Components of Great Manager Performance
Presented by:
Adam Zuckerman, PhD
Practice Leader
Thomas O. Davenport
Senior Consultant
John Bell
Senior Consultant
(Formerly Head of
Engagement at Rio Tinto)
February 12, 2014
Twitter: @towerswatson
© 2014 Towers Watson. All rights reserved.
Objectives
In this session, we will cover:
The impact of manager behavior on sustainable engagement and
business results
A case study from Rio Tinto on the critical role of the manager and
solutions to support manager effectiveness
Highlights of the key manager capability elements that need to be
developed to maximize engagement and performance levels.
Examples of employee survey questions that can be used to measure
these critical aspects of manager capability
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Survey design: Sustainable engagement
Attachment
to the
company
and willingness
to give
discretionary
effort
A local work
environment
that supports
productivity
and
performance
Individual
physical,
interpersonal and
emotional wellbeing at work
41%
lower retention risk
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6.5
fewer days lost
3X
operating margin
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Results of improving manager performance
100%
92%
82%
78%
80%
68%
Percent Favorable
68%
60%
 Sustainable Engagement
 I would prefer to remain with my
company even if a comparable
job were available in another
company
53%
47%
 How would you describe your
40%
health: Very Good or Exceptional
37%
32%
20%
0%
Pointy-Haired
Boss
Bad Boss
GoodBoss
Boss
Good
Great
GreatBoss
Boss
Source: Towers Watson Global Workforce Study 2012 – Global Data Set.
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Manager effectiveness correlates with company financial performance
Growth over Prior Year versus Sector
Total Assets
20%
Total Revenue
8.8%
8.2%
6.4%
5.7%
4.4%
Gross Profit
3.7%
0.4%
0%
-0.3%
-0.3%
-2.4%
-11.1%
-13.1%
-20%
Manager
communication
Above median
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People
development
Performance
feedback
Performance
feedback
Performance
feedback
Team building
Below median
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To build an engaged workforce leaders have
to be on board … Using data to achieve buy-in
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At Rio Tinto, the link between engagement and performance had always
been intuitive…
On-site team interactions
An efficiently run
operation where
employees are
motivated to
deliver their best
is more likely to
be safe and
profitable.
Solid line
management and
positive
interactions
between teams,
are key to
success.
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but…leaders needed to see demonstrable links to measures that matter…

A suite of internal performance measures were used to identify the employee opinions
and behaviours that drive success. Our survey helped us to measure these components,
now referred to as levels of employee engagement
Engagement-Performance Linkage
-ve
Internal Efficiency Metrics
+ve
Lower Quartile
90%
Upper Quartile
85%
80%
75%
70%
Employee engagement levels
121
118
115
112
109
106
103
97
100
94
91
88
85
82
79
76
73
70
67
64
61
58
55
52
49
46
43
40
37
34
31
28
25
22
19
16
13
10
7
4
60%
1
65%
Operation Site
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…and understand how they directly affected engagement and performance

The next step was to identify what creates high levels of performance through increased
employee engagement

The few key areas for change were identified to help the business focus on their action
planning
Key areas for action
Outcomes
Inputs
Supervision
External Reputation
Levels of
Employee
Engagement
Performance
Safety Practices
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The Manager Redefined performance framework.
Empirically proven route to higher levels of Sustainable Engagement
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
From the book : Manager Redefined: The Competitive Advantage in the Middle of Your
Organization, Jossey-Bass, A Wiley Imprint, 2010.
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Let’s start with the first requirement: Helping employees
structure jobs that take advantage of employee’s talents and skills
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
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Question #1
What percentage of employees agree that their immediate managers:
Assign tasks suited to their skills and abilities
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1
83%
2
73%
3
63%
4
53%
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Question #1
What percentage of employees agree that their immediate managers:
Assign tasks suited to their skills and abilities
towerswatson.com
1
83%
2
73%
3
63%
4
53%
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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The manager must craft a job and a work environment that builds
and sustains employee engagement
Job Resources
Job Challenges

Range of
responsibility

Workload

Urgency
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
Autonomy

Energizing goals

Development

Rewards and
recognition
Hindrances

Resource shortfalls
(including staffing)

Role conflict and
overload

Workplace risk

Politics
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The second area, developing people, is a key global engagement driver
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
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Question #2
What percentage of organizations say managers
are effective at providing career management support to employees?
towerswatson.com
1
55%
2
45%
3
35%
4
25%
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Question #2
What percentage of organizations say managers
are effective at providing career management support to employees?
towerswatson.com
1
55%
2
45%
3
35%
4
25%
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Being a human capital treasurer: Focus on both short-term and long-term
human capital growth and performance
Manager Direct
Development
Giving
Feedback
Other Learning
Sources
Giving
Feedback
Setting
Directions
and Goals
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Goal-setting must occur within the context of a
career path (and career paths aren’t always paths!)
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Delivering the deal requires a partnership between managers and HR
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
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Intrinsic and extrinsic rewards
Intrinsic
Extrinsic
Inherent
External
Part of the fundamental
nature of an entity;
originating from the
inside
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Not an essential part;
originating from
the outside

Challenge/accomplishment

Base pay

Meaning/importance

Bonus/incentives

Growth/mastery

Benefits

Autonomy

Penalties

Recognition/feedback
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How two individualized deals might work
Elements
Work
design
Star Contributor
Future Executive
• Stimulating projects to work on • Growing responsibility for team or
• Membership on teams with smart project leadership
people
• Challenges reflecting both team and
relationships, and project operations
• Challenges reflecting technical
issues and questions
Growth
• Career-development plan
•
Recognition
focused on achievement of high
technical contributor status
Contact with network of senior
experts in the discipline
• Technical contributions
leadership potential reinforced
• Goals and incentives
• Goals and incentives emphasizing
emphasizing commercializable
contributions
Benefits
•
on achieving executive rank
Leadership responsibility for
increasingly larger and more
important projects over time
• Project success acknowledged,
acknowledged
Rewards
• Career-development plan focused
• Flexible schedule/work location
project success
• Cubicle (eventually office) with a
window
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Change never stops — Managers must consistently build change capability
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
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© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
22
Sustaining engagement through times of
change requires managers to support high enablement and energy
Among engaged employees:
High
Sustainable
Engagement
Unproductive
Engagement
Manager
effectiveness:
75% favorable
Resilience
Innovation
Energy
Burnout
Danger
Unhealthy
Engagement
Low
Low
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Enablement
High
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Authenticity and trust form the
foundation of the manager performance model
Crafting
Jobs
Developing
People
Delivering
the Deal
Energizing
Change
Authenticity and Trust
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Authenticity reinforces trust – but what does it mean?
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The problem is…
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…that many companies have allowed the manager’s job to become a death
spiral
And don’t forget to master manager
self-service so you can reduce HR’s
burden
Unfortunately, we can’t
offer training for new
managers
We’re focusing your pay
chiefly on your personal
production
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You’re our best producer, so
we’re promoting you to manager
Overstressed
managers,
frustrated
employees,
higher
turnover, lower
productivity
But keep producing —
after all, you’re the best
And we’re expanding
your span of control,
to save money
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Question #3
What percentage of employees agree that their immediate managers:
Have enough time to handle the people aspects of their jobs
towerswatson.com
1
56%
2
46%
3
36%
4
26%
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
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Question #3
What percentage of employees agree that their immediate managers:
Have enough time to handle the people aspects of their jobs
towerswatson.com
1
56%
2
46%
3
36%
4
26%
© 2014 Towers Watson. All rights reserved. Proprietary and Confidential. For Towers Watson and Towers Watson client use only.
29
What actions should an organization take to improve manager
effectiveness?
The manager effectiveness system
Diagnose
Manager
Performance
Develop
Manager
Capabilities
Redefine
Manager Role
Make Change
Happen
Define Critical
Competencies
Align Rewards
Measure
Manager
Performance
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Measuring manager effectiveness
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The payoff: ROI from higher-performing managers
$38.1M
59%
Potential
ROI
$21.3M
$23.9M
$1.5M
$7.5M
$14.9M
Decrease manager
total hours worked
Decrease span of
control
$152,500
Front-line employee
overtime decrease
$11.3M
Front-line employee
turnover improvement
$2.9M
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Front-line employee
absenteeism
improvement
$2.4M
Improve competitive pay
positioning
Expected Cost of Selected
Recommendations
Impact of 5% higher
supervisor and
employee engagement
on operating income
Supervisor turnover
improvement
Potential Value to
the Organization
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Case Study: Large North American Bank
Situation





Large financial institution with approximately 80,000 employees
and operations in 45 countries
Had existing manager training curriculum, but wanted to refresh
current offerings
Organization historically had high employee engagement scores,
but metrics had dropped slightly in recent survey; assessment of
data showed employee concerns about manager performance
The client became interested in our Manager Redefined research
and themes and agreed to work with Towers Watson to upgrade
manager training
The training focused on the middle levels of the organization,
chiefly in the retail delivery functions, emphasizing themes from
our work and research, and findings from the organization’s
employee survey
Key Objectives




Beginning with key concepts from the Manager Redefined book,
create a new manager training program focused on behaviors
associated with employee engagement
Ensure the program is consistent not only with company culture,
but also with existing manager training on fundamental skills
Deliver the one-day training at regional headquarters across the
organization’s geography
Use the training as a foundation for future programs to be rolled
out to next levels of managers
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Deliverables




One-day training delivered by Towers Watson
facilitators
Training supported by PowerPoint discussion
document, participant workbook and detailed
facilitator (train-the-trainer) notes
Train-the-trainer materials to be used as
foundation for additional programs aimed at
next levels of managers and supervisors
Supplementary pre-session material for
attendees
Results/Next Steps
 Program built on Manager Redefined
foundation achieved 96% approval rating from
attendees
 Representative comment:
“I found this to be the most beneficial learning
event I have ever participated in during my
tenure with XYZ. I came away feeling as
though this is the type of organization I want to
work for ‒ one that focuses on these types of
leadership practices and building this type of
culture.”
 Roll-out to broader geographic and business
unit audiences has begun
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33
A to-do list for improving manager effectiveness







Do your economic homework on the manager role
Do a make-buy analysis on manager training
Don’t compromise on hiring and promotion
Be careful about shifting HR duties to managers
Deal with low-performing managers sooner rather than later
Never put managers in a position that compromises trust with employees
Involve managers in the process
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