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Cascading: Critical Metrics and Competencies Change requires a balanced Value Exchange Employee Gives Employer Gives Energy Effort Commitment Learning Opportunity Career Benefits Compensation Job The Performance Process can provide the keys to development Base Pay Promotion Training Career development Succession planning 89% 77% 56% 51% 32% Reduction in force 26% Variable pay 34% Current Use of Performance Management Data Source: Watson Wyatt Best Practices in Performance Management Performance Management Evolution Traditional Recent Emerging Measures Traits/ Outes Behaviors/ Outes Time/Quality/ Value Evaluator Boss Self/Peers Customers Outes Merit Pay Development Organization Success Implementation Distribute Forms Train and Communicate Ongoing Education and involvement Ownership HRD Management Employees Compliance Voluntary Mandatory Motivation Factors That Influence Process effectiveness Organization Supervisor PM Culture Skills Process The Organization Values that Support PM The Capability to Measure and Discuss Performance The Interaction Between the Employee and the Supervisor People Factors Technical Factors Performance Measures Rewards Delivery PM Forms Measures that Support the Organizations Goals and Values and are Possible to Accurately Measure How and Why Pay is Linked to Performance How the Design of the Form Supports the Process Performance Management Effectiveness Feedback from multiple sources Coaching and feedback are integral Deemphasis on a rating Decentralized control Greater linkage between pay and performance Effective measures Competencies Business strategies “ Champions”— sponsorship Employee participation Employee involvement in system design Communication training Alignment with business objectives, strategy, customer needs Ongoing monitoring of effectiveness of program Best Practices Elements of Successful Programs High Impact Performance Management Key elements found in all “best practices” ? Emphasis on looking forward – Planning and development ? Joint process with employee ownership – Cooperative goal setting ? Feedback (continuous, multiple sources) ? Developmental focus ? Pay and performance linkage Source: Watson Wyatt Best Practices in Performance Management Use of Key Elements Development Planning Multisource ratings 14% 65% 81% 84% 94% 97% Goal Setting Team standards No ratings Competencies/behaviors Source: Watson Wyatt Best Practices in Performance Management Evolution of Performance Feedback Top Down SelfAppraisal Peer Reviews Upward Feedback Internal Custo