enterprise performance management case study

Today we are the world reference in Small Domestic Equipment, being the number one in various different product categories and in numerous geographic areas, and we aim to be the global benchmark in our Industry . Our purpose is to make daily life simpler and more wonderful for consumers throughout the world, by creating new products and services that meet people’s current needs and anticipate their individual aspirations and desires. I think these aspects of our purpose, as well as our mission to create lasting value by making strong profitability a priority, are something we share with Board International!

The Challenge: Legacy planning and reporting systems creating unnecessary complexity

As with most businesses, Groupe SEB faced challenges in its performance management activities, including raw material price volatility, market and distribution consolidation, the emergence of disruptive business models, and the acceleration of changes within the industry. SEB had dedicated substantial resources to budgeting and forecasting, but its processes were manually intensive, lacked agility, and were not always strategically aligned.

The Group's management reporting system was based on SAP BW. It focused on historical data, lacked simulation capabilities, and did not support users in their budgeting and forecasting processes. The system also suffered from slow response times, poor ergonomics, and did not provide quarterly views of data. In addition, SEB's performance reporting processes were quite rigid, did not feature workflow management, and would often produce irrelevant results. There was a clear need to simplify these processes and introduce more flexibility and relevance, as Philippe highlights:

Our pre-existing reporting system, based on SAP BW, was complex and included a lot of analytical dimensions and axes that were difficult to feed, resulting in a time-consuming process. The tools were designed for experts; therefore our Finance users could not gain autonomy from the IT Department . As we must cope with increasing volumes of data , the previous system hampered flexibility, as well as lacking the planning and forecasting capabilities to control, handle, and properly make the most of our big sets of data. We were suffering from the 'heaviness' of the system and its complexity, which became functional limits and technical shortcomings . The executive committee was starting to complain about the rigidity of our processes: it was time-consuming to calculate our standard costs, make updates related to a change in the volume of our factories, and so on .

Overcoming all these obstacles using the company's legacy systems would require heavy investment and long-running projects which would utilize too many resources. As a result, SEB decided to embark on a new project with the objective of overcoming these challenges in an Enterprise Performance Management (EPM) solution on top of its SAP BW reporting system. The EPM solution would bring agility to the process and encompass the Group's strategic plans , allowing it to apply the Agile approach , as Philippe explains:

For us, the Agile approach was important because we needed to implement a flexible solution . In the traditional approach the quality is so-so; you never meet your budget and you never meet your deadlines. Instead, with the Agile approach, your variables are no longer the calendar or your means but the scope… and you always meet your objectives !

The Selection Process: Searching for one platform to build many applications

The robustness of Groupe SEB’s management schemes, master data, reporting processes, and tools provided the opportunity to confidently introduce a lighter and more flexible Enterprise Performance Management solution; one which was straightforward, user-friendly, intuitive, visual, and would provide more agility, increased speed, and state of the art reporting .

The main business priorities of SEB’s project were:

The Enterprise Performance Management solution had to replace the current BW reports and support decision-making processes by creating plans, budgets, forecasts, and re-forecasts based on monthly, quarterly, yearly, and multi-year visions. On the same EPM platform, Groupe SEB needed to perform simulation and business modeling, related to purchase price, absorption of fixed costs in the plants, and what-if scenarios.

After a review of the market, the decision was made to choose the Board Intelligent Planning Platform. Philippe explains the decision:

Starting from a set of eleven vendors, we compared the Board platform to six EPM solutions on the market and concluded that it is the most complete, powerful, and easy to use product . We wanted to bring value to very specific aspects, enhancing the capabilities of multiple solutions and seamlessly combining them within the same platform .

Finance Agile Smart Tools (FAST): The Board project

The transformational project was given the acronym FAST to represent its purpose. Philippe highlights the desired outcomes:

U sing the power and ergonomics of Board through an Agile approach, the key objectives were to increase flexibility , allow simulation capabilities, and progressively build up a finance toolbox made of smart , dedicated, user-friendly solutions.

The core of the Board project at SEB is represented by the above-mentioned Strategic Orientation solution and is based on the company’s matrix structure, as Philippe explains:

Group SEB simplified org. chart presented at Boardville, May 15, 2018.

We have three main Strategic Business Units (SBUs) – Cookware, Kitchen Electrics, and Home & Personal Care - that are mainly dedicated to Strategic Marketing and Product Development. Their role is to imagine the products of tomorrow and develop them, manufacture them, or buy them from outside the group. These SBUs are regarded as Cost Centers - instead of profit centers - because they sell their products internally to Sales Geographies (Continents, Areas, and Markets) where there is a SEB sales presence organized by product lines or families . These products, in turn, are the responsibility of local teams, who develop them under the supervision of the relevant SBU.

The first level of SEB’s business model is structured across two main axes - Product and Sales Geography - with secondary axes for brands, production sites, marketing, and development.

Strategic Business Planning is built up throughout the entire organization. The process starts with the proposal of a baseline Actual and Budget P&L by the Corporate Function (including aspects such as OpEx and Sales Growth) to help build a five-year plan. The SBUs then draft their own plans to fit with the proposal (such as R&D and product launches).

In the past this strategic plan was managed using spreadsheets, creating an error-prone process. Due to the rigidity of Excel files, the teams across different markets struggled with control and management of OpEx and other measures they received from the previous phases of the planning processes. With Board, we have the possibility to effectively define strong ownership . Now, everybody is responsible for their own expenses, and if you sum up all the numbers and measures, you get the right operating result of the group. It also means Corporate, SBUs, and Continents cannot change the expenses of the different markets.

In particular, if we focus closely on the initial phase of the strategic planning process, we find out that the simulation capabilities of the Board platform are used by Groupe SEB to feed three cubes, by re-processing the data baseline relating to the previous 10 years of historical data. Based on the above-mentioned axes or dimensions of the company (such as Product family, Market, Product Line, or Area), SEB builds up one simulation cube at Corporate level, one at SBU level, and one at Continent level to release a five-year business plan. Philippe continues:

We apply Board's simulation capabilities to the data baseline because – of course – our product categories have changed over the years, and also due to the inclusion of new brands in our portfolio . Therefore, it is important to have a consistent view of the past to plan for the next five years . The corporate function initializes the business modeling process, with specific assumptions regarding the growth of the expenses of the group and the sales goals. Then the SBUs present their R&D pipeline and the products they are about to launch. They also provide their own view of sales and of their business across the different geographies. Finally, the continents take the lead, completing the process by providing the final version of the strategic orientation.

Alongside the Strategic Orientation solution, Groupe SEB has implemented an activity it refers to as Smart Reporting . The business has overcome the previous reporting process’ fragmentation by delivering more than 800 SAP BW reports in Board. Now, every report which has been created, or is going to be created, in SAP (including new ones such as cash-flow forecasting or re-forecasting) is instantly transferred to Board too, and in some cases these reports are created directly in Board.

Within the reporting process of Groupe SEB, a solution the company refers to as the 'Weekly Sales Report' stands out on the Board platform, as Philippe explains:

Thanks to this solution created within the Board environment, we achieve the consolidation of the Weekly Sales Estimates of all our 150 subsidiaries around the world. Every week, each subsidiary provides the management team with sales forecasts for the current and the coming months (up to 6-12 months). These reports show either one figure, or they are broken down into two figures (e.g., by brand and distribution channel, depending on the specific topic we want to follow up). We also aim to progressively extend this consolidation to Supply Chain S&OP , therefore integrating sales forecasting with operations and leveraging the unified nature of the Board platform .

The Intelligent Planning Platform model of Board is suitable for an end-to-end approach that, together with strategic and financial planning and analysis, can also incorporate the operational performance of a complex organization like Groupe SEB. With these capabilities, SEB has implemented a solution it refers to as Result Operating Performance Analysis (ROPA) .

Philippe continues:

We can assess how we go from one year's operating result to the next year’s operating result, isolating several effects. Also, we have a specific view of the OpEx, making the distinction between marketing expenses, advertising, and the rest of the structure’s expenses.

How Board exceeded SEB’s expectations and produced a “snowball effect”

Thanks to Board, SEB’s strategic planning activities are now extremely flexible. Geographies can create their plans on the proposed P&Ls and – by default – P&L OpEx follows the evolution of sales according to trend percentages. Users are able to go back and forth along the process to adjust sales, advertising means, and OpEx amounts.

Our planning processes in the Board platform have become collaborative, iterative, and flexible. The three versions we get from the simulation process at the strategic orientation level – Corporate, SBUs, and Continents – are separate, but each team can see the versions created by the others and input their own data according to the others' data .

The Strategic Orientation solution is the heart of the Board project in SEB and is highly appreciated by the management team. Among the features of the product they praise most is Board's 'split & splat' function, which makes it possible to distribute and spread every variation immediately, up to its maximum level of detail, providing business users with significant support for interactive simulations.

We are particularly happy about Board's solution for strategic planning and simulation, and it is giving us a lot of ideas for the next stages of the implementation and for new applications we aim to create. For example, within that solution, we have added a new feature: versioning logic for local scenario management .

Supported by the Board connector for SAP, the reporting and analysis processes have also been meaningfully enhanced, producing what Philippe refers to as a snowball effect:

Board is our full suite of state-of-the-art analytics services and at the same time a scalable and flexible planning solution that responds effectively to all of our technical and functional requirements. Among the business benefits we have gained through the use of Board, I would highlight what is a kind of ‘snowball effect’. Now the implementation of new reports is much faster and both our office of finance and senior management teams have the capability to create new application prototypes or mockups, generating the future tools and solutions that feed our Finance toolbox. Besides, Board has empowered us with the capability to reprocess legacy reporting data using our current hierarchies, bringing further value by helping us to anticipate future trends.

The snowball effect has ensured a fast time-to-solution, increasing Groupe SEB's self-sufficiency in the management, maintenance, and implementation of additional planning applications. This has also been possible thanks to the unique programming-free approach of Board, as Philippe concludes:

The implementation of the solutions is fast and efficient and our teams are highly motivated to participate. We have many projects in mind with Board, which meets our expectations in every way.

The content and views discussed in this case study represent the information shared by Groupe SEB during the Boardville event on May 15, 2018.

00:00:08 Groupe SEB is the world reference in small domestic appliances. Talking about brands now. So we have close to 30 iconic brands. You will recognize some of them. We have Lagostina, WMF, KRUPS, EMSA also.

00:00:28 Now, we will have a few words about our strategy planning application. We call it "strategy orientations". To do so, I need to briefly present you with some simplified organization shots of the Group.

00:00:44 Now we are going to initialize the exercise, which is a simulation exercise - the end result will be this five year business plan. It's important to have a consistent view of the past to plan the coming five years. The Coporate initialize it. If they have specific assumptions regarding the growth of the expenses of the Group, they input it. They can also frame the organic growth of the sales. Then it is the SBUs who, given their R&D pipe on the products they are about to launch, give their own view of their sales; of their business across the geographies, and in the end it is the continents who take the lead and who end the process.

00:01:31 These three versions are separate. Each one can see the versions of the others, and has to input its own data based on what the others did. So it's a collaborative and iterative process. To sum up - it is a bit of a heavy slide - but first of all you have, as I said, a baseline P&L which is created. This is the base for extrapolation, the main axes, are products and markets but you also have secondary axes. You can work by brand, by production site, by marketing or product development responsibility. Not everyone has to follow this, it is your pick the way you want to work.

00:02:19 If you have a specific issue to mention by production site or, depending on your brand, you are going to use these underlying axes. So, in the end, it is consistent because Board brings it down to the lowest level and each user can manage the tool as he wishes. Can be top-down, bottom-up, by product, by geography. So this is very smart and very much appreciated by all the users. Because we didn't change the processes, with this tool we have enabled them to work as they did in the past.

00:02:55 Then - maybe you want one small comment to finish - is that if you first work on those sales, on the gross margin for instance, your OpEx will follow in terms of percentage - so you will keep the same operating profit as a percentage of operating margin and then you will fine-tune your OpEx, depending on the growth you generate.

00:03:16 Some screens about the application, we follow here the process. We start with the sales screen, which can be managed in volume, in value. You also have the gross margin in the screens. Then you follow specifically the advertising because, of course, to sustain the growth you need to you need to communicate and in the end, and of course we way have hidden data which is a bit sensitive, we have over all the P&L. And there you can also play on the operating expenses and you see there you must fill in the ownership, or I will say the user only has access to his own ownership. You can see the global P&L but he will be only able to change the expenses on there in his own responsibility.

00:04:07 We added this year a new feature. We have a logic of versioning from our app, so we start with 80% of the need of the specification and then year after year we intend to grow the base of the app.

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Reinventing Performance Management: A Deloitte Case Study

performance management survey on Harvard Business Review . Today, we’re going to examine how exactly Deloitted changed the approach to performance management, and review the practical action items to take from Deloitte’s case study to reinvent our own performance management.

Old vs. new approach to performance management

Deloitte found that their current approach to performance management – annual 360-degree feedback – was wasting a shocking 2 million hours per year. Furthermore, it wasn’t engaging employees and the level of performance management was dropping. In an effort to combat that, Deloitte set out to build something much more nimble, real-time and individualized. Something that was focused on fueling the performance rather than assessing it in the past.

Shift your performance evaluation focus from the past to the future

Before getting into the new approach, let’s take a look at how they came to the conclusion that they need to change. Why? Because, the Deloitte cookie trail has some really insightful crumbs on it.

Before, the goals were set once a year and reviewed once a year. The problem with this approach is that annual goals are too “batched” for a real-time world and a lot of time is wasted on performance ratings. Instead, it should be spent on talking to people about their performance and careers.

Insight: “Shift your performance evaluation focus from the past to the future”

Their next discovery was that assessing someone’s skills is subjective and says more about the rater rather than the ratee. That is called an idiosyncratic rater effect.

This discovery left Deloitte puzzled. They knew that in order to get the best feedback, it has to come from an immediate team leader. But how do you deal with the idiosyncratic rater effect?

Insight: “Ratings reveal more about the rater than they do about the ratee.”

Before deciding how to deal with biased assessments, let’s take a look at another insight Deloitte found. They used the Gallup 1.4 million employee study to see what are the similarities between high and low performing teams.

The most powerful characteristic was that other the high performing team members felt they are doing their best every day. Simple as that. On that basis, Deloitte went from there and identified 60 high performing teams of their own. Furthermore, they did a six-item survey to define their similarities between high performing teams.

Insight: The most powerful commonality between Deloitte’s highest performing teams was the belief that “I have the chance to use my strengths every day.”

Soon the results were in and the most common one was that team members had the chance to use their strengths every day.

Soon after, the results were in and the most common bit of feedback was that their own high performing team members felt that they had the chance to use their strengths every day. What can we conclude from those results? Deloitte set out a clear goal: “We want to spend more time helping people use their strengths”. As a businessperson- are you focusing on that?

Quick recap. Now that Deloitte was able to recognize the strengths in performance, the question became how to best evaluate it. They also now knew that the best insight comes from the immediate team leader, but how can they do provide it without the idiosyncratic effect getting in the way? That’s the million (or even a billion) dollar question.

Insight: “The key is that people rate other people skills inconsistently, but they are highly consistent when rating their own”

We also know that people rate other people skills inconsistently. To combat that, Deloitte did not ask the team member what they think of each team member. Instead, they asked team leaders to rate their own future actions regarding each team member.

Here are the statements Deloitte asked leaders to select about an employee in order to overcome the idiosyncratic effect:

Insight: In effect, they are asking what the team leaders would do, not what they think.

They call this evaluation process performance snapshot rather calling it rating, mainly because it’s in real-time. Now they had the system to measure the performance. The question next became – how can we improve it?

Suggestions to reinvent performance management

One factor stood out the most from Deloitte case study – frequency. Deloitte points out that the optimal frequency of these new performance reviews should be weekly. They also suggest that the best way to ensure frequency is to have regular check-ins about near-time work initiated by team members.

Deloitte performance is also getting impact from a consumer technology platform that is designed to be simple, quick and above all, engaging. People tend to be interested in themselves – their own insights, achievements and impact, so they believe that employing such a method would engage an employee around their own performance in a way they had not done before.

Mostly because Weekdone has features (image below) below that urge team member input and sharing.

No that we’ve sorted the reviewing, what about the reviews themselves? The current reality is that most team members are rated on a single number, but Deloitte began to wonder if that was the richest and most simple way of viewing personal performance.

Deloitte says that they have not found the answer yet. From our perspective, team members should get a weekly progress report where there are 4 different indicators that correlate into weekscore. Weekscore takes into account persons happiness, progress, overdue plans and problems. We don’t know if this is what Deloitte might be looking for, but it is definitely a step forward in the right direction.

We don't know if this is what Deloitte might be looking for, but it is definitely a step forward in the right direction.

To conclude, Deloitte (and us here at Weekdone) are both of the opinion that traditional, once-a-year, 360-reviews are inefficient and also do not give a transparent view of the current working situation, and it is time to reinvent the performance management process. The best way to do this is by asking the team leaders to assess their team members through statements, which describe what they would do, not what they think.

Employee performance snapshots should be regular, preferably weekly and the technology should be designed to be simple, quick and above all engaging to use.

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Acknowledgements.

About the Contributors.

1. Performance Management.

2. LubeOil: Shaping Business Today and in the Future .

3. HomeHealth: Delivering Activity-Based Costing .

4. SuperDraft: Activity-Based Costing/Management and Customer Profitability .

5. Canaraus: Performance Management—The New Ammunition for Armed Forces .

6. Standard Loan: Interest in Activity-Based Costing Rates High .

7. Sierra Trucks: Trucking along with Activity-Based Cost/Management .

8. Sierra Trucks: Implementing Real Activity-Based Budgeting .

9. Wendals Foods: Managing Customer Profitability with Activity-Based Costing Information .

10. Veri Glass: See Clearly with Activity-Based Costing?

11. ABC Airways: Implementation Lands Millions in Process Improvement Savings .

12. Power & Light: Gets A Charge Out of Activity-Based Costing/M anagement.

13. OBOK Food Company: Right Ingredients Cook Up Savings.

14. Veterans Benefits: Discovering the cost of Doing Business Using Activity-Based C osting.

Final Thoughts.

Wiley and SAS Business Series

Building a Business Case for Performance Management

It’s hard to make a business case for performance management when the CEO only thinks about old-school review processes. Some traditional performance review processes are so bad that they make performance worse one-third of the time .

CEOs and CFOs think about how ineffective reviews can be . It’s understandable that they would hesitate to start a new performance management process.

Modern performance management makes a difference. The right strategy with the right software can boost employee performance, but you’ll have to make a business case for it. CEOs and other leaders may not understand how important and impactful the right performance strategy can be.

This article can be your guide to making a business case for performance management. Use the facts and case studies below to build a convincing business case for performance management.

First, let’s talk about what good performance management looks like in a business.

Need to show your CEO why performance management is worth it? Learn More

What Does Performance Management Look Like in a Business?

Bad performance management techniques are like a one-sided interview. The employee feels like they are being judged. These reviews are so bad that 22 percent of Millenials have admitted to calling in sick rather than face a review. Another 59% say that their manager wasn’t prepared to give meaningful feedback.

A performance review should feel collaborative. Feedback should be clear, the next steps should be laid out, and employees should have plenty of time to offer feedback of their own.

But, how does that work?

There are many types of performance appraisals you can try:

The key is selling your management team on the fact that your performance management process needs an overhaul .

Here’s everything you need to know about building a business case for performance management.

Building a business case for performance management is all about presenting accessible statistics. These facts will show how the right strategies and software can impact your organization in positive ways.

A few benefits of overhauling your performance management strategy include:

Reduced administrative cost

Reduced turnover, reduced liability, improved organizational alignment, reduced succession gaps, improved workforce optimization.

Poor management leads to lost productivity. It has been estimated that U.S. employees who aren’t engaged cost businesses and organizations a whopping $960 billion to $1.2 trillion per year .

A good performance management strategy saves money. This is true even if you pay for performance management software.

The right performance management software can reduce administrative costs. It does this by automating review distribution, collection, and recording. The software saves time, which saves money. Strong performance management systems motivate your employees to perform their best.

Use PerformYard to save time and money with new performance management. Learn More

Employee turnover is a serious problem. When an employee leaves their position, it costs over 20% of their annual salary on average to replace them.

It pays to get to the bottom of employee discontent. An effective performance management strategy reveals problems before they arise. It also encourages employees to stay.

In 2012, Adobe had a revolutionary idea that led to a revolutionary approach to performance management. This approach influenced big-name companies from Microsoft to GE along the way. The companies chose not to continue slogging along with traditional performance appraisals.

Instead, they implemented regular performance check-ins. These check-ins provide employees with ongoing, real-time feedback . There are no forms to fill out and no deadlines. The companies can now respond to organizational or market adjustments more quickly.

This Adobe performance management case study shows how Adobe achieved a 30% decrease in employee turnover.

Crunch the numbers for your particular organization. You’ll be amazed at how much you will save when you choose a performance management strategy that works for your business.

Decentralized performance reviews can lead to false statements appearing in employee reviews. That can spell real trouble for your organization. Managers may report false or confidential information to third parties without employee consent.

These mistakes can lead to costly litigation. The mistakes also reflect a lack of respect that can lead to decreased productivity among employees.

A formal approach to performance reviews fixes this. It features measurable objectives, self-assessments, and reliable data storage. These features reduce the chances of your organization experiencing a lawsuit.

Do your employees understand what their performance reviews are trying to achieve? Chances are, they don’t. A measly 14% of employees understand the organization’s strategy .

This disconnect happens when organizations fail to use cascading goals .

Cascading goals strategy requires that you first identify organizational goals. Next, break them down so each member of the team can contribute to the same common goal. With cascading goals, everyone in the organization knows what to do, how to do it, and why they’re doing it.

Everyone’s actions align with the goals of the organization.

Software for cascading goals does cost time and money. Employees who spend time on misaligned activities cost time and money too. You’ll save in the long run if you ensure the actions of every employee align with your organization’s big goals.

Do your top performers know who they are? Do they know that you have plans to promote them in the future?

Without a clear system for performance reviews, you aren’t communicating your appreciation. That comes with expensive consequences. Nearly 80% of employees who quit their jobs say that a lack of appreciation is one of the major reasons they left.

Top performers who don’t stick around can leave a huge hole in your business. For example, executives can cost over 200% of their annual salary to replace.

Telling your top performers that you have plans to advance their career path helps prepare them for leadership positions. Employees are more likely to stay in organizations when they see a clear path to leadership positions. This will reduce the costs associated with searching for and interviewing new candidates.

Some business leaders and managers fall into the trap of thinking that performance management is a waste of time. They think that time would be better spent on letting employees do their jobs. In fact, the right performance management strategies optimize the time your employees spend on work.

The key is choosing performance reviews that improve workforce optimization.

They are reinventing performance management at Deloitte. Their case study demonstrates that performance management doesn’t have to be a lengthy, complicated process. Instead, they ask four questions — questions managers can answer. Deloitte now spends less time than ever on reviews. The company does conduct more often though and has more accurate data as a result.

What Are the Stages of Performance Management?

Once you’ve built your case for performance management, it’s time to show the leadership team exactly how a new strategy is implemented.

Check out the three-step process below. It will help you choose performance management tools that get leaders excited about changes..

Choosing a performance management process

Nine out of ten managers are dissatisfied with how their companies conduct annual performance reviews. When deciding on a new performance appraisal strategy, ask for manager input. Discuss the five modern alternatives to annual performance reviews . Determine which one your team thinks will best support individual, team, and organizational goals.

No matter what process you choose, make a plan to check in on how it’s serving your business. If the performance management plan isn’t supporting your employees, try something different.

Implementing a performance management software

No performance management process is complete without the right software. The software allows you to manage goals and check-in with employees according to the process you have chosen. Performance management platforms also create reports. These reports allow you to compare employee performance over time. The reports also provide data to track the effectiveness of the performance reviews themselves.

PerformYard is a favorite among leadership teams, managers, and employees. Its flexible, streamlined system makes it easy for everyone to use the performance review process. The platform can be slimmed down for simple annual reviews or built up for more complex strategies.

PerformYard’s visual reporting makes it easy for every member of the team to see how the results of each review impact your organization.

Show your C-Suite why PerformYard is worth it. Learn More

Getting buy-in from managers and employees

There are two ways to get manager buy-in when choosing a new performance management process. You can start by gathering manager input when selecting a new process. Next, be sure to show them the process with a demo.

The best way to get managers and employees on board with the new process is to let them experience it for themselves.

Managers will be glad to give up the old way of doing reviews once they see the benefits of modern performance management. These benefits include clearer expectations, more aligned goals, and an open dialog about progress.

You should also reward employees after the reviews are complete. Clear data will help you identify top performers and reward them for their efforts. The reward will make them look forward to performance reviews instead of dreading them.

A revamped performance management process may be what your organization needs. Show your leadership team the statistics and case studies from this article. It will help you build an irresistible business case for performance management.

What to do next.

Here are three ways you can continue your journey to a more modern and effective performance management strategy:

PerformYard streamlines and automates performance management.

PerformYard is powerful and simple performance management software. For annual reviews, quarterly goals, continuous feedback and everything in between, we reduce the burden on HR and create a simple experience for your employees.

Performance Management Case Study: Fossil Group

Jocelyn Stange

February 4, 2021 | 2 minute read

Performance Management Case Study: Fossil Group

In this blog, we'll share how Fossil Group evolved its performance management process and 3 simple steps.

The Evolution of Fossil's Performance Management Process

Fossil Group was using a complex, 100% paper process for performance reviews and check-ins for more than 15,000 global employees. They wanted to move toward a digital performance management strategy, but knew they needed to simplify the process first.

Fossil Group set up four traditional components that were stretched across three strategic touch points throughout the year. These touch points were supplemented with ongoing performance conversations that could be initiated by any employee, at any time.

As Fossil Group evolved its company-wide performance appro a ch , they were happy to see immediate progress.

92% of employees were participating in goal-setting reviews, setting an average of six goals per employee.

However, when they dug into the data, they found that 35% of individual goals created were misaligned or did not have an impact on the organization and its strategic priorities. They knew they needed to get better at goal alignment if they wanted to meet important business objectives.

Explore the three ways Fossil Group simplified performance management.

1. They scheduled ongoing performance conversations and continuous feedback.

Although the three formal performance touch points in place were working, Fossil Group knew teams needed to have goal conversations more frequently. They implemented informal “check-ins” that could be launched by any employee at any time.

To ensure adequate time was made for important performance conversations and other performance related activities, Fossil Group implemented "Performance Days" — days strictly dedicated to employee performance. On these days, n o task-related meetings are scheduled, and all work is set aside for the day. Conversations between managers, employees, and teams are all centered on performance.

2. They created intuitive goal conversation templates.

Fossil Group recognized that simply having more performance conversations wasn’t enough — the conversations needed to include healthy dialogue, debate, and collaboration from managers and employees. They created 1-on-1 templates to help guide managers and employees through an effective and productive goal conversation.

Check-in templates could be customized to the needs and work of individual teams and team members. The templates helped ensure conversations were focused on creating clear, aligned, and motivating goals.

3. They used recognition to keep performance conversations fresh.

Fossil Group wanted to bring performance conversations full circle by recognizing employee performance daily. They created recognition toolkits for managers including fun notecards, gift cards, and employee recognition tips. They also launched an online, peer-to-peer recognition program that generated an average of 140 recognition stories each week.

By taking time to uncover the needs of its employees, and delegating time for managers to focus on perf ormance, Fossil Group was able to listen and act on employee voices and evolve their performance strategy f or succes s .

Download our latest ebook: Making Time for Performance Management to get more tips for simplifying your performance management process.

Published February 4, 2021 | Written By Jocelyn Stange

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DOI: 10.5539/ibr.v4n2p213

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How Deloitte Reinvented Their Performance Management

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This article on performance management was originally published on business.com .

Deloitte is the largest professional services network in the world in both revenue and number of professionals. In 2013–14, they earned a record of $34.2 billion USD in revenue. So, when one of the biggest companies in the world takes on reinventing performance management, they do it with a bang.

Marcus Buckingham and Ashley Goodall described the process and findings of the large-scale Deloitte performance management survey in the Harvard Business Review . We also examine how Deloitte changed their approach to performance management. In addition, we review the practical takeaways from Deloitte’s case study. The goal is to reexamine our own performance management system and how we can change it.

Old vs. new approach to performance management

Deloitte found that their current approach to performance management, annual 360 feedback, was wasting a shocking 2 million hours per year. Even more significant, they realized that their system wasn’t engaging employees at all. Performance levels were also dropping drastically. In an effort to combat this, Deloitte built something much more nimble, real-time, and individualized. They wanted something that was focused on fueling performance in the present rather than assessing it in the past.

First, let’s look at how Deloitte needed to change. You will find some of your own problems there. You should identify any issues. This is the first step to towards a useful solution.

With 360 feedback, goals were set once a year and reviewed once a year. The problem with this approach is that annual goals are too “batched” for real-time situations and a lot of time is wasted on performance ratings. Instead, this time should be spent on talking to people about their performance and careers consistently.

[Tweet “Insight: “Shift your performance evaluation focus from the past to the future””]

Their next realization was that assessing someone’s skills is always subjective. The process says much more about the evaluator instead of the person being evaluated. This is called an idiosyncratic rater effect.

The discovery left Deloitte puzzled. They knew that in order to get the best feedback, it needs to come from a team leader. But how do you deal with the idiosyncratic rater effect?

[Tweet “Insight: “Ratings reveal more about the rater than they do about the ratee.””]

Before deciding how to deal with biased assessments, let’s take a look at another insight Deloitte discovered. They used the Gallup 1.4 million employee study to see what the similarities are between high and low performing teams .

The most powerful characteristic was that the high-performing team members felt they were doing their best to accomplish meaningful goals. On that basis, Deloitte identified 60 high-performing teams from their own ranks. Using these teams, they conducted a six-item survey to find out what their own high-performing teams had in common.

Insight: The most powerful commonality between Deloitte’s highest performing teams was the belief that “I have the chance to use my strengths every day.”

When the results came back, the most common trend was that their own high performing team members felt that they had the chance to use their strengths every day.

So, what can we learn from these results?

Deloitte set out a clear goal: “We want to spend more time helping people use their strengths.”

So, for a quick recap: Deloitte was able to recognize the strengths in performance. The concern came with evaluating it. They also now knew that the best insight comes from the immediate team leader, but how can they do provide it without the idiosyncratic effect getting in the way? That’s the million (or even a billion) dollar question.

Insight: “The key is that people rate other people skills inconsistently, but they are highly consistent when rating their own”

We also know that everyone rates other peoples’ skills inconsistently. To combat thisDeloitte did not ask team members what they think of each team member. Instead, they asked team leaders to rate their own future actions regarding each team member.

Here are the statements Deloitte asked leaders to select about an employee in order to overcome the idiosyncratic effect:

[Tweet “Insight: In effect, they are asking what the team leaders would do, not what they think.”]

This evaluation is called “process performance snapshot.” The big difference is that it evaluates performance in real-time. Now they had the system to measure the performance. The question next became – how can we improve it?

Suggestions to reinvent performance management

One factor stood out the most from Deloitte case study – frequency. Deloitte points out that the optimal frequency of these new performance reviews should be weekly . They also suggest that the best way to ensure frequency is to have regular check-ins about near-time work initiated by team members.

Deloitte performance is also getting impact from a consumer technology platform that is designed to be simple, quick and above all, engaging. People tend to be interested in themselves – their own insights, achievements, and impact, so they believe that employing such a method would engage an employee around their own performance in a way they had not done before.

We’ve sorted the reviewing, so what about the reviews? Most team members are rated on a single number, but Deloitte began to wonder if that was the easiest way of viewing personal performance.

Deloitte hasn’t found the answer yet. From our perspective, team members should get a weekly progress report where there are 4 different indicators that correlate into the weekly score. The weekly score takes into account the individual’s happiness, progress, overdue Plans, and Problems. We don’t know if this is what Deloitte might be looking for, but it is definitely a step forward in the right direction.

To conclude, Deloitte realized that traditional, once-a-year, 360-reviews were inefficient. They also do not give a transparent view of the current working situation. It is time to reinvent the performance management process . Ask your team leaders to assess their team members through statements that describe what they do, not what they think.

Employee performance snapshots should be regular and weekly. The technology should be designed to be simple, quick, and above all, engaging to use.

And if you’re looking for a world leading software tool to implement this try Team Compass for free.

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