One of the greatest impacts on organisational performance is leadership effectiveness. The Port of Melbourne Corporation’s Peter Fotiades looks at how to create opportunities to significantly improve the overall leadership effectiveness
One of the greatest impacts on organisational performance is leadership effectiveness. The Port of Melbourne Corporation’s Peter Fotiades looks at how to create opportunities to significantly improve the overall leadership effectiveness
Name me one thing that impacts upon the bottom line that isn’t either directly or indirectly influenced by human behaviour? In addressing this question one comes to realise the critical importance that people play within an organisation. That realisation creates the foundation for HR’s impact upon strategic issues within one’s organisation.
In considering the impact of people upon an organisation’s performance one needs to integrate that, with the realisation that all aspects of the organisation’s performance, no matter what it does, are determined by the interaction of three key aspects:
• operational – what it is that they do and what they actually deliver, being service or product;
• financial – the management of the organisation’s financial resources;
• human resources – the management of the organisation’s people, be they full-time, part-time, casual or contractors.
One of the greatest impacts on current organisations’ performance is theorised to be leadership effectiveness. Business analysts and columnists all are constantly pondering why certain organisations are successful and how the CEO and key leadership group have impacted performance levels. This question has intuitive appeal and hence executive and senior HR practitioners must have an impact upon strategic leadership issues in order to be successful.
Value added HR practice
A value added approach is critical for success of HR practices. The key, however, in determining value add is not to rely on theoretical concepts but rather to rely upon the real world deliverables of the organisation. Applying HR theory and practice to achieve those deliverables will guarantee a value added proposition. Therefore, one is left with the challenges of:
• identifying what the organisation is meant to deliver, when by, to what level and at what cost;
• who is required in ensuring those deliverables, how are they going to do it and how was one assured that they have done it?; and
• ensuring that one’s HR policy and practice underpins that delivery.
Performance appraisal systems (PAS)
Simply put, key performance indicators (KPIs) of successful performance appraisal systems are ones where the PAS identify what is required, when by, to what performance level and what cost, measures actual past performance and provides objective measures for forthcoming performance, and is linked to pay levels.
If one’s PAS does not have those indicators, it is doomed to fail in the short to medium term – that is, within one or two rounds of appraisals, as it will quickly lose credibility with all staff.
Why is a PAS so important? Apart from the obvious, that is the previously identified KPIs, there is another little known concept that seeks to explain the foundations of human behaviour. And that is the interaction between mental and physical attributes, the opportunity to display and develop all attributes, and conditioning – post and negative reinforcement.
The two key areas leaders can have an impact upon are in the areas of opportunity – by creating opportunities for staff to exhibit and practise good behaviour leading to higher levels of performance; and conditioning – by rewarding aspirational and appropriate behaviour while punishing inappropriate and unwanted behaviour.
The best opportunity to engage in both is through the PAS. How else are leaders to achieve this in a regular, objective, transparent and continuous manner?
What of organisational development (OD)?
Too often the HR practitioner is forced to implement the latest OD fad either inherited or introduced by key leaders in an attempt to satisfy the requirements for higher levels of performance and productivity, prior to properly evaluating its relevance and utility to the business.
A pragmatic OD life cycle can be seen as one that incorporates the sequence of innovation, implementation, consolidation – a cycle not often properly utilised. Unfortunately, too often, because of the pressure to achieve quick turnarounds, practitioners get caught in the innovation-implementation mini trap. This occurs when one seeks to implement a more innovative OD concept before consolidating the previous one. Thus, no proper measurements of the previous initiative’s outcomes are properly measured or the process adjusted to achieve optimum outcomes. The assumption being that the newer initiative is more innovative and will supposedly deliver greater outcomes. Thus, one is trapped forever implementing and never achieving optimum performance and outcomes.
Practitioners need to progress through the entire pragmatic life cycle in order to achieve optimum outcomes and not to repeat mistakes. This trap has led to some of the greatest failures of OD initiatives over the past 30 years. Following the life cycle will at least create a solid foundation towards success in creating organisational renewal through the implementation of innovative OD initiatives. Thus an effective organisation renewal strategy is heavily dependent upon efficient and effective OD initiatives.
The basics
Proving leadership effectiveness is substantially dependent upon understanding:
1. The interplay between the three key aspects in relation to human behaviour that impacts upon organisational performance.
2. Being able to distinguish the difference between the key concepts of competence and commitment and how they can be applied within the workplace.
3. Applying effective performance appraisal systems.
4. Fully applying and implementing, in its entirety, the pragmatic OD life cycle.
While not guaranteeing the highest levels of leadership effectiveness, one can be assured that addressing these areas will create many opportunities to significantly improve the overall leadership effectiveness.
Peter Fotiades is head of human resources and organisational development for Port of Melbourne Corporation. He will be speaking at LexisNexis’ Human Resources 2006 conference. For more information see www.lexisnexis.com.au/aus/conferences/conferences06/HRLaw/.
