Human Resource Audit – Performance Management System

1. State Employees Credit Union Human Resource Audit – Performance Management System Laura Beatty Meredith Frisbie Shelby Westbrook Zach Smith North Carolina State University – MIE436

2. Presentation Overview • Orientation to SECU • What is Performance Management (PM)? • PM conducted at SECU • How PM is being handled • Strengths • Weaknesses • Recommendations for improving PM • Areas in need of improvement • How to improve deficient PM areas • Justification/Outcome of improvements • Conclusion • Questions

3. Orientation to SECU • Non-profit financial cooperative • Founded June 4, 1937 • "People Helping People in North Carolina." • Limited Membership with approx. 1.5 million members. • Promote thrift among its members by affording them an opportunity to accumulate their savings. • Creates a source of credit at a fair and reasonable rate of interest for members. • Provides an opportunity for members to use and control their money to improve their economic and social condition. • 4,200 employees , 225 branches, and more than 1,000 ATMs • Exponential growth rates (State Employees' Credit Union, 2009)

4. What is Performance Management? • Performance Management is the continuous process of identifying, measuring, and developing the performance of individuals and/or teams, with the goal of aligning performance with the strategic goals of the organization. (Aguinis, 2009, p. 2).

5. Current PM Practices at SECU • HR/Personnel Department • Centralized internally • Manages PM through PMS developed in 2001 • Yearly employee self-appraisals • Yearly employee evaluations by supervisor • Progressive discipline policy • Limited topic grievance process • Performance improvement through training • Documentation of PM actions and events (Woodson, 2009) Section IA

6. PM’s Contribution to Strategic Goals • Facilitation of strategic goals • Yearly online evaluations • Attraction • Education decides salary • Scholarships • Retention • Progressive discipline policy • Additional evaluations • Motivation • Modules • Lead to promotions Section IB

7. PM Consistency with Other HR Functions • Training and Development (Source) • Expectations • Ongoing process • Compensation (Source) • Wages - based on education and experience • Merit pay – Merit pay given in July by board decision • Recruiting and Selection (Source) • Advertised by the branch • Posted internally and externally (Woodson, 2009) Section IC

8. Evaluation of PM Practices by SECU • Does not have distinctive PM evaluation system • Lack on-going, continual process for offering feedback • Only report issues to HR manager when necessary • PMS not working properly • Employees have no input/say in design • System is outdated (not changed since 2001) • Just recently , evaluations became electronically-based Section ID

9. Strengths • Yearly online evaluations (Steingold, 2009) • Easy to use/store/transfer • Legal protection • Promotion The Form (State Employees' Credit Union, 2009) • Graphic Rating Scale • Short answer section-open-ended questions • Free to ask for feedback at anytime Section II

10. Evaluation Form (State Employees' Credit Union, 2009)

11. Weaknesses • 1) Lack of incorporation of organization’s mission, vision, and goals into their PMS (Source) • 2) Absence of coaching and feedback in the workplace (Source) • 3) Facilitation of performance appraisal rather than a PM (Source) • 4) Outdated PM practices (Staneart, 2009) Section II

12. Mission • “People helping people in North Carolina” • Geared towards members, not employees • No postings of statement around office • Needs to include • why the organization exists • the scope of the organization’s activities • what products and/or services are being offered Section III

13. Vision • “To challenge State Employees’ Credit Union to provide opportunities for members to improve their economic and social condition; to encourage thrift among members; to create sources of credit at fair and reasonable rates of interest; and to broaden the economic awareness of members through planned programs of consumer protection” • Needs to be more future-focused, motivating, and inspiring to employees Section III

14. Coaching/Feedback Implementation (Aguinis, 2009) • 1) Set developmental goals • 2) Identify resources and strategies • 3) Implement strategies • 4) Observation and documentation • 5) Feedback Section III

15. Performance Appraisal • Performance Appraisal (Aguinis, 2009) • Gives a logical description of an employees strengths and weaknesses • PMS include six steps: • 1) prerequisites • 2) performance planning • 3) performance execution • 4) performance assessment • 5) performance review • 6) performance renewal and re-contracting • Ongoing

16. Outdated PM Practices • Evident by low validity in PM Process (Staneart, 2009) • Results from typical arbitrary and subjective approaches • Is the practice related back to the job performed? • i.e. coaching, feedback, appraisals • Contaminated Material and Information(Staneart, 2009) • SECU is currently using invalid metrics in measuring performance due to dynamic job nature. (Woodson, 2009) “All businesses and organizations alike, in order to operate an ideal PMS, require a constant update and improvement in the way they apply certain PM practices, i.e.. appraisals and feedback.” -Doug Staneart, CEO of the Leaders Institute Section III

17. Implementing New PM System • Preparation of New PMS • Achieve system buy-in by employees • Communication Plan • Communicate important factors of implementing a new PMS in an organization and its benefits • Avoid biases, consider employees, promote positive, & document • Appeals Process • Create tiers in the process for advancement of unresolved issues • Training Programs • Rater Training, RET, FOR, BO, SL • Pilot Testing • Discover problem, fix problems, gain input, sample size • Continuous Monitoring and Evaluation • System satisfaction, cost/benefit, performance level • Continuous update of PM practices Section III

18. Questions/Comments

19. References Aguinis, Herman. Performance Management Second Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2009. Cross-Training Boosts Efficiency. CU360, Credit Union National Association, Inc. 7/27/2009, Vol. 35 Issue 13, p6-7, 2p; (AN 43374399), Business Source Premier. Holley, Don. How to retain good staff.Manufacturers' Monthly, Sep2009, p17-17, 1/4p; (AN 44327636), Business Source Premier. Noe, R. A., Hollenbeck, J. R., & Gerhart, B. (2007). Assessing Performance and Developing Employees. In J. Weimeister (Ed.), Fundamentals of Human Resource Management (pp.303-304). New York, NY: McGraw-Hill/Irwin. Staneart, D. (2009). Is Your Performance Review System Outdated? . Retrieved November 14, 2009, from Business Know-How: http://www.businessknowhow.com/manage/perfappr.htm Steingold, F. S. (2009). Personnel Practices. In A. Schroeder (Ed.), The Employer's Legal Handbook (pp. 47-50). Berkeley, CA: Nolo. Woodson, Bob. Senior Vice President - Personnel and Human Resources Zachary Smith. 20 September 2009.