Key excellence indicators for human resource focus
Key excellence indicators are based on 12 years of Baldrige experience. They are the features exhibited by organisations which score highly in this criteria
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Integration with overall business planning
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“Internal customers” recognised
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Comprehensive training and education is a feature
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Individual and organisational learning are linked together
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Empowerment and cross-training are applied
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Team and individual recognition are strengths
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They exhibit lower turnover, accidents, absenteeism
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There's a strong commitment to employee satisfaction, motivation, and well-being
Source - NIST
| 5.1 | Work Systems (35 points) | | | Describe how your organisation's work and job design, compensation, career progression, and related work force practices enable employees to achieve high performance in your operations. |
Key words and phrases for this item
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Work and job design
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Compensation and recognition
| 5.1a(1) | How do you design, organize, and manage work and jobs to promote cooperation and collaboration, individual initiative, innovation, and flexibility, and to keep current with business needs? |
- Since this is your first opportunity, start by explaining how high-level strategic decisions impact on work design.
- Show by example how work design has changed to track changes in corporate intentions and in the marketplace.
- If you've changed your staff resources to match the needs of the e-economy, for example (and who hasn't?), give examples
- The key words cooperation and collaboration indicate that this is a good place to describe your approach to team work, multi-skilling and cross-functional work design
- Review the case study material for examples of teaming. Note that extensive use of teams is a core capability for all of the Baldrige winners in the case study collection.
- See the exhibit Keeping current with business needs and directions.
“'When employees quit, the main reason is that they were not well-matched to their jobs in the first place' … says a national study of 180 companies, by Princeton-based human-resources experts Caliper (email: writeus@caliperonline.com).”
Anne Fisher, Inc. magazine's 'agony aunt'
Examples
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5.1a(2) |
How do your managers and supervisors encourage and motivate employees to develop and utilize their full potential? Include formal and/or informal mechanisms you use to encourage and support employees in job- and career-related development/learning objectives. |
- This is not a general question about education and training (that's dealt with in 5.2, below). The key words are managers and supervisors. This area is looking specifically for the roles played by middle management and above in encouraging and motivating your workforce, individually and collectively
- Examiners are likely to look for evidence of a systematic process for encouraging and motivating, including but also going beyond day to day performance (career-related is the phrase to pay attention to in that context).
For a best-practice example see Granite Rock's individual professional development program (IPDP, universally known in the firm as the ippydippy) in the Granite Rock's IPDP exhibit.
Note that the main emphasis of Granite Rock's IPDP is the collaborative decision-making of workers and their immediate supervisors, with the active involvement of senior managers at an annual round-table discussion. Note also that almost all employees (including managers and supervisors) at Granite Rock have IPDPs.
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5.1a(3) |
How does your employee performance management system, including feedback to employees, support high performance?
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Performance management (and performance appraisal, which may or may not be the same thing) can be a controversial subject, and it's unclear what the authors of the 1999 criteria intended with this question.
If performance management is a loaded phrase in your organisation, you may choose to tread lightly when compiling a response to this item.
The Item Descriptions and Comments section in the 1999 Criteria for Performance Excellence skips fairly lightly over it, with a 5-line explanation that “The item also addresses the important alignment of incentives with the achievement of key organisational objectives. The basic thrust of this is the consistency between the compensation and recognition and work structures and processes.”
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For a discussion of 'Performance Appraisal' (as distinct from performance management), and an explanation of why it's controversial, see the Performance Appraisal exhibit.
- For a contrary view which does seem to represent a common industry view, look also at the APQC example below and follow some of the links at www.APQC.com.
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5.1a(4) |
How do your compensation, recognition, and related reward/incentive practices reinforce high performance?
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“… the balance between change and continuity has to be built into compensation, recognition, and rewards.
“We learned long ago that an organization will not innovate unless innovators are properly rewarded; that a business in which successful innovators do not make it into senior management, let alone into top management, will not innovate.
“We will have to learn, similarly, that an organization will have to reward continuity by considering, for instance, people who deliver continuing improvement to be as valuable to the organization and as deserving of recognition and rewards as the genuine innovator."
Source – Peter Drucker 1999
- Notwithstanding 5.1a(3), if you've got any sort of performance-related compensation scheme, this is the place to explain how it works
- Show how your scheme results in high performance
- If you don't have a performance-related scheme, explain why? If you've used formal PM schemes in the past and abandoned or modified them, then explaining why, and demonstrating what's happened subsequently (things are much better, right?) will score good points here
- For a gain-sharing scheme that seems to avoid some of the problems associated with anti-cooperation and team-destroying aspects of performance pay, see the Gain share at Texas Nameplate exhibit
- What non-compensation rewards for good performance are available to your workforce?
- Brown (1998) says that three criteria are important in assessing the compensation systems in an organisation:
- A portion of employee's compensation should be based on the degree to which individual and group performance goals have been met
- All levels and categories of employees should participate in improvement-based compensation programs
- A large enough percentage of income should be based on improvement results to make a difference in motivating employees.
At Solar Turbines, for example, performance pay, linked to appropriate targets, varies from 8 to 12% "… that part of the pay is at risk … and this is a prime motivator in Solar Turbines … it means that employees are directly linked to business success. Managers have more at risk, their 'performance share cheques' are high motivators."Awards and bonuses reinforce the workforce's commitment to achieving business goals. Incentive payouts have helped Solar meet or exceed goals for increasing return on assets. Payouts across the board increased from 7.6% of salary in 1994 to 10.4% in 1997.
For an up to date discussion on employee benefits, see the Business Week article on 'Perks that work' in the exhibits collection.
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5.1a(5) |
How do you ensure effective communication, cooperation, and knowledge/skill sharing across work units, functions, and locations, as appropriate? |
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See the exhibit Knowledge management for an explanation of how sharing knowledge improves organisational performance
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See the exhibit How teams span functions for an illustration of the cross-functional nature of effective, function-spanning teams
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Since the early 1990s, 3M Dental has strongly emphasized team-based approaches to problem solving and continuous improvement. Management credits the 3M Dental team approach with enabling the division to double sales over the past 10 years without increasing the size of the workforce
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Solar Turbine's integrated teams begin with a leadership commitment and extend to cross-functional work teams. At every level, teams are effectively linked to others, ensuring that decisions and actions do not occur in isolation or without an understanding of business-wide impacts
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5.1a(6) |
How do you identify characteristics and skills needed by potential employees; how do you recruit and hire new employees? How do you take into account key performance requirements, diversity of your community, and fair work force practices?
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How do you translate your high-level strategic decisions into employee skill-sets, and once that's been done …
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… how do you find the people with those sets of skills?
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Note that diversity is not just about a fair go for minority and ethnic groups. In an increasingly diverse world, and marketplace, diversity provides the richness and variety needed to keep many organisations performing to their best.
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Show how your policies in this area are translated into practice.
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IBM Rochester's strategic plan has hard targets for the employment of women and minority groups.
Note Texas Nameplate Company's policy of using both English and Spanish as workplace languages.
- The company has a culturally diverse workforce (46% Caucasian, 32% Hispanic, and 22% African American).
- Key company documents are printed in Spanish and English, and translators are present at all meetings.
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5.2 |
Employee education, training, and development (25 points)
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Describe how your organisation's education and training support the achievement of your business objectives, build employee knowledge, skills, and capabilities, and contribute to improved employee performance.
Brown's (1998) overview of this subject comments that “… this section … is all about what you do to maintain and continually develop employee knowledge and skills. Because training is so important, and also so expensive, it is crucial that the [organisation] link its education and training to key business drivers and overall company goals. One way of doing this is by developing a strategic training plan … for identifying needed competencies and skills based on the long-term goals... This approach begins with the business goals and works backwards until specific training needs have been identified.”
Key words and phrases
Key needs - short and long-term
Design of education and training
Delivery and reinforcement
Employee development
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5.2a
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Employee education, training and development
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| 5.2a(1) | How does your education and training approach balance short- and longer-term organisational and employee needs, including development, learning, and career progression? |
- This requirement links to category 2, Strategy Development, where short and longer-term organisational needs should be identified?
- The requirement seeks evidence of balance - implying a discussion of how you trade-off short and longer term priorities in the context of organisational and employee development, learning and career growth and progression.
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5.2a(2) | How do you design education and training to keep current with business and individual needs? Include how job and organisational performance are used in education and training design and evaluation? |
- See the exhibit Keeping current with …
- If a key purpose for education and training programs is to drive performance improvement (and it should be), then what's the link between the two?
- See the exhibit Linking education and training with performance at Granite Rock.
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5.2a(3) |
How do you seek and use input from employees and their supervisors/managers on education and training needs, expectations, and design? |
- Buying in proprietary packages from specialist suppliers is a common approach, and for some skills is appropriate (see the anonymised employee development exhibit for an example of the use of Covey products, for example). But a one-size-fits-all approach is quite likely to be wasteful, irrelevant to many participants, not related to workplace or larger organisational needs, and not translate into better performance in the workplace.
- What's required here is a description of a process for capturing the expressed needs of employees at all levels, including supervisor's and manager's understanding of workplace skill gaps
- Your response may link to work design issues discussed in 5.1, and include topics like teaming skills, cross-functional skills, problem solving and process analysis.
- As Brown (1998) emphasizes “It is impossible to conduct a thorough training needs analysis without involving employees.”
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5.2a(4) |
How do you deliver and evaluate education and training? Include formal and informal education, training, and learning, as appropriate. |
- Organisations which undertake training and education will have little difficulty describing program details, but very few (even at Baldrige winning levels of performance) will have undertaken comprehensive evaluation exercises
- Linking expenditure on education and training with performance improvement over a period of several years is a form of evaluation (see above), but what is required here is a process for evaluating how well your programs match the requirements identified in your work design, needs assessment and strategic planning exercises.
- Think in return on investment (ROI) terms?
- Brown (1998) suggests that education and training should be evaluated with respect to four dimensions:
1. Reaction data - collected via surveys filled out by participants after classes, or perhaps when back in the workplace. Did the class feel that work undertaken was worth while?
2. Tests - at the end of courses, as a pre-requisite for certification, for example. Performance tests are best, asking whether new skills are or can be applied in the workplace. Formal examinations may be appropriate in some workplaces, especially where worker qualifications are important to customers or partners.
3. Behavior change - how has workplace performance changed as a result of training and education? The use of specific skills like completing statistical process control charts may be an indicator of behavior change.
4. Results - the most important link between education and training and performance is shown by better results. Before-and-after comparisons might provide evidence of the extent that training has made a difference, for example.
See the Granite Rock exhibit referred to in 5.2a(2), above.
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5.2a(5) |
How do you address key developmental and training needs, including diversity training, management/leadership development, new employee orientation, and safety, as appropriate? |
- In these two requirements (5 and 6), the criteria are seeking specific program details which you may have dealt with at least in part elsewhere:
- How do you deal with diversity training (and I hope you know what that is, because the criteria doesn't elaborate!
- Does it mean training that's relevant to an increasingly diverse workforce, or training your workforce to deal with an increasingly diverse marketplace, or even, training people to work in a diverse workplace)?
- How do you resource and implement education and training in management and leadership skills - to minimise risk during leadership succession and to preserve institutional memory, for example
- How do you design and deliver new-employee orientation?
- How do you deliver safety-in-the-workplace training, and deal with any other risks that your workforce may encounter?
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5.2a(6) |
How do you address performance excellence in your education and training? Include how employees learn to use performance measurements, performance standards, skill standards, performance improvement, quality control methods, and benchmarking, as appropriate.
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- And here, the requirements are for an explanation of the details of the performance excellence tools and techniques that people learn in your organisation
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5.2a(7) |
How do you reinforce knowledge and skills on the job? |
- If reinforcement of education and training occurs, describe the process
- Coaching will be a key component of what you do. A lack of systematic follow-up is the number one reason for training and education failures, and Brown (1998) suggests that at least as much money needs to be spent on after-training activities.
| 5.3 | Employee well-being and satisfaction (25 points) |
| Describe how your organisation maintains a work environment and an employee support climate that contribute to the well-being, satisfaction, and motivation of all employees. |
Key words and phrases for this item are:
Safe work environment
Support and motivation
Satisfaction determination
Relationship to improvement priorities
How do you address and improve workplace health, safety, and ergonomic factors? How do employees take part in identifying these factors and in improving workplace safety? Include performance measures and/or targets for each key environmental factor. Also include significant differences, if any, based on different work environments for employee groups and/or work units.
- Your organisation either does these things, or it doesn't. The requirements are quite specific
- A tabulated or matrix presentation will make it clear how complete your approach is - look at Writing an application for examples
- A good response to these questions will show that you pay as much attention to workplace health and safety as you do to key production and support processes. A good safety program, with demonstrated compliance with your national and local occupational safety and health law is a start point ¾ it won't earn you many marks, but you'll lose plenty if you don't have one.
- What examiners will award points for is evidence of a preventive approach - to use the cliché, whether you have your ambulance parked at the top of the cliff (preventing accidents) or at the bottom (to collect the casualties). A good indicator of which approach you adopt will be provided by how you measure safety. Counting lost time through accidents, or numbers of incidents, is like measuring quality by counting post-production defects. And just as quality can't be inspected-into your production processes, so safety can't be improved after the event. Keeping a record of performance is necessary to drive and measure improvement, but it's not sufficient. Proactive, preventive approaches, going well beyond minimum and mandated standards, should earn mid-range points.
- Excellence in this area will (as elsewhere) be characterised by a systematic approach to identifying appropriate measures, the search for best-practice or benchmark standards, the adoption of stretch goals to attain or exceed those standards, and a process to drive continuous improvement. Frequent measurements of factors that affect safety, and checks (on compliance with safety practices for example) will show a preventive approach.
- The last part of 5.3a is a deployment and diversity question. Having a flash health and safety program at headquarters is one thing. Making sure it applies at all remote and field locations is another. And if you have facilities, or operations offshore, or in areas with different workforce ethnicities, how do you deal with that?
| 5.3b |
Employee support climate |
| 5.3b(1) | How do you enhance your employees' work climate via services, benefits, and policies? How are these enhancements selected and tailored to the needs of different categories and types of employees, and to individuals, as appropriate? |
- Approaches for enhancing employees' work climate might include: counseling; career development and employability services; recreational or cultural activities; non-work-related education; day care; job rotation and/or sharing; special leave for family responsibilities and/or for community service; home safety training; flexible work hours; outplacement; and retiree benefits (including extended health care).
Source - Baldrige Criteria notes
- A key element in your answer to these two questions will be evidence of a process for categorising and segmenting your workforce
| 5.3b(2) | How does your work climate consider and support the needs of a diverse work force? |
- The need to recognise diversity and tailor your approaches to account for it is new in the 1999 criteria, so there are few examples from past winners
- Here's an opinion that captures the business case for a diverse workforce “… the reason profit-based corporations form management teams with people from different backgrounds has nothing to do with being politically correct, having inspirational managers, or providing an enlightened work environment. You build a team of professionals from varied cultures for the simple fact that their breadth of insight at high speed will dominate that of a team of people from the same background six days a week and twice on Sunday …”
From Judd D Bradbury, in a letter to FORTUNE on Levi Strauss' fortunes.
| 5.3c | Employee satisfaction |
This area calls for information on how the organisation determines employee well-being, satisfaction, and motivation … many factors might affect employees. Although satisfaction with pay and promotion potential is important, these factors might not be adequate to assess the overall climate for motivation and high performance. For this reason, the organisation might need to consider a variety of factors that might affect well-being, satisfaction, and motivation, such as: effective employee problem or grievance resolution; safety; employee views of leadership and management; employee development and career opportunities; employee preparation for changes in technology or work organisation; work environment; workload; cooperation and teamwork; recognition; benefits; communications; job security; compensation; equality of opportunity; and capability to provide required services to customers.
In addition to formal or informal survey results, other measures and indicators of well-being, satisfaction, and motivation might include safety, absenteeism, turnover, turnover rate for customer-contact employees, grievances, strikes, and worker's compensation claims. Factors inhibiting motivation need to be prioritized and addressed. Further understanding of these factors could be developed through exit interviews with departing employees.
How is information on the well-being, satisfaction, and motivation of employees are actually used in identifying improvement priorities? Priority setting might draw upon human resource results from 7.3.
Source - 1999 criteria: item descriptions and comments
| 5.3c(1) | How do you determine the key factors that affect employee well-being, satisfaction, and motivation? |
Specific factors that might affect employee well-being, satisfaction, and motivation include: effective employee problem or grievance resolution; safety factors; employee views of management; employee training, development, and career opportunities; employee preparation for changes in technology or the work organisation; work environment and other work conditions; workload; cooperation and teamwork; recognition; benefits; communications; job security; compensation; and equal opportunity.
Source - Criteria for Performance Excellence - notes
| 5.3c(2) | What formal and/or informal assessment methods and measures do you use to determine employee well-being, satisfaction, and motivation? How do you tailor these methods and measures to a diverse work force and to different categories and types of employees? How do you use other indicators such as employee turnover, absenteeism, grievances, and productivity to assess and improve employee well-being, satisfaction, and motivation? |
Measures and/or indicators of well-being, satisfaction, and motivation might include: safety; absenteeism; turnover; turnover rate for customer-contact employees; grievances; strikes; other job actions; insurance costs; worker's compensation claims; and results of surveys. Results from such measures and indicators should be reported in 7.3.
Source - Source - Criteria for Performance Excellence - notes
| 5.3c(3) | How do you relate assessment findings to key business results to identify work environment and employee support climate improvement priorities? |
These questions are looking for links between the various measurements applied in category 5 and the key business factors identified in your business overview, and in your responses in the leadership and strategy categories.
Area 5.3c also addresses how the information and data on the well-being, satisfaction, and motivation of employees are actually used in identifying improvement priorities. Priority setting might draw upon human resource results presented in Item 7.3 and might involve addressing employee problems based on impact on organisational performance.
Source - Criteria for Performance Excellence - notes
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See the exhibit Customer satisfaction at IBM for a watershed study that links employee and customer satisfaction.
And to wrap up human resources, here's a couple of Baldrige-winning (but just a bit dated) summaries from AT&T:
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