Employees “get” their purpose with cascading goals

Employees “get” their purpose with cascading goals

The Balanced Scorecard Institute calls it “cascading goals.”

I love this term, because you can visualize how the organization has a strategy and a big goal for the year, and important bits cascade down to departments (sales, customer service, production, even accounting). Then the department manager lets each employee know how they contribute to this department goal.

A great example I heard last year at a seminar was how a chain restaurant made corporate goals tangible and clearly understandable to every employee.

The general manager had a goal of 5% increase in revenue this year (to achieve the corporate goal of 5% increased revenue at same locations.) She then computed what this meant for the hostess, servers, kitchen staff, and even the “busboys.”

The Hostess knew that the team needed to reduce wait time (goal- less than 10 minutes at peak hours) so they did not lose diners due to a long line. She worked with the busboys to clear dishes so that diners left faster after eating (goal- 2 minutes) and clean up tables for a new party (within 2 minutes).

Servers knew that they needed to increase their average sale per diner 5%- which equaled an extra appetizer or dessert for every 3 tables. Servers also concentrated on expediting orders, response to requests (ketchup, please) and rushing food to tables to decrease overall customer time at the table.

I think you get the picture… when employees have simple Key Performance Indicators, they understand their purpose, the results to achieve, and the priority actions that would achieve those results.

Then the restaurant manager would share daily and weekly results (average sale per diner, average time per table, table wait time at peak, etc) so that employees could see if they were on track to meet monthly goals. A simple visual dashboard of these KPI was posted in the employee area, and reviewed with weekly and monthly update and celebration meetings.

Different shifts and days even had a friendly competition going, and servers would stop to ask their KPI results after a shift!

After a few months, revenue increased 10% over the prior year, and better yet, customer satisfaction scores also increased significantly.

After all, those KPI weren’t just good for the restaurant, but also what customers want: no wait for a table, faster and more responsive service, being offered the specials of the day.

Here is a great free guide from Gazelles & Rhythm Systems:
5 Tips All Executive Teams Must Know About KPIs

Learn more about how Expectations, goals and KPI dashboards work as part of your People Plan:
Clarifying Expectations section of our free resources

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Half of managers fail at employee goal setting

Half of managers fail at employee goal setting

If your soccer team cannot see the goal post, and players don’t know what steps they need to take to score a point (can I use my hands?), you can’t expect to win many games. You can always hope the other team is more clueless.

Yet most managers (even at large employers) do not let employees know their expectations for performance or what results or goals are required for the individual to contribute to department and organizational success.

In fact, Towers Watson 2014 Talent Management and Rewards Study found that “Only half of the organizations participating in the say managers are effective at working with employees to set appropriate performance goals for individual performance.”

I have read other research that asked managers and employees to name the top 3 priorities in a job, and they agreed on only ONE! So most employees focus on two main results areas that are not the highest priority.

Basically, employees want to know what does a doing “good job” look like and how I will be measured– but they are usually left guessing.

And who is responsible? The manager….

The solution (simple to say, serious effort to do):

  • Get crystal clear on the activities, results and key performance indicators for each job
  • Share with employees and gain their understanding and agreement
  • Track, monitor, share results with employee
  • Coach performance (and process) improvements with each employee weekly, monthly, quarterly

Then you will often hear (to quote our retired Buffalo Sabres hockey commentator Rick Jeanneret), “he shoots – he scores!!!!”

Article- Employees get their purpose with cascading goals /a>

Learn more about how Expectations, goals and KPI dashboards work as part of your People Plan:
Clarifying Expectations section of our free resources

Image courtesy of Ohmega1982 at FreeDigitalPhotos.net.

Most Bonus Plans Violate the “4 C’s of Variable Pay Plans”

Most Bonus Plans Violate the “4 C’s of Variable Pay Plans”

Currently I have four projects re-designing “bonus” or profit sharing plans for a wide range of clients (from 30 to 3000 employees, and from a local company to two mid-sized regional to a global one).

They all are faced with the same challenges:

  • Bonus calculations are discretionary (picked by the manager), with limited guidance on how to calculate an amount
  • Employees are likely not incentivized for the work that achieve business goals
  • Managers cannot clearly explain to employees what they need to do to earn the same or more next year
  • Employees don’t like or trust the plans (they do not believe bonuses are internally fair, or that their performance makes a difference in the final amount, or that their bonus is market competitive for their position)

To transition your bonus (profit sharing, incentive) program from a perk for employees to one that motivates and rewards performance and business results, it needs to follow the “4 C’s model.”

4’s Model of Variable Pay Plans

  1. Control- key individual performance measures in the plan align with business results and are under the control of the recipient
  2. Clarity – recipients understand the behaviors, activities and results they need to achieve what reward
  3. (not) Complex— maximum 4 measures (per job role/ level)
  4. Communication- recipients receive regular updates on the key performance measures to monitor if their work is achieving the target (even if payout is annual, monthly updates are ideal)

(4’C is the revised model from Dr. Jerry Newman’s 3’C Model, University at Buffalo)

Design steps to effective variable pay programs with the maximum business ROI

1. Basically, you need to go back to the drawing board to identify what matters most:

  • Outline key business metrics that add the most value to your firm and show achievement toward 5-year goals (strategy)
  • Cascade goals and down to department and job level key performance indicators (KPI)
  • Create a tracking and reporting system to communicate a monthly dashboard of KPI results (individual, department, company)

2. Finish with Incentive Plan Design:

  • When you have completed these first three elements, then link your incentive pool and payout calculation to reward those KPI
  • Keep it simple Sam, and communicate clear results often

The real “bang for your buck” will be that everyone be focusing their work on the most important things and finally understand how they can contribute to achieving organizational goals.

Then the incentive pool will be worth every penny.

(Sounds like a daunting task? With expert guidance to facilitate your management team through the 10 key decision steps, you can design a plan in about 3 months.)

Was she really “trained?”

Was she really “trained?”

When we have an employee who seems to be struggling with part of the job, we think back and exclaim “but she was trained!”

Often a person has been “trained” but still does not adequately complete the job duties.

There are multiple reasons “training” doesn’t succeed:

  • It was not comprehensive enough- just covering the basics does not convey enough information
  • It was given too fast in too short a period of time (everyone learns at a different rate)
  • The trainer only demonstrated the skill, and did not have the trainee practice it twice with coaching
  • Training did not match the learner’s best learning method (Some people learn better by listening, some via doing it, some by reading)
  • The trainer did not have adequate knowledge or verbal skills to impart all informa tion (if someone knows 70% then they train 70% of that and trainee gets 49% of it.

The basic solution is to re-visit the skill or knowledge that needs to be taught, and to systematically review this information.

Seasoned trainers also regularly check to make sure the trainee is absorbing the information, by asking for some sort of demonstration of learning. (“Okay, now I would like you to show me how you would enter a new order.”)

Once you have verified that the person was adequately trained or re-trained, you need to keep the knowledge active. Give the person the opportunity to use it periodically and coach for improvement.

If you don’t see improvement over time then you have your answer “will training help?” – and look for other causes (usually job fit related).

Image Courtesy of FreeDigitalPhotos.net.

If your whole crew fell in, who would you save?

If your whole crew fell in, who would you save?

I remember a vivid scene from the movie “Master and Commander” when the captain (Russell Crowe) decided to leave a sailor overboard, instead of saving the crew member but endangering the whole ship. <PS A great movie about leadership, and reminded me of the Hornblower series I read as a nerdy kid.>

Luckily our business is not life or death, and this is a tough decision that you will not have to make.

However, when you choose to keep onboard the crew members who are “dragging down” the team, you are essentially slowing or sinking your ship.

So consider—if everyone fell overboard, who would you “save” and why? (This is sometimes call the lifeboat drill.)

Now you have two lists—one to save (your best performers and solid citizens) and your list of the ones you would leave behind.

Before I get irate comments—let me be clear I am not advocating “throwing someone overboard” as a solution.

What I am suggesting is that you take each person that was on the “leave behind” list and do four important things:

  1. Systematically and objectively identify this person’s strengths and improvement areas
  2. Consider how the strengths can be re-deployed into another set of tasks or role
  3. Create a list of crucial and immediate changes required
  4. Meet with this employee to discuss 1-3 and create a plan to bring this person back on the crew list

Almost all of your low performance employees can be improved with a combination of change in role and expectations.

You can learn more about how to identify the three main reasons someone isn’t keeping up (gap in ability, motivation or values) in our webinar “Evaluating Your Current Team for Job Fit.”

See our current webinar schedule here: People Plan Webinars

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Engagement Driver #4-  Development Opportunities

Engagement Driver #4- Development Opportunities

Our prior article “What Drives Engagement?” listed the top 10 engagement drivers.

Three areas impact employee perceptions of available development and career opportunities (category 4):

1. Enjoy challenging work assignments that broaden skills

2. Improved my skills and capabilities over the last year

3. Have excellent career advancement opportunities

Many people are comfortable and happy in their current job and do not wish to take on additional responsibilities.

Others crave challenging work and the opportunity to learn and grow. A key component in keeping the second group of employees at your organization is to figure out how to meet these needs.

If you are small business, you usually do not have a “career paths” or a training department. However, you have many informal opportunities for additional development—these include cross-training, job enrichment, project assignments, and team lead opportunities.

It is always best to have a “back up” for each role– and developing someone as a  backup cross-trains another team member and gives a sense of skill development. Job “enrichment” means learning a bit deeper or broader on current tasks, such as increasing knowledge of accounting principles or equipment repair. We can always learn more about the work we do.

Even if your organization does not have “layers of management,” some employees are interesting in a newly emerging role of team leader. Team leaders are the “go-to” people who peers ask for help or to get another opinion for a decision. They often assist managers with routine supervisory tasks such as scheduling, assigning specific work, compiling reports, and side by side skill training. You may have someone now that is informally in this role.

Three steps you can take NOW to improve employee perceptions of development opportunities

  1. Think of one project or ongoing task that would be a stretch assignment for a team member, and delegate to someone with the competencies to accomplish.
  2. Spend 30 minutes one morning each week meeting with a team member to discuss “What skills or knowledge do you want to develop in the next year? How can this be accomplished?” Then create a timeline and action plan to achieve.
  3. Identify and start developing a team leader: If you have a great performer with interpersonal skills and a desire for additional responsibility, start with delegating a routine team task (scheduling, weekly project report, train new employee). If this person continues to grow in this role, create a team leader position with specific responsibilities and coach to achieve.

Two articles for more reading

For a source of stretch assignments, read our People plan article: “Too busy to delegate

Inc Magazine article How to Tell If Your Employees Are Bored

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