020529JHJHO494SueJ_P3 CONFIDENTIAL Implementing Performance Management and Goal Setting Workshop outcomes document 6 June 2002 This report is solely for the use of client personnel.No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey & Company during an oral presentation; it is not a complete record of the discussion. 020529JHJHO494SueJ_P3WHAT MUST REGION 3 DO TO ENSURE PERFORMANCE MANAGEMENT SUCCESS (1/2) FOR DISCUSSION Issue Action required 020529JHJHO494SueJ_P3WHAT MUST REGION 3 DO TO ENSURE PERFORMANCE MANAGEMENT SUCCESS (2/2) FOR DISCUSSION Issue Action required 020529JHJHO494SueJ_P3HIGH-PERFORMING COMPANIES SHARE 3 KEY CHARACTERISTICS Integrate with HR budget processing Set stretch targets against technical limits Plan and implement Track and adjust Stretching performance management cycles Targets set against technical limits, cascaded to razor-sharp front-line goals Process to turn targets into actions across all properties Standardised KPI trees and ‘roadmaps’ Opportunities incorporated into budgets Direct link to rewards and consequences for individuals Extraordinary change leaders at each level driving improvements Rigorous processes to build management strength Performance evaluations at all levels Talent management (A, B, C’s) Hiring for fit with change culture Knowledge sharing processes Push and pull of ideas across company Incentives for sharing ideas and practices Standardised problem-solving methodology CI processes and infrastructure– Central team– On-site teams/coaches 020529JHJHO494SueJ_P31. Value-focused KPIs cascaded throughout the organisation 2. Opportunity-based targets Planning and performance management system + + PERFORMANCE MANAGEMENT WORKSHOP PROCESS Business performance Individual performance Topics Objectives Define business KPIs to site department manager level Define maintenance KPIs to Artisan level (generic) Determine opportunity target setting mechanisms for all KPIs Determine target setting process Develop flow for review processes Determine how deviations will be managed