Upon joining LPL Financial as head of human capital, Denise Abood found that people were confused about the link between performance and pay. Employees felt that the existing system was arbitrary, subjective and inconsistent. In her drive toward increased employee engagement, Abood listens carefully to what LPL’s employees have to say.
“We have made significant progress in the past eight or nine months in creating venues to get employee input,” she says, citing focus groups, town hall meetings and a company intranet that allows for interactive Q&A. The company’s first employee engagement survey, conducted in 2007, uncovered the confusion around pay and performance.
“LPL Financial has always been a very entrepreneurial organization,” says Sheila Hunter, director of human resources. “We had been investing our time in creating systems and leveraging results, but the survey made us realize that we needed a structure for compensation and bonuses.”
Furthermore, the new human resources organization wanted to be relevant to its business partners, says Jodi Gold, senior vice president of organizational development and training. “Working with the survey results, we had to create a system that showed a link between tenure and engagement, and allowed users to apply consistent measurement.”
LPL worked with Hewitt Associates to create a new performance management system. This meant going back to square one, laying the groundwork by defining goals and competencies for each position, then creating a system that is customized and tailored to LPL. Goals are fluid, and roll up to the enterprise level. The weighting of the ratings—75 percent goals to 25 percent competencies—is a manifestation of LPL’s keen focus on results.
“The breakdown keeps the emphasis on achievement, but also shows that we do care how you get there, and that you’re not leaving a trail of bodies in your wake,” Hunter says. New people management goals were incorporated for all managers, including staffing, retention, development and appraisals. All of the elements were then combined into one easy-to-use tool.
More than 700 managers were trained on using the tool in August and September. Fifteen HR business partners received train-the-trainer instruction, then went out nationwide, conducting classroom-based training sessions to groups of 30 to 35 managers. The training consisted of three main parts: a PowerPoint presentation explaining the new system and its reason for being; a workshop on goal setting and goal writing; and hands-on exercises with the new tool. Participants are intended to practice and get comfortable with it through December, then begin using it to implement 2009 goals in January.
“We have gotten great feedback from managers, saying, ‘We needed this,’ ” Gold says.