Corporate Performance Measurement and Management at M.P.

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Agenda
1. 2. 3. Introduction to Corporate Performance Management Individual Performance Management Definition: Competencies Organisational and Individual Competencies Competency framework Why Develop a Competency Framework
Approaches to Competency Profiling Competency & Skill library features and Benefits Steps for implementing a Competency & Skills library Examples Definition: Job Profiling Process for Creating a Job Profile Examples and Templates
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4.

5.

Performance Measurement
What gets measured gets done and What gets measured becomes important!

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Performance Management the linking pin !

Vision Strategy Processes Starting with the ultimate goal and mission of the organisation. Aligning the business units, teams and individuals

Systems

Performance Management
Behavior and Actions Results
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What employees look for the linking pin!

Vision Strategy Processes Systems Understand what is expected form them This will lead to aligning individuals towards achievement of organisational goals

Performance Management
Behavior and Actions Results
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What does Performance Management Involve?

Achievement of strategic goals & objectives Allocation of KPIs Facilitate employee personal development as part of a integrated process Understanding true strengths and weaknesses at every level of the organisation Transformation of people management into a result-driven, strategic business function Alignment of employee goals and actions with corporate strategy Retention of top performers and development of low performers Increased quality and frequency of communication between managers and employees
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CEO Questions
Have I set the right organisation goals to achieve my strategy? There must be a more systematic approach we could use for goal setting. What kind of behaviors and skills and focus should I be directing my employees to have in order to achieve these goals? Does anyone know what behaviors will most likely help to improve our financial performance or improve customer satisfaction? Do the employees understand my vision and strategy? Have they been clearly communicated? Do employees buy-in to these goals and do they understand and buy-in their role or their divisions role in meeting the 7 strategy?
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CEO Questions Cont.,

Is my company structured optimally to fulfill our Strategy? Have we set up a performance incentive system that aligns with our organisation strategy? Does it include objectives that our staff care about? Do I have the right tools, systems and processes in place, both formal and informal to support performance related communication? Isnt there some form of automation that can give me more detailed, relevant information.

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Performance Management
May the most agile win

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Measurement and Performance

There are some questions that are relevant for business: Do we attract and retain the right people with the right skills? Are we performing effectively in our operations to produce and deliver to our stakeholders? Are we meeting or exceeding our stakeholders expectations? How are we doing financially? o Margins? o Costs? o Revenues? o New business revenues?
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Integrated and Balanced Management Approach

Perspective Strategic Objectives Financial
Shareholder value Profit New revenue Differentiation Strategic alliances Customer service

Measures
Shareholder Equity Operating margin Revenue from new services Value for money Profits from alliances Customer satisfaction

Targets
R X million in 3 years RPI + x% annually 25% in three years

Owner/Accoun t-ability
Finance Dir. CEO Business Dev. Mgr

Initiatives
Implement Economic Value Added

Customer

Number one customer rating R x million in five years Number one customer rating Best-in-class within five years Reduced by 50% in two years 60% within one year Triple in three years 10 in five years 20% in two years

Marketing Dir Bus. Dev. Mgr. Marketing Dir

Create customer Segmentation model Redefine channel strategy Reengineering new product development process

Business Processes

Productivity New product devt. Segmentation

Revenue/work hour Product development cycle time Number of initiatives targeted at profitable segments Management span of control Number of learning partnerships % management time interfacing with cust.

COO R&D Manager Marketing Dir.

Learning & Innovation

People policy Alliance Mngnt Customer focus

Human Res. Dir. Bus. Dev. Mgr. CEO

Develop new HR strategy Implement performance based compensation program

This prioritised set of initiatives defines the executive agenda and should support the planning and budgeting process. Conversely, senior management should 12 call into question any initiatives inconsistent with the strategic objectives.

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So far so good .. But ..

Is there any difference between organisational and individual performance management?

Where should management put more attention to when managing performance?

At the end what is performance management?

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Defining Individual performance

Performance Management Support and tools Competencies, knowledge and skills

KNOWLEDGE I know how to do it

CONTEXT I know what to do

Motivation
WILLINGNESS I want to do it

Performance: Those behaviours, that under the right conditions, lead to the expected results
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The need to cascading down to level n

Value for clients, stakeholders And employees Organisational Strategies Divisions, Sections, Programs Plans etc Individual Action

Best Practices
In value based managed enterprises, individual employees understand how processes and day-to-day activities contribute to value creation They know what they have to do individually to contribute to value creating This value creation focus becomes the basis for determining appropriate performance measures and enables to differentiate between what could be measured and what should be measured (Business Balanced Scorecard Concept) 16
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Individual performance management infrastructure

Performance Management infrastructure 1. Roles & Responsibilities 2. Annual objectives and feedback 3. Competencies model

Organisation Structure

Compensation & Incentives

Career Development

Training & Education

Recruiting & Selection

Integrated People Management Process

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Performance Management System

PERFORMANCE MANAGEMENT
GOAL MANAGEMENT COMPETENCY MANAGEMENT
Core Capabilities & Key Competencies

Corporate Goals

Team Goals

Competency Mix

Individual Goals

Individual Competency

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Competencies.

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What are competencies?

Competencies are a set of behaviours that encompass skills, knowledge, abilities, and personal attributes that, taken together, are critical to successful work accomplishment.

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Organisational and Individual Competencies Organisational Competencies:

Pinpoints the most critical competencies for organisational success. These are an organisations core competencies.

Individual Competencies:
Those competencies that each employee brings to his or her function.

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What is a Competency Framework?

A Competency Framework is a map to display a set of competencies that are needed to achieve an organisations mission, vision, and strategic goals. A Competency Framework is future-oriented, providing a master of core individual competencies required to develop the ideal future workforce. The competencies that make up the framework will serve as the basis for future employee management, since they play a key role in decisions on recruiting, employee development, personal development, and performance management.
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Why a Competency Framework?

A Competency Framework will help to bridge the gap between where the organisation is now and where we want to be in the future. This occurs in two ways.
Serves as a guide for management in making decisions, since it is based on the competencies that support the mission, vision, and goals of the organisation. Serves as a map to guide employees towards achieving the mission of the organisation and their functional areas.

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Approaches to Competency Profiling

Two approaches to competency profiling:

Top-down approach:
Generally involves picking, based on a strategic analysis of the organization's performance objectives, an array of competencies from a dictionary of competencies and assessing those for a particular position or class of positions.

Bottom-up approach:
Involves exploratory checklist surveys and subsequent confirmatory interviews to derive the competencies from employees.

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Functional Competencies
Administrative Knowledge Business Acumen Computer Filing Financial Health & Safety Knowledge and Skills Human Resources Industrial Relations Legal Knowledge Management Information Marketing/Sales Procurement Quality Knowledge and Skills Security Typing
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Task and Leadership Competencies

Analytical Ability Assertiveness Conflict Handling Customer Focus Decisiveness Flexibility Individual Leadership Initiative Judgement Leadership of change Negotiation Skills Oral Presentation Oral Persuasiveness Performance Orientation Persistence
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Task and Leadership Competencies

Planning/Organising/Control Self-development orientation Strategic and Global Perspective Team Leadership Values Verbal Communication Written Communication

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Competency & Skill Library Features & Benefits

Comprehensive Library
No need to reinvent the wheel. Allows a quick start. Completely customisable: Create new skill groups, skills, and subskills as needed

Create Common or Unique Performance Levels

Define different levels of competence (for example, from beginner to expert) for each competency, or use one scale for all

Input Performance Targets

Identify performance expectations for each competency/skill group for entry level up to senior management

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Competency & Skill Library Features & Benefits

Define Behavioural Indicators
If desired, enter behavioural examples/targets for competencies and skills

Continually Enhanced and Grows in Value

The library is easily enhanced as a by-product of job profiling, performance planning, and employee development

Fully Integrated with Other HR Functions

Your competency/skill library is used in every other function of HR, it ties them all together, and allows consistency throughout all of your performance management and developmental programs

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Steps for Implementing Competency & Skill Library

Step 1: Review provided library; eliminate competencies and skills that are irrelevant to the organisation Step 2: Select core competencies based on organisational strategy and values

Step 3: Departments review list of competencies and skills for their function and add additional competencies and skills as they are needed Step 4: Library grows naturally as new skill needs are identified while building job profiles, performance, development, or succession plans
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Example of Competency Assessment Process Step 4: Assess Competency Level Achievement

Competency Assessment
Competencies Required Level of Complexity [Refer to Competency Framework] Employees Rating Actual Rating GAP Developmental Requirements

Business Acumen

-1

Work towards attaining required level. [Refer to Academy, or engage in formal training, e.g. Advanced Management Programme, UNISA]
Investigate marketing & sales activities in BU. Report back in 3 months for actions to be taken after discussion with Reviewer Requires training on financial modeling. Recommend that Academy module on Financial Modeling be taken.

Marketing/Sales

-1

Financial

-1

Industrial Relations

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Job Profiling

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What is Job Profiling

Job Profiling is a systematic procedure for identifying the Competencies critical for success in a particular job or a job role. Job profiles can then be used for recruitment, selection, performance review, promotion, career development and succession planning.

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Job Profiling Procedure

Step 1: Obtain background information about the job to be profiled and how that job fits into the organisation.
Step 2: Develop an initial list of the tasks most relevant to the job being profiled. Step 3: Meet with subject matter experts (SMEs) incumbent workers or supervisors of the job being studiedwho review and revise the list, adding, deleting, consolidating, or changing the wording of each task to make sure that the list of tasks accurately represents the job as it is performed in the organisation.

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Job Profiling Procedure

Step 4: Present detailed descriptions of each of the Analytix Competency Framework to the SMEs. The SMEs decide, as a group, which competencies are relevant to the job and which skill levels are necessary for entry into the job and effective performance in the job.
Step 5: The final product of the profiling procedure is a report listing the most critical tasks an individual in that job must perform and, for each relevant Analytix competency, the skill level required to perform the job.

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Operational objectives Executive Role Represent Finance & Funding and provide strategic input and value add at EXCO, ABCC Board Meetings, Board Committee Meetings, External Boards, Divisional Merit Committee Meetings, and facilitate the implementation of Executive/Board decisions. Effectively provide leadership in the Finance & Funding Division and participate in executive decision-making and leading of division and SBUs: Enhance performance culture in Division and SBUs by successfully implementing the enhancements of the ABCC Star Performance Management Project:

Leadership Effective PM

Long-term strategic objectives Financial Mngmnt Effectively manage and monitor all activities that may have a financial impact on the IDC: Ensure timely and accurate budgeting and financial reporting on all the IDCs financial matters, including the subsidiaries Enhance financial reporting functionality at SBU level to include Profit & Loss and Balance Sheet reports There is adherence to the PFMA and other regulatory reporting requirements Company and external auditors are satisfied that proper treatment of transactions were made (including tax) Ensure the ABCs ability to fund all financing activities through effective utilisation of cash resources (including borrowings) as determined by its mandate through provision of loan finances, leased buildings, suspensive sales, plant leases, guarantees and the provision of ordinary preference share capital ABCs Credit Rating Ensure that the Moodys rating of the ABC, to be obtained by June 2003, is at least maintained or improved to ensure IDC access to competitive funding Liquidity Establish and implement programs to protect the IDCs capital in place through management and realisation of the Mature Holdings to enable the Corporation to remain within its limit, and to ensure a ready income stream, and a debt: equity ratio below 60% Attractive Longer term funding Enable IDC access to attractive priced longer term funding by developing and maintaining relationships with a number of international development finance institutions, including European Investment Bank, DEG, Proparco, and Japan Bank for international Cooperation relationships with leading DFIs.

Strategic Initiatives

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Example of Individual Target Setting Step 3: Set Measurable Targets for Individuals
Department Programme Team objectives Personal development needs and aspirations

Individual objectives
Self Manager Assess 1-5
3
4 3

Objectives
Grow net new money excluding market growth by the end of Q4 2001
Improve client satisfaction feedback by setting up an appropriate survey by Q3 2001 Improve capabilities in client service by attending course by end Q4 2001

Target Final

Result

Weighting Assess % 15

15
3
4 4

10%

6%
Survey set up Attended

40%
40% 20%

4
4 2

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Parameter Executive Role

Performance Standard Represent Finance& Funding and provide strategic input and value add at Board, EXCO, Board Committee Meetings, External Boards, Audit and Merit Committee Meetings, and facilitate the implementation of Executive/Board decisions.

Measurement Divisional Merit Committee Evaluation

Weight 20%

Divisional Leadership

Effectively provide leadership and guidance to SBU Heads in policy and operations, and implementation of strategy and business plans and participate in executive decision-making
Enhance performance culture in Service Sector Division and SBUs by successfully implementing the enhancements of the IDC Star Performance Management Project by June 2003. Ensure accurate and timely quarterly, 6 monthly, and annual budgeting and reporting Ensure Divisions contribution to successful roll-out of ATG and successful implementation of EXIM project by June 2003

Subordinates Evaluation

20%

Effective Performance Management

VP Human Resources Evaluation

20%

Financials and Compliance ATG and EXIM

Chairman of Board Audit Committee Evaluation CIO Evaluation

10%

10%

Corporate Support

Effectively manage the corporate support function, including maintenance of buildings and infrastructure, Infrastructure, secretarial division, dematerialisation of shares
Successfully manage the IDCs application in obtaining a Moody credit rating by June 2003

Sample VP and SBU Head satisfaction survey

CEO Evaluation

10%

Moodys Rating

10%

100%

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Thank you

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