Canadian HR Reporter

CANADIAN HR REPORTER January 25, 2016 10 NEWS Ian Hendry Norm Sabapathy Heather Briant Kim Carter Suanne Nielsen Mark Edgar Are performance rankings on the way out? Roundtable takes a look at how to improvement performance management BY SARAH DOBSON IT'S around the break of the New Year that the often-unwelcome tradition of performance man- agement reviews and goal-setting comes calling. It's an area that con- tinues to challenge HR, but some employers are trying new ap- proaches to improve the process, judging by a roundtable hosted by the Strategic Capability Network (SCNetwork) in Toronto. When Maple Leaf Sports & Entertainment (MLSE) decided to abandon performance ratings, it considered the amount of eff ort and cost that went into that pro- cess, for everyone — employees managers, executives — and how to do it diff erently, to do it better, said Kim Carter, head of HR at MLSE in Toronto. "It's about the quality of conver- sation, it's about paying people for performance, so those are the two things that we want to make sure happen — how do we build some- thing that makes sense for us?" e key for MLSE was to opera- tionalize it so it doesn't become a twice-a-year conversation. That means having people building out, setting people's busi- ness priorities and then doing it all through the company's HRIS and having those set for employees and managers to see the changes hap- pen, she said. It puts the ownership back on employees and leaders to execute on business priorities and development priorities. "When you're having your one- on-one, that's kind of the basis of your discussion — how do you really build that into what they're doing every day?" said Carter. "For us, it's that we are going to hold managers accountable and we're going to move forward under the assumption that people can make these decisions, so you'll get your plot of money and you'll reward your top contributors as you see fi t. Not on a bell curve but on overall contribution." Having those conversations is hard and more work but in trying to make it operational, it becomes part of the regular one-on-one sessions, said Carter. "Just having it part of the tech- nology too is that we can measure all the activity on it, so we know what groups are actively in there, going back and forth and manag- ing those conversations. So it al- lows us to go in and start to work with them a little bit more." With forced rankings, a compa- ny may be paying for performance but when you dig down and ana- lyze the data, star performers may be making incrementally more, such as two per cent, than the av- erage Joe, said Carter, who cited a large pharmaceutical company in the United States that has gone so far as to have its executives de- cide how to distribute the pool of money — with no parameters. " ey can give one person all of it and the other one gets noth- ing, if they want to. And it has an approval process but overall they have the fi nal word. And then, on top of that, they give you a report to say, 'Dear Kim, you're an HR manager, there's 15 HR manag- ers, they all got an average bonus of this, your bonus is this.' So you actually get to see where you rank against everyone else in your level. So they take a fully transparent picture of it. "So you're an employee (at this pharmaceutical company) and you get this report showing you're at the bottom of the list, so you're either going to say, 'I've got to get out of here or I've got to improve.' And what's wrong with that?" Cineplex intuitively does that, said Heather Briant, senior vice- president of human resources at Cineplex in Toronto. "Rewarding 50 per cent or more on individual performance means people know that their personal contributions matter." But it's also about the conversa- tion and giving leaders the cour- age to have great conversations, she said. "In a perfect world, you really don't even need multi-raters be- cause you really would be con- nected enough to people. We put pressure on all these ratings all the time on every person in the work- force and… so much of it is such a forced process." Even if ratings are disposed of, there is already a method of cor- relation to what people are paid, said Suanne Nielsen, chief talent offi cer and corporate secretary at Foresters in Toronto. "You have to apply judgment as a leader for how you're going to sort out pay, who's your highest performers. You know who they are… your lowest ones; you don't need a rating to tell you that. I'm all for improving the quality of conversations between manag- ers, on how people can have a greater impact on improving per- formance. And putting the rating aside because it's distracting." Ratings are part of the issue but organizations that shift their whole system from an annual review-type cycle to something that's more ongoing is where there's success, said Mark Edgar, senior vice-president of HR at RSA Group in Toronto, adding you have to have the leadership capability to manage performance in a more ritual way. e key is to ensure appropri- ate diff erentiation, said Norm Sa- bapathy, executive vice-president of people at Cadillac Fairview in Toronto. His company doesn't do rankings per se but it diff er- entiates people several ways, one being performance results. e company recently redesigned its short-term incentive program for its top 650 people, he said. ROUNDTABLE > pg. 11 Late last year, Ian Hendry, president of the Strategic Capability Network and vice- president of HR at Interac, moderated a discussion with human resources executives in downtown Toronto. The gathering has become an annual exercise for Canadian HR Reporter and is an opportunity to tap into the minds of senior leaders on the latest HR issues and concerns. In this, the fi rst of a three-part series, panellists look at challenges around performance, including the possibility of abandoning ratings and better defi ning goals. PANELLISTS: • Ian Hendry, president of the Strategic Capability Network and vice-president HR, Interac • Norm Sabapathy, executive vice-president of people, Cadillac Fairview • Heather Briant, senior vice-president of human resources, Cineplex Entertainment • Kim Carter, head of HR, Maple Leaf Sports & Entertainment • Mark Edgar, senior vice-president, human resources, RSA Canada • Suanne Nielsen, chief talent offi cer and corporate secretary, Foresters "I'm all for improving the quality of conversations between managers."

• Cover