Performance Management Our journey

What got us here…won’t get us there

New Bold Growth Goal Has Implications 3 “Build muscle” and “Get fit to compete” Address structure, capabilities and cultural gaps Highly engaged, high performance, accountability-driven culture Stronger leadership and new talent Improve our Organization Health! $25 to $30 Billion Growth Company?

Annual Process…. Provide feedback and review performance quarterly Assess previous year performance Set current year goals Create current year IDP Deliver previous year performance and reward Update Career Profile Provide feedback and review performance quarterly Q4Q1 Q2Q3

Rating Scale and Competencies Outstanding 5 More Than Fully Contributing 4 Fully Contributing 3 Needs Some Improvement 2 Needs Significant Improvement 1

Progress on Performance Management

Accountability by Performance Rating

Upgrading Talent Initiative Continuously upgrading talent, performance, and capabilities Identifying and managing bottom 10% performers Identifying and retaining top talent Developing and challenging existing talent Acquiring “best in industry” talent Upgrading Talent Initiative We will do it the Land O’Lakes Way

Business Goals: Double revenue and more than double earnings Best Talent Survey Results: Poor performance is tolerated here Top Talent to sustain continuous, rapid Business Growth Culture Shift Continuous Workforce Planning Acquire and Retain Top Talent Aggressively Manage Top Performers and Bottom 10% of Workforce on an Annual Basis Identify Critical Rotational Roles/Career Paths Identify and Manage Blockers Identify Skillset Needs and Close Skillset Gaps – Acquire/Develop Improved Coaching and Feedback Skills for Leaders TalentLinkBest Talent SurveyUpgrading Talent Upgrading Talent – Our Journey

Every employee needs to be continually raising the bar on their own performance Similar performance rated a as “fully contributing” last year might not be rated as “fully contributing” this year Employees need to keep their skills current and fresh For current job In anticipation of future needs Employees will be rotated more deliberately through key jobs Employees should be planning their next developmental opportunity Not become complacent Employee’s Role

Message appropriately/courageously, balanced feedback with no surprises Identify, retain and challenge top talent Aggressively manage bottom 10% of performers – if in bottom 10% 2 years in a row immediate action is required (PIP or separation) Develop plan to develop/acquire necessary talent Identify rotational roles and remove blockers Manage Talent Develop Talent Add Talent Leader’s Role

We’ve followed the same Performance Management process for years. In 2015, we asked a simple question…why?

Pre 2015 Q1 – “the Super Bowl of HR” Reviews Merit Calibrations Goals HR DrivenEvent based Common rating scale (1-5)Common competencies SuccessFactorsIDPs mandated Mandatory GoalsCompliance focus

Late 2014 New Talent Management team Significant Performance Management changes making the news “Everyone hates reviews”, “let’s throw out ratings!” Engaged CEB for a Talent Management maturity functional diagnostic What’s important to us? How mature are we? We have an opportunity to improve

Benchmarks Our Talent Management steering team held a series of off-sites CEB Bersin by Deloitte

Our findings We concentrate more on the “what” than the “how” Building talent is a secondary priority for leaders We needed a comprehensive Talent strategy We aren’t as mature as we want to be

Why we still need Performance Ratings Managers need as guide for providing effective feedback on performance Enables clarity for Employees on performance expectations Supports Pay for Performance approach Consistent view of talent across the enterprise Provides targeted insights around the POV of top talent

Our 2018 Performance Management vision Everyday Performance Management Quarterly Conversation Guides Re-vamped Coaching training Better Talent Metrics Shift from distributions focus ‘Voice’ of Hi Potentials Increase Manager Accountability Business drives & HR Supports Posting BTLI scores

Items we’re discussing… Creating a culture of frequent feedback Needed before removing ratings would be considered Leaders with a Talent Mindset Talent is a top priority all year long Agile Performance Management Shorter cycles, quicker adjustments, faster action True “Pay for Performance” Compensation that drives behavior Further Transparency High Potential talent Best Talent Leader Scores

Thank You