Managing Employee Productivity A Performance Management System June 2009

1. Thrive Managing Employee Productivity A Performance Management System June 2009

2. The Opportunity • Could I get your interest if I told you that there was a way to save your company 10% of payroll expense with no capital investment, and you could realize the savings on a run-rate basis in less than 6 months?

3. John Shade Bio • Currently a Principal of Certifi Solutions • Served as CDO, CTO, CIO, COO, and General Manager • Have held positions in 8 companies • Worked in Technology, Software and Service Industries • Sold 3 companies, taken a company public, taken a company private In other words, I can’t keep a job

4. Competing Priorities No Funds to Invest Need for Quick Results Typical Work Situation

5. Result • Developed a repeatable process called Thrive that allows us to meet the demands of these situations • Performance management is the core of this process

6. Performance Management • Measurement + Action = Results • Performance Management is applicable to: • Any industry • Any business • Any business function

7. Thrive Activities • Identify throughput and quality measures for each operational job • Collect and publish metrics to evaluate employee and manager performance • Implement a consistent performance management process to address ineffective contributors • Summarize program impact to senior management team

8. Productivity ImprovementReal-World Example – Claims Processing • Average Claims Per Hour Increased by 15% • No Capital Increase, No Process Change • Full Change Made in 6 Months Improved Distribution Original Distribution 1000% To 100% Y1

9. Why Don’t More People Do This? • Denial • Too Hard • Too Expensive • Not Enough Time • Senior Management Not Committed Do I have your interest?

10. What We are Going to Cover Measurement Action Sustaining Results

11. What Makes a Good Measure? • Relevant • Trended • Comparable • “Easy” to Understand

12. What are Meaningful Measures? • Throughput (how much per period of time) • Claims per Hour • Calls per Hour • Growth in Revenue Managed over Time • Quality (how good was each action, activity, or deliverable) • Dollars Paid Correctly • Calls Answered Correctly • Customer Retention

13. The Importance of Trended Data Sample Size is Important It’s obvious many people perform better than average

14. A Sample Dashboard Quality Speed

15. What is the Result? • People get Timely, Relevant Feedback • Performance is Directly Comparable • Emotion is Reduced • Communication is Easier • People will Manage Themselves • Managers can Act

16. Goal Setting is Straightforward It is the same goal every year • Goal for throughput = xx • Goal for quality = yy Improved Distribution OriginalDistribution

17. Results Only Occur when Actions are Taken Measurement + Action = Results Improved Distribution Original Distribution

18. Action (Execution) What is the Secret to Effective Action? • Don’t Think • Sense • Appropriate Response

19. How is Effective S/R Achieved? • Understand what can happen • Design a solution for each likely outcome • Train people to recognize each situation • Rehearse them until response is automatic • Put the practice into Use • Monitor the Adoption

20. Achieving S/R in ManagementBroad Scope Manager Reviews HR Reviews Measurement Concept Training Analysis Detailed Company Specific Materials Monitoring Action Case Studies Executives Employees Managers Coaching Sessions Review Sessions Manager Kick-Off Employee Kick-Off Ongoing Communication

21. What Are the Likely Situations?

22. Getting Consistent Management Behavior • “I called this meeting to review your performance data. As you know we value our employees, and want everyone to succeed. We feel that measuring performance and providing feedback is an important part of getting the best from our team. Unfortunately, your performance over the last xx days has not been satisfactory, and I am informing you that we are entering our performance management process” Guides • Your job as a manager is to notify your employee that their performance is not adequate. You have 4 Objectives for this meeting: • Ensure that the employee understands what will happen if performance does not improve • Ensure that your employee understands that they have to sustain the improvement • Schedule a regular meeting to review the progress your employee is making • Ensure that your employee understands that HR is aware of this, and that they have the option of meeting with HR or your manager if they have any concerns Scripts Training & Rehearsel

23. How Do We Sustain the Gains • Build a Senior Manager Dashboard • Business Case ($$$ Saved) • Compliance by Sub-Organization • Behavioral Compliance • $$$ Saved • Trend View • Ensure that Senior Management Also Acts

24. Performance Management Benefits • Changing the way managers interact with employees creates the following results: • engagement is higher; • employees actually self-manage; • goal setting is simplified; • appraisals become non-emotional; • reduced number of HR claims. • Program is Quick to Implement • Savings are Relatively Easy to Track • Savings Come from the Single Largest Corporate Expense

25. Questions?

26. Certifi Solutions with Support, Not Just Opinions in Reports