【正文】 loped takehome materials so that every candidate now gets a thorough pany overview. Finally, the group created interviewerreport forms that must be sent to the manager who might ultimately work with the candidate. As a result, Chickarello says the pany slashed its openjob rate in half, from 10 percent to 5 percent. “Hand’soff” management means not being “onmessage”For years experts have emphasized the importance of dialogue in performance management. But too many managers avoid it. One veteran says annual performance appraisals “are like delivering a newspaper to a house with a growling dog. You throw the paper on the porch and get away as fast as possible.” “Managers don’t want to deal with confrontation,” says Charlotte Merrell, senior vice president for Bostonbased Jack Morton Company, a leader in event marketing. “Even when employees are not doing the right things, they’re usually working hard. Managers are concerned they might demoralize the employee or cause them to leave.” In fact, the exact opposite is true. Employees get demoralized when they don’t get candid performance feedback. When it es to annual performance reviews, the issue is not what goes unsaid on the day of the review, but what goes unsaid the other 259 working days of the year. Ironically, with the right kind of performancebased dialogue, managers could eliminate the onerous annual performance review altogether. In a true culture of dialogue, feedback is given candidly and consistently in small doses—like an IV—and the annual review bees a nonevent. Don’t overlook the people factorIn sum, strong execution occurs when top management creates performance management systems and process (“transmitter opportunities”) and ensures that line managers are trained to use them. Companies often do a good job with the former, but underestimate the importance of the latter. Many managers got where they are through intellectual and technical abilities—not through their people skills—and need help to bee effective performance managers. In particular, they need the skills to help make those tough performance review sessions go more smoothly. But the good news, according to Linda Johnston, vice president for human resources at Berkshire Bank in Massachusetts, is that “performance coaching is not rocket science. With practice, most managers can bee quite adept at it.” (See sidebar on page xx for advice on what managers need to do to deliver performance messages effectively.) 3. Making rewards countStrategy and execution signals get distorted when top teams lack clarity and when managers lack—or don’t use correctly—systems and processes to force performance dialogue. Wrongheaded reward policies plete the triplewhammy that cripples strategy execution.Aligning Rewards With StrategyIt sounds obvious that rewards have to be aligned with strategy. In fact the idea that a pany would reward behavior that’s “out of sync” with the pany strategy seems ludicrous. But it happens all the time. The reason is that creating reward systems is plex, and the critical importance of reward, which is just one piece of the strategic equation, is often overlooked. A health care insurance pany, for instance, wanted to improve customer service, so it invested heavily in a program to train customer service representatives. The reps learned better voice technique, interviewing skills to ferret out customer needs, and upselling skills. But the pany kept the same reward system as before, basing incentive pay on the number of calls pleted. When management got its first set of customer satisfaction surveys, they were bleak reading. Customer widely agreed that although the staff was courteous, it was remarkably unhelpful in resolving problems. Why? Because, as one reps put it, “If we spend more than four minutes on a call we would never get our bonus.” The strategy required that reps engage in longer, more indepth conversations with customers. But, as the rep pointed out, the dysfunctional reward system punished reps for doing so. Before AeroMexico had clarified its strategy, it had a reward scheme that unintentionally rewarded the wrong behavior. Pilots got merit pay based on ontime arrival records. This incentive helped give AeroMexico the best ontime record of any airline in North America. But this good oute came with unintended consequences. Pilots sometimes left the gate before scheduled departure times to ensure their bonuses, leaving passengers stranded and angry. AeroMexico later changed the key goal to overall customer satisfaction, with ontime arrival as just one ponent. Continual dialogue prevents such missteps.Differentiating rewardsStandard management theory says highperforming workers should get higher rewards than average or belowaverage workers. But at many panies it rarely works that way. Figure 4 shows the narrow difference separating the merit pay of highperformers—stars—from the average in a Hay survey of 75 . panies. Figure 4: Average Merit Increases: 2001 Source: Hay Compensation Report, involving some 75 panies in the .2001Increase to highest performers (Stars)%Average Increase%Difference%(Cutline: Despite all the talk about the importance of differentitation in recent years, organizations still do not differente salary increases very much A Hay Employee Attitude survey shows the tragic consequences of failing to differentiate rewards. In surveys conducted at 335 panies worldwide, only 35% of employees said they believed they’d earn more if they improved their performance. Figure 5: If my performance improves, I will receive better pensation. [EDITOR’S NOTE” Vertical or “Y” access needs to be labeled as “Percent indicating”。 Series 1 and Series 2 must be removed. Also, scale needs to be 1100]Topperforming panies believe that welldifferentiated rewards—even forced ranking of emplo