Achievement & Development Process (ADP)

Outcomes of Session Understand your role in a Performance Management Process Understand the four elements of the Achievement and Development Process - Goal Alignment - Continuous Feedback - Summary Discussion - Human Resource Review

Why have a Performance Management Process? Clear Expectations of the Individual Aligned Goals Clear Performance Understanding Career Development Plan Plan for Individual Improvement in the position Evaluate Corporate Resources (individuals) Individual Income Management Manage individual Expectations Open two-way Communication

Performance Management Components Achievement & Development Process Balanced Measures Training & Development Performance Management Career Development Staffing Strategy Compensation Strategy

Achievement and Development Process Elements of ADP Achievement and Development Process Goal Alignment Continuous Feedback Summary Discussion Human Resource Review SUCCESS

Goal A desired result that increases customer satisfaction and/or improves processes to attain business objectives; A desired result that contributes to employee growth and development

What is Goal Alignment? Process used at all levels of the organization for setting goals that are consistent with and supportive of with the goals of: the next level up and down - Vertical key customers - External key partners within the company - Horizontal

Goals/COTs - Definition Business Goals: macro, high level, business results/objectives; there can also be higher level business unit/process area goals Individual Goals: Your business unit/process area objectives that support the Business Goals. Critical Operating Tasks: specific actions key to the achievement or in support of corporate or business/process area goals

ADP Goals/COTs drive... Individual / team accountability for achievement of results – performance “pay for performance” compensation through merit increases and incentive pay

Goal Setting/COT Alignment Process Goal Setting/ Alignment Review and update during year Review higher level goals “How do we/ should we contribute?” Our Goals Determine team and individual work Develop COTs “Are goals/COTs aligned?” “Do goals/ COTs meet criteria and guidelines?” Develop action plans for goals begin

Constructing A Goal/COT Statement Answers the question: “What am I/are we committed to achieve?” Begins with a concrete, action word Focuses on what is to be achieved and when, not how it is to be accomplished Is objective, clear and concise Is specific with timing

Effective Goal/COT Development Checklist Specific...describes end results Meaningful...contribute to accomplishment of business goals Aligned with other goals...linked with higher level goals & goals across organization/between functions Realistic and attainable...a manageable number within your control Timing and measurable..include a deadline Balanced...include process improvement & end result achievement; team and individual results

Vertical Goal Alignment Example Corporate Goal Achieve sales of “X” dollars for (year) Business Unit Goal Achieve sales of “Y” dollars during (year) Western Region Goal Gain additional market share by July, (year)as follows: Missouri: 40% Texas: 42% Sales Representative COT Identify 10 new target accounts and convert at least 5 by (year)

Horizontal Goal/COT Alignment Example Western Region Goal Gain additional market share by July, (year) as follows: Missouri: 40% Texas: 42% Establish production schedules for (yr.) and beyond to support new business with no loss of efficiency levels within the plant Plant Production Identify 10 new target accounts and convert at least 5 by June, (yr.) Sales Representative

Achievement and Development Process Elements of ADP Achievement and Development Process Goal Alignment Continuous Feedback Summary Discussion Human Resource Review

Continuous Feedback Review What is Continuous Feedback? Leader’s role Continuous Feedback Process feedback sources feedback topics soliciting feedback good feedback development planning

What is Continuous Feedback? Process for individuals and teams to collect feedback from managers, peers, co-workers, customers, and suppliers to assess performance against goals, customer satisfaction, and developmental needs Feedback is continuous and collected on an on-going basis via informal and formal means Feedback should capture both the “what” and “how” what was achieved how was it accomplished

Benefits Of Continuous Feedback Allows employees to collect specific, actionable information directly from individuals with whom they work most closely. This information can be used to improve: individual performance work processes relationships with others

Continuous Feedback Process Identify feedback sources Evaluate Progress Solicit feedback Develop and Implement Action Plan Document & interpret feedback Prepare & Lead ADP summary discussion with leader

A Feedback Source is someone who... Identify feedback sources A Feedback Source is someone who... you work with on a regular basis can provide information about how your work is going is familiar with your goals/COTs and achievement toward them

Possible Feedback Sources Identify feedback sources Possible Feedback Sources Your feedback sources should include: yourself your leader peers & colleagues team members cross-process team members internal and external customers/suppliers

Feedback Topics Progress on goals/COTs Solicit feedback Feedback Topics Progress on goals/COTs Meeting your customer’s needs & expectations Interpersonal skills Work habits Quality of work Leadership characteristics and job competencies

Formal Surveys Two versions: leader (also two versions; cost) Solicit feedback Formal Surveys Two versions: leader (also two versions; cost) individual contributor (no cost) Available electronically via HR Online

Document & interpret feedback Good Feedback Is informal and ongoing Relies on combination of sources and methods used to collect it Comes from asking open questions Depends on active listening Is specific, based on examples, and actionable Develops over time Usable for improvement

Receiving Feedback Listen attentively Remain calm, objective, and open-minded View all information as potentially useful Ask for specific examples Avoid rejecting, defending, or justifying Paraphrase or summarize to clarify understanding View it as a challenge & opportunity for development Thank the person for the input Give the feedback time to digest

Giving Feedback Begin by using the word “I”. State your Feelings Describe the Behavior in specific terms Be prepared to give Examples Give the Reasons for your feelings Explain What you would like the other person to do Ask for Agreement

Competencies Categories of behaviors key to roles performed at OC Solicit feedback Competencies Categories of behaviors key to roles performed at OC Typically used during interview process Examples: communication teamwork problem solving customer focus Use these in soliciting feedback and to outline strengths & areas for development

Achievement and Development Process Elements of ADP Achievement and Development Process Human Resource Review Goal Alignment Continuous Feedback Summary Discussion

What is a Summary Discussion? Leader and employee have a discussion on the following: performance against goals summary of feedback collected, how those learnings were applied strength/development area identification career growth (short and long term) development needs and plan Formal documentation once per year (based on reviews during the year)

Characteristics Leader and employee both prepare and discuss Leader acts as coach Each business determines the timeframe Focuses on achievements and development Forward looking new goals/COTs for the year development needs & career objectives Leader and employee share feedback

Preparation Summarize overall performance & achievements against goals/COTs feedback received Identify: strengths & developmental areas Tie to Competencies career planning (short & longer term) development needs/actions possible new goals/COTs Use common electronic format for summary discussion

Goal/COT Alignment

Competencies Leadership Characteristics Job Competencies Supporting Tools: Leadership Characteristics 10 Characteristics that have been identified by the Sr. Leadership Team Job Competencies Also known as Targeted Selection interview dimensions Competencies by Function Provides selected Characteristics and Competencies that should be reviewed for employees in specific functions.

Position Description The ASM is responsible for development and implementation of a territory business plan defining distribution, product, pricing and promotional strategies (including System Thinking concepts and processes) for designated retailers and distributors of Owens Corning building material and composite products. This position drives the generation of sales growth for the Roofing, Insulation, Composites and Exterior Systems Business Units within the assigned area which may have approximately $8-$10 million in annual sales volume. Strategies include account conversions, product upgrades, new product introductions and effective use of internal and external sales support resources to build customer partnerships. The ASM works with product and sales teams including a customer service support team for the region. The ASM manages local pricing to build profitable businesses across multiple product lines. Building customer relationships is key to delivering outcomes, along with working through a variety of markets and channels of distribution. The product mix includes glass, insulation, roofing, foam, siding, and windows. The markets and channels of distribution include one and two step distributors; buying co-ops, retail store chains, and national accounts. Performance requirements include achievement of sales commitments by business unit; emphasis on profitable product mix; focus on the customer’s customer; and management of expenses within a budget. Key competencies include tenacity, problem solving, risk taking persuasiveness, responsiveness, independence, customer focus, work standards, teamwork, and communication skills.

Leadership Characteristics Catalyst for Change Good Listener Communicates Openly and Seeks Information Creates Teamwork Climate Seeks Personal Growth Personal Confidence Personal Integrity Encourages Individual Dignity Sense of Urgency Sense of Humor

Competencies

Leader’s Role Initiates process and schedules final review Preparing for discussion as employee does Responsible for seeing that all elements are covered Provide own feedback Reality check on performance results, strengths/development areas, career objectives & development plans Coach employee Ensure Summary Discussion Form is documented and signed

How does my evaluation affect my pay? Performance evaluation is one tool that is used in determining an employee’s merit pay. Focus on past year performance, multiple input from multiple levels Overall achievement Look at contributions to assignments; were improvements made or were processes done more efficiently Other items include: Current salary in relation to market value and band ranges Amount of time since last increase Allocated salary budget

The Bands 2 3 4 5 6 7 8 Officers Senior Leadership Leadership Managers, Senior Individual Contributors 3 Supervisors, Professional, Analysts $120,000 to $520,000 4 $90,000 to $300,000 5 $65,000 to $175,000 Technical 6 Owens Corning uses eight bands to encompass all of its job classifications, from administrative employees to officers of the Company. As you can see, there is a broad range of pay for each of the bands, and the bands overlap each other. This provides flexibility in many ways - for example, it reduces the risk that an employee will see a decrease in pay for making a career change. $50,000 to $140,000 Administrative 7 $30,000 to $100,000 8 $20,000 to $70,000 $15,000 to $55,000

Compensation Goals Reward fairly for your contribution to Owens Corning’s success Provide a competitive compensation package Align compensation with individual and Company performance Provide flexibility for both the Company and you Owens Corning’s goals for our compensation program are based on our total compensation philosophy: Reward fairly for your contribution to the Company’s success; Provide compensation that’s competitive with the external marketplace; Make sure your compensation lines up with your individual performance and the Company’s performance; and Provide flexibility for both the Company and you. You’ll see some examples of how this works later.

Major Surveys Used to determine market values Organizational Resource Counselors (700 companies) Hay PayNet - Next generation of Hay survey data (500 companies) Owens Corning uses compensation data from major surveys to set market values for its jobs. For the United States, we use surveys from two highly reliable organizations, Organizational Resource Counselors, which compiles compensation data on about 700 companies in the US, and Hay Group PayNet, which surveys about 500 companies. Both of these survey instruments allow us to access data on comparable, “peer group” jobs. For positions that are highly specialized, the Company may use other survey data. Both allow for peer group specification Other surveys may be used for specialized positions

Determining Merit Pay Focus on performance, achievements, feedback Look at contributions to assignment Consider current salary in relation to market value and band ranges of assignment Consider amount and date of last increase Administered within salary budget Let’s take a look at how salaries are administered, beginning with how merit pay is determined. As we mentioned previously, your individual salary depends on more than just the market value of your job. It also depends on your performance achievements and feedback about you. Owens Corning also looks at your individual contributions to your assignment, your current salary level, the amount and date of your last pay increase, and the Company’s annual salary budget.

Achievement and Development Process Elements of ADP Achievement and Development Process Goal Alignment Continuous Feedback Summary Discussion Human Resource Review

What is an Human Resource Review (HRR)? Process in which leaders of the company meet to discuss various HR strategies Follows Achievement and Development Summary discussions Among leaders of a particular organization (NLT’s) Facilitated by Human Resources Representative

HRR Focus Human resource implications of business strategy Potential organizational structure changes Needs of selected employees Potential job movements Training & development needs Succession planning Diversity opportunities Inventory of organizational skills Recruiting needs

HRR Outputs Plans for job movements, succession planning, recruiting Development needs Feedback to Training and Development organizations Shortfalls in structure, skills, training, and manpower

Key Leader Staffing Process Identify Open Position Review interview data and determine if offer will be extended* *Selection of non-Succession Plan participant must be validated by Senior VP of HR Outline Job Specifications Responsibility: HR Leader Staffing Leader Sourcing Procedure: - JOBB Posting - Internal review of key succession plan information - External Search as necessary - Executive Team communication and nomination - Diversity nomination - HR Leadership Team Review Responsibility: Staffing Leader Candidate Finalization Review sourcing comparison data and determine candidate interview pool. (Provide status update to Hiring Manager and HR Leadership team.) Responsibility: HR Leader Conduct Interview Panel consists of: Organization Senior Leader Hiring Manager HR Leader Staffing Leader Others as necessary Responsibility: HR Leader

Questions? TM

Career Management ACTIVITY: Ask the group to identify their objectives for this training session and record them

Career Management What is Career Management? Your role in Career Management Your leader’s role in Career Management What tools and/or experiences are available for career management?

Career Management Defining your career objectives, understanding your current performance, capabilities, aptitudes and then developing a plan to match your expectations.

Your Role in Career Management You “own” this journey..only you can make the final decision about what to do or NOT to do Consider: Your contribution in current assignment Your strengths and areas for development Your short and long-range career objectives Your developmental needs Your potential to do other things

Your Role in Career Management Select Tools to help define career objectives that include: Interests Motivation Inventory of current capabilities (self) Professional expectations Personal expectations What do you want to do?

Your Leader’s Role Jointly determine what success is in your current assignment Provide ongoing feedback about your performance Ensure that career discussions occur Provide a logical framework for review Understand what resources are available to assist employees in this area Understand career alternatives in OC Be honest and direct regarding expectations Your Leader’s role in Career Managment

What tools are available? Achievement & Development Process Personal Development Plan Career Coaching Guidelines for Employees and Leaders Education/Information on: organization roles/jobs requirements skills experiences competencies Mentor

Key Steps Self - Assessment regarding interests Gather information regarding opportunites Explore and network Engage leader an mentor Develop action plan Get in the game Your Leader’s role in Career Managment

Mentoring Process

What is the Mentoring Process? Mentoring helps employees develop and become a successful member of the team faster. Mentoring helps transfer knowledge between seasoned employees and newer employees.

The Mentoring Process - Overview Mentor-Mentee Pairing Potential Mentor Identification Mentoring ID Potential Mentors Assign Mentor to Employee Mentee Initiates Mentoring Session Provide Mentor with Information Mentee Meets with Mentors Conduct Mentoring Session Maintain Mentor Biographies Mentee and Mentor Agree to Relationship Follow Up as Necessary Evaluate & Improve the Mentoring Process

Potential Mentor Identification A positive role model of the company’s values and practices Knowledgeable about organizational goals, policies, programs, and opportunities Aware of the culture, trends, networks, and information resources within the organization

Potential Mentor Identification Regarded as successful in their job Skilled in setting goals, coaching, providing feedback Strong in listening, communication, and problem solving Committed to the process and effort

Mentor-Mentee Pairing For new hires or transferred employees Based on similarity and diversity of backgrounds and/or interests, willingness to mentor new hires, etc. Meet to define relationship The mentee can establish a relationship with a different mentor

Mentoring Process - Roles and Responsibilities Mentors Set realistic expectations Make themselves available Maintain consistent contact Identify areas for personal development Share business contacts

Mentoring Process - Roles and Responsibilities Mentees Initiate contact with mentor / plan meetings Set goals for self Open to feedback -- accept information without interpreting it as evaluation Be candid about needs and deficiencies Follow through on commitments/ seek help

Mentoring Process - Roles and Responsibilities Mentees Willing to discuss failures as well as successes Do what is appropriate to build a strong relationship Utilize resources provided for career growth

BUILDING SUCCESS IN A MENTORING RELATIONSHIP Respect each other’s ideas & experiences Realize ownership of the process is mutual Seek additional support if necessary Meet / communicate regularly