managing smart with cutting edge practices

Managing Smart – Cutting- Edge Employee Management Practices for the New Economy

The Smart Guide to Human Resource and Management Seminars

Presented byWarren J. RutherfordThe Executive Suite

© theexecutivesuite.com 2009 2

Program

Managing Smart Survey

Our new economy – knowledge based

Company future strategies – planning

Formal Processes & Procedures

Professional Standards

Company Needs

Alignment of Processes, Procedures, & Standards

Position Description and Function Alignment

Performance Appraisal and Company Strategy Alignment



1. We have a formal organization chart with job descriptions and responsibilities for each position.

2. We have developed a plan for evaluating our employees’ performance regularly.

3. We have developed a compensation plan that is equitable and motivating to employees.

4. We have written policies, procedures, and employee handbooks.

5. We trust employees to do the right things right.

Average Score = (Total/5)

Please rank on a scale of 1 to 5, 5 being the highest, your company’s score for each statement below. Statement Score



Results -

If your average score is 4 to 5, you are managing smart.

If your average score is 3 to 3.8, you are in the caution zone & need improvements to your managing program. You can benefit from better alignment, making you much more productive & profitable.

If your average score is < 3, you are in the danger zone & are probably out of alignment, and much less productive & profitable than you could be.


The Economy We Knew

1978 NYU Stern School of Business Study (5,000 companies)

95% correlation between balance sheet and business value

Balance Sheet

Intangible


The New Economy We Need to Know & Understand

2005 NYU Stern School of Business Study

28% correlation between balance sheet and business value

Intangibles – the 72%

Intellectual Property

Strategy

Brand

Systems

Processes

Access to Capital

Off balance sheet items

Customer reputation

Executive Team

Balance Sheet

Intangible


Why it is Important!

Only 5% of a workforce understands their company’s strategy.

Only 15% of senior management spends more than 1 hour a month defining strategy and aligning operations to it.

Only 25% have their operations aligned to the strategy.

Only 40% align company from budget to strategy.

David Norton, Balanced Scorecard Report, Vol. 3, No. 5 (Sep/Oct 2001)


Strategies to Succeed

How do people contribute to the success of our business?

Cornell Study –Workforce alignment requires -

The right types of people,

In the right places at the right times,In the right places at the right times,

Doing the right things right.

A company with the right types of people has employees with the knowledge and skills necessary to help that company achieve its goals.


Formal Processes & Procedures and Professional Standards

4 management strategies used to manage people –

Formal Processes & Procedures Formal Processes & Procedures –– have job duties & descriptions so employees know their roles & responsibilities, & regular feedback through performance appraisals;

Direct Monitoring Direct Monitoring –– closely monitor day-to-day activities & tightly control pace & schedule at which work is completed;

Professional Standards Professional Standards –– great deal of discretion to monitor own performance & trust to get the job done right the first time without direct oversight; and

Culture & Peer Pressure Culture & Peer Pressure –– expected to track each others work & effort & to provide feedback to each other about job performance.

Formal processes & procedures and professional standardsFormal processes & procedures and professional standards were found by the Cornell researchers as strongly and positively related to creating the best, long-term workforce alignment.


Alignment Enhances Productivity and Profit

Doesn’t it make sense that -

An aligned workforce increases productivity and profit,

We need to better understand our employees to further drive the success, growth, and performance of our business.

A study of large publicly traded firms, found that companies using “high performancehigh performance” human resource practices have market values that range from between $16,000 and $40,000 per employee higher than firms that do not use such practices.


Company Needs

What is your company’s long-term company strategy and plan? Mission, vision, values, purpose.

Have you involved your employees in its development? What are some of the steps you used – retreat, questionnaire?

How are you communicating that strategy and plan to your employees, (in person, email, postings, meetings, interactive discussions); and

Are you using that strategy and plan in the design of your job descriptions, management practices, and performance appraisal processes so that you can -

Enable your employees to understand what is needed for yours and their future success?


Aligning Your Management Practices to Manage People in the Right Places at the Right Times Requires -1. A better understanding of company’s needs by defining

and communicating your long-term company strategy and plan to your employees;

2. Communicating that strategy and plan as a management strategy – communicating what you want and need to do for your future success;

3. Defining (or refining) your job descriptions to better match your company strategy and plan so that they include the requisite essential functions and knowledge, skills, and abilities required to effectively perform the job;


Aligning Your Management Practices to Manage People in the Right Places at the Right Times Requires -4. Matching an employee’s strengths (their natural

talents, potential and interests) to the position and minimizing the need to rely on an employee’s weakness to perform their functions;

5. Matching job functions to the accomplishment of company goals and objectives by establishing performance metrics and standards that accompany the functions so that they are job specific; and

6. Designing an appraisal process with the involvement of management & employees and providing effective training on implementation.


Developing a Smart Job Description

Conduct a thorough job analysis to develop the following information –

Information about the nature of the worknature of the work (e.g. duties and responsibilities);

The level of the worklevel of the work (e.g., degree of responsibility or complexity);

Job requirementsJob requirements (e.g., the knowledge, skills, abilities and other characteristics needed to perform work effectively);

Job qualificationsJob qualifications (e.g., years of education or experience needed for the position); and

Working conditionsWorking conditions (e.g., the psychological, emotional, and physical demand placed on employees by the work environment).

Identify how the nature of the work relates strategically to the accomplishment of certain company goals and objectives


Position Function Profile Analysis

Identify primary and secondary position tasks

Aggregate tasks up to categories

(e.g. management, sales, finance, marketing, process)

Identify decision attributes for each category

Develop a position-specific profile to measure an employee’s match to the job profile as part of job description development process

Identify tasks or categories that could shift to other positions


Functional Assessment of Each Employee

We know that there are 3 ways we can think about anything –

Our head – systems & structure

Our hands – practical, let’s get it done

Our heart – empathy, the impact on others

Each of us has a different balance of these 3 styles & explains why our decisions and actions are different.

The way we make decisions & how we use them are at the core of who we are. They are key to our preferences, our strengths, and our weaknesses.

What are the dominant thinking patterns required for people in each position?

How does knowing that help to ensure that the employee in the position will be more successful in achieving position objectives and be more able to accomplish the desired person- future fit?

Think PositionThink Position--Person Alignment & Workforce Alignment.Person Alignment & Workforce Alignment.


Aligning Employee Strengths to the Position Function Profile

Once an assessment of an employee’s strengths as well as their weaknesses has been performed –

Identify which strength attributes match to the job description key attributes,

Identify whether the position requires the employee to utilize any of his attribute weaknesses,

Determine the possibility to reassign and realign certain position functions amongst employees in order to maximize the use of each of their natural talents, and

Modify position functions to accomplish the reassignment and the realignment.


Creating Position Function & Position Appraisal Alignment1. Establish policy connection between company

goals & employee goals –a. Improve communication between employee and

manager, b. Promote clarity around employee responsibilities,

project priorities and their linkage to company strategy and plans, and

c. Provide a fair and consistent framework to recognize individual levels of performance.


Creating Position Function & Position Appraisal Alignment2. Identify function-based measures

a. E.g. – # of sales, # placements, etc.3. Identify attribute or strength-based measures

a. E.g. – Decisiveness, Self-confidence, strategic thinking, following directions, etc.

4. Identify company goals that directly link to specific position functions

a. Sales increase from x to y, # repeat customers increase from a to b, etc.


Creating Position Function & Position Appraisal Alignment

Incorporate –Formal appraisal mechanismSelf-appraisal mechanism360° appraisal mechanismTeam/work unit appraisal mechanism


Formal Appraisal Mechanism

Employee evaluated at established intervals (2x year).

Evaluator is a superior to supervisor.

Common to all models:

Rating-based across different categories.

Each category may be point-scored and/or weighted.

Final result is numerical, tied to performance grid.


Self Appraisal Mechanism

Employee completes self-appraisal form requesting honest, objective assessment of performance during performance period.

Utilized most frequently as part of a formal, 360°, or team-based appraisal.

Enables employee to reflect on performance.

Enables superior to understand the employee’s point of reference.


360° Appraisal Mechanism

Employee performs self-evaluation AND is also evaluated by co-workers and superior(s).

May/may not be anonymous.

Emphasis on teamwork to overcome wounded egos.

Employee critically reviews evaluation comments, prepares performance improvement plan, discusses confidentially with superior(s).


Team/Work Unit Appraisal Mechanism

Work Unit (department, division, section, team) evaluates performance for period under review.

Each member of work unit completes appraisal form that links to unit goals, objectives, strategies for performance period.

Unit performance results shared equally with all employees in unit.


Creating Alignment with Professional Standards

Monitor and trust – If either or some of the appraisal mechanisms briefly described are utilized it then becomes important for ownership to establish regular review interviews (quarterly, semi-annually) and to trust and enable employees to execute AND to provide them to the tools to be successful.

Employees are often more rigorous in the standards they establish for themselves – if they know the they can be trustedtrusted.

Employees want to be trustedtrusted to be able to know how to get the job done rightget the job done right.


Creating Alignment with Professional Standards

Employees want to be able to innovate, experiment, be creative – they want the standards to enable that capability to be more successful.

The standards employees adopt usually are self- enforcing.

Practical standards suggest that the employer and employees work together to create meaningful performance standards that help foster greater productivity.


Summary

When there are formal processes and procedures,

When there are professional standards, and

When you work with employees to increase each others’ success -

You can have the two effective practices to Managing Smart.Managing Smart.


Thank you!For more information -

Warren J. RutherfordOwnerThe Executive Suite129 Airport RoadHyannis, MA 02601wjr@theexecutivesuite.comwww.theexecutivesuite.com508-778-7700

mailto:[email protected]

http://www.theexecutivesuite.com/

managing smart with cutting edge practices

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