Strategy in Action: Hertz expands PMED to its operations in Brazil

PMED (Performance Management and Employee Development) is Hertz’s corporate model of performance management and demonstrates a combination of strategic and tactical approaches. One goal of PMED is to encourage employees and their supervisors to manage performance by working together.

Strategic

Hertz is expanding its corporate performance management model beyond its U.S. headquarters. Over the last three years, the same concepts and timelines that govern the U.S. program have been extended to Hertz’s operations in Brazil. Although PMED is a relatively recent addition in Brazil, Wagner Ruffo, HR Business Partner in Hertz’s Sao Paulo office says, “The experience has been very positive because it puts both the manager and the employee in frequent sessions of giving and receiving feedback.”

Tactical

The calendar year process involves setting performance objectives, establishing a personal development plan, discussing career goals and, for the managers, evaluating and refining performance behaviors or competencies.

Ruffo says that of Hertz’s 500 employees in Brazil, about 80-85 are in the formal corporate PMEDPlus program, specifically designed for managers and two levels of supervisors. The program has recently been expanded to include the entire population of Brazil employees.

Multi-rater Approach

The PMED performance rating system uses a five-level designation that ranges from “Needs Development” to “Exceeds Expectations.” While ratings are not specifically tied to salaries for most employees, they do influence eligibility for $150-200 bonuses that may be granted. In the PMEDPlus group, however, performance ratings are linked to a specific bonus program.

For additional scrutiny at upper levels, a 360-degree feedback program supplements the PMED assessment. Ruffo says, “We do use multi-rater systems, but the application is limited to senior management team evaluation.” This would include such positions as general manager, marketing director and others.

In situations in which performance needs a boost, Ruffo says, “We seek to guide both the manager and the employee in personal development plans in cases where the evaluation of performance falls far short of our expectations.” This includes the recognition that sometimes Hertz must address the lack of coaching by a leader.

Training for All

Training for supervisors is also a big part of Hertz’s performance management system in Brazil, covering an overview of the PM process and the tool. There are three opportunities during the year to receive training. Ruffo says, “It’s for everyone―the appraisers and the appraisees.” The first opportunity for training is at the beginning of the year when meetings are held to set goals and objectives for the upcoming year. The second opportunity comes in June/July during the mid-year review process. The third training opportunity is offered near the end of the calendar year. Ruffo says, “The focus of this training is on the concept of establishing individual objectives that can help the company reach its goals.” In other words, the training is used to drive the purpose behind Hertz’s PM efforts. Such training is a critical component of purpose-driven PM, and is discussed in the next section of this report.

Ruffo is pleased with the big picture that’s emerging. “I have in mind the full magnitude of a program that goes beyond the simple idea of assessing performance to the concept of developing our future talent. Everyone wins with this.”

This article is an excerpt from i4cp's report, Purpose-Driven Performance Management in High-Performing Organizations.