- Inspiring Vision
- Core Values
- Job Descriptions
- Transparent Performance Management System
- Performance Linked Pay
Inspiring Vision
Company’s Vision statement has the potential for inspiring all stakeholders (employees, partners, customers, investors and communities served). The key to having an effective Vision statement is simplicity. They should not only reflect your aspirations but also be easy for people to related to.
Some Organizations create lengthy Vision statements which are posted on the walls for every one to see every day. However, if you were to ask any employee if he / she knows what the Company’s Vision statement is – chances are you would draw a blank.
Effective Practice: A short statement that people can relate to - effortlessly.
Core Values
To inculcate Values in the DNA of the organization and build the desired culture, it is important to limit the number of values between 4 and 6. Employees must be able to remember all values at all times without having to refer to written material. Secondly, and more importantly, Senior Leaders – starting with the Chairperson/MD/CEO – must exhibit these values and stand by them.
My favourite example of how values help employees in decision making is about the Airline Stewardess who upgraded a man to first class because the person seated besides him refused to be seated next to a person of colour.
Effective Practice: 4 to 6 core values, Senior Business Leaders demonstrate the values in all decisions & interactions, Employees encouraged for exhibiting the values.
Job Descriptions
Establishing clear and comprehensive Job Descriptions helps organizations hire the right talent, ensure new hires become productive faster, set Performance Objectives and identify the right Training needs.
Well established Job Descriptions also help in eliminating duplication of work, overlapping roles, eliminating gaps and clarifying authorities & accountability. In our experience with documenting Job Descriptions we have often seen Organization Structures undergo significant changes to optimize manpower as well as de-risk business.
Key elements of Job Descriptions include the reporting hierarchy, Accountabilities, Tasks, Job Environment (Problem Solving / Decision Making, Challenges handled, External Interfaces etc.) & competencies required to perform the job.
Effective Practice: Well documented JDs for all positions in place and reviewed & updated Annually.
Transparent Performance Management System
A well documented and practiced Performance Management System starts with Goal setting and comprises of regular progress reviews to minimize variances. Goals are aligned with the Company’s business plan and cascaded downwards to front line employees. The rating system is linked to level of achievement of clearly defined Goals with minimal subjectivity.
Key Components of PMS include Goals/Objectives, Key Performance Indicators (KPIs), Target against each KPI, weightage of each Goal/Objective or KPI and a clear Rating Scale indicating level of Performance.
Effective Practices: Minimal subjectivity, Goals aligned horizontally (across functions) and vertically (across reporting levels), Goal setting completed one month before start of Performance Cycle, Monthly Progress Reviews & Course Correction, self evident objective Rating Scale.
Performance Linked Pay
Introducing Variable Pay linked to target achievement has the potential to motivate high performers to exceed planned targets. It also limits payouts to Low performers. In a typical PLP structure 20-30% of pay is linked to achievement of planned targets.
The PLP payouts range from 0% to 200% of Target Variable Pay based on level of achievement of Targets. Employees who significantly exceed their planned targets receive 2 times the planned variable pay whereas those who fail to meet base level of targets receive zero Variable pay. Introducing weightages for each Goal/Objective or KPI helps establish focus on business priorities and balances rewards for achievement of Critical and non-critical Goals.Key Components of PMS include Goals/Objectives, Key Performance Indicators (KPIs), Target against each KPI, weightage of each Goal/Objective or KPI and a clear Rating Scale indicating level of Performance.
Effective Practices: Performance – Pay linkage is transparent and clearly established & communicated to employees before start of Performance cycle, Rating system is objective.
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