Canadian HR Reporter

CANADIAN HR REPORTER January 25, 2016 NEWS 11 "It's gone really well, especially when one considers the general anxiety associated with chang- ing compensation systems. e idea was to drive a greater link between pay and performance as well as boost results account- ability linked to the short-term incentive program. We also im- proved our ability to calibrate per- formance across the organization cross-functionally, which is an area where I think many organi- zations can improve. "And it was simple — we didn't use a fancy compensation consul- tant or system, we used Google Sheets to create software to facili- tate real-time performance cali- bration as leaders rated objectives across the organization." To calibrate results effectively, the company had to modify the ratings scale to ensure account- ability to a common standard, which was an ah-ha moment, said Sabapathy. "We essentially needed to de- fine what results looked like at each rating level and then get people's heads around it, in- cluding laying out for them the realistic positive and negative outcomes related to how each person handled the process. We implemented a comprehensive change management approach to support this, including train- ing, behaviour management and communication, to help people understand how the new world calibrated to the old world. "Once we did that, we were able to measure progress in real-time, calibrating groups and course- correcting if they were skewing right or left as we managed the overall team across the finish line up to final approval by our board." e process increased trans- parency and perceptions of fair- ness, said Sabapathy. "Every function had a common rating scale and people under- stood the organization was trying to ensure calibration of perfor- mance relative to expectations within each function. Because no function was considered better than another function, that mini- mized 'turf wars,' boosted positive employee perception, and HR's oversight of the whole process was perceived as helpful." Another way Cadillac Fairview differentiates is through talent calibration, he said. "But we focus on giving people the right message; we don't give them the rating. e organiza- tion invests a lot of time each year on its talent review process, and the focus is on the growth and de- velopment of people rather than telling them in what box they happen to be at any given time. A talent rating is dynamic and can easily change over time; for us, the outward labelling of each em- ployee does not add much value. Our focus is on assessing people's true strengths they can leverage, as well as the most critical areas where they can develop, and then providing them with clear and candid feedback." Goals e area of goal-setting seems to be one that's often woefully lack- ing, said Ian Hendry, president of the Strategic Capability Network and vice-president of HR for In- terac in Toronto, who asked the group whether HR was improving in this area, whether goals receive the consideration they deserve and whether they're often too vague. "Interac has a corporate score- card with 28 metrics, with line or functional businesses having pri- mary or secondary responsibility," he said. "The primary drives perfor- mance and holds the principal accountability, but by articulat- ing which other functions are key contributors in the process, it provides a clear line of sight for all. "We use the secondaries (to say) 'is is the way I'm going to help those primaries achieve those re- sults,' so it demands collaboration for it to be successful. And then you can drill down into more specific departmental and indi- vidual goals, which sets the stage for a comprehensive goal-setting conversation." And then there are monthly business updates where Inter- ac assesses plan to results and how to address disparities, said Hendry. "e monthly review commu- nicates down to levels below the executive level and more perti- nent information is going to fil- ter through the organization. So when you have quarterly perfor- mance check-ins with employees, you've actually something quite tangible that links back to the corporate scorecard." Cadillac Fairview uses a system that has assignable goals, so that's helped, said Sabapathy. "Naturally, we can't force every goal down through the organiza- tion, but at least for important common goals, we cascade those so each person is using the same deliverables and metrics, includ- ing cross-functionally; it's worked really well." Goal-setting is part of Forest- ers' year-end discussions, said Nielsen. "We've set our organizational priorities and communicate them and we invite people, the leaders, to cascade that down and set their priorities in alignment and so on. And then it gets embedded into the beginning of the performance management cycle, the objectives for the year. So, again, it's evalu- ated at the end." As for goals being too vague, people can't get out of the tool un- less they say how they're going to measure that, she said, "so it sort of forces you into it." Foresters also does a goal cali- bration exercise, so in January, the executive team will share primary objectives for the year around strategy and how they'll be mea- sured, said Nielsen. "And we challenge each other: 'Is that a significant goal? Is that how you measure that?' Or 'I had no idea you had this on your list, I've no idea if I can manage that in the performance management program…' so it's an interesting way to go." Every few years, Foresters does an exercise where all the top lead- ers in the organization sit in a room and put the corporate prior- ities on the wall. ey then write down their own set of priorities on Post-it notes and place them on the wall under the priority they line up to, said Nielsen. "It's interesting to see how many don't really line up to the corporate priorities." ROUNDTABLE < pg. 10

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