DRIVING BREAKTHROUGH PERFORMANCE IN THE NEW WORK ENVIRONMENT Gail Thakarar June 2014

AGENDA Changes in the Labor Market Driving Performance & Retention Through Employee Engagement Driving Performance in the New Work environment

CHANGES IN THE LABOR MARKET

Geographically Dispersed Workforces Higher Volume of Information More Matrixed Organization Structures Generational

CHANGES IN THE LABOR MARKET WORKPLACE CHARACTERISTIC VETERANS BABY BOOMERS GENERATION X GENERATION Y Work EthicRespect Authority, Hard work, Company first, Seniority Workaholics, Desire quality, Question authority Eliminate the task, Self reliant Want structure & direction, Skeptical What’s next, Multitasking, Tenacity, Entrepreneurial Work Is:An obligationAn exciting adventure A difficult challenge, A contract A means to an end Leadership StyleDirective, Command & control QualityEveryone is the same, Challenge others, Ask why Remains to be seen CommunicationFormal memoIn personDirect, Immediate , Voic

CHANGES IN THE LABOR MARKET WORKPLACE CHARACTERISTIC VETERANS BABY BOOMERS GENERATION X GENERATION Y Rewards & Feedback No news is good news. Satisfaction in a job well done Money. Title. Recognition. Give me something to put on the wall Sorry to interrupt but how am I doing? Freedom best reward Whenever I want it. Meaningful work Motivated ByBeing respectedBeing valued and needed Freedom and removal of rules Working with other bright people Work/Life BalanceKeep them separate No balance ‘Live to work’ Balance ‘Work to Live’ Balance – It’s 5pm - I’ve got another gig Technology is:Hoover DamThe microwaveWhat you can hold in your hand, PDA, cell Ethereal – intangible

EMPLOYEE ENGAGEMENT

WHAT IS EMPLOYEE ENGAGEMENT? “The extent to which employees commit to something or someone in their organization, how hard they work, and how long they stay as a result of that commitment.”* CLC research demonstrates that increased discretionary effort is a direct prediction of improved performance CLC survey of 50,000 employees found: Engaged employees perform 20% better 87% less likely to leave the organization 1 in 10 employees are fully disengaged No high-engagement or low-engagement groups Engagement levels determined by company strategies and policies Emotional engagement is 4 times more valuable than rational engagement *Defined by Corporate Leadership Council

20 MOST EFFECTIVE LEVERS OF EFFORTMANAGER IMPACT 1.Connection Between Work & Organization Strategy 2.Importance of Job to organization Success 3.Understanding of How to Complete Work Projects 4.Internal Communication 5.Demonstrates Strong Commitment to DiversityYes 6.Demonstrates Honesty & IntegrityYes 7.Reputation of Integrity 8.Adapts to Changing EnvironmentsYes 9.Clearly Articulates Organizational GoalsYes 10Possesses Job SkillsYes MOST EFFECTIVE LEVERS OF DISCRETIONARY EFFORT

20 MOST EFFECTIVE LEVERS OF EFFORTMANAGER IMPACT 11.Sets Realistic Performance ExpectationsYes 12.Puts the Right People in the Right Roles at the Right TimeYes 13.Helps Find Solutions to ProblemsYes 14.Breaks Down Projects into Manageable ComponentsYes 15.Accepts responsibility for successes & failuresYes 16.Encourages & Manages InnovationYes 17.Accurately Evaluates Employee PotentialYes 18.Respects Employees as IndividualsYes 19.Demonstrates Passion to SucceedYes 20.Cares About EmployeesYes

MAXIMUM IMPACT ON DISCRETIONARY EFFORT Change in Discretionary Effort EMOTIONAL RATIONAL Source: CLC Employee Survey The impact of rational commitment is much smaller

DRIVING BREAKTHROUGH PERFORMANCE IN THE NEW WORK ENVIRONMENT

EXECUTIVE EXPECTATIONS Percentage of Executives Source: Business Barometer Quarterly Report, CEB Finance Leadership Council, Q3 2012

PERCENTAGE OF EMPLOYEES EXPERIENCING AN INCREASE IN WORKLOAD IN THE PAST 3 YEARS Percentage of Employees Source: CEB, CLC, HR High Performance Survey, 2012

Understand the most important changes taking place in the new work environment and the implications for employee performance and productivity Identify the necessary new skills and competencies for employees to be productive and determine how best to quickly build them across the workforce, and Adjust management approaches and target technology investments to better enable high performance TO ACHIEVE PROFITABLE GROWTH

Frequent Organizational Change – more and frequent – greater financial uncertainty – organizational downsizing Interdependent Work – cross-function or departmental work groups – matrix reporting relationships – Geographically dispersed workforce – Team-based work Knowledge Work – New information technology – More non routine work – Greater information availability UNDERSTAND THE NEW WORK ENVIRONMENT

HIGH PERFORMER CHARACTERISTICSNEW COMPETENCIES – DRIVERS OF PERFORMANCE Adapt to ChangeOrganizational Awareness (3) Self-Awareness (5) Proactivity (6) Learning Agility (9) Work CollaborativelyTeamwork (2) Influence (7) Technical Expertise (10) Apply JudgmentPrioritization (1) Problem Solving (4) Decision Making (8) NEW COMPETENCIES: DRIVERS OF PERFORMANCE Source: CEB - High Performance Survey

Target Technology Investments to the Evolving Needs of Knowledge Workers & Collaborative teams Build back from employee needs, not just broad business needs Identify and use early adopters to redefine technology needs Fix data accessibility and usability Create collaboration platforms to make immediate, in- the-moment interactions easy Provide a wider array of analytic application TECHNOLOGY INVESTMENTS

EMPLOYEE PERFORMANCE SCORES CANNOT PREDICT BUSINESS UNIT PERFORMANCE Source: CEB, CLC, HR High Performance Survey, 2012 Business Unit-Specific Average Employee Performance Score Business Unit Performance Against Profit Goals

MODEL OF HIGH PERFORMANCE Individual Task Performance An employee’s effectiveness at achieving his / her individual tasks and assignments + Network Performance An employee’s effectiveness at improving other’s performance and using other’s contributions to improve his or her own performance Enterprise Contribution An employee’s effectiveness at his / her individual tasks, contribution to others’ performance, and use of others’ contributions to improve his / her own performance Business Unit Outcomes Profit Revenue =

THE ENTIRE WORKFORCE MUST DISPLAY ENTERPRISE CONTRIBUTION Source: CEB, CLC, HR High Performance Survey, 2012 Percentage of Employees Percentile Change in Profit High Individual Task and Network Performance (High Enterprise Contribution) High Individual Task Performance Alone

FOUR IMPLICATIONS FOR COMPETENCY MODEL DESIGN Prioritizes Tasks: Prioritizes activities to fulfill job description and manager directs work Builds Connections: Increases the number of, and maintains strong, personal relationships Knows Formal Organization: Understands business basics and the formal structure and mechanics of the organization Receptive to Change: Displays openness and willingness to change behavior in response to new situations From:To: Prioritizes Contributions: Prioritizes activities based on organizational goals and self-directs work Understands Peers’ Motivations: Coordinates one’s work and performance with that of others to achieve mutual outcomes Understands Organizational Context: Understands the informal structures and decision-making processes of the organization Initiates Change: Identifies problems or opportunities for changes and implements solutions when appropriate Prioritization Teamwork Organizational Awareness Problem Solving

TO DRIVE BREAKTHROUGH PERFORMANCE IN THE NEW WORK ENVIRONMENT Design jobs and roles that provide: – Clear guidelines for network responsibilities, not just individual responsibilities – Boost manager effectiveness at facilitating and advising not filtering – Design roles to facilitate critical relationships, not tasks

Improve Critical Competencies: – Update competency models to reflect fundamental changes in how employees’ prioritize their contributions, work with others, understand the organization and initiate change – Tailor core competency models for critical employee segments – Incorporate customer input to improve the relevance and impact of competency models – Consider the needs of specific business lines and customize the relative importance of behaviors for each specific group TO DRIVE BREAKTHROUGH PERFORMANCE IN THE NEW WORK ENVIRONMENT

Performance Management Systems – Update current performance management approaches to better align with changes in the nature of work – Orient talent investments toward improving individual task and network performance – Focus on shifting all employees, not just a handful of ‘A-players’ to higher enterprise contribution to achieve breakthrough performance

QUESTIONS?