MANAGEMENT APPRAISAL in the PostMerger Process - PowerPoint PPT Presentation

Loading...

PPT – MANAGEMENT APPRAISAL in the PostMerger Process PowerPoint presentation | free to view - id: f3730-OTI1Y



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

MANAGEMENT APPRAISAL in the PostMerger Process

Description:

Analytical with strong financial acumen and ability to effectively evaluate ... strategic and business acumen, which is not found frequently in individuals in ... – PowerPoint PPT presentation

Number of Views:101
Avg rating:3.0/5.0
Slides: 31
Provided by: liz126
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: MANAGEMENT APPRAISAL in the PostMerger Process


1
MANAGEMENT APPRAISAL in the Post-Merger Process
  • Presentation by Erik Slingerland

2
WHAT IS A MANAGEMENT APPRAISAL?
  • Management Appraisal is an assessment of the
    business capabilities and the market value of an
    organizations human capital
  • Business Capabilities. It defines and identifies
    individuals characteristics that deliver
    superior business performance
  • Market Value. It provides you with an up-to-date
    assessment of how your team rates against the
    market
  • It is designed to support the commercial
    requirements of the business
  • Pragmatic. Focused on business performance
  • Systematic. A refined and reliable process

3
WHEN COULD YOU USE A MANAGEMENT APPRAISAL?
  • When Major Decisions Depend on Human Capital
  • Merger/Acquisition
  • Succession planning, internal promotion
  • Rapid growth, major reductions
  • When There Are Big Issues But Limited Resources
  • Turnaround situation
  • Due diligence
  • When Things Change
  • Outside Market or Competition
  • Inside Ownership (e.g. privatization),
    strategy, structure, size, or the CEO

4
MANAGEMENT APPRAISAL PROVIDES A NUMBER
OF SPECIFIC OUTPUTS
  • An assessment of human capital against
    organizational demands
  • A benchmark of human capital against the market
  • A comparison with executives across geographies
  • An objective evaluation of leadership bench
    strength
  • A pragmatic assessment of executives potential
    within the context of the business
  • Clear recommendations and options for filling key
    positions
  • A basis for strategic human capital planning and
    development

5
THE VALUE OF A MANAGEMENT APPRAISAL FOR MERGER
AND ACQUISITION TRANSACTIONS
  • Identifying human capital needs for the new
    company
  • Core executive competencies to lead the new
    company
  • Objective evaluation of the senior leadership
    team of each organization
  • Benchmark executive talent
  • Support selection decisions for the new
    organization
  • Target key people for new roles
  • Anticipating potential obstacles
  • Cultural issues and integration challenges
  • Areas of competency strength and weakness
  • Helping the individuals and organization to move
    on
  • Reduce anxiety and ensure fair treatment
  • Provide feedback and development plans for each
    executive to support individual growth and
    strategic planning

6
THE VALUE OF A MANAGEMENT APPRAISAL FOR DUE
DILIGENCE
  • Evaluating the companys human capital
  • Objective evaluation of the senior leadership
    team
  • Evaluating the capability to deliver planned
    objectives
  • Benchmark executive talent
  • Assess bench strength of executive talent
  • Anticipating potential obstacles
  • Provides advice to the acquirer on team
    management
  • Areas of competency strength and weakness
  • Future areas of concern
  • Enabling pragmatic evaluation of people costs
  • Identify the scale and scope of areas for
    development
  • Identify the size of future needs against todays
    capabilities

7
THE MANAGEMENT APPRAISAL PROCESS IS ALSO OF
SIGNIFICANT VALUE TO YOUR MANAGERS
  • The nature of the approach should be
    non-threatening and could even be enjoyed by the
    participants
  • Opportunity to talk about their own achievements
    and aspirations
  • Remains business focussed
  • Opportunity to share personal views with third
    party
  • The approach chosen should take local
    considerations into account
  • Local language of executive if necessary
  • Location of interviews
  • The output is designed to be helpful to the
    individual
  • All appraisal team members should be trained in
    giving feedback
  • Personal feedback on strengths and development
    needs is seen as objective and constructive
  • Provides foundation for individual development
    plans

8
ACHIEVING GOALS REQUIRES ALIGNED BEHAVIORS AND
COMPETENCIES
Goals
Behaviors
  • Goals are achieved through specific behaviors and
    actions
  • Competencies categorize and describe behaviors
  • Scaled competencies specify the range/degree of
    those desired behaviors

Competencies
Structured Interview
  • Future behavior is best predicted by past actions
  • Defined performance expectations and key
    situations to overcome
  • Questions about how someone accomplished what
    they did - specific examples

Defined Competency Set
  • Results Orientation
  • Market Knowledge
  • Strategic Orientation
  • Collaboration
  • Team Leadership
  • Change Leadership
  • People Development
  • Customer Intimacy/Focus
  • Intercultural Sensitivity

9
EXAMPLE OF AN EVALUATION METHODOLOGY
10
WHAT IS A COMPETENCY?
  • A measurable characteristic of a person that is
    related to success at work. It may be a
    behavioral skill, a technical skill, knowledge,
    or ability.
  • Results Orientation
  • Each competency has a set of behavioral
    indicators, e.g.
  • Works on assigned roles and tasks works to
    complete tasks
  • Introduces a new model that successfully
    transforms an existing business
  • We order these behavioral indicators by relative
    difficulty and sophistication thereby scaling
    each competency

11
SCALED COMPETENCIES PROVIDE THE BASIS FOR
APPRAISALS
Transforms business model
Results Orientation
Redesigns business practices
7
Example
Improves business practices
6
Drives to exceed goals
5
Driven by goals
4
  • People demonstrating this competency drive
  • for improvement of business results.
  • Low levels They are dissatisfied with poor
    performance and drive to set goals
  • Moderate levels They go beyond goals set for
    them and drive towards higher, world-class goals
  • High levels They intelligently transform a
    business for significantly improved results

Would like to make things better
3
Fulfills assigned tasks
2
1
12
SAMPLE BEHAVIORAL INDICATORS
  • Results Orientation
  • Level 1 Fulfills assigned tasks
  • Works on assigned roles and tasks works to
    complete tasks expresses desire to do the task
    well or right
  • Demonstrates or expresses frustration with
    others' inability to do the job
  • Level 4 Drives to exceed goals
  • Sets own or team goals with relevant metrics
    which go beyond normal expectations to new,
    stretching, or challenging-but-achievable goals
    or targets
  • Identifies opportunities to exceed goals and
    works towards them, even under adverse
    circumstances
  • Level 7 Transforms business model for enduring
    high performance
  • Introduces a new model that successfully
    transforms an existing business or creates a new
    business, fundamentally changing the way the
    company or industry operates for the better
  • Creates a new business or technology opportunity
    that is significantly different or better
  • Creates and implements a world-class best
    practice, adopted by others

13
DIFFERENT ROLES ARE LIKELY TO REQUIRE VARYING
LEVELS OF CAPABILITY
VP Marketing
Transforms business model
Redesigns business practices
Operations SVP
Finance VP
7
Improves business practices
Operations VP
6
Drives to exceed goals
5
Support Functions
Driven by goals
4
Would like to make things better
3
Fulfills assigned tasks
2
1
14
REQUIRED COMPETENCY LEVELS ARE SET FOR EACH JOB
BASED ON BUSINESS OBJECTIVES
15
WHAT REPORTS DOES THE PROJECT SPONSOR TYPICALLY
RECEIVE?
  • Reports on each individual
  • Career summary
  • Competencies contrasted to role demands (required
    levels)
  • Key strengths and areas for development
  • Benchmarking against the market
  • Potential for other roles
  • Summary reports on the organization or group
  • Pragmatic business assessment of the
    organizations human capital
  • Key organizational strengths and areas for
    development overall and by function, geography,
    or business unit
  • Summaries of benchmarking, potential and
    performance
  • Advice on appointments

16
TYPICAL OUTPUT OF APPRAISAL PROCESS
COMPETENCIES AGAINST ROLE REQUIREMENTS
Gaps between person and required levels
Demonstrated competency levels
Role- and customer- specific competencies
1
2
3
4
5
6
7
GAP
1
Competency A
0
Competency B
1
Competency C
1
Competency D
(-1)
Competency E
(-2)
Competency F
(-1)
Competency G
1
Competency H
Role-specific required levels
17
TYPICAL OUTPUT OF APPRAISAL PROCESS BENCHMARKING
Outstanding
Good
Some Reservations
Major Reservations
18
TYPICAL OUTPUT OF APPRAISAL PROCESS
POTENTIAL/PERFORMANCE
Star
Potential Talent
Person with ability to make significant
contribution in the future, but is not currently
doing so, either because of inexperience in role
or lack of fit to role
Performer with potential for multiple increases
in responsibility
Evaluate Further
Talent
Person with ability to make a contribution in
the future, but is not currently doing so.
POTENTIAL
Performer with significant promotion potential -
scale/scope
Performer
Reassign or Re-scope
Performer with limited promotion potential (more
likely scale than scope)
Person with limited potential to contribute more
to the organization
PERFORMANCE IN CURRENT ROLE
19
A MANAGERS EXPERIENCE AND CURRENT
RESPONSIBILITIES ARE INITIAL INPUTS
EDUCATION 1974 BS, Chemical Engineering,
University of Wisconsin 1986 MBA, Finance,
University of Chicago LANGUAGES English (mother
tongue), French, German MOBILITY To be confirmed
  • CURRENT TITLE Division President
  • DIRECT REPORTS 8
  • TOTAL STAFF 2,510
  • SALES /OR BUDGET 420
  • OTHER SCOPE ISSUES Integrating major acquisition
  • REMUNERATION 285K salary bonus

Interview Date 1 Jan 2002
PROFESSIONAL EXPERIENCE
FROM TO POSITION COMPANY LOCATION 2000 P
resent Division President ABC Industrial Co.,
Inc. Milwaukee, WI 1996 2000 SVP Marketing and
Sales Acme Growth, Inc. Chicago,
IL 1986 1996 Partner Strategic Consulting
LLC Chicago, IL 1976 1984 Various Sales
Marketing Positions First International,
Inc. Various to VP Sales
20
A MANAGER IS APPRAISED RELATIVE TO THE
JOB-SPECIFIC REQUIRED COMPETENCY LEVELS
STRENGTHS
ASSESSMENT VS. REQUIRED LEVELS
  • Very driven to succeed, record of delivering
    results
  • Analytical with strong financial acumen and
    ability to effectively evaluate strategic
    alternatives
  • Has strong conceptual capability, good strategic
    vision, and can translate that vision into an
    actionable plan
  • Very capable at developing long term customer
    relationships and generating new business
  • Has a passion for customer service

1
2
3
4
5
6
7
GAP
Competency A
Competency B
Competency C
Competency D
AREAS FOR DEVELOPMENT
Competency E
  • Needs to delegate more effectively to key
    subordinates when appropriate
  • Should focus more on operational detail,
    especially when managing less capable
    subordinates
  • Should proactively motivate his team through
    continual communication and other techniques
  • Needs to communicate the companys vision more
    effectively to the overall organisation and use
    this to generate focus and enthusiasm

Competency F
Competency G
Competency H
Managers Name
21
RECOMMENDATIONS ARE MADE REGARDING FIT TO ROLE
AND POTENTIAL FOR ADVANCEMENT
SUMMARY
He has had a long successful career in the
industry, having worked for several leading
multi-national companies, as well as benefiting
from a short period in the entrepreneurial
environment of this company. Most of his
experience has been in sales and marketing,
covering all aspects of these functions. This
functional experience along with his consulting
background helped him develop a strong strategic
and business acumen, which is not found
frequently in individuals in this industry. He
has made a very significant impact in his short
time with this company, being the principal
architect of the companys strategy and driving
the companys rapid growth. Under his
leadership, we believe the company will continue
to thrive and move successfully towards its
ambitious targets, although he will face certain
challenges in this exacting mission. He should
pay particular attention to enhancing his team
leadership and people development capability,
skills which were not as important in his
previous sales and marketing positions. He also
must delve more deeply into the details of
operational execution, an area for which he has
less passion. He must be willing to help in
problem solving and focus the organization on the
most important issues, particularly in the next
few months while the integration is underway. We
believe that his relative lack of attention to
these issues recently is not a lack of
competence, but more a question of being focused
on other issues. His tremendous enthusiasm for
the business and his exceptional desire to
succeed will help him to continue building on the
momentum he has built with the business to date.
POTENTIAL AND PERFORMANCE
Potential Talent
Star
Evaluate Further
Performer with Potential
Performer with Potential
POTENTIAL
PERFORMANCE IN CURRENT ROLE
22
TYPICAL OUTPUT OF APPRAISAL PROCESS ORGANIZATIONA
L COMPETENCY PROFILE
Sample Competency Profile of Organization
Below Target
Above Target
On Target
1. Competency A
2. Competency B
1
3. Competency C
1
4. Competency D
4
5. Competency E
5
6. Competency F
7
7
7. Competency G
23
TYPICAL OUTPUT OF APPRAISAL PROCESS SUMMARY
REPORTS (I)
Benchmarking in Current Role
Outstanding 33
Meets best-in-class external candidate benchmark
44
Good 32
Is an external benchmark candidate with some
areas to improve
42
Some Reservations 10
Falls short of external benchmark - has clear
limitations
14
Major Reservations 0
Not qualified vis à vis external benchmark
0
24
TYPICAL OUTPUT OF APPRAISAL PROCESS SUMMARY
REPORTS (II)
4 5
2 3
Potential Talent
Star
4 5
23 30
POTENTIAL
Evaluate Further
Talent
37 50
5 7
Reassign or Re-scope
Performer
PERFORMANCE IN CURRENT ROLE
25
TYPICAL OUTPUT OF APPRAISAL PROCESS HUMAN
CAPITAL BALANCE SHEET
Outstanding
Some Reservations
Major Reservations
Good
26
EXTERNAL CONSULTANTS ADDED VALUE AT EACH STEP OF
THE PROCESS AND BEYOND (I)
  • Developing competency models
  • Leverage global experience
  • Business perspective
  • Evaluation
  • Ability to benchmark against local and global
    markets
  • Objectivity of a third party
  • Capacity to execute with discipline
  • Uniform, global quality standard

27
EXTERNAL CONSULTANTS ADDED VALUE AT EACH STEP OF
THE PROCESS AND BEYOND (II)
  • Feedback
  • You may not be familiar with your entire talent
    pool
  • Many executives unwilling or unable to deliver
    feedback effectively
  • Managers appreciate a market-based assessment
  • Helps to motivate change
  • Development Plans
  • Has greater impact when agreed with third party
    and client
  • Assists with long-term career planning
  • Succession Planning
  • Comprehensive and integrated fact base developed
    quickly
  • Consistent and objective competency-based
    evaluation

28
NEXT STEP IS TALENT MANAGEMENT
  • 1 Management Appraisal accurate assessment of
    the leadership capital
  • 2 Talent Management informed decisions and
    implementation of appropriate action
  • Develop and coach
  • Plan succession
  • Retain and build teams
  • Management Appraisal allows strategic management
    of human capital - managing the talent pipeline
  • Leveraging organizational strengths
  • Minimizing organizational weaknesses
  • Planning for the long term

29
TO SUMMARIZE A MANAGEMENT APPRAISAL PROCESS
SHOULD ….
  • … be firmly grounded in the companys specific
    business aims
  • The appraisal criteria should be designed to
    reflect the companys strategic priorities
  • It is important to ensure they also reflect the
    market
  • …provide output that will help identify human
    capital priorities for the company
  • Objective and consistent evaluation of the senior
    echelons of the company
  • Benchmarking existing executive talent against
    the market
  • Highlighting relative strengths and weaknesses of
    individuals and of the organisation as a whole
  • … be specifically designed to enable action,
    making this dynamic rather than static
  • Executives are given individual feedback flowing
    logically into development plans
  • Analysis will generate divisional, functional and
    geographic data providing a platform for
    optimising human capital allocation
  • A foundation for comprehensive succession
    planning

30
THE MOST EFFECTIVE APPROACH ASSESSMENT
METHODOLOGIES AND THEIR EFFECTIVENESS
  • Frequency of Use
  • Interviews 100
  • References 96
  • Weighted appl. 93
  • Ability tests 70
  • Personality tests 64
  • Assessment Center 59
  • Biodata 19
  • Graphology 3
  • Astrology 0
  • Effectiveness
  • Structured interviews 62
  • Refs not employee-named 57
  • Case studies 55
  • Ability tests 54
  • Assessment Center 41
  • Biodata 40
  • Personality tests 38
  • Unstructured interviews 31
  • Employee-named refs 13
  • Graphology 0
  • Astrology 0

Reference Successful Selection Interviewing, by
Neil Anderson and Vivian Shackleton (1993)
About PowerShow.com