STEP September 29, 2005

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STEP September 29, 2005. Performance Alignment Review (PAR) Wayne Hays Shirley Dickson. Agenda. Brief Solectron Background Performance Management Overview Highlights Form Overview Rating Calibration Lessons Learned. Solectron History. Solectron was founded to - PowerPoint PPT Presentation

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STEPSeptember 29, 2005 Performance Alignment Review (PAR)Wayne HaysShirley DicksonAgendaBrief Solectron BackgroundPerformance Management OverviewHighlightsForm OverviewRating CalibrationLessons LearnedSolectron HistorySolectron was founded toTake advantage of the growing need for Electronics Manufacturing Services (EMS)Accommodate the overflow from manufacturing operations of Original Equipment Manufacturers (OEMs)From a single manufacturing location (1977)...To a presence in more than 20 countries...Asia/PacificAustraliaChinaIndiaIndonesiaJapanMalaysiaSingaporeTaiwanAmericasBrazilCanada Mexico United StatesEuropeBelgiumFranceGermany HungaryNetherlands Romania Scotland Sweden Turkey United KingdomUnited StatesCaliforniaKentuckyMassachusettsMichigan North CarolinaOregonPuerto RicoSouth CarolinaTennesseeTexasOur Service OfferingsProduct DesignDesign for Six Sigma and ManufacturabilityProduct LaunchProduct Life Extension Sustaining EngineeringPCBA and Subsystem ManufacturingSystems Assembly and TestResponsive Supplier NetworkProduct Fulfillment and LogisticsGlobal Network for Lowest Landed CostRepair Product LogisticsEnd-of-Life SupportProcess Loops for Design and Manufacturing ImprovementCustomersBrocade CISCO SystemsDellEricssonHewlett-Packard IBMLucentMicrosoftMotorolaMarconiNortel NetworksSamsungSonySunTiVoRecognitionAwarded the Malcolm Baldrige National Quality Award for manufacturing in 1991. In 1997, after waiting the required five years, Solectron reapplied for the award and became the first company to win the Award twice in the history of the program.For more than 25 years, Solectron has received more than 450 customer, quality and community awards.Performance Alignment Review (PAR)The Case for ChangeAt Solectron, we are undergoing a major transformation designed to help us better serve our customers, simplify how we do business and improve our financial performance. Instituting standards for aligning and measuring individual performance is a key part of the larger transformation underway.Ultimately, our success can be traced back to how we answer two fundamental questions: Do we as a company have the right goals and vision to move forward? And, just as importantly, do each of us personally and through our teams understand what we must accomplish and which behaviors we must model to make Solectrons vision a reality. It is about individual performance and collective progress. It is about building a One Solectron culture that simply outperforms the competition.Kevin OConnor EVP, Human ResourcesMichael R. Cannon President and CEOWhat We Found...Dozens of processes, forms, cycles, approaches used across the corporationAnecdotal feedback from employees and HR indicating the lack of any performance feedback from managersLinkage to other critical HR processes weak (compensation, stock awards, promotions, succession, executive selection, etc.)Behavioral and cultural expectations unclearPerformance Management GoalsCreate a common performance cultureEnhance individual, team and organizational effectivenessAlign individual performance with business goalsCreate a culture of on-going feedback and developmentCreate a consistent methodology to assess employee contributionProvide information to help determineCompensation decisionsPromotionsRewards & RecognitionDevelopmental OpportunitiesPerformance CyclePerformance Review TempoOne Solectron BehaviorsSustained Profitability: Reduce operating expenses; strengthen balance sheet; eliminate duplicate structures; improve effectiveness and efficiencyAsset Velocity: Increase inventory turns; improve cash-to-cash cycleExecution Excellence: Reduce complexity; common repeatable processes; improve overall quality and responsiveness; collaborate better with each other; streamline our organizationRevenue Growth: Continue to win new business; secure follow-on businessRestore Employee Morale: Themes include change; flexibility; creating an environment of open & honest feedback; learning quickly; accepting new challengesIntegrity Team PlayerChampion ChangeCoach OthersContinuously LearnTo accomplish our Business PrioritiesWe must create a One Solectronculture through demonstration of the right behaviorsOrganizationGoals, Priorities, Imperatives, BehaviorsBusiness Priorities & BehaviorsIntegrityTeam PlayerCoach OthersChampion ChangeContinuously LearnBehaviorsHow work is accomplishedResultsWhat work is accomplishedPerformance to ExpectationsBusiness ContributionsEqual Emphasis on Results & BehaviorsSample Behavioral DescriptionTeam PlayerWork effectively and cooperatively with others; establish and maintain good working relationships; cultivate an active network of relationships; identify opportunities and take action to build strategic relationships.Individual ContributorManager of OthersExecutiveAsks for & offers help to others when needed. Understands team & organizational goals.Places team & organizational goals before personal goals.Shares best practices with others.Stays involved; actively participates.Treats others with dignity and respect Set expectations for cross functional; cross business cooperationPromote the use of own and others capabilities to other functionsProactively share information across organizational boundariesPromote a team culture, recognizing the contributions of all team membersShare best practices across organizational boundariesTreat others with dignity and respectAddress behavior in others that may damage constructive relationshipsRemove organizational barriers to collaboration and teamworkShare best practices across organizational boundariesAchieve business results through collaboration with others; place higher priority on Solectron goals than own personal goalsOffer resources, even when it hurts, when it will help others achieve company goalsTreat others with dignity and respectActively engage with community and/or charitable organizationsPerformance ConceptA00-04050117BehaviorsPerformanceDidnt MeetMeetDidnt MeetMeetBehavior IssueBalanceResults & Behavior IssueResults IssueOverall Rating Guide54321BehaviorsPerformance12345ExceptionalCommendableFully EffectiveNeeds ImprovementUnacceptablePerformance = 5Behaviors = 1Performance = 5Behaviors = 2Performance = 5Behaviors = 3Performance = 5Behaviors = 4Performance = 5Behaviors = 5Performance = 4Behaviors = 1Performance = 4Behaviors = 2Performance = 4Behaviors = 3Performance = 4Behaviors = 4Performance = 4Behaviors = 5Performance = 3Behaviors = 1Performance = 3Behaviors = 2Performance = 3Behaviors = 3Performance = 3Behaviors = 4Performance = 3Behaviors = 5Performance = 2Behaviors = 1Performance = 2Behaviors = 2Performance = 2Behaviors = 3Performance = 2Behaviors = 4Performance = 2Behaviors = 5Performance = 1Behaviors = 1Performance = 1Behaviors = 2Performance = 1Behaviors = 3Performance = 1Behaviors = 4Performance = 1Behaviors = 5Rating DistributionManagers have the flexibility to adjust distributions within guidance. Total distribution must equal 100%.Distribution is to be applied when population sizes reach 100 or more. Small departments are not expected to meet the distribution.Managers can include employees that have been managed out of the organization during the review period. These situations are limited to performance issues not employees who have left in good standing.FromToRules5Exceptional10%0-10%5 cannot exceed 10%; together cannot exceed 30%4Commendable20%20-30%3Fully Effective60%50-60%Can be adjusted up or down2Needs Improvement5%10% +Cannot be less than 10%1Unacceptable5%Form DemonstrationRating CalibrationCalibration ConceptThe purpose is to create a review process that establishes a more consistent, equitable, and accurate performance evaluation and feedback environment across manager groups within functions.The process facilitates a common understanding and method to arrive at final ratings Distribution of ratings is not the goalMeeting ParticipationEVPVPDirectorSupervisorIndividual ContributorManagerNext Level ReviewAll manager of managers participate with their direct manager (peer group)Matrix reporting relationships not included, only direct reporting relationshipsOrganization structure will drive number of meetings requiredSequence of meetings not important (e.g., top down vs. bottom up)Participation ExampleImportant: Functional reviews; not site or region!Rating Profiles Optional Resource1 = UnacceptableEXCEPTIONALTop 10% of performers. Clearly stands out from others; exceeds all expectations, measures and targets against established objectives and/or standardsSelf starter who takes initiative and works independently with minimum supervision; produces high quality products with very little rework required; always delivers on commitmentsProactively assumes additional responsibilities; willingly works outside of job scope for the good of Solectron; consistently surprises with level of effort, quality work, improvement suggestionsProactive problem solver; looks for improvement opportunities with customers and/or process; recognizes what needs to be done and generates creative solutionsClearly understands and supports organization strategy and priorities; understands how own work contributes to the success of SolectronRecognized expertise; others seek out this person for guidance and counselWorks across functions and organization boundaries to build strategic relationships; valued team player who builds effective partnershipsConsidered a change champion; always open to new ideas and stimulates others to embrace change; model of flexibility, accepts changes and redirection as improvement opportunitiesOpenly shares information with others for the good of SolectronBuilds trusting relationships; provides constructive and honest feedback to help others succeed; accepts feedback from others and acts on the feedback for self-improvementWillingly takes on new challenges; stretches current capabilities; seeks new learning opportunities2 = Needs Improvement3 = Fully Effective4 = Commendable5 = ExceptionalRating Calibration Tool Data EntryData EntryPAR - Rating Calibration ToolOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005ManagerEmployeeRatingsEmpl IDComdef Site (Optional)Last NameFirst NameJob Grade (Optional)Status (T for Termed)Comdef SiteEmpl IDLast NameFirst NameObjectivesBehaviorsFinalNP ScoresManager AEmployee 1333Manager AEmployee 2444Manager AEmployee 3333Manager AEmployee 4333Manager AEmployee 5333Manager AEmployee 6333Manager BEmployee 1545Manager BTEmployee 2322Manager BEmployee 3433Manager BEmployee 4444Manager BEmployee 5333Manager BEmployee 6333Manager BEmployee 7444Manager BEmployee 8433Manager BEmployee 9555Manager BEmployee 10444Manager CEmployee 1333Manager CTEmployee 2322Manager CEmployee 3333Manager CEmployee 4333Distribution GraphsPAR - RATING CALIBRATION GRAPHSOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005;October 1, 2005Distribution Graphs021242RatingNumber of EmployeesRatings Distribution - NumbersOFFICE USE ONLY00.10.60.20.1RatingPercentage of EmployeesRatings Distribution - PercentagesFinalFinalFinalFinalFinalFinalFinal12345>03COUNT:021242204%:0%10%60%20%10%100%33335234334354323300000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000Rating Calibration Tool DistributionChart1021242RatingNumber of EmployeesRatings Distribution - NumbersData EntryPAR - Rating Calibration ToolOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005ManagerEmployeeRatingsEmpl IDComdef Site (Optional)Last NameFirst NameJob Grade (Optional)Status (T for Termed)Comdef SiteEmpl IDLast NameFirst NameObjectivesBehaviorsFinalNP ScoresManager AEmployee 1333Manager AEmployee 2444Manager AEmployee 3333Manager AEmployee 4333Manager AEmployee 5333Manager AEmployee 6333Manager BEmployee 1545Manager BTEmployee 2322Manager BEmployee 3433Manager BEmployee 4444Manager BEmployee 5333Manager BEmployee 6333Manager BEmployee 7444Manager BEmployee 8433Manager BEmployee 9555Manager BEmployee 10444Manager CEmployee 1333Manager CTEmployee 2322Manager CEmployee 3333Manager CEmployee 4333Distribution GraphsPAR - RATING CALIBRATION GRAPHSOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005;October 1, 2005Distribution Graphs021242RatingNumber of EmployeesRatings Distribution - NumbersOFFICE USE ONLY00.10.60.20.1RatingPercentage of EmployeesRatings Distribution - PercentagesFinalFinalFinalFinalFinalFinalFinal12345>03COUNT:021242204%:0%10%60%20%10%100%33335234334354323300000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000Chart300.10.60.20.1RatingPercentage of EmployeesRatings Distribution - PercentagesData EntryPAR - Rating Calibration ToolOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005ManagerEmployeeRatingsEmpl IDComdef Site (Optional)Last NameFirst NameJob Grade (Optional)Status (T for Termed)Comdef SiteEmpl IDLast NameFirst NameObjectivesBehaviorsFinalNP ScoresManager AEmployee 1333Manager AEmployee 2444Manager AEmployee 3333Manager AEmployee 4333Manager AEmployee 5333Manager AEmployee 6333Manager BEmployee 1545Manager BTEmployee 2322Manager BEmployee 3433Manager BEmployee 4444Manager BEmployee 5333Manager BEmployee 6333Manager BEmployee 7444Manager BEmployee 8433Manager BEmployee 9555Manager BEmployee 10444Manager CEmployee 1333Manager CTEmployee 2322Manager CEmployee 3333Manager CEmployee 4333Distribution GraphsPAR - RATING CALIBRATION GRAPHSOrganization:Human ResourcesLeader:Kevin O'ConnorDate:October 1, 2005;October 1, 2005Distribution Graphs021242RatingNumber of EmployeesRatings Distribution - NumbersOFFICE USE ONLY00.10.60.20.1RatingPercentage of EmployeesRatings Distribution - PercentagesFinalFinalFinalFinalFinalFinalFinal12345>03COUNT:021242204%:0%10%60%20%10%100%33335234334354323300000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000000Lessons LearnedChange management is under ratedThere is no such thing as over communicatingSweat the small stuffIntensive boot camp for HR field partnersWelcome participants and conduct introductions if necessary.Our agenda today is structured in two parts. We will start with the PAR Manager Training and then move into the Rating Calibration Process.The PAR Manager Training will be used by each of you to prepare your managers for the upcoming year end PAR process. Reviewing this first will provide a good background before we discuss the calibration meetings.To help you with your preparations, we have provided several resources and tools that we hope will be helpful.PAR Manager slides with supporting facilitator notes for delivering sessions to your managersPAR Manager Resource Guide which includes additional supporting information for managers on Handling Difficult DiscussionsRating Calibration slides we will be using todayRCM Reference Guide which includes supporting information and tools to help you effectively plan and facilitate the rating calibration meetingsA CD containing all content electronically; also contains a blank roster format you can use if you desire to track attendanceAny questions about our agenda for the day or your materials before we begin?[Solectron History]In the 1970s there were lots of opportunities in the electronics market for manufacturing services. Our original vision was to Be the Best and Always Improve and the focus on customer satisfaction was strong.[Yesterday]From a single location in Milpitas California in 1977[Locations]to an international company spanning five continents and in more than 20 countries.[Our Service Offerings]These are Solectrons services:Collaborative DesignLean Manufacturing and FulfillmentPost-Manufacturing Global ServicesOur employees design, make and service electronics products people around the world rely on every day.[Customers]This list is alphabetized[Quality Awards]During the 1980s, Solectron also adopted the Malcolm Baldrige National Quality Award criteria as a system to measure the organizations overall effectiveness. The Malcolm Baldrige National Quality Award, established in 1987, is the most respected standard for performance excellence among U.S. companies and serves as a model for quality to businesses worldwide. To date, only 16 companies have won the award for manufacturing. In 1997, Solectron became the first company to ever win the Malcolm Baldrige National Quality Award for manufacturing twice in the 10-year history of this national program. Solectron uses the Baldrige process as a roadmap to help sustain the companys global commitment to quality. Our success in using this process is evidenced by our record growth and prosperity.Our performance management process is used by all Solectron sites worldwide. This process is designed to support our alignment towards a One Solectron culture. To remain competitive, we must have a consistent process for managing our business. This process helps us to align our personal goals with those of the corporation and ensure we are all contributing to the overall success of the corporation.Our performance management process is designed with these specific goalsCreate a common cultureImprove how we collaborate with each other not only in our teams but across organizational boundariesMake sure we are aligned with our business goalsMaintain open and honest communication with each other about our performance; seeking ways to personally be more effectiveCreate consistency in how we evaluate our contributionsTie the expectations to our other HR systemsOur PAR Cycle has not changed and by now, you should begin preparing for the rating calibration meetings and final employee reviews.This year we will be including our non-exempt employees in this same process. This allows us to have all Solectron employees on the same process and cycle.Our goal is to create a common performance rhythm or tempo that happens at about the same time every year. This way we all know what needs to happen and that it will happen in a predictable fashion every year.The specific calendar dates may change slightly from year to year but generally speaking we all know the general time frame so we can plan accordingly.As illustrated on this chart, we should be currently planning for the rating calibration meetings so we will be ready to finalize our employee reviews at the end of our fiscal year. There is always flexibility for some groups to begin earlier if they desire. As an example, some employees may not be directly impacted by the close of year earnings or metrics. In these cases, managers may want to begin the process in August instead of waiting until business results are communicated.The One Solectron behaviors are a critical focus for every employee to help us achieve our business priorities.We should pay attention to these behaviors, learn them and create a common understanding of what they mean to us.What has not changed is the continued focus on ensuring that there is an equal emphasis on results and behaviors. For sustainable results over time we want to ensure that we are getting the right results in the right way.We will continue to reinforce a performance management process that requires equal emphasis on what gets down and how it gets done.Now, we will take you on a very quick tour of the new forms so you can see some of the changes we described earlier.This is one of the behavioral descriptions. Each of the 5 behaviors has this same structure.A general description of the behaviorSpecific items under each perspective describing effective performanceYou may have noticed that we removed the plotting tool for guiding your overall rating. We did this to remove pages in the form. We have replaced the plotting tool with a reference guide that is included in the PAR Manger Guidebook.To review, your assessment of a Performance rating and a Behavior rating are not simple averages. Where the ratings intersect is how you should view the overall performance rating. This reinforces the concept that these ratings carry equal importance and emphasis. If employees perform well on one but not the other, the overall PAR rating should reflect this. For this reason, we cannot consider the overall rating as a simple average.For those employees who you feel are borderline, you have the flexibility to adjust the mathematical rating to reflect your overall assessment. However, the final decision will be made during the rating calibration meeting.As you would expect, the forced rating distribution was the most frequent dissatisifier for most managers. We met with each EVP individually to relay this feedback and discuss options. So you will know, not a single EVP was in favor of changing the forced distribution concept but did agree to allow some flexibility if we thought it would help the managers.Here is the changed process they accepted. You will have flexibility to manage within a range but there will be ceilings you cannot exceed. As an example, you can use less 5s in order to assign more 4s but the total top end (4 and 5 combined) cannot exceed 30%. Additionally, you cannot exceed more than 10% with a rating of 5. You can adjust the 3 distribution up or down as needed. You must still have 10% at the bottom but this is a combined percentage. We have eliminated the requirement to force 5% and 5% in each category. This will allow you to assign all 2s and have zero 1s.However you choose to operate within these rules, your total distribution must equal 100%.As was the case last year, these distributions apply to only larger samples of employees. If you have less than 100 employees, you are not expected to meet this distribution. As the populations roll-up to 100 or more, the distribution should fall within these guidelines.In addition to understanding the roles, it is important that we all understand the key concepts behind the rating calibration meetings. It is important for both HR Business Partners and Management to understand these concepts, to align to them, and to communicate them consistently. Our primary purpose is to create a review process that establishes a more consistent, equitable, and accurate performance evaluation and feedback environment across the organizational function.The rating calibration process helps us create a common understanding and method for evaluating performance. Most important is consistency in how managers interpret and use the final employee ratings. We have all had experiences with managers who are hard raters and easy raters; some set very high expectations; some have much easier expectations. The calibration meeting is the time to discuss and agree on how to apply the ratings consistently across employees.Many times our managers think the real goal is to discuss the final distribution and move immediately to the distribution discussion without taking the time to calibrate the definitions. Using this approach makes it more difficult to have meaningful discussions about performance because we are using different definitions.Hopefully, our recommended approach will provide you a workable framework to avoid these types of manager debates.These key concepts are provided for you on page 2 of the RCM Reference Guide.Another important concept to understand is who should participate.The calibration meeting was designed to serve as the next level management review. Under previous site processes, most of you required the next level manager and HR to review an employees final rating. In most cases appraisal forms required a next level and HR signature to verify this review had been completed.This same concept applies but we are performing this step in a different way. Instead of one-on-one reviews the calibration meeting provides an opportunity for managers to collectively discuss and calibrate employee ratings. This requires each manager who has managers reporting to them to participate in a rating calibration meeting.This illustration might lead you to believe that lower level meetings cannot happen until the higher level meetings have been conducted. In an ideal world this might be the most effective process but we do not require this top down process. Meetings can happen in parallel or at the same time. A second key point is that these meetings should be organized functionally rather than by site or region. Calibrations are happening with direct managers who are responsible and accountable for employee appraisals. A dotted line or matrix reporting relationship must have input into the process but they are not the manager of record and do not make the final performance and compensation decisions.The main point is to ensure that RCMs are happening within the structure and at a level that makes sense for the organization. This will requires up front planning on how to organize the meetings. Large organizations will naturally be more complicated and require more planning.

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