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Chapter 9: Anticipating and Managing Performance Issues To minimize the need for future downsizing, organizations need to be deliberate on (1) the strategies they use to determine the need for new talent, (2) the design of their organizational practices such as clarifying performance expectations through specific criteria and the conduct of regular performance appraisals, and (3) attending to employee job and organization âfitâ during the recruitment process. In this chapter, we present challenges, strategies, and workforce practices related to âAnticipating and Managing Performance Issues.â The majority of workforce challenges that result from performance issues are primarily retention related (i.e., issues concerning employees already on the job who are having performance issues that may voluntarily or involuntary terminate their employment). This chapter describes a couple of strategies that organizations can implement to minimize this inevitable challenge. However, the bulk of the strategies described here are preventative measures that organizations can employ during the recruitment process. Exhibit 9-1 provides a snapshot of the chapter. Exhibit 9-1 Snapshot of Chapter 9 Chapter Road Map Concept and Definition Anticipating and managing performance issues helps organizations reduce unwanted reassignments, poor performance, and involuntary turnover. Workforce Challengesâ¦..â¦â¦..........68 Poor Employee Performance Industry Strategies.â¦â¦â¦â¦â¦â¦â¦68 Provide Meaningful Performance Feedback Evaluate Organization and Job Fit in the Recruitment Process Implement Workforce Planning and Hire the Best People Utilize Realistic Job Previews (RJPs) Mentor and Coach Employees Workforce Practicesâ¦..â¦â¦â¦â¦â¦.70 Minnesota DOT Individual Competencies for All Positions Virginia DOT Downsizing Substitution Program Definition of Anticipating and Managing Performance Issues: Involves avoiding adverse decisions (e.g., reassignments, layoffs, terminations) that could have been prevented with the proper forethought and better differentiating between good and bad performers during the selection/promotion process. 67
Exhibit 9-1 (Continued) Snapshot of Chapter 9 Workforce Pipeline Target Area 9.1 Workforce Challenges. Programs related to âAnticipating and Managing Performance Issuesâ are typically designed to address challenges associated with managing an organizationâs current workforce. For example, one common challenge an agency might face is: Poor Employee Performance. Organizations constantly struggle to identify best practices to deal with under-performing employees. Poor employee behavior and unsatisfactory performance are major workforce challenges that limit an organizationâs potential to achieve its goals. Participants indicated that it is significantly easier to avoid unsatisfactory employee behavior and performance by reducing the number of poor hires and better managing applicantsâ expectations of the job and its related duties. 9.2 Industry Strategies. Researchers and program managers identified the following programmatic strategies when describing industry efforts in âAnticipating and Managing Performance Issuesâ (see Exhibit 9-2). While these strategies represent the general direction of human resource (HR) departments across the nation, it is important that the specific needs of your agency are used to guide the development and implementation of a program in your agency. Exhibit 9-2 Industry Strategies: Anticipating and Managing Performance Issues Strategy Strategy Description Provide Meaningful Performance Feedback Administrative and developmental performance reviews are an important component of employee retention because they help the employee respond to expectations of the organization and effectively determine his/her standing in the organization in terms of performance, development, and promotion. Performance feedback also helps to ensure that employees are not terminated due to poor performance and therefore reduces involuntary turnover. Evaluate Organization and Job Fit in the Recruitment Process Recruitment strategies that consider a personâs personality fit with the organization are linked to reduced turnover and fewer performance issues (Johnson et al., 2008). Target Career Stages K-12 Comm. Colleges 4 year Colleges Graduate School s Entry-Level Staff Mid-Career Staff Senior Leaders Retirees Anticipating and Managing Performance Issue s Chapter 9 Target Area TRANSPOR ATT ION WORKFORCE PIPELINE 68 Strategies to Attract and Retain a Capable Transportation Workforce
Exhibit 9-2 (Continued) Industry Strategies: Anticipating and Managing Performance Issues Strategy Strategy Description Implement Workforce Planning and Hire the Best People While organizations are having senior-level leadership determine the direction of the organization and future initiatives, they are also having those leaders determine the skills that will be needed to accomplish future initiatives. When plans for the future are shared throughout the organization, supervisors can begin to prepare and train their employees to be ready when new initiatives are implemented. Knowledge of leadershipâs strategic plans also allows hiring managers to locate and hire the right candidates to support these initiatives. This knowledge during the hiring process helps to avoid unnecessary layoffs due to uninformed staffing decisions. Utilize Realistic Job Previews (RJPs) When it is time to start hiring, organizations have found that involving incumbents in the selection process results in decreased turnover because they can provide candidates with previews of actual job experiences and use their experience to contribute to the assessment of the candidateâs qualifications. It is also positive for the organization if an applicant who would soon come to dislike the working conditions is deterred by the realistic job preview. For example, front-line workers in the oil industry who do not want to be managers are at times promoted into recruiting positions to share their knowledge of the job. Mentor and Coach Employees Organizations indicated that developing a career path and certification program for transportation workers has been successful in retaining their workforce. The intent is to provide a series of goals for career progression and promote lifelong careers. To support these career path initiatives, organizations are having mentors meet one-on-one more than annually with assigned employees to determine the next step in each employeeâs career, what obstacles stand in the way of reaching that step, and what the mentor can do to remove those obstacles. Organizations are also adding pages to their intranet sites that provide information on the steps that employees of different levels must accomplish to reach the next consecutive level. This transparency is intended to help convey to employees that there are opportunities for advancement within the organization. For âharder-to-retain groupsâ such as women and minorities, organizations have developed specific mentoring programs where junior employees are paired up with senior employees from the same minority group to periodically discuss their career path and goals. Mentors share their experiences and help mentees find ways to overcome obstacles to their success. During workshops, mentors and mentees solve work-related activities and are involved in large group discussions with other mentors-mentees teams. Anticipating and Managing Performance Issues 69
9.3 Workforce Practices. Four workforce practices that were designed to assist in making the process of âAnticipating and Managing Performance Issuesâ within transportation agencies efficient and effective were reviewed, and we identified two workforce practices that were the most noteworthy within this context: Minnesota DOT Individual Competencies for All Positions Virginia DOT Downsizing Substitution Program For these two practices, we conducted a case study. Summaries of the two case studies are presented below. The full case studies can be found on the TRB website at http://trb.org/Main/Blurbs/164747.aspx as part of Volume II: Supplemental Materials. The full case study descriptions detail each practiceâs background, implementation, maintenance, evaluation, and transferability. 70 Strategies to Attract and Retain a Capable Transportation Workforce
Minnesota DOT Individual Competencies for All Positions Job Type: All ROI: Short- to Mid-term Generation: All Key Program Highlights: o Describes performance standards and helps employees understand desired behaviors and actions o Ensures a level of consistency across the organization o Helps hiring managers quickly identify and evaluate more qualified applicants Minnesota DOT Individual Competencies for All Positions. Minnesota Department of Transportation (Mn/DOT) employs 5,033 people in a variety of employment conditions (i.e., temporary, unlimited, full-time, part-time). Mn/DOT has identified and defined seven individual competencies that describe how successful employees perform on the job and help employees understand the actions or behaviors that are desired. The seven competencies include Leadership, Learning and Strategic Systems Thinking, Quality Management, Organizational Knowledge, People Management, Technical Knowledge, and Individual Characteristics. Mn/DOT utilized a card-sorting process to narrow an initial list of 67 competencies down to 10 that are most important to the agency and relevant to an employeeâs success. The implementation of these competencies required minimal costs and produced great benefits for the agency. Aside from the cost of hiring a consultant initially, the implementation of the seven competencies has only required HR personnel time and effort to successfully incorporate them into all HR functions and tools including position descriptions, performance appraisals, career planning, succession planning, recruitment, and selection. Mn/DOTâs leadership has explained that the individual competencies provide greater accountability for employees and their performance because the competencies serve as a reference point for employees to help them understand what is expected in the job. From the staffing perspective, rolling the competencies into position descriptions and minimum qualifications has ensured a level of consistency across the organization in how the competencies are utilized. While the competencies have helped make Mn/DOT more unified, the competencies have also made it easier for hiring managers to identify and evaluate more qualified applicants. The approach was designed to serve as a foundation for Mn/DOTâs Succession Planning effort in the early 1990s. The intent was to align the competencies, positive behavior, and values with the organizationâs vision and goals. Mn/DOT has found the program to be successful in unifying the agency, establishing expectations, and giving managers tools to use in performance management and during initial probation periods after hires. The stateâs bargaining units were involved throughout development of the program. In 2009, Mn/DOT went through the process of refreshing and updating the competencies for the next decade. Anticipating and Managing Performance Issues 71
Virginia DOT Downsizing Substitution Program Job Type: All ROI: Short-term Generation: All Key Program Highlights: o Allows retirement-eligible employees the opportunity to serve as substitutes for employees whose positions were eliminated as a result of layoffs o Reduces the risk of losing majority of retirement-eligible employees at once o Of 370 employees who would have been laid-off, 333 were retained through the program Virginia DOT Downsizing Substitution Program. The Virginia Department of Transportation (VDOT) has a workforce of roughly 7,600 full-time employees with an average age of 48 years. VDOTâs substitution practice falls under the Commonwealthâs layoff policy. As of 2008, VDOT employed roughly 8,400 full-time, classified employees, but mandates require the agency to be at 7,500 staff by July 1, 2010. The state of Virginia has a Department of Human Resource Management responsible for overseeing all HR departments for the entire Commonwealth and for providing policy oversight regarding layoff mandates. Within the stateâs downsizing policy, there is a âsubstitution rule.â Most agencies in Virginia have not utilized the substitution rule and instead implement strict layoffs. VDOT wanted to invoke the substitution rule to help provide staff with a choice in the layoff process. VDOT requested and was permitted to exercise full flexibilities in the implementation of the substitution rule during the mandated reduction of staff. Full flexibilities allow VDOT to identify substitutes based on minimum qualifications as opposed to being restricted to make placements within the same role (e.g., engineer has to be substituted for engineer). The substitution program was used to help temper morale and ease the process of terminating staff based on the mandate. Retirement-eligible employees may serve as substitutes for employees whose positions were eliminated. To coordinate the substitution program, the agency developed and maintains a database where retirement-eligible employees can apply to be substitutes for junior employees who were given initial notice of layoff. If an employee was planning on leaving the agency, this layoff process allows him/her to leave sooner with an enhanced severance package if their position was directly eliminated or if they were able to serve as a substitute for another employee. If VDOT did not apply the substitution rule, they would have to lay off many of their junior staff and then face the risk of a large population of more senior employees retiring soon after, leaving the agency with a future cost and recruitment burden. This system allows those whose jobs are in jeopardy to be placed into the jobs of the substitutes. Those individuals whose jobs are in jeopardy and want to stay are then matched according to minimum qualifications with those ready to be substitutes. The cost of implementing the substitution program has included a part-time programmer who spent 50% of his time for 3 to 4 months to develop the application that is used to track applications to substitutes and for placements. Additional cost included the HR placement team that spent 5 full-time weeks pairing junior-level employees who would have been laid off with senior-level employees who offered to substitute. The cost of offering early severance packages was substantial, yet it was predicted to be offset by the savings of avoiding costs that would have otherwise been associated with future hiring and training. The substitution program has been much more successful with VDOTâs rounds of layoffs than the agency originally anticipated. The agency provided an initial notice of layoff to 640 employees in July 2009. VDOT had approximately 270 employees who elected not to seek placement leaving roughly 370 employees who wanted placement for only 109 vacancies that could be immediately filled. However, the agency was able to successfully place 333 employees because 224 of the remaining 260 employees seeking placement were able to be placed into a position using an employee substitute. The agency had a number of employees, approximately 25, who identified opportunities outside the agency and were 72 Strategies to Attract and Retain a Capable Transportation Workforce
voluntary quits. As a result, VDOT was only unable to place approximately 12 employees who sought placement and were laid off, a great morale saver. Other Example Practices To serve as an additional resource for agencies interested in âAnticipating and Managing Performance Issues,â we have included a list of other practices that transportation agencies have implemented for this purpose. Additional information on each of the following practices can be found in one- to two-page summaries within the supplemental materials. Personality-Fit Recruitment Strategies Using Mentors to Socialize New Recruits The practice summaries include information, such as the lead organization, practice description, practice purpose, targeted participants, return on investment (ROI) timeline, influence of the economy, innovativeness, and resources to find out more information on the individual practices. Anticipating and Managing Performance Issues 73