Author: Site Staff

Dear Underperformance:

This issue is more often about the system rather than the actual supervisors. If the organization has done its part to create a workable, efficient performance management system and culture of accountability, then it’s easier for the supervisors to do their jobs.

Here are six things you can do to create a system that sets up supervisors for success in the performance review process.

1. Secure ownership by senior leaders.

Senior leaders need to consistently promote performance management as critical to achieving business results. Identify role models at the top who visibly use the system. Actively involve senior leaders in communications about performance management. This gives supervisors “permission” to provide candid feedback.

2. Tie individual goals to business strategy.

Try goal-setting from the top of the organization on down. If your supervisors’ goals are linked to strategy, it will be easier to link all employees’ goals. The clearer the link, the easier it is to discuss results (or lack thereof).

3. Hold individuals accountable for living the organization’s values.

Strategy helps prioritize what work must get done. Organizational values guide how the work should be accomplished. When values are built into the review process, supervisors can more easily address destructive “results at all costs” behavior.

4. Encourage employees to take responsibility for their own career management.

An effective system should create a partnership between employees and supervisors focused on mutual success. Sure, employees need guidance and coaching from their supervisors. But to stay motivated and committed, employees need the chance to tap into their personal motivators and have a say in how their unique capabilities can be leveraged.

5. Hold supervisors accountable for providing regular feedback.

Consider tracking and compensating them for conducting regular coaching discussions. Hold them accountable both for results and for developing their teams. Don’t train them in conducting performance appraisals. Provide the skills and tools they need for the discussions you want them to have throughout the year.

6. Stop changing those forms or screens.

The critical ingredients of an effective performance management system are the business and cultural drivers, and the conversations that take place between the people who need to execute the organization’s strategy. In the end, performance management needs to be less about forms or online systems, and more about continuous dialogue and partnership around issues that matter most to employees and the organization.

When supervisors focus on performance and mutual goals year round, the performance review is a much easier conversation.

SOURCE: Mary Ann Masarech, BlessingWhite Inc., Skillman, New Jersey, March 19, 2008.

LEARN MORE: Please read “Copping Out on Performance Management,” about “bail out” ratings that allow managers to avoid confrontation.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear Angling:

You should expect challenges from those who don’t see themselves as part of “diversity.” This will happen if you cast diversity primarily in terms of race, gender, ethnicity and sexual orientation. Instead, to prove that you’re serious about workforce diversity, and not political correctness, include equal emphasis on a realistic variety of diversity dimensions, such as age, marital and parental status, education, personality type, communication style, the four previously mentioned dimensions, and others. Emphasize—and mean it—that everyone is part of the diverse workforce.

There will be resistance if the amount of time devoted to training, education and other diversity interventions is seen as taking away from what some will refer to as “real work,” especially if allowances aren’t made for time away from the job. Telling someone he has to take a day to attend diversity training, but that there won’t be any slack on that project deadline, is a good way to breed resentment toward the entire effort.

The best defense against resistance to an examination of diversity is education, but not limited to the classroom variety. Leaders throughout the company, not just in HR, must help everyone in the workforce grasp this concept: If Company A has developed systems, procedures, policies and a culture that allows men and women from a variety of backgrounds to contribute productively, and Company B’s systems, etc., seem to work only for certain types of people, Company A’s going to perform better.

Changing an organization to adapt to a more diverse workforce requires changing culture, systems, behaviors and more. This takes time. And it takes realistic expectations.

Nothing converts skeptics like success. Demonstrating strong performance while building an organization that manages a diverse workforce helps convince the doubters and cynics that managing diversity, which we could simply call “managing reality,” is a smart business strategy.

SOURCE: Richard Hadden and Bill Catlette, co-authors, Contented Cows MOOve Faster, March 19, 2008.

LEARN MORE: Learn how Denny’s used diversity efforts to overcome an image of corporate racism. Also: a counterpoint suggesting that diversity programs don’t measure up to the hullabaloo that surrounds them.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear On the Fence:

You’ve already done the right thing in identifying your “best employees”—those who will make the strongest contribution to success in the short to medium term. Ensure that your criteria for selecting these top performers are transparent and commercially sound.

Next, communicate clearly to let them know that they are important. Establish an engagement plan for each individual. For example, some of our clients commission us to interview each “high-value” employee confidentially about how long they intend to stay, what they want from the next few months, factors that might make them want to leave and factors that would make them stay, and how they’d prefer to share their knowledge with others.

Employees are handed the resulting “personal engagement plan” to discuss with their managers. You can do this internally or, for a bigger “brag factor” and more frank responses, hire an external provider.

Personalized engagement plans should include: learning and development preferences, knowledge-transfer options, changes in manager practices to encourage higher performance, and so on.

These are the people whose performance warrants access to external coaches, internal mentors and other signals that their contributions are highly valued.

Embark on other more visible changes, such as creating a working group in which all or some of your best employees work with the CEO (presuming he has earned their respect) on initiatives or problem-solving during the merger.

Ensure departures are celebrated, followed by “storming, norming and reforming” events for those left behind.

If a person has a future with your organization, tell him or her now—and reinforce the message many times, in as many different ways as possible, to assuage any concerns about job security.

On the other hand, be frank with individuals who don’t appear to have a professional future with your organization. Provide these people with financial rewards based on clearly defined performance expectations, as a way of retaining them until the time comes when they are to be let go. The amount of money you give them should result from a cost-benefit analysis relating to the value of their institutional or professional knowledge.

The key, however, is not to rely on financial rewards alone. Every employer’s money is the same color, and real talent can easily choose to walk away. But almost everyone responds favorably when they believe that the work they do is both important and valued.

SOURCE: Lisa Halloran, Retention Partners, Sydney, Australia, March 19, 2008.

LEARN MORE: Aside from cash awards, another effective strategy involves re-recruitment of high-value workers. Also: tips for how to manage retention during a downsizing.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Dear Sweating the Details:

Calculating retention is easy. If you have 100 employees start work this month, and 10 of them leave before the end of that month, your retention rate is 90 percent. The retention-rate formula is:

Although calculating your retention rate is interesting, it can be misleading. Using the retention formula, it appears that you lost only 10 employees during the month. What happens if you hired 50 employees after the first day of the month and 40 of them left before the end of the month?

A better measure is turnover rate. There are many ways to compute a turnover rate. The simplest approach is:

Even though your retention rate is 90 percent, your turnover rate is 50 percent.

Although the turnover rate does reveal more than the retention rate by itself, neither tells the whole story. Using the turnover formula, it appears that you are in serious trouble. At this rate, you’ll be all by yourself in a very short period of time. Adding in additional elements will provide you a better sense of what is really going on.

Examine voluntary versus involuntary turnover
If you want to reduce turnover, you really need to know how many people are leaving voluntarily. Of the 50 exiting employees in the example above, 39 left as a result of permanent layoffs and one was fired for insubordination. The remainder (10) left for jobs offering more money. The formula for voluntary turnover is:

While your turnover rate is still 50 percent, your voluntary rate is only 10 percent.

Analyze special characteristics
You can focus on specific characteristics to get even more value out of turnover statistics. Many organizations look at longevity, shift, employee succession planning status, protected class and other factors to find out what kind of employees they are losing. Companies also frequently monitor turnover by supervisor, a typical source of voluntary turnover, and departmental turnover.

Assume that of the 10 people who left voluntarily, five left in the first week of employment and two were considered high potentials for succession planning purposes.

You could easily determine the percentage of voluntary turnover attributable to employees who came and quickly left (within the first 30 days, for example) by using the formula below. In this example, five employees left within 30 days of hire, so the turnover rate would be 50 percent (5 short-term employees / 10 voluntary terminations).

Alternatively, if you want to determine the percentage of turnover attributable to those considered high potentials from the above example, you would plug “2” into the numerator (the number of identified high potentials who left) and divide by 10 voluntary terminations, resulting in a 20 percent turnover rate of high potentials. You could use this same formula for many attributes and could easily modify it for involuntary termination analysis as well.

A finishing touch
While most will find these simple formulas good enough to give them the directional information they need, some want more precision. Many of the more sophisticated formulas compute turnover based upon “average headcount.” To determine the average, add the number of employees at the beginning of the period to the number at the end of the period and divide by two. Some formulas go into even further detail.

It makes sense to focus your time, effort and resources on fixing what you can fix. Good turnover analysis will help you figure out where to begin to look for avoidable causes.

SOURCE: Richard D. Galbreath, SPHR, Performance Growth Partners Inc., Bloomington, Illinois, March 26, 2008.

LEARN MORE: You could also use your retention rate to measure hiring costs. Also of interest is Workforce.com’s archive on retention.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

People moving into key executive positions
	Ki Ryung “Charlie” Kim has been named CEO of Aon Consulting Korea, based in Seoul. He recently served as representative director in Korea at Hay Group. Kim previously was worldwide partner at Mercer and representative director at Mercer Korea.
	Robert Croner has been named senior vice president of human resources at The Children’s Hospital of Philadelphia. He recently served as the hospital’s interim vice president of HR. Croner previously was executive vice president of human HR at Radian Group and vice president of HR at Independence Blue Cross.
	Rebecca Callahan has been named president of SourceRight Solutions. She recently served as senior vice president of recruitment process outsourcing at Spherion. Callahan previously was Spherion’s senior vice president of sales and vice president of the assessment group, and vice president of sales at Blue Pumpkin Software and PageNet.
Robert A. Schriesheim has been named CFO of Hewitt Associates. He recently served as the executive vice president and CFO at Lawson Software. Schriesheim previously held executive positions at ARCH Development Partners, Global TeleSystems, SBC Equity Partners, Ameritech, AC Nielsen and Brooke Group.
Allen J. Delattre has been named technology global market managing director at Korn/Ferry International. He recently served as global managing director in the communications and high-technology group at Accenture, where he worked for more than 20 years.
Heather Mayfield has been named vice president of service and quality at Corestaff Services. She recently served as vice president of branch operations at Snelling Staffing Services. Mayfield previously held training and operations positions at ProActivate, CareerBuilder.com/Headhunter.net and ProStaff.
Theresa Harkins has been named director of organizational learning and analytics at Diamond H Recognition. She recently served as managing director of HR strategy, technology and analytics at Tesoro Cos. Harkins previously was manager of rewards and recognition at Delta Air Lines.
Susan Johnson has been named vice president of client services at Publicis Selling Solutions. She recently served as the company’s senior director of business development. Before joining Publicis, Johnson worked at HighPoint Solutions and Wyeth Pharmaceuticals.
Great-West Retirement Services recently made these appointments:
Scott Sitzes has been named regional sales director for the Dallas/Fort Worth, northern Texas and northern Louisiana markets. He recently served as the regional vice president for the North Texas market at ING. Sitzes previously was a retirement plan consultant at Franklin Templeton Investments.
Doug Rosendahl has been named regional sales director for San Diego, Riverside and Imperial counties. He previously worked for The Principal Financial Group in a variety of sales and marketing positions.
Aon Investment Consulting recently made these appointments:
Clint Cary has been named senior vice president in the Chicago office. He recently served as vice president and investment strategist at Northern Trust Global Investments. Cary previously was founder of Capital Strategies Group.
Craig Pearlman has been named vice president in the Chicago office. He recently served as the Midwest investment business leader/director of sale at Mercer. Pearlman previously held leadership positions at Northern Trust Global Investments and Ibbotson Associates.
Bank of America Merrill Lynch recently made these appointments:
Kevin Crain has been named head of institutional client relationships. He recently served as head of plan participant solutions.
David Roberts has been named head of equity plan services.

General Motors joined Chrysler on Monday, February 2, in offering a new round of hourly worker buyouts and retirement incentives to cope with the industry downturn and meet federal labor-saving requirements for the automakers’ rescue package.

Chrysler and GM notified United Auto Workers locals of the plan Monday, said two union sources who asked not to be identified. Automotive News, which Monday first reported the Chrysler buyout plan, obtained a copy of the Chrysler notice.

GM spokesman Tony Sapienza declined to comment on the matter.

Chrysler confirmed the buyouts Monday afternoon. In a statement, the company said workers have until February 25 to elect to leave.

“Given the difficult economic and market conditions in the U.S., Chrysler LLC determined in December 2008 that it would offer another phase of special programs,” the statement said.

Chrysler and GM want to move veteran workers off their rolls to eventually bring on hires who will earn half the $28-an-hour wage of current veteran workers and half their benefits. Chrysler employs about 38,000 workers represented by the UAW, while GM employs 71,000.

Chrysler also must bring its labor costs in line with Japanese transplant automakers by February 17. That’s when the automaker is required to justify a federal rescue loan of $4 billion. General Motors has the same timeline to justify a federal loan commitment of $13.4 billion.

UAW spokeswoman Christine Moroski declined to comment.

Chrysler’s incentives are more generous than those offered by GM. Retirement-eligible Chrysler workers who leave will receive a $50,000 incentive plus a voucher of $25,000 for a new Chrysler vehicle, according to the notice. Last year the incentive was $70,000.

GM hourly workers who retire are eligible for $20,000 in cash and a $25,000 car voucher, according to a UAW source. About 18,000 GM hourly workers took larger buyout incentives in 2008 to leave the company.

Chrysler workers who take a buyout and leave with no retiree health care benefits get $75,000 and a $25,000 car voucher, the union source said. The incentive was $100,000 last year. GM buyouts offer $20,000 and a $25,000 car voucher.

Another group now is eligible for full retirement benefits at both automakers: workers 55 or older with 10 years of service, according to the sources.

Filed by Robert Sherefkin and David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.

 

Executive compensation shouldn’t be based purely on performance, warned Jamie Dimon, chairman and CEO of JPMorgan Chase, in his opening keynote speech at “The Future of New York City,” a half-day conference held by Crain’s New York Business, a sister publication of Workforce Management.

In his speech Tuesday, February 3, at the Grand Hyatt Hotel in New York, Dimon warned regulators and the government against taking a too-simple approach to solving the issues that caused the financial crisis.

“It’s very important that companies acknowledge the legitimate concerns around issues like executive compensation,” said Dimon, whose company received federal bailout funds. “But don’t paint all executives with the same brush.”

Performance measures have an important place in executive compensation, Dimon said, noting that JPMorgan executives are required to keep 75 percent of their equity shares.

But in order to get people to do difficult jobs, compensation can’t be based solely on performance, he said.

To demonstrate his point, Dimon described a scenario in which he has an easy job and a tough job. “Let’s call the tough job Vietnam,” he said.

“While we would want the best person for that job, we also know that there will be casualties,” he said. “You want to support that person and sometimes it’s not performance-based.”

Some aspect of the compensation for difficult jobs has to show those who hold them that the organization trusts and supports them, Dimon said, adding that he hopes President Barack Obama approaches this issue carefully.

“Performance is not the end-all, be-all,” he said. And making proper and balanced judgments on issues like executive compensation is going to be crucial in turning the economy around, Dimon said.

“We need to keep companies healthy … in order to keep our country growing,” he said.

—Jessica Marquez

Workforce Management’s online news feed is now available via Twitter.

 

A Callan survey released Monday, February 2, showed that 44 percent of private and public defined-contribution plans expect to replace an investment option for performance-related reasons in 2009, up from 39 percent that did so last year.

Plan officials also said fund and manager performance and due diligence are their primary focuses for 2009, according to Callan Associates’ “2009 Defined Contribution Trends Survey: Impact of Recent Market Volatility on DC Plans.”

Target-date funds were used as the default investment option in 59 percent of plans surveyed, up from 36.4 percent in 2007 and 32.5 percent in 2006.

Also, 76 percent of those surveyed said they’d be increasing the frequency of investment committee meetings in light of market volatility.

“There is a real focus by plan sponsors on making sure their ‘I’s are dotted and ‘T’s are crossed in their plans,” said Lori Lucas, defined-contribution leader at Callan Associates. “Given the events towards the end of last year, sponsors are looking to see if plans need to make changes in their due diligence procedures and in their investment funds. Conversely, with all the energy being spent on nuts-and-bolts due diligence, there is going to be a lot less emphasis on plan features in 2009.”

The online survey was conducted in late November and early December, and results incorporate responses from 107 companies; 80 percent of respondents offered 401(k) plans, while other respondents provided profit-sharing, 457 and 403(b) plans. The majority of plans had more than $100 million in assets and nearly one-third had assets of $1 billion or more.

(For more, read “Emanuel’s Memo May Put DOL Advice Rule at Risk.”)

Filed by John D’Antona Jr. of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce com.

Workforce Management’s online news feed is now available via Twitter.

The French Competition Council issued fines against Adecco SA, Manpower Inc. and Randstad Holding NV totaling $121 million for anti-competitive practices between March 2003 and November 2004.

Manpower said it would appeal the council’s ruling, while Adecco and Randstad are studying options.

Milwaukee-based Manpower senior vice president and legal officer Kenneth Hunt said the fine was unwarranted.

“We are very concerned by the decision of the Competition Council, as we take seriously our commitment to the highest standards of ethical business practice as well as ensuring
that we are in full compliance with the laws of the communities we serve,” he said.

“The council’s holding that our French operation was broadly engaged in a concerted practice to avoid competition on price is not supported by the facts of the case, and the fine imposed by the council is excessive as a measure of the damage to the economy that the fine is supposed to reflect.”

Manpower’s fine was $53.8 million and was based on a calculation on gross profit from French operations.

Switzerland-based Adecco’s fine was $43.8 million.

“The company will carefully analyze the decision before taking a final position in terms of a potential appeal,” the company said.

The French Competition Authority’s investigation also involved Vedior NV, which was acquired by Randstad. Its portion of the fine was $23.3 million.

“Having received the findings just now, we will continue to study them carefully,” a Randstad spokesman said.

—Staffing Industry Analysts

Workforce Management’s online news feed is now available via Twitter.

 

Chrysler has launched a new companywide round of hourly worker buyouts and retirement incentives to cope with the industry downturn and meet federal labor-saving requirements for the automaker’s rescue package.

Chrysler notified United Auto Workers locals of the plan Monday, February 2, said a union source who asked not to be identified. Automotive News obtained a copy of the notice.

Chrysler wants to move veteran workers off its rolls to eventually bring on hires who will earn half the $28-an-hour wage of current veteran workers and half their benefits. The carmaker employs about 38,000 workers represented by the UAW.

Chrysler also must bring its labor costs in line with Japanese transplant automakers by February 17. That’s when the company is required to justify a federal rescue loan of $4 billion. General Motors has the same timeline to justify a federal loan commitment of $13.4 billion.

Chrysler spokeswoman Shawn Morgan declined to comment.

The buyout incentives are similar to those offered last year but with a couple of new wrinkles, the union source said.

Retirement-eligible workers who leave will receive a $50,000 incentive plus a voucher of $25,000 for a new Chrysler vehicle, according to the notice. Last year the incentive was $70,000.

Workers who take a buyout and leave with no retiree health care benefits get $75,000 and a $25,000 car voucher, the union source said. The incentive was $100,000 last year.

Another group now is eligible for full retirement benefits: workers 55 or older with 10 years of service, according to the notice.

Filed by Robert Sherefkin and David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Workforce Management’s online news feed is now available via Twitter.