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Important Information Performance management is a strategic tool used to promote an effective organization. It ensures that individual employees’ efforts are focused on the priorities and strategies set out in the corporate and departmental business plans. It directs efforts towards effectiveness and away from merely being busy. The success of employees depends on a clear performance management process, which recognizes the accomplishments and supports the professional development of Nova Scotia’s public service employees. There are two distinct, but similar, performance management processes in the Nova Scotia Government: one for MCP employees and one for BU/AS employees. If you have questions regarding your performance management responsibilities or what type of performance management process you fall under, contact your manager or OD&E Senior Consultant at the Nova Scotia Public Service Commission.
The Performance Management Cycle
Performance Management Resources
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Performance Management Responsibilities
Managers ensure that each employee knows what is expected in terms of performance and professional development. They manage towards successful outcomes for both the employee and the organization. Managers are responsible for coaching employees and giving feedback based upon goals set at the beginning of the performance cycle. As well, together, managers and employees review progress periodically throughout the year and formally at the end of the cycle. Employees are responsible for their own performance, are in charge of their own career development and should take the initiative to be successful. The performance management process helps them do this by linking the business plan with their individual responsibilities and helps them focus on what needs to be done and how it needs to be done. If you need help with performance management, contact your HR representative or Karen Meins (902424-4271).
Sustained Human Capital (page 5/6)
We recognise leadership as a primary focus of our organisational development. Our interventions include formal executive coaching at Exco and senior management level, formal business school programmes and management training modules. In 2007 we developed an integrated training programme divided into four levels of leadership. The programme focuses on the implementation of our 2010 strategy, but with emphasis on teamwork and holistic, big-picture thinking. We also invested in executive coaching for our top 60 managers (including Exco members), positively addressing our leadership style through a 360-degree review and simulation processes.
We introduced a completely revised induction process from the beginning of 2007. All staff now begin their induction at the head office in Cape Town, where they meet the leadership, get to understand the brand, the company’s values, and why our company is the best place for them to realise their aspirations.
We have a structured Performance management system that sets specific objectives and measures performance achievement while identifying development opportunities. This enables the company to develop individuals, identify potential, reward performance, improve productivity and create a performance culture.
A survey was undertaken resulting in the revamp of the Performance management system and processes – with emphasis placed on the training and re-skilling of staff. we develop more sophisticated training tools. .With the rollout of our Broker Management Model Programme (BMMP) and the adoption of our new values. and opportunities presented by. Training for Brokers and Intermediaries We provide internal training and work with our business partners through operational and product training (approximately 12 000 brokers and intermediaries participate per year). our various products. Performance training started in 2007 and around 70% of staff have already been trained. As short-term insurance products become more specialised and complex. it became opportune to review our Performance management systems and procedures across the country. including an emphasis on video-based training. making use of visual examples to bring home the intentions of.
retail. and consumer goods sectors. Those involved in the research were all at board or senior management level. . This reflects an innovative and creative approach to talent that other sectors would do well to observe.Top 10 HR Tips For beating the recession A survey of HR directors and business leaders by recruitment firm The MBS Group has produced what it calls 'Ten tactics for tough times'. Tactics For Tough Times 1. but they provide a useful barometer of the current thinking taking place in top firms. Ride the storm . How useful these tactics actually are is open to debate. and luxury industries are wisely shying away from kneejerk staff cuts or talking about culls of more mature staff.preparing for difficult times but not currently planning large scale layoffs. within the retail. leisure. luxury. Leaders of consumer.
Online business continues to defy gravity. Keep up with customers . ‘Extreme value propositions’ are working well with increasingly cost-conscious consumers. In an effort to grab market share. 3.rapid response and appropriate price promotion are working for some. The latter are now benefiting from this shift in consumer behaviour. Consumer loyalty is not surviving the challenge of great deals and people are defecting to (own) brands that previously they would not have considered. to a lesser extent. to capture consumer spending power with a ‘best-price’ message. The results seem to indicate a ‘digital divide’ between companies who have older business models and those who have successfully incorporated ecommerce and new technology platforms. Pocket returns in pockets of growth . See upside in downturn . Eastern Europe. . Many respondents indicated that they are refocusing their businesses on the significant growth opportunities in the Middle East and Asia and.businesses must find a way to match or exceed customers' increasingly agile changes in behaviour.opportunities in Asia are attracting increased attention and investment whilst Europe and the US flounder.2. aiming to find new opportunities and disrupt existing markets with innovation. Show me the value . 4. Refocus on emerging markets . home entertainment and some luxury brands. a race downmarket is developing.the best business leaders see opportunities in turmoil. Customers’ behaviour is changing faster than businesses are able to shift their strategies.some sectors are positively booming. 6. such as online. Business leaders are focusing on the future. based on consumer insights. 5.
Keep up morale .personneltoday. Empower your people . Some of the key findings are: . while also ensuring that their people have the right skills and training in place to survive and prepare for the upturn. but also becoming increasingly difficult. Engage your staff . Businesses reported that they are redoubling efforts to demonstrate decisive leadership via more internal communication. Ref: http://www. 8. Hang on to talent . They recognise that it will be increasingly difficult to attract the best new talent into their organisations. For this reason companies are working on the areas of recruitment & retention to get more insights on the same.attracting the best talent is increasingly vital. they are focusing on whether they have the skills and talent to take them through the downturn. Internally.maintaining workforce morale will be a decisive benefit.com/cgi-bin/mt/mt-tb. as well as managing under-performers in a tougher way. A minority of companies cited examples of the impact that this can have.keep staff members on your side. For example. several companies are making increasing use of face-toface communication to increase the CEO’s visibility. Incentives are being adapted to reflect these changed priorities.7. A high proportion of our survey respondents recognised that full employee engagement is needed to be able to shift strategy successfully. 9. to set the right tone and convince employees that their jobs are safe.business leaders are recognising the value of experience. Instead. Business leaders are not planning for the large-scale lay-offs that happened in previous recessions. 10. the focus is on having the right strategies in place to retain the best people.cgi/40472 Cost effective Hiring and Successful retention in the corporate world is very essential today. They recognise the need to avoid the creation of a bunker mentality within their businesses and build employee confidence and trust in their leadership.
. The logic is that simple. if the intention is to recruit more from this generation. They like changing jobs. . Defining the 'Y' cadre Commonly referred to as "Millennials". and earned the title "job-hoppers" . A few well-documented and work-relevant characteristics of this generation are: . They are more ambitious than the previous generation so much that sociologists call them the overachieving. overscheduled generation . However. "they desire to shape their jobs to fit their lives rather than adapt their lives to the workplace". according to research. But to know them organisations must move beyond perusing documented information. This information should help them realign their existing strategy to recruit successfully and retain them. generation Y constitutes those who were born from 1980 to 1999 and grew up in the 1990s and 2000s. "What more can we learn about them?" The answer is critical to formulating an effective strategy-one that ensures a competitive edge. The better you know your prospective candidates the better the chances of luring them. "Echo Boomers" and "Net Generation". the question to ask is. Knowing the generation Y better will improve an organisation's chances of recruiting and retaining them . They have great expectations from their workplace as. This week's mailer will clue in organisations and their recruiters on the characteristics and quirks of generation Yers. There is already a lot that organisations know about generation Yers. This outlook is a huge challenge to employers.
That this generation job-hops is a well known fact. But there are a few other quirks that are not so well documented but can have an equally huge impact on an organisation's strategy. Tip: In getting the Yers to make career decisions. This gives them better control in deciding their priorities and also makes them conscious of managing their work activities based on priorities. but what is undocumented is that their job-hopping is driven by the will to learn. Less rebellious than their predecessors.The above-mentioned characteristics are well-documented. . Encourage them to make those phone calls to their parents from the interview room itself. However. first-out basis but on the "most important comes first" basis. This means that what they do is not dictated by what comes into their in-box or in-tray but by what they feel is important. but the fact that Yers choose to start their work day without a 'to-do' list actually makes them better 'prioritisers'. "Baby boomers use their in-boxes and in-trays as to-do lists and go by them on a typical work day. they do not work on a first-in. most of them even let their parents decide on where they will work and for whom. Gen Y is sold on the idea of an 'empty box'". They are: Trait: Dependence on parents Being the products of helicopter parenting. In short. most organisations have already realigned their recruitment strategies around them. Also the fact that they can fall back on their parents makes them greater risk-takers than their predecessors. the generation is willing to risk job security and fantastic salaries for the thrill of learning something new. Trait: In-box management It might not appear as an advantage. give them time to consult their parents. As a behavioural expert comments. Encouraged by their parents' advice to learn and grow from different experiences. This generation does not think much of moving back home after college. In fact. generation Yers find it difficult to wean off parents.
Generation Y women feel more empowered. customer. Promotion and advancement practices and trends 7. Because the external consultant has fewer biases about the organization and has less personal interest in the outcome than an employee of the company. safety. go solo in making career and personal decisions. Tip: Divide everyone into work teams. Collect existing data such as: 1. the external consultant may be more objective. Collect Data Assess the mission. Exit interview summaries 5. Turnover 3. strategy. Trait: Women power Yers appreciate gender equality and have little qualms about women surging ahead as earners. hiring projections) 2. harassment. Even a one-employee function or department can be integrated into a large group. Human Resources budget and expenditures . other) 6. Some of this information is probably already known but not accounted for as yet. Trait: Team spirit Generation Yers thrive as teams. hiring rate. or shareholder relations). what is essential is to be aware of these undocumented generational differences. Probably the first generation to value the importance of team power. Hiring statistics (acceptance rate. as it provides the auditor with a broader perspective. and feel less insecure at work. Another observation is that women take a back seat voluntarily when they decide to have children. vision. So oriented are their efforts to work in teams that team-building and bonding initiatives are only reminders of what they already appreciate. Compensation and benefits philosophy and practice 4. Therefore. and culture of the organization. However. Organisations must interpret this information to use it as a recruitment advantage. Tip: Think of flexible work hours and work-at-home options for new mothers. from whatever written material there is in the company (check with the department or person who handles public. Employee complaints (discrimination. this generation appreciates how individual efforts at work multiply when combined with team efforts. where they really need help is in developing their leadership potential. Having experience working in more than one company is a plus. Effectiveness of the Human Resources Function The purpose of a Human Resources audit is to assess the effectiveness of the Human Resources function and to ensure regulatory compliance. The audit can be conducted by anyone with sufficient Human Resources experience. Strict scheduling can frustrate them.Tip: Allow Yers the leeway to plan their day. There's an advantage to having the audit conducted by an external consultant.
6. Compare the results with market surveys. Recommend specific improvements referring to the results of both the Effectiveness audit and the Regulatory compliance audit. This information will provide you with a point of view for the next phase of the audit: the interviews. 8. internal forms. Conduct Interviews The purpose of the interview is to collect input from the internal customer on their Human Resources needs and how those needs are being met. The topics to discuss during the interview include: 1. 2. . 4. 8. etc. 2. Perceptions of the company and its goals Strengths and weaknesses of top management Employee perceptions of the company and top management Relations with subordinates Support of career goals for self and employees Major Human Resources issues Which Human Resources functions work well Which Human Resources functions need improvement Conduct the Regulatory Compliance Audit The following areas should be audited as part of the regulatory compliance audit: 1. Begin the interview with top management. Determine how to measure whether the improvements are successful. during the interview. compare the data you collected with market data. 5. 6. 7.) Workers' Compensation Fair Labor Standards Act Family and Medical Leave Act Legal reporting Summarize the Results Consolidate the information you collected. 7. 10. 9. Determine which practices are good/popular/effective/competitive. 5. Justify the recommendations. If. 3. 3. Determine which practices need improvement. 4. Personnel files and recordkeeping (contain only job related information) Pay equity Job descriptions (ADA compliance) Legal postings Equal Employment Opportunity and Affirmative Action Forms (applications. discrepancies arise between the data and the interviewee's answer. Next conduct interviews with a sample of subordinate managers including first line management. you can explore the reasons for the discrepancy(s).Where possible.
those which pull the focus of the organization away from what is most important for its ultimate success. organizational performance can be further enhanced by linking the performance results to individual or team incentives. Another key item is selecting relevant information for measuring organizational performance relative to organizational goals. is critical for the success of an organization. (Selecting the wrong metrics. Monitor and measure success and seek to continuously improve processes. Be prepared to modify the program if an organizational change requires it. Implement the Program Consider implementing the program in part of the organization as a pilot program. Point out how these recommendations will support their needs. Obtain their support. Processing information quickly and accurately. then acting upon what is learned. Plus the information gets filtered along the way.Obtain Approval from senior Management Present the preliminary results and recommendations to senior management individually. Traditional organizations. Effective Organizations(Organization Development) The trend toward reducing the number of management levels in organizations is being driven by the need of organizations to increase the speed and accuracy of communication. This can be challenging in light of today's information rich environment. often for political reasons which can conflict with the overall good of the organization. will harm an organization). process information slowly. After selecting the appropriate metrics. then present the final results and recommendations to the senior management staff for final approval. with their many levels of management. .
creator of brands such as Tide. as well as the basic love. care and feeding that we get each day. Charmin and Crest. A formal feedback system in which individual performance results can ultimately flow back and influence the organization's strategic plan. Also. It determines the work an individual is assigned. health and well-being at Procter & Gamble Co." . has isolated the manageremployee relationship as a critical component of effective performance management. 1 reason why people leave a company." said Keith Lawrence. With more than 135. 2. "It's the No. "It's such an important relationship. The mutuality is what encourages the feedback. director of human resources. beauty. Procter & Gamble.000 employees working in some 80 countries worldwide. Feedback must occur frequently. performance results are mutually determined. Folgers. to the President's or CEO's individual performance goals. Performance Management includes the following: 1. on down to all employees in the organization. their future assignments. to the annual organizational goals. Pringles. compensation. A flow-down of goals beginning with the organization's strategic plan.Performance Management is a process that can facilitate the flow of information in an organization. A mutual (between the employee and manager) establishment of duties and responsibilities and criteria for measuring success. 3. promotions. Thus each member of the organization can ultimately tie their individual performance goals to the organizational goals .
"The worst thing a manager can do is make a commitment and either not deliver on it or not be honest. respect and a sense of teamwork. Lawrence said the process must begin with a manager's fundamental belief that a high-quality relationship with every one of his or her employees is important." he explained.particularly senior managers' bonuses. benchmarked and tied to manager . some like to get it in person. On-boarding can help the two get to know each other. others like to hear all the good stuff. Positive manager-employee relationships actually start when an employee joins the manager's team or attends the company on-boarding program. The survey has several relationship-based questions for which answers are monitored. but recognition of what is going well . Stephen Covey would say you need seven deposits in the emotional bank to account for one incident like that. To set the right tone at this stage.including not only what needs improvement. It's very hard to rebuild trust. "Some employees like to get written feedback. "We have a lot of systems to give feedback on an ongoing basis. and you have to soft pedal the issues. continuous feedback . it can take only one incident to damage it. "Fundamentally. It's important for the manager to know every one of their employees and deliver feedback as they like it delivered. Lawrence said the manager should have clear work plans and objectives for what will be accomplished in the first assignment. candid and complete with their employee." Lawrence said. it's beyond that.will help reinforce the employee's contribution and build a basic feeling of trust. identify their strengths and establish how they can work together." Procter & Gamble uses its annual employee survey to measure how well managers are building and sustaining employee relationships. Ongoing. offering inaccurate information or not fulfilling commitments related to advancement or new opportunities for growth and development are a few critical but common manager mistakes. A manager can really blow a relationship when they're not trustworthy or when they lack integrity. but the most effective way to give feedback is to tailor it to the individual employee. all relationships boil down to trust." Lawrence said. "We also have a wide range of . Saying one thing and doing another." The level of personalization and trust in this manager-employee relationship is so relevant. "That puts teeth behind the importance of this.In order to enable effective manager-employee relationships. In the trust fund.
it's not about YOU. we're leaning toward what we call strength-based relationships. socially aware and adept at managing relationships. 2. and the analogy here is in a marriage. we have a relationship-building tool kit that has an array of different exercises and approaches that both employee and manager can use to help them strengthen their respective relationship. Managers Cannot Treat Everyone The Same: Great bosses learn how to customize their approach to each person. self-managing. but bosses got promoted because of their personal achievements. If they do well. And that's a real skill. People Fall In Love With Ideas & Solutions Of Their Own Creation: It's faster and easier to tell people what to do. to know how to power up or power down in synch with a situation. they hold true to core values. Yes." 1. but don't assume that they have to act in identical ways with each staffer. 4. you learn to appreciate and play to each other's strengths as opposed to trying to fix the parts you don't like. integrity and empathy. they are much more invested in them. but when people come up with their own ideas. The same is true here. . they have to shift the focus from themselves to the growth of those who report to them. It's about the troops.tools and training available to managers and employees to help their relationship building. EQ Takes Them to The Next Level: I'm talking about emotional intelligence: the ability to be self-aware. Now. IQ Gets Bosses Only So Far. They manage people as the complex individuals they are. too. The Most Important Thing Bosses Do Is Help OTHERS Succeed: This sounds simple. Anyone who's ever assigned stories knows this one. For example. to build trust through expertise. In other words. This means knowing how to read the emotions of others as well as our own. "Last. boss. 3. We're trying to focus on what are the strengths that each employee and manager has and how can they respectively play to those over time and build and strengthen one another. you should.
It's hard work to make your intentions clear. the person and the product improve. Coaching Is A Critical Skill: Bosses who "fix" the work of others don't help them grow. With good coaching. or between confidence and arrogance? It's often in the the way the leader communicates and the staff perceives her. Not Your Evil Twin: What's the difference between visionary and delusional. a roll-up-my-sleeves helper and a micromanager. negotiation and conflict resolution. When we put our personal stamp on something. Fixing is about the product.Journalists love the project they come up with more than the one that's given them. Conflict Doesn't Get Better If It Is Ignored: . Fixing may be faster. 6. coaching is about the person. Staffers Must See You. 7. Leaders can't assume their employees can read their minds. 5. but has shortterm impact. Coaching takes more time but the results last. This applies in work assignments. we care more about it.
skill sets. New Hampshire. but leaders must move people in new directions. Don't fear that you will look corny by sharing a vision. the Centers for Disease Control and Prevention. 10. The best bosses make us feel better about ourselves. and Montana. Differences are aired. Dare to inspire. Alaska. or a dream. people are held accountable. but it is handled extremely well. Great bosses know what drives each person they lead. Missouri. Five additional partners include the Association of State and Territorial Health Officers. 9. Today's newsrooms are undergoing massive changes of culture. or achieving something solo. and the Association of State and Territorial Local Health Liaison Officials. That's intrinsic motivation: Internal engines like competence. values are clear. formats and technology. New York. the National Association of County and City Health Officials. meaningfulness and progress. honor and dignity in every form of honest work. creative people. workflow. Managing Change Is A Constant Responsibility: Change can make people very uncomfortable. Intrinsic Motivation Is The Most Powerful: The best work gets done when people motivate themselves. West Virginia. Leaders Inspire Others: There's meaning.The best bosses build cultures where conflict may be inevitable among smart. Or the joy of working with a team. Great leaders build bridges to the future. Performance Management Collaborative The Performance Management Collaborative consists of a seven state core including Illinois (lead state). our work and our goals. and bullies don't win. the Health Resources and Services Administration. 8. . toward new opportunities. choice. a passion.
targets and goals and relevant indicators to improve public health practice Performance Measures .establishment of organizational or system performance standards. to prioritize and allocate resources.Definition of Performance Management Performance management is the practice of actively using performance data to improve the public's health. Collaborative Products . and to improve the quality of public health practice. including the program.documentation and reporting of progress in meeting standards and targets and sharing of such information through feedback Quality Improvement . to inform managers about needed adjustments or changes in policy or program directions to meet goals. measurements and reports. to frame reports on the success in meeting performance goals. community. Performance management can be carried out at multiple levels. A Performance Management System is the continuous use of all the above practices so that they are integrated into the organization's core operations. This practice involves strategic use of performance measures and standards to establish performance targets and goals.establishment of a program or process to manage change and achieve quality improvement in public health policies. programs or infrastructure based on performance standards. organization. and state levels. Performance Management components include: Performance Standards .application and use of performance indicators and measures Reporting of Progress .
Performance mangement case studies and learnings. With performance management methodologies we assist you to effectively increase your . one employee at a time. From Silos to Systems: Performance Management to Improve the Public's Health. Find more Collaborative's products on the Public Health Foundation's Web site. instilling preferred behaviour and rewarding high performance. along with helpful tips for successfully implementing a performance management system. The Silos to Systems guide explains and showcases examples of the Collaborative's four-part model for performance management. It is ineffective to change behaviour.The Collaborative released its third major product in March 2003. Performance management CT enables you to achieve the goal of successfully implementing performance management.
point approach: Driving performance management will result in a long term culture change. CT has a web-based performance management system that enables your business to effectively and timeously manage employees’ performance. Competencies . by providing you with a tool to develop performance agreements that are aligned with business goals. In addition to our consulting expertise. “how”. Support in this process is an active and dynamic communication strategy that will inform all stakeholders of the “what”. and will ensure that employees and management have the skills to fully implement the process and make it work. Aligned business goals and focussed employees can result in an increase of more than 70% in efficiency. why”. It also allows for informed decision-making through extensive and detailed reporting. resulting in focused and performance-related development plans for every employee. The behavioural model that CT embeds in performance management follows a five.employees’ natural ability to motivate themselves. We endeavour to make performance management a practical and understandable tool for employees on all levels. while decreasing the de-motivators in your organisation throughout. CT will support your business in the enabling process to ensure that the performance management process receives the required buy-in and cooperation from employees and management. and consequences of supporting the implementation of performance management within your business.
cost-to-fill. quality-of-hire. and management skill building.Organizational Development & Training • • • • • • • • Organizational Assessment and Gap Analysis New Manager Assimilation On Boarding Manager Boot Camp Situational Leadership Executive Coaching Mentoring Programs Team Development Staffing & Recruitment • • From strategic needs assessment. we can ensure you are positioned to hire the best and brightest to meet the demands of your business Tools and metrics for time-to-fill. source-of-hire. optimum hiring processes. etc. to measure results .
Performance Management • • Linking individual & team performance to organizational goals Strategic performance coaching packages On Site Specialists • • • Interim HR leadership Sexual harassment and discrimination investigations HR audit for compliance Compensation & Benefits • • • Salary survey participation and data analysis Administration and analysis Comprehensive benefits review and vendor management .
into something they thought last year that it was right. Information Technology by Juergen H.D.'s Beyond Budgeting Info Center . Finance and accounting. How it works. Daum content: Table of Intro Why should a company consider to move Beyond Budgeting ? How does the Beyond Budgeting model work ? Who should contribute to make it happen ? The Transition Route – Major success factors Summary Additional resources (updated Jan 2005) “Fixed budgets don’t work today. But then the fixed budget comes into their way and prevents them from really doing the right things. management processes and tools – concepts such as the Beyond Budgeting Management Model. The introduction of new management instruments such as the Balanced Scorecard. Daum New! visit J. has created the right foundation. one can principally react faster to changing market conditions. In order to do that. Because if corporate strategy and the objectives are clear for all people in an organization. Performance management and controlling. To be effective in a global economy with rapidly shifting market conditions and quick and nimble competitors.” Juergen H. News categories: Enterprise and business strategy.H. A budget is a too static instrument and locks managers into the past . they need the right concepts. organization have to be able to adapt constantly their priorities and have to put their resources where they can create most value for customers and shareholders. Though what is often missing is a more flexible operational planning and control model.Performance Management Beyond Budgeting: Why you should consider it. which help to better align the entire organization with corporate strategic objectives and to focus it on the essentials. The Beyond Budgeting model wants to fill exactly this gap. and Who should contribute to make it happen.
which is in essence last year’s reality. and allows senior management to react before financial figures turn into the red. when the world is changing” – I saw just nodding heads. When I was talking about that “every manager is sitting on his budget after it is released – no possibility to adapt priorities. Nestlé. How can they? How can a static instrument that locks you into something you thought about last year be effective in a global economy with rapidly shifting market conditions and quick and nimble competitors? Comparing the “annual budget”. They told me that this represent their most important objective with respect to their intentions to improve the management system of the company. perhaps monthly. Rolling. Meanwhile many other companies I worked with followed the same route and wanted to move beyond their traditional budgeting based management system.. The most exciting thing of the SEM concept for them was.D. the corporate controller stood up and asked the budgeting manager to come back until the following week with a plan for implementing the SEM concept and to define the requirements for the information systems to support it. that it enables their organization to become more flexible and to react to change faster. The reason is. and it makes the organization as a whole very inflexible. that fixed budgets don’t work today. As they execute . In this regard. And after we finished in the afternoon with the workshop on the planning processes. here an extract: | J. Resource allocation needs to be consistent with strategy and prevailing business conditions. Companies have to manage strategy as a continuous process. and resource allocation can follow suit. CFO of Svenska Handelsbanken | Panel Discussion with Borealis. It merely locks them and their managers into the past.'s insight article "Beyond Budgeting" | Interview with Lennart Francke. it does not provide them with incentives to look for new growth opportunities. which was mainly targeted at the responsible person for budgeting and planning. so that strategy can be adaptive to changing business conditions. I received strong agreement from these executives: yes. the budget ties managers to the past.S. When I started to talk about the limitations of the traditional budget based management system. forecasts and budgets focuses them on current and future realities. and Unilever | Interview with Jeremy Hope – co-founder of the Beyond Budgeting Round Table | Interview with J.D. it provides the possibility to offer realistic expectations for revenues and costs. interviews with BB pioneers etc. and resource utilization plans faster to changes in a company’s environment. Budgets and forecasts are tools for resource allocation. At the same time SEM was also an emerging new software product to support these management processes (and I was the product manager at SAP for it). based consumer products company with global operations the concept of “Strategic Enterprise Management” (SEM) – a concept that ties enterprise management closer to strategy and establishes management processes that make it easier to manage trade offs in the business system and to adapt strategy.including latest BB insight materials. on finance and IT | Intro Three years ago I presented to a group of senior executives at the headquarters of a large U. with actual revenues and expenditures on a monthly basis does not provide companies with useful information to manage their business. managers in an organization are forced to think ahead. For the company as a whole. they should approach strategy just as they do day-to-day operations. Through monthly or even event based forecasting. operative activities.
In fall 2000 we met and reconciled our findings and concepts. 2001).strategy-setting tasks again and again on a monthly or even weekly basis. While regular. In addition. That is the reason why the Beyond Budgeting concept is consisting of two elements: a framework of 6 rules that focus on a management culture that allows frontline managers to really perform. which usually are focused on the “hard facts”. Management Challenges for the 21st Century. to perceive change as an opportunity. there was a large overlap (if not a total match) concerning the concepts for SEM management processes and BBRT management processes. when I started with research for our SEM project at SAP. Also the behaviour and the entire management culture has to change. Every enterprise today is challenged by the fast change of market conditions. New York. they need an appropriate strategy and corporate performance management system that allows them to do that very efficiently. Around the same time. that the BBRT concept tries to deal also with the soft facts of the new management system. analyse what they did instead in steering the organization and to try to identify the principles of a new management model that will enable companies to introduce more effective management processes and steering mechanisms. change leaders are also able to effectively translate the required change into action . Companies and organizations of all kind have to become change leaders if they want to survive in today’s market environment. begin of 1998. technologies. Their mission was to identify companies that abandoned budgeting. A change-leader organization is searching always for changes in its environment and disposes of the necessary “Organizational Intelligence” that allows it to identify quickly what changes are required internally and in their business model/system in order to respond. but also on adjustments of operational enterprise activities and resource utilization plans. Peter Drucker writes: “One cannot manage change. One specific characteristic of a change leader is. 1999). that is on numbers – a management culture that enables managers to really perform and to develop their and their people’s capabilities. one can only can be ahead of it” (Peter Drucker. But the real differentiator was the fact. or customer behavior. the CAM-I Beyond Budgeting Round Table (BBRT) was founded in the UK. and of 6 rules that focus on adaptive management processes that support such a management culture (see my first report about the BBRT concept from May 22. This should enable the enterprise to continually control and optimize its short and long-term success in a dynamically changing enterprise environment. Interestingly. working with some innovative customers and with some of the leading experts and consultants in the US and Europe. The biggest contribution from the BBRT and Beyond Budgeting concept and what makes it really unique is that they found that today’s companies need – beside more effective and flexible management processes “beyond budgeting”. Why should a company consider to move Beyond Budgeting ? The management system’s task is to institutionalize decisions through management processes on strategy adjustments. it is not enough. ideally event driven forecasting (events that threaten to reach defined objectives and targets) represent the core building block of any performance management system “beyond budgeting”.
are fixed over the following fiscal year as soon as they are released. The budget determines how managers behave and on what activities and objectives they focus. which require considerable capital investments. and where the investors rapidly increase their own market share. The monthly actual/budget comparison. . and with commercialization activities on the other. But this rule not only applies today to knowledge and R&D intensive companies like in the pharmaceutical and high tech industries. Knowledge-based assets are also often characterized by "spill over effects" where competitors detract from the use of an innovation that its investors have. nearly continuous adaptation of the business system and of business activities to market and technology changes. And this is especially true for companies that are based on intangible assets. And the main problem today is the inflexibility of the budget based management system. which are absorbing considerable management time and other resources in creating them. rely on intangible assets.effectively with the objective to not only maintain their actual market position but to extend it by leveraging the changes happening in their markets. Through monthly actual/budget comparisons companies check. This requires a close link between markets and internal development activities on the one side. The budget. They are subject to a higher risk exposure. These annual budgets. can not be effective in a global knowledge economy with rapidly shifting market conditions and quick and nimble competitors. that they do not only support companies and their managers to monitor and optimize their performance in the area of costs and revenues. the corner stone of the management system of a company is the budget. The main target of these managers therefore is. the phenomenon becomes a more common one. to not exceed their budget. also in traditional industries. that is the commercialization process. but also to enable them to recognize immediately limits to growth in their value creation system and to eliminate them. by copying it. with the capability for fast adaptation in the case of changing markets as the key success factor. especially to the risk of changing markets. as well as to control and manage output. which enable dynamic action and reaction and fast. where the investors are on the market with the product faster than the competition. But a strategic instrument that locks managers into something they thought and found right at the end of the previous fiscal year. The problem can often only be solved by use of "time-to-market". how good manages are in meeting their budgets. Budgeting is the central instrument of traditional management systems. but usually not completely. Traditionally. This can be partially restricted by means of patents or protection of proprietary rights. the budgeting based traditional management systems represents a hurdle for an enterprise’s success rather than a supporting tool. because their bonus is dependent on meeting the budget. Enterprise management systems therefore have to be designed in a way. What is required are management systems. which not every start up is able to fund. As more and more companies. This is because knowledge based assets and related products can be copied much more easily than physical assets based value creation systems. All management processes and methods are based on and aligned with it: from strategy planning through resource allocation and cost management to monthly performance measurement and rewards.
which compares financial actuals, that is actual revenues and expenditures, with a budget that is typically already overtaken by reality only after a few weeks of the new fiscal year have passed, locks these managers in the past and in the fictive world of the budget. Companies are therefore trying to get rid of their inflexible budgets. They are moving instead to continuous rolling forecasting as part of their management processes, which enable for fast and coordinated adaptation to anticipated changes in their business environment and which also allow to balance the initiated change-management activities with continuity and short term performance. The key for it is an integrated strategy and corporate performance management process, of which the core and central process is not any more a fixed budget but a dynamic forecasting process (see figure 1).
Figure 1: Integrated strategy and corporate performance management processes (source: Juergen Daum, Intangible Assets and Value Creation, 2002)
In contrast to the monthly actual/budget comparison, rolling monthly forecasts of financial performance and for other non-financial value drivers, which are related to the different value creation processes of a company, focus managers on current and future opportunities and risks and not on the past. The forecasting process forces them to look ahead and to achieve market objectives under changing conditions, instead of focusing their attention on how they can better meet the budget. In addition, budgeting is an expensive activity: the average company invests more than 25000 person days per billion dollars of revenue in the planning and performance measurement processes; a KPMG study showed that inefficient budgeting is eating up 20 to 30 percent of senior
executives’ and financial manager’s time. But the strategic costs, the opportunity costs for companies not being able to thrive in the new knowledge and intangible based economy will probably be much larger. The CAM-I BBRT names six external factors affecting every company today and that are driving the case for change to abandon traditional budgeting and to move to the Beyond Budgeting model:
Shareholders are more demanding and are only loyal to those organizations that are consistently at (or near) the top in their industry. But investors measure relative performance of companies (relative to their industry peers), rather than absolute performance. An important fact that needs to be considered when designing the Beyond Budgeting model. Talented people are increasingly scarce. They want freedom, challenge and responsibility. And they care about values and the environment. The pace of innovation is increasing and product and strategy life cycles are shrinking. To compete, firms must produce a constant stream of new solutions and strategies Prices are falling and quality is rising. Firms must be operationally excellent to compete Customers are in charge and will switch loyalties if not totally satisfied. Firms must keep close to customers and respond rapidly to their changing needs. Demands for higher standards of ethical and social responsibility. Investors and regulators are demanding more open and honest performance reporting. -
How does the Beyond Budgeting model work ? The response of companies should be – according to the CAM-I BBRT – to develop a new leadership vision and governance model in order to establish a new performance management climate that allows an organization to react to these external factors and changes and to move to a networked type of organization, where decision power is devolved to those, who know the business the best: to frontline managers (see figure 2). The BBRT calls this a devolutionary framework:
1. Create a performance climate based on competitive success – rather than on internal politics and on the principle that managers have to meet pure internal performance commitments 2. 2. Motivate people by offering them challenge, responsibility, clear values as guidelines (instead of clear orders) and shared rewards 3. 3. Devolve performance responsibility to operating managers; give them the freedom to decide 4. 4. Empower operational managers by giving them the capability to act, by removing resource constraints (but agree on certain limiting parameters such as for example “cost-income-ratio” in bank) 5. 5. Organize around customer oriented teams that are accountable for profitable customer outcomes – not around functions and departments that are accountable for meeting just the budget 6. 6. Support transparent and open information systems that provide “one truth” throughout the organization
Figure 2: The new environment is driving the case for change of a company’s governance model
To make that really happen, the company needs a new way, how it manages performance, that is finance and the CFO have to come up with a new type of performance processes:
1. The goal setting process: It should be based on agreeing external benchmark based targets, not on negotiating fixed targets. This is focusing mangers on beating the competition and not on meeting the budget. If the market goes up, a manager is still challenged to do better than competitors.
2. The motivation and rewards process: It should be based on recognizing and rewarding team-based success. Today, no single person can act
To reward people individually for reaching specific targets will create tension and mistrust in the organization. which is a recipe for bad performance.alone in achieving specific targets for an organization. 3. not on the basis on allocating them through annual budgets. 4. Only this way frontline managers are able to act fast in front of threats and to realize sudden opportunities. 3. 4. The resource utilization process: It should be based on local access to resources (within agreed parameters). Only this way a company is able to use the know how from the people at the customer front to adapt fast and constantly to changing market needs. . The strategy and action planning process: It should be devolved to operating mangers and made continuous. It should not be managed centrally as an annual event.
operative units negotiate resource and service requirements with service units and agree on certain ranges for required services (service level agreements). not through predetermined detailed actions set down in central plans. Information should be available to everyone. The measurement and control process: It should provide fast. open.5. 6. Fast Close / Business Activity Monitoring) - . and distributed information for multilevel control. The coordination process: It should be based on making crosscompany interactions through “market-like” forces. 6. Analytics. so that operational managers are able to compare their performance with the one of their colleagues and that senior managers can see what is going on and can monitor and challenge their subordinates (instead of controlling them). 5. Information systems are playing a crucial role in making the new concept happen. This are requirements for information systems to support the Beyond Budgeting concept as I have presented it to the BBRT (see figure 3): Flexible KPI based measurement systems that provide operational managers with timely and relevant information and decision support (Data Warehouses and OLAP data marts. Frontline.
management process support and user interaction) - Figure 3: Management Information Delivery Architecture (source: Juergen Daum. provide flexibility to change processes. forecasting and monitoring processes require an information system that spans the organization (a planning system and forecasting system decoupled from operational systems and optimised for cross functional planning. 2002) Analytical applications that supports managers and business analysts in performance management and in communication processes around performance management provide the tools and information they need to act under the Beyond Budgeting principles. enables user centric access and services without lousing the necessary integration (an open and flexible IS infrastructure for accounting. analytics. but that can integrate data from all sources – e. Intangible Assets and Value Creation. . based on a data warehouse system) Flexible IT infrastructure that is able to easily integrate various systems.g. This has to include also a framework for enterprise wide planning and forecasting as well as support for processes such as activity based management (see figure 4).Flexible resource planning.
as the economic conscience of the company. that is for the design and usefulness of its management system. CFOs are the guardians of a company’s financial resource and are. The CFO needs the help of the CIO. responsible for the economic transparency and for the “Business Intelligence” of the enterprise. the performance management culture of a company is crucial. As the BBRT pointed out. will be to understand . But not only the “hard facts” are a decisive factors for companies today. The CIO needs the support of the CFO in order to be able to focus his resources and the expertise of his team on those projects that are most relevant to the economic success of the company. and information distribution. information storage. who has to provide the new information technologies and infrastructure for the new management system. CIO’s are the masters of one of the most important basis resources of intangibles based businesses: of the infrastructure for information collection. also the soft factors. in order to create maximum value for his company. the CFO. HR experts and people experienced with organizational change projects should therefore be part of the project team.Figure 4: Information Systems optimised for analytics and decision support Who should contribute to make it happen ? Beside the business managers. People related success factors might be ultimately the most important drivers of a company’s performance. might change his role as well in the transformation process. two other corporate functions contribute significantly to the success of companies in the intangibles based new economy: the one of the chief financial officer (CFO) and the one of the chief information officer (CIO). The core competency of a CFO in the future. And the guardian of the hard facts.
to provide support for managers in understanding new business problems that require in-depth economic knowledge. rather than to manage basic accounting processes and the treasury function of the company. M&A services. This will include the collection. training in business issues and economics (for example also in form of online webcasts). and on its unrealized value creation potential and he is constantly pressing for its realization. and to provide related services to management and investors. In addition. strategic planning. . who always keeps an eye on the effectiveness of the value creation system of the company. and preparation of relevant unstructured internal and external business information that will be supplied to business managers and for example investors through the above-described web based self-services.together with his management team colleagues . who directly contributes to the success of the company by ensuring the necessary management transparency. The staff of the centre might come from different functions: from HR. investor relation services etc.. of which the task is.and monitor the economics of the value creation system of his company. Companies might start to establish business intelligence competence centres. The CFO will be transformed from an administrator of administrative processes to a real business partner for his management colleagues. on the efficiency of its business processes. from the operational business … (see figure 5). editing. finance.this understanding into a concept for an appropriate management and reporting system. This also has to include the ability to translate . So the traditional role of a CFO will be transformed from the role of a “chief cash manager and chief accountant” to the one of an agile and active Chief Value Officer (CVO). the center will provide other services such as management consulting.
the corner stone of the management system of a company is the budget. fast actuals. Intangible Assets and Value Creation.g. through a structured survey) and actively sell the case for change and a vision for a new system to senior management Look for quick wins (by providing e. how good manages are in meeting their budgets. by improving access to information. It requires an active commitment of the executive level. where the people at the front. They are experimenting already with KPI based reporting systems. Through monthly actual/budget comparisons companies check. is therefore the most important step in making it happen. A possible action plan for implementing a new performance management system beyond budgeting may therefore look like this one: Identify the problem areas with the current performance management system (e.Figure 5: The corporate Business Intelligence Competence Centre (source: Juergen Daum. But what is needed is a more comprehensive and systematic approach. are fixed over the following fiscal year as soon as they are released. 2002) The Transition Route – Major success factors The move to a performance management model “beyond budgeting” is not an easy task. These annual budgets. A concept which is gaining increasingly mind share worldwide and which intends to provide just that. the budget is not the right tool anymore to manage a company and its performance. interdisciplinary team to steer and manage the implementation project – the team can serve later as the core group of the new Business Intelligence Competence Center - Summary Traditionally. to not exceed their budget. It can not be effective in a global knowledge economy with rapidly shifting market conditions and quick and nimble competitors. by moving to continuous forecasting. It locks managers into something they thought and found right at the end of the previous fiscal year. Companies are therefore looking today for performance management concepts “Beyond Budgeting”. It tries to combine the hard fact side in form of new performance management processes (typically the responsibility of finance) with the soft fact side of a new performance management climate and a “devolutionary framework”. because their bonus is dependent on meeting the budget.g. is the Beyond Budgeting concept of the CAM-I BBRT. be fast Set up a cross-functional. To get their buy in.. by introducing new KPI’s …) – start small. get the . The budget determines how managers behave and on what activities and objectives they focus. working with customers. which are absorbing considerable management time and other resources in creating them. In today’s business environment. rolling or event driven continuous forecasting etc. The main target of these managers therefore is. which forces companies to constantly change and adapt to changing customer demands and markets.
at Svenska Svenska Handelsbanken. which was co-authored by colleagues at SAP AG.Dec 07. Daum at the Beyond Budgeting Round Table member's meetings: . 27 January 2004 in London. 26 June 2003in Walldorf/Germany. London/UK: Strategic Enterprise Management . 2002.freedom to decide and act (typically the responsibility of the CEO and of HR). London/UK: Information System Requirements for Performance Management Beyond Budgeting SAP’s White Paper “Beyond Budgeting”. and the Consortium for Advanced Manufacturing International (CAM-I) Beyond Budgeting Round Table Beyond Budgeting – article from Jeremy Hope and Robin Fraser (the initiators and researchers behind the CAM-I BBRT concept). 2nd July 2003 in London/UK program of the summit Interview with Lennart Francke.A Blueprint for a New Approachand the role of Information Systems Presentation held by Juergen Daum at the BBRT member's meeting. Daum. Leadership and Business Control for Value Creation .S. UK program of the briefing Beyond Budgeting on the move: report from the First Annual Beyond Budgeting Summit in London.presentation from Juergen H. published in the U. Juergen Daum. To make it happen it requires the commitment of the executive team. Cranfield School of Management. 1-2 July 2003 Enterprise Management in the 21st Century . issue October 2000 . but the contribution of especially three corporate functions: finance (hard facts) IT (bringing the hard facts to everyone) HR (managing the change from a people perspective) Additional resources (updated Jan. and held as well at the First Annual Beyond Budgeting Summit. 2000. held at the Executive Briefing on Performance Measurement of the Centre for Business Performance.May 16. Magazine “Strategic Finance”. Stockholm: Managing without budgets CFO. Handelsbanken Presentations held by Juergen H. 2005): Juergen Daum’s Beyond Budgeting Information Center New! Website of the Beyond Budgeting Round Table (BBRT) - Interview with Jeremy Hope (co-founder of the BBRT): The Origins of Beyond Budgeting and of the Beyond Budgeting Round Table (BBRT) Enterprise Management.
and it develops a framework for a new management system and describes its elements. Oktober 18-19. Editor-in-Chief CFO Europe Magazine. Belgium: "The Beyond Budgeting Management Model". as well as how a company can set it up and bring it to live. Participants: Janet Kersnar.Panel discussion at the eCFO conference 2001 of the CFO Europe Magazine. Can a company really implement the Beyond Budgeting model? This question was discussed by the participants on the panel: »video (Real Player) »video (Media Player) Intangible Assets and Value Creation – a book from Juergen Daum. It describes the new environment and its consequences for businesses. 2001 in Brussels. . Senior Manager Deloitte Consulting UK. Robin Fraser. comprising many examples and case studies. Guiseppe Biamino. Juergen Daum. focusing on a new enterprise model and on the new management system “beyond budgeting” for the new knowledge and intangible assets based economy of today. Peter Herold. SAP AG. manager Budgeting & Controlling at SNAM Rete Gas in Italy. the rules that can be extracted from this understanding for the design of a new management system. Program Director CAM-I BBRT.
ii. outsourcing provides business opportunities to the service providers. turning the management's focus to strategic level processes of HRM accessibility to the expert knowledge and state of the art technology . time and money on the routine work. The major advantages of outsourcing performance management are: Outsourcing is beneficial for both the corporate organisations that use the outsourcing services as well as the consultancies that provide the service to the corporates.Advantages of Performance Management Outsourcing Appraisals Home » Advantages of Performance Management Outsourcing HR outsourcing helps the HR professionals of the organisations to concentrate on the strategic functions and processes of human resource management rather than wasting their efforts. The Advantages of Performance Management Outsourcing accruing to the corporates are: i. Apart from increasing their revenues. enhancing the skill set of the service providers and exposure to the different corporate experiences thereby increasing their expertise.
hence. vi. operational flexibility and competitive advantage v.The Meeting How to Complete a Performance Appraisal Form Analysis for Improving Performance Active performance appraisal conversation Performance appraisal feedback Performance Consulting: Moving Beyond Training Writing performance appraisal Performance Appraisal Training How to Measure Employee Performance FAQ about Performance Appraisal Performance Management . highly productive employees value creation. Therefore outsourcing helps both the organisations and the consultancies to grow and perform better. freedom from red tape and adhering to strict rules and regulations optimal resource utilisation structured and fair performance management. Once a Year Overview Self Appraisal Performance Review . iv.iii. vii. a satisfied and.Preparation Performance Review .
PDRI’s model of performance management includes:
• • • • •
Competencies Appraisal Promotion Compensation Succession Planning
We have successfully developed and implemented numerous results-oriented performance management systems. We help organizations, managers, and employees develop performance objectives and standards that clearly communicate expectations by translating organizational goals into more specific lower level goals.
Performance Management — A Leadership Priority
USAID uses strategic management processes to ensure that its program planning, management, and reporting capabilities:
effectively support U.S. foreign policy are able to respond quickly to today's rapidly evolving global environment achieve and report on desired results.
The Challenge of Strategic Alignment
5th January 2009
A FSN & Oracle White Paper The Challenge of Strategic Alignment The role of Scorecards & Dashboards in Strategy Execution Contents Introduction Communication Is the message clear? Strategy maps and trees The challenge of alignment Technology and strategy Scorecards Dashboards Summary Introduction A strategy is by definition the starting point for corporate behavior. It expresses an organization’s ambitions, sets out its chosen direction and describes the principal initiatives and projects necessary to achieve its mission. Business schools, management gurus and strategy boutiques regularly develop new approaches and methodologies for strategy formulation and all acknowledge its overwhelming importance in setting the tone for the organization and its prospects for success.
Threading its way through all of these apparent pre-requisites for success is communication and collaboration which are the binding agents that ‘glue’ the organization (the people) to the process and its enabling technology. The manager sets out the strategy and each player’s role within it so that they understand how their actions affect other players and the delivery of the desired outcome. A highly trained workforce that is equipped and competent to act on the strategy. Feedback mechanisms that enable under or over performance to be identified rapidly so that remedial action can be taken to bring strategy delivery back on course. aligning an organization to its strategy remains one of the most elusive and unsatisfactory areas of management endeavour. Communication . Decisions all along the chain of command from manager to captain and to the rest of the team are geared to delivering strategic objectives.(2) Yet the notion of aligning an enterprise with its strategy is not beyond the grasp of all organizations. with measurable objectives and clearly articulated performance measures. research has shown that 85% of executive teams spend less than 1 hour per month discussing strategy and only 5% of the workforce understands strategy. Take for example a football team about to play a vital competitive match. namely. An unequivocal statement of strategy. hoping and praying that their vision will bear fruit.(1) Executives spend days or weeks devising well-crafted strategies and then throw them “over the wall” to the rest of the company. Indeed. industry and commerce but there are useful pointers which help to distil the essential components of strategic alignment from the corporate ‘noise’ that frequently obfuscates the strategic message. Systems and processes which enable the strategy to be communicated in a consistent. relevant and appropriate way to all corners of the organization.Despite its significance. so why is it so difficult to emulate this behaviour in a business setting? A football analogy may not be a perfect paradigm for the world of government. • • • • • A clear understanding of stakeholder requirements and external influences.
. It is now incumbent on management to ensure that strategy development and communication follows a robust and auditable process so that resources deployed in the business are strategically aligned and management actions can be justified. This in turn means that if strategy is to be delivered successfully by an organization it must be clearly articulated and communicated throughout the business. Methodologies such as The Balanced Scorecard. in today’s complex multinational organizations it draws on the skills of management from across the enterprise and in all functional areas. After all. Changing attitudes to corporate governance and corporate social responsibility throughout the developed world coupled with demanding legislation to protect shareholders in many geographies. experience and creativity. means that management are now formally accountable to a wider set of external stakeholders as well. Six Sigma. In addition. However. In other words. to an external audience. product development and financial management to name a few. break-out groups and facilitated meetings to drive out the thinking and record key decisions. So they do not readily keep pace with the iterative and creative nature of strategy development. employees and internal stakeholders. as well as the use of all other assets and resources owned by a company. the strategy must be widely understood at all management levels so that operational plans and day to day activities are aligned with corporate goals and objectives. the importance of communication in the strategy process is no longer confined to management. Capturing such fluid requirements is a challenge. EVA and others can provide a helpful framework but they are largely paper based in the development phase and can be difficult to change and communicate. fact and insight. if required. strategy has implications for the development of human capital.Strategy development is a curious mixture of science and art. Most management teams resort to flip charts. information technology. knowledge.
product lines and functional areas can have very different views on what makes an organization ‘tick’ and may disagree even more on the performance measures that should be monitored. say. Take for example the development of Key Performance Indicators (KPIs) – measures which support the achievement of specific objectives derived from a strategy. let alone cascade it through the organization. they are widely acknowledged to be of limited value when predicting future performance. particularly where these affect remuneration policy. Often. and can align execution with corporate objectives. Unfortunately. traditional . This stage of strategy development is a demanding and often contentious process. they begin to create a culture of performance. an organization has too many performance indicators and simply achieving functional and organizational alignment of KPIs (Key Performance Indicators) can seem like a Herculean task. social and environmental initiatives need to be developed. However. While financial key performance indicators will always have a prominent role in measuring performance of a business.”(3) Is the Message Clear? In large and complex heterogeneous organizations the sheer scale of the task makes it extremely difficult to view the overall strategy and check its integrity.“When companies commit to a strategy and communicate ‘This is how we win’. There is also a tendency to rely too heavily on trusted financial indicators of performance rather than less familiar non-financial indicators. Old KPIs can often go unchallenged while at the same time new KPIs reflecting. Recent research also shows that many organizations give too much prominence to internally generated KPIs – controlling the controllable – rather than looking outwards at threats and opportunities on the horizon which can ultimately be far more influential on performance. there is a growing acceptance that concentrating purely on financial metrics may not be the best way to increase shareholder value. Managers from different geographies.
Yet it is vital that the management team can view the entire performance “world”. measures of customer satisfaction are often linked with a propensity to buy goods and services in the future. the ability to earn revenues in the future. non-financial indicators are often tightly correlated with future financial performance. “cash generated from operations”. While these key areas of performance such as employee engagement. corporate vision. Likewise.financial measures such as “profit”. After all. customer loyalty and innovation may be impossible to express in purely financial terms and can be difficult to measure. But how do you identify such conflicts from a sprawling mass of information and how do you keep a strategy agile and flexible in the face of increasingly volatile markets? Strategy Maps and Trees Visualising a strategy and keeping a handle on the integrity of the links between. define the principle objectives and tactics necessary to . and “revenues booked” so called. such as the percentage of sales derived from new products inform about a company’s medium to longer term prospects for success. Similarly. On the other hand. provide little insight into future prospects and outcomes. strategic objectives and the KPIs which support them is a huge challenge. measures around innovation. Clearly. by implication. few doubt that they are critical to assessing the health of a company. the strategic decision to take market share in emerging markets with a new product may be at odds with financial key performance indicators such as increasing profit. lagging indicators. markets in developing economies are usually expensive to enter and exploit – normally with lower returns. For example. There are also internal challenges around the compatibility of KPI’s in one part of an organization with another. employee commitment gives insights into future workforce attrition and. For example. this simplistic scenario is capable of generating conflicting organizational behaviour around the allocation of capital.
teams and departments responsible to get it done and you have a solid plan of action. assess the correct relationships and agree on the aspects of performance to measure.deliver the strategy. Inevitably though. the related critical success factors (what you must have or be good at to achieve the objective) and ultimately the actions or initiatives related to each critical success factor (what you will do in order to achieve the critical success factors and ultimately the objective). the idea of including only objectives and their relationship to one another on the strategy map has become very popular – especially with executives. Fig 1: Strategy Trees in Oracle’s Hyperion Performance Scorecard application depict both the objectives and how you intend to achieve them. Strategy trees depict each strategic objective (what you are a trying to achieve). Creating a Strategy Tree is an excellent way to not only layout what it is you are trying to achieve. but also how you intend to achieve it. Strategy maps typically contain a subset of objects from the strategy tree. the development of objectives and the relationships between them can become . Thinking through and illustrating this logical network enables everyone to clearly see the plan. Add to it the people. To create a “single page” view of the organizational strategy.
It is not surprising that many strategies end up as a collection of printed PowerPoint slides. Maintaining a coherent view of each strategic scenario can be a huge presentational challenge using traditional paper based tools or spreadsheets. which enable large amounts of information to be displayed on screen at one time. Add in a huge number of KPIs and the scale of the problem starts to become clear. strategy maps become an active window on performance enabling under and over achievement to be monitored together with the consequences for the organization. Excel spreadsheets and Word documents gathering dust on a shelf. They enable the integrity of relationships between objectives and KPIs to be explored and confirmed during the strategy development phase and changes can be made on the fly. trees and related scorecards overcome this by using visualization techniques. Strategy maps.unwieldy and complex in a multinational organization. Once agreed upon. Fig 2: Strategy Maps in Oracle’s Hyperion Performance Scorecard application graphically show the key interrelationships between strategic objectives and current performance based on KPIs . they provide a platform for articulating strategy and linking it into operational plans and budgets. Finally.
customers and even environmentalists is the crucial first step to creating value in one’s own organization. the thinking around strategy development and how it relates to broader performance management is still evolving as the very latest methodologies attempt to recognise more complex market dynamics. “Investigate to Invest” encapsulates the market perspective and the need to understand the market dynamics affecting the business – an outside-in viewpoint that has to be married up with an inside-out perspective. The newly emerging paradigm of “Strategy to Success” takes a more process oriented view of performance management. Fig 3: The traditional performance management cycle . In other words the strategy has to be an inextricable part of a broader performance management regime which constantly tests and refines the strategy as new information comes to light. the strategy has to be accessible and constantly fine tuned in response to market conditions. underscoring the real purpose of performance management with more conviction. the starting point for strategy developments is re-positioned in the phrase “Gain to Sustain” – which more aptly recognises that meeting the needs of multiple stakeholders such as employees. However. stakeholder interests and more diverse trading relationships. For example. In a climate of constant change.The challenge of alignment The inherent agility of a strategy map is important since strategy development can no longer be viewed as a standalone activity. The traditional performance management cycle (Figure 3) which focuses on a series of linked applications or tasks no longer adequately describes the true nature of these core business processes.
In 2004 it was a sector experiencing massive change. creating a myriad of people and process issues for the business. Hospitality Services Company (HSC) finds that a holistic approach to performance management pays dividends Hospitality Services Company (HSC) connects people with the world’s greatest travel and leisure possibilities by retailing travel products and providing distribution and technology solutions for the hospitality industry. The results of these analyses are then used to inform and refine the strategy which is adjusted as appropriate before the whole performance cycle starts again – which is why performance management is sometimes referred to as a closed loop process. The strategy establishes the goals and performance measures for the organization which are built into business plans. budgets and forecasts which are monitored continuously against actuals. analysed and reported upon. The lack of communication regarding strategy and its execution led the CEO at the time to conclude that “only 25 percent of our .The traditional performance management cycle depicted in Figure 3 above is a continuous process made up of a series of iterative steps.
After a period of acclimatization this provided greater insight into trends in performance. (6) . coupled with planning applications that focussed on key drivers of the business. The initial phase was to develop a strategy map for the core business units which was closely aligned with Kaplan and Norton’s Balanced Scorecard framework. measures and rewards – an integrated approach to Corporate Performance Management (CPM). Finally. establishing a “system of sensors” to accelerate identification of. Having secured project sponsorship at the highest levels of the organization.strategy is effectively executed”. For each objective on the strategy map two to three key performance indicators (KPIs) were identified together with an initial target. Steps were taken to reduce funding in this area. enhancing the traditional strategic planning process. The leadership team knew that they had to align the entire organization around a common strategy if the company was to achieve its longer term goals. HSC’s CEO concluded “Our CPM program has helped us to focus on the business as a whole and build alignment across the organization. Operational plans were revised to make sure that they had an appropriate mix of specific metrics and targets – some designed to stretch the organization. The initial charter for the CPM initiative included. initiatives. emerging opportunities. organizational alignment was embedded more deeply through the introduction of a rolling forecast that linked operational drivers to the financial results. The new HSC management team had set aggressive and inspirational goals but to achieve them they needed to better align strategy. reduced the burden of traditional budgeting and delivered greater confidence in forecast outcomes. When a list of current initiatives was associated with the strategic objectives it was found that 65 percent of discretionary spending was not core to the strategy. the organization embarked on a comprehensive change program. better (strategically aligned) investment decisions and more accurate forecasting. and response to. more effective responses to performance gaps. The program was hugely successful in bringing about more rapid decision making.
the way you are going to drive your company. Fig 4: Oracle’s Strategy to Success Framework But how does an organization communicate its strategy and imbue its workforce with the knowledge it needs to confidently take decisions knowing they are strategy compliant? How do they take the concept of ‘Strategy to Success’ and bring it to life? How do they transfer the strategy from the board table to each employee and embed it in the organization? “Strategy is completely useless unless the results of the strategy process. re-enforcing each other’s choices because everybody is pursuing a common value proposition. quite broadly. is well understood. seminars. it’s really to get all the people in the organization making good choices. Oracle’s leading edge “Strategy to Success” paradigm depicts the performance management cycle from a more meaningful process oriented view. a common way of gaining competitive advantage.On the other hand. workshops and other forms of meeting (both formal and informal) in order to communicate the strategy and make it relevant for a particular part of the . Because the number one purpose of strategy is alignment. There is no substitute for traditional forms of communication such as briefings. webcasts. the position you choose to occupy. conferences. starting with a thorough assessment of stakeholder interests.” (4) Technology and Strategy Technology is not a ‘magic bullet’ that will instantly transform an organization and remedy all cultural impediments to change.
Scorecards Once the messages are broadly understood this needs to be followed up with the use of scorecard technologies. Individual televisions display the aircraft’s position on a map. their direction (performance getting better or worse). presenting them with those aspects of the strategy map (objectives and performance indicators) that are relevant to their role. department or division. all contribute to an on-time arrival. returning to their seats when requested and cleaning up the seating area at the end of the flight. As such. assuming full responsibility for its customers’ IT and infrastructure and their . They provide a method of visualising the key measures of performance. Although this analogy is simplistic it serves to underline the essence of strategic alignment which is communication. on-time arrival is the mutual objective for crew and passengers alike. Some sense of the importance of scorecard technology and how it can assist strategic alignment can be taken by considering the example of a commercial aircraft in which the passengers have access to the same information as the flight deck. Cooperating with the flight crew during on-board activities such as being seated quickly. Employees and their managers need to know how the strategy affects them. storing their hand luggage.organization. flight crew and passengers are strategically aligned – there is a common understanding of the destination. how far the journey has progressed and each person’s role in helping to get there on time. with a precise understanding of how their actions or inactions affect the achievement of the strategy. key responsibilities and what actions are being taken. Effectively. A safe. speed and displays important messages about safety and key activities. its height. Fujitsu Services OY uses scorecards to promote strategic alignment Fujitsu Services OY provides information technology (IT) services in Finland. what they might be doing differently and how they will be measured and rewarded. These are central to strategic alignment as they bind the users to the strategy itself. scorecards make users strategically aware. Failure to recognise and embrace the cultural aspects of performance management is courting disaster.
These measures are consistent with the organization’s annual and longer-term goals.enterprise applications. which employs 2.300 people decided to implement a scorecard system in its banking and insurance services businesses for several reasons. (6) But scorecards are a means to an end – not an end in themselves. Many organizations are littered with failed scorecarding projects because they are divorced from strategic intent. Prior to the implementation of the scorecard system the organization’s strategy and objectives were viewed as being too abstract. Fujitsu believes that the scorecard system has driven performance improvement. There was a need to communicate the strategy to everyone simply and clearly as well as the requirement to ‘translate’ strategy into operational terms. the scorecard methodology followed a tailored version of the Kaplan and Norton Balanced Scorecard framework. systematising the existing scorecard process and providing data more frequently it was considered possible to more readily understand cause and effect between measures and align the organization more completely around its strategic goals. 40 percent are financial. This enhanced understanding has resulted in more strategically aligned and rapid decision making together with a more responsive organization. achieved sustainable alignment throughout the organization as it has grown and supported better communication of its strategy to its employees. The company. Of the measures being tracked. divisions and major accounts and these are linked to employee reward and compensation schemes. They have little purpose or relevance to the . Supported by senior management. Fujitsu executives review six to ten performance measures which are considered vital to understand the status of the overall organization. The system enables the same measures to be reported at the level of individual managers. 40 percent are non-financial and 20 percent are mixed. By having appropriate measures at different levels of the organization. Fujitsu track around 20 measures but report only those that are crucial to the strategy on executive scorecards.
It is also possible to review historic performance of say. However. The usual way of depicting performance metrics on a scorecard is to use a grid style layout together with icons. But performance management is about gleaning insights into future performance and guiding decision making rather than simply looking at historic performance through a rear-view mirror. is consistent. in different time periods and for different slices of the organizational hierarchy and other dimensions. scorecards as part of an integrated performance management platform provide an invaluable method of supporting change in the organization. In this way it is possible to look at different performance measures. but the . In the first instance. or other user selected icons to denote the status of performance. Failures also occur because the roll-out of the project uses inappropriate technology. In general the available scorecard technologies are highly adaptable and support all of the leading scorecard methodologies. These objectives cannot be met by a series of disconnected spreadsheets no matter how appealing the initial design of the scorecard may look. actual against target for any given measure as a graphical display.individuals charged with using them and perhaps do not enjoy management sponsorship and support. meaningful. such as colored arrows. the scorecard should enable users to monitor the status of the objectives and current performance by highlighting under or over achievement and on target performance. The scorecarding approach needs to be an integral part of the wider performance management platform so that the data required to populate the scorecard. The exact layout of the scorecard is usually user definable and can normally draw on the full multidimensional capability of the underlying database. Whereas the emphasis of a dashboard is to instantly communicate performance for a limited number of measures in an eye catching way. The precise strategy methodology employed. accurate and available on demand. for example. the scorecard is designed to promote deeper enquiry and analysis. the ‘Balanced Scorecard’ or ‘6-Sigma’ is a matter of personal choice for an organization.
goals and objectives and start to form a view about how performance in one area is affecting performance in another. flagging where acceptable performance at one level may be masking poor performance lower down the structure. The drill-down capability of a scorecard system enables the user to follow KPIs down the hierarchical organizational structure revealing the performance contribution made by business units or individuals lower down the tree.challenge is then to determine what is driving current performance and what can be done to deliver above target performance or bring below par performance back on track. . data is not refreshed frequently as most organizations to not monitor strategy on a daily basis. Both are capable of being used in a wide variety of contexts and for example. It is important that a scorecarding system provides visual cues. dashboards which are generally regarded as a window on historic performance can complement the delivery of strategy. Scorecards are widely acknowledged to be the best vehicle available for helping organizations communicate and execute on their strategies. a dashboard can be employed on a tactical and operational level as well as a strategic level by shifting the metrics to suit the organization at different levels of the hierarchy. half-year or annual basis. The insights gained through scorecards and the explicit relationship between different performance measures derived from the strategy help to ensure that users understand exactly how their goals support the corporate strategy and how their decisions affect its execution. and attachments to record discussions and document supporting initiative progress. Dashboards There is no firm delineation between Dashboards and Scorecards. Also typically. but rather a quarterly. Similarly. Scorecards typically make extensive use of threaded discussions. annotations. It should also be possible to drill across the hierarchies to look at performance in different dimensions. Crucially. during drill down a scorecarding application should show the interrelationship between the performance indicators and other measures such as projects.
current performance and status. In effect a handful of measures tell the pilot how he is performing and. The ability to view current performance at a glance and to increase understanding of variances by navigating to underlying data makes dashboards an invaluable aid to tactical decisions. A dashboard is often likened to an aviator’s instrument panel or ‘head-up’ display of key data such as altitude. Like a strategy map. above or on target. Typically. what remedial action needs to be taken to keep the mission (operational performance) on track. performance bands can be established for whole companies or defined uniquely so that individual employees can set their own personal targets within the overall boundaries defined by the company. Typically. dashboard data is refreshed frequently to enable fast tactical adjustments and does not include much textual explanation. dashboards often make generous use of color. to denote good (green). rather like the fuel gauge in a motor vehicle. performance dials can usually be viewed for different time periods. below. amber (acceptable) and red (bad) performance. for example.e. An organization. “traffic lighting”. Dashboards provide an intuitive and accessible window on current performance and are therefore highly suited to tactical decisions and managers that are uncomfortable with tabular information and spreadsheet style grids that pervade most information systems. Dashboards make extensive use of familiar dials and charts that colorfully convey the status of performance at a glance. can decide whether performance should be measured at the level of a product / customer. Similarly. activity or project and may choose to display KPI targets or actual. The exact information shown on a performance dashboard is usually a matter of choice. acceptable and bad performance are normally completely user definable. All measures on the dashboard are only relevant to the execution of the current mission but do not indicate the importance of the mission (as would a scorecard). by inference. . i. The criteria that determine what constitutes good. fuel and compass bearing.One main principle behind a dashboard is that it should be easy to understand so that users have immediate visibility of the KPIs relevant to their role and function and can assess instantly whether performance is on target or within an acceptable range.
Technology plays a vital role in visioning the strategy and communicating it throughout the organization as part of a broader performance management regime. Ultimately. Kaplan and David P. planning and reporting applications. have proved invaluable in communicating the essence of strategy across an enterprise in an engaging and relevant way. Dashboards typically help you to understand and manage tactical operations while scorecards help you to understand and manage strategy. for executing strategy. the full panoply of modern performance management systems provide a robust platform for sound decision making at both a tactical and strategic level. by using dashboards and scorecards in the same performance environment an organization can encourage both strategic alignment (scorecards) and better operational analysis (dashboards). dashboards and scorecards are complementary tools.(5) . Norton.However. Great companies do not just happen by accident. Summary One of the greatest management challenges of the 21st Century is guiding large and complex organizations towards their goals. In complex environments strategy maps help management describe the performance framework. articulate performance measures and ensure consistency across the enterprise while integrated scorecards popularised by Robert S. confident in the knowledge that their actions are aligned with the overall goals of the organization. Ultimately. Research shows that those which are able to ride the challenge of strategic alignment create long term greatness not just temporary success. accompanied by succinct and relevant performance measures provides the baseline which nurtures and supports the desired management behaviours. whether expressed in shareholder value terms or delivery of services in the public sector can only be assured if strategic intent flows uninterrupted from board room to shop floor. In this way individuals feel empowered to make decisions. both of these can be used to inform and trim strategy as and when needed. Communication is at the heart of strategy delivery. Value creation. A clearly articulated message. Closely coupled to budgeting.
HBR Interview. Eckerson. Wayne W. Oracle Nigel Youell. Group Publisher of FSN and Managing Editor of FSN Newswire. Toby Hatch. Formerly a partner in Deloitte for more than 16 years. Denis Desroches. Inc. He is a graduate of London University. by Michael Coveney – John Wiley & Sons 2003 Performance Dashboards. Copyright 2008 John Wiley & Sons. Director – Product Marketing. Bruno Aziza & Joey Fitts Professor Michael E Porter. Leading author Gary Simon Group Publisher of FSN and Managing Editor of FSN Newswire. Oracle The authors would like to thank Hitachi Consulting Corporation for their contribution to the HSC case study contained in the whitepaper About FSN FSN Publishing Limited is an independent research. he has led some of the most complex information management assignments for global enterprises in the private and public sector. Measuring. Monitoring and Managing Your Business. The Five Competitive Forces That Shape Strategy Details in Beyond Entrepreneurship. Enabling a Culture of Intelligent Execution. news and publishing organization catering for the needs of the finance function.Bibliography • • • • • • The Strategy Gap. Consulting Solution Specialist. Reprinted with permission of John Wiley & Sons. Inc. Raef Lawson. Prentice Hall. New York 1992 Scorecard Best Practices. Drive Business Performance. Harvard University. Contributing authors Toby Hatch. The report is written by Gary Simon. Oracle . Turning your Business into an Enduring Great Company. a Chartered Accountant and a Fellow of the British Computer Society with more than 23 years experience of implementing management and financial reporting systems.
Effectively implement new processes and proactively report progress. executing on a sound decision making process: Focused. . which provides competitive advantage and leverages their operational investments. We guide management in deploying resources towards achieving results charted out in the strategic planning including institutionalizing the results through business process improvement (BPI). This enables organizations to achieve a state of management excellence. With a balanced view of strategy. Consistent.’s (NYSE: HIT) global consulting company. Create an Agile Business .877. people. financial and operational management processes.0010 or visit CGM partners with your organization to implement a system that extends beyond basic measurement. Europe and Asia. and to develop and implement practical business strategies and technology solutions. we work with companies to understand their unique business needs. supporting a broad range of strategic. call 1. Our three BPI principles: • • • Know Your Business . For more information. The result is a high performing team.Apply techniques to optimize sustainable processes. CGM uses three principles to conduct the business process engineering methodology. process and technology. Our methodology for performance management establishes a communication and feedback mechanism for aligning the organization’s activities with the strategic plan.664. Hitachi Consulting Corporation As Hitachi Ltd.Oracle is the leader in Enterprise Performance Management (EPM). Iterative Methodology . with operations in the United States. and Efficient. Oracle provides a complete and integrated system for managing and optimizing enterprise-wide performance.Benchmark your current business processes. unifying Performance Management applications and Business Intelligence (BI). Hitachi Consulting is a recognized leader in delivering proven business and IT strategies and solutions to Global 2000 companies across many industries.
across all business functions. accountability. IT managers can drive better adoption and compliance by enabling organisations to intuitively associate business intelligence and corporate performance. . forecasting. The application reaches all employees. analytics. and actionable insight across the entire organisation. PerformancePoint Server 2007 allows the organisation to build reliable plans faster and execute against them by aligning and driving accountability across business operations. and plan activities with an integrated and collaborative solution.Performance Management is the process by which an organisation sets objectives. dashboards. It allows customers to monitor. and plan their business as well as drive alignment. analyse. budgeting. while information workers can monitor. planning. Microsoft® Office PerformancePoint™ Server 2007 provides all of the functionality that is needed for performance management including scorecards. monitors progress and takes action to maximise business results that align to its BI strategy. Decision-makers need to drive performance by accelerating business decision making. Business executives can drive accountability and alignment across and up-and-down the organisation. and consolidation. analyse. plans. while adapting to changing business conditions and enforcing corporate governance. management reporting.
The Performance Management Suite Courses: REVIEW AND FEEDBACK COACHING OBJECTIVES AND TASK SETTING TRAINING RECRUITMENT Performance Management Toolkit This course provides a practical approach and structure for managing and improving team performance and develops the skills and approaches required to achieve this successfully It is a course that shows how to turn performance management into an everyday job – to improve performance – every day . The Performance Management Suite This set of courses delivers a powerful opportunity for managers to develop Performance Management skills. In fact. Performance Management is a powerful and effective toolkit of skills that is essential to success. Our core course Performance Management Toolkit provides a foundation understanding and covers the essential skills and approaches required. Specific skills and approaches are required to achieve this performance and yet “Performance Management” is a phrase often reserved for team members performing badly or the annual review.Performance Management Courses Successfully managing people creates business success. Equip Learning presents a modern strategy for Managing Performance by linking the steps required into an effective process and developing the skills and approaches required. This course can be completed as a powerful stand alone module or it can be completed with other modules from the suite to provide an in depth programme. The remaining courses in the Performance Management Suite build on this foundation by focussing development on specific areas.
they are an essential part of effective management and offer the potential to help. Getting this wrong will limit performance and make a manager’s job harder. However. not hinder performance. encouragement. whilst the structure links Performance Management together in a compelling way. Getting this right will support good performance that is achieved sooner and with better retention.The course takes a toolkit approach. Coaching Skills for Managers Team members need support. The best teams are not the ones that are left to get on with it but the ones who are coached to perform. . A Great Start – Effective Recruitment and Training Great performance starts with the bedrock of effective recruitment and training. feedback and monitoring on a regular basis in order to perform. providing lots of ideas and practical help. This course helps you to get the most out of them. The Successful Appraisal Appraisals often get bad press and can be viewed negatively both by managers and team members. This course is designed to help managers perform in their role as Coach.
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Ensuring the worker has access to appropriate resources. . Welcoming challenges to the status quo and rewarding innovation and creativity. Ensuring the worker has the right tools and equipment. Defining the structures. This means: • • • • • • • • • • Defining the task or jobs to be done. December 15. This includes: • • • • • Trusting workers to exercise professional judgement and to take responsibility for decision-making and problem-solving. Ensuring reasonable workloads. Supporting staff and helping them to learn from mistakes and misjudgements. but the way that you do it. Defining the role of the worker. Ensuring fair employment and reward strategies. the terms enabled and empowered will help to separate out and develop our understanding of leadership. Ensuring the worker has supervision and feedback on performance. Trusting workers to be responsible for balancing work requirements and lifestyle commitments. knowledge and experience to find the best way to achieve a particular task. Trusting teams to solve problems. To empower is to give staff the freedom and authority to use their skills. To enable is to provide the means for a member of staff to do the job. Ensuring the worker has the necessary knowledge and skills. Enabled and Empowered are best considered as two sides of the same coin. and organisational culture and how this influences performance and motivation. allocate work and maximise flexibility. Getting the 'back room' supports running smoothly.The Scottish Government Publications Wednesday. policies and procedures.It's not just what you do. 2010 Defining Enabled and Empowered . Just as 'competent and confident' has broadened our understanding of 'training and development'.
Workers may feel reined in and constrained to 'do things by the book'. involving workers in service planning and review. and when diversity and flexibility are valued and positively promoted. Enabling without empowering is likely to cause frustration. (1) Empowering is akin to delegation but goes much further. high-performing staff will move to organisations that afford them greater influence and responsibility. This will stifle innovation and creativity and is likely to lead to staff performing at a level that is 'good enough' rather than excellent. There is likely to be a 'them and us' attitude between staff and managers and highly motivated. Empowerment can take a number of forms. safe and healthy. autonomy and self-control over their work. Leaving people to get on with it is not the same as empowering them. and responsibility for decision-making. Enabled workers can do what they have been told to do but empowered workers do what needs to be done and reflect on how it could be done better next time. Consider the following: (2) Empowerment through participation: for example.• Building belonging and ownership. it is not just about delegating responsibility but also power. Enabling and Empowering the workforce is more easily achieved when the other components have been addressed. that is when the workforce is competent and confident. in organisational design and development and in decision-making. Empowering without enabling is dangerous. the delegation of decisionmaking which in a traditional organisation would be the domain of management. The following story (see page 24) presents a negative scenario to highlight the issues around enablement and empowerment and to generate a problem-solving approach. . Empowerment is generally explained in terms of allowing employees greater freedom.
Empowerment through involvement: for example. and they waste a lot of time going from phone box to phone box in attempts to raise management support. without any opportunity to influence individual care packages or the way the service is delivered. Margaret and Brian are home care workers. a range of checks and balances are necessary. within tight timescales. reviews or assessments. A story that paints a picture Shona. They are concerned that they have little or no back-up from managers when out doing their work. and defining and monitoring appropriate leadership and management styles and behaviours. having a diverse and flexible workforce. but don't. through reducing the number of tiers of management. Brian was told that . Empowerment through commitment: for example. They don't have mobile phones. They tell of being directed to new clients without any background information on the circumstances or needs of the individual. See the section on Management and Leadership for further discussion on this topic. and this is not just when they are working out of office hours. The prerequisites for effective empowerment are: having a competent and confident workforce. they are not invited to contribute to care plans. Empowerment through de-layering: for example. Enabling and empowering individuals and teams to have greater autonomy cannot happen in isolation. nursing care requirements or mental illness. having a safe and healthy workforce. often to find that the service user has dementia. and service users' safety and wellbeing remain the priority. They feel they are kept on too tight a rein to deliver to prescribed plans. They feel it is ironic that they are left to use their own wisdom and discretion in these circumstances. To ensure that service delivery is never compromised. through greater commitment to the organisation's goals and through improved job satisfaction. but in the normal run of things. ideas and suggestions. They are fed up and frustrated being told 'someone will ring back' or 'ring again in 5 minutes'. when management's concern is to gain employees' experiences.
Why can't they? What would be the barriers to allowing this team to have more control over the workload and how it is addressed? Just a Minute: . but they usually just have to get on to the next service user. Sometimes they go home deeply upset because a service user has died. Their innovation and creativity is well matched by a realistic awareness of resource constraints. They want to know why they can't just get on with it. All three talk of going home 'with a knot in their stomach' because no one responded to their request for advice and support. Margaret and Brian have put together a report to demonstrate how they would like to improve the service. and as teams.'confidentiality' prevented him from having access to information about service users. They wish there was time to have a cup of tea and a talk with a manager. at the local supermarket. and the hours of work. and recognition that teamwork and partnership working could let them make a bigger whole out of the parts. and the pay was the same. Sharon and Margaret have never had supervision or been involved in a team meeting where they could share concerns or offer ideas for change and improvement. Brian has had one or two sessions in the past 12 months but they are ad hoc and used mainly to 'give' information on changes that are happening. they feel they take the brunt of resource issues they have no control over. often anger. Quite often they go home feeling they haven't been able to do a good enough job and sometimes their ears are ringing from the criticism. Shona. They are keen for greater delegated responsibility as individuals. or a colleague when this happens. especially if they were the one to find them. many realised that they were afforded more influence over the job. of service users or their families. and improve their working lives. While 'making a difference' to people's lives had brought them into the service and provided reward.
experience and qualities of the individual required. What are the barriers to greater empowerment of the workforce? 1. It is costly in financial and human terms to get it wrong. They will want to see evidence that you value diversity and respect their work-life balance needs. The same is true of when it comes to specifying the skills. provide further development opportunities. They will also be looking at how this post will reward them. GOOD BEGINNINGS. Put a mark on the following continuum to represent your own current position or style of leadership. Where would you place your line manager and senior managers? 3. What impact might a wide variation of positions have on the effectiveness of leadership and change management? How can this be addressed? 4. and where it might lead them in terms of career progression.. will set the scene. Where they work closely with . Developing Job Briefs and Further Particulars in addition to person specifications and job descriptions can help to tell it like it is. Much has been written about safe recruitment practices in social work and social care and guidance on methods of selection are plentiful. AND ENDINGS Getting off to a good start: Enabling and empowering starts at the job design stage..1. Recruitment and safe recruitment practices: Getting the right people in the right job is an art and a science and is worth taking time over. put another mark to represent what you consider to be the ideal position for 21st Century Social Work and Social Care Services. 2. and how they can use their skills and energy to best effect. Would-be employees will be looking for language that tells them clearly what is expected of them. the way that tasks and responsibilities are delegated and how this particular post fits within the service or organisation as a whole.
Do H. how can you improve this? Would you consider shadowing each other for a day or two? diagram 2. dedicated H. Are you confident that job titles.operational managers. descriptions.or if a different role and set of skills improve the service? 2. person specifications and job briefs truly reflect what is required of the role and the individual? When a vacancy arises. guide and support the process. do you check out with the team whether the post. staff can do much to advise.R. A safer recruitment toolkit is available from the Scottish Recruitment and Retention Consortium. A closer look at some Key Components of an Enabled and Empowered Workforce . is still valid . in its current form.R. managers and staff work well with operational managers and staff to make the best of both sets of skills and knowledge? If not. Are you confident that selection methods are effective and are regularly reviewed? Are you concerned about the resource implications of doing it thoroughly? How can you make progress? 3. (3) Just a Minute: 1.
the key to success lies in keeping addressing all the components simultaneously. performance and morale. 1. Leadership. Workloads and Backroom Systems: behind every good front line worker there are processes. Good Beginnings and Endings: recruitment practices. Rewards: everything a person gains by working 3. induction. people and equipment behind the scenes making it happen! 4. Performance Management: how we know we are doing the right things well 6. . supervision. a bit like spinning plates. Management and Organisational Culture: 'how we do things here' 5. Work .In the next sections we will consider each of these components in turn: however.Life Balance: a critical factor for staff support. continuing professional development and exit interviews 2.
It's a bit like Russian dolls with the individual worker at the centre. Setting a date for a continuing professional development session ( CPD) in the first week will enable this to be explored and an action plan developed. but this just provides the framework on which to write an individual plan. it ensures that the performance of an individual worker is connected all the way up to the strategic plan. should boost the confidence of the new worker and remove any fear about shortcomings being discovered. One-to-one supervision is the means of assessing individual performance and assisting future development. It is however important to make the link between supervision and performance management which is addressed elsewhere in this framework. The starting point for induction is often the job interview itself.Induction: The quality of induction will influence the new recruit and the speed at which they are able to become a fully operational member of the team. and also the areas in which they are less competent and confident. There is already a wealth of information on this topic and it would add little to explore it within this framework document. it's the same and yet different for everybody. If it goes wrong in the early days it can be hard to retrieve and the confidence and competence of the new worker will suffer. It will also help the manager to allocate work and to decide on the need for supervision and support. Induction is a two-way process and needs to be tailored to the needs of the individual. . Supervision: Supervision in social work is a crucial aspect of professional development and workload management. At the end of the selection process there will be a great deal of information about the new recruit's background. This is a learning approach in action. Knowing that areas for development have been identified and those areas of weakness or inexperience have been recognised. skills and experience. It's worth the effort to get it right. A policy and procedure are clearly essential. In this respect it is a bit like undertaking a person-centred assessment and developing a care plan.
REWARD . money is not the main reward from working. There is a wealth of research that supports the view that for many people. teams and do you help each other to monitor and evaluate recruitment and selection processes? 2. it is not just about pay. If the supervisory relationship has been positive the exit interview should hold no surprises but it should provide an opportunity to reflect on the wider picture without the pressure of day-to-day matters. Are there working relationships between operational managers and H. being valued and praised and given recognition for long service or particular achievements.Exit interviews: These tell us why people left and what they thought about the job and the organisation. . Others will look for an employer that will invest in their future development and will sacrifice pay for the opportunity to undertake qualifying training. For some people time is more important than money and they would be more interested in working for employers who offer more holidays and greater flexibility on how that leave can be taken.R.EVERYTHING A PERSON GAINS BY WORKING Reward is a complex issue. Just a Minute: 1. There is much to be learned from aggregating information from exit interviews and looking for common issues and patterns. For many it is the intangible rewards that make the difference. Are you doing exit interviews. department and that analysis is never undertaken. They can be very informative tools and some organisations even encourage members to do 'mock' exit interviews as a way of finding out how satisfied they are at work and whether the actual job still matches its description.R. Sometimes exit interviews can get lost between the operational manager and the H. and are you asking the right questions? Are there arrangements in place to aggregate and analyse findings from exit interviews and do you use this information to make changes? 3. Are you confident about the way you manage induction? What evidence is there that new recruits have a good experience? 2.
Some parts of the sector remain of the view. Branson believes successful people management is about inclusion and Branson works on making all his staff like a team where each is valued not only for fulfilling their job remit but for contributing to the development of the business as a whole. Since the Single Status Agreement of 1999. In the public sector the situation is simpler. (4) However. In many industries and work groups reward packages can include things like bonuses. Historically. The company's success in its field is down to his management philosophy where all staff feel valued and he is just as interested in a flight stewardess's opinion as he is in his Marketing Director's. that local flexibility has led to unhealthy competition amongst authorities. there is also a considerable body of evidence that when there is a sense of unfairness or injustice about pay it zooms to the top of the agenda and will prevent employees from seeing the 'other' rewards that are provided. shareholding. however. private health care. almost all pay and terms and conditions are subject to local negotiation. Some social workers' grades together with those of staff working in the residential sector and nursery nurses have been determined nationally while those of other staff have been determined locally.Richard Branson pays some of the lowest salaries in the industry and yet his staff are very talented and loyal. local government has had nationally negotiated pay and conditions. Employers can offer reward packages that reflect the local market and fit in with the overall pay model within that authority. with some local flexibility. as well as addressing the pressing issue of equal pay. The intention of the Scottish Joint Council in implementing the Agreement was to recognise local variations and to enable each employer to design jobs and structures to suit their local circumstances. child care and assisted travel. This view should be considered alongside the concept of the total reward package. but here too it is necessary to consider a flexible approach to reward that . There is a whole branch of human resource management devoted to reward management and a wealth of research on the impact of different types of reward on performance and motivation.
Are you aware of any differences in attitude to working patterns and rewards between different age groups. It might help to simplify the complex issue of reward if we consider three main areas of 'gain' that employment can bring: financial security. What a person gains by working for a good employer FINANCIAL AND SOCIAL REWARDS CAREER & PERSONAL FULFILMENT • • • • STATUS AND VALUE Recognition Value Public Support • • • Pay Pension Benefits and Allowances • Continual learning Career progression and diversity This can be achieved by: • • • • • Personal Achievement This can be achieved This can be • by: personal supervision long service awards achievement awards praise and thank you's care accolades or other sector awards • achieved by: sickness. What might other members of your team consider to be most important? 3. different work groups and roles? 4. How can you test this out? Do you think that rewards and working patterns are flexible enough to respect the diversity of the workforce? Who determines the reward strategy in your organisation? table 3. What 'rewards' are most important to you? 2. Just a Minute: 1. paternity and maternity allowances flexible working and family • • • • • CPD qualifying training career pathways job swaps .recognises the diversity of the workforce and the need for people to achieve a healthy work-life balance. career and status.
I recently did the Leading to Deliver course and I want to implement what I have learned. Quote from a home carer: 'I feel guilty that I don't have enough time to spend on each service user. I know they would love me to stay and talk.T. equipment and training subsidised leisure facilities free financial advice and guidance wellbeing at work • mentoring and coaching delegation • healthy workplace 3. Quote from a Manager: 'I know what I should be doing to be a good manager and leader.• • • • • • developing a positive public profile of the service and profession that lets people be proud to be part of it developing a sense of identity and belonging making people feel that they matter enabling and empowering leadership and management • • • • • • • friendly policies flexible leave arrangements sabbaticals workplace child care or child care vouchers subsidised qualifying training subsidised I. Meeting service demand with finite resources is a major challenge in the care services and most people who enter through the doors know what to expect. my . WORKLOADS AND BACKROOM SYSTEMS Workload: Having a manageable workload that allows time for a job to be well done are high on the list of desirables listed by staff as characterising good workplaces. In times of high demand and high vacancies it is a key factor in people to deciding leave their posts and look elsewhere. but I just can't or I am taking someone else's time away from them'.
but this framework document is not going to provide an ideal model either. and to reduce the bureaucracy. . This does not mean that people don't know when 'enough is enough'. or service demand. determine the ideal number of cases. is just part of the picture.manager is supportive and we do what we can. well resourced and fully integrated with the overall service aims and standards. how tasks are delegated and the supports that are available to front line staff will influence the amount of direct work that can be undertaken. But what it will do is see what can be learned from other sectors and try to unpick everything that goes in to make up a workload. not caseload. Workload Management / Measurement Systems: It sometimes feels like the search for the Holy Grail. assisted by technology and e-government. but there is simply not enough time to put it into practice'. Does anybody out there have the ideal system or format? Many attempts have been made to weight caseloads. a review of backroom roles and responsibilities might assist. note. Sorry. Could the same apply to supporting front line staff? The drive is to increase the amount of time front line staff spend with service users. Getting the Backroom Right: Modern public service is centred around putting the needs of the service user first. The actual workload. this means having backroom systems and processes that are well thought-out. not the frantic paddling of feet below the water. seamless and joined-up at the point of delivery. and account for the activity that takes place but to date there is no particular model that has excelled to the point of being promoted widely. the service user must see only the swan gliding on the surface. it's just a matter of finding the right way to measure and quantify it. The intention is that services. will be smooth.
All too often the backroom makes more demands on the front line staff than it does to service their needs. In common with other workgroups and industries. it's constantly struggling to get the right paperwork done. to get the right decisions. Just a Minute: 1. or failure to provide the necessary equipment such as mobile communication systems. and delays for service users. What's the Problem? Why do these backroom problems arise? Sometimes it's simply a resource problem. and sometimes it's just the amount of time I waste organising taxis. it might just be because we don't question why 'we keep on doing what we do in the way that we do it' so we 'always get what we always had'. . sometimes it is because there is a clash of policies or demands. sometimes it spills over into the relationship between the two. The upshot is pressure on staff. the need to meet competing personal. whether this is in paperwork. organisational and service user needs presents a serious challenge. despite the changes in expectation about service delivery. or logistic tasks? 3. finding venues for meetings and contact'. to get the right resources. to get management time to discuss and agree. time wasted finding someone to make a decision or approve resources. The result is that what should be in the 'backroom' often gets between the front line worker and the service users. Is the development of new technology freeing up administrative staff to take on more front line staff support. How long is it since you had a good sortout of backroom processes and routines? 2. Are there regular and robust arrangements for administrative staff to contribute to review and planning? Quote from a front line staff member: 'It's not the service users that wear me down. time wasted in sorting out logistics.
the problem is that there aren't enough of them. but all too often they were working to outdated job descriptions that said ' team clerk' or 'clerk typist'. Leaving may not be the answer. It might be better to wait until you have time to take leave and are in a more relaxed and objective frame of mind. I don't want to leave but can't carry on like this. we never have a full team. Some speak of the frustration of watching busy social workers waste time doing tasks that don't play to their strengths: ' I watched three different social workers order three separate taxis from the same company. but I don't have the authority'. I've always got more on than I can manage and it's really getting me down. Although . Answer: Leaving is always an option but it doesn't sound like you are in the best frame of mind to make a balanced judgement about another post or employer. without due reward and are often worried that they will be told off for acting above themselves. Some do it anyway. With modern administration qualifications this workgroup are well positioned to be logistic experts and to re-think the backroom operations. in your current post you seem to have a good team of colleagues around you and attempts are being made to recruit.A team clerk LOOKING FOR HELP: A social worker writes to a Community Care Career Helpline: Question: I'm a front line worker in children and families and for the past year have found my caseload almost unbearable. I would like to help.Information from best value reviews where these fundamental questions were asked. I've tried talking to my manager about this but she is also overworked and stressed and it always ends up with her whingeing about her own workload. I love the job itself and like my colleagues . for the same destination within an hour. so everyone else is in the same boat. you could be jumping from the frying pan to the fire. they all got different price quotes. Despite several recruitment drives. suggest that many administrative staff are equally frustrated.
Managers need hard evidence to present to the next management tier. This could just pay dividends. Use language that is positive and solution-focused. Involve your manager if possible and avoid a 'them and us' divide. is not likely to be successful. and your proposed solutions. Behind the Face to Face Contact . you could look at ways of improving the situation in your current post. more effectively. Define the problem more clearly:Is it the caseload or the workload that is too high? Perhaps you are spending time on tasks that could be done by someone else? Perhaps you could review the scope (or care plans) for each case to something that is realistically achievable. particularly if you are emotionally charged. 4.Encourage others to follow your lead. diagram 3. Communicate the problem. and if not at least you will have the satisfaction of having taken a problem-solving approach. Share it with the team. An alternative would be to prepare an 'exit interview' report for your next supervision session outlining why you would want to leave this post and what would need to change to make you stay. Prepare a short report for your manager outlining your findings and your suggestions for reducing the workload.it may take up even more of your hard-pressed time. Talking to a stressed and busy manager. and work to produce a well-evidenced. 2. coherent team report. 3. 1.
diary planning. .Regardless of the number of cases or tasks. maintaining statistics and employment-related correspondence. workers need to invest in connections and partnerships and in their own continuing professional development. How often is the time needed to do these 'other' tasks taken into account? Probably rarely. Some of the administrative tasks will also be fixed where these are related to time management. if we did there would be copious material on formulas and benchmarks. Perhaps the time is right to try and quantify the time needed to address the preparation time and prerequisites in a more formal structured manner.
The following model attempts to capture all that goes on to support direct contact between social care staff and service users: it may not directly reduce the problem but there should be some comfort in recognising the pressures and celebrating all that is achieved despite constraints. It's a fact. and others to prepare for working directly with individual service users. the literature. the intention is to challenge your thinking. Some of these are to ensure that they remain a competent worker. MANAGEMENT AND LEADERSHIP Warning! Management and Leadership are vast subjects that can only be touched upon in this document. It found that having a poor relationship with their manager was the top reason for people leaving a job (90%) and having poor senior support and advice was the sixth top (75%). others to maintain networks and contacts. front line workers have a range of time tasks and activities to complete before they even meet a service user. and what you need to develop further. others to ensure that they are up to date on policy and procedure. On the positive side having a good relationship with the manager was the third top reason for staying in a job (89%). was carried out by Community Care in October 2003. A survey of more than 2000 workers across the social care workforce. help you work out what you already know and believe. motivation and satisfaction. When it comes to determining what makes a good manager and leader. at all levels of seniority. Having competent and enabling managers is fundamental to staff wellbeing. The approach taken and the material quoted is in keeping with the content of the Scottish Executive's 'Leading to Deliver' programme which is delivered in partnership with the Scottish Leadership Foundation. research and evidence is weighty. 4. the pool of knowledge and evidence widens further.Preparation and Prerequisites: In addition to back room administrative requirements. (5) .
but it feels like we are poles apart. he rarely asks how I am getting on and when I start to tell him. we don't understand what they do all day. or at least the daft questions they ask suggest they don't'. if it wasn't for her I wouldn't stay'. What people want most from their managers is: • • • • • • • • • availability âšwillingness to listen doing what they say they will do responding in good time making decisions and not procrastinating telling it like it is. 'Senior managers come on a royal visit sometimes. 'I've only seen the Director in a newsletter and the only time we see other senior managers is when something has gone wrong and we are in trouble'. Defining Management and Leadership Put most simply: Management: is what managers do .Views gathered as part of the Supporting Front Line Staff Initiative concur with those expressed in other surveys and research. Some frequently heard comments at Supporting Front Line Staff consultation events: 'My own line manager is fantastic. it makes me so mad I could shake him and I decide it's better not to bother'. and I am sure they don't understand what we do. above and below being an advocate for the team recognising their potential trusting them to do a good job but not abandoning them to their own devices. 'My manager won't come out of his room and the door is usually shut. These examples highlight a mixture of management and leadership issues. she really puts herself out to be there for me. but she gets no support herself. he just sort of glazes over and makes 'there there' noises. inviting us to meet with them.
a calling. many would argue that leadership in modernised public services is no longer of a command and control nature. they are two sides of the same coin.a leader innovates A manager maintains . defined by Likert(8). the CIPD(7) suggests that the public sector needs to undergo a fundamental shift from traditional command and control styles of management to a high-performance model based on autonomy and trust. a status. a set of beliefs and way of being.a leader develops A manager focuses on systems and structure . models and approaches. or that what they do 'is natural'.a leader does the right things. a personality trait. an approach. Others will provide a summary of their organisation's vision for good people management.a leader has an eye on the horizon A manager does things right . Although this view was based on reliable evidence. Ask them how to define management or management style and some will wax eloquent on various theories. based on a set of standards or competencies that define desired behaviours. In reality leadership and management overlap and while separating them out aids understanding. Some will find it difficult to distinguish between leadership and management.a leader inspires trust A manager keeps an eye on the bottom line . Hollingsworth (6) identifies six fundamental differences between leadership and management: • • • • • • A manager manages .a leader focuses on people A manager relies on control . Which of the following. In a paper on Change and the Public Sector. most closely resembles the management system where you work? . pondering and admissions that they don't really know.Leadership: is how managers do it Ask a room full of people to define leadership and expect a host of responses including: it's a role. or they haven't had time to think about it. but there will also be some head scratching. a set of skills and behaviours.
Management as Science: Successful managers are those who have learned the appropriate body of knowledge and have developed an ability to apply acquired skills and techniques. individual managers will have their own personal management styles and approaches. responsibility is centred at the top of the organisational hierarchy. motivation is based on a system of rewards. (Low Trust) Benevolent authoritative: There is a condescending form of leadership. Science. Participative: Leadership involves trust and confidence in subordinates. responsibility for achieving the goals of the organisation is more widely spread through the hierarchy. there is very little teamwork or communication. Look at the following definitions by Watson (9) and reflect on how much these are true for you. intelligence and personality which they develop through the practice of leadership. Consultative: Leadership involves some trust in subordinates. or communication. . your colleagues and your managers. motivation is based on rewards but also some involvement. there is a fair degree of teamwork and communication takes place vertically and horizontally. Management as Art. motivation is based on rewards for achievement of agreed goals. motivation is usually based on threats. there is responsibility at managerial levels but not at lower levels of the organisational hierarchy. (High Trust) In addition to the prevailing management system. responsibility for achieving the goals of the organisation is widespread throughout the hierarchy. there is only limited team work.Exploitative authoritative: Decisions are imposed. Magic and Politics(9) Management as Art: Successful managers are those born with appropriate intuition. there is participation and a high degree of teamwork and communication.
sometimes called emotionally intelligent leadership. but this does not necessarily prepare them for the job of managing in the complex. multifaceted organisational structures of social care. Underpinning all of these are the ten key principles about people management in chapter three of this framework.Management as Magic: Successful managers are those who recognise that nobody really knows what is going on and who persuade others of their own powers by calling up the appropriate gods and engaging in expected rituals. In the social care sector people are often promoted because they are professionally or technically good and they have good people skills. It is about getting the best management and leadership 'fit' for the complexity of modern social care organisations and the way that the nature of change. Management as Politics: Successful managers are those who can work out the unwritten laws of life in the organisational jungle and are able to play the game so that they can win. influencing. It is about leadership that connects with people at both head and heart levels. negotiating. empowering. So what is appropriate leadership for 21st Century Social Care? Modern public service requires managers to be good at motivating. . New managers often replicate the attitudes and behaviours of their managers. A successful manager is likely to be the one who can cover all these bases and knows when it is most appropriate to use each aspect. which may be no longer appropriate. collaborating and maintaining effective partnerships. The thrust of this framework document is to recognise that staff are the key to improved services and that they should experience enabling and empowering leadership that will maximise: • • • diversity and flexibility confidence and competence wellbeing and work-life balance.
On the other hand. some of more relevance than others to the public sector. This kind of leader helps people reach an understanding of the complexity of issues. organise. Personal Qualities . It is about empowering people to manage change for themselves.(11) One of the U. more traditional 'transactional' leadership behaviour seeks to obtain effective performance within agreed assumptions. Leading and Developing Others • • • • has a genuine concern for their wellbeing and development. Transactional leaders plan. co-ordinate. transactional leadership is 'doing things right'. (10) A transformational leader aims to change the values of the organisation. approachable. Transformational Leadership is 'doing the right thing'. It's not far removed from the notion of 'giving a man a fish and feeding him for the day. This kind of leader: • • • • creates a vision of the future inspires others by communicating this vision enthusiastically encourages others to think afresh and encourages them to question current ways of doing things coaches people to help them be responsible for their own development and effectiveness. delegates and develops potential accessible. (12) She has carried out considerable research and the essence of her thinking is that leaders encompass three broad areas: 1. 2. direct.K's leading thinkers on leadership in the Public Sector is Beverley Alimo-Metcalfe. and the means to transform their understanding and behaviour. in touch encourages questioning and critical strategic thinking. or giving him a fishing rod so he can fish every day'. practices and rules of the organisation. For our purposes here it is useful to consider two different approaches: transformational and transactional leadership. empowers.There are many models and theories to choose from. report and budget.
PERFORMANCE MANAGEMENT . This and many of the other ideas and concepts have been taken from a national 'Leading to Deliver' programme funded by the Scottish Executive and attended by managers from all sectors. How much time do you spend on managing tasks and how much leading people. and to manage change? Do you have an action plan as part of CPD? 2. or planning to be an effective leader? What can you do about this? 4. How well do you score yourself against the Alimo-Metcalfe framework? How would others score you? How would you score your own manager(s)? 3. priorities and purpose unites through a joint vision creates a supportive learning and self-development environment manages changes sensitively and skillfully. 5. How confident are you that your management and leadership style is the best fit for the task.• • • • • transparency. Prepare a 30-second commercial in which you convince your team why you are worthy of being their leader. The Leading to Deliver programme covers the key aspects of leadership: • • • • changing self to lead leading for change leading to deliver leading through effective relationships. 3. honesty and consistency integrity and openness to ideas and advice decisive and risk-taking charismatic. in touch analytical and creative thinker. Reading the Organisation • • • • • inspirational communicator. networker and achiever clarifies individual and team direction. Just a Minute: 1.
they wanted to know how well they were doing. Consultation with front line staff across Scotland as part of the Supporting Front Line Staff Initiative revealed that staff wanted more performance management. Sometimes in large organisations it is hard for staff to make this connection up through many layers to the strategy level. manage and enhance the performance of the individual and the organisation'. to some it suggests indicators. It's a pity that it often gets bad press. they wanted supervision and appraisal and they wanted their CPD needs to be addressed. and fairly simple definition. because it is one of the most supportive tools in the kit bag for supporting front line staff and managing them well. This sounds like a good fit with transformational leadership. and they wanted to be assured that what they were doing was making a difference. and their satisfaction rests with the approval and confirmation given at middle manager levels. that is. There are many definitions of performance management. performance is defined in the following terms: • Ensure that what we do is guided by our values and is relevant to the purposes of the organisation . At the Scottish Executive. They also wanted to know the reasons behind changes to working practices or services and they wanted to know if they could influence those changes. some of them extremely technical and daunting. enabling and empowering management and a commitment to diversity. statistics and spreadsheet. The following is a commonly used. and in so doing.Performance management means different things to different people. how they could improve. In their words they wanted clear standards and expectations. (13) 'The real concept of performance management is associated with an approach to creating a shared vision of the purpose and aims of the organisation. for others it is linked negatively to performance-related pay or disciplinary proceedings. the dots are joining up. helping each employee understand and recognise their part in contributing to them.
A simple analogy is to consider performance management being like a set of Russian dolls. There are quantitative as well as qualitative aspects and yes this does involve gathering a host of data. but also ensuring that everyone knows what they are a part of. Perhaps early attempts at improving performance management at the macro level were rather clumsy and convoluted and put people off. the skill is in knowing what to measure on each of the layers.• • • • • • • • Ensure that we are all clear how to demonstrate the skills. each fitting in to the other. as with change management and project management. and how we intend to fulfil it Link our job roles and individual objectives to the organisational objectives and priorities set out in the management plan Ensure that all managers agree and review objectives. but also the processes . priorities and developmental needs of team members Review performance against objectives and areas of competence to ensure that we are making the best possible contribution to the organisation's overall aim Ensure that all team members receive constructive feedback in order to develop and improve performance Ensure that a thorough review of training and development takes place as an integral part of the system so that PDPs reflect both business and individual aims Ensure that poor performance is identified quickly and support is provided to eliminate it. knowledge and behaviours that are expected of us Ensure that we are clear what our individual role is. You have to define what you expect of performance before you can measure it. much of this work should be hidden from the average front line worker's eye. measuring it and providing detailed reports. But. this involves setting standards and determining indicators that will show if you are en route to achieving them. It's about layering up. (14) Modern performance management is an inclusive process. it is a smooth backroom process. each important in itself but not complete until it has formed a whole. It is a multi-dimensional activity and the measurement varies depending on a variety of factors. a bit like over-complicated project management methodology did for that cause. and ensuring that these are compatible. The measures and variables get more complex at each level. it's not just about checking up on people. It's about measuring results. It is complex and brings in its train a whole range of specific techniques and methodologies.
and to assess whether the job that they have been doing still fit with the one on the paper. It is also about measuring what we do today while planning for measuring what we will be doing tomorrow. both professional and business. what and why changes have occurred. ongoing performance review and CPD. but these images are pervasive. which aspects . diagram 4. usually a year. While changing into his best clothes he was desperately trying to hide what he hadn't done and to think up 'clever lines' to make up for any shortfall. Appraisal is a form of annual performance review but it too has negative connotations from the past when perhaps it was top-down. expectations of performance were not clearly laid out.and behaviours that get those results. But a few key principles should underpin whatever process is adopted: Individual performance assessment is a time to reflect over a given period. and feedback was more subjective opinion than fact. The front line staff member needs to have supervision. The Performance .Management Cycle This framework does not have the scope to compare and consider the most effective individual performance methods or schemes. This is likely to be a million miles from your experience of appraisal. There was a scene in a television drama just last week that showed a worker getting nervous and anxious about his appraisal. especially if you remember that is how it used to be.
what we target. It needs to concentrate on the problems and opportunities of changing environments. It is a process. The model requires self assessment and action planning across eight criteria. and what CPD has taken place to improve them. plan and deliver services: A number of public service organisations find The European Foundation for Quality Management ( EFQM) Excellence Model (see table 4) useful when assessing current performance and planning improvements. People Development and Involvement: The full potential of people is best released through shared values and a culture of trust and empowerment which encourages the involvement of everyone. It is to review how this post and skill-set fits within the service plan. Performance management at individual and organisational levels share the same process (see diagram 4). and look at new approaches and ideas for solving problems. The time should be divided evenly between looking back and looking forward. and Results . . the model is based on the premise that learning and innovation are key to change and improvement. A learning organisation needs to look both beyond its organisational boundaries and review within them. Underpinning concepts: Leadership and Constancy of Purpose: The behaviour of leaders creates a clarity and unity of purpose and an environment in which people can excel. The model identifies: Enablers . and to highlight changes that may affect services.are more to the fore than others. It is also to consider whether skills and experience have been adequate.how we do things. measure and achieve. not an event. (15) At its heart. Using an Excellence Model to manage.
build on trust.Continuous Learning. Management by Processes and Facts: Inter-related activities are understood and systematically managed and decisions concerning current operations and planned improvements are made using reliable information that includes stakeholder perceptions. or service user. Innovation and Improvement: Performance is maximised when it is based on the management and sharing of knowledge within a culture of continuous learning. Customer Focus: The customer. Partnership Development: Developing mutually beneficial relationships. is the final arbiter of service quality and provision and services are provided on the basis of meeting current and potential service user needs. Results Orientation: Excellence is dependent upon balancing and satisfying the needs of all. Public Responsibility: The long-term interests of the organisation and its people are best served by adopting an ethical approach and exceeding the expectations and regulations of the community at large. sharing of knowledge and integration with partners. suppliers and society in general as well as those providing the funding. innovation and improvement. EFQM Excellence Model Just a Minute: . service users. table 4. this includes the people employed.
While fairness and equity are paramount. Employers of Choice are taking a proactive approach and demonstrating how they are working to get it right. staff are likely to be loyal. Is it clear how individual workers' activity and achievement contributes to the wider strategic plan? 3. the organisation. and that the balancing. will be different for each individual according to their age and stage of life and circumstances. Is your attitude to performance appraisal positive? 4. when employers are actively supporting them to do this. or tipping point. and off sick less. Work . WORK . There are legal obligations to be met by employers but the approach can be reactive or proactive depending on the mind set and commitment of individual workers. individual circumstances must be recognised. To what extent has a performance culture been developed in your organisation? 2. And. The term is used to describe working practices that aim to support the needs of staff in achieving a balance between their home and working lives. retained. When staff have greater control of their working lives and can fit in all the other aspects of life without feeling guilty about robbing time from Peter to pay Paul. They know it makes sense to respect the need for a healthy balance between work and non-work activity. What are the barriers to implementing appraisal in your organisation? How can you overcome these? 6.life balance policies should sit alongside those promoting wellness at work and diversity. and even the country. committed.LIFE BALANCE: THE CRITICAL FACTOR The concept of work-life balance underpins all good staff support and people management.1. . they will have more focus and energy for the job.
but this comes at a cost.Life Balance Effective work-life balance requires trust between employers and employees. regulation and practice.K. This takes courage and commitment at the best of times. robust performance management at organisational and individual levels is a prerequisite for trust and empowerment to flourish. A survey. It requires employers and line managers to be committed to the basic principle that staff want to give of their best at work and will do so in the right conditions. Technology has enabled many to be continuously accessible. There is a constant need to ensure that communication goes beyond giving details about specific provision without capturing hearts and minds on the intent behind pieces of legislation. On the contrary. or cannot be trusted to regulate their hours and workload. The survey also revealed that one in three partners of people who typically work more than 48 hours a week feel that this has had a negative effect on personal relationships. Some nuts and bolts: . This is not to underplay the need for effective goal setting. Improving Work . it is also about having high workloads. particularly in the area of flexible working. undertaken by the Chartered Institute of Personnel and Development (2004). work longer hours than most of their European counterparts and it's not just putting in the hours. shows that one in five people take work home almost every day. The challenge is to join up the policy dots to make a holistic framework for people management. performance management. but managers who believe that staff will take liberties. need to do some work on their own management style and approach first.Life balance practices are a combination of: • • • Legislation Parenting and Carer Policies Flexible Working Practices.Workers in the U. Work . supervision and support.
Sex Discrimination Act 1975 Legislates against discrimination on the ground of sex in full.life balance has brought about many policy changes and has influenced legislation. training and other related matters. Employment Relations Act 1999 This act aims to provide the balance between work and home life for the employee. Equal Pay Act 1970 This states that pay should be equal for both men and women. Working Time Regulations 1998 This has a direct impact on working practice by reducing excessively long working hours. It provides employees with rights to parental leave. Human Rights Act 2000 This takes into consideration the concept of work-life balance as it addresses the respect for family and private life. While Human Resource. all managers should be aware of the legislation that underpins the policy. Race Relations Act 1974 This act ensure no discrimination of race on the basis of ethnic origin. Disability Discrimination Act 1995 Work-Life Balance policies must be consistent with the requirements of this act. or Personnel Officers will hold the detailed knowledge. Part-Time Workers Regulations 2000 . time off in family emergencies and improved maternity rights.and part-time employment.The concept of work . and how this might be interpreted in a positive and proactive way that aids staff support and retention.
and they know it will be returned. It might seem a small shift in perspective. This is a term that means many different things to people. working time. were significantly extended in April 2003 to cover annual leave. right to request flexible working. maternity leave. What people want and what organisations want are usually compatible. Good people managers recognise that the way to employee engagement and commitment is to give people freedom and control to make choices. adoption leave. paternity leave. The constraints of fixed working hours and fixed work locations might be holding back improved performance and innovation. Find out what these mean for you and your workers. but there are more creative ways of bringing people and teams together. perhaps in environments that are more conducive to the purpose. team work and colleague support is essential. . technology will allow more to be done away from a fixed base. much of it driven by EU directives.5 day. (16)(see table 5) Flexible Working: Flexible working practices are a way to achieving work. part-time working. but is a shift that can achieve a great deal of change. parental leave.life balance. either internally or by following the links and references at the end of the section. time off for dependent care. and. This could help resolve accommodation and travel problems. We already see a shift from people thinking about 'going to their work' to 'working'. To some it means being able to start or finish work earlier than the standard 9 . Work-life balance provisions.This enables people to work part-time at all skills levels and responsibility without discrimination. As E-Government gathers momentum. while at the other end of the spectrum it means having no fixed core hours and individuals and teams allocate time to meet the needs of the service while getting the best fit with their own circumstances. It is recognised that in social work and social care.
stretch themselves and develop new abilities in their professional and personal lives Make a valued and recognised contribution to organisations that understand their lifestyle and work style needs .It can also mean: • • • • • • • • • • • • • • Part-Time Working Job Sharing Working from Home Term Time Only Working Annualised Hours Nine-Day Fortnights Career Breaks Sabbaticals Study Leave Compressed Hours Mobile Working Job Rotation Secondments for career development Secondments for community or voluntary activity. achieve success and excel at what they do Organisations want to: Engage people and enable. table 5. People want to: Enjoy life and work. encourage and reward outstanding performance Provide enriching services tailored to individual need Create and build a distinctive positive image for the profession Find the best people and match them to the right roles Use the skills of their people to improve effectiveness and to achieve excellent services Enable and reward contribution and support staff Do work they care about on their own terms Create and express a unique professional identity as themselves Find the right organisation and role that suits them best Use their skills.
This emphasises the need for close collaboration between H. reducing 'them and us' divisions between managers and staff. and some organisations at given points in their history. Effective implementation depends on commitment to all four key components of good staff support to ensure a social care workforce that is: • • • • enabled and empowered confident and competent flexible and diverse safe and healthy. recruiting from a diverse set of skills and geographies will require a more open approach and tolerance of different life and work styles. They will increase openness and trust and give workers a sense of ownership and responsibility. The key task is to grasp the underpinning principles of good people management and to look for ways to maximise flexibility and work-life balance.Flexible working is a way of managing people. In summary. Flexible working policies can quickly become dated. not just a set of policies. Flexible working practices will promote the wellbeing of the workforce and have a positive knock-on effect on sickness and absence. The options outlined above will suit some of the people some of the time. flexible working practices enable and empower staff to give of their best. staff and operational managers. or end up being just as inflexible as the previous way of doing things. while continuing to put service needs first. policy and practice can be used to best effect to create a positive 'can do' culture. in return they will perform well and be responsive to the need for flexible services.R. Just a Minute: . This will all add to workers' feelings of confidence and competence and will increase their commitment and loyalty. It's a fluid and dynamic activity. The social care sector is continuing to diversify its workforce to match the diversity of the population and integrated service delivery. by working together and sharing knowledge and skills legislation.
Managers were able to report the following: • • • Reduced backlog of paperwork Cases allocated increased over the summer months. so I'm not disturbed all the time by phone calls Staff are generally less tired. and is the reason for this clear? 3. How developed are flexible working practices in your organisation? 2. Are there any conflicts between flexible working practices and service needs? Is anyone or any group addressing this issue? If not. so when they come to work they are refreshed and work more effectively Morale is higher Staff are communicating more effectively There's a buzz about the place People are nicer to each other and work more co-operatively.uk Teams described their findings in terms of the following benefits: • • • • • • • • • • • Feeling more in control of the workload Improved continuity and consistency of contact with clients and relatives of clients in residential settings The team are much happier Being able to spend more time with the children which has also reduced child care costs Knowing we've got time off keeps us motivated and our spirits high. Pilot studies have been successful and barriers to further development identified. Are there differences in the way policy is applied in different work groups.fife. Here is a quick summary of some of the feedback: For further information contact Alison.Carnegie@smtp5. making the job more manageable. how could this best be done? Flexible working in Fife Fife Council Social Work Services was successful in securing funding from the DTI Partnership Fund to encourage flexible working.1. even though we're running with a lot of vacant posts Being able to deal with work requiring quiet concentration outside normal office hours.gov. which would not normally be expected during the holiday season Increased available time for supervision .
The general comment is that. managing flexibility is not as difficult as anticipated.work balance across the generations.' Overcoming the barriers. The following is a typical manager response: 'Contrary to my initial feelings. Staff have identified certain barriers to working nonstandard patterns: • • • • Buildings being open evenings and weekends.policy on whether files can be removed from the office needs to be clarified. Laptop provision. increased laptop provision would make it easier for staff to work more flexibly. Why? Because he believes that work-life balance isn't working and the emphasis is still too much on work coming first.Life Balance? or Life . he makes . cost/policy issue.Work Balance? In his book about the new rules of employee engagement. Further Reading: Work .some staff have voiced the concern that increased flexibility for certain categories of worker places constraints on the flexibility of clerical/support staff. this has proved to be a very positive experience and I would not now like to see a return to the previous working practice. in practice.g home working) most could achieve some flexibility if they want it. cost implications. This is an interesting text that highlights the differences in attitude to work and expectations of the life . Access to files . In a humorous but enlightening chapter on 'it's their lifestyle not your lifestyle that counts'. It is clearly important to involve support staff in discussions about changed working patterns. as team members are cooperating with each other to manage service requirements and individual working preferences. Mike Johnson (16) suggests that it is time to reverse the word order and make 'Life . While not everybody can have the same flexibility (e.• • • • Reduction in the use of relief staff of between 10 and 20 hours per week Decline in the number of simple administrative errors Offering an extended service between 8am and 6pm Reduced short-term absence.Work' the priority. Impact on clerical/support staff .
Johnson's views are in keeping with the notion that employers must meet the individual needs of employees and that one size will not fit all. and evidences. Footnotes (1) Laurie J Mullins: Management and Organisational Behaviour Seventh Edition. that different generations in the workplace have different understandings of the employment contract and have varying expectations of what work should give to them. If you don't give you may lose staff altogether. a similar commitment to personal employment plans should also be the ambition for workers. workers will have demands as parents. staff losses through dissatisfaction damages both purse and reputation. ISBN 0-273-68876-6 (2) C. Health and wellbeing will fluctuate as will demands on finances. additional time off might be the chosen reward for another. While additional pay might be the most important form of reward for one member of staff. Lashley. FT Prentice Hall 2005. At different ages and stages. Other factors that enable and empower are addressed under the most appropriate chapters: Working Environment: Safe and Healthy Wellbeing at Work: Safe and Healthy Flexible Working: Flexible and Diverse Managing Change Effectively: Flexible and Diverse. He proposes. in Mullins: Management and Organisational Behaviour. The balance of giving may be greater on the employers' side this year. page 886 (3) Safer Recruitment and Selection for Staff Working in Child Care: Scottish . The social care sector is committed to personal care plans for its service users that are regularly reviewed and resourced. The task is to track and match the different situations and expectations.a compelling argument for employers to recognise that younger employees in particular will always put their life before your work. carers or learners. but reversed next.
in Mullins: Management and Organisational Behaviour. page 245 (9) T. 2000 page 8 (14) Scottish Executive statement. Watson: Management. Likert.J.M. in Mullins: Management and Organisational Behaviour. page 255 (5) Community Care Workforce Survey: 30. page 6 Performance Management . Routledge Keegan & Paul 1986 (10) In Leading to Deliver: Taylor Clarke Partnership for the Scottish Executive 2003 (11) Bennis and Nanus (in Leaders: The Strategies for Taking Charge 1985). in Managing Performance Management in Action: Armstrong and Barron 2004 CIPD (15) European Foundation for Quality Management EFQM Registered Trademark 1999 (16) Mike Johnson: The New Rules of Engagement Life-Work Balance and Employee Commitment CIPD 2004.04 (6) J.7. Fletcher: Appraisal: Routes to Improved Performance (1993a) London CIPD. Hollingsworth 'Purpose and Values' in Mullins: Management and Organisational Behaviour. page 284 (7) The Change Agenda: Why Central Targets Miss the Mark: Simon Caulkin Management Editor/The Observer for CIPD 2003 (8) R. Crown Copyright 2001. ISBN 0755901797 (4) In Mullins: Management and Organisational Behaviour. in Performance Management The New Realities: Armstrong and Baron.Recruitment and Selection Consortium. in Leading to Deliver: Taylor Clarke Partnership for the Scottish Executive 2003 (12) Beverley Alimo-Metcalfe. Organisation and Employment Strategy. page 388 (13) C.
job goals. Faculty have a review process. The reviews are based upon the goals and standards set out in the Performance Evaluation and Development System (PEDS). The completion of the performance goal setting takes part in two stages: Stage One: Getting Started: Setting Duties. goals and timelines. most frequently in early fall. Goals and Standards for Performance and . but it is not currently conducted using the PEDS online system. and the related standards against which actual performance will be evaluated. Both should understand the job responsibilities. and how to help employees develop the skills and abilities that they need to achieve performance goals and be successful at the University. Performance reviews for appointed staff are conducted at least annually.The Performance Management Cycle Overview The goal of the Performance Management Process at DU is to ensure that supervisors and employees understand and communicate openly about job performance. The supervisor and employee have equal responsibility to contribute to the performance review process.
Development At the beginning of the review cycle (often as part of the previous year's review) supervisors and employees define essential duties and responsibilities. and to monitor the progress of meeting defined goals. New employees and their managers should complete performance and development goals and standards within the first 60 days of employment. Through performance consulting. Essential duties and responsibilities (and measurement standards for these) 2. supervisors and their employees should meet for Quarterly Discussions. Weighting of Duties. keeping in mind departmental goals for the upcoming year. The following sections of the PEDS online form should be completed in Stage One: 1. DU Training and Development is available to consult with managers. NOTE: In the same way that setting performance goals is important. Stage Two: Reviewing Performance and Development Goal Accomplishments In order to provide continuous feedback on how employees are meeting or exceeding expectations on their essential duties. performance goals (job goals) and development goals. Job goals (and measurement standards for these) 3. Goals and Competencies This is done with the aid of the employee's position description. performance-related. and standards for measuring achievement of these goals. Development goals (and measurement standards for these) 5. Competencies 4. We recommend that the . and aligned with departmental goals. we will also partner with you to identify performance support needed to ensure that individual and departmental goals are achieved. individuals or unit groups to identify relevant and appropriate development opportunities within and beyond the University. we encourage managers and employees to set development goals that are specific.
job goals and development goals) 3. Stage Three: Year-End Performance Reviews At the end of the review cycle (often as part of the previous year's review) supervisors and employees review the performance and development goals. Measurement rating (using the 5-point rating scale) 4. job goals and development goals 2. an employee will not be eligible for a merit increase. . Evaluation of actual performance (for essential duties. April and July each year.discussions take place in January. Narrative comments NOTE: Without a completed review in PEDS. The review (Stage Three) should include completion of the following sections of the PEDS online form: 1. Employee Self-Assessment (for essential duties. evaluating accomplishments based on the standards and timelines that were established at the beginning of the year.
The Performance Management Cycle Individual Reports .
managers and employees. what training is overdue. or jointly. However. unique learning activities for individuals can also be added to their PDPs. L&D Reports can be produced at all company levels . with 24/7 online access. job rotation. attainment. location. target group. Reports can be generated by unit/department. should all these modules be required by a client. . projects. The Learning Management Module is an add-on module to Performance Advantage (regular performance appraisals) or the Smart360 (360 feedback) System/Module . Manage your employee Personal Development Plans (PDPs) online (accessible by HR. Generate real-time reports to establish the status and statistics of current and completed employee learning and development activities.independently. it can also be utilized as a standalone system in it own right. special assignments.on demand and in real time to see who needs what type of training. job title. employee. selected from the L&D Library. Training histories are permanently archived in the system database for easy access at any time.learning & development Manage your employee training/learning easily and efficiently. and to ensure organization-wide training/learning compliance. The optional Learning Management Module enables you to: Populate a Learning & Development (L&D) Library with your company-specific learning interventions/activities (internally or externally provided). and for year-round internal and external audit preparedness. such as on-the-job coaching. etc. according to client-defined system settings and access privileges). line manager. Apart from listed learning activities. status. etc. and L&D activity. or any combination of these. who had undergone certain types of training.
and cascaded down to the lowest position. MANAGING PERFORMANCE: Performance observation. Behavioural) and Targets for each position/employee. APPRAISING (REVIEWING) PERFORMANCE: Using a suitably designed Performance Appraisal Form that facilitates the . Performance Management (the successor of Management By Objectives or MBO) is the essence of managing. Key Performance Indicators (KPI's: Input and Outputbased). de-motivation. A sound Performance Management Process/System subscribe to the crucial Principle: "What gets measured gets done". The days of having a "one-set-of-measures-fits-all" Performance Management System are long gone and inherently flawed. This stage includes Performance Coaching and Counselling whenever employee performance or behaviour is not up to standard/expectation. We subscribe to the Balanced Scorecard KPI technology to ensure a proper balance in the types of measures (based on four perspectives of the business) used at corporate level. In the absence of such a system. stress. This ensures vertical and horisontal alignment and integration of the key performance measures throughout the organisation to ensure optimal productivity and bottom-line results. They should also clearly link to Organisational Strategic Goals. Indicators that focus you and your people on what makes your business tick. Performance objectives and measures need to be specific to job categories and individual roles. feedback and coaching. staff members are unclear as to the employer's expectations regarding performance objectives and standards/targets. and conflict. leading to low productivity.Performance Management / Appraisal System Design Consultation by William Gresse Convert your business plans and strategies into a framework of balanced performance indicators (or KPI's). as well as managing the performance environment. The Performance Management Cycle involves Four Stages: 1. 2. using a suitably designed Performance Agreement Form. recording. measurement. 3. and the primary "vehicle" for getting the desired results through employees at all levels in the organisation. Qualitative. PLANNING PERFORMANCE: Formulating Objectives. and Performance Standards (Quantitative. costly mistakes.
favouritism. lack of performance feedback. (We assist organisations in designing suitable reward/incentive systems or schemes for their employees. poor timing of merit rewards. poor performance tracking and reporting. stereotyping. lack of fairness and transparency. when accepted by jobholders. Specific problems include perceived inequity.) GOAL SETTING THEORY SAYS: Specific Goals/Objectives increase performance. etc. and challenging goals. and a host of other factors. Reasons for this typically include poorly identified and formulated performance measures. subjective judgements. The result is frequently conflict during Performance Appraisals. bias. rating errors. No small wonder that Merit Pay / Bonuses . coaching and training. poor linkage between merit pay and actual performance. REWARDING PERFORMANCE: Linking actual performance to appropriate rewards/remuneration to reinforce excellence in performance. result in higher performance than easy goals While probably the most widely used approach to reward employees for excellent performance. merit pay is also fraught with dangers if not applied properly. 4.smooth running of appraisal interviews (See our Constructive Performance Appraisals Workshop).
to meet the customer's needs as precisely. perceived as being fair. and can assist you in the design of a Performance Management System that addresses all the issues mentioned above .both line managers and staff members generally hate Performance Appraisal time! One thing managers will always tell you they need is to have a Performance Appraisal System where the subjectivity regarding actual performance is largely removed. The MOST IMPORTANT OBJECTIVES of a welldesigned Performance Management System: • • To serve as the primary vehicle for implementing organisational goals and strategies (cascaded from top to bottom throughout the organisation) To align and integrate the objectives and key performance measures (KPI/s) of the organisation vertically and horisontally through all job categories and levels. and be acutely aware of potential unintended consequences. i. organisation development and culture change To achieve quality and efficiency.g. negative behaviour of some sort).reinstating its main purpose. as do many other performance-related factors that affect human behaviour. namely to increase staff performance and motivation. quickly and cheaply as possible To ensure clarity regarding work expectations and performance standards. reducing job holder anxiety/stress. We have many years experience working with these Performance Management and Human Behaviour principles. with bottom line RESULTS following as a matter of course ("What gets measured gets done"). The timing of rewards also forms part of this equation. including management. HR and line also crave to have a system where the calculation of merit bonuses for all staff is easily understood. The "Reward-Behaviour-Performance" Link Organisations have to be very careful in deciding what performance or behaviour they reward.e. even that which you did not foresee at the time (e. To facilitate continuous performance improvement. resource wastage and conflict To continually enhance employee competence through the identification of output-related training and development needs and strategies To reduce Line Manager reluctance and fear to do Performance Appraisals with their staff • • • • • . and devoid of potential unhappiness and conflict. and to impact on the organisation's bottom line. In this way the entire system works together in pointing towards the critical bottom line MEASURES. Behavioural psychology says that you will get what you reward.
Just Kids Ltd . Lynette Richards .would rid the workplace of major sources of stress" Not only is the existence of a sound Performance Management and Appraisal/Review System an OPERATIONAL PREREQUISITE for achieving organisational goals. so employees can see and experience a clear link between their performance and the rewards they receive New Zealand Herald. 4 October 2004 ON WORKPLACE STRESS: "Industrial Psychologist Steward Forsyth pointed out that eliminating role ambiguity . a staff member for persistent poor performance.Regency Duty Free Stores Ltd The Performance Measurement/Management and Appraisal System you have designed for us is the best I have seen in all my years in retail. It is done through an in-house task force (2-5 key decision makers and specialist contributors) who are facilitated through a needs assessment and design process to produce the eventual system.• To facilitate performance-based remuneration and rewards. Designing Performance Management Systems from scratch We are specialists in designing Performance Management Systems customised to the specific operational needs and requirements of organisations. and a NO OBLIGATION QUOTATION in respect of upgrading it if necessary. Contact Us for a FREE ASSESSMENT of your present system. Our managers have found the KPIs and sales tracking system easy to use and sales staff have commented that the monthly "on-track" coaching meetings enable them to get regular feedback on their performance and progress.National Retail Manager . Upgrading Existing Systems Your present Performance Management System may just need to be assessed and adapted to optimise the results you wish to achieve. Client Comments I would like to express my appreciation on behalf of the Regency Duty Free management team for all the work and effort you have put in to develop a Performance Management and Appraisal System for us. and especially dismissing.HR Manager . Our goal to create a culture of performance within Regency has been greatly enhanced by your efforts! Lesley Beacham . It is great to have a system that has been specifically designed for our company.giving workers clear instructions about what was expected of them . which is very positive. but also a LEGAL REQUIREMENT to prove that proper/due process was followed (backed by sound documentation) when eventually disciplining.
formulating Objectives/KPI's & Performance Standards. or to address poor Performance or Behaviour throughout the year. Half-day sessions are normally sufficient for this purpose.e. . the "HARD" part of the system). it will not automatically provide line managers with the "SOFT" interaction skills to conduct the Performance Appraisals/Reviews effectively. Performance Appraisal documentation. Constructive Performance Appraisals 2.i.g. Our following training programmes address these needs: 1. once a Performance Management System has been designed. the organisation's Performance Management policy & procedures. etc. Also.Performance Management System Training It is highly recommended that line management and general staff be trained in the correct "technical" application of their newly designed/upgraded Performance Management/Appraisal System (e. Performance Coaching and Counselling Also consider Appraisal Smart our online Performance Appraisal System .
. What rewards will be forthcoming if agreed targets are achieved. How the role fits into the organisation as a whole. When finished it should be clear to both manager and employee: What is expected in terms of knowledge. What level of authority the employee has in terms of carrying out the tasks. This would be included in a Personal Development Plan. How these will be measured and communicated. Personal Development Planning Following the Performance Agreement there may be certain areas identified that highlight a need for additional training and development in order to achieve what has been agreed.The Performance Management System / Cycle The Performance Management Cycle / System fits very closely with the classic management cycle: Performance Agreement The performance agreement defines expectations. This provides a forum to discuss both vertical and lateral progression and enables the manager to know where employees ambitions lie and enable them to meet their needs to keep them challenged and motivated. This should be done at the start of the year and will provide the basis for performance reviews. skills. behaviours and results. manager and employee work together to define what the employee should be doing for the upcoming period. Employees may also wish to discuss future aspirations and what development may be required at this stage to prepare for future roles.
The Performance Review should be approached in a positive way where manager and employee are in partnership working out what has gone well in the period and diagnosing and coming up with strategies for things that have gone not so well. there has been continuous dialogue and managers have dealt with poor performance as it occurred. . support and feedback taking place between the manager and the employee. generally if they have performed poorly in an area they are aware of it and by them bringing it up they take more ownership of the problem. I have personally always found it helpful to have the employee actively involved in self evaluation. When dealing with problems never blame but rather focus on learning and generating solutions. There is section specifically for performance reviews for a more in depth coverage of the subject than dealt with here in the performance management system . it can sometimes be awkward and uncomfortable bringing up poor performance but everyone suffers. . If a manager surprises an employee with anything in a Performance Review the fault lies with the manager for not communicating effectively throughout the period. if it is not dealt with immediately. Always start with positives and things that have gone well. Once again the manager should be focusing on working together with the employee to help him/her achieve targets. the individual. This is continuous and ad hoc so be informal. If things are not going as well as hoped managers must be candid and deal with them immediately. the organisation. the Performance Review should contain no surprises for the employee. together as a team. What is important is that employees are being helped and coached to achieve their best.Performance There should be continuous dialogue. Diagnosing problems and coming up with solutions forms part of the upcoming performance agreement and development plan in the next performance management cycle. Only if there have been severe lapses in performance will documentation be required. as discussed above. the team. The worst thing a manager can do is avoid dealing with poor performance at the time and save it till the performance review to bring it up! Always be candid and transparent. Performance Review If.
The Role of Performance Management in Organizations
Updated: 2008-08-21 Performance management is a quickly maturing business discipline. Like its better known siblings—sales and marketing, human resources, supply chain management, and accounting and finance—performance management has a key role to play in improving the overall value of an organization. Wayne Eckerson of The Data Warehouse Institute defines Performance Management as “a series of organizational processes and applications designed to optimize the execution of business strategy.” The focus of this book (and its complimentary volume, The Rational Guide to Monitoring and Analyzing with Microsoft Office PerformancePoint Server 2007) is on the application side of the definition, but it is important to understand how the organizational process works. This article is an excerpt from The Rational Guide to Planning with Microsoft Office PerformancePoint Server 2007, by Adrian Downes and Nick Barclay, and is property of Mann Publishing Group (978-1932577-42-6), copyright January 2008, all rights reserved. No part of this chapter may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, electrostatic, mechanical, photocopying, recording, or otherwise—without the prior written permission of the publisher, except in the case of brief quotations embodied in critical articles or reviews. The fitness program described earlier outlines a strategy for following certain recommended exercises and healthy habits, helping you to achieve your objectives (e.g., becoming stronger, lighter, etc.), and leading towards your goal of becoming more fit. Throughout the program, there may be certain targets to strive for, such as 20 more pushups a month, or completing that 20-minute treadmill run at a higher average rate of speed. Your trainer also uses the program to record your progress from visit to visit, providing feedback on your overall performance and determining whether you are on track towards meeting specific objectives. Feedback is important to us, because it helps us to further understand why we may or may not be meeting specific targets. Feedback can also be used to modify our expectations, and to set new objectives over the course of the program. In business, a similar process takes place: 1. Planning what we would like to happen, based on insights from analysis of trends in our industry and events that impact our business. 2. 3. 4. Executing, by making decisions and taking action, based on the outcomes of planning activities. Monitoring our progress towards a certain time-limited target or objective. Analyzing further to understand why we may or may not be on-track to meet a specific target or objective. 5. Forecast what we think will happen, based on what we have analyzed. Here we build one or more scenarios to help us predict certain outcomes. These outcomes help us to confirm or refute our choice of tactics to meet our objectives. Figure 1.1 illustrates this process. Figure 1.1: The Performance Management Cycle.
Similar to our fitness program, where progress is monitored and analyzed in areas such as weight loss or number of repetitions for a given exercise, performance management involves monitoring key performance indicators (KPIs) that measure whether an organization is meeting its objectives and overarching strategy. A KPI in this sense is a measure defined by a business that allows for observation of actual values, as they may emerge from line-of-business (LOB) applications and their comparison to established targets (or budgeted values). If a KPI reveals an actual value that deviates too far from (or in many cases, closely approaches) a pre-defined target, then further analysis is warranted. Discoveries made during analysis should help us plan our next steps, set new (or adjust existing) expectations, and predict what may happen based on our decisions. In larger organizations, data from multiple LOB systems are often centralized within “a single version of the truth” business intelligence (BI) system to optimize KPI monitoring, detailed analysis, and performance reporting. BI systems often (but not always) consist of several layers that work together, helping businesses to:
• • •
Integrate and refine data from a variety of applications, systems, and documents into a centralized data mart or data warehouse. Analyze refined data to gain insight into current performance (monitoring KPIs), potential causes for specific KPI variances (or deviations of actual values from target values). Report past, current, or forecast conditions to stakeholders.
The goal of a BI system is to ultimately help business people make better, faster decisions. Classically, such decision-making has occurred at higher levels of an organization and been limited to a relatively small number of individuals. However, corporate culture has changed significantly over the last decade, and themes of transparency, accountability, and empowerment have emerged. Performance management frameworks, like Kaplan and Norton’s Balanced Scorecard method, build on these notions by making all steps in the cycle (illustrated in Figure 1.1) occur at executive, departmental, and operational layers of the modern organization.
Performance Management Cycle
Performing reviews is something that is one of the most common forms and parts of being apart of the workforce. Throughout completing these reports, is making sure that the employees are well aware of what positives they are adding to the job with their work and their work ethic, and what areas as a whole they need to work. The moment that the review is concluded, it's time to begin working and preparing for the next years reviews by repeating the process of observing. This process of yearly reviews in this manner is called performance management cycle. The reason for this process to be considered a cycle because it continues and revolves around in a manner that involves a repetitive system that happens yearly, and in some professional establishments, it happens quarterly. The reviewing process is one that takes place on a continuing process is which is used in order evaluate the employees of a company in order to make sure that they are making the necessary improvements, which is a helping factor to help show if a person cares about their jobs.
the employer gathers all materials that are needed for the evaluation. a review of the standards of the company are reviewed. based upon positives and negatives that happen to come across the scoring process. Any improvement in scores generally results in a raise of sorts. which is always good for both employer and employee. by having no criticism of an employee could leave them feeling stagnant and at a standstill. the employee receives a certain score. That includes the evaluation form for the current reviews. In the Planning section of the performance management cycle. the employer is responsible for discussing any questions that they have about the assessment process. From there.one of the main ways in which an employer is able to decide whether or not their employee is able to work along the guidelines of the company's standards that have been set. execution. it's common for employees to not always get a 100% on their reviews. Should these standards not be met. there are a certain amount of points that are assigned to each category. there are those who have received a considerable raise and a promotion due to their high scores and improvement. scoring. Once this score is totalled. and renewal. or anything else that play an important or non-important role in the matter. it will be viewed through doing an evaluation where the company's standards will play as the guidelines in which will be used to judge an employee. The performance management cycle is responsible for a series of five steps that goes into performing an evaluation of an employee. In most evaluations. With the consideration of these five steps. Next. this is frowned upon in most business and company establishments. With the total points that are added up. review. as though you also don't notice them. It also has a way of showing that employers aren't holding their employees up to the company's standards. From a psychological standpoint given by many psychologists. The routinely aspect of doing evaluations is what is better known as performance management cycle. it will then be compared to the scores from the last evaluation. or sometimes a bonus. The five steps are planning. assessment. This score is based upon how each employee does within each of the categories. . and those that from the past reviews. In some cases.
the employee has the opportunity to discuss how they feel about the company. On both levels. Through this discussion. they also discuss how that plays a major part within the company. any problems that they have had. The Assessment of the performance management cycle is the portion of evaluation where both the employer and employee have the opportunity to discuss the performance on an overall level. and discuss what they have noticed on the positive scale of the employees performance. From this. While talking about their performance. the employer will begin to discuss and go through exactly what will happen during the evaluation. The employer will pull all of what they have observed from their past experiences since the last review of the employee and begin discussing what they've noticed.In the Execution process of the performance management cycle is the moment in which the review actually begins. or anything that they feel would improve their working ethic. and how that is a positive impact for both the company and themselves as a person. This is where any questions and/or concerns can be brought to light. This is the time in which the employer will begin to discuss and review everything from the last evaluation. or even improve the company as a whole. the employer will . and what they have positively seen.
Through these efforts. The Review portion of the performance management cycle involves the processing of the entire evaluation. and in some cases. . and each point can mean the different between getting a promotion. a raise. and even begin the process of implementing any plans or solutions that can be put to work in the effort of helping the employee to further themselves within the company. dress code problems. Many business work with a performance management cycle in order to help them understand and keep a watchful eye on their employees. how they get along with other employees. they are able to conduct a business and company that upholds the standards and levels in which the foundation is made of. etc. and then there is a discussion of the why the particular points were given. all play a role in being scored.have the chance to entertain such notions. and/or a bonus. completing work. how they handle their job. though may seem small to a degree. especially if they have an interest in gaining a promotion. people getting fired. The Renewal of the performance management cycle is a simple process in which the employer has the employee sign a sheet of paper that states that they have discussed the employees review one on one. This could include timeliness to work. and that they are aware of their assessed score and understand why they have received the score that they have gotten. This is also the time in which the employer will discuss any problem areas in which they have noticed within the employee. their work ethic. All of these factors.
All Australian Government agencies are required to publish performance information in key accountability documents such as Portfolio Budget Statements and annual reports. Policy & purpose The Government has promulgated a set of Performance Management Principles that identify the main features of good practice in performance reporting and management for purposes internal and external to its agencies. Performance information should be published for the following major components of the outcomes and outputs framework: • • • Outcomes: these require indicators of effectiveness. 1. in terms of the contribution of the relevant departmental outputs and administered items to the achievement of the outcome. be it grants.Performance Reporting Under Outcomes & Outputs This advice on performance reporting under the outcomes and outputs framework has been updated following the publication of 2001-2002 departmental and agency annual reports. quantity and quality of the final output. The following discussion outlines the purpose of performance information under the outcomes and outputs framework. linking it to other common performance management approaches such as business planning and the balanced scorecard approach. It includes some good practice examples. transfers or benefit payments (for example). policy statements or inter-governmental agreement controlling the item. It can be collected at many levels depending on the purpose and the structure of each agency. The requisite performance information for administered items is often indicated in the associated legislation.1 Purpose of performance information Performance information is evidence about performance that is collected and used systematically.the price. Administered items: require indicators relating to the achievement of the objectives of the administered item. There is a requirement that performance reporting within portfolios be reviewed against these principles at least every three years. Outputs: require indicators of efficiency . Various aspects of the Performance Management Principles are discussed further below. . Most Government programmes are administered items. 1.
store and manage. 2. Experience has shown there are definite advantages in aligning an agency's administrative or financial control structure with its outputs or outcome streams. Externally. the purpose of performance information is to assist stakeholders and management to draw well-informed conclusions about performance from what is provided in the published documentation. the reporting of actual performance for that year occurs through annual reports. When the same budget year is over. This can be achieved with a concise basket of performance indicators which can be understood. are well-defined. Design issues This section addresses the design issues in developing performance information under the outcomes and outputs framework. There is a risk that managers may feel obliged to generate output that is tailored to an artificial or inappropriate target (for example.1 Performance information & behaviours Poorly designed or specified performance indicators can result in unintended consequences if the behaviours they encourage are not carefully considered. 2. but there will be a few agencies where this is not practical or cost effective. . so that those to whom agencies and governments are accountable can make informed judgements. a toplevel strategic overview is essential. Before a budget year commences. Generally. As stated above. Guidance on these accountability documents is available on the web sites of the Department of Finance and Administration (in relation to PBS and PAES requirements for all agencies and for annual reporting for Commonwealth Authorities and Companies Act bodies) and Department of Prime Minister and Cabinet (in relation to requirements for departmental annual reports). redesigning a process or output where necessary) will add to an agency´s credibility. an alignment between an agency´s organisational structure and it´s outcomes and outputs structure is recommended. and action on performance information (for example. Candour in disclosure. External reporting is generally less frequent and less detailed than that for internal purposes. This process should be carried out in a transparent way. It is therefore important to keep this possibility in mind when designing performance indicators. It is also important to stress the inter-relationship of the indicators: meeting a quantity target at the expense of price or quality expectations is not appropriate or desirable. it external reporting focuses on foreshadowing the desired or expected performance for that year in the agency´s Portfolio Budget Statements. and provide a sound contribution towards decision-making. In this context. output or administered item. Measures aligned with personal performance agreements can also be used to provide feedback to staff on their contribution to the management of outputs and administered items. breaking up or amalgamating supplier contracts). agencies are required to identify their planned performance in their budget documentation (Portfolio Budget Statements and Additional Estimates Statements) and to report on their actual performance in their annual reports. and are cost-effective to collect. 2.The internal uses of such information include providing timely feedback on the performance of outputs and administered items so that action can be taken during the budget year to ensure that the expectations of the government and agency can be met. a specific number of ministerial briefs) or change the nature of their work to make the numbers 'right' (for example.2 Balance & clarity Performance information will be useful where it is pitched to provide a comprehensive and balanced coverage of a particular outcome.
performance information for administered items will also address . Parliamentarians and the Government are most interested in is results . Ultimately.where relevant . ehat the community.5 Outputs In addition to reporting on effectiveness in achieving outcomes. other contractual arrangements.e.3 Targets Performance information should provide perspective. In a context of continuous improvement.6 Administered items In addition to reporting on the effectiveness of any administered items in achieving outcomes. outputs and performance information structures can be expected to evolve with experience to meet contemporary needs and changing policy objectives or priorities.2. 2. Activity levels should be realistic. Outcomes information needs to achieve a balance between addressing progress against milestones or intermediate outcomes and ultimate long-term impacts. outcome reporting can often be complemented by identifying the results of performance audits. However. output performance information relates to an agency´s efficiency in executing its responsibilities. 2. According to the circumstances. Outcomes constitutionally provide the purpose and level at which funds are appropriated. It must also measure the unintended impacts of agency outputs or administered items.the quality. 2. Performance information should be regularly . It will also address transfer payments which meet the Government's requirements. Output efficiency indicators measure the quality. quantity and cost associated with delivery of the item. Performance information for any purpose is most effective where trends can be compared over time. The extent of "stretch" should be identified explicitly. 2. The aim is to demonstrate through a concise basket of indicators that an agency has addressed the government's purchase requirements in a way that demonstrates overall value for money and value for the community. where relevant.7 Stability versus improvement Agency outcomes. demanding significant but achievable improvement) where possible. Job Network). These are most often specified in legislation. targets or activity levels where this is appropriate. it is useful to identify the impact of strategies which have been adopted during the year to achieve or improve performance. quantity and price of agency products and services. This is also the level at which the community views the activities of the government. and the availability of more relevant or more reliable information. reviews or programme or output evaluations. For internal performance management. inter-governmental agreements. and performance information in this area must focus on effectiveness of contribution to achieving the outcome. and to recognise continuous improvement. In some cases this will include information extracted from other jurisdictions (in the case of State or Territory outputs funded by the Australian Government) and in some cases outputs delivered by non-government organisations (eg. or other expressions of Government policy. this needs to be carefully balanced against changes in needs. it is desirable that these be of a stretching nature (i. It is most effective where current output performance can be compared qualitatively or quantitatively against specific benchmarks.in the achievement of outcomes.4 Outcomes Outcome performance information relates to the specific impact that an agency's outputs and administered items have had on the community. Outcomes are often long-term or on-going in nature.
depicted in the diagram below.8 The performance management cycle The outcomes and outputs framework provides the basis for agencies to develop robust performance management systems that allow them to continuously improve the way they do business. report on results and interpret the information to identify areas for improvement. It aims to encourage managers to actively question the relevance of particular activities and the need to continue with a given set of responsibilities or modes of operating. The performance management cycle has six stages: • • • • • • identify the crucial areas of performance. review and evaluation of the Government outcomes they support. Performance Management Cycle The performance management cycle interconnects with the wider framework of the Performance Improvement Cycle (PIC). where necessary.assessed for appropriateness through systematic review and evaluation of departmental outputs and administered items and. 2. promulgated by the Department of Finance and Administration in March 1998. : Should the Australian Government be involved in the activity? . The PIC has four stages: Phase One: Review Government Activity. make appropriate changes to management and operations. establish benchmarks for achieving the specified outcomes as effectively and efficiently as possible. The PIC is a case-by-case approach to management review and improvement. develop information systems to generate the appropriate data. This gives rise to a cycle of improvement. and revise the relevant benchmarks accordingly (taking into account the need for continuity of indicators over time).
benchmarking. partnering re-engineering. privatised or discontinued? Phase Two: Testing Cost and Effectiveness. especially in terms of the effectiveness of outcomes. : How will improvements be implemented most efficiently? Phase Four: Review and Evaluation. The outcomes and outputs approach has a strong focus on performance measurement. the outcomes and outputs framework 'maps' across two other common corporate management tools . Corporate planning helps organisations identify their key result areas and ensure that their strengths. contracting with another agency etc? Phase Three: Implement Improvements. Mapping outcomes & outputs to planning and balanced scorecard systems . weaknesses. opportunities and threats are clearly identified and dealt with in the organisation's strategies. Each approach is concerned with aligning strategy and operations so that they are consistent with the overall purpose of the organisation.: Should the activity be devolved to another level of government. The balanced scorecard provides a matrix to check the consistency of performance information from all levels in the organisation within the four (or sometimes five) perspectives of customers. innovation and financial performance.corporate planning and balanced scorecard . business planning and the balanced scorecard For those agencies that utilise such management tools. : How well did the improvement strategy work and is it still relevant to the current environment? (Repeat phases one and two) 2. internal processes.in the fashion outlined below.9 Performance information under outcomes & outputs. : What is the most efficient way for the Australian Government to be involved in the activity competitive tendering and contracting.
and those that relate to the overall state of the outcome. These indicators require very careful design and specification. Outcome information Outcome performance indicators focus on the effectiveness of government activity in contributing to specified outcomes. 3. a high per unit cost and low quality to also be effective in realising the desired outcome. principally through its administered items and its agencies' outputs.1 Information on overall outcome result Most outcome statements will implicitly include some suggestion of the indicators of their overall achievement. In general. It is therefore up to agencies . Effectiveness indicators will generally be judged by four criteria: (i) the degree to which they reflect the terms of the specified outcome. While it is possible to have an inefficient output or administered item that is highly effective in terms of impacting upon the desired outcome. it is important that the best available effectiveness indicators are identified and reported against. (iii) the degree to which they encompass contributions to the outcome by all relevant outputs and/or administered items. This information is useful in describing the broad environment in which the agency is operating and in developing and communicating policy options.2 Information on effectiveness 'Effectiveness' refers to the extent to which outputs and/or administered items make positive contributions to the specified outcome. For long-term planning and policy purposes. (ii) the degree to which they relate to the appropriateness of the specified outputs or administered items in contributing to the specified outcome.3. Effectiveness. Effectiveness indicators will generally be derived from some characteristic of the outcome and they should be designed to identify as clearly as possible the causal relationship between the outputs and/or administered items and the outcome.to identify realistic. Such indicators. It is desirable to specify at least one or two such indicators for each outcome as a means of reporting on the general trends in the area targeted by the outcome. then. however. however.in close consultation with their ministers and stakeholders . There are two types: • • those that relate to the effectiveness of government's contribution to the result. is a function of outputs and administered items being both appropriate and well performing. since there are limits to the effect government action has on the community. They cannot be as easily characterised as output or administered item indicators and there are few 'generic' indicators of the effectiveness of outputs and administered items. in practice it is rare for an output that is of. useful and relevant effectiveness indicators to help those interested in the agency and/or the administered items the agency manages to better understand their value in terms of specific policy outcomes. for example. 3. indicators of effectiveness will form a subset of indicators of the overall state of the outcome. That information should be contained in the effectiveness indicators discussed below. and . should not purport to necessarily represent the agency's contribution to the outcome.
processes or even outputs often occurs over time. If. This learning is iterative and adjustments to inputs. some it cannot. where the outcome is aimed at striking a balance between competing objectives (for example.. then it may not be possible to establish effectiveness criteria that demonstrate the link between an output or administered item (even if the contributing aspects are well specified in their own terms) and the outcome. This allows for the combined effects of the outputs and administered items to be measured and reported. In these cases it is also best to report on effectiveness at the outcome level to account for the differing influences of the relevant outputs and/or administered items. economic growth and environmental sustainability). outputs and effectiveness indicators and efficiency indicators (and inputs. however. This may occur where there is a clear one-to-one causal relationship between the outcome and the output or where the optimal means of identifying the achievement of the outcome is through reporting on the separate effects of the various outputs and/or administered items.(iv) the degree to which they account for factors outside the direct or indirect influence or control of the agency and/or government policy mechanisms (i.to the outcome.3 Effectiveness information & outcome and output structures The process of designing indicators of effectiveness can be a useful tool for checking the appropriateness of the overall framework supporting a given outcome and the outputs and administered items designed to achieve it.5 Coverage of outcome indicators & accounting for extraneous factors Most government agencies operate in environments that are complex systems of interconnected factors. None of these criteria is an absolute. 3. Even within an agency's scope . there is a need to counterbalance the potential gains in refining it with the risk of diminishing year-on-year comparisons of performance and results. with opportunities to cross-check the fit and alignment of each element of the structure with the others. Similarly. for example. in relation to administered items).and only its contributions . an output is not well specified. The design process for outcomes. it may conceivably detract from the realisation of another aspect of the same outcome. This maximises the opportunity for an optimal system to be established. The intention. Some of these the agency can influence. however. Under a slightly different scenario. for that matter) should therefore be iterative.4 Attach effectiveness indicators to outcomes Effectiveness indicators should reflect the terms of the outcome as much as possible. 3. some effectiveness indicators will arise from a specific output or administered item. 3. for example. while one output or administered item may make an appropriately effective contribution to one aspect of an outcome. There are few (if any) effectiveness indicators which will always entirely reveal the appropriateness of the output or administered item as well as measure all its contributions . activities and processes. Once a structure has been established. if the outcome itself is too general or couched in inappropriate language. This can happen. it may well prove difficult to identify robust and reliable indicators of its contribution to the outcome.e. as well as various extraneous factors. agencies are responsible for establishing an outcome and output structure (including relevant performance indicators) that is as close to optimal as possible. is to come as close as possible to this ideal. In practice. Within the limits imposed by available resources and time.
many outputs and administered items are necessarily constrained by: • • the intrinsic limitations of the agency in terms of its regulatory or policy scope and its resourcing. well-based assessment of the agency´s contribution is likely to be respected by readers of annual reports. however. In some cases. For example. The public reporting of effectiveness indicators ought to give Parliament and stakeholders a good indication of how well specific outputs or administered items are. the narrative surrounding them should make clear that the agency is aware of the imperfect match between the indicators and the relationship between the outputs and the outcome. the Treasury portfolio has responsibilities that cover the entire national economy). where relevant especially where it impacts upon the effectiveness of the agency. they should also take account of factors that are beyond the direct or indirect control or influence of the agency. Under these circumstances. and the general state of the outcome area in the community is also monitored. Some outcomes. or are not.of operations. For example.6 How many outcome indicators? As a general rule. More than six. less than two effectiveness indicators for an outcome is unlikely to provide interested parties with enough data to make judgements about the contributions of the departmental outputs and/or the administered items. In general. the achievement of a particular target or milestone that relates strongly to the government's policy objectives. performance information intermediate to the achievement of the desired outcome) may be utilised to offer trend or percentage data or other reliable proxies to illustrate the impact agencies are achieving. other agencies within the Australian Government or the wider national or global economy. 3. operate at such a high level and imply such a wide range of actual or potential interests to be addressed (for example. 3. the effectiveness indicators should cover the disparate aspects specified in the outcome. A frank. As far as possible. intermediate outcomes (ie. both the appropriateness of government outputs or programmes are measured against what they were designed to achieve. would help indicate the effectiveness of government action. In this way. if the outcome identifies efficient as well as fair results for the target group. contributing towards the achievement of an outcome. Where it is not possible to 'quarantine' the indicators in this way. there can be competing goals or objectives. then it would be desirable to specify at least one indicator for each of these qualities. whether these are factors arising from the work of different levels of government. and/or the need to balance different objectives. it is important that the effectiveness indicators in combination reflect these different interests.7 Independent data collection Wherever possible. data for effectiveness indicators should come from public or at least independent sources. As a consequence. Some agencies may also wish to highlight in their outcome reporting any significant impacts on the outcome (positive or negative) that are due to major external factors. however. They should also give a general indication of the overall state of the outcome itself. may confuse the issue by including data that is of diminished relevance to the outcome and/or the outputs and administered items. that it may be necessary to concentrate effectiveness information on those aspects that are most pertinent from an accountability and policy point of view. It may be necessary from time to time to commission specific research or . as specified in the outcome statement.
Be careful not to confuse measures of an output's quality characteristics with measures of its effectiveness on the desired outcome. quantity and quality separately. 4. maintaining and interpreting the data used in assessing the effectiveness of its own outputs. accuracy. and the mix between them will often be determined by the balance between the government´s requirements for a certain standard of service or quality of product. measure and interpret. Lastly. This circumstance will most often arise when the output is not an appropriate or optimal response to the demands of the specified outcome. An output can only be determined to be efficient when the combined impact of all three characteristics are taken into account. It is therefore important that quality indicators: . Quantity & Price The following sections discuss price. 4. it is possible for an output to perform to a very high level-including in terms of its quality aspects . Output information Output indicators provide information on the productivity and therefore efficiency of a given output in terms of the combined and interdependent effects of its price. measuring and especially interpreting performance information. peer review or public perception/profile). conformity to specifications) and less tangible.analysis of statistical or other data to generate the required measures. Output Performance: A Balance Between Quality. It is important for probity and public confidence reasons that the agency not be solely responsible for gathering. objective criteria (e. timeliness. to a lesser extent. Quality indicators can relate to tangible.. Each of these three characteristics has an impact on the other.1 Quality Quality indicators relate to the specific. The qualitative aspects of an output can be elusive to define.while its impact on the outcome is negligible or even detrimental. coverage. quantity and quality. and the amount it is willing to fund an agency to produce this. Indeed. immediate characteristics of an output that are not encompassed by price or quantity. These aspects will often also have the greatest relevance to those immediately affected by the output and. to accountability bodies such as parliamentary committees. but their mutual dependence should always be borne in mind when designing. agencies should keep in mind that an efficient output is not always an effective output.g. interpretive data (such as client satisfaction. Measuring the `quality´ characteristic of an output is not concerned with the degree and nature of the output's contribution to the specified outcome.
and are kept to a minimum number. would be information about the capacity of the agency's policy areas. include both tangible. defence). foreign relations and diplomacy. for example. but there are others.e. These cases are often analogous to private sector arrangements whereby a client might be paying for a capacity (for example. objective indicators as well as subjective. fastturnaround legal advice to a specific standard of expertise) rather than one off (for example. qualitative information. Policy development and advice is perhaps the most ubiquitous example. Where an agency seeks a change in funding it needs to comply with the Budget process operational rules as promulgated annually. 4. This might be measured in terms of officer hours applied to policy work. Generally speaking. an output would need to have at least two and perhaps up to four or five indicators of quality. and more relevant to the attendant quality and price indicators. drafting a contract) or serial activities where demand is known in advance (for example. Further information on costing. the quality and quantity to be produced of the chosen output. Examples might include the processing of veterans' benefit claims (where the unit of measurement is the number of claims) or the administration of a grants scheme (where the unit of measurement is the number of grant applications). More important. as it is possible to overload both the user of the information and the agency's capacity to gather and interpret relevant data. capabilities or reserves of various types (for example. distribution and supply (i. and the amount the government is willing to pay. This is particularly so if the number of briefs is used as a performance target. processing monthly accounts). the measurement of quantity is a straightforward matter.3 Price Price refers to the market value of a good or product. a minister may not see the number of policy briefs prepared as being an appropriate metric against which to cast information about the quality or price of an agency's policy advice outputs. Price is therefore the point of balance between the cost of production. To build on the example of policy development and advice. often generate outputs that are not so homogeneous. This is especially so where the activity in question is a reasonably homogeneous administrative or service function. pricing and accounting practices can be found at Finance's web based service Accounting and Budgeting Information.2 Quantity In many circumstances. however.• • • measure those aspects of the output that are most pertinent to clients. This characteristic is largely influenced by the cost of production. the inputs).4 Demand is not the same as performance . the price of alternatives. customers or stakeholders. 4. Less than two would probably not encompass both the objective and subjective information required. Where there is a relative lack of homogeneity. Public sector organisations. and regulation. 4. while more than around five would usually either confuse the issue or generate costs in data collection and interpretation that would outweigh the benefits. it is important to select a quantity indicator that will make the most sense when read in conjunction with the price and quality indicators. and what government is willing to pay. but it can also be determined by demand and the extent to which there is an alternative supply. then. including: research and development.
This is most common in the area of quantity indicators (for example. In general.There is a tendency for some agencies to designate as 'performance indicators' factors that are actually measures of demand (for example. especially if the selected indicators are of marginal relevance. rather than production of individual outputs. quality or price).8 Management information systems for output indicators Generating information for performance measurement is not cost-free. There may at times be extraneous factors that affect delivery of an output through one of the three key class of indicators (quantity. the . number of client phone calls received or number of ministerial briefs called for) rather than performance. Agencies should not report on a factor of marginal relevance to the output. while quality measures often require at least two indicators (covering subjective information such as client satisfaction and more objective information such as performance to specifications). for example. is of diminished relevance if that rating is only among the 50% of clients whose phone calls are actually answered. quality and price of their outputs.5 Cross-output indicators Some agencies find that some indicators derive from factors that cut across outputs. Sometimes. client queries. External factors are generally considered more important where they effect achievement of an outcome. It can be just as misleading to have too many efficiency indicators as too few.7 How many output indicators? Efficiency is usually best measured by a concise basket of inter-related performance indicators. 4. for example. an agency may want to explain and quantify that impact. It is often not possible. even if in general terms (for example. More than four quality indicators for an output may confuse or frustrate the reader while adding little to their level of understanding of the output. some apportionment of the respective contributions of the outputs to the performance indicator result should be provided. it is reasonable to retain such indicators but to identify their cross-output character in the explanation of the indicators or results. Having a 100% client satisfaction rating. often reflect customers' perceptions of the performance of the agency as a whole. number of ministerial briefings). Where possible. rather than individual programmes or outputs. One indicator each for quantity and price should normally be sufficient. efficiency indicators used for external reporting purposes should be a subset of those generated for internal management purposes.6 Extraneous factors and output delivery Agencies are generally recommended to report on just the quantity. While demand data is often of considerable interest in itself. or not even necessary. Under these circumstances. 4. Customer satisfaction measures. by noting that a percentage of responses were from customers who had made no use of a particular output. 4. 4. If an outside effect is particularly pertinent to an outputs performance. however. On occasion this may be the result of poor specification of the output. This happens particularly where the outputs are oriented towards the same outcome. it may be unavoidable. while another percentage might have used only that particular output). Where possible. to account for all extraneous factors that may contribute to or detract from an efficient output. validity or utility. It is therefore important to consider management information factors when designing indicators. The relationship between these factors and agency performance can sometimes be marginal at best. especially when read in conjunction with quality indicators. thereby affecting that agency´s record of efficient performance. it is not necessarily an indication of agency performance. or poor design of the data collection arrangements.
[example] 4. providing trend data where available (eg. The agency annual reports for 1999-00 were the first to be published under this framework. including forecasts. (a) outcomes reporting The Department of Education. Many agencies.37-44). A further source of such information would be the terms and conditions attached to grants and the performance criteria stipulated in inter-governmental agreements relating to transfers to the state and territory governments.9 Allocation of overheads and shared resources Overheads and other shared resources are allocated across departmental outputs. Much of the information used in output performance indicators must be aggregated up from the level of activities and processes. the criteria used should relate as closely to 'true' cost drivers as possible (for example.24-29). It is often implicit in the relevant legislation or policy documentation what the key performance characteristics should be.information used should emerge as a natural byproduct of the agency's normal functions and information needs. There have been two further complete cycles. indicators of quantity. Science and Training (DEST) identifies in its 2001-02 Portfolio Budget Statements (PBS) a range of measures. quality and cost should be identified. adding to the credibility of the reporting. rates of actual computer usage). The criteria by which this distribution takes place vary from case to case. however. however. This is consistent with the devolution of responsibility to agency heads and the different responsibilities and needs of agencies. They are discussed within the annual report. and allocating overhead and shared resource costs may demand sophisticated mapping of activities and processes. fax and data connections for telecommunications). Administered items information Performance information for administered items generally arise from the specific circumstances and characteristics of the items themselves. 6. policy development and public accountability. outputs and performance indicators that were identified in the 1999-00 Portfolio Budget Statements. that where such costs are distributed other than on the basis of direct cost drivers (for example. . Where possible and appropriate. Outcome 1 pp. number of telephone. Examples of good practice Agencies have taken various approaches to performance reporting under the flexibility allowed by the outcomes and outputs framework. have found that robust and reliable data for output management calls for enhancement of their information and accounting systems. These are often independently collected measures. It is important. The test of appropriateness should be whether the proposed performance information regime will serve to enhance management decision-making. The following are presented as examples of good practice. 5. for each outcome (eg Outcome 1 pp. with the following discussion centered on the 2001-02 annual reports. especially in using such tools as activity based costing (ABC) and benchmarking. staff numbers for personnel functions. they will include features capable of further improvement. As in most matters concerning performance reporting. These reported against the outcomes.
the output measures and targets for Outcome 2 are identified in the PBS (p. For instance. most with targets identified. The Department of Immigration and Multicultural Affairs identifies performance indicators and targets in its Portfolio Budget Statements (PBS) for outputs but not targets for outcomes. Two examples are provided below. with those for outputs under Outcome 1 identified at pages 63-80 in the 2001-02 PBS under the quality. together with the performance result. and annual reports.1 pp. see outcome related information under Outcome One in the 2001-02 PBS (pp.6565). (d) strong linkages between 2001-02 Portfolio Budget Statements and annual reports One feature of the outcomes and outputs framework is that appropriations are now aligned with reporting.1 pp. This did not occur previously.77) and the end-year results for all outcomes and outputs are summarised at page 9 of the annual report with full output details at Appendix A (pp. For example. It reproduces the same information in its annual report.63-80) and the general approach of these is explained at pages 38-39.23-27). The indicators are discussed in the 2001-02 annual report (pp. Reporting in the 2001-02 annual report discusses these measures in sequence showing original targets and results (eg Output Group 2.38-39) and the 200102 Annual Report (pp. Another feature of the framework is that a `clear read´ is now possible between planned performance in Portfolio Budget Statements and actual performance for the same year as recorded in the corresponding annual reports. It quantifies results against indicators. For example.24-32 in volume 2). quantity and price labels. adding a result column.37-38) and the 2001-02 . effectiveness indicators for Outcome 1 (Stronger families) are identified in the 2001-02 PBS (pp. reflecting the fact that these represent over 98% of the department's appropriation.179-180). enabling the reader to make an easy comparison. although this is interspersed with the effectiveness information mentioned above. The reporting of most Commonwealth agencies has achieved improved focus through this approach. The Department of Finance and Administration identifies performance indicators and targets in its PBS for outcomes and outputs. Activity levels and achievements against quantity and quality/timeliness targets are well presented in the annual report (pp. (b) outputs reporting FaCS reporting at output level is also comprehensive. The strength of the FaCS reporting lies in its analysis/explanation of each indicator's results in the annual report. through common outcome statements for the Appropriation Bills. The Australian Trade Commission reported consistently in its 2001-02 annual report against output indicators and targets identified in the 2001-02 PBS. and often specifically notes where effectiveness and quality indicators have been achieved. (c) administered items reporting DEST's output groups are structured against the department´s administered items. DEST's administered item measures in the 2001-02 PBS are often accompanied by targets (eg Outcome Group 2. see Outcome One in the 2001-02 PBS (pp. There are also a set of environmental indicators providing a broader focus.114-115). For example. surpassed or not met.The Department of Family and Community Services (FaCS) identifies a comprehensive suite of effectiveness indicators. It identifies the same indicators in its annual report. Budget and BudgetRelated Papers.24-86 of volume 2) for Outcome 1. Quantity indicators show forecast and actual values in the annual report.
Output and administered item information has the benefit of target information with most PBS indicators (pp. and Summary.66-77). Purpose | How to use this program | The university's expectations regarding performance management | Definition | Objectives | Principles of developing a performance management plan | Supervisor's responsibility | Available resources Purpose The purpose of this program is to provide supervisors with a resource to help them implement a performance management plan. Cycle. Performance management continues with the filling of the job with the best candidate. If you are familiar with Performance Management. Note: Supervisors on campuses with an established performance management program should follow and use campus-specific procedures and forms. what the qualifications are to fulfill those duties and what level of performance is needed to meet the mission of the department. . The university's expectations regarding performance management One of the most important functions of managers and supervisors is to effectively manage resources. If you are not familiar with the concept and principles of performance management. Also check out the information under the "Forms" section. go through the steps of the Cycle in sequence (starting with "Determine Major Job Duties") and conclude with the Summary. Consult the campus Human Resources office for details and clarification. the training of the new hire and the continuous coaching to clarify expectations. At any time you can look for a term using the search function. all supervisors are expected to do some form of performance management consistent with the following guidelines.Annual Report (pp. first familiarize yourself with all of the content in this Introduction. Then. and one of the most important resources they have is the staff they supervise. against which performance is reported in the annual report (pp. feel free to go directly to a section to obtain specific information based on your needs. Managing them (and consequently their performance) begins with designing the jobs – determining what duties are important to include in a job. 63-65). How to use this program This program is divided into three sections: Introduction. While the University does not dictate a specific plan.38-45).
defining performance standards. succession and strategic planning. and documenting. . all supervisors are expected to participate in a performance management program with their staff. and pay for performance. supervisors will want to consult the appropriate policy manual. priorities and expectations Identify and resolve performance problems Recognize quality performance Provide a basis for administrative decisions such as promotions. 3. therefore. 5. It emphasizes communication and focuses on adding value to the organization by promoting improved job performance and encouraging skill development. It is a philosophy which values and encourages employee development through a style of management which provides frequent feedback and fosters teamwork. Certain employee groups have specific policies and guidelines for applying the principles of performance management.Management of performance is important to being a good supervisor and clarification of expectations and performance feedback is also important to those they supervise. 4. Consequently. continuous process of communicating and clarifying job responsibilities. Objectives The objectives of Performance Management are to: 1. goals. 2. Increase two-way communication between supervisors and employees Clarify mission. Performance Management involves clarifying the job duties. Following are two examples: • • Performance Management policy for Professional and Non-union Service and Support Staff university wide Performance Appraisal policy for Support Staff at Bloomington and Northwest Definition Performance management is an ongoing. evaluating and discussing performance with each employee. responsibilities. priorities and performance expectations in order to ensure mutual understanding between supervisor and employee.
feedback and communication are integral to success. Training for supervisors and employees is encouraged and will be provided by University Human Resource Services. Provide continuous coaching and constructive feedback in a timely manner. 9. 3. Performance management is considered a process. The Performance Management Plan should be consistent with federal and state laws which address non-discrimination. 4. 11. Elements for discussion and evaluation should be job specific – not generalized personality traits. 2. 6. Available resources Employee and Organizational Development. The major duties and responsibilities of the specific job should be defined and communicated as the first step in the process. 2. It follows good management practice in which continual coaching. 6. 7. Provide necessary information. Monitor employees' performance through observation. Supervisor's responsibilities The supervisor's responsibilities are to: 1. Hold performance discussions (at least annually). Documentation of performance will occur as often as needed to record the continuum of dialogue between supervisor and employee. Communicate and clarify major job duties. Establish and communicate performance standards. 4. One year is a common evaluation period. 12. The Performance Management Plan is primarily a communication tool to ensure mutual understanding of work responsibilities. If formal ratings are included. Correct poor performance and reinforce good performance. The formal evaluation period should be long enough to allow for full performance and to establish a history such that evaluations are fair and meaningful. they should reflect the incumbent's actual performance in relation to the performance standard for that major duty. University Human Resource Services. Document good and unacceptable performance. 5. resources and opportunity to allow accomplishment of key results. Performance standards for each major duty/ responsibility should be defined and communicated. discussion. 5. 8. Professional development should be an important component of the plan. 3. 7. not an event. etc. The supervisor should be evaluated on the successful administration of the plan and ongoing performance management responsibilities. Employee involvement is encouraged in identifying major duties and defining performance standards.Principles of developing a performance management plan Development of a performance management plan should be consistent with the following principles: 1. Help employees to develop skills and abilities for improved performance. 9. is available to provide consultation with supervisors interested in developing a Performance . 10. priorities and performance expectations. priorities and expectations. 8.
accurate and valid. Individual and/or group training on all aspects of Performance Management is provided upon request. that your assets are adequately safeguarded and that your operations are .Management Plan. Are you in control of this performance management cycle? Do you know which levers can be pulled to manage performance in year? Are you able to continuously improve the quality of your forecasting and budgeting by the appropriate use of variance analysis? Do you have the necessary internal control system in place to ensure that no nasty surprises come out of the woodwork? How good is your risk management and corporate governance? Good practice is to be confident that your financial statements are complete.
Reliable management information. A prerequisite was the ability to work in French. in turn productivity and satisfaction can improve Decision making is aided with relevant reports and statistics. Good practice performance management and internal control Key Benefits Identification of levers that can be pulled to manage performance in year. Performance Management Talent management has never been easier with the availability of performance management software. Good practice internal control system to manage risks. Capabilities Prepared the year end financial statements to US Generally Accepted Accounting Principles (GAAP) for a US golf company. Implemented and managed effective internal management control systems for a biotech company.as efficient and effective as possible. Restored the management accounting and reporting of a multinational company division to a professional standard thus enabling the reintroduction of sector cost control. The advantages of the Talent2 LMS performance management software are clear: • • • • • Effective record keeping delivers a transparent audit trail for employees and managers Automation saves time with repetitive tasks and allows paperless management People are empowered. Talent2’s Learning Management System (LMS) is a proven choice to simplify your performance management processes and track your employees’ performance plans against your business objectives. from micro to macro organisational views Ability to integrate with your learner development plan for seamless management .
• • Assists with customisation of employee training plans rather than a one solution fits all approach Ease of use and ability to track results encourages repeat use and involvement You can expect a lot more from the Talent2 performance management solution: Audit your performance reviews • • • Build your own performance review templates Map your organisational processes into the Talent2 LMS Automatically assign your employee performance reviews with their manager and set the frequency of these reviews Eliminate the performance management paper trail • • • • • Build your own performance management templates or tailor them for specific groups Automatically schedule all employees for periodic performance reviews Empower your employees and managers to initiate and schedule their own appraisals Empower your employees to complete an online self assessment prior to review Allow managers to enter comments and assessments for view by the employee or for their own record Centralise talent management • • • • • Centrally manage and report on organisation-wide performance reviews View detailed employee reports and performance management review comments Produce exception reports at a group or organisational level Generate completion reports and statistics Conduct statistical analysis of employee performance against organisational goals Complete the cycle – development plan • • • • Create your learner development plan Set job-based and personal development targets Identify desired business outcomes and activities Enable an iterative creation and approval process between your employees and their manager Performance Management Cycle .
easily match courses that support your employee’s development plan outcomes to the learner’s training plan. The performance management solution has many applications for your business and Talent2 the necessary expertise to deliver the outcomes you desire.Customise your training plans To complete your professional development plan and achieve a customised curriculum. .
and integrated strategic measurement. and scorecards. For Bitam. total quality management. analytics. Some of the most known and adopted methodologies on performance management include: six sigma. metrics. They fail within the organizations operational processes because of poor execution and the unalignment of action and metrics. The sole purpose of these combined solutions is to align the tactics. Resource Documents . “Methodologies. activity-based costing. is a strategic approach to improving business performance. and systems used to monitor and manage the business performance of an enterprise” as defined by Gartner Inc. EPM is a top down framework consisting of 3 individual solutions: Business Intelligence. Bitam offers a complete suite of software tools that deliver the benefits of implementing and measuring strategic plans correctly. processes. The EPM integrated solutions concept was recently conceived to define the actionable solutions that arise when information resides in concentrated sources within an organization. “EPM in short represents the strategic deployment of business intelligence solutions”. economic value-add. balanced scorecard. dashboards.Enterprise Performance Management (EPM). Strategic Planning and Financial Planning. methodologies on their own cannot deliver results. strategy and execution of business plans. However. The solutions are created on a unique platform utilizing a multidimensional model that supports a diverse array of capabilities that power the information through metrics. also known as Corporate Performance Management (CPM) and Business Performance Management (BPM).
• • • • • • Community Engagement Planning Integration Funding Accountability Performance Strategic Commissioning and Performance Management Division . The Central East LHIN has purposely modified its business planning cycle and started with engaging the people and communities within the LHIN to identify priorities and areas for attention. Accountability and Performance Management and serve as a resource to health service providers and the larger community. In any normal business cycle. Integration. The strategic plan for an organization routinely outlines the activities and initiatives that will structure the work of the organization for a specified period of time. Documents contained in this section of the website reflect the order of the Central East LHIN Business Planning Cycle including Community Engagement. Funding.Sign up on MY PAGE to receive an email alert when new content is added to this section of the website. Planning. everything starts with a plan.
Using highly trained staff. responsive services that better meet the needs of the people in the communities we serve.We have a range of services which aim to maximise people's independence and enable them to have as much control over their own lives as possible. Our services include: • • • • • Strategic Commissioning Quality and Procurement Carers and Customer Engagement Intelligence. . Improvement and Partnerships Home Care Kim Harlock Head of Division IPC framework for joint commissioning and purchasing of public care services. our services are constantly looking at ways to work in partnership with other organisations in order to develop flexible.
In this way. The goal of this step is to embed the strategic plan into the organization's performance management process. If the organization does not have an effective performance management system. the strategic plan is nearing completion. reported and evaluated. it should develop one in connection with implementing the strategic plan. the expected plan results can be tracked. The content and tools in this section will help your organization cascade accountability down to the individual employee level so that all personnel understand how to contribute to the success of the organization's strategic plan. The strategic plan is cascaded down the organization by presenting the expected contribution of each person at each level to the organization to the overall results. it must be connected to a performance management system if it is to create the accountability necessary for success. measured. Also. However. . Pushing the expectations down into the organization assigns responsibility to a broad cross-section of people who then can see their connections to the agency's outcomes. key accountabilities can be monitored so that tasks are completed according to the quality and time requirements.Step 8 — Connect the Strategic Plan to a Performance Management System At this point.
BACKGROUND 3 2. and 7) Resources. 4) Work Design. MUNICIPAL PERFORMANCE MANAGEMENT SYSTEM ULUNDI LOCAL MUNICIPALITY TABLE OF CONTENT 1. 5) Information. PURPOSE OF A PERFORMANCE MANAGEMENT SYSTEM 3 . 6) Performance Feedback. 2) Personal Capacity. This mindmap details the key components associated with these factors. 3) Motivators.performance at work depend on seven factors: 1) Direction.
3.2 5.11 5.9 5. THE TEN STEP ACTION PLAN TO EFFECT THE ULUNDI PERFORMANCE MANAGEMENT SYSTEM 8 6.5 5. CRITICAL SUCCESS FACTORS OF A PERFORMANCE MANAGEMENT SYSTEM 6 5.10 5.13 Focus Balance Stretch Mobilisation Latitude Contracting Motivation Measurement Appraisal Feedback Remuneration Caring Visual 6 6 6 6 6 7 7 7 7 7 7 7 7 6.12 5.1 6.7 5. COMPONENTS OF THE PERFORMANCE MANAGEMENT SYSTEM 5 5. MANAGEMENT STRUCTURE OF THE ULUNDI MUNICIPALITY 4 4.3 5.4 5.6 5.8 5.2 Assuming Responsibility Project Team 8 8 .1 5.
A WORD ON RECOGNITION 1 9 8. ACTION. RESPONSIBILITIES AND TIMEFRAMES 1 7 8.7 6.5 6.6 6.1 Renumeration Policy Guideline 1 9 9.8 6.3 6.6.4 6.10 Participation Developing the Ulundi Performance Management System Contractual Commitment and Agreements Publication of the Performance Management System Adoption of the System Monitoring Framework Performance Evaluation Reporting on Performance 8 9 1 3 1 3 1 3 1 3 1 4 1 6 7. CONCLUSION 2 0 ANNEXURES Annexure A Municipal Performance Management Framework .9 6. ROLES.
staff. Once a Municipality starts to implement the IDP. BACKGROUND The White Paper on Local Government sets out a broad vision for establishing developmental local government. the Municipal Systems Act requires from municipalities to develop their own performance management systems and to set performance targets and to monitor and review their performance based on indicators that are linked to their Integrated Development Plan (IDP).1. PURPOSE OF A PERFORMANCE MANAGEMENT SYSTEM The purpose of a Performance Management System is to assure accountability on the basis of a simple. it is important to check that the delivery is happening in the planned manner. performance management and community participation as crucial mechanisms to achieve this. effective and management tool for the Municipal Manager and as a control tool for the Council. articulate and measure employee performance to IDP as well as individual (or team) standards and to help each employee reach her/his full performance potential and IDP responsibilities. reinforcing the commitment to deliver based on a fully integrated and publicly approved IDP. Before tabling this report and having it audited by the Auditor-General. In addition. A Performance Management System is therefore linked to both day-to-day management responsibilities as well as IDP responsibilities. that . This report needs to incorporate and report on a set of general indicators prescribed nationally by the Minister responsible for local government. Involving the community in setting indicators and targets and reviewing municipal performance are explicitly required. A critical element in the performance management process is the publication of an annual report on achieved performance for distribution to councillors. The purpose of the IDP is to ensure that the resources available to the municipality are directed at the delivery of projects and programmes that meet agreed development priorities. The Performance Management System will assist the Municipal Manager and the Executive Managers in meeting their goals and objectives by having in place a systematic process designed to. calling on municipalities to find means of confronting the legacy of underdevelopment and poverty within their local areas. municipalities are to conduct an internal audit on performance. Herein recognition is given to integrated development planning. the public and other spheres of government. 2. The IDP for the Ulundi Municipality has been adopted and it has now become crucial to develop a Performance Management System suitable to the particular and own circumstances prevalent to the Ulundi Municipality in the quest to give effect to this IDP and achieve its goals and objectives.
Developmental – A key element of the system is on providing the means for employees to learn more and perform better in their current jobs. measure and review the performance of the Municipality against indicators and targets set in its IDP. means. projects and programmes. Positive – The primary focus of the system is on providing the tools necessary for all employees to achieve their full performance potential. Achieving this requires the pro-active development of a Performance Management System and undertaking an annual review of the IDP Plan. appropriate changes in the delivery and management of resources. To achieve this it is necessary to monitor and evaluate. All line. the system is designed to foster a work environment where employees are internally motivated to do their best every day and to assist their work unit to improve its overall performance in meeting the IDP goals and objectives. The Administration to the Executive Committee or Executive Mayor. shared responsibility. • • . Performance management in local government is a tool to ensure accountability. and assistance necessary to improve their performance. its objectives. identify and overcome major systematic blockages and guide future planning on development objectives and resource use. and All employees to the organisation. open communications and challenging work assignments. of: • • • • • The municipality to its constituents. Performance management will thus assist the Municipality to make immediate. frequent feedback. Non-punitive – The system is geared to helping every employee succeed and any employee experiencing performance problems is provided the opportunity. which characterise the Performance Management System: • • • Better Performance – The primary goal of the system is improved performance by all employees that will be reflected in their overall performance in meeting the IDP goals. producing the quality of delivery envisaged and that the delivery is having the planned effect on the lives of people living in the Municipal area. The Executive Committee to the Council. Builds Desire – Through clearly defined performance outcomes and expectations. citizens and communities. based on the IDP. functional and sectoral managers to the Executive Management and the portfolio and standing committees.the Municipality is using its resources most efficiently. The philosophy underlying this system can best be gained through an understanding of the following terms.
• • Shared Responsibility – A successful performance management system requires both input and participation by employees. 3. Simple – Through user-friendly automation aids. and sensitive to time requirements. the system is designed to be easily understood. and managers. and reference material. accessible. supervisors. MANAGEMENT STRUCTURE OF THE ULUNDI MUNICIPALITY See overleaf . training.
The Municipality will enter into Performance Agreements with the Municipal Manager and the individual Executive Managers as part of this Performance Management System and in compliance with the requirements of the Municipal Systems Act. . These Performance Agreements will be implemented for each Executive Manager over and above the normal Employment Contracts and will be linked directly to the Performance Management System set out in this document.The management structure of the Ulundi Municipality is indicated in the preceding diagram.
For each of the core functions a Performance Charter will be developed, setting out in detail the kind of activities the responsible Executive Manager responsible need to engage in, in order to perform his/her job. These will be consolidated into a Performance Plan per Department with this Performance Plan then becoming the Annexure A to each individual Executive Manager’s Performance Agreement with the Municipality (refer to Appendix A of this document for the various proforma sheets). 4. COMPONENTS OF THE PERFORMANCE MANAGEMENT SYSTEM The Performance Management System consists of the following components:
Plan – The Municipal Manager and Executive Committee share the responsibility for developing the project related and individual performance standards. All performance standards consist of outcomes (products or accomplishments) and expectations (measurement of outcomes in terms of cost, quality, quantity, time, etc.). Monitor – The Municipal Manager and Council observe the performance of the Executive Managers and provide feedback throughout the year, not just at the end of the performance cycle. Executive Managers can provide feedback on how well the Municipal Manager and the Council carry out their performance management responsibilities. Develop – The Municipal Manger has an open discussion with the Executive Managers to identify their training and other needs for improving his or her job performance. Performance Summary – A narrative description of the Executive Managers’ performance, prepared by the Municipal Manager with input from the Executive Managers, is given to each Executive Manager in a face-to-face meeting. A performance summary should include: an
assessment of the Executive Manager’s effectiveness in meeting his or her goals and objectives, any recognition received and areas of suggested improvement.
Recognition – The Municipal Manager and Council are encourage to reward Executive Managers throughout the year for doing their jobs well. Recognition may occur in a number of ways, i.e. verbal praise, cash awards, and time-off awards.
5. CRITICAL SUCCESS FACTORS OF A PERFORMANCE MANAGEMENT SYSTEM The following factors are critical to the sustained success of a performance management system and need to be applied in developing and implementing a Performance Management System for the Ulundi Municipality: 1. Focus The core service mission, vision, strategic objectives and values of the organisation must be sound and understood by every employee. The employee’s role in the mission and objectives must be discernible and every worker must know what they must contribute to ensure that the strategic intent is realised. Every job must have a clear mission and set of objectives, targets and measures, linked directly to the IDP. 2. Balance Performance must be planned and measured to ensure balanced performance. Focus must be on agreed internal and external results as well as financial and non-financial results. Customer satisfaction is a key consideration in performance planning and measurements. 3. Stretch Easy goals are sure to close the individual energy taps sooner that intended. It is essential to induce individuals to set demanding objectives and targets that require more than ordinary effort. Conversely, targets that are clearly unobtainable for various factors will have a demotivating effect on employees. The skill lies in setting goals within these two parameters.
4. Mobilisation People are mobilised through challenges such as those fundamentally contained in objectives, standards and targets. Continuously reviewing personal results that need to be achieved and offering training where required sustain momentum. Using a single set of factors that apply to all induces stagnation and inefficient performance management. 5. Latitude Space for self-direction and prioritisation in the context of the overall mission of the organisation is essential as more value will be realised by the individual. A person like to be asked for his/her opinion, especially where it concerns tasks that they are responsible for. Latitude allows for the development of innovative thinking.
6. Contracting Individuals must enter into a contract with their supervisors to access resources and compensation. 7. Motivation People need a continuous stream of recognition and support to stay inspired and content with the job. Motivated employees are productive employees. 8. Measurement A popular saying based on the business wisdom contained in "What gets measured gets done" holds true at all levels and for all jobs in which an employee has to perform. The more specific and accurate the targets and measures are, the better the value of the contributions of employees. 9. Appraisal It is essential to put a score or value to the achievement of the individual and to be sure that it is contextually ranked and objective. Criteria for appraisal should be mutually agreed upon. 10. Feedback
Make sure that incentives for performance are differentiated from basic remuneration. flowers. to set performance targets and to monitor and review their performance based on indicators that are linked to the IDP. Although these factors are critical they are neglected in the compensation structures of business. strategy. THE TEN STEP ACTION PLAN TO EFFECT THE Ulundi PERFORMANCE MANAGEMENT SYSTEM The following Ten Steps and sections detail the components of the Ulundi Performance Management System and its development. 11. responsibilities and timeframes required in achieving the adoption of a Performance Management System for the Ulundi Municipality. STEP 1 1. For this to be realised it is necessary for the municipality to actually take on this responsibility. In the case of the Ulundi Municipality it is assumed that the responsibility of developing an appropriate Performance Management System has been delegated to the Municipal Manager and the Executive . Paying for performance is the hallmark of excellence. values and performance of the organisation and that of teams and individuals should be displayed for all to see. Assuming Responsibility The Municipal Systems Act requires that each municipality develop a performance management systems. whilst assigning roles.Feedback induces behaviour change irrespective whether it is positive or negative. Embargoes must be placed on personal attacks that hurt the ego or self-concept of individuals as emotional disengagement is guaranteed in not done. 6. 12. Remuneration This in the final analysis is the tangible proof that the individual’s contribution was appreciated. kindness and small gestures to the family of the employee. 13. Caring is shown through birthday cards. Visual All of the above are of little effect if they are kept locked in filing cabinets. Caring This is the invisible compensation for loyalty and commitment. The mission.
1 – 5. providing guidance that is based on the goals.1 – 5. their first task would be to set up a workshop session with (a) all employees of the Ulundi Municipality and (b) all the Ulundi stakeholders to inform them of what the Performance Management System would be.1 and 5.e.13 .13 STEP 3 1. Factors 5. the first and most critical step in the process is the establishment of a project team. Participation Once the Project Team has been established. The following will apply to the Performance Management System Project Team: • • • • Membership: The Project Team is to be constituted by Executive Managers within the Ulundi Municipality and Councillors that are familiar with the IDP process. Success Factors: All.13 STEP 2 2. This implies that all stakeholders will be identified and a database set up containing all the relevant stakeholder information. Success Factors: 5.Committee. Factors 5. Leadership: This should rest with the Municipal Manager. Project Team To facilitate the development of the Ulundi Performance Management System and in compliance with the legislative and regulatory framework. i. i. Participation: Stakeholders from the Ulundi Municipality and community need to be identified as part of a participation process in the development and implementation of the Ulundi Performance Management System. objectives and policies of the IDP and principles of good governance. what it would involve and what change it will most likely bring about. Responsibilities: The Project Team is responsible for overseeing the process of developing and implementing the Performance Manager System for Ulundi. Involving the Ulundi stakeholders from the onset of the Performance Management Process will ensure the participation of the Ulundi communities in determining the output of the Municipality in terms of meeting community needs. Success Factors: All.e. This Step has therefore already been executed and sets in motion the process of developing a fully-fledged Ulundi Performance Management System.
whilst determining the roles of different role players. A tabular compilation of the output targets for all IDP projects. including the local community. review and reporting will happen. The Project Team needs to plan how the process for developing this System will be managed within the legislative framework. in the functioning of the system. Clarifies the process of implementing the system within the framework of the IDP process.STEP 4 2. measurement. i. which are.e. An action plan including resource requirements for managing the performance management system. Determines the frequency of reporting and the lines of accountability for performance. Provides for the procedure by which the system is linked with the municipality’s IDP processes. including information flow. be organised and be managed. 2001. The Performance Management System consists of the following components: 1. A list of performance indicators. Developing the Ulundi Performance Management System This means a framework that describes and represents how the municipality’s cycle and performance planning. A time schedule with dates of major milestones of all projects. Planning . The minimum requirements of a Performance Management System are: • • • • • A consolidated list of development indicators for the IDP objectives.: • • • • • • • Demonstrates how it will operate and be managed from the planning stage up to the stages of performance review and reporting. Show how any general key performance indicators (KPIs) contained in the Municipal Planning and Performance Management Regulations. Links the organisational performance to employee performance. not project specific. monitoring. will be incorporated into the municipality’s planning and monitoring processes. timing and responsible actors. they should focus on assessing the current reality. Defines the roles and responsibilities of each role-player. identifying stakeholders that will participate in this process and establishing structures to facilitate the actual development of the System. Specifically.
etc. The Municipal Manager and Executive Committee share the responsibility for developing the project related and individual performance standards. amongst others. monitoring and evaluation of the IDP.2 Planning The Ulundi IDP fulfils the planning stage of the Municipality’s Performance Management System which in turn fulfils the implementation. systems and procedures in developing and implementing a Performance Management System. describing what has to be done during the performance cycle.). projects and priorities of the Ulundi IDP as well as the employees' position description or career level definitions. upward feedback will be utilised to assess supervisor/manager compliance in the development of the plan. providing the institutional analysis and assessment of the Municipality’s capacity. All plans shall include clearly defined outcomes and expectations. developmental work assignments. objectives. This involves a seamless integration between the IDP planning process and the Performance Management process with the IDP outputs defining what performance is to be managed.4. The following provides a summary of what a performance plan should entail: • • • • • • A performance plan is a two-part written document between an employee (or team) and their supervisor. All performance standards consist of outcomes (products or accomplishments) and expectations (measurement of outcomes in terms of cost. Each employee shall have a documented performance plan in place within 30 days of the beginning of the performance cycle. 6. address the identified gaps. implementation and monitoring is happening in the Municipality and identifying gaps in terms of planning and performance management requirements. management. Essentially this step involves an assessment of how planning. time. individual development desires and/or other developmental needs proposed for/by the employee for the upcoming cycle. his/her dayto-day management responsibilities and functions. This first part of the plan is based on the goals. The development of the Performance Management System will. resources.e.The Ulundi IDP forms the basis of this component. Position essential development needs and opportunity for personal and career developmental activities (long term and/or short term). i. ability. The second part identifies training. The responsibilities in performance planning include the following: . clear linkage to organisational goals. and how will accomplishment be measured. At an appropriate time during the performance cycle. quantity. how well it has to be done. quality. All plans shall be developed within 30 days of the beginning of the performance cycle.
linked to the IDP objectives that need to be achieved are set based on the long-term vision for the Ulundi Municipality. Maintain official copy of performance plan for continuous feedback. Implementation of the plan within 30 days of the start of the performance cycle. This Plan will indicate the training and development activities required to assist an employee in obtaining the skills and knowledge required in order to advance in his/her career. 5. Understand what element of performance will be measured (outcomes) and how it will be measured (expectation). and the Executive Manager has to be capacitated through training to maintain an agreed upon level of performance in respect of such new competencies. Effectively communicate expectations and outcomes to employees. This is of particular relevance where new competencies are allocate to a Department. 2. when achieved. 5. 4. would enable the delivery of services. . over and above the core functions. 5. Also included is a set of internal transformation strategies.4 6. 6.1. Provide upward feedback regarding jointly developed performance plan. These priorities would therefore contribute significantly to the achievement of the development vision as contained and detailed in the Ulundi IDP. Maintain employee's copy of performance plan for continuous feedback. An essential part of this performance plan is the individual learning plan.3 and 5.SUPERVISOR’S RESPONSIBILITY 1.3 Priority Setting Priorities. It is critical that employees not be scored negatively during the Performance Evaluation process where they have been allocated new competencies without the opportunity to obtain the appropriate skills and knowledge to fulfill their performance responsibilities in this respect. Review organisational goals and their individual role in accomplishing those goals. and needs prior to the establishment of the plan.4. EMPLOYEE’S RESPONSIBILITY 1. Communicate individual developmental training. These are based on identified needs and what can realistically be achieved in the current term of office. Initiate the plan based on the upcoming work assignments of the work unit. Identify meaningful training to assist in accomplishing mission. desires. priorities and objectives which. Success Factors: 5. Assure that the plan can be linked to the next levels' goals.2. 3. Review previous plan and performance summary. local economic development and the realisation of the development vision.
5. Focus should broadly be on: • • • • • • Infrastructure and service delivery. Such KPIs must be developed with the following in mind: • • • The result must be within the control of the incumbent. and Data must be available for measurement. the wording and intention of each objective and the scope and nature of the change desired. showing the steps that need to be taken in order to achieve each key objective.e. Time related. All components of the IDP. Institutional transformation. Performance or non-performance will be measured against the KPIs and are determined in relation to what the expected outcomes are as set by the KPIs. In terms of this there is a specific focus on outcome and impact and specific consideration needs to be given to the results desired.Essentially priorities have already been set in terms of the adopted IDP for Ulundi. Financial management. Democracy and governance. Specific.e. concise and tangible statements of objectives that focus on the results individual employees are expected to achieve in their job. Worthwhile and in Writing. Realistic.: INDICATOR Input Indicators DESCRIPTION Efficiency/Cost SUMMARY Measuring economy and EXAMPLE The unit cost of delivering . Such statements need to SMART. It is thus a measure that is used to provide evidence or proof of whether or not an IDP priority project and the related IDP objectives have been met. Attainable. Various types of indicators are used to set the KPIs. The indicators must be objectives and observable. Measurable. and The spatial manifestation of these elements.5 6. Social and economic development. Success Factors: 5. Key Performance Indicators (KPIs) are set for each of these individual Project Implementation Plans as measurement units against which progress made in achieving the IDP goals can be gauged.4 Setting Key Performance Indicators A Project Implementation Plan is prepared for each IDP priority to be implemented within the current financial year.3. These can then be translated into performance deliverables.4.WW. These need to be assessed. clustered and agreed upon in order to facilitate the development of the key performance indicators that will follow. i. need to be translated into a set of clear. i.4 and 5. whether strategies or priority areas.
. as a number or a %.e. service delivery and infrastructure standards. In terms of impact the net effect of the products/services on the overall objectives is measured. i. Measuring the quality as well as the impact of the products resulting from achieving the overall objectives. the following applies: • • The targets need to be realistic.8 6. These targets are expressed in terms of quality or time and the first step towards setting performance targets is to identify the baseline measurements. Success Factors: 5.5 Setting Targets Performance targets are the planned level of performance or the milestones the Ulundi Municipality will set for itself for each of the KPIs that has been set.2.4. i. and 5.1. The public needs to be consulted on their needs and expectations. Outcome Indicators Impact/How Affects the Community/Quality Composite Indicators Relationship between Indicators Baseline Indicators Status Quo Level of poverty. the measurement of each indicator at the beginning of the performance period. Showing the status quo or current situation. Combining a set of different indicators into one index by developing a mathematical relationship between them. Does the service provided to households comply with applicable standards or what % reduction is expected in the number of houses burnt due to the use of other sources of energy as a result of the electrification programme. Output Indicators Effectiveness/Achieve Desired Results/ Quantity Measuring whether a set of activities or processes yields the desired products.e. money or number of people it took the municipality to deliver water to a single household. 5. These indicators are usually expressed in quantitative terms.efficiency water to a single household or the amount of time. In identifying targets to be achieved. measurable and be commensurate with available resources and capacities. The number of percentage of household that will be connected to electricity as a result of the municipality’s electrification programme.
The KPIs and target that have been in relation thereto should be included as Annexure A to the contractual agreement of the Executive Managers and Municipal Manager of the Ulundi Municipality. Executive Managers and Project Team. Success Factors: 5. Adoption of the System A final draft of the Performance Management System must be prepared by the Project Team. incorporating comments and input . Targets should be informed by the development needs of communities and the development priorities of the municipality. the Municipality must publish this Performance Management System in the local media for any further comment and input. decision-makers must then make a contractual commitment to achieve these targets within the agreed upon timeframes. agreed upon and signed by the Project Team. Publication of the Performance Management System Once the Ulundi Performance Management System and Contractual Agreements have been developed. Public approval of the Ulundi Performance Management System is critical to the success of this System as it will (a) indicate the needs that will be addressed. Once performance targets have been set and agreed upon by the Municipal Manager.13 STEP 6 2.6 and 5. Success Factors: 5. Contractual Commitment and Agreements Individual performance in the Municipal System today is directly linked to the implementation of a Municipality’s IDP. without creating false expectations and (b) confirm the Municipality’s commitment to delivery in terms of their responsibilities Success Factors: 5.• • Politicians need to give clear direction as far as the importance of the target and how it will address the public needs are concerned. the Council and the relevant stakeholders.13 STEP 7 3.4 STEP 5 1.3 and 5.
budget information from other spheres of government. The Council should adopt the Performance Management System for Ulundi when it is satisfied that the process was handled in accordance with the legislative framework and complies with the requirements of the law. making performance observations. changes in the existing situation due to unexpected events such as natural disasters. Monitoring involves the collection of data.13 STEP 8 4. Information capturing will relate specifically to capturing data and information on the activities of the different line departments and will best be done on an individual IDP project basis. etc.received as a result of the publication of this Performance Management System. events and situations throughout the year. documenting results and managing the overall process. information about new developments and trends. new policy and legislation. more or improved in-depth information about the existing situation and priority issues. Success Factors: 5. Three main bodies of information are important as input into the review process. Information about the achievement of objectives set in the IDP: This will have to be measured over time in terms of the indicators that have been set to determine whether the outcomes aimed for have been achieved. The information required and the frequency of the data and information need to be determined for each individual IDP project and . providing feedback. Monitoring Framework The development of the monitoring framework runs parallel to the implementation of the Ulundi IDP and involves a process of making accurate and objective performance observations based on the performance plan's outcomes and expectations and providing timely feedback throughout the performance cycle to encourage maximisation of performance. new investment opportunities. New information: This may be generated from internal or external sources and reflects changes to the internal or external context of the Municipal area that impacts in the appropriateness of the IDP and include information such as baseline data on demographics. Monitoring in the context of the IDP review refers to the gathering of data into sets of information about certain actions. etc. use of resources such as money and staff. • • • Implementation management information: This refers to information that measures progress with the implementation of programmes and projects through a series of indicators such as completion timeframes.
objectives. Such data and information also needs to be considered appropriately in the Performance Evaluation process of the Ulundi Performance Management System. 5.g. assisting in improving performance on the basis of analysing measured performance. other supervisors and stakeholders. Performance evaluation will be provided from multiple sources and refers to the analysis of data received from the monitoring system in order to assess performance. Performance Evaluation The information gathered through the process of monitoring is assessed to understand its relevance and implications to the priority issues. project close down report. This information needs monitoring and recording throughout the year for consideration in the review process. The Municipal Manager may receive anonymous performance management observations from immediate subordinates. 5. a project information/data capture sheet.9. The Municipal Manager shall have the opportunity to provide input to the Executive Managers regarding resources required for performance management application. etc. This information should in particular be focused on an analysis and synthesis. input sources might eventually include peers.8. indicators and targets. Success Factors: 5. Various tools can be used to this end. The organizing of data and collation of information is the responsibility of the Municipal Manager or IDP Manager who has to put in place and co-ordinate a process or system for this purpose and designate roles to appropriate persons. Depending on the position. . e. and the Council input to the performance of the Municipal Manager. Executive Managers may provide self-observation to supplement the input of the Municipal Manager. its implementation programme and the requirements of the measurement of the KPIs.10 and 5. Conducting performance reviews. which is relevant to the Ulundi IDP. At least one of these sources would be included as input. The intent is to capture input from those who have had the best opportunity to accurately observe the performance of the Municipal Manager and Executive Managers.11 STEP 9 1. In all cases: • • • • The Municipal Manager shall provide input to the performance of the Executive Managers.will relate to the nature of the project.
With this perspective.Operationally. Provide upward feedback regarding immediate supervisor’s compliance with the Performance Management Process 2. Provide upward feedback regarding immediate supervisor’s compliance with the Performance Management Process At this point it is also important to assess how performance could be improved. Utilise feedback to adjust performance (as related to Performance Management) If appropriate. to name but a few . recognise performance. inadequate policy or strategy. peer. On a formal basis. through effective monitoring. face to face feedback between the Council. Performance evaluation is based on a scoring system with the Performance Plan as the point of departure. Feedback will be used by an employee to obtain a comprehensive view of performance effectiveness. the Municipal Manager and the Executive Managers should be provided and discussed 2 or 3 times per year. Good and excellent performance need to be maintained and acknowledged in order to meet the needs of citizens and improve their quality of life. occurring during normal interactions at work. Conduct and provide ongoing performance observations while providing meaningful feedback to employees Conduct face-to-face interview with each employee at a minimum semi-annually. in a timely manner during performance cycle. feedback may provide useful indicators of potential developmental needs. This methodology also closely relates to the amendment of the IDP as it will serve to inform the review phase. the act of observing performance and providing feedback is an ongoing and continuous process. All aspects of performance are evaluated and scored and then consolidated into the Consolidated Score Sheet (refer to Appendix A) to provide a final performance score for each employee that is evaluated. approach. Provide other feedback (team. Informal sessions can occur weekly or even daily as a way of addressing priorities and achieving outcomes. or work style to improve effectiveness. Frequency of the feedback may vary based on the tenure of the employee or the dynamics of the position. Conduct and provide meaningful selfobservations to supervisor 1. customer) as appropriate during performance cycle 5. The responsibilities in the monitoring process involve the following: SUPERVISOR’S RESPONSIBILITY EMPLOYEE’S RESPONSIBILITY 1. Additionally. an employee may need to adjust their priorities. resource shortcomings and requirements. Prepare for face-to-face interviews 3. Poor . Utilise feedback to adjust performance 4.
a performance evaluation procedure will include the following: • • • • • • • • • A formal performance review occurs once a year in June. the Municipal Manager has the final say with regard to the final score given. on the Executive Manager’s performance throughout the review period. needs to be specifically addressed and ways and means designed to improve on such performance. The Municipal Manager will ask the Executive Manager to prepare for formal appraisal by rating himself/herself against the agreed objectives. The Municipal Manager will prepare ratings of the Executive Manager’s performance against objectives as a result of his/her evidence and customer input. . The Municipal Manager and Executive Manager will meet to conduct a formal performance rating and agree on final scores. The following table gives an indication of the possible causes for poor performance and the strategy that could be chosen in response to redress such poor performance: CAUSE OF POOR PERFORMANCE Inappropriate structure Poor systems and processes Lack of skills and capacity Inappropriate organisational culture Absence of appropriate strategy RESPONSE STRATEGY Restructuring within the organisation Improvements to systems and processes Training and sourcing additional capacity Change management and introduce and educational programme Revision of strategy by key decision-makers Typically. In the event of a disagreement. i. people who are able to comment on performance because they have worked closely with such an Executive Manager. KPIs that have or have not been supplied as evidence of achieving an objective should also be marked.performance. however. before the end of the financial year. The Municipal Manager may request input from customers.e. Any reasons for non-compliance should be recorded during the review session. Deadline dates met or not met should be clearly marked. Initially the scoring should be recorded on the scorecard and then transferred onto the consolidated score sheet.
and acknowledgement of accomplishments and effectiveness throughout the performance cycle.7.10 and 5. the performance summary is an annual process of documentation and discussion between the Municipal Manager and Executive Managers and should occur within 30 days from the end of the performance cycle. It provides an assessment of actual achievements based on the outcomes and expectations contained in the performance plan. 5.9. The performance summary or report is a consolidation.. The performance summary represents the review of record for the performance cycle. and . for the following financial year. At a minimum. Reporting on Performance Reporting on performance to the Council and stakeholders in the form of a performance summary is an annual process of documentation and discussion between the Municipal Manager. This mechanism of reporting on the performance may be used for: • • • • • • Identifying developmental needs. The Municipal Manager and Executive Manager should prepare and agree on an individual learning plan and set new objectives. etc. A basis for team acknowledgement and recognition.• • • • The Municipal Manager should make his/her own notes during the formal review meeting and should assign a score in relation to the weighting assigned to a specific objective. Success Factors: 5.11 STEP 10 1. 5. Determining compliance with the agreed upon performance plan. targets. discussion. performance indicators. strategy. includes a synopsis of formal feedback received during the performance cycle and contains highlights of developmental activities undertaken during the period. Only those items relevant for the review period in question should be scored. etc. institutional capacity. 5. Executive Committee and Council which is also open for public scrutiny.8. Identifying shortcomings in resource availability. weightings. dates. Poor work performance will be dealt in terms of the incapacity procedure as outlined in the applicable Labour Legislation. A basis for individual recognition. This annual report is legislatively required and must be available to the public. Analysing individual [or team] performance in terms of the IDP goals and objectives.
Prepare to discuss summary of expectations and outcomes 4. Provide meaningful input to assist supervisor/manager in summarising individual accomplishments of the performance cycle 2. ACTION. Establishment of Project Team. Responsibilities related to reporting on performance and the compilation of the actual performance report or summary include: SUPERVISOR’S RESPONSIBILITY 1. 6.2 Project Team • • • .1 ACTION Accepting Responsibility • DESCRIPTION The Municipal Manager and Executive Committee accept responsibility for developing the Performance Management System.12 and 5. RESPONSIBILITIES AND TIMEFRAMES The following table summarises the previously detailed 10 Steps involved in developing a Performance Management System for the Ulundi Municipality and allocates responsibilities and timeframes to each of these Steps: REF. Identify developmental needs for the upcoming performance cycle based on the previous cycle 3. Constituted by people involved and familiar Municipal Manager Executive Committee Simultaneous to report outlined above RESPONSIBILITY Municipal Manager Executive Committee TIMEFRAME Council report to serve ASAP • 6. 5. This must be done officially and in writing. ROLES. Consolidate data from entire performance cycle Identify developmental needs for the upcoming performance cycle based on the results of the performance summary Effectively communicate summary of expectations and outcomes to employee Prepare to initiate the next performance plan based on the past performance cycle and upcoming work assignments of the work unit EMPLOYEE’S RESPONSIBILITY 1.13 7. Led by delegated official. Review feedback obtained during performance cycle and begin to formulate ideas for upcoming performance plan Success Factors: 5.11.• A point of consolidation of feedback from the performance cycle.
measurement. Steering function. Reporting to the Municipal Manager. Setting Key Performance Indicators (KPIs) 6.The IDP fulfils the planning stage of performance management. The following components make up the Performance Management System: • Planning . Project Team Supported by the Executive Manager: Corporate Services Project Team to submit a report to Council Within 2 weeks of Council approval initial report To be initiated as soon as workshop session has been completed and feedback interpreted 6.A set of priorities and objectives based on identified needs. Identification of stakeholders and establishment of structures to facilitate the development of the Performance Management System. monitoring. review and reporting will happen. whilst determining the roles of different role players. achievable in the current term of office and that would contribute significantly to the achievement of the development vision.3 Participation Workshop session in the process of managing the change process. A framework that describes and represents how the municipality’s cycle and performance planning.• • • with the IDP process. Priority Setting . be organised and be managed.4 Develop the Performance Management System Project Team together with Executive Managers Completed – it is assumed that Interim IDP serves this purpose Completed – it is assumed that Interim IDP serves this purpose • Project Team together with Executive Managers • Project Team together with Executive Managers 3 days per Executive Manager .
Project Team together with Municipal Manager and Executive Managers At least twice a year. Project Team 6. 6.7 Adoption of the System Final draft of the Performance Management System to be prepared.8 Monitoring Framework Developing a process of: • Making accurate and objective performance observations based on the performance plan's outcomes and expectations. incorporating comments and input received.• Setting Targets Project Team together with Executive Managers Project Team together with Municipal Manager and Executive Managers Executive Manager: Corporate Services 3 days per Executive Manager Within 14 days of finalisation and agreement of targets Within 14 days of signing of contractual agreements and allowing 14 days for comments and input Within 14 days after the closing date for the submission of comment and input Simultaneous with development of the Performance Management System 6. Involving the collection of data.5 Contractual Commitment and Agreements Publication of the System Based on targets that have been set contractual agreements are finalised for the Municipal Manager and Executive Managers. The Performance Management System developed and agreed upon is to be published in the local media for comment and input. Project Team together with Municipal Manager and Executive Managers • • 6.9 Performance Evaluation Conducting performance reviews. but preferably quarterly .6 6. documenting results and managing the overall process. Providing timely feedback throughout the performance cycle to encourage employees to maximise their performance. assisting in improving performance on the basis of analysing measured performance.
10 Reporting on performance.e. there must be no confusion in the minds of the Municipal Manager and the Managers reporting to the . etc. 8. the Performance Management System for Ulundi requires a Remuneration Policy to be in place.e. recognition needs to be given to employees that achieve their performance goals. bonus payouts. This is a means of rewarding employees for sustained outstanding performance and service and providing incentives to continuing to do so. Based on the Performance Evaluation process and the scoring in terms of this process. tickets to a local event. It is essential that the remuneration policy is clear i. and others types of recognition (i. Reporting on performance to the Council and stakeholders. i. To facilitate an appropriate financial rewarding system. Timely to the event. there are clear guidelines on what it takes to be recognised. Recognition based on performance criteria.6.e. Measures of reward and recognition that can be used include time-off. and Handled at first level of supervision. the Municipal Manager and Executive Managers will receive their performance bonuses and budgetary provision would be required. A WORD ON RECOGNITION To maintain a high level of motivation and performance. Recognition should be linked to performance outcomes and employees should be recognised or rewarded for being result-oriented and IDP-focused. Project Team together with Municipal Manager and Executive Managers Annually within 30 days after the end of the performance cycle 8. Monetary and non-monetary. monetary. dinner) and should be focused on: • • • • • • The ability to recognise a team as well as an individual accomplishment. Within this Remuneration Policy recognition needs to be made of the Performance Management Contracts of the Municipal Manager and the Executive Managers and the implications of these contracts on financial resources. Achievements based on every day superior contribution as well as high visibility projects.1 Remuneration Policy Guidelines The Performance Agreement’s requires that the Ulundi Municipality must have a Remuneration Policy that sets out the link between performance and reward for the Municipal Manager and the Managers.
after the performance appraisal. The amount of the merit increase will be determined by the score resulting from the performance appraisal and will be calculated as follows: • • • • • . The option put forward need to consider the following in the preparation of the remuneration policy. • There is a cost of living increase based on the affordability of the Municipality. and Outstanding performance The remuneration policy therefore need to link the results of the performance review to that of the employee’s pay. The merit increase along with the annual cost of living increase will be awarded annually at the beginning of the financial year. Should external factors play a major role in impacting negatively on an employee’s ability to meet the required standards of performance. namely: • • • Cost of living increase.Municipal Manager what the remuneration policy is in relation to linking the results of their performance to reward. The option put forward reads as follows. The performance score is obtained using the performance plan. it is at the discretion of the Remuneration Committee whether or not the employee should be entitled to a merit increase. The amount awarded is further dependent on the affordability of the Municipality. A merit increase above the cost of living increase will be awarded to employees who obtain high performance scores. In the preparation of a remuneration policy the following aspects need to be taken into account. Merit increase. namely: The Employee receives an annual cost of living increase and a merit / performance bonus for outstanding performance based on the result of his / her performance score.
9. The implementation of a Performance Management System for the Ulundi Municipality. reduction of procurement lead-times. objectives. targets. Attached as Annexure A is the Municipal Performance Management Framework for Ulundi. as outlined in this document will have the following benefits: • An improvement of Departmental performance in many key areas including stakeholder satisfaction. The Performance Management System put forward is potentially the only area of management that can significantly contribute to the overall municipal performance. . The framework forms an integrated part of the Integrated Development Plan (IDP) process with specific reference to Key Performance Areas (KPA’s ). CONCLUSION Performance Management in the local municipality is a two way communication process between the municipality and the community that is making use of municipal services. etc which directly feeds into the vision. strategies and programmes/projects identified and developed. development objectives. Key Performance Indicators (KPI"s). The performance of the municipality is then measure against specific key development priority objectives and performance indicators which have been discussed and analysed and agreed upon during the IDP process.
employee satisfaction and cost efficiency of all operations. Input into the review of the Ulundi IDP. The delivery of IDP projects and programmes with an evaluation of effectiveness and efficiency in this regard.• • • • • • on-time delivery. . An assessment process that is uniformly well-received. Ulundi Council and Council officials – one built on mutual respect and co-operation. particularly by stakeholders who are pleased that their needs and expectations are being addressed. Executive Committee. An improved relationship between the Municipal Manager. The development of useful information for management. and The creation of an environment that encourages continuous improvement.
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