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Business Performance Pty Ltd


November 2010

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We sincerely welcome our newest subscribers and our regulars. This year is rapidly drawing to a close. Are you achieving as much as you intended? Now is the time to consolidate your efforts and focus on the projects and outcomes that mean the most to your business before the year closes.

In this issue, we bring you updates on current thinking on employee performance management, the business case for outsourcing your processes and the recent Appreciative Inquiry Forum. Our popular Q & A section returns this month to answer a couple of thorny questions about staff financial incentives and mapping business processes. If you have any questions that you would like answered, send them to us at submissions@businessperform.com We also encourage you to ask questions and contribute your experiences on our Business Performance blog. We trust you will enjoy this edition of our newsletter!

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CIPD Members Rate Performance Management a Failure

Participants at the October 2010 Chartered Institute of Personnel and Development (CIPD) conference expressed disappointment over the failure of current performance management systems to improve business performance. Despite the best of efforts, the points of failure are many. What does the future hold for our efforts in managing employee performance? Read our commentary on the CIPD conference response.

Outsourcing Survey Reveals Poor BPO Performance

The American Society for Quality (ASQ) recently conducted a survey of its members and customers to gauge satisfaction with Business Process Outsourcing (BPO) services. More than half of client companies expressed disappointment with low levels of quality and service delivery. On a positive note, respondents suggested how improvements could be made to improve delivery performance and satisfaction levels. Read our report on the ASQ outsourcing survey.

Appreciative Inquiry Forum Update

The inaugural Appreciative Inquiry (AI) Forum in Australia was held in the tranquil surroundings of The Abbotsford Convent in Melbourne on 6th October 2010. The day's events were facilitated by Sue James and Dayle O'Brien. Sue and Dayle took us on an eventful journey through the Appreciative Inquiry phases of Discover, Dream and Design. A working party has been formed to explore options for future interaction and collaboration. Read our latest update on the Appreciative Inquiry Forum.

Keep up to date with what's happening on our Business Performance blog. Check out some of our other recent blog posts:

How should I set bonus levels for my employees?


Ours is a consulting firm providing various services to pharmaceutical companies. I want to reward those consultants that do a great job. How many billable hours, for example, should a consultant complete to receive a bonus? And what percentage of salary should we give as a bonus?


Building performance measures that (a) motivate employees and (b) appear fair and objective is a difficult task, as many organizations have found out. Some general principles to guide you in designing an effective incentive program are these:

  1. The size of the financial bonus needs to be sufficiently large to act as a motivator. (One credible study suggests a minimum of 6% of current salary.)
  2. The performance criteria need to allow objective measurement of performance.
  3. Each employee's performance level needs to be reviewed and fed back to the employee regularly.
  4. The performance measures need to drive desired behaviors (such as teamwork) and discourage undesired behaviors (such as withholding information).

Looking at your case in particular, I will make the following observations.

Consider whether rewarding only the amount of billable hours will possibly drive counterproductive behaviors. For example, in an effort to increase billable hours, consultants may:

  • aggregate jobs and hours by pushing new jobs into your next billable period
  • allow or encourage scope creep so that project timelines and hours blow out
  • withhold work from peers with more expertise or experience

In effect, with employees using these counterproductive behaviors, project costs will increase and client satisfaction will decrease.

If you do end up using "billable hours" as a performance criterion, you may want to balance it with other key project delivery measures, such as quality, delivery, cost and client satisfaction.

Whatever measures you use, make sure they are objectively verifiable by an independent third person. Measures such as "done to my satisfaction" are too subjective and just won't cut it. Keep uppermost in mind that the granting and withholding of performance bonuses is a highly emotive act for many employees. If not done right, your bonus scheme can actually work to demotivate people.

Remember also that performance feedback needs to be given regularly. I suggest at most fortnightly and possibly weekly. Doing so gives people the opportunity to correct their course along the way. Do not leave it till the end of the year to tell an employee that they did not cut it and won't be getting a bonus. Help your people to succeed and give them every opportunity to develop. In fact, this may be more of a motivator and performance enhancer than the actual financial bonus.

2 Way FeedbackDo you want to find out more about building a feedback culture in your organization? Get Jennifer McCoy's practical guide, 2 Way Feedback, today. This compact e-book is packed with strategies for building trust and creating a high performance culture in your workplace. Used successfully by business owners, team leaders and managers, use it at all levels of your organization. Find out more and download the book from our 2 Way Feedback web page.

"It's short, accessible, full of the 'good-oil' -wise and practical suggestions about feedback and within a solutions focused framework. Great for supervisors and managers and busy people."

Ross Gillespie (Director), CoachCorp Pty Ltd

Which of our many business processes should we map?


Our company is embarking on a process mapping exercise. How can we quickly determine whether a process needs mapping?


In our consulting work, we map a process or create a work instruction in cases where:

  • the task is performed infrequently and employees are prone to forgetting the steps
  • the task is complex and difficult to follow (e.g., setting up a machine)
  • it would be useful for training novices and new hires
  • the process has been prone to failure (e.g., high defect rates)
  • the process involves handover to another organization, department or team

After your teams have made up your list of processes, apply the above rules to filter out low priority processes.

To find out more about managing processes in your organization, check out our informative process improvement articles.

Succession Planning Made Easy

Succession Planner softwareDo you have people in your organization that you want to cultivate into a leadership role but don't know how to manage the process? Or are you looking to provide a career path for your employees but don't know where to start? Our Succession Planner software will help you manage your entire succession planning effort. From initially identifying your succession positions through to analyzing and reporting succession progress, this tool does it all. The familiar Microsoft Excel format gets you up and running as quickly as possible. Find out more and download the free demo version from our Succession Planner web page.

"I wanted to thank you for coming up with this tool. I presented our information to my manager's boss and he liked it so much he has asked me to spearhead this for the rest of our business unit at the corporate office."

Amy Sidney-Banks SPHR, Human Resources/EHS Manager

Visit our web site 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
CIPD Members Rate Performance Management a Failure Outsourcing Survey Reveals Poor BPO Performance Appreciative Inquiry Forum UpdateHow should I set bonus levels for my employees? Which of our many business processes should we map? Succession Planning Made Easy
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