Understanding change to deliver enhanced performance
Post the global downturn, organizations face stern challenges regarding how they do more with less and enhance organizational performance. The majority of businesses now recognize that organizational performance requires robust performance management, with the leadership skills and behaviours to bring the process to life.
However, a trap that organizations can fall into is not recognizing that the implementation of performance management is a change process. Too often, organizations just look over the fence to what others are doing and do the same. This is not bad practice, but needs to be coupled with a robust understanding of how performance management will deliver the organizational strategy and vision. To do this, HR needs to clearly articulate the “current state”, the “desired state” and the shift change that is required to deliver enhanced performance.
Case study: driving a high performance culture in the world's largest shipping line business
Every organization can benefit by gathering candid feedback from its employees. However, when you have more than 110,000 people, working in 20 businesses, speaking 100 different languages and spread across 130 countries, as the world's largest shipping line business has, the task of gathering that feedback becomes considerably more complex.
Kenexa has been helping this organization to meet this challenge every year since 2006 by conducting an annual global employee engagement survey. In 2006, the first engagement survey achieved an 80 per cent response rate, which has steadily improved each year up to 89 per cent today. By understanding what engages the best performers, the organization is able to create a stimulating workplace and attract and retain the best talent. It uses the engagement survey to improve the workplace, focus attention on key interventions and track progress and, because it is undertaken in consecutive years, the organization is able to review the impact of these interventions, monitor trends and compare results with scores from previous years.
The survey shows that it has highly engaged employees who are proud to work for the group. It also shows that engagement is clearly linked to retention. However, it does more than measure the “temperature” of the organization. Employees are also asked to assess their direct managers. Over the past year, employee perception of their managers' effectiveness has risen from 69 per cent favourable to 73 per cent favourable.
Understanding the vision of what is possible
To understand the vision, HR will need to engage with the business to truly understand the organizational strategy and translate what that means for managing performance. The following pieces of information are critical.
The criteria for future high performance
For performance management to be successful there need to be robust job profiles/job descriptions (performance profiles) that are focused on:
- Why does this job exist?
- What does this job need to deliver?
- How are those accountabilities measured?
- What behavioral competencies are required to support the deliverables?
- What knowledge and experience underpin the job demands?
Without these in place then performance management has nothing to measure against. The critical success factor of these profiles is that there is vertical alignment so that individual performance aligns to team, functional and organizational performance metrics.
The high performance behaviors that will deliver the organizational strategy
As mentioned in the previous section, the performance profiles need to include the behavioral competencies that will support the deliverables. From CHPD's 30 years of research into high performance, there are 11 behaviors that are proven to differentiate high and average performers. These are broken into four clusters.
HR needs to identify how these behaviours align to the strategy, at an organizational, functional, team and individual level. At the individual level it is about aligning the behaviours to the deliverables. However, prior to undertaking this there needs to be a clear understanding of how the behaviours are “weighted” in order to deliver the specific strategy as this will then cascade down to the functional, team and individual level.
"In an increasingly globalized economy, the way in which different cultures interpret organizational structures, processes and strategy is a critical factor in the success of performance management."
Readiness of the organization
This is a critical piece of data that is often overlooked by organizations. “Readiness” can be described as a measure of “the current state”, but in this context HR needs to understand how far performance management can be implemented – what is desirable. In a more mature business it would be appropriate for a more structured system with focused objective setting and review. This may be seen as constraining in a start-up where people are encouraged to do whatever it takes and performance management needs to be more flexible.
Case study: culture development across utility company's partnerships
In 2009, a major utility company contracted with CHPD to complete a cultural audit across its partnership organizations. The partnerships were created in 2005 to deliver infrastructure development across the utilities networks. When the partnerships were created, time was spent developing a culture by bringing together the utility company and the partner organization. What the utility company was observing in 2009 was that some of these partnerships were more effective than others and it wanted to understand what was driving success in some, while others were not fully meeting expectations. CHPD developed a bespoke audit with 12 organizational dimensions that identified the key drivers of performance across the partnerships. The output from the audit identified additional key drivers of performance, including the following:
- Each partnership had developed its own distinct culture. The cultures which valued and behaved the highest in teamwork, collaboration and working safely performed more effectively than those that ranked hitting performance targets highest.
- The utility company's operating model, for working with the partnerships, was not clearly defined, which resulted in partnerships having varying degrees of effectiveness in processes, reporting and communication.
CHPD and the utility company are now planning the next stages of work utilizing the results from the audit. One area of development is to create a shared set of values across all of the partnerships that have been identified to drive effective performance across the partnership network.
Understanding the practical steps
Many of the data points discussed in this document already will inform the practical steps that can be taken by organizations. However, the following insights would add additional value to support organizations in deciding how to move from the current to the desired state effectively.
Understanding where people are in the change process
Although this is also a measure of the current state, an understanding of where people are in the change process should be periodic as performance management is implemented and embedded. Using Claes F. Janssen's four rooms model of change – i.e. contentment, denial, confusion, renewal – HR can get a sense of how people are responding to change at any point and what practical steps can be taken to help people through the change process.
Understanding cultural differences
In an increasingly globalized economy, the way in which different cultures interpret organizational structures, processes and strategy is a critical factor in the success of performance management. Cultural differences may be national, religious or social and implementing a change process and embedding performance management will require a recognition of these.
Performance management that delivers
In reality, not all of the above data will be practical to collect at any one time, and HR will need to think laterally about how to remain informed by aligning data collection to business as usual processes. The important point for HR is that none of this data should be considered in isolation. The value for HR is in linking together the various insights to understand causal links, and then translating this all into language the business can understand. This will help HR build a compelling case for change and a performance management system, process and practice that is focused on delivering on the organizational strategy.
This is a shortened version of “Embedding performance management: understanding the enablers for change”, which originally appeared in Strategic HR Review, Volume 10 Number 1, 2011.
The authors are Kieran Colville and David Millner.