Kim Lupo, SVP and Global Head, Total Rewards at Walmart, joined Dr. Edna Chun’s Transforming Total Rewards class for a highly engaging and thought-provoking guest lecture on performance management and pay for performance. She stressed that what she has learned over the past decade in the performance space is “the simpler, the better” in terms of understanding what really matters to employees and teammates. Kim Lupo shared three overarching pillars in performance management systems of the future: clear expectations; ongoing feedback; and development. Such systems have become increasingly simplified and must directly relate to the area or function’s performance and company performance.
In making changes to existing performance management systems, Kim Lupo emphasized that since culture change necessarily accompanies any type of performance management transformation, leadership buy-in is critical. She further noted that every company struggles with what is meant by pay for performance and noted that no single program can solve the entire pay for performance spectrum. Furthermore, due to limited resources available for annual merit increases, these increases may not be the most effective lever for differentiating performance. As she explained, “the reality is that these budgets are so small, that, in my opinion, differentiation is minimal” and small increase pools can only yield minor adjustments to recognize performance. As a result, for some groups of employees, long-term incentives may have the most impact in unlocking performance potential and affecting business performance.
Thinking reflectively, Kim Lupo noted that HCM professionals need to really focus on and be passionate about the business case and specifically, the pitch. In other words, HCM professionals need to identify the problem that they are compelled to solve for the business and determine how they will add value to solve it. She further advised the graduate students to be able to articulate the “pitch” in two minutes or less.
Through her engaged discussion with the class, Kim Lupo provided a clear picture of the changing nature of performance systems and the need for simplified models that provide continuous feedback and drive enhanced business performance. The students unquestionably benefitted from the practical strategies she shared that translate to workplace realities.
