Pd@ge (2017) sharing session

New Paradigm of Performance Management August 2017

Imagination at work.

Agenda ▪ ▪ ▪

GE Performance Management Journey PD@GE Connecting Remuneration with PD

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GE Performance Management Journey

GE Performance Management Journey Forced-ranking Performance Review ▪ Early 80s – 2005 ▪ Differentiation rules (70–20–10) ▪ Annual basis

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GE Performance Management Journey Forced-ranking Performance Review ▪ Early 80s – 2005 ▪ 10 – 70 – 20 rules ▪ Annual basis

5-rating Performance Review ▪ 2006 – 2015 ▪ Performance-matrix ▪ Annual basis

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GE Performance Management Journey Forced-ranking Performance Review ▪ Early 80s – 2005 ▪ 10 – 70 – 20 rules ▪ Annual basis

5-rating Performance Review ▪ 2006 – 2015 ▪ Performance-matrix ▪ Annual basis

Performance Development @ GE ▪ 2016 – onwards ▪ No rating ▪ Real-time 360° feedback ▪ Ongoing conversation 8

Growing Momentum to No-Rating

n = 296 Source : CEB 2016 HR Agenda Poll

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PD@GE • Reasons • Core elements & cycle • A view of PD@GE tool

PD with no Rating – Why?

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A Shift in Focus Performance Review

• • • •

Twice-a-year discussions Backward looking Formal & routine activity, tend to be forgettable afterwards Classifying people into rating

Performance Development

• • • • •

Ongoing feedback Focus on moving forward, reinforce, insights, coaching Less formal, conversation-setting, actionable 360° Not bound by rating

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PD@GE Core Elements Priorities

Focus on the work that matters most to the customer.

Touchpoints

Ongoing conversation between manager & employee throughout the year.

Insights

Giving & receiving feedbacks to & from colleagues on the contributions and behaviors (continue/consider) to increase effectiveness.

Career Dialogue

An opportunity to reflect on performance, and discover new possibilities.

Coaching

Focus on performance and growth.

GE BELIEF • Customer determines our success • Learn & adapt to win • Empower & inspire each other • Deliver results in uncertain world 13

PD@GE Cycle JANUARY

DECEMBER

Priorities Touchpoint

Ongoing Touchpoints

Summary Summary Touchpoint Touchpoint

Manager & employee together:

Manager & employee together:

Manager & employee together:

• Set priorities aligned with customer outcomes … fewer things better • Discuss connection with organization goals • Identify behaviors for effectiveness, impact

Measure Impact , Integrate with HR Processes

• Review the hole year contributions, insights • Create a brief summary • Discuss learnings for coming years • Move forward

• Discuss contributions to priorities • Set new/adjust priorities • Incorporate career dialogue at the right time • Share insights, provide coaching

Colleagues insights

Technology supports •

Can be done through computer, i-pad, or cellphone

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View organization goals

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Request & give colleagues insight, at anytime

A View of PD@GE Tool – Touchpoint

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A View of PD@GE Tool – Summary

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Connecting Remuneration with PD • Reward decision process • Salary increase & bonus guideline • Budget control mechanism

Reward Decision Process Managers are provided with

Performance factors and employee impact

• Pay reference range & compa-ratio

• Contribution to Priorities

• Budget to adhere to

• Demonstration of GE Beliefs

• HR training and coaching

• Impact on customers

• Skills & competencies needed for development

Decision

Reward decision (salary, bonus, development plan, etc.)

Meritocracy remains a culture, performance differentiation is still expected

Managers are trusted, empowered, and expected to consider multiple factors when making reward decisions 18

Salary Increase Guidance EXAMPLE

Compa-Ratio Zone Green circle (below min)

75% – 90%

90% – 110%

110% – 125%

Red circle (above max)

0 – 4x

0 – 3x

0 – 2x

0 – 1x

Lump sum

The numbers above are the multiplication of Country Annual Salary Increase budget (e.g. 10%).

There is no magic calculator!

Managers are trusted, empowered, and expected to make salary increase decisions by considering individual performance and compa-ratio, as long as within the salary increase budget.

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Bonus Guidance EXAMPLE Bonus Target %

Business Multiplier %

Individual Performance

Annual Base Salary

Bonus Amount

Manager to decide. e.g. ranging 0–150%

There is no magic calculator!

Managers are trusted, empowered, and expected to make bonus decisions by considering individual performance, as long as within the bonus pool.

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Budget Control Mechanism (Merit Increase) • Budget utilization is controlled by Manager, Business Unit Head, HRM, and C&B. • Total salary increase must be within the allocated budget.

EXAMPLE OF MANAGER’S VIEW

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Budget Control Mechanism (Bonus) • Budget utilization is controlled by Manager, Business Unit Head, HRM, and C&B. • Total bonus payout must be within the allocated budget.

EXAMPLE OF MANAGER’S VIEW

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No Rating: A Solution? • Learn & Adapt to Win • Strategic questions ahead:

Where do we see PD bringing the most value to our business?

What different behaviors will be shown after the introduction of PD?

What are the most impactful actions to further unlock the potential of PD?

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