Performance Management - The 12 Steps

Implementing a performance management system? Avoid these mistakes!

Companies are adopting performance management systems to help optimise their workforces in this tough economy. Here are some tips on how to do it well - and the traps to avoid ...

Mistake #1: Keeping managers in the dark - communication and training that focuses on the benefits to the manager can help turn resistance and fear into acceptance and excitement.

Mistake #2: Introducing too much change too quickly - focus efforts on a few key outcomes and show success in those areas.

Mistake #3: Creating complex performance review forms - Keep it simple! Approach system configuration with the specific end-user in mind.

Mistake #4: Underestimating change management - dialogue is critical to understanding what could be sabotaging the project, and offers and opportunity for users to take ownership of the process and avoid feeling as though this new way of doing things has been thrust upon them.

Mistake #5: Failing to adequately plan - Get together with peers who have gone through an implementation. Have contingency plans in place for delays, technical issues and end-user resistance.

Mistake #6: Keeping end-users out of the configuration process - allow a representative team of managers and employees to participate in the configuration of the system.

Mistake #7: Failing to ask questions and uncover issues - create a feedback survey and establish a regular forum for suggestions for improvement.

Mistake #8: Not establishing links to business objectives - consistently strive to communicate how the performance management system supports the success of the business.

Mistake #9: Unclear roles and responsibilities - identify everyone in the business who will be needed or affected by the new system.

Mistake #10: Lack of buy-in from senior executives - create a set of reports that show trend data relating to important business metrics.

Mistake #11: Ambiguity about what to measure - Examine your existing job descriptions. Every employee needs to understand the duties and responsibilities of their job and on what basis their performance will be measured.

Mistake #12: Failure to establish a culture of performance - Creating a culture of performance often requires a dramatic shift in the attitude of an organisation towards its employees from one of a 'workforce' to on that values unique contributions, recognises strengths and invests in developing weaknesses, and understanding the value of each individual.


[Source: Human Capital Magazine, Issue 7.9]

Call for Nominations

If you know someone in the hotel industry in Canada who is deserving of nomination for any of the awards below, please do so....even vote for yourself. For instance, if you know a student who stands out and would benefit from the bursary, or an outstanding supplier, say perhaps a recruiter for hotels(ahem!), then vote for them at www.hotelassociation.ca and click the “Awards” link on the main page!

Call for Entries
HAC Hall of Fame Awards of Excellence


The Hotel Association of Canada (HAC) is now accepting entries for the 2009 Hall of Fame Awards of Excellence. Now in its sixth year the Hall of Fame Awards program continues the association’s tradition of acknowledging the strong standards and values of those involved in and with the lodging industry.

Each year the Hall of Fame Awards attracts more and more entries from HAC members across the country. The Awards program proudly recognizes those individuals, companies or properties that have demonstrated significant accomplishments, exemplary leadership and tireless commitment to our industry in the following divisions:


New! Outstanding Supplier Award
Recognizing Allied Members of the Hotel Association of Canada that have made a significant contribution to the Canadian lodging industry and to their individual lodging customers. Candidate will have provided outstanding customer service and support.

Nominations are also open for the Stephen Phillips Passion For Hospitality Bursary
This bursary is dedicated to the memory of Stephen Phillips, former Vice-Chairman & CEO of AFM Hospitality Corporation Inc., who passed away from cancer in early 2007. The bursary will be awarded to the hospitality student who best represents the qualities that Stephen Phillips brought to the industry.

The Humanitarian Award
Given for individuals/programs that demonstrate to residents that the individual property is responsive to the local community.

The Human Resources Award
Given for programs/individuals that develop a climate conducive to new and/or repeat business, create goodwill among guests, provide special services, reverse negative public relations situations or effectively solve guest complaints.

The Energy & Environment Award
Recognizes lodging properties that have developed a culture towards integrating environmental management practices that improve everyday operations and the bottom line, while maintaining quality service and meeting guest expectations.

Winners will be honoured at an Awards Luncheon in February 2010 in conjunction with HAC’s Annual Conference at the Fairmont Royal York Hotel, Toronto, ON. To access the Hall of Fame Awards Call for Entries, and to view a list of past winners, visit www.hotelassociation.ca and click the “Awards” link on the main page. Deadline for submissions is November 23, 2009.

The Hotel Association of Canada is the national organization representing the lodging industry in Canada. Our membership encompasses the provincial and territorial hotel associations, the corporate hotel chains, independent hotels, motels and resorts and the many suppliers to the hotel industry. Our objective is to assist both our national and international members as they endeavour to enhance their competitiveness and achieve their bottom line.

Planning for the Upturn

When faced with a downturn in the economy, the obvious reaction is to cut costs and typically that involes a lot of firing. However, in studying the successes and failures of hundreds of companies as they navigate downturns, numerous reports suggest that this approach is a short term savings that doesn't justify the larger and long-term negative impact of cutting the employee numbers.

Most executives understand the potential damage of massive cuts to employee numbers and see the negative impact of the firm’s reputation and the goodwill of their employees. However, the oft used method to cut the wage bill is with lay-offs.

In a recent survey of HR directors conducted by Hewitt, 81 per cent of companies said they plan to further cut costs this year even though they have already made significant reductions. Furthermore, 28 per cent say they are planning to do so by “restructuring” and 25 per cent are considering lay-offs.

Meanwhile, a recent Towers Perrin study of 600 HR executives found that while cost pressures remain intense, cutting too deeply into an organisation’s muscle – its talent – could seriously hamstring a fast return to growth.

As economists and reports have stated, we have entered this downturn very quickly and may come out of it equally as quickly. The Hewitt study showed that 54 per cent of HR directors believe the US’s economic upturn will begin at the end of this year or in early 2010 and most believe their own company’s economic improvement will coincide with that upturn.

So it seems that the logical solution for companies under economic pressure is not to buckle under the pressure in the search for a quick fix, but rather be creative and innovative in looking for other cost-cutting strategies that will keep the company not only alive, but strong for the upturn.

There are many other options companies can take that will either cut costs, or counter the need to cut costs by increasing productivity and performance.

Below are five cost-cutting strategies proffered by various HR directors, academics and survey findings, which will help companies avoid the dreaded lay-offs.

Strategy 1

Purchasable annual leave

PricewaterhouseCoopers (PWC) have had their “equilibrium” program in place for the past four years. It was introduced as a flexible work arrangement whereby indi viduals could elect to work in a range of flexible ways. But, as the company felt the pressure of the downturn, they opted to offer additional purchasable annual leave for an extended period of seven months, until the end of January 2010.

The offer was made to 4500 employees and was communicated in a transparent way, so that each employee knew the reason for the offer – to avoid having to lay people off.

The results of the offer were significant. Ninety per cent of the 4500 employees accepted the offer to take between 10 and 15 days unpaid leave.

“It was an amazing response,” says HR director of PWC, Nicole Brazil. “It really said a lot to us about the fabric of our organisation and that people know we are all in this together.”

Exactly how much money the strategy saved the company – and in turn how many jobs it saved – is difficult to quantify, however, with more than 4000 employees taking an extra 10 to 15 days unpaid leave it’s easy to say it would have a huge impact on overall savings. This measure will be far more beneficial to the company than letting people go in preparation for when the economic pressure eases.

Strategy 2

Job sharing

At the outset it might not seem like a cost-cutting strategy, but, job sharing can actually work as a means of saving cash.

If two people are doing the one job, in one sense there are the same costs involved because a company still has to pay the same salary for a particular role to be performed. However, the savings in benefits normally paid to a full-time employee are significant, so in that sense there is a cost saving to be had.

Job sharing also leads to reduced absenteeism and increased productivity. Having two people doing the one job means they work out a schedule to do certain hours and they therefore have more time off work and tend to turn up for those scheduled hours, leading to decreased absenteeism.

Job sharing also tends to motivate people. Loyalty is up, productivity is up, but where the customer is concerned it can be less predictable. However, overall the advantages over-ride the disadvantages.

Strategy 3

Pay cuts and reduced hours

A recent Employee Insights Survey of 560 professionals showed that nationally, 70 per cent would prefer to stay at their current employer and work reduced hours than face alternative cost-cutting strategies.

One of the most successful strategies globally has been to cut both pay and hours. But the key to success when taking this strategy is to cut it across the board – by including every person in the organisation. The management must tell the employees what the situation is and explain the environment they are working in. They must explain that everybody is going to cut back in order to save jobs.

If pay cuts are not across all levels of the organisation, he says, it creates a level of cynicism and consternation among employees. People want to see that the situation is affect ing everybody – including senior executives – and that those strategies are a genuine and sincere attempt to save the company.

People need to buy in. If you have employees buying in and they see what you’re doing and why you’re doing it and it has a good level and degree of fairness, then people will work with you.

Strategy 4

Work with employees – not against them

In a lot of cases, cost-cutting measures are driven from the top down,. but sometimes it's better to go to employees themselves and ask them how they think they could save money or increase productivity.

The staff know their own jobs themselves and each of them knows where there is corporate slack, so if you can work on a system and involve the employees on eliminating slack – eliminating non-value-adding components of their work – it produces a lot of buy-in and goodwill.

The differentiator between companies in times like this is getting out there and growing the business and seeking opportunities to expand and grow when every one else is hunkering down.

A suprising statistic suggests that increasing performance by 1 per cent has a much greater impact than reducing employee costs by 10 per cent, so moving the focus to increasing performance under economic pressure is a better cost saving method.

The other big way in which HR can make a difference is through talent management.

HR can really make a difference by identifying who your best players are, who will bring you through this period and how you can help these employees, coach them, and position yourselves to ensure you keep them and mitigate the risks of them leaving.

Because of the speed with which we entered this down turn, and the possibility that we may exit from it just as rapidly, if a company doesn’t have the right people in place to respond when the upturn comes, it will be in danger. Therefore, there are a lot of dangers involved in cutting costs too much. If you’re just cutting costs and cutting costs … when the upturn comes you don’t have the people or the structure in place to respond.

Everybody turns to cost cuts as a good way to go, or taking out numbers as a good way to go – but it’s got a huge cost in terms of brand damage and reputation and that’s one of the hardest thing to get back.

Strategy 5

Avoid layoffs and utilize alternative measures first as a means to cut costs.

Lay-offs must be the very last resort. It has such a huge impact on the culture of a company and people don't forget.

It impacts staff motivation and although productivity may not be impacted short-term, in the long-term loyalty gets affected, work satisfaction gets affected, innovation gets very much affected.

You have all these negative aspects which sometimes are very difficult to quantify. You spend years and decades building a corporate culture and then a bump occurs in the economic cycle and managers jump straight to employee lay-offs.

While lay-off are not always wrong, companies must look for a solution that is creative, that will work in the short, medium and long-term and keep in mind that the economic downturn is only temporary and will pick up again.


[Source: Human Resource Leader, 25 June 2009]

Recognition in a Dowturn

Rewarding and recognizing performance is especially important in a downturn.

The economic downturn has impacted on companies and their approach to reward and recognition in a variety of ways. Some companies have actually increased their spend and efforts to reward and recognize staff in a bid to boost performance, some have kept their investment in such programs steady, while others have rationalized their spend as part of cost-cutting programs across the entire organization.

Most companies have maintained their commitment to rewards and recognition, despite others cutting back. Still, companies realize that recognition, maybe less so reward, is an integral part of business. Despite economic conditions, companies still realize that they need to invest in their teams.

Recognition plays an important role in an economic down turn. There are people who have missed out on bonuses or who are missing out on pay rises as a result of a pay freezes, but one thing companies can do is to continue to recognize their people. The authenticity of how an acknowledgement is made is really, really important – much more so than an award that someone gets just because they’ve spent so many years with a company.

Improving discretionary performance is important in an economic downturn – a particularly good time to make a strategic investment in performance improvement. When employees perform better, the company performs better and while there has been some affect on non-sales generating areas, companies are still recognizing that the people generating income need to be motivated. Those sorts of programs haven’t been affected either on the incentive or rewards side.

Return on investment

Return on investment in reward and recognition programs is being scrutinized more closely in the downturn. Companies are looking more closely at the level of return, which also needs to be more tangible than it has been in the past. Most companies, now more than ever, have a clear understanding the reward and recognition program they have in place and what they want out of it. Companies don’t run them just because it’s good to look after employees.

The ROI on an incentive program is obvious: low fixed cost element and a high variable cost element, so that when people generate revenue, such programs pay for themselves because people are hitting their targets. It doesn’t really matter what the budget is, however, with a smaller budget you have to be more clever about how you put the elements of the program together.

Boosting discretionary effort is vital in tough times, and companies need to think about the “loyalty mirror. The more the workforce is engaged, the higher the customer loyalty, and this absolutely goes to profit and the bottom line. Gallup has given us the figures. Engaged employees deliver 27 per cent higher profit, 50 per cent higher sales and 50 per cent higher customer loyalty. So it’s just a commercial decision,” she says.


Human Resources’ role in reward and recognition

HR is in a prime position to help make the most of any reward and recognition programs. Now, more than ever, leadership teams want increased discretionary effort. And the only way to get that is if people feel engaged with the organization.

To get engagement you've got to go through the three basic steps. Firstly, do people have all the performance development tools hat people need - that's the HR role. Secondly, are people emotionally connected to the organization? And, thirdly, are they connected to the brand?

Te key role for HR is in championing an initiative to the executive team to help them understand how reward and recognition can contribute to a broader strategy. HR has to put it in the context of the business. Obviously there is a cost to such programs, and, if these come into question, HR's role is in helping the business understand the non-financial benefits.


Elements of successful reward and recognition

Reward behaviour as well as performance, because behaviours such as exhibiting company values or excelling in customer service contribute to outcomes.
Everyone should have access to the reward and recognition program - not just high achievers or sales professionals.
Increase frequency of rewards and recognition to reinforce positive performance and behaviour.

Secure strong executive support, so a company's leaders own and drive the program.

[Source: Human Resource Leader, 8 July 2009]

When You Don't Tip Housekeeping Staff....

Did you ever wonder what kinds of things happen when you're not in your hotel room? This short clip might give you an idea for those that don't tip the housekeeping staff....