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March 2010

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Welcome to this edition of our regular monthly Business Performance newsletter. And we extend an especially warm welcome for our new subscribers. We are very pleased to see that markets worldwide continue their upward trend, excepting trouble spots in some countries. We may not be in the clear as yet as the restructure of governance and regulatory systems is far from complete. Some analysts predict that we have not yet seen the worst. Is your organization prepared to meet any new downturn in the economy? Do you have the systems, processes and people in place to manage the risk effectively?

This month, we update you on a couple of recent research studies on factors impacting organizational performance. We also bring you answers to some common questions that we receive. And for you, our readers, we have a special offer on our popular managing change guide and workbook. We trust you enjoy this month’s newsletter.

Industry News in Brief

Roffey Park’s latest research report shows that organizations that focus solely on cutting costs damage their ability to change in this volatile business environment. On the other hand, companies that pay attention to customers, quality and efficiency of resource use are better able to adapt to a changing market. The study finds a definite link between financial performance and approach to strategy, capability development and relationships. Among the telling findings are the following survey results:

  • 49% of best performing organizations invest in sustainability (25% for underperformers)
  • 45% of best performing organizations focus on core business (56% for underperformers)
  • 49% of best performing organizations work in partnerships (30% for underperformers)
  • 49% of best performing organizations invest in leadership development (23% for underperformers)
  • 62% of best performing organizations are very successful at delivering their strategic plan (7% for underperformers)
Read more

Managing Change in the Workplace Because managing change successfully is so important for your business to remain competitive now and in the future, we are offering a special deal this month for you, our valued newsletter reader. See below to get your special pricing on our popular change management guide and workbook. For a limited time only.

The recent Enterprise Connect study of management practices reveals some important findings on the links between the quality of management and business performance. The research was part of an international study conducted by the London School of Economics, Stanford University and McKinsey & Co. Amongst its key findings were:

A single point increase in management score is associated with an increase:

  • in sales of 13%
  • in output equivalent to a 56% increase in the labor force
  • in output equivalent to a 44% increase in invested capital
In the area of creativity, the highest scoring firms were found to be about 50 times more innovative than the lowest scoring companies. The study also highlighted the importance of skilling up managers and the rest of the workforce in remaining competitive. It found that:
  • 64% of managers in the highest scoring firms are university educated (only 3% in lowest scoring firms
  • 20% of non-management employees in the highest scoring firms are university educated (only 1% in lowest scoring firms)
Considering the dramatic increase in international competitiveness, the study concluded that companies need to invest in building their management capability and in retaining and developing their internal talent.

Read the full report or join the discussion on our Facebook Fan Page.

Succession Planner software For a simple yet highly functional talent management tool for managing the potential leaders in your organization, check out our Succession Planner.

Follow Business Performance Pty Ltd on TwitterKeep up with the latest news by following us on Twitter and Business Performance Pty Ltd fan on Facebookbecoming a Business Performance fan on Facebook. As an added bonus, you'll be getting our daily online management tips.

Should we pay employees based on their performance?

Q Our company uses very formal methods of communicating with employees. What are the disadvantages of using such formal methods and what other methods could we adopt?

A Systems that pay according to the outcomes of an employee’s tasks are referred to as “performance-based pay”. You will need to put in a good amount of thinking before you adopt this kind of pay model. More generally, what pay system will work best in any given organization will depend on its history, culture, employee tasks and management preferences, to name but a few variables. There is no one single answer to the question of which pay system works best in an organization.

Although “performance-based pay” has prima facie plausibility, it works well in but a limited number of situations. Such systems have come in for a lot of critical scrutiny of late. These are the main points offered by its critics:
  1. Performance-based pay rests on an inaccurate view of what motivates employees. Managers are mainly motivated by challenge, interesting work and respect from peers. Most managers, on the other hand, believe that it’s different for their reports; that mere employees are motivated principally by money.

  2. Financial incentives can actually lower performance where creativity and judgment are required by diverting an employee’s focus off the task at hand. Monetary rewards work in limited situations where the task steps are clearly defined and the job is rule-based.

  3. Most problems in organizations are caused by systemic deficiencies. Focusing on individual motivations diverts much needed attention away from fixing problems with the system.

  4. Organizational effectiveness these days depends more and more on the collaboration of people within and between organizational units. Improving how people operate in teams is more effective than focusing on the performance of individuals.
Traditionally, the quality movement has been a main critic of individual performance-based pay. Refer to the works of W. Edwards Deming in particular. More recently, Jeffrey Pfeffer has had a lot to say about the ineffectiveness of financial rewards. Tread carefully and review the literature before making changes that you may live to regret.

Click here to find out more about employee performance management

How do we improve interactivity in our training programs?

Q How can we improve the interactivity of our project management systems training? The objective is to familiarize employees with the system. However, without proper computer training facilities and a shortage of laptops, we can only demonstrate the system. Time is also a factor. The three hour time limit only just gives us enough time to cover the content we are mandated to cover.

A Let’s start with the objective of the session. If your objective really is to “familiarize employees”, then perhaps your objective is already being met. You can give employees some familiarity simply by showing them some pictures pertaining to the system. If you simply want them to be familiar with it, then you may even be able to cut the session time from three hours to less than one hour.

Think seriously about the real learning objective for your session. What is that your clients want the participants to be able to do with the system once they get back to their jobs? Do they want the participants simply to be able to name system components (cognitive objective), or do they want them to be able to construct a project schedule, calculate task dependencies, and so on (behavioral objectives).

Get the learning objectives clear first and the why and how of interaction will follow more naturally. The point here is that introducing interaction simply because we have always heard that interaction is good may make your training less effective, not more. To begin with, using interactive exercises merely for the sake of having some interaction may come across to your participants as patronizing.

For much of training, some form of interaction with participants is essential. However, the type and frequency of interaction employed needs to be relevant to the learning objectives and the subject matter. One way that interaction promotes learning is by allowing feedback. The participant tries something and the system lets them know directly whether they were successful. Imagine trying to teach someone how to ride a bicycle without a bicycle, or learn to play the piano without a piano.

If you want to teach people how to use software, then they will need to interact with the software during the learning process. This really is a non-negotiable aspect of your training design –unless you just want them to be “familiar” with it. So, if you want them to be able to do things with the software and you don’t have access to a computer lab or laptops, here are three suggestions:
  • Find a room in which to set up one computer with running software or access to the network. If your class is small enough, get your class to congregate around the one computer and have the participants take turns at accomplishing set tasks. If you have access to one or two more computers, break the participants up into groups to take turns in completing exercises.

  • Set the class a pre-session exercise that they complete on the job. During the class, get your participants to discuss how they completed the exercise, problems they encountered and hints and tricks. Make sure you send out whatever instructions the participants need to complete the exercise before you assemble for the class. Repeat this process weekly.

  • Create a set of on-the-job aids. These could include a keyboard shortcuts card, macros, quick start guides, templates and forms, and online help. Assemble the class weekly for one half hour at a time to review one task and to share tips and tricks.

The first suggestion necessitates you cutting some content from the session to make way for the practical exercises. If your client objects to the cutting of content, impress on them how including interactive exercises leads to more beneficial outcomes overall. You can incorporate learner assessments or follow up surveys to demonstrate your point. The last two suggestions, on the other hand, use less continuous class time and capitalize on the advantages of pacing the sessions for easier learning.

To find out more about how to write powerful learning objectives, get our practical guide, Writing Learning Outcomes

Special Offer for Our Readers

Managing change in these turbulent economic times is not easy. To help you lead your change initiatives to success, we are offering our valued subscribers 20% off the price of our change management guide, Managing Change in the Workplace. That’s a low US $40 for the complete guide and reusable workbook. You will need to hurry. This special offer only lasts till 31st March.

Click this special buy now link now to receive your 20% discount. Remember, our secure shopping cart now accepts 15 national currencies. And you can download your ebook immediately upon confirmation of your payment.

Managing Change in the Workplace: A Practical GuideOur Managing Change in the Workplace: A Practical Guide is intended for everyone expected to lead, manage and implement change. It covers every aspect of managing change, including essential principles, managing stakeholders, dealing with resisters and much more. As you work through the guide, you will complete a series of practical exercises that will help you plan and manage your change for maximum impact. On your journey, you will be treated to a variety of tools, techniques and tips for ensuring that your change lasts. The guide is packaged with a separate reusable workbook that you can use time and time again. To find out more, visit the Guide’s product page

“… a gift to executives, leaders, managers and supervisors who want to initiate a change process in their organizations”
  –Dr. Maree Harris, PhD., Director, People Empowered

“We are delighted with this programme”
  –Margy Jackman, Synergy Seminars

“… the best resource I have found anywhere to help me do my work”
  –Cindy Emmanuel McLean, Caribbean Centre for Development Administration

“… a solid, practical guide from beginning to middle to end”
  –Lisa Rosendahl, HR Director, SPHR

Visit our website at www.businessperform.com for lots of expert guidance and practical tools designed to help you get ahead of your competition. Also, be sure to pass this newsletter on to friends and colleagues who want to stay up with what’s on. From all of us here on the Business Performance team, we wish you a productive month and look forward to communicating with you again soon.


In This Issue
Industry News in Brief

Should we pay employees based on their performance?

How do we improve interactivity in our training programs?

Special Offer for Our Readers
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