Perform To Survive

Excellence Achievement LLC December 17, 2008 Prepared by John R. Eve

… .associates performing effectively on the job to create returns to the company in terms of increased revenue, cash flow, and profits.

People Performance Research Conducted by The Corporate Leadership Council: “ Building the High Performance Workforce: A Quantitative Analysis of the Effectiveness of Performance Management Strategies” Sample used included: 19,000 Employees 34 organizations 7 Industries 29 Countries

Research - Key Discoveries There is no “magic bullet” to enhance performance, multiple “levers” must be carefully selected and then used. It is important to consider indirect and direct impact on performance when selecting which levers to use. Financial incentives impact attraction and retention but do not directly improve employees’ abilities to do their day-to-day jobs. Personal connection to work has more direct impact on individual performance than financial rewards. Recognizing and rewarding achievement has strong impact on high performance attitudes. Training is most effective when it is functionally relevant and job specific.

Research - Key Discoveries The biggest drivers of individual performance are: fair, accurate, and immediate informal performance feedback (+39.1%), a culture of managed risk taking (+38.9%), emphasizing performance strengths during formal reviews (+36.4%), a clear understanding of performance standards (+36.1%), a culture of clear communication (+34.4%), matching employees with what they do best (+28.8%), providing solutions for day to day challenges (+23.7%). Confidential

Research - Key Discoveries Performance improvement methods that hurt performance or lack direct impact: frequently changing projects and assignments (-27.8%), emphasizing performance weaknesses (-26.8%), increasing the number of formal performance reviews (-1.0%), using rank ordering (-0.1%) presence of an employee development plan (+1.4%), treating best and worst performers differently (+1.5%).

Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Fair and accurate feedback Discretionary Effort = + 23.3% Commitment = +40.0% Match with Job = +40.6% +33.6 % +39.1% Culture of risk taking Discretionary Effort = + 18.4% Commitment = +45.7% Match with Job = +33.4% +29.7% +38.9% Emphasizing performance strengths during formal reviews Discretionary Effort = + 14.0% Commitment = +21.2% Match with Job = +20.5% Having Necessary Resources = +23.2% + 31.2% + 36.4%

Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Clear understanding of performance standards Discretionary Effort = + 19.0% Commitment = +34.0% Match with Job = +36.1% + 31.4% +36.1% Internal Communication Discretionary Effort = + 17.1% Commitment = +43.2% Match with Job = +34.7% +26.7% +34.4% Matching employees with what they do best Discretionary Effort = + 29.3% Commitment = +49.1% Match with Job = +65.7% +25.1% +28.8%

Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Providing solutions for day to day challenges Discretionary Effort = + 21.9% Commitment = +42.9% Match with Job = +39.4% +17.6% +23.7% Enjoyment of work Discretionary Effort = + 37.5% Commitment = +57.4% Match with Job = +65.8% 0% +13.1% Recognizing and Rewarding Achievement Discretionary Effort = + 19.0% Commitment = +35.9% Match with Job = +35.5% 0% +4.4%

Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Perceived Reward – Size of Bonus Discretionary Effort = + 4.9% Commitment = +18.1% Match with Job = +7.5% 0% +2.0% Treating best and worst performers differently Discretionary Effort = + 5.5% Commitment = +23.2% Match with Job = +13.1% Team Strength = +29.3% 0% +1.5% Presence of Employee Development Plan Discretionary Effort = + 0.5% Commitment = -2.0% Match with Job = +0.2% Having Necessary Resources = +0.5% +1.4% +1.4%

Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Increased number of formal performance reviews Discretionary Effort = - 0.5% Commitment = -4.8% Match with Job = -3.8% Having Necessary Resources = -4.7% -0.1% -1.0% Emphasizing performance weaknesses during formal reviews Discretionary Effort = - 6.3% Commitment = + 2.2% Match with Job = -6.6% Having Necessary Resources = -5.4% - 25.2% -26.8%

Is it important to be a great place to work? Fortune 100 Best Companies to Work For showed: Average Stock Market index of Fortune 100 = 25.2% 100 Best in December 1997 = 72.9% 100 Best in January 2006 = 133.8%

Is Recognition Important? Source: The Carrot Principle, by Adrian Gostick to be released January 2007. A recognition effectiveness study which used 200,000 participants across many industries and cultures. % Employees who: Companies that provide Low Recognition Companies that provide High Recognition Are Satisfied with Jobs 7.0% 46.0% Are Likely to Stay 24.7% 70.0% Have High Morale 8.0% 70.9% Are Highly Engaged 8.3% 73.0%

What does it all mean? People will perform…. when they have a heightened emotional and cognitive connection to their jobs, co-workers, managers, and the organization that influences them to apply effective effort on the job*. Bottom-line: We need to create an environment where all our people are willing and able to do those things that contribute to organizational success. So …how do we continue our journey to improve individual performance and how much is it worth? Source: Adapted from The Conference Board Employee Engagement definition

There a number of things you can do now to do more with the employees you have today! Be open minded and stop doing things that do not work and have never worked! Realize indirect impacts are important to raise High Performance Attitudes. Utilize good assessments to determine performance perception and reality CheckPoint 360 – Best Multi-rater tool available today with online training available Profile XT – It is what is on the inside that makes the outside successful! Profiles Performance Indicator - A manual for employees and teams Meet with me for a free, powerful performance review. John R. Eve President – Excellence Achievement LLC [email_address] www.excellence-achievement.com

Perform To Survive

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Perform To Survive