Proposal Real
- 1. Proposal for Selection System and Performance- Based Pay Implementation for the Department of Child and Family Welfare 2009 Divergent Consulting Inc.
- 2. Divergent Consulting Inc. • Previous clients include: Allstate Insurance Company Sylvan Learning Systems U.S. Army Research Institute Walt Disney World Company Walter Reed Army Institute of Research We deal with issues such as poor performance, turnover, and dysfunctional leadership We develop strategies to address organizational weaknesses and measure outcomes of training and incentive programs to evaluate costs and benefits High success rate with past clients We will assist DCF in attaining a healthy and high performing workforce
- 3. DCF’s Current Concerns High turnover rate (around 300%) of field workers DCF would like to implement: A selection system to reduce turnover A stress management program to reduce turnover A new pay scale to reduce turnover
- 4. What will be discussed Selection Systems Selection Criteria Selection Methods Criteria and Stress Probationary Period Overview Recommendation for a New Selection System Stress and Stress Management Advantages and Disadvantages of Stress Management Programs Pay Plans Pay-For-Performance Systems Advantages and Disadvantages of Variable and Merit Pay Plans Performance Appraisal Overview Recommendations for Stress Management and Pay System
- 5. Selection Systems “You can teach a turkey to climb a tree, but it’s easier to hire a squirrel” - Lyle Spencer Problem: Don’t know the applicant’s job performance Solution: Predict applicant’s job performance DCF ‘s current selection system o Is the current method the most effective system for choosing field workers?
- 6. Selection Criteria- GMA • Best Predictor of: 1. Job performance 2. Gaining job knowledge on the job 3. Performance in job training programs • Applicants most • Good predictor of task performance likely to learn and to perform Predictiv well on the job e • Predict performance in most jobs 26% GMA 1. Tests measure Single • Cost effective Advanta tests ges • Not influenced by faking 2. Tests that measure abilities and GMA • Group Disadvantag differences es adverse impact
- 7. Selection Criteria- Personality Big Five Neuroticism Insecurity, indecisiveness, anxiety Best predictors Also predict behaviors that Conscientiousness GMA Ambitious, practical, persistent cannot Extraversion Assertiveness, boldness, sociability Openness to experience Imaginative, original, independence Agreeableness Altruism, trustworthiness, cooperation • Most assess Big Big Five Five Personalit Occupatio •Criterion-focused Occupational y Tests nal Personality Scales Personality Scales o Integrity, drug and alcohol, stress tolerance, customer service
- 8. Selection Criteria and Stress - Personality traits relate to stress • More stressful events and High distress Neuroticism • Maladaptive ways of coping • More stressful and more High pleasurable events Extraversion • Active coping strategies High • Active problem solving Conscientiousne • Refrain from maladaptive ss coping
- 9. Tap into Not good conscientiousn predictors of ess, agreeable stress ness, and tolerance criteria emotional stability Stress Tolerance Scales Good 1. Predict handling work pressures well Good predictors of predictors of counter- 2. Identify job job productive applicants who are not performance behaviors tense and anxious
- 10. Selection Criteria- Job Experience 0-5 years of experience predicts about 11% of job performance •New hires in 1-5 year range predicts performance well for about first 3 years on the job Younger and less trained employees more likely to turnover
- 11. Selection Methods - Interviews Applicant Interviewers learns more about the job information on empathy, and organization personal initiative, and develops realistic applied social skills expectations Interviews 99% of organizations use some form of interview Unstructured Structured (best kind) Exact opposite of unstructured No fixed format or set of questions interviews Same interviewer often asks Questions determined by job different questions analysis No fixed procedure for scoring More valid
- 12. Interviews Cont. Interview Questions • Candidates • Describe what asked what they did in past they would do jobs as it in hypothetical relates to situation requirements of the job Situational Behavioral Backgroun Job d knowledge • Focus on work • Candidates experience, ed describe, docu ucation, and ment, or other demonstrate qualifications their job knowledge
- 13. Interviews Cont. Advantages Disadvantages
- 14. Probationary Periods Popular in US Good for Other Advantages Organizations Unionized Firms Get information not Protect from bad Helps attract available before hiring hiring choices applicants with desirable qualities •Workers can be laid off before firms have invested heavily in them Workers discharged typically have no Helps organizations •Probation higher net recourse to union obtain the kind of returns than monitoring grievance procedures workers they want workers on intermittent basis
- 15. Recommendations for a New Selection System One applicant pool and • Disparate treatment or impact one selection system could occur if more than one 2 or more years Social • Will have relevant job Work experience or knowledge, skills, and abilities degree in Social Work • Single measure of GMA GMA Test • Purchase Test • Personality test that measures Personality Test Big Five • Purchase test
- 16. Recommendations Cont. • Assess applicants’ experience and job Structured Interview knowledge with Behavior-Based Questions • Assess applicant’s stress tolerance, or behavior • Regardless of academic background or prior experience, new hires should: (1) Be aware of organization’s policies, culture, and mission (2) understand the goals and requirements of Probationary Period and their work area and (3) use specific areas On-the-Job Training of knowledge, skills, and attitudes to do their jobs • Permanent position and benefits if completed successfully
- 17. Stress Overview • Stress response stressor or stress distress or demand response strain Stress Direct costs- turnover, absenteeism, health care, compensation awards Indirect costs- poor morale, job dissatisfaction, poor performance Job stress estimated to cost the American industry $150 billion dollars annually
- 18. Stress Cont. Level Purpose Technique Primary •Modify or eliminate sources •Redesign tasks or job of stress that happen in work •Redesign work environment environment •Flexible work schedules Secondary •Improve stress management •Stress management programs skills to teach: oRelaxation techniques •Help deal with stressors coming oCognitive coping skills from the work environment that oWork/lifestyle modification cannot be changed skills, such as time management •Help deal with stress that is non-work related Tertiary •Reduce the employee’s •Typically done through distress counseling programs
- 19. Stress Management Programs Advantages Disadvantages • Cost effective • Most conducted at secondary • Up to 75% decrease in sickness and accident cost and tertiary levels • 200% to 800% ROI • Insufficient • Reduced absenteeism • Complement with primary • Up to 14% decline in absenteeism level programs • Up to 60% reduction in 1 year • Decreased job tension and stress • Optional participation attracts • Many programs "worried well" versus extremely • Increased satisfaction distressed • Many programs
- 20. Pay Plan Overview Seniority-Based Systems Turnover of high performers Protect average and poor performers Performance must meet only a minimum standard Pay-for-Performance •Purpose: Systems Motivate performance Recognize differential employee Variable Pay contributions Plans Piece Profit sharing, Gain Merit Group Incentive rates, Bonuses, Commiss sharing, Bonuses Plans Plans ions •Focus on •Work •Individual’s •Group’s individual’s group, facility, performance performance levels of organization performanc performance •Reward not •Not added to e •Added to added to the the base salary •Added to base salary base salary
- 21. Variable Pay Plans 1. Success rate = HIGH Advantages 2. Organizational performance = INCREASED 3. Productivity = INCREASED 5. Costs = LOWER 6. Absenteeism and turnover = LOWER 7. Employee attitudes = MORE FAVORABLE 8. Payouts = LARGER and FREQUENT 1. Poorly designed system = FAILURE 2. If the hurdle for achieving payout is too high = employee GIVES UP 3. If payout achievement too easy= NO BEHAVIOR CHANGE 4. Employees can neglect aspects of job not covered in performance goals 5. Less motivation for employee
- 22. Merit Pay Plans 1. Outstanding performers= HIGHER PAY Advantage LEVEL 2. Works with unionized employees s 3. Salary growth = CUMULATIVE and LONG TERM 4. Employee job satisfaction = HIGH 5. Perceptions pay and performance link = HIGH 6. Pay and performance = BETTER LINK 1. Performance appraisal objectives= LESS SPECIFIC 2. Objectives seen as less doable and not linked to performance 3. Pay increases smaller and viewed as less meaningful 4. Adding pay increases into base salaries may weaken the pay for performance link Disadvanta
- 23. Performance Appraisal 2 main Accurately assess level of goals: Evaluation system to advance individual’s job operational functions performance o 1. All employees evaluated o 2. All key job-related responsibilities measured o 3. All measures relate to job performance o 4. Performance measurement includes only matters under employee’s control o 5. Employees give their own performance evaluations 6. Discussion of performance Between superior and subordinate before
- 24. Recommendations for Stress Management and Pay System • To reduce stress, we recommend that a stress management workshop is offered to Stress employees Management • Areas to be covered determined once current employees surveyed concerning what causes them distress • We recommend that DCF implement a merit pay system because: Pay System • Used for many different groups of employees • Establish a better link between pay and performance Performance • Develop a performance appraisal system whereby supervisors evaluate employees’ Appraisal performance to tie in performance with pay
- 25. Proposal Data Collection and Planning Job Supervisors Position Analysis Analysis Questionnaire (PAQ) Five field workers workshop to describe the work that they do in their jobs GMA Selection Wonderlic Personnel Test (WPT) System High construct validity and reliability test-retest reliabilities of .82 to .94 Personality NEO Personality Inventory-Revised Test-retest reliabilities over a six month period ranging from .86 to .91 Interview Assess stress tolerance, past experience, and job knowledge Structured and ask behaviorally-based questions Interviewers will attend training Develop questions based off of competencies identified through job analysis
- 26. Data Collection and Planning Cont. Probationar y Training Trainers Period Field workers who are high performers with good interpersonal skills Training Program SMEs develop content and structure Trainer Training • Prepare their trainee • Present the training • Ask for a response from their trainee • Provide feedback to their trainee • Evaluate their trainee’s performance Evaluation Trainees self-report evaluation of his or her learning progress Trainer observe trainee and rate their performance
- 27. Data Collection and Planning Cont. Stress Management Employee Survey Workshop - All current field workers - 10-15 minutes and 1 week to complete - Results analyzed and presented to management - The consultant will work with SMEs to design workshop Workshop - Interactive lectures and role playing concerning: - Recognizing and understanding stress - Stress reduction techniques - Workshop is optional and offered on Tuesdays after the workday - Eight weeks - One hour long Workshop Leader - The workshop will be led by a supervisor from DCF - Trained on stress process, coping strategies, managing the stressors identified in survey, and stress reduction techniques
- 28. Data Collection and Planning Cont. Pay-for- Performanc e Plan Joint Effort Supervisors and field workers involved in development Performance Areas SMEs will determine important tasks employee must be able to perform well and other dimensions important for success Rater Training - Interactive lectures and videos on: - How system will work - Tasks and dimensions to be rated - How to accurately rate and observe - Discussion of types of rating errors and brainstorming on how to avoid them - Trainees will rate behaviors presented on videotape and identify similar behaviors in the workplace
- 29. Implementation and Evaluation Interviewer, Rater, On-the-Job Trainer Training Pre-test Questionnaire on knowledge and Post-test abilities of the training material • t-test will be used to compare the tests and determine if there is a difference between scores Selection System- Implementation Screening NEO-PI-R Interview Wonderlic Test • Applicants • About30-45 • Conduct • Structured given 12 minutes to and ed on the minutes complete phone behavior- • Score 20 • Score high on based or above conscientious • 2 ness and low interviewer on s neuroticism •A multiple hurdle approach will be used
- 30. Implementation and Evaluation Cont. Selection System- Evaluation 1. Compare rates across different times Measure turnover Measure turnover Measure overall rates and job rates and job turnover rate and job performance of new performance of new performance before employees six employees after implementation months after another six months implementation 2. Assess the utility of the system- Cost Benefits Analysis Cost of selection system test Job Performance
- 31. Implementation and Evaluation Cont. On-the-Job Training 1. Effectiveness of training Post-test 1. Reaction to the training Training 2. Knowledge, skills, abilities, tasks, and behaviors learned while in training 2. Evaluate employee’s performance 3 months 6 months 1 year 3. Return on investment of the training Cost of the training Monetary benefits
- 32. Implementation and Evaluation Cont. Stress Management Workshop- Evaluation Before Workshop After workshop 1. Assess employee’s stress 1. Assess stress levels levels 2. Assess effectiveness of 2. Assess effectiveness of coping skills coping skills Performance Appraisal- Implementation As soon as they are designed and all raters have successfully completed training Performance Appraisal- Evaluation 1. Employee’s perceptions of fairness of the process and their satisfaction with the process After Performance Appraisal Performance Appraisal Employees fill out a Conducted by manager questionnaire
- 33. Implementation and Evaluation Cont. Pay Plan- Evaluation 1. Assess if pay practice follows pay policy Correlation Pay Performanc e • Stronger the correlation between merit increases and performance ratings stronger the link between pay and performance 2. Assess employees’ satisfaction and fairness perceptions After Implementation Before Implementation Questionnaire Questionnaire 3. Assess the utility of the system Current revenue and expenses Revenue and expenses after the plan has paid out
- 34. Timeline Job analysis PAQ about 2 months Group meetings Purchasing tests, developing Selection System interview questions, training about 2 months interviewers, pre- evaluation measures 2 weeks to select trainers, 2 On-the-Job Training weeks to train trainers, pre- about 2 ½ months tests, developing training content Stress Workshop Stress survey, pre- tests, creating workshop about 2 ½ months content, training leaders Collecting data on Performance Appraisal job, developing performance about 3 months standards, creating rating scales, rater training Pay Plan pre-tests, how to use system, developing monetary about 1 month amounts, budget analysis
- 35. Timeline Cont. Timeline Data Development Implementation Total Collection Job Analysis 2 months 2 months Selection System 2 weeks 2 weeks 1 month 2 months On-the-Job 2 weeks 1 month 1 month 2 ½ months Training Stress Workshop 2 weeks 1 month 1 month 2 ½ months Performance 1 month 1 month 1 month 3 months Appraisal Pay Plan 1 month 1 month Evaluation #1 1 month 14 months • With the total estimated time of implementation being approximately 14 months, Divergent Consulting Inc. will be able to finish these projects within the
- 36. Fees and Expenses • Consultant’s fee: $100 per hour If DCF needs additional legal support than we have previously allotted, the following charges will apply: Data Analysis- $45 per hour Deposition- $ 175 per hour Witness Stand- $200 per hour PAQ Costs: $39.00 each Wonderlic Personnel Test Package $1925 Test Booklets (500) Answer Sheets (500) NEO-PI-R Test Booklets (Reusable) Form S (10): $102.95 NEO PI-R Manual: $106.95 NEO PI-R Profile Forms(25): $102.95 Answer Sheets(25): $102.95
- 37. Fees and Expenses Cont. On-the-job training development, performance appraisal development, interviewer training, on-the-job trainer training, and rater training Meeting of Managers (subject matter experts): Duty included in manager salary Manager Training: Trainer fee: $150 per session 2 for interview training 3 for on-the-job training 4 for performance appraisal Manager: Duty included in manager salary Stress Workshop Meeting of managers (subject matter experts): Duty included in manager salary Manager training: Trainer fee: $150 per session 3 sessions Manager: Duty included in manager salary Lecture Materials: $1500 for DCF’s use
- 38. Cost of Project Cost Hours Unit Other Needs Total s Consultant $100/hr 20 per a$104,000 week PAQ $39 per unit b70 $2,430 Wonderlic $19.25 per c500 $1,925 500 NEO-PI-R $14.90 per c500 $106.95 for $7,565.25 unit manual Interview $4,000 d$4,000 On-the-Job Training $3,500 d$3,500 e500 $10 per workbook Stress Workshop $150 per 160 $30,500 session session $1500 for lecture s Performance Appraisal $4500 d$4,500 Training: Interviewer $150 per 2 f140 $42,000 session session s Training: On-the-Job Trainer $150 per 3 g250 $112,500 session session s
- 39. Cost of Project Table- Assumptions a Assumption: 20 hours per week for one year b Assumption: 1 manager per county office c Assumption: 500 units initially ordered d Assumption: Total cost for data collection and design e Assumption: About 500 employees will participate f Assumption: 2 managers per county office g Assumption: About 250 field workers will need to be trained hAssumption: Evaluation of selection system, on-the-job training, stress workshop, performance appraisal, and pay plan
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Editor's Notes
- #21: Higher pay dispersion sends a clearer signal to good performers that better alternative opportunities exist in other organizations