in 2006.
■■ Decreased turnover rates for corporate staff in 2008 to 12.5%, down from 18% in 2007 and 19% in 2006.
COMPANY SNAPSHOT

Industry: Retail
Revenue System revenue of US$2.4 billion; franchise restaurants
generated sales of US$12.5 billion.
Employees: 39,000 worldwide; franchisees employ about 310,000.
Headquarters Miami, Fla.
60
THREE FAILURES OF PEOPLE GOALS
Goals Insufficient to Produce Talent Outcomes
Council research indicates that people goals frequently fail to improve talent outcomes
due to three key challenges:
■■ Lack of individually relevant people goals.
■■ Lack of alignment with desired business outcomes.
■■ Poor execution of people goals.
61
SHORTCOMINGS OF STANDARD PEOPLE GOALS
People goals fail to improve

talent outcomes because
they lack individual relevance
People-Focused Goals Fail to
for leaders, are unclear
Improve Leaders’ Talent Outcomes
and poorly aligned with
business goals, and are poorly
executed.
Lack of Individually Lack of Alignment Poor Execution

Relevant People Goals with Desired Business of People Goals
People goals are created Outcomes Lack of guidance for
and deployed from the Lack of clear, business- “how to” effectively
corporate center, limiting aligned goals delineating execute people goals
flexibility to adjust to specific actions and undermines long-term
the talent challenges outcome metrics fail to sustainability of talent
and needs of individual drive significant change results.
leaders. and talent results.
Source: Burger King Corporation; CEB analysis.
62
BURGER KING INTEGRATES PEOPLE MBOs INTO PERFORMANCE

RATING AND COMPENSATION PROCESS
Success of People Results Driven by Three Components
In 2007, Burger King introduces people results to its performance rating and
compensation process. Burger King includes three critical components to their people
results process that drive its success:
■■ Guide leaders to select individually relevant people objectives.
■■ Review people objectives for quality and business alignment.
■■ Enable leader execution of personal people objectives.
63
CREATING EFFECTIVE PEOPLE MBOS
Burger King introduces Burger King’s

Performance
=
people results to the existing Pre-2007 Business
Review
performance rating and Leader Results
Business MBOs
compensation process and Performance (100%
Rating Weight) Compensation
addresses key barriers to
Equation:
identifying and executing on
people-related objectives. ■■ Merit Pay
■■ Bonus
■■ Equity
Performance Review
Burger King’s Considerations
+ =
Business People Business MBOs People MBOs
2007 Leader
Results Results
Performance
(Two-Third (One-Third
Rating
Weight) Weight)
Equation:
1. Guide Leaders to Select 2. Review People Objectives 3. Enable Leader Execution of

Individually Relevant People for Quality and Business Personal People Objectives—
Objectives—Burger King Alignment—Direct managers Burger King provides
creates an MBO catalog that and HR review leaders’ leaders with targeted “how
allows leaders to choose proposed people objectives to” guidance on key talent
individually relevant people for their ability to drive talent management activities.
objectives and metrics. outcomes and alignment with
business needs.
MBO Selection Tool MBO Assessment Process Talent Management Toolkit

F’08 Performance Management:
HR MBO Assessments
Name: Burg R. King
F’08 Performance Management:
Title: District Director
Approved Sufficiently aligned with organizational
Name: Burg R. King Function:
Operations “Green” and business unit needs; robust
District Director
Title:
enough to drive meaningful change
Function:
“What”
Operations and improved talent outcomes

Go
Objective
Action: Execute MBOs
Weight Forward Committed Deliverables
“What” Measures
Name
Pillar Inadequate alignment with
Go Needs
Forward
Objective
Committed Deliverables Measures organizational and /or business
Pillar
Name Improvement
“Yellow” unit needs; able to drive limited
This is the
change and minor improvements in
POTENTIAL
These are the committed
name of These are the measures
Business Fund the deliverables for
Objectives
.25
Future
my FIRST
Business
my FIRST Business
for my FIRST Business
Objective.
talent outcomes
Objective.
Action: Adjust MBOs and resubmit to
RATINGS
Objective
• Develop and
communicate an
• Increase in employee
awareness and
HR for approval
GUIDE
inclusion plan to understanding of the
Working
your manager and company’s diversity and Misaligned with organizational and/
0.5 Inclusion direct reports that inclusion initiative
Together supports Burger King • Increase in favorable
Declined or business unit needs; lacks ability
Corporation’s strategic employee perceptions of “Red” to drive change and improvements in
People direction for diversity the company’s diversity
Objectives and inclusion. and inclusion initiative talent outcomes
• Design work assignments • # of employees involved
to provide stretch in cross-functional Action: Select new MBOs with the
0.5
Working People
opportunities for
individual development.
projects.
assistance of HR business partner and
Together Development
• Involve employees in resubmit to HR for approval
cross-functional project
or team.
64
LEADERS SELECT PEOPLE OBJECTIVES WITH HR SUPPORT
MBO Selection Guides Assist with Objective Setting

Burger King creates a business leader MBO–setting tool, designed to help business
leaders select the most appropriate goals. This tool includes MBO selection guides
for the most critical people objectives, such as inclusion and people development.
These selection guides include a description of the organization’s strategy for that
objective, sample deliverables, and sample measures. HR business partners further
support business leaders in selecting their people MBOs by questioning them on
critical elements of their human capital and business strategy and advising them on
appropriate objectives.
© 2014 CEB. All rights reserved. XXXXXXXXXXXXX
65
PERSONALIZING LEADERS’ TALENT OBJECTIVES

HR facilitates business leaders’ selection of business and people objectives that align with corporate priorities and leaders’ individual talent
challenges by providing specific sample deliverables and measures.
Burger King’s Leader MBO–Setting Tool
People Development MBO Selection Guide FY 08 Performance Management: O&D Objectives Inclusion MBO Selection Guide
Name: Burge R. King Title: District Director, Operations
People Development Strategy: Inclusion Strategy:
Identify objectives that will advance the business and improve results.
Improve employee development to grow Objective Committed Elevate inclusion beyond compliance to
Weight Measures
future leaders from within and meet employees’ Name Deliverables establish a committed culture of inclusion that
demand for development opportunities. reflects Burger King’s customer base.
Business Objectives
MBO Categories: MBO Categories:
Business
■■ Development planning ■■ Employee learning 0.25 ■■ Promoting an inclusive ■■ Business partners
Objective 1
■■ On-the-job ■■ Talent sharing and workforce ■■ Guest experience
development succession planning ■■ Leadership commitment ■■ Cross-functional
and communication collaboration
Sample Deliverables Sample Measures ■■ Develop and ■■ Increase employee ■■ Local engagement
■■ Conduct functional ■■ Reduce skill gaps communicate an awareness and
inclusion plan to understanding of the
skill assessment to within the function. Sample Deliverables Sample Measures
Category: Promoting an Inclusive Workforce

your manager and company’s diversity
identify gaps and direct reports that and inclusion initiative. ■■ Serve as a mentor to ■■ Increase percent in
0.50
Category: Development Planning
Inclusion
create subsequent supports Burger ■■ Increase favorable
develop and coach retention of diverse
action plan. King Corporation’s employee perceptions
People Objectives
strategic direction of the company’s

diverse employees. employees.
for diversity and diversity and inclusion
■■ Conduct quarterly ■■ Achieve 100% of inclusion. initiative.
development plan action steps in ■■
Design work ■■ Determine number of
■■ Develop ■■ Increase high-
review sessions development plans. assignments to employees involved partnerships with value, ongoing
with direct reports provide stretch in cross-functional organizations partnerships with
opportunities projects.
to ensure ongoing 0.50
People supporting organizations
for individual
progress. Development development. minority talent for supporting minority
■■ Involve employees recruiting purposes talent.
in cross-functional (e.g., business/
project or team.
professional
organizations,
community
organizations,
HR Business educational
Line Leader
Partner
HR Business Partner–Line Discussion Points for Selecting People MBOs

■■ What human capital resources do you require to achieve short- and long-term business objectives?
■■ How will you support employee development to ensure the talent needed to achieve those objectives?
■■ How will you create a culture of inclusion reflecting Burger King’s customer base to drive business results?
66
HR ENSURES LEADERS CHOOSE STRONG OBJECTIVES
Two Separate Reviews of People MBOs

Business leaders submit their people MBOs for two reviews: one by central HR and the
other by the HRBP and the business leader’s direct manager. The first review by central
HR ensures that people-related objectives drive the right talent outcomes. Business
leaders are given a color code to indicate their compliance: green (approved), yellow
(needs improvement), and red (declined). Leaders who achieve the lower two colors
need to adjust or change their MBOs, with HRBP help if necessary, and resubmit them.
The second review is executed by the HRBP and the business leader’s manager,
frequently the head of a region or business unit. This review ensures people MBOs
adequately support the organization’s and the business unit’s business and talent needs
and that they are sufficiently ambitious in comparison with other leaders.
67
CALIBRATING PEOPLE MBOs FOR QUALITY AND BUSINESS ALIGNMENT
HR reviews people-related HR Objective Review Leader-Selected Objectives HRBP and Direct Manager
objectives selected by leaders Objective Review
for their ability to drive talent
outcomes while HRBPs and
direct managers review
objectives for alignment
HRBP and Head of Region/
with business strategy. HR HR Business Unit
HR MBO Assessments FY 08 Performance Management: O&D Objectives Approval Considerations
Approved Sufficiently aligned with Name: Burge R. King Title: District Director, Operations
“Green” organizational and business 1. D
o the MBOs adequately
Identify objectives that will advance the business and improve
unit needs; robust enough results. support the organization’s
to drive meaningful change business and talent needs?
Objective Committed
and improved talent Weight Measures
Name Deliverables
outcomes ■■ ■■ 2. D
o the MBOs support the
Develop and Increase
Action: Execute MBOs. communicate employee business unit’s strategy and
an inclusion awareness and talent needs?
Inadequate alignment
Needs plan to your understanding of
with organizational and/or manager and the company’s
Improvement
business unit needs; able direct reports diversity and
“Yellow” that supports inclusion 3. A
re the objectives
to drive limited change
0.50 Inclusion Burger King initiative. sufficiently ambitious in
and minor improvements Corporation’s ■■ Increase favorable
comparison with other
in talent outcomes strategic employee leaders in the business
Action: Adjust MBOs direction for perceptions of
People Objectives
diversity and the company’s unit?
and resubmit to HR for
inclusion. diversity and
approval. inclusion
Misaligned with initiative.
organizational and/or ■■
Design work ■■ Determine
Declined business unit needs; lacks assignments to number of

provide stretch employees
“Red” ability to drive change and
opportunities involved in
improvements in talent for individual cross-functional
outcomes 0.50 People development. projects.
Action: Select new MBOs Development ■■ Involve
“Providing feedback on employees
with the assistance of HR
MBOs has allowed us to business partners and
in cross-
functional
establish consistent resubmit to HR project or
for approval. team.
standards across the organization
while guiding leaders in talent
management practices that will Objective Quality Self-Check
ultimately drive meaningful Align objectives with organizational and business goals.
culture change.” Ensure that objectives are ambitious yet realistically achievable within specified time frame.
Lisa Roberts Link objectives to specific outcomes rather than processes to track progress against goals.
Senior Manager, Talent Development
Burger King Corporation Source: Burger King Corporation; CEB analysis.
68
DETAILED MBO–EXECUTION GUIDANCE
Guides Help with Decision Making

Burger King develops manager guides on activities critical to talent outcomes to help
business leaders successfully execute their MBOs. These guides are designed to help
business leaders make better decisions and not just explain the talent management
process. Importantly, these guides also avoid all “HR speak,” communicating in a simple,
clear language.
69
GUIDING THE “HOW TO” OF MBO ACHIEVEMENT
Burger King helps leaders achieve their people-related objectives with simple guidance that enables more effective talent decision
making and outcomes.
Burger King’s High-Potential Review Ratings Guide
Targeting Manager Barriers

Burger King targets manager guidance
on activities that are critical to quality
talent outcomes and that managers
tend to struggle with the most. Avoiding “HR Speak”
Burger King simplifies
talent management
concepts by removing any
HR–specific terms and
delivering information in
clear, easy-to-understand
language.
Beyond the Process

All of Burger King’s
guidelines provide explicit
information and examples
that help business leaders
make better talent
decisions. The guidelines
are not just a description
of the talent management
process or a framework for
placing people (e.g., Nine-
Box Grid).
70
PEOPLE MBOS DELIVER RESULTS
Internal Fill Rates Up, Turnover Rates Down

Since implementing people MBOs into its performance rating and compensation
process, Burger King has experienced excellent talent outcomes. The percentage of US
positions filled internally is up by more than 13 percentile points from 2006. In addition,
turnover rates have dropped substantially: frontline staff turnover has decreased by 30
percentile points, and corporate staff turnover is down nearly seven percentile points.
71
IMPROVED DEVELOPMENT AND RETENTION
Improved people development Percentage of US Positions Filled Internally Turnover Rates

results and decreased Frontline Staff
turnover rates are attributed
by Burger King’s CEO in large 50.0% 180.0%
161.4%
part to a new leadership focus 41.7%
140.2%
on talent outcomes. 131.4%
33.6%
28.5%
25.0% 90.0%
0.0% 0.0%
2006 2007 2008 2006 2007 2008
Source: Burger King Corporation; CEB analysis. Source: Burger King Corporation; CEB analysis.
Turnover Rates
Corporate Staff
20.0% 19.5%
18.2%
“Nothing is more
important than our 12.6%
people, particularly
when you look at the growth we 10.0%
are facing over the next five to
ten years. (Our talent processes)
make it far easier to see where
our development needs are,
where our weaknesses lie, and
0.0%
where we need to recruit.” 2006 2007 2008
John W. Chidsey Source: Burger King Corporation; CEB analysis.
Chief Executive Officer
72
PRACTICE Q&A WITH PETE SMITH, CHIEF HUMAN

RESOURCES OFFICER
Commentary and Implementation Tips from Burger King Corporation
1. What is the key to making this a successful practice?

“There isn’t a silver bullet for making this work. Because the use of MBOs for people results was a radical departure and required a
huge culture shift for Burger King, we had to deliver a consistent, simple message over time. We also had to provide a lot of guidance,
education, and feedback to ensure we could truly start to embed our renewed emphasis on talent into our company’s culture. To
provide that support to our leaders and to make sure they understood the degree of quality we expect in people MBOs, we worked
with them to design and evaluate the quality of their proposed objectives. This way, we could also calibrate the MBOs to ensure
consistent quality across Burger King and ensure objectivity in the MBOs.”
2. How do you leverage accountability efforts to improve talent outcomes for leaders lacking a talent mind-set?
“Compensation is critical to accountability. While you have to educate leaders and provide them with the tools to realize improved
talent results, at the end of the day, you must link it to compensation to really get executives’ attention. Linking people results to
compensation in such a significant way is necessary for leaders to take responsibility for something they aren’t naturally responsible for.”
3. What was hardest about implementing this practice, and how did you deal with that obstacle?
“The most challenging part was inspecting and policing all of the proposed objectives to ensure that we had a consistent level of quality
across the organization and to ensure that the people MBOs were properly aligned with business needs. It was time-consuming, but it
was something we had
to do to show that we were serious about improving our talent results by holding leaders to a consistent standard. For example, the
MBOs couldn’t simply focus on hiring targets, as there are other important areas such as community outreach and people development
to address.
In addition, HR had to make tough judgment calls about senior-level executives and the quality of their MBOs, and there is a lot on the
line for the executives if they do not achieve their objectives. In the future, we are looking to include representatives from the line on
the panel that reviews proposed people MBOs so that we have the level of scrutiny and objectivity required for successful MBOs. As
leaders get used to this annual objective-setting process and are more adept at setting high-quality objectives, the need to evaluate
and police the objectives won’t be as strong, and the burden for HR will decrease significantly.”
73
BURGER KING CORPORATION: IMPLEMENTATION ROAD MAP
The Council recommends First Steps: Personalized People MBOs

the following steps to begin
implementing Burger King
Corporation’s practice.
tep 1: Introduce People Results to Performance Rating and Compensation Process—Include people MBOs that
S
account for a significant proportion of the overall performance review and total compensation.
tep 2: Support the Line in MBO Identification Through Selection Guides and an MBO–Setting Tool—Develop
S
tools that provide specific sample deliverables, measures, and a framework to facilitate business leaders’ selection
of business and people objectives that align with corporate priorities and leaders’ unique talent challenges.
Step 3: Calibrate People MBOs for Quality and Business Alignment—Implement dual reviews of people
objectives: one by HR, to ensure leaders chose MBOs that drive talent outcomes, and one by the HR business
partner and direct manager, to ensure objectives align with business strategy.
tep 4: Guide Business Leaders on Making Better Talent Decisions—Help leaders achieve their people MBOs
S
with simple guidance that provides explicit information and examples that helps business leaders make better
decisions, is focused on the activities most critical to talent outcomes, and uses clear language that lacks any
HR–specific terms.
74
Part 3: Evaluate
Performance

We enable consistent performance
Level Managers and employees perceive the performance
3
evaluation and monitoring.
management system as fair; talent mobility is
better supported because employees are assessed
consistently across the organization.
We evaluate indicators of future Why should your organization move to the next level?
Level
4
and network performance, not just At Level 4, you assess employees on not only
past individual performance. individual, past performance contributions, but also on
future and network performance.
75
CHECKLIST
ACTIVITIES
Gather data across the organization to understand the ‘current state’ of evaluation techniques, identifying areas of
2 Support alignment and variability.
Identify internal best practices and tools being used throughout the organization to determine what techniques can
the Process
be repurposed or distributed more broadly.
3 Evaluate Develop a business case to highlight the importance of consistent evaluation and monitoring of employee
performance standards, and how to evaluate employees against those standards.
Performance
Execution
4 Connect Develop an organization-wide approach to evaluating employee performance by codifying existing best practices,
tips, and support tools from across the organization.
to Talent Strategy
Meet with senior leaders to discuss ‘current state,’ and build buy-in across the organization.
Ensure managers across the organization have a group session with their HR business partner to talk about the
performance review process, including how to appropriately evaluate their employees’ performance.
Develop guides that help managers effectively evaluate their staff, including examples of best and worst practice.
Highlight common pitfalls for managers, such as misdiagnosing the true causes of employee underperformance,
unintentional bias, and ratings inflation.
Run calibration sessions across the organization to ensure consistency and the incorporation of broader feedback.
Provide managers with guidance to effectively discuss their direct reports in calibration sessions.
Update an online resource center with tools to help managers evaluate performance and deliver reviews.
Track
Monitor the process: e.g., communication to managers & employees; calibration sessions complete.
Monitor the impact: e.g., employee satisfaction with performance review process; normal distribution across groups.
Make managers aware
of typical evaluation
pitfalls that affect CHANGE MANAGEMENT TIPS
accuracy, such as misdiagnosing ■■ Ensure alignment at the top—Before communicating a new process to the rest of the organization, ensure that senior
the causes of performance leaders have had the opportunity to understand, discuss, and align around it.
problems, bias, and ratings ■■ Aid decision making—Develop tools that help managers make decisions about employee performance rather than just
inflation.
telling them what to do.
76
PERFORMANCE ISSUE ROOT CAUSE EXERCISE—DIAGNOSTIC

1 Define What Is It? A diagnostic tool to support managers in accurately identifying the root causes of performance issues
(motivation vs. environment vs. knowledge vs. skill).
2 Support Format: PowerPoint
the Process Benefit: Managers often fail to examine underlying causes of employee performance issues correctly, typically
considering surface level issues. These assumptions can lead to incorrect performance assessments. Using reflective
3 Evaluate questions, this customizable tool guides managers to identify the real reason behind a performance issue, and partner
with the employee to brainstorm a targeted solution.
Performance
Time Required: 1–2 hours
4 Connect Hyperlink to Interactive Resource: Performance Issue Root Cause Exercise—Diagnostic
to Talent Strategy
HOW TO GET STARTED
Preparation
■■ Review the tool to see if there are any additional questions that might be relevant for your organization.
■■ Share the tool with HR business partners and a sample of managers to get feedback and update the diagnostic.
Implementation
■■ Educate managers about the importance of identifying the root causes of performance issues to drive behavior
change and ensure accurate performance evaluations.
■■ Share the root cause diagnostic tool with managers with guidance on how to use it in conversations with their direct
reports; encourage managers to use the diagnostic as part of the formal performance evaluation process and as
performance challenges arise.
■■ Provide an opportunity for managers to discuss the tool with HR business partners should they have any questions or
want to practice using it.
77
GODFREY PHILIPS: DISCOURAGING OVERRATING IN PERFORMANCE REVIEWS—CASE STUDY

1 Define Overview of Godfrey Philips: Discouraging Overrating in Performance Reviews for Maturity Level 3
2 Support Page 80
Learn more about overrating, why
Page 81
Action Step 1 details how Godfrey
Page 83
Action Step 2 details how Godfrey
the Process
it happens, and the detrimental Philips correlates performance Philips introduced the new
effects for both individuals and the reviews with business unit results to performance review process to the
3 Evaluate organization. identify instances of overrating. organization.
Performance
4 Connect
■■ Managers tend to overrate employees to avoid conflicts; this leads to lack of differentiation, frustrating high performers
to Talent Strategy
who are not recognized for that performance and giving low performers a false, inflated sense of their performance.
■■ To mitigate this challenge, Godfrey Phillips correlates employee performance scores with business unit results.
■■ This resource will help you correct overrating of employee performance and correlate employee performance and
business results.
■■ More highly correlated employee performance and business performance and less overrating in performance reviews.
Note: This research tactic can found online here.
78
DISCOURAGING OVERRATING IN PERFORMANCE REVIEWS

(GODFREY PHILLIPS INDIA LIMITED)
SITUATION
■■ Some managers at Godfrey Phillips India Limited continually overrated employee performance in annual reviews.
■■ HR intervention was ineffective due to absence of correlation between employee performance ratings and business
unit/departmental results.
■■ Correlating Business Unit (BU) results with aggregate of individual performance reviews enabled the HR team at
Godfrey Phillip’s to discourage overrating in employee performance reviews.
SOLUTION HIGHLIGHTS
■■ Enable Correlation of BU Results with Performance Reviews: Measuring employee performance on a percentage scale
to enable objective correlation with BU results.
■■ Shift from a “Rating” Mindset to a “Percentage of Target Achieved” Approach: Measuring employee performance on
a percentage scale to enable a more objective performance management approach wherein employees understand
that their review is not based on perception but on percentage of performance delivered.
■■ Flag Overrating: Flagging BUs where average employee performance review (in percentage) is significantly higher/
lower than BU results (percentage of target achieved).
■■ Hold One-to-One Discussions with Heads of “Problem” BUs: Encouraging heads of BUs (where employee
performance is overrated) to scale down performance ratings such that average employee performance rating is in
sync with BU results.
COMPANY SNAPSHOT
Godfrey Phillips India Limited

Industry: Tobacco Products (Primary) Godfrey Phillips India Limited is an India-based company that
2009 Sales: Rs. 22,269 Crores operates in two business segments: cigarette and tobacco products,
and tea and other retail products. The company’s products are
Employees: 1,460 distributed over a network of more than 500 distributors and
800,000 retail outlets. With the corporate office in Delhi, the
Company has offices all across India in over eight locations.
Source: Godfrey Phillips India Limited; CEB analysis.
79
CONSISTENT OVERRATING IN EMPLOYEE PERFORMANCE REVIEWS
Managers often have a Comparing Individual Performance and BU Performance

tendency of overrating Illustrative
employees to avoid potential
conflicts. Average Employee Rating
■■ High-performers feel
disengaged due to
Employee performance ratings were
ineffective evaluation and continually increasing out of sync with
the subsequent lack of business units’ results…
differentiation.
■■ Performance overrating thus

2006 2007 2008
diminishes employees’ drive
BU Results
to improve.
Average Employee Ratings BU Performance

Five-Point Scale, Illustrative Illustrative
…and HR intervention was ineffective due

to lack of an objective correlation between
performance reviews and business outcome.
No Percentage of Target Met

1.0 3.0 3.3 5.0 Objective 96%
“A herd mentality further
accentuated the Correlation 0% 100% 200%
Average
Performance Rating
Far Exceeds
Expectation
Meet
Expectation
Does Not Meet
Expectation
tendency to overrate Possible

Interventions by my team were
ineffective as managers defended
their reviews, though they did not
have a solid case.”
Arun Kumar
Executive Vice President, Human
Resources
80
ACTION STEP 1: CORRELATING PERFORMANCE REVIEWS WITH

BUSINESS UNIT RESULTS
Measuring employee Comparing Apples with Apples
performance and business
units results on the same
scale enables an objective Individual Performance BU Performance
correlation between the two.
Average Employee
Performance Rating
■■ Employee performance Does Not Far Does Not Target Far
Meet Meets Exceeds Meet Met Exceeds
ratings started being
measured on a percentage
scale, as was the case 0% 100% 130% 200% 0% 96% 100% 200%
with business unit results.
■■ Overcalculation of rating
could now be flagged The HR team established a similar scale for BU
through comparison results and individual performance rating…
of average employee
performance review
…and held managers accountable to
and business unit results. demonstrate correlation between the two.
■■ Shift from a “rating” mindset

to a “percentage of target
achieved” approach in Unrealistic Gap
itself diminished managers’
tendency to overrate.
Does Not Far

Meet Meets Exceeds
0% 96% 100% 130% 200%
BU Target Average Employee

Achieved Performance Rating
81
THE NEW PERFORMANCE REVIEW PROCESS
Managers ensure fair employee

performance ratings once they
understand the requirement Step 5: Step 1:
of causality between BU Managers deliver the Managers/Reviewers submit
results and aggregate of performance review to reviews of their direct reports
individual performance their direct reports. to the HR team.
reviews.
■■ Employees understand that

their rating is not perception
but a percentage of
performance delivery.
Step 4: Step 2:
Overevaluation is normalized HR does an intergroup and
as managers understand the intragroup trend analysis of
requirement of correlation various locations/functions/
between BU results and BUs and compares aggregate
individual performance of individual performance
reviews. reviews to locations/
functions/BU results.
Step 3:
HR engages in discussion with managers
of BUs/functions where performance
evaluations are not in line as emerging
out of the analysis done in step two.
82
ACTION STEP 2: MAPPING THE CHANGE MANAGEMENT PROCESS
A change in the performance

management system (PMS) Obtain Executive Roll-Out the Communicate the New
requires executive buy-in and Buy-In New System PMS and Train Managers
manager training.
■■ The HR team presented a business ■■ The HR team finalized the ■■ The HR team initiated group
case to the HR steering committee transition of performance ratings presentations for all managers to
and obtained sign-off. to a percentage scale. explain the philosophy behind the
change in the PMS and the new
–– The extent of performance –– Performance rating criteria for
performance review process.
overrating was explained along employees in all BUs were based
with its disadvantages. on a similar foundation. However, ■■ Individual managers were
some modifications were made encouraged to reach out to the HR
–– The process for corrective action
according to unique BU factors team with questions, concerns, and
was presented to obtain inputs
that emerged out of discussions suggestions.
and sign-off.
with BU heads.
■■ The HR team then reached out to
■■ Software systems were modified
BU and functional heads to obtain
as required by the shift to the new
their support for the change in the
PMS.
performance management system.
“We did receive a

pushback from a few
managers, but providing
further clarification on our intent
made the transition smooth.”
Arun Kumar
Resources
83
TRANSITION TO A NEW PMS YIELDS ENCOURAGING RESULTS
Normalized performance Comparing Individual Performance and BU Performance

ratings lead to higher Illustrative
engagement levels and a
renewed employee drive Employee performance ratings . Average Performance Rating
to improve performance are in sync with BU results. BU Performance
amongst employees.
High-performing employees are more engaged …and the entire employee base aims to improve
due to fair evaluations… performance and skills.
Individual Business
Earlier Level Level
1 3 5 ■■ Higher ■■ Increased
Average Rating of Average Rating of Motivation Productivity
Low-Performing High-Performing ■■ Higher and Quality
Employees Employees Engagement Hiring Spend
“Feedback from the ■■
entire leadership and Levels to Reduced

management base has Now Improve ■■
been very positive. Often, the new 0% 100% 200%

■■ ■■
PMS has been described as a right ■■

Average Rating of Average Rating of
fit.” Low-Performing High-Performing
Arun Kumar Employees Employees
Resources
84
CALIBRATING EMPLOYEE PERFORMANCE—MANAGER GUIDE

1 Define What Is It? This manager guide is designed to ensure that managers understand the performance calibration process.
Format: PowerPoint
2 Support Benefit: This guide provides managers with a clear understanding of how to avoid rating biases and calibrate employee
the Process performance, including preparing for a calibration meeting and presenting and discussing employees during a calibration
session.
3 Evaluate Time Required: 2 hours for HR to develop a calibration meeting agenda and associated materials; 30 minutes per
Performance employee for managers to prepare for calibration meetings; approximately 10 minutes per employee to discuss
employees in a calibration meeting
4 Connect Hyperlink to Interactive Resource: Calibrating Employee Performance—Manager Guide
to Talent Strategy
HOW TO GET STARTED
Preparation
■■ Familiarize yourself with the current state of calibration at your organization. Do you have an overarching approach
or guidelines for calibrating employee performance?
■■ Use this guide to help you design a calibration meeting agenda and develop preparation materials for managers.
Implementation
■■ Use this guide to alert managers of the common rating biases they should avoid; share it with managers several weeks
in advance of the calibration meeting so they can effectively prepare unbiased presentations of their employees.
■■ Share the guide with managers, HR business partners, and other stakeholders participating in calibration sessions in
advance of the session to inform them of the calibration meeting process and agenda.
■■ Consider providing employees with an overview of the calibration process so they are confident their performance is
being assessed fairly.
85
Part 4: Connect
to Talent Strategy
We connect our performance Performance management is not a stand-alone
Level
3
management process to other process; other talent management processes
talent processes. (succession management, career pathing, learning
and development) inform and are informed by the
performance management process.
We use data from our performance Why should your organization move to the next level?
Level
4
management process to identify At Level 4, you use performance data to gain insights
organization-wide talent risks and into strengths, risks, and opportunity areas across the
opportunities. organization.
86
CHECKLIST
ACTIVITIES
Identify all talent management processes and work-streams within the business that are connected to or should be
2 Support
connected to the performance management process.
Identify the key stakeholders or program/process leads for each of the talent management areas that are or should be
the Process
tied to the performance management process.
Identify all relevant data, metrics, and processes that are currently operating and available, as well as new
3 Evaluate opportunities for better integrating talent management practices with performance data.
Performance Execution
Clarify the key talent outcomes that you want to achieve, and then work back from there to determine how
4 Connect performance management might influence those outcomes.
to Talent Strategy Communicate key metrics and insights from performance management to the rest of the talent management organization.
Develop internal working groups and/or steering committees around each of the talent outcomes.
Identify the performance management data that can inform each talent outcome.
Conduct talent reviews with business unit leaders after your formal performance review process ends. Use talent
reviews as a key source of information to identify strengths and gaps around key talent outcomes.
Analyze trends and correlations between different talent data across the organization.
Create a centralized system for storing and sharing talent management data and information.
Design an integrated dashboard to present talent data both within and outside the HR function, including each
steering committee.
Track
Collaboration and sharing (e.g., frequency and attendance at shared meetings, data quality and sharing, activity).
Trends and analysis (e.g., common themes across the organization, highlights and talent hot spots and risk areas).
Impact of connectivity (e.g., Improvement in talent outcomes through increased sharing and better knowledge transfer).

■■ Define talent outputs and inputs—Before linking performance management to other talent processes, define
objectives and needs of each talent process, as well as terms and data to ensure consistency.
■■ Create a system-map—Develop a visual representation so that people both within and outside HR can see where and
how the different parts of talent management are interconnected.

■■ Use the ‘squint test’—For dashboards and communications outside of HR, use the ‘squint test’ to see if you can clearly
determine the most important trends with little effort.

87
CONDUCTING AN ORGANIZATIONAL AND TALENT REVIEW

1 Define What Is It? A 3-step action toolkit to help HR and business leaders conduct effective talent reviews aligned with business
objectives.
2 Support Format: Compilation of two Excel documents and one PowerPoint presentation
the Process Benefit: This toolkit provides step-by-step guidance and tools to help organizations conduct talent reviews that:
1) engage leaders in the process by demonstrating the connection to business strategy, and 2) analyze talent and
3 Evaluate organizational barriers to achieving business objectives.
Performance Time Required: 2–5 hours for each leader to analyze their talent and create an action plan; one hour for each leader to
present their action plan during the talent review meeting; up to one day for HR to aggregate the information and create
an organization-wide talent action plan.
4 Connect Hyperlink to Interactive Resource: Conducting an Organizational and Talent Review
to Talent Strategy
HOW TO GET STARTED
Preparation
■■ Review the contents of the toolkit and create a timeline based on the 3 steps in the toolkit.
■■ Prepare guidelines and instructions for business leaders and their HR business partners; prepare HR business partners
to review the analysis and action plans.
■■ Plan and schedule the talent review meeting. They often occur after the formal performance review cycle, or in
advance of business strategic planning cycles. The meeting may be standalone or part of a broader leadership offsite.
Implementation
■■ Introduce the talent review process and expectations to business leaders. While a central e-mail from HR and
subsequent HR business partner communications help, ideally the process and expectations can be introduced
alongside the process and expectations for business strategic planning.
■■ Encourage HR business partners to offer their support and provide feedback on the analysis and action plan both
before the talent review meeting and throughout the year.
■■ Facilitate the meeting to ensure robust discussion of talent needs and the link to business strategy. Ask probing
questions and pressure test, and encourage business leaders to do the same.
■■ After the meeting, aggregate the information to create an organization-wide talent strategy. Consider holding an HR
leadership team meeting or offsite to refine it.
88
Appendix
Checklists from Maturity Level 2
These checklists have been included so you can confirm you have
completed all the necessary steps to advance to Level 3.
89
CHECKLIST
ACTIVITIES
Ensure that you have an up-to-date list of line managers.
2 Support Source internal best practice examples of performance expectation setting.

Bring key stakeholders together to agree on the focus and intention behind performance expectations at the organization;
the Process
bring copies of organizational objectives or goals, values, and competencies, if available.
3 Evaluate Execution
Document the performance management process with timelines, expectations, and requirements for managers and HR
Performance
business partners. The process for defining performance expectations often begins with senior leaders, and then cascades
down to business unit leaders and functional heads, middle managers, frontline managers, and individual contributors.
4 Connect Develop guidance documents and tools that managers at all levels can use to set performance expectations with their
to Talent Strategy staff.
Organize meetings (in person or virtually) to communicate the performance expectations setting process to line
managers and HR business partners; include time for questions.
Follow up meetings with supporting tools and resources for managers and HR business partners.
Communicate directly with employees about the process and purpose of setting performance expectations,
and offer HR support.
Create an online resource center for managers with tools, support, and FAQs.
Track
Monitor manager completion of the performance management process (e.g. documentation of performance
expectations).
Assess employee satisfaction with the performance expectation setting process.

■■ Think from the manager’s points of view—Work back from the activities that the manager will need to do and provide
support and guidance on how to prepare and manage each step.
■■ Provide context—Help managers by explaining the purpose of each activity and tool and the way they can be used.
■■ Set clear expectations—Provide clear guidance on deadlines, expectations, and boundaries for managers about the
degree to which they can customize performance criteria for their direct reports.
■■ Allow an opportunity for dialogue—Provide an opportunity for questions around the process—both before and during.
90
CHECKLIST
ACTIVITIES
Ensure you have an up-to-date list of line managers across the organization.
2 Support Identify and collect examples of effective methods that managers currently use across the organization to provide
feedback, both formal and informal, to their employees.
the Process
Review CEB e-learning modules about helping managers prepare and deliver high-quality feedback. See the next
3 Evaluate page for more information about the modules.
Performance Execution
Incorporate time into existing leader and manager training and development to highlight the importance and value of
4 Connect providing ongoing feedback to their employees.
to Talent Strategy Provide guidance to managers around the many ways to provide feedback, with tips and examples to help bring it to life.
Develop a cheat sheet for managers with “dos and don’ts” of providing feedback to help guide and inform their
behavior.
Provide support tools to prepare managers to navigate difficult performance conversations with their employees.
Create an online resource center for managers with easy access to tools, support, and FAQs.
Track
Monitor the frequency with which employees receive feedback (both positive and negative) from their manager.
Monitor employee satisfaction with the feedback—both the quantity and quality—they receive from their manager.

■■ Make it easy—Develop support tools that are easy for managers to use so that giving feedback is straightforward even
for new managers.
■■ Highlight the benefit—Think from the manager’s point of view and communicate the benefit (to both manager and
employee) of providing timely feedback.
■■ Build manager comfort with giving feedback—Allow opportunities for managers to practice giving feedback in ‘safe’
situations with their peers so they develop their own style and comfort with their approach.
■■ Hold managers accountable—Clearly communicate to managers that providing ongoing feedback is an expectation of
their role and it will be measured.
91
CHECKLIST
ACTIVITIES
Assess the approaches used by different groups across the organization to evaluate performance; consider the
strengths and opportunities of each of those approaches.
2 Support Outline for managers the critical elements of assessing employee performance.
the Process
Execution
Draw on best practices within and beyond the organization to design a central performance management approach
3 Evaluate used consistently across the organization.
Performance Meet with HR Business partners and senior leaders to gain input on the proposed centrally managed process,
including performance expectations.
4 Connect Establish a clear set of evaluation standards or criteria that are flexible enough to be relevant throughout the
organization.
to Talent Strategy
Run a pilot set of managers through the new performance management system to gather feedback, outline the key
lessons and tips for successfully using the system, and ensure managers are applying performance criteria the same way.
Develop an overview of the step-by-step process for managers and employees highlighting milestones, activities and
expectations.
Communicate the new process to HR business partners and managers and provide them with the talking points, tools,
and support needed to successfully support and execute the process.
Create an online resource center where managers and employees can access process overview documents, guidance on
completing reviews, documents defining performance criteria including rating scales and competency models, and FAQs.
Track
Monitor the process: e.g., communication to managers & employees; percent of reviews completed by deadline
Monitor the impact: e.g., feedback from employees and managers around the ease and effectiveness of the process;
normal distribution of review ratings
Managers tend to
inflate the performance CHANGE MANAGEMENT TIPS
of their direct reports ■■ Clarify the purpose—Help employees understand why the performance management process, in particular effective
during evaluations. In your evaluation and feedback delivery, is critical to their own performance, their teams, the business, and their peers.
guidance for managers and HR
■■ Make tools easy to use—Think from the audience’s point of view when developing tools and guidance so it is simple to
business partners, encourage
apply.
them to be aware of this
tendency. ■■ Learn and improve each time—Set aside time post-review cycle to listen and learn from key stakeholders across the
business about how the process has gone, what lessons can be learned, and determine improvements to make for the
next cycle.
92
CHECKLIST
ACTIVITIES
Ensure HR business partners have access to both performance and compensation data.
2 Support
Evaluate how talent data are currently being used to inform pay and promotion decisions throughout the organization,
including policies and practices that are consistent across the organization or unique to certain parts of the business.
the Process
Execution
Establish criteria for using talent data consistently across the organization to make pay and promotion decisions.
3 Evaluate Seek any necessary guidance or sign-off from your legal function or general counsel on revised pay and promotion
Performance guidelines.
Develop guidelines and decision-making criteria in partnership with leaders and managers across the business to
4 Connect inform how they should apply performance evaluation data to make pay and promotion decisions.
to Talent Strategy Develop a mechanism for affirming proposed pay and promotion decisions were made appropriately and fairly using
provided guidelines (e.g., review by HR, review by skip level manager, calibration session with the head of the function).
Test and adapt guidelines for different parts of the business, employee levels, and geographies, considering that
common approaches to pay and promotion tend to vary by employee population.
Communicate the new process and criteria to leaders and managers, allowing time for questions about how it might
apply to their business area.
Ensure that the distribution of performance related pay and promotions is also tied to business need.
Continuously reinforce pay for performance in the organization through effective communication and manager education.
Provide FAQs and support tools for managers to help them discuss pay and promotion decisions with their direct
reports, including how decisions were made and validated to ensure fairness.
Pay and promotion
decisions are Track
particularly sensitive Performance ratings across different parts of the business to identify trends and anomalies
for employees and hard
Pay levels promotion trends by workforce segment (e.g., business unit, employee level, geography, tenureI
for managers to discuss.
Spend extra timing making CHANGE MANAGEMENT TIPS
sure managers can address
common employee questions
■■ Involve stakeholders early—Involve key stakeholders in the development of the pay for performance process early to
about how pay and promotion test assumptions and ensure buy-in.
decisions were made, and ■■ Be transparent—While you may not want to share the specific details of decision making criteria, share the process
how the organization ensures and intention with employees so they understand that it is an objective and fair approach.
fairness in those decisions. ■■ Review and learn—After each round of performance and pay reviews, look back at how the approach is working and
identify lessons learned. Share these back to the organization and incorporate into the next round.
93
MATURITY OVERVIEW
Level
1

Level
2
Level
3
performance.
Level
4
opportunities.
Level
5
94

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Performance MGMT

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Blueprints

HOW DOES A BLUEPRINT HELP YOUR ORGANIZATION?

Provides Tailored Implementation Support

Understand the Varying Maturity Levels Within and Between HR Processes

HOW TO USE YOUR BLUEPRINT

USING THE RESOURCES IN YOUR BLUEPRINT

Make the Case: Business Case

Follow the Steps: Activities Checklist

How Others Did It: Best Practices for Your Level

Get It Done: Interactive Resources

Maturity Level Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 4

Actions to Get You to the Next Level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 5

Make the Case: Business Case . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 6

Part 1: Define Performance Expectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 19

Part 2: Support the Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 43

Part 3: Evaluate Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 75

Part 4: Connect to Talent Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p. 86

MATURITY LEVEL OVERVIEW

We provide managers We require managers to We manage a formal, centrally We inform operational

ACTIONS TO GET YOU TO THE NEXT LEVEL

Provide Managers with Clear _________________________________________________________________________

Apply a Consistent Approach _________________________________________________________________________

Recognize Both Individual

Why Build a Business Case? MAKE THE CASE

Show others the importance Take Advantage of Windows of Opportunity

Demonstrate the Risks

Illustrate the Path

Convince Others with Externally Focused Talking Points

Note on Increasing in Maturity

EXECUTIVE SUMMARY: UPDATING PERFORMANCE MANAGEMENT

■■ Within our own company1:

EXECUTIVE SUMMARY: UPDATING PERFORMANCE MANAGEMENT

–– Inspire—Connect each individual to the organization’s mission and its success.

–– Grow—Leverage work experiences and others’ expertise to develop day-to-day.

BUSINESS CASE GUIDE

PERFORMANCE MANAGEMENT METRICS: EFFECTIVENESS

Set the Scene Sample Performance Management Metrics

Employee Rating of Value of Performance Feedback

PERFORMANCE MANAGEMENT METRICS: PROCESS

Tell a Story Sample Performance Management Metrics

Employee Rating of ROI of Time Spent on Performance Management

PERFORMANCE MANAGEMENT METRICS: COMPLIANCE

Draw Logical Conclusions Sample Performance Management Metrics

Performance Review Completion Rate by Managers and/or Employees

■■ Succinctly communicate key

BUSINESS CASE GUIDE

FOLLOWING BEST PRACTICE

MATURITY LEVEL OVERVIEW

We provide managers We require managers to We manage a formal, centrally We inform operational

BUSINESS CASE GUIDE

THE NEW WORK ENVIRONMENT REQUIRES EFFECTIVE

Geographically ■■ Need clear expectations across distance

Greater Interdependence ■■ Need more effective and regular feedback

Frequent Change ■■ Need agile expectations and goals

Requirements for Meaningful ■■ Need continuous learning to retain talent

SATISFACTION WITH PERFORMANCE MANAGEMENT

95% of managers are dissatisfied with their performance

“Am I getting what I need from my

59% of employees feel performance reviews are

90% of HR heads report that their systems generate

Part 1: Define Performance

We set performance standards What is the value of completing Level 3?

SEE HOW OTHERS DID IT