Module 3 – “The Moderation Process ” Corporate Managers

1. Module 3 – “The Moderation Process” Corporate Managers Performance, Development and Rewards Training

2. Module 3 The moderation process focuses on the course objectives outlined below At the end of this session participants will be able to: • Describe the purpose of the moderation process and the principles that underpin the process; • Describe the 4 key steps of the moderation process; • Understand their role in the moderation process and the role of their direct reports • Effectively prepare for and participate in a moderation meeting; and • Apply the guidelines for participating in a moderation meeting through a moderation process case study discussion.

3. This module focuses on the ‘Conduct moderation process’ step highlighted in red Develop Performance and Development Plan The PDR Process • Draft Performance and Development Objectives • Agree Performance and Development Plan – discussion • Manager Sign-off Conduct Mid Cycle Review • Employee Performance Plan Review • Manager Performance Plan Review • Discussion and updates • Manager Sign-off Conduct End Cycle Review • Employee Performance Review (and rating) • Manager Performance Review (and rating) • Performance Discussion • Performance Review Sign-off Conduct Moderation Process • Business Unit Moderation Process • Division Moderation Process • Incentive Modelling • Final Performance Rating Sign-off Performance Bonus Payments May pay run

4. Objectives of the moderation process • To ensure individual performance assessment outcomes are as consistent as possible in comparison to peers within the same business unit. • objectives set were not too easy or too difficult to achieve; and • performance ratings assigned by a Manager are not too harsh or too lenient. • To ensure the distribution of performance ratings (at a business unit and division level) are consistent and fair across Swinburne and align to business unit performance.

5. Principles of the moderation process • All individual performance assessment ratings will be signed off by two levels of management. • Individual performance outcomes of stand alone roles will be assessed on an absolute basis and not compared with the performance outcomes of any other roles within a business unit. • Individual performance outcomes will not be compared with similar roles across other business units. • Once an individual’s performance rating has been signed off by two levels of management: • It will not be compared further with other individual performance ratings; and • May only be moderated based on the absolute distributions of the business unit / division. • Final performance rating outcomes will not be communicated to individual employees until Ian Young has signed off the performance distributions of the Corporate division.

6. Some facts about the moderation process • The moderation process: • Is an iterative process that will be improved year on year as Managers become familiar with and participate in the process; • Is an opportunity for Managers to discuss, learn from others and to calibrate their judgment accordingly; • Is a mechanism to check performance ratings are consistent and fair across the University (parity across groups/teams and appropriate distribution of ratings across Swinburne); • Is an opportunity for Managers to test the process and provide feedback in preparation for the 2009 PDR cycle; and • Consistently applies the guiding principles at all steps of the process.

7. Some facts about the moderation process cont.. • The moderation process is not: • An exact science; • A complicated or detailed exercise in comparing all employees’ objectives and ratings against all peers; • A forum to introduce hearsay evidence; or • An opportunity to introduce new evidence (all evidence will have been discussed with employees beforehand).

8. The moderation process involves 4 key steps Step 1 • A series of moderation meetings involving Team Leaders / Managers/ Assoc. Directors and Directors* Step 2 Direct Repor1 1 Manager A Moderation meetings facilitated by Head of Division with his/her business unit Directors Vice Chancellor reviews performance outcomes for a division and signs-off ratings Direct Report 2 Step 3 Performance Review Direct Repor1 1 Manager B Director A Employee notified of final rating by Manager Step 4 Direct Report 2 Performance Review Facilities& Services Group Direct Repor1 1 Manager C Direct Report 2 Head of Division Direct Repor1 1 Manager A Human Resources Direct Report 2 Performance Review Direct Repor1 1 Director B Manager B Direct Report 2 Performance Review Direct Repor1 1 Manager C Direct Report 2 * Note: number of moderation of meetings will vary based on reporting levels within each business unit

9. Swinburne Press VP Director Facilities & Services Group Director Human Resources Director Information Technology Services Director Student Operations Director Student Services Director Information Resources Manager Team A Manager Team A Manager Team A Manager Team A Manager Team A Manager Team A Manager Team B Manager Team B Manager Team B Manager Team B Manager Team B Manager Team B Manager Team C Manager Team C Manager Team C Manager Team C Manager Team C Manager Team C Manager Team D Manager Team D Manager Team D Manager Team D Manager Team D Manager Team D Step 1 - The moderation process is conducted within a business unit Let’s take a look at an example business unit within Student & Corporate Services The moderation process is conducted within each Business Unit

10. Overview of the moderation process within a Business Unit with multiple PDR reporting levels • Refer to Handout provided. Not all business units have the same reporting hierarchies for PDR purposes. For example one business unit may have two reporting levels, while another may have four (or more) reporting levels. • A Manager A conducts moderation meetings with each of his/her Team Leaders to review the performance outcomes of the Team Leaders’ direct reports. • Associate Director A then conducts three moderation meetings with each of his / her direct reports (i.e. meeting one with Manager A, meeting two with Manager B etc. • At this meeting Manager A and Associate Director A discuss: • the Team Leaders’ performance outcomes (ratings); and • Manager A’s direct report 1’s performance outcome (ratings). • The Business Unit Director will conduct 4 moderation meetings. One with each of his / her direct reports to review the performance outcomes of Managers A to H and a final meeting with all Assoc. Directors to review performance distributions of the business unit.

11. How does Step 1 actually work? Review individual performance ratings at each level: • At each reporting level, PDR managers collate the individual performance assessments of their direct reports (ratings and evidence of performance where applicable). • The PDR Manager will meet with his / her Manager to review the performance ratings the PDR manager assigned to his / her direct reports. • This is a sense check to ensure performance ratings are being applied consistently at each level within a team / business unit. • It is not a detailed exercise of debating the relative merits of each performance objective or performance ratings of all employees. • By comparing performance objectives and outcomes the process will provide visibility of soft/hard objectives and/or rating performance outcomes that are either too harsh or too lenient allowing ratings to be calibratedaccordingly. Question: What are some examples of distorting factors that may impact performance ratings?

12. Putting the Step 1 into practice: Case Study Activity Part A Case Study Activity 1 – Review individual performance outcomes • Refer to the case study and performance plans provided. • Work in pairs (10 mins) to answer the following questions: • Would you recommend any changes to these performance plans? • What changes, if any would you recommend and why? • If implemented, would these changes impact on the final ratings assigned? Discuss your findings with the other participants

13. How does Step 1 actually work? cont.. • Following the moderation meetings the Director of the Business Unit has with his / her direct reports, a final moderation meeting is held (all direct reports attend) to review the performance distributions of the business unit. • evidence of team / sub-business unit performance (i.e. performance against business unit plan) where applicable; and • distribution of performance across your team / sub-business unit (i.e. 20% 5’s, 5% 4’s, 70% 3’s etc). The purpose of this moderation meeting is to: • Compare broad performance outcomes between teams / sub-business units to ensure distributions of ratings that fall outside of the guidelines are justified with evidence of actual team / sub-business unit performance. • Checks should be made both across team / sub-business units and across individual HEW levels to ensure equity and fairness. The Business Unit Director then prepares for Step 2 of the moderation process

14. Putting Step 1 into practice: Case Study Activity Part B • Case Study Activity 2 – Review performance distributions • Working in pairs discuss what you would do as the Director of the business unit if: • Darren provided evidence that his team exceeded all the relevant objectives agreed in his business unit plan; and • It was clear Darren’s team had not exceeded any of the relevant objectives in the business unit plan. • Discuss your findings with the group.

15. Facilitation of the moderation process • Moderation meetings will be facilitated by the most senior manager attending the moderation meeting. The facilitators role is to: • monitor time and interject when necessary to ensure that the meeting flows smoothly; • ensure the rating guidelines are being adhered to at the year-end process; • query any rating other than 3 ‘meets expectations”’ to ensure reliable and adequate evidence to support the rating. A baseline of 3 ‘meets expectations’ is assumed unless otherwise supported; • ensure appropriate and comprehensive feedback is presented by those who have worked directly with the employee; and • ensure hearsay or other non-documented, informal opinions are not considered. Note: HR are able to assist upon request.

16. Step 2. The moderation process is conducted across a division Let’s take a look at an example across Student & Corporate Services: • The head of the division, e.g. Student and Corporate Services, conducts Moderation meetings with his / her direct reports (i.e. Business Unit Directors), and a final moderation meeting which all direct reports attend to review performance distributions across the Division. Swinburne Press VP Director Facilities & Services Group Director Human Resources Director Information Technology Services Director Student Operations Director Student Services Director Information Resources Manager Team A Manager Team A Manager Team A Manager Team A Manager Team A Manager Team A The moderation process is conducted within each Business Unit for each equivalent level Manager Team B Manager Team B Manager Team B Manager Team B Manager Team B Manager Team B Manager Team C Manager Team C Manager Team C Manager Team C Manager Team C Manager Team C Manager Team D Manager Team D Manager Team D Manager Team D Manager Team D Manager Team D

17. Preparing for step 2 of the moderation process Business unit Directors should prepare in advance for the moderation meeting: • Collate information to bring to the moderation meeting including: • The performance assessment information of their direct reports (involved in the moderation meetings in step 1 of the process) including performance ratings and evidence of performance; • evidence of team / sub-business unit performance (i.e. performance against business unit plan); and • distribution of performance across the business unit (i.e. 20% 5’s, 5% 4’s, 70% 3’s etc). • Directors will consolidate business unit performance outcomes (% of ratings at each performance level). For example, a Director of a business unit will provide a summary of performance outcomes at the business unit level and provide a breakdown at each team / sub-business unit level. • Where performance outcomes are not in line with performance distribution guidelines, evidence of either over or under performance against the agreed business unit plan should be provided to support the distribution of ratings.

18. Participating in step 2 of the moderation process The focus of step 2 of the moderation process is to: • Review individual performance outcomes: • The Head of the Division will conduct a moderation meeting with each of his / her direct reports. This process is the same as that conducted in step 1. However performance outcomes of the Director’s direct reports are reviewed with the Head of the Division. • Note: With the exception of the business unit Director’s direct reports, individual performance is not discussed during step 2 of the moderation process. • Review performance distributions: • A single meeting is then convened with the Division Head and all of his / her direct reports to compare broad performance outcomes between the business units to ensure distributions of ratings that fall outside of the guidelines are justified with evidence of actual business unit performance. • Note: Broad performance outcomes may be calibrated (i.e. at a business unit level) based on a comparison with other business units within the same division.

19. Step 3 of the moderation process Review individual performance outcomes: • The Heads of each division will meet individually with the Vice Chancellor to discuss and review the performance outcomes of the business unit directors (two levels of management approval). Review performance distributions: • Following the review the Vice Chancellor will convene a meeting with all Heads of the Corporate divisions to review the performance distributions of each division. • Following these meetings (and any final amendments) the Vice Chancellor will sign-off the final performance ratings and performance distributions of the Corporate Division.

20. Step 4 of the moderation process • Individual performance ratings are entered by the relevant PDR manager into the PDR online tool. • Note: The 2008 performance mini cycle is not tied to rewards. • The appropriate division head and or Director will inform each Manager in cases where final performance ratings have changed from those originally assigned with clear reasons why. • Managers should advise each of their direct reports of their final performance rating and any applicable reward. • Employees will be notified of their final performance rating through the online PDR tool, once their manager has confirmed the post-moderation ratings.

21. A few things to reiterate….. • Summary • The Moderation process is a 4 step process that is designed to ensure performance ratings are applied fairly and consistently across similar job roles and business units. • Evidence must be provided to justify performance ratings and outcomes, and changes can only be made where evidence exists to support the change. • This is the first time our managers have participated in a moderation process, ensure you prepare well to contribute fully to during the moderation discussions. • What are your key learnings from today?

22. Let’s review our course objectives to see if we have covered off all required topics • You should now be able to: • Describe the purpose of the moderation process and the principles that underpin the process; • Describe the 4 key steps of the moderation process; • Understand their role in the moderation process and the role of their direct reports; • Effectively prepare for and participate in a moderation meeting; and • Apply the guidelines for participating in a moderation meeting through a moderation process case study discussion.

23. Key Contacts General Project Email: pdr@swin.edu.au Richard Williams HR Director P (03) 9214 8897 F (03) 9214 8565 E riwilliams@swin.edu.au Eleanor Newington  HR Project Officer P (03) 9214 8799 E enewington@swin.edu.au Other Key ContactsKelly-Ann James (03) 9214 5788 Tamara Sullivan (03) 9214 5424 Jenny McGrath (03) 9214 8223, Erin Freeman (03) 9214 8827 Melinda Higgins (03) 9214 5369