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OBI, a home improvement retailer operating 537 stores in 13 countries, expanded rapidly into new international markets in the 1990s and 2000s. Unfortunately, there was no focus on developing parallel overall HR standards during the expansion.
Over the years, performance evaluations for employees at the company weren’t regulated or streamlined in the many countries in which they were conducted. By mid-2008, there were several differing competency models, rating scales and performance evaluation processes active.
The challenge—supported by management—was to develop one standardized performance evaluation system to be used ineach country where OBI has employees—no small feat considering that the 40-year-old
Germany-based OBI operates in Italy, Austria, Hungary, the Czech Republic, Poland, Slovenia, Switzerland, Bosnia, Russia, Croatia, Ukraine and Romania.
Corporate Human Resources was assigned in 2008 to develop,in cooperation with the local HR departments, a universal performance evaluation process that could be established in 2009.
Analyzing the Situation
To start, a core project group was established to represent the enterprise’s organizational units: headquarters, international and the sales division of the largest country—Germany.
First the group collected and analyzed the evaluations and considered feedback and years of experience of those conducting the evaluations. The main focus, however, was on the performance evaluation process, the competency model and the rating scale.
The first results of this analysis were confusing. The timeframe of the evaluation process included “any time during the year” and “April/May.” The frequency included “once a year” and “every two years.” Similar results occurred when analyzing the different rating scales and competency models.
It was decided that the performance evaluation process should be scheduled parallel to the change of the business year (turn of the calendar year) with a range from December through February. The first proposal allowed a process of three steps: (1) performance evaluation; (2) development plan; and (3) defining objectives. All three steps would be taken in a two-hour meeting between employee and line manager. The rating scale was implemented as a 5-scale rating where the middle was defined as “fulfills all expectations.” The scale was divided into two groups: employees that need further development to succeed, and “high performers” that need special (career) development.
The complexity of the competency models was reduced to five main competencies that included further sub-competencies. The five main competencies were: business mastery, social competencies, emotional intelligence, getting results and leadership (for line managers).
During several workshops and meetings the proposal was adapted to focus more closely on business needs. For example, the competency model was complemented by a sixth main competency, “customer orientation.” In early 2009, the management board approved the basic structure of the evaluation process and the competency model.
The rollout was structured in four waves. In the first wave, the homogeneous group of store managers was evaluated by their line managers. The line managers had two-hour training sessions and were supported by HR. Results from this first rollout wave influenced the second wave directly at HQ. The two-hour trainings were replaced by several open introduction events (of approximately 45 minutes), separately for managers and employees. Experiences from these first rollout waves were concentrated and results went directly into the third international implementation wave. Finally, the sales employees at the stores were evaluated in a fourth rollout wave.
Monthly conference calls were implemented among OBI HQ and the local HR departments abroad. The implementation process was quite difficult because of cultural differences—communication between people of Eastern and Western European cultures. The main problems occurred when trying to get people to meet deadlines and in getting active participation and feedback during conference calls.
Fixing Those Issues
In order to meet deadlines, communication with all countries was doubled. In addition to sending e-mails about the deadlines and reminders about the necessity of the project, colleagues were reminded during day-to-day business operations about the project’s importance.
Keeping participation levels and open discussions high proved far more difficult than keeping deadlines and keeping projects alive. A two-day meeting involving all HR colleagues from abroad was scheduled; during this meeting the need to be creative was addressed and experiences and ideas were exchanged—however small, redundant or silly. Demonstrating the core group ideas and unveiling the many wrong turns the group had taken helped create trust among most of the participants. Being an example for others helped achieve the frankness needed.
Keeping the core project team small was one key success factor. However, using established elements of existing performance evaluation processes helped obtain a faster commitment from various organizational units.
The evaluation process of the group was delayed by up to three months and was rolled out with the fourth wave.
The goal of having one competency model for all employees wasn’t met 100 percent. For store employees, the sub-competencies were reduced to the six final main competencies: customer orientation, business mastery, social competencies, emotional intelligence, getting results, and leadership. All are necessary to expedite the performance evaluation process at the stores.
In the end, patience and gratitude helped. Intercultural cooperation always needs much more time than communication within one’s organizational culture or structure. A good sense of humor helped, too, to standardize
the worldwide performance evaluation of OBI.
Thomas Belker, SPHR, GPHR, managing director of human resources for OBI Group Holding in Cologne, Germany, sits on the board of the HR Certification Institute. Timo Michel is senior manager, international talent development at OBI.
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