Performance Management绩效管理英文论文.docx
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PerformanceManagement绩效管理英文论文
SteveSherretta
April26,2022
PerformanceManagement:
EnhancingExecutionThroughaCultureofDialogue
PeterisChiefExecutiveOfficerforamedicalsupplymultinationalthatrecentlycraftedanewstrategytocountercompetitivethreats.Theplanstressedtheneedtocutcycletime,concentratesalesonhigher-marginproductsanddevelopnewmarkets.
Fourmonthsaftercirculatingtheplan,Peterdida“walkaround”toseehowthingsweregoing.Hewasappalled.EverywherePeterturnedpeople,departments—wholebusinessunits—simplydidn’t“getit.”
Firstsurprise:
Engineering.Thegrouphadcutproductdesigntime30%,meetingitsgoaltoincreasespeed-to-market.Good.ThenPeteraskedhowmanufacturingwouldbeaffected.Itturnedoutthenewdesignwouldtakemuchmoretimetomake.Totalcycletimeactuallyincreased.“Ourstrategicplanmessageisnotreallygettingthrough,”Peterthought.
Secondsurprise:
Sales.Thenewstrategycalledforashift—emphasizehighmarginsalesratherthatpushingproductdownthepipelineasfastaspossible.ButjustabouteverysalespersonPeterspoketowasmakingtransactionalsalestohigh-volumecustomers;hardlyanyonewasbuildingrelationshipswiththemostprofitableprospects.Salesisdoingjustwhatit’salwaysdone,Peterthought.
Worstsurprise:
Evenhistopteam,thepeoplewho’dhelpedhimcraftthestrategy,wasnotstickingtoplan.Peteraskedateammember:
“Whyareyouspendingallyourtimemakingsurethenewmachineryisworkinginsteadofdevelopingnewmarkets?
”
“Becausemyunit’schiefgoalwastoimproveon-timedelivery,”heanswered.
“Butwhataboutcompanygoals?
”saidPeter.“Wecameupwithagoodplanandcommunicateditveryclearly.Butnowhereitisn’tbeingcarriedout.Why?
”
Manyorganizationscreategoodstrategies,butonlythebestexecutethemeffectively.FortunemagazineestimatesthatwhenCEOsfail,70%ofthetimeit’sbecauseofbadexecution.Weakexecutionispervasiveinthebusinessworld,butthereasonsforitarelargelymisunderstood.WhyisitthatnooneinPeter’sorganizationwasactinginsyncwiththestrategy?
Unlessweunderstandthereasons,wecan’thopetosolvetheproblem.
Imaginesomeonehittingatennisball.Whenthebrainsays“hittheball,”itdoesn’tautomaticallyhappen.Themessagetravelsthroughnervepathwaysdownthearmandcrossesgapsbetweenthenervecells.Thesegaps,or“synapses,”arepotentialbreaksintheconnection.Ifneurotransmittersdon’tcarrythemessageacrossthegap,themessagenevergetsthrough,oritgetsdistorted.Whenthathappens,eitherthearmdoesn’tmoveatall,oritmovesthewrongway.
Creatinga“cultureofdialogue”
Justlikeanervoussystem,organizationsalsohavegapsthatblockanddistortmessages.Thesecrettoeffectivestrategyexecutionliesincrossinghierarchicalandfunctionalgapswithclear,consistentmessagesthatrelaythestrategythroughouttheorganization.Soundsimple?
It’snot.Thereasonisthatthe“neurotransmitters”inorganizationsarehumanbeings—executiveteammembers,seniormanagers,middlemanagersandsupervisors—whosejobitistomakesurethatpeople’sbehaviorisalignedwiththeoverallstrategy.Doingwhatittakestoachievealignmentisverydifficult.ItiswhatRamCharancalls,the“heavylifting”ofmanagement,andit’sthekeytoexecutingstrategy.
Aswe’llseelater,thereisanimportantdifferencebetweencompaniesthatsuccessfullyalignbehaviorwithstrategyandthosethatdonot.Companiesthateffectivelyexecutestrategycreatea“cultureofdialogue.”Acultureofdialogueencouragespervasivetwo-waycommunicationswhereindividualsandgroups1)question,challenge,interpretandultimatelyclarifystrategicobjectives;and2)engageinregularperformancedialoguetomonitorbehaviorandensureitisalignedwithstrategy.
Threekeystomanagingperformance
Acultureofdialoguedoesn’thappeninstantly,anymorethanafluidtennisstrokedoes.Ittakespractice,persistenceandhardwork.Sohowexactlycanleadersensurethatstrategymessagesgoallthewaydowntheline—thatthetennisballgetshitcorrectly?
Thethreekeystomanagingperformanceeffectivelyare:
1.Achievingradicalclaritybydecodingstrategyatthetop.Manyorganizationsthinktheysendclearsignalsbutdon’t.Insomecases,managerssubordinatebroadstrategicgoalstooperationalgoalswithintheirsilos.That’swhathappenedwithPeter’stopteam.Elsewhere,topteammembersoftenhavetoomany“top”priorities—we’veseenasmanyas100inonecase—whichresultsinmixedsignalsandblurredfocus.Strategydecoderequireswinnowingprioritiesdowntoamanageablenumber—aslittleasfive.
2.Settingupsystemsandprocessestoensureclarity.Oncestrategyisclear,organizationsmustcreateprocessestoensurethattherightstrategymessagescascadedowntheorganization.Theseinclude:
strategy-centeredbudgetandplanningsessions;staffandteammeetingstodiscussgoals;performancemanagementmeetings;andtalentreviewsessions.Dialoguedrivesalltheseprocesses.Eachrepresentsa“transmitteropportunity,”wherestrategicmessagesareconveyedandbehaviorisalignedwithgoals.
3.Aligninganddifferentiatingrewards.Leadersmustmakesurerewardsencouragebehaviorsconsistentwithstrategy,whichsoundseasybutisn’t.Differentiationisaboutmakingsurethatstarsgetsignificantlymorethanpoorperformers.Butalmosteverywheremanagersdistributerewardsmoreorlessevenly.Aswe’llsee,lackofeffectiveperformancedialogueisakeycontributortodysfunctionalrewardschemes.
Welistthesethreeitemsseparatelybuttheyare,ofcourse,interconnected.Systemsandprocessesdependonclarityfromthetop.Differentiationandalignmentofrewardsdependonmanagersusingperformancesystemseffectively.Dialogueisthegluethatholdsitalltogether.Butnotjustanydialoguewilldo.Itmustbedialoguewithpurpose,focusedonperformance.
Linktocompanyvaluation
Companiesthatmanageperformancewell—GeneralElectriccomestomind—havehighermarketvaluations.Why?
Because,moreandmore,institutionalinvestorsviewstrategyexecutionasavitalfactorinfluencingstockprices.
Justafewyearsagoinstitutionalinvestorsreliedalmostexclusivelyonfinancialmeasuresforcompanyvaluations.Now35%ofamarketvaluationisinfluencedbynon-financial,intangiblefactors,accordingtoastudybyErnst&Young.Thestudyshowedthat“executionofcorporatestrategy”and“managementcredibility”rankednumberoneandnumbertwoinimportancetoinstitutionalinvestorsoutof22non-financialmeasures.JohnInch,amanagingdirectorandanalystatBearStearnsnotesthatinsomesectors,suchasdiversifiedindustrialcompanies,intangiblesaccountforevenmore—uptohalfacompany’svalue.“Youcantakeevenamundaneassetandinjectgoodmanagementandhavesomethingprettystrong,”saysInch.
1.AchieveRadicalClaritybydecodingstrategyatthetop
Thefirststepinsuccessfullyexecutingstrategyisachievingclarityonthetopteam,whichisfrequentlythesourceofgarbledsignals.
LackofClarityattheTop
ArecentHayGroupstudyshowsadisturbinglackofclarityontopteams(organizationalclaritymeasurestheextenttowhichemployeesunderstandwhatisexpectedofthemandhowthoseexpectationsconnectwiththeorganization’slargergoals).Thechartbelowshowsdramaticallyhigherlevelsofclarityonoutstandingvs.averageteams.Infactthebiggestsingledifferencebetweengreatandaveragetopteamsandtypicaloneswasinthelevelofinternalclarity.SeeFigure1.
Figure1:
OrganizationalClimateandTeams
[ChangeHay/McBerto“Source:
HayGroup,Inc.”infinalversion]
AndaLackofClarityBelow
Workersatlowerlevelsstronglyfeelthislackofclarity.Figure2looksatsatisfactionlevelsforworkersplanningtoleavetheirorganizationswithintwoyearsversusthoseplanningtostaylonger.Thisstudyshowedthatakeyreasonpeopleleavetheirjobsisthattheyfeeltheircompanieslackdirection.Evenamongemployeesplanningtostaymorethantwoyearsattheircompanies,only57%felttheirorganizationshadaclearsenseofdirection.
Figure2:
Keyreasonswhyemployeesleavetheircompanies
Total%Satisfied
Satisfactionwith:
Employeesplanningtostaymorethantwoyears(%)
Employeesplanningtoleaveinlessthantwoyears(%)
GAP
(%)
1.Useofmyskillsandabilities
83%
49%
34%
2.Abilityoftopmanagement
74%
41%
33%
3.Companyhasclearsenseofdirection
57%
27%
30%
[NOTE;HIGHLIGHTSECTION3;MAKEITPOPGRAPHICALLY]
Claritymatters
Whydoemployeescraveclarity?
Thinkaboutit.Whatcouldbemoredemoralizingthantherealizationthatyourhardworkisnotcontributingtooverallcompanygoals?
Employeeswanttodothe“right”thing,buttheycanonlydosoiftheyknowwhattherightthingsare.
Unfortunately,aswesawinouropeningvignette,companiesoftendon’tcommunicatestrategicgoalseffectively.Anoilrefineryclient,forexample,setastrategicgoaltocutcosts.Toseehowwellthemessagehadgottenthrough,anoperationsteamleaderheldastrategydecodesessionwherehequizzedhisteammembersonwhattheyfeltwasthechiefpriority.Tenteammembersproducedfourdifferent“top”objectives,includingcost-cutting,safety,environmentalcomplianceandreducingsalesprocessingtime.Themessagehadn’tgotthrough.Theteamleadercalledhisteamtogetherandcreateda“transmitteropportunity.”
“Don’tyouguysrealizethatifwecan’tcutourrefiningcostsbythreecentsagallon,they’regoingtoshutusdown?
”hesaid.
“Isthatallyouneedustodo?
”repliedtheteammembers,take