PPM End-Year

Human resources
and Goal Setting
Dialogue guide

Every dialogue
is different
Performance determines the difference
A guide to having high quality talent and For
People

performance dialogues with your team members Leaders

About this guide
The purpose of this guide is to support you as a manager in having high quality
dialogues with your team members for PPM End-Year and Goal Setting.
It includes tips on preparing for these conversations, and focusing the
discussions on career, performance and development.

Table of contents
Talent and 3 What is PPM 4 End-Year 4 Timeline PPM 5 Goal Setting 6
Performance cycle End-Year and processes End-Year and and our
Goal Setting in 4 steps Goal Setting behaviors in
about? processes PPM End Year

How we 8 Behavior 9 Integrated 10 Getting a 11

can live our framework Goal Setting better
behaviors in drives understanding
2020 development of development
goals

Prepare for a 12 8 steps to 13

good dialogue guide the
PPM End-Year
dialogue and
Goal Setting

Feedback 15 Tips for 17 Tips for 17 How to deal 18

effective performance with 5 common
performance feedback emotions
dialogues language

Sharing 20 PPM 4 and 5 20 PPM 3 rating 21 Good results, 22 PPM 1 and 2 23

PPM ratings rating inconsistent rating
behavior

Learn more! 25 General information, HR Portal, 25

Experience Maps, Talent Card,
Anytime Feedback and Philips
University courses

2
Talent and
Performance cycle
At Philips, we run an integrated Talent and Performance management cycle
anchored to our Philips Business System, helping each of us deliver value to our
customers, consumers, employees, society and shareholders.

Performance management allows us to translate our People Performance Management

vision and strategy into meaningful objectives and Our People Performance Management (PPM) dialogues
plans. People’s individual targets are derived from are a priority for everyone at Philips: they help us improve
organizational targets and are included in the People our performance, check in on how we are developing in
Performance Management (PPM) cycle. our careers and raise the bar on how we contribute to our
business strategy.
A regular dialogue
As with all HR processes in Philips, we use Workday to
Having regular dialogues with everyone is essential to
record and manage the PPM cycle.
retaining and developing talent across our organization.
Having an ongoing dialogue with your team members
throughout the year with both formal and informal check-
ins, helps you to understand what your team members
need to perform and develop in their respective roles.

Strategic
Workforce Goal
Our company
Planning Setting Development
strategy
Discussions

Our Roadmap
to Win

Assess Strategic Development

Potential Talent Capabilities Performance Discussions

Talent Review

PPM
End-Year
Development
Discussions

Succession Know Annual Compensation

Planning the Talent Review (ACR)

3
What is PPM End-Year & Goal Setting about?
PPM End-Year is about having a dialogue with your team member to reflect on their achievements of the
past year and share the PPM rating. Then look forward to the year ahead with Goal Setting; align on key
areas of responsibility, set SMART business and development goals and discuss behavior expectations.

You can combine looking back (PPM End-Year) and looking forward (Goal Setting) in one dialogue or you
can separate the two, depending on your preference and your team members specific situation.

End-Year processes in 4 steps

Reflect Plan and Develop Connect Reward

Start by requesting Review your team During the dialogue, Review your team
feedback from member’s proposed facilitate an open and member’s compensation
others and review 3-4 business and 1-2 honest discussion on in Workday and propose
your team member’s development goals your team member’s changes based on their
self-evaluation. If the upcoming year. performance over the performance.
your team member’s past year.
Support your team Take time to share
performance has
member when they are Set goals for upcoming and explain the
previously been rated
preparing their proposal year business and compensation statement
1 or 2 or if you are
of their business goals. development goals. in person to your team
considering giving
Proactively share your Share your team member.
a 1 or 2 PPM rating,
own functional and/ member’s PPM rating
connect with your
or business/market and support the
HR manager to align
goals to facilitate activation of their
and agree on further
the translation from development.
actions.
company commitments
Add final comments
Submit your PPM to business goals.
to the PPM End-
End-Year evaluation,
Share your feedback Year document (if
PPM rating and LTI
to give insights into applicable) and update
Criticality Indicator
options for their Goal Setting document
(only CG80+) before
development goals, in Workday after the
January 31.
either a skill or behavior dialogue.
that supports their
performance and helps
them move closer to
their career aspirations.

Good to know
1. Your team member will only see the PPM Rating and comments in Workday after the Dialogue step
and when you have submitted for employee acknowledgement.
2. You can only add comments to each of the individual goals before the dialogue takes place. After
the dialogue has taken place you can only add an overall comment on the performance/dialogue.

4
Timeline PPM End-Year and Goal Setting processes

PPM End-Year

Employee Manager Manager / Manager Employee

Complete the Complete Manager Employee Comments Comments on
self-evaluation evaluation* Dialogue on Dialogue Dialogue and
acknowledges*

*Complete your evaluation, At this stage it is only possible
provide the PPM rating and to comment on the Dialogue,
LTI criticality indicator (only not change comments on each
CG80+). Modifications not of the goals. The PPM rating
possible after Jan 31. will be visible to employees
after managers have included
comments on the Dialogue.
*March 1: Closure of the
PPM End-Year process.
No automated push by
Workday will be done
to move PPM End-Year
from Dialogue phase to
acknowledgement phase.

Dec 2 Jan 2 Jan 31 Mar 1

Goal Setting
Employee Manager / Manager*
Employee
Proposes business and Update the proposal of goals and
development goals. Dialogue submit
Manager reviews
before the dialogue

*For NL, an additional step is required for

Employee acknowledgement of Goals.

Key dates to remember

2 December Kick off PPM End-Year

2 January Kick off Goal Setting

31 January Closure of Employee and Manager evaluation PPM End-Year

1 March Closure of PPM End-Year and Goal Setting processes

5
Goal Setting and our
behaviors in PPM End Year
Our behaviors are a key area of focus in all of our performance and talent
management processes. We define our culture by the way we work and our
focus on improvement through our behaviors. This is how we drive business
impact and become leaders in health technology.

Our behaviors are formally included into our PPM cycle with a rating scale for each of the 5 behaviors.
Both your and your team member give a rating for each of the behaviors and share examples in an
open text field. The rating scale is an assessment that contributes to the overall PPM rating of 1-5,
together with the assessment on the KARS and Goals.

Including the behaviors into the overall PPM rating
The behavior that your team members displays (the
‘how’) to achieve their results (the ‘what’) is just as
important and should be reflected in the overall PPM
rating. The inclusion of the PPM rating scale, makes
‘the how’ more explicit, giving you more guidance
on what rating to give your team member. Living our
behaviors is vital to our success, therefore ensure
that you reflect on both the results (WHAT) and the
behaviors (HOW). As guidance, if you have given
your team member a ‘does not meet’ for one of the
behaviors, it should significantly impact the overall
PPM rating. A strong performance cannot be made
possible without living the desired Philips culture.
How to discuss our behaviors?
• Explain what ‘meets’ looks like for your team member
in their specific role. You might want to refer to your
Goal Setting conversation in which you already
established a joint understanding about each
behavior.
• Ask you team member to share their rating and give a
example that underpins the rating.
• Share the rating that you captured on the manager
evaluation form and explain why with a specific
example.
• If your rating is different from your team member’s,
take the time to discuss each of your interpretations
of their behavior and why this has resulted in a
difference.
• Set expectations for the next year and be specific by
giving examples of what your team member can do.
In the beginning of the year, you agreed
what meets looks like, together with
your team member, for their specific
role and based on the definition of the
behavior. You can interpret the rating
scale as follows:
Exceeds expectations: Your team
member is a role model for this
behavior by constantly demonstrating
all elements of this behavior. Your team
member also encourages others to
show this behavior.
Meets: Your team member has shown
the behavior as agreed with you during
the Goal Setting dialogue and based
on the definition of the behavior. You
consistently see the behavior displayed
and the positive effect it has on
performance.
Partially meets: Your team member
demonstrated this behavior at times but
are inconsistent or only display certain
elements of this behavior. You have
seen areas/situations where your team
member needs improvement and have
examples how they can develop.
Does not meet: Your team member
does not meet the expectations that
you set with him/her at the beginning
of the year. You have seen areas/
situations where your team member
did not demonstrate this behavior
and have examples that clearly need
improvement and you can explain
explain their impact.
Too early to rate: less than 1 month in
role

6
How to live our behaviors? Customers first

We refer to our customer as our

Customers first
external ‘paying’ customers.
I always seek to understand our customer needs. I prioritize to
So how can your team member,
engage effectively with our customers and deliver innovative
in a non-customer facing role,
solutions. I want our customers to have the best experience with apply this behavior?
Philips, outperforming competitors.
Not everyone has direct
Quality and integrity always interaction with our customers,
I apply the highest quality and integrity standards to my work. I yet it is important that we
always act in compliance with laws and regulations and I adhere to all put our Customers first.
the Philips Business System. When quality issues arise I take action Even if your team member is
in a role where he/she does
to improve. I speak up when I observe non-compliance by others.
not have contact with our
customers, he/she can still
Team up to win
put the Customer first through
I collaborate with colleagues across organizational boundaries to
their work. Start by identifying
deliver the best result for customers and Philips. As we drive for
who their key stakeholders are
success, we have open and robust dialogues and hold each other and determine their specific
accountable to deliver on our plans. needs that contribute to
them being able to put our
Take ownership to deliver fast Customers first. Make sure to
I pro-actively take responsibility to deliver on our company and my prioritize this work so that their
team goals. I take decisions swiftly and execute accordingly. I will stakeholder can deliver on his/
persist until the work is accomplished. I expect my colleagues to do her customer commitments.
the same. Ask your team member to be
proactive and seek feedback
Eager to improve and inspire on a regular basis on how he/
I am eager to learn and improve every day. I apply Lean methods like she can improve on delivering
problem solving, daily management and Kaizen, and make processes better work that will lead to
simpler and more efficient. I inspire those I work with and celebrate a great customer experience.
success together. And ask your team member to
take responsibility to resolve
any problems related to this
work in a timely and proactive
These elements together are expected of each and every one of us. way. And remember, anyone
can be a Philips customer!
Together we will live the desired Philips Culture. This is foundational to
So even outside of your team
success in delivering on our vision. As we succeed together, we will be
members’ daily work, they can
the best company in health technology to work for.
find ways to put our Customer
first by keeping this in mind.
Visit the Our Culture intranet page for more information and materials.

7
How we can live our
behaviors in 2020
How do we live each behavior every day? Reflecting on – and evaluating our behaviors – are a vital part
of goal setting and the PPM cycle. For the 2020 cycle, we will continue to use the same rating scale for our
behaviors. This year, we have further clarified what ‘meeting’ the behaviors looks like through the inclusion
of the behavior framework.

This means that next to the definition of each behavior, we included actionable descriptions of how your
team member can demonstrate the behavior on a daily basis. The descriptions are clarified per corporate
grade level.

Creating understanding about

behaviors during Goal Setting Tip! Try to make it even more concrete by
discussing specific examples in their daily
Which behavior(s) do your team members meet? work. This is a crucial part of the dialogue
Which behavior(s) would they like to improve to where you discuss how they can achieve
grow and reach their career aspirations? results (the ‘what’). Doing so helps avoid
different interpretations of what is expected
In order to evaluate behaviors successfully during during the PPM cycle.
PPM End-Year, it is important to discuss them
in your goal setting dialogue with each team
member. Use the dialogue to align with them on
what each of the 5 behaviors means for their
specific roles.

Behavior development guides are available for you on the HR Portal with actionable suggestions on how
you can further develop your team along the 5 behaviors.

How our behaviors are included in PPM End-Year evaluation form

Essential:
CG70 and
below

8
Behavior framework
Philips 360 feedback
Customers first:
I always seek to understand our
customer needs. I prioritize to engage
effectively with our customers
and deliver innovative solutions.
I want our customers to have the
best experience with Philips,
outperforming competitors.
Quality and integrity always:
I apply the highest quality and
integrity standards to my work.
I always act in compliance with laws
& regulations and I adhere to the
Philips Business System.
When quality issues arise, I take
action to improve. I speak up when I
observe non-compliance by others.
Team up to win:
I collaborate with colleagues across
organizational boundaries to deliver
the best result for customers and
Philips. As we drive for success, we
have open and robust dialogues
and hold each other accountable to
deliver on our plans.
Take ownership to deliver fast:
I pro-actively take responsibility to
deliver on our company & my team
goals. I take decisions swiftly and
execute accordingly. I will persist until
the work is accomplished. I expect my
colleagues to do the same.
Eager to improve and inspire:
I am eager to learn and improve
every day. I apply Lean methods like
problem solving, daily management
and Kaizen, and make processes
simpler and more efficient. I inspire
those I work with and celebrate
success together.
CG70
and
below
ESSENTIAL
Acts to high standards; expected from
everyone in Philips
• Always prioritizes his/her work to
deliver on customer commitments.
• Cares deeply to deliver a great
customer experience; seeks feedback
to identify pain points to improve on.
• Takes responsibility to resolve
customer problems in a timely and
proactive way.
• Applies quality and regulatory
standards to own work.
• Looks for opportunity to improve the
quality in own area/team.
• Keeps promises, is transparent and
speaks up when non-compliant
behavior is observed.
• Participates constructively and
willingly as a team player, including
adapting own position for the good of
the team.
• Has robust dialogues, soliciting
other’s contributions to come to
productive conclusions and decisions.
• Follows through on team agreements
even when disagreeing individually.
• Takes personal responsibility for
decisions, actions, and failures.
• Identifies issues, explores root causes
and pro-actively ensures quick
resolution.
• Persists in accomplishing objectives
despite obstacles, stops internal
debates and urges colleagues to get
to results fast.
• Learns from experience, reflects,
actively seeks and gives feedback to
improve.
• Applies LEAN practices in own team.
• Suggests simple, effective ways of
working; cuts wasteful activities that
don’t add value and inspires others to
improve.
CG80
and 90
ADVANCED
+ drives improvements across the
company consistently
• Invests time & energy to personally
experience, analyze and understand
the customer perspective and needs.
• Prioritizes with the customer in mind;
stimulates others to always put the
customer first and sets the example
in creating excellent customer
experience.
• Encourages others and supports new
ideas and solutions.
• Applies and improves quality and
regulatory standards and stimulates a
quality mind-set.
• Builds a plan to improve the quality in
own area/team.
• Challenges people inside and outside
the (own) organization, in order to act
consistently with values.
• Teams up with others to deliver better
solutions; avoids reinventing the wheel
by seeking best practice from others.
• Tackles important issues constructively
through courageous conversations.
• Actively seeks input and advice from
the others across boundaries and
takes different perspectives into
account.
• Takes ownership for the results
outside of own scope; puts resources,
processes in place to ensure rapid
execution.
• Confidently makes decisions
regardless of not having all the data to
continue with speed.
• Challenges the status quo in order
to come up with more effective and
efficient ways of doing things and
adopts new approaches quickly and
champions them.
• Looks at what the best are doing to
raise the bar and significantly improve.
• Builds Lean methods and tools into
ways of working across teams and
applies them consistently.
• Encourages others to suggest better,
faster and simpler ways to work (e.g.
reducing bureaucracy).
EL+
MASTERY
++ role models and shapes performance
exceeding external benchmarks
• Seeks to anticipate and understand
unmet customer needs consistently and
creates win-win long term customer
partnerships, beating competitors.
• Leads and inspires the organization to
excel in customer focused behaviors and
performance.
• Champions innovation across Philips to
ensure superior customer solutions and
winning business models.
• Sets and assures the highest quality
standard and delivers flawlessly
to customers, beating external
benchmarks, in full regulatory
compliance.
• Leads transformations to optimize E2E
processes for highest productivity and
quality performance.
• Builds teams that role-model the Philips
Culture and always acts with the highest
quality and integrity.
• Leads multi-disciplinary teams
(including partners or customers) across
organizational boundaries, leveraging
available resources and expertise across
Philips.
• Engages in honest dialogues with
courage and consideration to
productively achieve big goals.
• Role models in doing what is right for
the customer and Philips, versus self-
interest, and inspires commitment in
others to do the same.
• Transforms businesses or functions to
realize superior customer and business
outcomes sustainably.
• Ensures teams take difficult decisions
swiftly and resolves roadblocks to
performance fundamentally.
• Leads large organizations with high
energy, tenacity and persistence to
achieve challenging goals also when
faced with significant resistance.
• Fosters a learning environment, uses
external benchmarking to raise the bar
to highest performance.
• Applies Lean, transforms organizations,
cuts waste, and maximizes simplicity,
speed & value to best in class.
• Builds great, high-performance teams.
Attracts, develops and inspires people to
outperform.
9
Integrated Goal Setting
drives development
New approach to Goal Setting
This year we are evolving how we set goals, as a kick-off to our 2020 People Performance Management
(PPM) cycle. Our aim is to help everyone grow and develop – to get to where they want to go in their career!

To better support you and your team in living the five behaviors and to strengthen the skills they need to
grow their careers, we’ve added development goals to the goal setting process. Next to setting 3-4 business
goals, your team members can also identify and set up to two (2) development goals.

Development goals Business goals

The personal and professional growth of your
team members is a top priority. That’s why
it’s included in the goal setting process and
dialogue this year. A development goal helps
your team members move closer to their career
aspirations and underscores their happiness
and performance.
Setting a development goal:
• Discuss your team members’ career
aspirations with them
• Support your team members in
understanding what areas they can and
want to develop, using feedback as a key
ingredient. Ask: “Where are they today vs.
where they would like to be?”
• Or perhaps you see an opportunity for them
to strengthen themselves on one of the five
(5) behaviors?
• Maintain an ongoing dialogue with each team
member about their development goals and
monitor their progress in Workday.
Driving quality and operational excellence
as a business goal
Out of the 4 business goals a team members
can set, one of the business goals needs
to focus on driving quality and operational
excellence within their scope. Be sure
to include one goal describing a quality
improvement. For example, streamlining an
existing process, adhering to quality norms or
regarding compliance.
Based on their Key Areas of Responsibility
(KARs), your team members can propose up to
4 business goals. As a people leader, please
help guide them in their goal setting. Proactively
share your own function/business/market
goals to facilitate the translation from company
commitments (KPIs) to tangible business goals.
Tip! Leverage the Goal Setting matrix that
enables you to do so.

Goal setting in short

During the dialogue: In Workday, team members can include:

• Reflect on your team members development • Up to 4 Business goals:

areas and the key priorities for the year ahead At least one goal focused on operational
to determine their development goals. excellence

• Share your team or organizational goals and • Up to 2 Development goals:

how they translate into business goals for your Focused on a skill or behavior
team members

• Share the standards of each behavior and give

examples what this means for your team member
in their role, see the next page for details.

10
Getting a better understanding
of development goals
Here are examples for each of the three types of development goals, along with
how their success are measured.
1
Behavior: Customer first
• Developing ‘’customer orientation’’ further
by scanning the customer environment to
map untapped segments/unmet needs
• Building new products & “First of kind”
programs to meet the customer needs
in each local market
• New joiner feedback score on induction,
linked to “Customer First”
Success measures/KPIs: Quarterly stakeholder
feedback improved, completion of the action
plan towards improving customer first.
Leadership
• Increasing number of development actions
for team by 30%
• Improving the engagement score of my
team (5% improvement against benchmark)
Success measures/KPIs: Quarterly stakeholder
feedback improved, completion of the action
plan towards improving customer first.
What does success look like?
SMART Goals
When setting your team members’ business
and development goals, make them ‘SMART:
Specific, Measurable, Achievable, Realistic
and Time-bound.
A clear description of what the goal is can
better guide your team member towards
achieving it!
Skill: Commercial Acumen
• Analyzing own product line P/L for last
year to map the implications of different
line items/levers
• Conducting a cash flow analysis across
the value chain
• Preparing a pricing analysis (waterfall,
pricing ladders, etc.)
Success measures/KPIs: Improved manager
feedback, improved efficiency in own work
around financial implications.
Managing goals throughout the
year, after closure of Goal setting
on March 1
• Goals can be managed throughout the
year via the Manage Goals process in
Workday.
• They can be updated to reflect changes in
position or depending on business needs.
• For details on how to manage goals
in Workday, check out the step-by step
guide on the HR Portal.
Success measures/KPI’s
A new element in the Goal Setting template
is the inclusion of Success measures/KPIs
for each goal. Success measures the ‘M’ in
the SMART goals (measureable) and also
describes how your team member will
measure progress and achievement of the
goal. It helps clarify what has made that goal
successful at the end-year evaluation.
11
Prepare for a
good dialogue
Here is a checklist with 9 actions to get yourself fully prepared for an effective
PPM End-Year and Goal Setting dialogue. Take the time to prepare so you have
all the information you need to share feedback, the PPM rating, behaviors and
development opportunities.

1. Schedule 60-90 minutes for a high-quality dialogue. Your team member will automatically
receive a task to complete their self-evaluation form in Workday. Both of you will need to
take steps after the dialogue to submit its outcome in Workday, so be aware of the deadlines
(see page 5).

2. Use the Anytime Feedback tool in Workday to gather feedback about your team member’s
performance and behavior from colleagues your team member has worked with closely.
Use the “Feedback” option under the Talent icon in Workday to launch this tool.

3. Review our 5 behaviors and consider the Goal Setting dialogue that you had with your
team member at the beginning of the year where you aligned on what ‘Meets’ looks like for
their role. Reflect on how they demonstrated each behavior. Be specific and have examples
ready to underpin your rating. Consider how they can develop and be sure to explain what
they can do specifically.

4. Once your team member has submitted their self-evaluation, you will be prompted to
submit your input. Review your team member’s self-evaluation, complete your Manager
Evaluation and decide on an appropriate PPM rating for your team member. Decide on
the ‘Long Term Incentive criticality indicator’ for team members in grades 80+. Your team
member will only see the PPM rating and your comments after the dialogue and when
you have have submitted for employee acknowledgement (final step).

5. Every dialogue is different and performance determines this difference. Consider how the
dialogue might play out and prepare by using the tips, tailored messaging, performance
coaching video’s and resources page in this guide to help you get ready. Invest time to
prepare for difficult situations where your assessment may not be aligned with your team
member’s expectations.

6. Review proposed Business and Development Goals for the year to come – check if they
are aligned with key areas of responsibility and team/organizational commitments.

7. Review the behavior framework for our clarified 5 behaviors and consider what each one
means for your team member. Be specific and have examples ready about what you expect
your team member to demonstrate for the coming year so you can align and agree on these
during the dialogue.

8. Check the Nominations and your team member’s Succession Plans and reach out to
managers that have placed your team member on a plan if still needed. Make sure you
understand the role and how your team member would need to develop.

9. Consider potential development opportunities to discuss with your team member.

Explore Experience Maps on the HR Portal for key experiences within strategic roles.

12
8 steps to guide the
PPM End-Year dialogue
1. Check in
How do you feel and what
are your expectations for this
dialogue?
2. Review goals
To what extent have you
achieved your goals over the
past year?
3. Review behaviors
Please share the status
of how you met the Philips
behavior and share
examples for each one.
4. Review performance
How well are you performing
in your role?
Start the meeting with a check in. This allows both parties to focus on
the meeting and to connect with each other. Make sure you set the
right scene and align on the expectations for the dialogue.
• Be brief
• Use feeling words; avoid words like ‘good’ and ‘OK’
Review your team member’s goals for the previous year and discuss
the status and achievements for each one. Goals are rated individually
in the following way:
Not applicable: the goal is no longer applicable, for example because
a project was not started or there was a change of structure.
Does not meet: the KPI set for a goal is not reached.
Partially meets: the target has been partially met, for example if the
project is not completed or delayed.
Meets: the goal set for the past year has been completed.
Exceeds: target has been overachieved.
Tip: Encourage an honest two-way reflection and review of the goals,
as this will impact goal setting for next year.
Review your team member’s examples on how they demonstrated
the Philips behaviors (during the year and where they encountered
challenges). Ensure that your team member shares concrete examples
for each one, discuss the examples and add your own comments.
Reflect on your team member’s overall performance in relation to their
KARs, goals and behaviors of the previous year, and then share their
PPM rating.
When sharing a PPM rating 1 or 2 (performance improvement cases),
allocate extra time to provide high-quality feedback during the
dialogue. On page 18 and 19 of this guide you find resources dedicated
to support you in addressing and managing low performance. Align
with your HR manager in advance on the course of action and to ask
for additional advice you may need.
13
5. Goal Setting
What are their business and
development goals for next
year?
A. Business Goals
Set 3-5 business goals
B. Development goals
Set 1-2 development goals
6. Set expectations for our 5 behaviors
What do each of our 5
behaviors mean for your
team member in their role?
7. Career development
How are they progressing
in terms of their career
development?
8. Check out
How can you turn insights
into action? How do you feel
now? What do you take away
from this meeting?
Review your team member’s KARs to make sure they are still
applicable for the next year. KAR’s and KPI’s are pre-populated
into Workday from the Job catalogue this year. If your team
memberpersonalized their KAR’s previosly, they are still available
in Workday by checking the Goal Setting 2019 template. Build an
understanding of what is expected for the upcoming year – and how
your team member contributes.
Based on this shared understanding, review the 3-4 SMART business
goals that your team member has proposed along with the Success
Measures/KPIs that determine the achievement of the goal.
Agree on 1-2 SMART Development goals for your team member
to focus on this year that will contribute to not only their current
performance, but also their future development and overall career
aspirations. A Development goal can be a skill that they would like
to learn, a behavior that they want to develop or a leadership skill.
Include a Success Measure/KPI that clearly describes how they will
measure progress and achievement of the goal.
Use this moment to discuss what each of our 5 behaviors mean for
your team member and the role they are in and use the behavior
framework as guidance. Align on how they should demonstrate
each of the behaviors to successfully perform in the coming year.
Check in on their development and career aspirations, and discuss
succession candidacy where applicable. The succession document
Is updated and visible to your team member in Workday.
Tip: Spend additional time on career and development for the top
performers in your team. Check out page 20 for key messages and
further guidance.
Make time for a brief check out to understand how you are both feeling,
the impact the dialogue has had and agree on next steps.
• Be brief
• Use positive language and aim to close the dialogue on a positive note.
14
All about developmental
feedback
Regular, targeted feedback conversations are important in helping your team
members continuously develop and understand how to live our behaviors.
Giving feedback can be one of the most challenging things you have to do as
a manager but it is key to making a significant impact in your team members
growth. It’s a great learning tool, but it’s only effective when delivered properly.

Effective feedback is a two-way dialogue that is forward-looking and focuses

on specific behavior and its results or impact. Explaining the impact that a
specific behavior has on your team members work, their peers or the overall
team, creates an awareness that will drive the change to improve. Presenting
feedback as a learning opportunity for the future instead of as criticism, makes
it positive, supportive and establishes trust, which in turn improves performance.

Guidelines for giving effective developmental feedback:

• Ask for permission to give feedback and create a safe environment by

demonstrating engagement and showing understanding.
• Having a growth mindset (see the following page for details) is key in being
a great performance and career coach. This makes feedback a learning
opportunity (no mistakes but a chance to grow) that is future focused instead
of an assessment on their capabilities, skills or talent. So give feedback based
on effort and determination, not on natural talent.
• See feedback as a two-way dialogue, not only a delivery from your side.
• Focus on: “What are you doing well? What can be better?” Using the STAR
method (S and T – Situation or Task, A - Action, R - Result) may help you to guide
your discussions around feedback (see following page for further details). Be
descriptive and give specific, observable behaviors and their results and impact.
• Be careful not to not make assumptions about the reasons behind your team
members behavior but check in with them to understand why. Be empathic
and realize you might not know what is causing certain behavior.
• Pause and then ask for the other person’s reaction. Give them time to think
through what you have said and react to it. Ask questions to understand and
listen to learn. Repeat back what you’ve heard to check if you understand their
thoughts and feelings.
• Pay attention to your team members reaction and emotions. Prepare for
different kinds of emotional response by reading the examples on page 10.
• Suggest concrete next steps. Give a small number of actionable suggestions
(ideally only one or two) that the other person can take in the future, to change
this behavior. They will appreciate that you are giving them the first step to
improving the situation.

15
… more about giving feedback
STAR method
The STAR method is a particularly
helpful manner to structure behavioral-
based feedback by telling a linear story
that describes the specific situation,
task, action, and result of the situation.
Situation – Set the scene and describe
the challenge that your team member
faced.
Task – What was your team member’s
responsibility and task in that situation?
Action – Explain what your team
member did, how they approached the
task and what steps they took to solve
the problem.
Result – Explain the outcome of your
team members’ actions. How did it
compare to your expectations? What
impact does the outcome have?
Available tools for feedback:
What is a growth mindset?
Dr. Carol Dweck introduced the terms
‘fixed mindset vs. growth mindset’ which
describes underlying beliefs that people
have about learning and intelligence.
When you have a growth mindset you
believe that talents and abilities can be
developed through effort, good teaching
and persistence. This is in comparison to
a fixed mindset where you believe that
intelligence, abilities and talents are static.
Someone with a growth mindset has a
strong desire to learn and is therefore
is not setback by failure but embraces
challenges, sees effort as a path to
mastery, learns from criticism and finds
lessons and inspiration in
the success of others.
For further details about the feedback tools,
check out the HR Portal article.
16
Tips for effective performance dialogues

Get comfortable Ask questions to Repeat back what Stay positive,

with being understand and you’ve heard focus on solving
uncomfortable listen to learn to check if you problems and be
by rehearsing understand their forward looking
the conversation thoughts and
beforehand feelings

Tips for performance feedback language

Do’s Don’ts

Use the term “development Use the words “poor performance”

areas” when providing negative and “weaknesses.”
feedback.
Use overly negative words if not
Use positive, empathic appropriate, such as “always” or
sentences, such as “You are “never”.
proactive and diligent with
project management, but your Compare to peers, for example,
communication style is somewhat “You are better than Mike at
formal and leads to fragmented project management.”
teamwork.”
Include label terms, such as
Be descriptive, for example, “irresponsible” and “careless”.
“Sara, I thought the way you
managed this was innovative and Make value judgements, such
professional. I particularly liked as “best”, “bad”, “incompetent.”
the way you…..”
Apologize after delivering
Emphasize words of negative feedback, make sure
encouragement, for instance, it is respectful and constructive.
“Overall, your analytical skills
are improving; moving forward
I will provide you with more
opportunities to develop this
skill further.”

17
How to deal with 5 common emotions after
constructive performance feedback
Consider how your team member might react to the feedback that you will
share based on previous feedback conversations and their personality.

3 key tips when dealing with an emotional team member:

1. Allow them to speak openly, vent true feelings and do not interrupt;
2. Observe signs of emotional reactions and react accordingly;
3. Remain calm and composed, and handle the situation with care.

1. Indifference

Your team member responds How to respond:

in an apathetic manner and
does not fully commit to
doing things differently. For
example:
“Maybe; I’ll see what I can
do.”
“I can’t make any promises,
but I’ll try.”
“Sure, whatever you say.”
• “I’d like you to think about what we discussed and whether it’s
something you can put the required effort toward developing. Let’s
set a date now to follow up on this discussion.”
• “It’s important to let me know if this isn’t something you can
make a full commitment to. If you decide it’s something you can’t
do then that’s acceptable, but then we’ll need to talk about the
consequences.”
Don’t:
• Overlook your team members’ indifference and non-commitment
toward the feedback
• Lose patience with your team member
• Judge them for being indifferent

2. Hostility/Resistance/Denial

Your team member attacks How to respond:

your credibility and the
facts in the review; does not
acknowledge the problem,
denies that the incidents
took place, or downplays the
impact of their actions. For
example:
“I don’t know what you’re
talking about. I provide great
customer service!”
“I disagree with your
feedback regarding my
project management skills
because the incident you
mentioned didn’t take place.”
• “Let’s review the examples I gave of areas where I see an opportunity
for improvement.”
• “Let’s give you some time to reflect on the feedback I’ve provided
and reconnect tomorrow morning.”
• “This is an opportunity for you to improve your performance.
Disregarding it will continue to impact your performance reviews
down the line, as well as the future opportunities available to you
here at Philips.”
Don’t:
• Get aggravated with your team members’ open hostility and
resistance to your feedback
• Moderate your feedback to alleviate the reaction
• Attack your team members’ personality based on his/her reaction

18
3. Responsibility Skirting
Your team member may
acknowledge the negative
feedback but may play the
‘blame game,’ and look for
ways to point the finger to
others, indirectly implying that
they will not change.
For example:
“It’s not my fault…I asked
John to help but he didn’t
have time.”
“I guess I didn’t realize that
was my responsibility.”
“My market is more
challenging than others so
it’s not my fault.”
4. Shock/Anger
Your team member becomes
angry and says things
impulsively or reacts in an
emotional way. For example:
“This is not fair! I always
knew you had something
against me, but this is just
unreasonable.”
“I’ve been working so hard
to meet all of my project
deadlines, and this is the
feedback I get!”
“I don’t know what to say
since I wasn’t expecting
this. I don’t understand this
feedback at all.”
5. Lack of Confidence/Self Pity
Your team member is
uncertain in their abilities to
succeed or is risk-averse. For
example:
“I don’t know where to start.”
“I knew this would happen;
I can never do anything
right.”
How to respond:
• “I know this might be difficult for you to acknowledge, but the
fact remains that it is part of your role and it requires you to work
productively with your peers.”
• “I agree, your market is unique, but we have set targets for this
year and I still need you to achieve them.”
Don’t:
• Agree with your team member when he/she blames other people
• Change your perspective based on the reasons or excuses if they
are not valid
How to respond:
• “I can see that you are upset with this feedback. I would like to hear
your thoughts and understand why you are feeling this way.”
• “If I understand correctly, you are angry because you feel that I have
not given you enough exposure, and think that I don’t have any
confidence in your abilities. Is that correct?”
• “Let me explain what I think happened so you can understand my
opinion. Then we can work this out together.”
Don’t:
• Attack your team members’ personality based on his/her reaction
• Become defensive
• Moderate your feedback to alleviate the reaction
How to respond:
• “Now that we have identified this area for development, it is an
opportunity for you to improve your performance. I firmly believe
you are capable of achieving this goal. I’ve seen you achieve similar
development goals in the past, for example…”
• “You will have support from me as you work on this. For example…”
• “Let’s talk about what you can do to improve in this area.”
Don’t:
• Focus on your team members’ past inability to achieve outcomes
• Moderate your feedback to alleviate the reaction
• Reflect your team members’ negative attitude
19
Sharing PPM ratings
PPM 4 and 5 rating
How to acknowledge a great performance and focus on the year ahead?
Key steps and messages:

1. Acknowledge an exceeds 4 or outstanding 5 performance: Express your appreciation for their hard work
and be specific using examples and feedback that have led to this rating.
“I want to emphasize that you have done an excellent job this year delivering on your goals and/ or
behaviors. Specifically, you did an outstanding job on ….and over-delivered on what was expected of
you.”

2. Identify opportunities for development: based on your team members reflections, your feedback and
feedback from others, discuss what areas can be developed to sustain and strengthen their performance
even further.
“You did a great job delivering on the project and managing your stakeholders. Now let’s see how you
further develop your influencing and convincing skills to increase your impact more.”

3. Check in on Development items: review what actions have been taken since the Mid-Year dialogue and
agree on what the focus will be for the coming months.

4. Check in on career aspirations: understand if your team members’ aspirations have changed since
Mid-Year and ask how long they will be happy in this role.

5. Share (updates) on Succession plans and Nominations: Be sure to share (updated) Succession plans,
ask for their feedback and update if needed.

Watch the Career coaching videos for tailored career coaching messaging depending on where your team
member is on their career journey.

Tips: Messages to avoid:

• Check out the Experience Maps on the
HR Portal to help you prepare in defining
the most suitable development actions by
identifying key experiences for strategic roles.
• Use the PPM Mid-Year Dialogue Guide for
further tips on specific messages to help
you coach your team member in their career
development.
• Promising a new role within a specific
timeline without having full confirmation
from all stakeholders involved.
• Implying a promotion or salary increase
without having full confirmation from all
stakeholders involved.

20
Sharing a PPM 3 rating
How to deliver the message when your team member might expect a
higher rating?

Key steps and messages:

1. Acknowledge a solid performance and give feedback: Make sure to recognize that a 3 rating means
strong, and you appreciate your team member’s work of the past year, in order to keep them engaged.
“First of all, I want to acknowledge your contribution in the past year. When looking at your results and
taking feedback from stakeholders into consideration, you delivered on the goals as we set them. I
would like to emphasize that you did a solid job delivering on what was expected ……”

2. Clarify the difference between a 3 and a 4/5 rating: Be specific when giving examples of what a higher
rating would look like, both in terms of results and behavior.
“If I understand you correctly, you feel that you have exceeded your goals with respect to completing
your projects while getting great feedback? Let me share my perspective on how I concluded that a
PPM 3 rating is a realistic reflection of your achievements this year..”

3. Highlight strengths and create opportunities to increase impact: Focus on their strengths and discuss
ways that your team member can increase their impact while looking into possible ways to develop
skills and gain new experiences.
“I’d like you to continue to deliver the solid results as you do, and let’s look into ways that you can
make more of an impact. For example...Let’s see how you can really making a difference with what you
do and how you approach it. There are many ways for you to develop skills and contribute beyond
your own scope for next year.”

4. Depending on how your team member responds: if you feel that your team member is open to discuss
development and career-related topics, ensure that you also check-in on career aspirations and
succession planning. Your team members will receive an updated Succession profile in Workday.
Be sure to share (updated) Succession plans, ask for their feedback and update if needed.

Watch this Performance coaching video on how to address this possibly challenging situation.

Tips: Messages to avoid:

• Be positive, your team member is keen to • Position the PPM 3 rating as weak
have a higher rating. Use this motivation and performance.
drive and encourage a higher performance
• Compare your team member to others.
by looking for development opportunities
and offering your support. • Only use very recent feedback to underpin
the rating.
• Set expectations on KARs, Goals and
Behaviors for next year. The disappointment • Blame other managers’ feedback or the
of your team member can be prevented by process when sharing the rating.
being specific and clarifying what you expect
in terms of performance and behavior for
next year.

21
Good results, inconsistent behavior
How to deliver the message when your team member is a strong
performer, yet is inconsistent with our behaviors?

Key steps and messages:

1. Create awareness of importance of behaviors: let your team member know that behaviors play a
relevant role as well, not only getting results.
“You were very results-oriented and proactively took ownership to meet your targets. However it is not
only about the targets, also how you achieved them and in this context there are development areas
that I would like to address. This feedback is something I want to discuss in further detail, is that ok?”

2. Be prepared, be specific, explain the impact: take the time to prepare well and have enough specific
examples ready to underpin your feedback. Explain the impact that the behavior has had on the team,
stakeholders or yourself, and in the end how the results were affected.

3. Improve through understanding: engage your team member to find a solution together. The best way
to do this is to understand your team members’ behavior by listening to your team member’s point
of view. Give them a chance to share their perspective and feelings, and then respond in a way that
shows you understand. When people know you are receptive to their feelings, they are usually much
more willing to change.

4. Reflect, align and develop: Reflect on the examples of inconsistent behavior and discuss what
your team member could have done differently. Highlight the alternative results that this behavior
could have created. Agree what the right type of behavior is for the future if a similar situation
arises and agree on concrete actions for development. 

Watch this Performance coaching video on how to address this possibly challenging situation.

Tips: Messages to avoid:

• Be sure to take extra time with this team • Compare your team member to others.
member during Goal Setting to focus on our
• Only use very recent feedback to underpin
5 behaviors and set expectations for each
the rating.
one of them for next year.
• Blame other managers’ feedback.
• Be a performance coach and offer your
support by giving ongoing feedback and
reviewing situations that might arise that
require improved behavior.

22
 Sharing a PPM 1 and 2 rating
How to manage low performance?
Every year there are employees that need to raise their performance. If you have a team member that you
will give a PPM 1 or 2 rating, you have three options to consider via a Performance Improvement Plan (PIP),
depending on your team member’s potential:

1. 2. 3.
Improve Improve Improve
performance performance performance
in the current role via a and develop the person and if not successful, exit.
Performance Improvement to move to another role
Plan (PIP) within Philips

A PIP is a formal document and process in Workday* detailing out the specific improvement areas your team
member needs to address. A PIP is required for PPM rating 1 and for PPM rating 2 for a second consecutive**
year. PIP is advised for PPM rating 2 when given for the first time. Connect with your HR Manager if this
applies to your team member(s) and for any team member who had an active PIP during 2019.

Overview of the PIP process in Workday

Dialogue 1. Initiation 2. Set content Dialogue 3. Employee 4. Manager If PIP is completed 5. Manager 6. HR 7. Employee 8. PIP
to define PIP acknowledgment evaluation earlier than acknowledgement Approval acknowledgement document
expected *** completed

Every
month
depending
Manager Launches Manager Sets PIP Dialogue Acknowledge on PIP Manager HRM Advances Manager HRM Acknowledge PIP document
reaches out PIP Content duration Evaluates PIP to Manager Reviews approves or available on
to HRM progress Acknowledgement progress sends back employee profile

HR Manager, HR Manager Manager Manager & Employee Manager HR Manager Manager HR Manager Employee Employee,
HRBP and employee Manager,
Manager released to released to HRM and
employee employee HRBP

Set Content Evaluate Progress Review Progress

The primary purpose of the After the appropriate period,
PIP is to capture concrete the “PIP – Manager Evaluation”
improvement actions to ensure will be launched by Workday to
that performance improves. capture the progress on the PIP
action items agreed upon earlier.
Upon completion, the “PIP –
Manager Review” will be launched
by Workday to capture the final
progress on the PIP action items
agreed upon earlier. After the
manager’s review the HRM and
Employee will receive the PIP
document.

* For the Netherlands, the PIP process is offline and not documented in Workday. For Germany only Leading Managers / Leitende Angestellte are eligible for the PIP process
** Global policy, local policy is leading
*** Check local guidelines for the US

23
Sharing a PPM 1 and 2 rating
How to have a performance improvement dialogue?

Be ready to deliver high-quality feedback

Preparation is key to having an effective performance improvement dialogue throughout the year with
your team member and for initiating a PIP. Taking the time to prepare yourself will make it possible to
quickly involve your team member in the dialogue, understand the root cause of the performance issue
and get to a mutual agreed action plan.
Delivering this message can be challenging, therefore a step-by-step training is available via
Philips University (search for: performance improvement dialogue) to help you be fully prepared and
understand how to conduct an effective performance improvement dialogue. Eventually this will
contribute to the high performance culture we are continuously striving for in Philips. The main topics that
will be covered in the e-learning are:
• How to prepare a performance discussion with an underperforming employee
• How to conduct the conversation on performance improvement areas in an effective way
This e-learning takes 20 minutes to complete and takes a very practical step-by-step approach.
The 5 steps of this approach and flow of the dialogue are highlighted below.

5 steps to prepare in order to have an efficient

performance improvement dialogue:
1. Identify the problem
2. Make the problem specific
3. Find the root cause of the problem
4. Reflect on the way of giving feedback
5. Think about possible counter-measures

The flow of an effective performance improvement dialogue:

10 seconds Opening statement: Make it result- or behavioral- oriented

and end with an open question

20 seconds Involve your team member: Invite your team member to talk

Max. 10 minutes Move to the root cause: Make an analysis of the root cause of the
problem together with your team member

2 minutes Decide on countermeasures: Agree on the counter measures

1 minute Wrap up: Ensure your team member is committed

and express your support

24
Learn more!
Tools and resources to help you with every step of performance management; preparing
for a high-quality dialogue, having and effective performance conversation and turning
insights into action by supporting your team members’ career development.
1 Prepare for a high-quality dialogue
Experience Maps: help employees successfully
navigate their career within Philips. They provide
practical suggestions on key experiences for
success in diverse roles and how they can obtain
the key experiences required for those roles –
from learning on the job to learning from others,
or through the Philips University. Use them to
identify learning opportunities.
Experience Maps ›
Anytime feedback: a flexible tool in Workday,
as feedback can be provided by anyone in the
organization at any time. This enables everyone
to keep a clear record of feedback regarding
their performance, which can be useful input for
PPM discussions.
Anytime feedback ›
Talent Card: an internal CV of your team
member. Covering the person’s job interests,
career aspirations and relocation preferences,
it gives you an additional insight to help
you support your team member in his/her
development. The Talent Card is visible to the
employee, you as the manager, your manager
and HR.
Talent Card ›
2 During the dialogue
Experience Maps: take relevant Experience
Maps with you during the dialogue and
discuss with your team member how they can
develop key experiences.
Experience Maps ›
Can’t find what you need?
Ask a general question in the People Leader community on Yammer using #PPM or contact your local PPS
Center for specific questions.
Performance coaching videos: Includes 3 videos
for possibly challenging performance dialogues.
Watch the videos ›
Career coaching videos: 4 videos for different
types of team members depending on where
they are at in their career journey. Help you to
tailor the messaging about career development.
Watch the videos ›
Performance improvement e-learning: step-
by-step training is available via Philips University
(search for: performance improvement dialogue)
to help you be fully prepared and understand
how to conduct an effective performance
improvement dialogue.
Listen with empathy to improve performance
Watch the video ›
Block That Defense: How to Make Sure Your
Constructive Criticism Works
Read the article ›
Goal Setting matrix: align your team goals
to company commitments.
Goal Setting matrix ›
3 Career development
Career development: use the search
functionality on the HR Portal to find all
career-related information.
Team management/ Career coaching: to
support you in your role as manager and
coach, the article on HR Portal provides you
with tips on how you can better support your
team members’ development.
Philips University courses:
• Developing employees
• Help others manage their careers
25
© 2019 Koninklijke Philips N.V. All rights reserved. Specifications are subject
to change without notice.

December 2019 www.philips.com