Importance of Effective Communication during Annual Performance & Rewards Cycle

1. Importance of Effective Communication during Annual Cycle NHRDN Webinar May, 2014

2. 2 NHRDN Webinar May 2014 What will we cover today?  Why focus on effective manager communication?  How to prepare managers for important communication?  Impact on engagement  Impact on fairness perception  Q&A

3. 3 NHRDN Webinar May 2014 Why focus on effective manager communication?  Annual Cycle culmination of an year’s hard work for employee  Managers determine ratings & rewards aligned with observations through this tenure  HR invests significantly to create a fair and objective process Yet… Actual conversations leave much to be desired

4. 4 NHRDN Webinar May 2014 Performance Reviews

5. 5 NHRDN Webinar May 2014 Common Pitfalls…  Managers feel nervous &/or unprepared  Insufficient time for the discussion  One Way Dialogue… no employee involvement  Usage of “negative” words  Generalizations  Employee “shut down” before start  Blaming the system

6. 6 NHRDN Webinar May 2014 Poll 1

7. 7 NHRDN Webinar May 2014 Impact on engagement  Employees report dissatisfaction with their performance management programs across organizations  If delivered well  If delivered badly

8. 8 NHRDN Webinar May 2014 Manager Effectiveness 37% 63% Effectiveness of Delivering Feedback Effective Managers Ineffective Managers

10. 10 NHRDN Webinar May 2014 Questions to ponder?  Are trainings focused on “performance management system”?  Do we train managers on “how to deliver performance reviews”?  Does our performance management system focus on developmental plans/ improvement plans?  Do we gather feedback on performance appraisal delivery effectiveness?

11. 11 NHRDN Webinar May 2014 Effective performance review delivery involves…  Scheduling sufficient time…without interruptions  Rehearsing the conversation… anticipating questions  Providing performance review document before starting the meeting  Soliciting employee inputs  Being honest and articulate

12. 12 NHRDN Webinar May 2014 Effective performance review delivery involves…  “Sandwich”: Strengths > Developmental Feedback > Encouragement  Focusing on employee behaviours  Providing specific examples  Offering support and suggestions to improve areas identified  Continuing the dialogue on development plan

13. 13 NHRDN Webinar May 2014 Do your managers…  Avoid difficult questions, referring them to someone else?  Does this make employee feel less valued?  Become defensive if encountered with negative employee reaction?  Prepare them to respond calmly to negative reactions by  Allowing employees to speak openly  Understanding signs of emotional reactions  Remaining calm themselves  Express dissatisfaction with performance management system  Must Own Feedback to maintain their own credibility  Discuss other employee’s ratings or makes comparisons  Instead explain types of behaviours necessary to achieve a rating

14. 14 NHRDN Webinar May 2014 Invest in  Performance feedback communication training  Role Plays  Case studies  Managing adverse situations  Solicit employee feedback on delivery to shape future process/ system enhancements  Development plan focused approach to make improvement “real”

15. 15 NHRDN Webinar May 2014 Rewards Communication

17. 17 NHRDN Webinar May 2014 Positive Pay Perception improves Engagement  Pay perception is determined by fairness attached to their pay decisions  Internal and external equity critical  How are people paid within my organization?  How are people paid outside my organization?

18. 18 NHRDN Webinar May 2014 Pay Perceptions shapes by Pay Communication 62% 38% 0% 20% 40% 60% 80% Pay Communication Pay System Effect on Perceptions of Pay Process Fairness Effect on Perceptions of Pay Process Fairness

19. 19 NHRDN Webinar May 2014 Benchmarking  Compensation information from organization impacts engagement positively  Informal sources negatively effect engagement  Organizational information often inadequate resulting in informal “chatter”

21. 21 NHRDN Webinar May 2014 Questions to ponder?  Do we train managers on “how to communicate pay outcomes”?  Are the managers in our organization “compensation/rewards spokesperson”?  Do we have a mechanism to communicate directly with employees on pay increase information?

22. 22 NHRDN Webinar May 2014 Effective pay decision delivery involves… Preparation  Gathering information about employee- positioning within range, compensation & performance history  Identifying issues that may emerge and preparing responses  Ensuring un-interrupted discussion with key messages rehearsed

23. 23 NHRDN Webinar May 2014 Effective pay decision delivery involves… Communicating  Overall process involved in decision making  Benchmarking process  Factors involved- individual contribution, individual pay positioning, budget  Salary increase guidelines & it’s application for individual  Key performance messages… linkage of pay to Rewards

24. 24 NHRDN Webinar May 2014 Manager Communication • Demonstrating ownership • Understanding rationale of salary guidelines well • Ensuring availability of right level of information prior to planning • Ensuring employee understands rationale of decision • Informing employee’s positioning vs. range • Communicating in time… • Dismissing as someone else’s responsibility • Leaving things to last minute • Skirting the issue… concerns don’t go away by ignoring it • Asking employees what they were expecting… it’s bound to be more! • Committing to increase the salary • Revealing someone else’s pay outcome • Going into discussion without homework

25. 25 NHRDN Webinar May 2014 Invest in  Ensuring managers understand compensation concepts well  Ongoing training  Specific training prior to launch of key programs/ changes in pay approach  Provide toolkit to help communicate  Key messages on budget, process, concepts  Solicit employee feedback on delivery to shape future process/ communication enhancements

26. 26 NHRDN Webinar May 2014 Effective pay decision delivery involves… Communicating  Overall process involved in decision making  Benchmarking process  Factors involved- individual contribution, individual pay positioning, budget  Salary increase guidelines & it’s application for individual  Key performance messages… linkage of pay to Rewards

27. Quality of delivery of Performance Reviews & Pay decisions directly impacts engagement Building quality “delivery skill” amongst our managers critical We owe appropriate feedback & rationale for pay increase to our employees In summary..

Importance of Effective Communication during Annual Performance & Rewards Cycle

National HRD Network

Importance of Effective Communication during Annual Performance & Rewards Cycle