Time to dial up productivity

With headcounts frozen, you’ll need 20 per cent more out of staff to meet goals: Expert
By Zachary Pedersen
|Canadian HR Reporter|Last Updated: 11/05/2013

Getting more out of your workforce: In September, Dion Love, senior director at CEB Corporate Leadership Council, talked about how to drive breakthrough performance in the new work environment at a Strategic Capability Network event in Toronto. For more information, visit www.scnetwork.ca.

Roles, work changing – reviews should follow (Organizational Effectiveness)

Applying more than just lipstick to the elephant (Strategic Capability)

Inspiration, effective leadership key to increased productivity from employees (Leadership in Action) 

To meet the future demands of business, employers will need a 20 per cent increase in overall employee performance, according to Dion Love, senior director at the CEB Corporate Leadership Council in Arlington, Va.

Asking employees to deliver more is not a new challenge but asking for it in today’s budget environment is unlike anything employers — and employees — have had to deal with before, said Love at a recent SCNetwork event in Toronto.

The numbers say it all. Going into 2013, 59 per cent of organizations had increased revenue expectations, according to the CEB 2012 Business Barometer: Quarterly Report, which included survey results from 1,500 global organizations.

Cost pressures were also expected to increase by 67 per cent. In contrast, only 33 per cent of organizations expected to see an increase in their headcount — and 35 per cent expected to see a decrease.

“So, increased revenue expectations, increased cost pressures with no commensurate increasing headcount,” said Love. “Now, where does that leave us?”

The answer: Employers need to develop a new way of thinking about performance management.

“The good news is all of our work within HR on improving performance management in our organization has paid off,” he said. “It’s paid off to an extent but you’ll see it’s not quite as much as we’re going to need in order to achieve breakthrough performance.”

Back in 2002, 34 per cent of employees believed their performance management system was fair, said Love. In 2012, that number went to 55 per cent.

“One way of looking at these numbers is saying this is a great improvement,” he said. “Another way of looking at it from the employees’ perspective is the performance management system helps identify development areas.”

In 2002, 18 per cent of employees felt their current performance management system helped identify development areas. In 2012, that number increased to 48 per cent.

However, that same year, 45 per cent of HR executives indicated significant changes were needed in their approach to performance management.

“On the one hand, we’ve made some improvements — some significant improvements in some cases — on the other hand, we’re not quite as far along as we need to be,” said Love.

Conventional performance management approaches will only improve performance by three to five per cent, according to CEB research. As a result, employers will be unable to increase employee performance by 20 per cent if they continue with their current performance management system, he said.

“Regardless of what organization we’re working in, regardless of what kind of organizational structure we’re working in or how many generations we’re working with, we all have to deal with more information in our day-to-day jobs,” said Love, noting 76 per cent of the employees in their 2012 study indicated the time required to review data and information has increased over the past three years.

Sixty-seven per cent of employees also said collaboration is more important within their job than it was three years ago.

“The organizational environment has changed, leading to changes in the way work gets done,” he said. “We’re more collaborative today because we’re working across silos, across regions and across different parts of the organization.”

In response, HR executives need to rethink their approach to performance management.

Enterprise contribution

While individual task performance remains the foundation of performance, network performance is the piece that leads to the new organizational environment.

An employee who is effective at improving others’ performance and using others’ contributions to improve his own performance is a high network performer.

When an employee is capable of high individual task performance and network performance, he is an enterprise contributor, said Love.

“Enterprise contribution is where we need our employees to focus,” he said. “Not just on the way they do (the) individual task or job but the way that they are contributing to the organization through doing the individual task of their job and also driving and leveraging others’ performance.”

Businesses will benefit greatly by encouraging workers to think in this way.

“We can’t think of performance anymore as just about the top 10, 20 per cent of our workforce,” said Love. “We need all employees to be enterprise contributors.”

The CEB estimates 40 per cent of employees are high individual task performers, while 40 per cent are average or low performers. Three per cent are high network performers.

“These are the people who know a lot of people in the organization, who interact with a lot of people in the organization but, unfortunately, don’t get a whole lot done,” he said.

“It’s not just about having a coffee with a whole bunch of people it’s about improving their contribution, improving your contribution and helping you to get the job done.”

Only 17 per cent of today’s workers are enterprise contributors, said Love.

“Remember, we need enterprise contribution from the entire organization,” he said. “It’s not just a matter of having that small segment at the top end of the curve being our top performers.”

To develop enterprise performance, employers need to understand the three main competencies of an enterprise performer. The first is prioritization.

“There’s so much more information, there are so many more people, there are so many more parts that you need to be effectively working with and through in order to get our jobs done today,” said Love.

“When you’ve got that barrage of information coming at you, those who can figure out what they need to focus on, what they need to prioritize, are the ones that really differentiate themselves today.”

The second competency is being able to effectively work with others in a team.

The third is organizational awareness.

“Understanding the broader organizational context is vital,” he said.

“(Enterprise contributors) understand what the organization is trying to achieve, technical skills you need and how you execute the individual tasks of your job.”

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SCNetwork’s panel of thought leaders brings decades of experience from the senior ranks of Canada’s business community. Their commentary puts HR management issues into context and looks at the practical implications of proposals and policies

Roles, work changing – reviews should follow (Organizational Effectiveness)

By Barbara Kofman

Most organizations have a formal performance review process for employees. But how effective is it and does it measure the right things? Those were the questions posed by CEB researcher Dion Love and while the answer was to be expected, hopefully it will serve to motivate companies to do more than just acknowledge changes need to be made.

Traditional performance appraisal systems, according to CEB research, are not doing the job they were intended to do — that is, evaluate how well individuals contribute to their unit, division and organizational goals in a way that correctly measures and ultimately drives enhanced employee productivity.

This is principally because performance appraisal systems are failing to adapt to the changing nature of work and the new environment in which they take place, so they do not accurately correlate with what is required in order to obtain enhanced business unit performance. They are evaluating and valuing the wrong things.

But if things need to change, where is the best place to start? In a global economy, enhanced productivity will be achieved only when we recognize how interconnected work has become. It is critical for all employees to be organizationally aware, to prioritize, collaborate and work together as high- functioning teams. Performance appraisals must evolve to encompass these changes. This means some roles, such as that of the “individual contributor,” may no longer be serving the overall needs of the organization.

It’s essential this transformation is also applied to how leaders are rewarded and, in particular, the part they play in encouraging enterprise performance.

To be more productive, organizations need to rethink what a good leader looks like and apply the same updated criteria for determining success to leadership roles as well as non-leadership ones.

As was the case with outmoded performance appraisal systems of the past, the implications of this change go well beyond simply remodelling one process. To effectively implement this new way of measuring achievement, it’s not only performance assessments that need to be retooled. Many other aspects under the purvey of senior leadership in general and HR in particular will also be affected, such as how to bring people out of their silos and develop a culture of teamwork that supports this evolution.

Just implementing the CEB’s recommendations won’t resolve the systemic issues that underlie performance appraisal systems. Indeed, changing the way individuals are measured to better reflect the factors that drive enhanced performance will not solve anything if there is a failure to address many of the other reasons performance appraisals do not succeed.

If appraisals are not done on a timely basis, are considered an imposition, treated as an afterthought, lack follow-through, retain a one-size-fits-all design or let goals and developmental plans lapse until the next time the process comes around, and if managers remain resistant to giving honest feedback, the outcome will continue to be disengaged staff unhappy with the whole process and no change in culture or output. All of that reworking of what is being evaluated will do nothing.

Barbara Kofman is SCNetwork’s lead commentator on organizational effectiveness and founding principal of CareerTrails in Toronto, a strategic career coaching and HR solutions organization committed to providing clients with the personalized processes and information they need, to achieve the individual and organizational outcomes they are seeking. She has held senior roles in resourcing, strategy and outplacement, and taught at the university and college level. Kofman can be reached at (416) 708-2880 bkofman@careertrails.com.

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Applying more than just lipstick to the elephant (Strategic Capability)

By Karen Gorsline
If key findings presented by Dion Love do not present a wakeup call for organizations, then what will?

His scenario outlined that:

• Economic times will continue to be tough, organizations must do more with the same or a reduced headcount to survive and employees must provide breakthrough performances.

• Employees feel they have already reached their limit in trying to cope with significant change — co-ordination of work across wide geographies, multiple managers and priorities, information overload, mixed messages, generational differences regarding work.

• HR wants to improve performance management.

Driving Breakthrough Performance in the New Work Environment is one of five studies undertaken by CEB. Two significant concepts in the model — “network performance” (sharing and using others to improve performance) and “enterprise contribution” — smack of existing concepts of teamwork, quality, process improvement and balanced scorecard.

For organizations to take advantage of this learning, they need to think very differently about four challenges identified and how existing concepts impact and integrate with those in the model presented.

What do enterprise contributors look like? The study shows a disconnect between what executives ranked as important competencies versus the competencies that actually impact enterprise contribution. Those looking at competencies will need to focus less on executive opinion and more on basic research specific to roles.

One important area is not addressed in the study. Given recent past job insecurity, frequent restructuring as part of “transformations,” a history of focusing on task performance and different generational expectations and motivations, a focus on competencies alone will not be sufficient.

Employees who are enterprise contributors also need to “give a damn.” Organizations need to find ways to make work meaningful and connect with employees in a very personal way to tap into a desire to contribute.

Does the performance management system evaluate enterprise contributors? The study indicated that “achieving breakthrough performance means all employees must display individual task and network performance.”

The target is robust contribution from all employees. Many performance management systems are linked to compensation systems and have forced rankings based often on subjective data.

Can all employees be motivated and encouraged to make enterprise contributions in this situation?

Cascading the balanced scorecard to the employee level has attempted to link individual performance to organization goals, but it is often seen as an organizational scorecard and not something to shape employee performance. Organizations have to change fundamental thinking around the objectives of a performance management system.

Perhaps managing performance is more about pointing employees in the right direction and providing more integration and assistance on concepts and tools that are often already in place — teamwork, quality, process improvement, “skunkworks” and other types of innovation.

Do roles support enterprise contribution? Only 36 per cent of employees agreed their role reflected how they worked with others. Most jobs are defined in terms of tasks and under-rate or allow no time for sharing information or obtaining new learning and experimentation on the job.

As the workforce has decreased, too often tasks have remained and are distributed to fewer people, resulting in even less time for anything except pure task activity. The classic but simple questions — What will start? What will stop? What will continue? — all need to be applied more aggressively. The elimination of unnecessary tasks creates time for network performance.

Organizations can focus discussions more on why a role exists and create an understanding that tasks are flexible, transient and evolve over time to encourage employees to innovate and contribute to new ways of accomplishing their role accountabilities.

Finally, every organization knows there are go-to people who are great mentors. In networking research, these individuals jump out as the hubs at the organization but often they are underappreciated and not recognized or rewarded for their contribution outside of their normal duties.

How do you support the extended performance “ecosystem”? This concept was presented as being the area of most stretch as it might involve external partners or suppliers in developing the internal and external critical talent for the organization. There are three steps to begin this process:

• Reinforce engagement of all in the mission, vision and values of the organization.

• Refocus attention from inward-looking and organizational politics to outward-looking learning.

• Look for opportunities to collaborate on at least one initiative with a number of stakeholders to create improvements that are win-win and celebrate the collaboration.

The presentation presented a burning platform and challenged HR and organizations to think more broadly about performance. It included a useful model that proposed that enterprise contribution was composed of both task performance and networking performance.

Will organizations use the model concepts to simply apply lipstick to their performance management process or will they rise to the challenge to rethink work, how it gets done and reimagine how to manage performance?

Karen Gorsline is SCNetwork’s lead commentator on strategic capability and leads HR Initiatives, a consulting practice focused on -facilitation and tailored HR initiatives. Toronto-based, she has taught HR planning, held senior roles in strategy and policy, managed a large decentralized HR function and directed a small business. She can be reached at gorslin@pathcom.com.

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Inspiration, effective leadership key to increased productivity from employees (Leadership in Action)

By Trish Maguire

Only three out of 10 companies in the S&P 500 have been able to grow and restrain costs since the global financial crisis, according to CEB’s 2012 survey. As a result, many executives believe 20 per cent more productivity from employees is the strategic initiative required to be “competitive, grow and achieve top-line revenue and bottom-line profitability.”

To meet organizational goals, the team will “continue to drive transformational productivity across the entire enterprise,” said one CEO.

When a business leader talks about “the entire enterprise,” does this include the executive suite and all managers? Is it realistic to believe that when leaders declare the need to “drive breakthrough performances” from employees, this also applies to them?

The CEB has been tracking employee performance levels since the late 1990s and, with this latest survey, substantiates the fact employees are reaching a workload limit.

Nonetheless, there are still some executives who maintain that for every person who is productive, there are seven who need to significantly improve.

Even more revealing is the confirmation that “on average, executives think only about 29 per cent of their employees are operating at peak productivity.”

It’s a sad state of affairs if any business leader accepts this as the standard at their organization. What would happen if these business leaders began to think about productivity as an outcome — not a strategic initiative? Fundamentally, talent management is a strategy.

Productivity, on the other hand, is an individual’s real-time contribution and total effort, influenced by a multi-faceted set of working conditions and leadership practices.

Many of you are familiar with the book First, Break All the Rules by Marcus Buckingham and Curt Coffman. One particular story comes to mind: A specific manager states one of his mission-critical responsibilities was to “help employees become more of who they already are.”

Rather than commanding “transformational productivity” from employees who have reached their limit, what would happen if business leaders unreservedly practised this principle?

What would happen to productivity if they were to instigate and inspire every manager and leader to embrace this level of commitment with every team member and customer across the enterprise — and in the community?

Most organizations are in a “state of permanent white water” with environments that are turbulent, ever-changing, highly ambiguous, uncertain and ever more complex, according to John Yardley, president of Metrics@Work.

Additionally, other recent surveys confirm workplaces can continue to expect expanded employee interdependence, greater interconnectedness and collaboration with increased knowledge work.

Business leaders are accountable for ensuring their organizations are “competitive, grow and achieve top-line revenue and bottom-line profitability.” Surely the real-time opportunity is to master the art of enabling — not commanding — people to maximize their full potential.

Trish Maguire is a commentator for SCNetwork on leadership in action and founding principal of Synergyx Solutions in Nobleton, Ont., focused on high-potential leadership development coaching. She has held senior leadership roles in HR and OD in education, manufacturing and entrepreneurial firms. She can be reached at synergyx@sympatico.ca.

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