The document summarizes research on performance management strategies that enhance individual performance. Key findings include: (1) multiple factors like feedback, risk-taking culture, and clear standards must be used to improve performance, not a single strategy; (2) non-financial factors like personal meaning in work directly improve performance more than financial incentives; (3) the biggest drivers of performance are feedback, risk-taking culture, emphasizing strengths, clear standards, and communication. Strategies that hurt performance are frequently changing assignments, emphasizing weaknesses, and increased reviews. High-performing companies provide more recognition and satisfaction.

1. Excellence Achievement LLC December 17, 2008 Prepared by John R. Eve

7. Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Fair and accurate feedback Discretionary Effort = + 23.3% Commitment = +40.0% Match with Job = +40.6% +33.6 % +39.1% Culture of risk taking Discretionary Effort = + 18.4% Commitment = +45.7% Match with Job = +33.4% +29.7% +38.9% Emphasizing performance strengths during formal reviews Discretionary Effort = + 14.0% Commitment = +21.2% Match with Job = +20.5% Having Necessary Resources = +23.2% + 31.2% + 36.4%

8. Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Clear understanding of performance standards Discretionary Effort = + 19.0% Commitment = +34.0% Match with Job = +36.1% + 31.4% +36.1% Internal Communication Discretionary Effort = + 17.1% Commitment = +43.2% Match with Job = +34.7% +26.7% +34.4% Matching employees with what they do best Discretionary Effort = + 29.3% Commitment = +49.1% Match with Job = +65.7% +25.1% +28.8%

9. Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Providing solutions for day to day challenges Discretionary Effort = + 21.9% Commitment = +42.9% Match with Job = +39.4% +17.6% +23.7% Enjoyment of work Discretionary Effort = + 37.5% Commitment = +57.4% Match with Job = +65.8% 0% +13.1% Recognizing and Rewarding Achievement Discretionary Effort = + 19.0% Commitment = +35.9% Match with Job = +35.5% 0% +4.4%

10. Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Perceived Reward – Size of Bonus Discretionary Effort = + 4.9% Commitment = +18.1% Match with Job = +7.5% 0% +2.0% Treating best and worst performers differently Discretionary Effort = + 5.5% Commitment = +23.2% Match with Job = +13.1% Team Strength = +29.3% 0% +1.5% Presence of Employee Development Plan Discretionary Effort = + 0.5% Commitment = -2.0% Match with Job = +0.2% Having Necessary Resources = +0.5% +1.4% +1.4%

11. Performance Levers - Impacts Performance Lever Indirect Impact - High Performance Attitudes Direct Impact Individual Performance Improvement Increased number of formal performance reviews Discretionary Effort = - 0.5% Commitment = -4.8% Match with Job = -3.8% Having Necessary Resources = -4.7% -0.1% -1.0% Emphasizing performance weaknesses during formal reviews Discretionary Effort = - 6.3% Commitment = + 2.2% Match with Job = -6.6% Having Necessary Resources = -5.4% - 25.2% -26.8%

13. Is Recognition Important? Source: The Carrot Principle, by Adrian Gostick to be released January 2007. A recognition effectiveness study which used 200,000 participants across many industries and cultures. % Employees who: Companies that provide Low Recognition Companies that provide High Recognition Are Satisfied with Jobs 7.0% 46.0% Are Likely to Stay 24.7% 70.0% Have High Morale 8.0% 70.9% Are Highly Engaged 8.3% 73.0%

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