Work Levels
The Foundation for High Performance Organisations
Work Levels The Foundation for High Performance Organisations Introduction An article in the Harvard Business Review (July/August 2005) reviewed all the theory and research on high performance organisations since Tom Peters and Bob Waterman published the now classic ‘In Search of Excellence’ in 1982. The article concluded that the ‘master keys’ to company success have yet to be found. This is despite the development of such disciplines as lean production, six sigma and business-process-reengineering. Creating a high performance organisation involves the interplay of three mutually reinforcing domains.
Cost of Failure For many researchers, finding the master key for high performance has been like finding a black cat in a coal cellar. This is probably because people do not conform to the same laws relating to physical resources or money. They are ‘messy’, make independent choices and have aspirations. Also, people management involves a complex web of inter-related activities. Whilst the key to high performing organisations have been hard to find, the cost of failure is all too easy to see.
The following are classic symptoms within a low performance organisation; Spheres of high Performance Slow response to market opportuniProducts ties, Services Silo mentality, Customers Poor customer relationships, Legal and Technological/ Slow decision-making, business Institutional Low productivity, Legal process Managers ‘dipping down’ - lack of framework effective delegation, Money supply Negativity, Organisation Governance People Authorities unclear, Management People playing politics. Individual contribution Many approaches to tackling the above rest on putting in place performance management systems or more realistically the The aim of this article is to introduce a set once a year staff-appraisal. of concepts and ideas that can be summarised as Work Levels. Work Levels idenIn April 2005 e-reward.co.uk (available on tifies where the ‘master keys’ to high perfortheir website at www.e-reward.co.uk) conmance can be found - at least within the cluded that, of the 181 organisations people domain. responding, covering 1,122,383 employees, 96% had performance management
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Work Levels
The Foundation for High Performance Organisations
systems that revolved around an annual appraisal, 32% judged that their impact was insignificant or ‘not known’, 50% believed that staff were more de-motivated than motivated by the process, and 40% believed that there was no evidence that performance management improved performance.
The key to high performance is clearly not going to be found by looking simply to introduce an annual appraisal system or any other magic bullet. Low performance comes from a poor system in operation. Without a systemic viewpoint, it is always easy to point the figure and blame the end-operator. Hiring and firing is the result of a poor system in operation. Setting The Right Course High Performance comes from a series of mutually reinforcing activities.
In broad terms, creating high performance requires that the vision and mission is translated into tasks and activities in a coordinated manner. This occurs when the following are present; An organisation has clarity of purpose why it exists and what is its strategic intent, Structure follows strategy – an organisation’s structure should be capable of producing the outputs required by the strategy. A high flying strategy that does not address the means of delivering this is no strategy at all, Accountabilities are aligned with the authorities operating within the levels of work model, Work is clustered so that activities performed by a sub-unit or individual directly contribute to the area’s mission/purpose, The reporting relationships are aligned to the process flows in the business and the handoffs and dependencies are minimised, The right space is provided to job holders to use initiative and judgement, Clear and relevant metrics are available on which to base an assessment of performance. Work Levels So let’s turn to Work Levels and see how this supports the positive cycle outlined above. Work Levels is a management system that is used by some of the largest and most successful companies on the planet. In reality it could be said that Work Levels is a source of competitive advantage for such companies as BHP Billiton, G4S, Huntsman, Anglo-American, Unilever and Tesco. This system ensures that accountabilities are clearly defined and that people are placed into jobs where they can make their maximum contribution to the organisation. Contribution describes the purpose, accountabilities and main outputs of the job.
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Work Levels
The Foundation for High Performance Organisations
At each successive level, value is added to the work carried out above and below. This value-add is expressed as level specific accountabilities. Work Levels is a holistic system that sees work and people as two sides of the same coin. This is a simple and powerful concept that is directly relevant in today’s information/knowledge economy and directly enables: Getting the fundamentals right. Clear accountabilities have to be aligned to the strategy with commensurate delegation of authority. The development of smart metrics. The ‘rubber has to hit the road’ and you need to know that it has. However in many organisations, managers are overwhelmed by measures and information, much of which is dross. What they need are key metrics that provide clarity and objectivity. Establishment of key principles that create engagement.
same value-adding area, they feel compressed and accountabilities become defused. Smart Metrics Often within organisations, the volume of data is overwhelming. However there is a big difference between data, information and knowledge, understanding and insight. Despite investing in enterprise systems, which generate plenty of data, many organisations have only limited information on which to build an understanding of their current workforce and its future needs. They lack the necessary insight to identify the current capability within the talent pool and to assess resource flexibility. As a result, organisations under-perform; they fail to seize opportunities that could further differentiate themselves in the market.
With these in place it is possible to create a positive cycle.
Work Levels provides the foundations for HR to fulfil its business partner role by providing timely data that helps business leaders make fact-based decisions that impact or depend upon people. It does this by making a comprehensive and seamless connection between the job and the person.
Getting the Fundamentals Right Work Levels focuses on accountabilities. Allocating these clearly without gaps and overlaps is the foundation of high performance.
By using job profiles and person profiles that share a common language and the same dimensions Work Levels, and associated profiling methods, automatically measure the extent to which people match jobs.
Accountability defines the scope of the decisions and judgements that a person is required to make in their role.
Measuring the extent of the match between people and jobs provides the basis for creating a complete talent inventory and establishing Workforce Analytics that really do drive performance.
ACCOUNTABILITY SHOULD NOT BE SHARED, although others may contribute to its delivery. Accountability occurs when a job-holder is held to account by a higher authority for particular outcomes. A lack of well defined and clear accountabilities in an enterprise leads to organisational inefficiency. When people effectively operate in the
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Principles of Engagement Every organized activity gives rise to two fundamental and opposing requirements; the division of labour and co-ordination (Henry Mintzberg). Management activity since the advent of scientific management largely focused on the division of labour. In this it has strived for standardization and ‘replicability’.
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Work Levels
The Foundation for High Performance Organisations
Leadership encompasses both this division of labour- the ‘chunking-up’ and the co-ordination of effort- the holding together. Leadership provides the climate for high performance where the whole is greater than the sum of the parts. The outcome of which is empowerment, engagement and self-motivation.
When jobs have clearly defined accountabilities; when the people are capable of undertaking these; when they want to do so and are given the appropriate space to do so, human endeavour can produce the most remarkable achievements.
Whilst a great deal of theory has been written on empowerment, engagement and self-motivation, in fact, most people working in organisations want their leaders to provide three simple conditions with regard to their work. They want to be clear about what they are expected to do, They want to feel that their work makes a useful difference and to be left to get on with it in their own way, They want to know that the work undertaken is heading in the right direction and at the right pace. Summary High performance is not the result of a once a year appraisal based activity. High performance starts with being clear about the strategic direction and ends with making the right selection decision and there being consequences for either good or bad performance. Good and bad performance can only be judged once clear accountabilities have been set together with clear and relevant metrics to enable objective assessment. Work Levels provides the framework that is equivalent to the accounting standards in Finance. It provides the ruler against which organisational performance can be measured. It also clarifies the conditions that leaders must set for others.
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