Across-The-Board Raises - Increase Cost and Reduce Performance

Organizations that continue to use across-the-board raises as an easy and effective way to control compensation costs and reward employees soon find out the truth. Yes, it may be easy- but it is not an effective means of controlling costs and rewarding employees, especially over the long term.

Employee pay is a key tool in fulfilling many corporate objectives. Among these are: attracting top performers; maintaining employee satisfaction; ensuring strategic alignment; increasing performance; and encouraging innovation. However, Robert Heneman, a noted compensation consultant says, “The ultimate goal of a pay system is to align the goals and interest of employees with the goals and interest of the organization.” How do across-the-board raises help achieve this?

First, it’s important to recognize that most top performers are driven by achievement. Since achievement is an internal motivator, organizations can harness its power- as well as the power of other internal motivators- by setting clear goals for individual and team performance. Management By Objective (MBO) is one way organizations have found to tap into the power of motivating employees to achieve. Across-the-board raises are not based on achievement, and so they miss out on harnessing the influence of a powerful internal motivator. Top performers would rather work in an organization that recognizes and rewards both their achievements and the effort that goes into them.

Over the last few years, several federal organizations have raised the salary range for many of their employees. This was done primarily as an effort to both attract and keep high achieving employees. Is this a workable strategy producing positive results? We think not. As stated previously, most high performers are motivated to achieve. Without a system that rewards their efforts, one of two things almost always happens: Either the high achiever leaves; or there is a noticeable drop-off in achievement. Instead of a race to the top with appropriate rewards for those who make it, across-the-board raises turn beneficial competition into a race for mediocrity.

Book Review - Influencer - Business Consulting & Training

Book Review - Influencer by Kelly Patterson, Joseph Grenny, David Maxwell, Ron McMillan, and Al Switzler.

Managers have very complex jobs. Not only must they be well grounded in the technical side of the business, but understand the intricacies of human nature as well. In fact, dealing with human behavior is the most frustrating aspect of the job for many managers.

At last, I have found a book that provides five practical strategies for making change happen. The authors of Influencer have done a marvelous job of distilling powerful insights from behavioral scientists and business leaders into a guaranteed formula for change. Anyone who reads this book will benefit from it.

The authors demonstrate how five simple strategies achieved startling successes. This book is vividly illustrated with successful stories describing how these strategies have worked, such as dramatically reducing HIV infection in an entire country, how a large manufacturing facility turned the dismal implementation of Six Sigma into a massive success for the company, as well as how you can change self defeating behavior for yourself and others.

If you have been a regular reader of my blog, you know I focus on practical information leading to measurable results. This book delivers both.

Business Accountability - Performance Management Software

Top companies already use detailed performance metrics (Analytics), benchmarks and individual quantitative performance measures. Yet, accountability continues to invoke fear and trembling in the minds of many managers and staff members. One reason that performance ratings are so threatening is that internal performance reviews are often done so badly. Managers frequently see them as bureaucratic exercises to check off the boxes for salary purposes. Accountability is often thought of as a way to justify blame, pass the buck or cover your butt (CYA). Phases such as, “Not my job,” and “Good enough for government work” serve to reinforce inaction and continued failure. Ask people how work is going and you are likely to hear something like “Same shi*, different day” (SSDD). A lack of accountability has destroyed job fulfillment and pride in work.

A lack of accountability allows individuals to justify entitlement thinking, such as, “I have been here longer than anyone else; I should be next in line for promotion.” Fear is a major impediment to individual and organizational success. Howard Lewis, author of Technological Risk, contends that we have become a risk-adverse culture. This is completely understandable when one considers how much we are pelted by frightening media reports, homeland security alerts, economic crises and “lite” wars (similar to lite beer with reduced calories, lite wars have reduced casualties). Lewis contends that we have become afraid of risk and that fear, more than anything else, impedes a nation’s progress. Nothing weakens an individual’s or an organization’s resolve more, than the rejection of accountability. Accepting accountability empowers us.

Twenty years ago Intel was the leading manufacturer of memory chips. Yet, the writing was on the wall. Intel would lose the chip market to cheaper, more nimble Asian competitors. That business model no longer worked in the new globalized market place. CEO Andy Grove was accountable to shareholders and employees for sustaining Intel’s success. Grove took action and replaced Intel’s old business. Intel focused all its resources from making memory chips to making microprocessors. The rest, as they say, is history. Andy Grove’s decisiveness put Intel on a new trajectory of success that continues today.

A great definition of accountability can be found in the Wall Street Best seller The OZ Principle. The authors Roger Connors, Tom Smith and Craig Hickman define accountability this way, “A personal choice to rise above one’s circumstances and demonstrate the ownership necessary for achieving desired results.” Accountability is the first step to ownership. It is understandable why all high-performing organizations build a culture of achievement by increasing employee accountability and empowerment.

Leadership in Action - Performance Management Software

From 1991–1993, IBM lost more than 15 billon dollars. Lou Geistner was hired as CEO to turn things around. By carefully making sure the right people were in the right positions and installing a team-oriented compensation system, Geistner eliminated silo thinking and expanded cross functional cooperation. He returned IBM’s focus to its cultural roots: ardent customer service and discipline. Promotions and performance management shifted the culture focus from entitlement to achievement. Geistner once remarked, “I have come to see in my time at IBM that culture is not just one aspect of the game, it “IS” the game.” By the early 2000’s IBM had shed 14 billion dollars in inefficiencies and become the world’s largest and most influential information technology company. 

How do you know if your managers are creating value or destroying it? James Collins said it best in How the Mighty Fall, “People do not have jobs, they have responsibilities.” Performance based job descriptions define measurable leadership responsibilities. Establishing specific leadership measures encourage managers to do more than act as coordinators. They must get the best out of their people. Accurately defining and measuring leadership provides an incentive to excel at every level throughout the organization. 

There are several ways to measure leadership effectiveness. One way to establish leadership effectiveness is to measure employee responsiveness:

• How long does it take for employees to take action (Agility)?
• How well do employees perform in activities that drive strategic objectives (KPI’s)?
• What percentage of employees go beyond just meeting job requirements, e.g., exceeding customer expectations or suggesting better ways of doing things (Discretionary Effort)?
• How many ideas from employees are initiated and implemented? (Innovation)?
• How many employees can directly link their daily activities with mission or strategy (Strategic Alignment)?
• Ensuring the performance range between top performers and poor performers does not exceed 10% year after year.

Leadership Delivers The Future

Effective leadership pays off. Measuring leadership effectiveness in organizations tells us a lot about the future performance of an organization. Towers Watson’s Human Capital Index provides striking data showing leaders that are trusted by their employees generate higher employee commitment and return 42% more to shareholders. It is well recognized that good leaders are effective decision makers. But that does not entirely explain the high return to shareholders.

Effective leaders engage their employees by:

• Increasing their awareness of task importance and value.
• Getting employees to focus first on team or organizational goals, rather than their own interests.
• Activating their higher-order needs such as: Achievement, Self Respect, Belonging, Competency and Recognition, etc.

Increase Employee Performance

Align, measure and view daily performance impacting mission, vision and goals!

Kaplan and Norton, developers of the Balanced Score Card reported that 70 to 90 percent of organizations failed to realize the full potential their strategy promises. A recent article by Erik Berggren and Lars Dalgaard estimate that companies experience successful strategy results only 15% from planning but 85% from execution.

It is one thing for business leaders and senior management teams to develop new strategies. It is quiet a different challenge to have them successfully implemented. Many strategies fail to deliver their full potential. This can be traced back to four critical success areas.

Strategies fail because;

• The mission or strategy is vague or unclear. People are not sure what they need to do to support them day to day,
• The values described in the vision, mission and goals are at odds with the existing values and beliefs guiding behavior within the organization,
• There are no measures to help staff mark progress toward goal achievement ,
• There is no reinforcement for behaviors supporting change.

Strategic Mapping Vision to Action Workshop

Strategic Mapping Overview

Strategic mapping is a strategic planning and execution process. It has been successful used by Fortune 100.corporations such as Chevron, ATT, and Colgate. It provides executive teams with the technology to quickly execution and anticipates bottlenecks and blunders. The process quickly identifies underperforming high impact areas key result areas. Avoid wasting valuable time and money.

Strategic mapping ensures senior management can ...

• Build consensus quickly even with the most diverse membership.
• Envision areas holding the greatest opportunities and failure.
• Generate business alignment.
• Measurably links strategic drivers with the day-to-day actions of employees.
• Track strategic performance by department, position or person.
• Execute strategy changes faster.
• Increase return on investment of money, machines, and manpower.

Strategic mapping is an analytical process developed to align diverse opinions while pin pointing the key result areas essential to long term success. Participants identify and force rank the factors which they believe have the greatest impact on their future success. The items are rated according to their current performance level and plotted on a matrix. Through the welding together of diverse opinions the matrix provides a clear road map indicating current strengths, weaknesses, opportunities and threats.

With this new perspective, rational and realistic business plans can be easily constructed. Individual team members will be able to confidently create measurable performance objectives aligned with a sense of purpose shared by the entire team. Valuable resources can be focused where they are most needed. Team members will be able to support organization mission, strategy, and goals while making independent decisions.