key performance indicators for alibaba’s sales staffs at osb investment and technology joint stock company

i ACKNOWLEDGMENT I express my gratitude to a number of people for the assistance that they have given me in conducting the research for this dissertation In particular I wish to thank my supervisor whose interest guidance and thoughtful criticism have been of the greatest benefit to me Also, I would like to convey my sincere appreciation to lecturers and staffs at the NEU Business School for their insights, knowledge and support for this endeavor I also want to thank Vice Director of e-Commerce of OSB Investment and technology joint stock company, my co-workers for their co-operation and valuable assistance throughout the execution of the study A special word of appreciation goes to my family for their moral support without which it would have been impossible to initiate this study I thank them sincerely ii TABLE OF CONTENTS ACKNOWLEDGMENT i TABLE OF CONTENTS .ii ABBREVIATIONS v LIST OF TABLES vi LIST OF FIGURES AND CHARTS vii EXECUTIVE SUMAMRY viii CHAPTER INTRODUCTION Rational Research Objectives Research Questions .3 Research methodology 1.4.1Research Process 1.4.2Data Collection .4 1.4.3Data Analysis Scope of research Thesis structure CHAPTER THEORETICAL FRAMEWORK ON KEY PERFORMANCE INDICATORS .6 Nature of Key performance indicator .6 2.1.1Definition of Performance Appraisal and KPIs 2.1.2Characteristics of KPIs 2.1.3Purposes and benefits of KPI .10 2.1.4Steps to implement KPI .11 Balance scorecard as a tool for KPIs development 12 2.2.1Balance scorecard definition 12 iii 2.2.2Balanced scorecard as a tool to develop KPIs 15 2.2.3 Four perspectives of developing KPIs 19 Factors impacting on developing and using KPIs 25 2.3.1 External factors impacting on developing and using KPIs 26 2.3.2Internal factors impacting on developing and using KPIs 26 CHAPTER DEVELOP THE KEY PERFORMANCE INDICATORS FOR ALIBABA’S SALES STAFF AT OSB 29 Overview of OSB and Alibaba’s department 29 3.1.1Overview of OSB 29 3.1.2Overview of Alibaba’s department .34 Requirements for Alibaba’s sales staff performance measurement .37 3.2.1Alibaba’s sales staffs job requirements 37 3.2.2Requirements for Alibaba’s sales staffs performance measuarement 40 Develop KPIs for Alibaba’s sales staffs base on BSC .42 3.3.1Respondent profile .42 3.3.2 KPIs for Alibaba’s sales staffs according to financial perspective 47 3.3.3KPIs for Alibaba’s sales staffs according to Education and Growth 47 3.3.4KPIs for Alibaba’s sales staffs according to Internal business process 48 3.3.5KPIs for Alibaba’s sales staffs according to customer perspective 49 CHAPTER SOLUTIONS AND RECOMMENDATIONS TO USE THE KPIs FOR ALIBABA’S SALES STAFF AT OSB 50 Plan and objective of Alibaba’s department 51 Solution to implement KPIs for Alibaba’s sales staffs at OSB JSC 51 Recommendations to implement KPIs 56 4.3.1Recommendation for Leadership 56 4.3.2Recommendation for HRM 57 4.3.3Recommendation for training activities at OSB 58 iv CONCLUSION 61 REFERENCES 62 APPENDIX SURVEY QUE STIONNAIRES 64 APPENDIX IN-DEPTH INTERVIEW QUESTIONS 68 v ABBREVIATIONS BSC Balance score card GGS Global Gold suppliers HR Human resources KPIs Key performance indicators OSB OSB Investment and Technology Joint Stock Company PA Performance appraisals SM Sales Manager SE Sales executive TL Team leaders vi LIST OF TABLES Table 2.1 Generic Mesuarements of four perspectives 25 Table 3.1: OSB’s financial highlights from 2010-2012 33 Table 3.2: Current Appraisal Form 40 Table 3.3: Employees’ Perception about OSB’s Strategic Development .43 Table 3.4: Employees’ perceptions about the KPI system 44 Table 3.5: Employees’ satisfaction with current job .45 Table 3.6: Employees’ perceptions about career development opportunities 47 Table 3.7: Employees’ perceptions about working relations and cooperation .48 Table 3.8: Suggested indicator groups and indicators for Alibaba’s sales staffs .50 Table 4.1: Instructions for Evaluating Job Results 53 Table 4.2: Sugested KPI for Sales Manager 54 Table 4.3: Sugested KPI for Sales Executive 54 vii LIST OF FIGURES AND CHARTS Figure 1.1 Research Process .4 Firgue 2.1 Model of KPI by David Parmenter Figure 2.2 Balance scorecard framework 15 Figure 2.3: Using the BSC as a strategic Management system .17 Figure 2.4: Internal business process .23 Figure 2.5: Four perspective of Balance scorecard 24 Figure 3.1: OSB structure 29 Figure 3.2 Alibaba’s team structure 36 Figure 3.3 Sales process 37 Figure 3.4: Current Performance Appraisal Flow Chart 42 viii EXECUTIVE SUMAMRY Key Performance Indicators (KPIs) are increasingly used by the private and public sectors to measure progress towards organizational goals using a defined set of quantifiable measures For the OSB JSC, KPIs are becoming an essential part of monitoring Alibaba’s sales staffs This research provides an analysis and evaluation of KPIs system which supporting personnel appraisal activities of Alibaba’s sales staffs at OSB JSC Its idea was formed when the research monitored and summarized results of personnel appraisal of Alibaba’s sales staffs at OSB The main target is to develop a more effective appraisal system for sales forces by using KPIs base on BSC This new system not only helps leadership evaluate performance appraisal base on the measurement of four perspectives of BSC but also provides leadership a comprehensive look and specific strategy’s implementation Method of research is analysis, comparisons, synthesis to examine both primary data and secondary data Base on given KPIs required, the survey was conducted to assess the current KPIs for Alibaba’s sales staffs at OSB JSC In this step, Four business perspectives of BSC model was to identify their current KPIs Different types of data sources were used to gather the data that include OSB’s report, regulations, procedures, job description, magazines, books and Internet (secondary data), and surveys and interviews (primary data) which covering different levels of employees of OSB, the survey questionnaires was directly distributed through OSB internal mailing system to explore deep information on how to develop KPI for sales department in Ha Noi The research objectives are to analyze the job requirements of sales teams and performance requirements for Alibaba’s sales staffs, to develop KPIs base on BSC model model to measure the performance of Alibaba’s sales staff at OSB JSC and to propose solutions and recommendations to use the KPIs for Alibaba’s sales team at the OSB The research covered different issues related to effective KPI ix system such as the scope, criteria, method of measurement and procedure of applying KPIs system, the improvements in new KPIs system, and how the employees perceive the evaluation conducted by their concerned managers Base on KPIs required, thesis suggested some solutions and recommendation to use KPIs for Sales teams and the company's requirements The report found the suitable of having KPI system for Alibaba’s sales staffs to improve their activities This thesis also suggested some recommendations to use KPIs for Alibaba’s sales staffs at OSB Company:  Develop KPIs based on Balance Scorecard model  Training apply KPIs: Raising awareness and widespread KPI for all officers and employees, training evaluators and designer of KPIs for Alibaba’s sales staffs at OSB Company…  Solutions to implement KPIs and recommendation for OSB Company to use new KPIs system for Alibaba’s sales staffs: Recommendation for awareness of leadership and recommendation for training activites at OSB CHAPTER INTRODUCTION Rational People say that selling is a numbers game, and all sales organizations keep track of certain sets of numbers It is easy to obsess over the obvious numbers like monthly or quarterly revenue or close rates If enterprises want to improve the way their team plays the game and boost the score in the future, they need to be paying much closer attention to another set of numbers, namely, the Key Performance Indicators (KPIs) that give them insights into how well each member of their team is actually playing A KPIs is a measure of a business activity used to estimate how a particular process is actually performing It is KEY to the success of the business For example, is the number of sales contacts per week important to the success of organization? It is related to PERFORMANCE when it can be clearly measured, quantified and easily influenced by the members of team For example, does a business have a benchmark that tells sales manager that when a salesman makes at least contacts with Executive level decision makers during a sales cycle the value of the final deal will go up by 40%? And it is used as an INDICATOR; in other words, it is something that provides leading information about future results For example, one version of the 80/20 rule says that 80% of a salesman’s production is generated by activity in 20% of their accounts Given that information, it might be a good idea to track the number of calls and the amount of time each sales maker spends with high value contacts in those accounts, and set some specific expectations there that can be measured Essentially, KPIs should provide visibility into current activity that will impact future sales team productivity Tracking these indicators in the present will allow you to identify gaps and coach team members, which will help manager influence the outcome of those monthly, quarterly and annual productivity numbers that are so important 54 Table 4.2: Sugested KPI for Sales Manager Description up dealers Measure Index/month and Dealers Build selling system Set Stabilize business systems Data report Control debt Debt recovery Brain storm distributions Ensure sales/month Sales reports, consumption Data Consumption Report Report of debt recovery Contribute comments to Times Times Times Times develop business Systems & Performance appraisal Data storage Products Performance appraisal form Times Store all data related to sales File Gather and analyze activities Gather weekly data: Volume File of sales, payments, nonpayments, new & renew customers Coordinate management, Compare sales data, help Times on-site executives, with and sales sales executive to solve debt difficult situations recovery Complete report Not complete or complete Times late require report Company regulations Violation of company rules Times Participate in meetings, Absences, tardiness except Times the training courses and for good reason or meetings activities of the company out of work Source: Author’s research Table 4.3: Sugested KPI for Sales Executive Description Set up potential Find, follow up and close Measure No of Index/month 55 customers deal with potential customers customers Ensure target of sales Ensure target of sales Manage customer Get well customer information information Selling via telephone Contact with potential, Times new and renew customer Manage and care Contact customers support by phone customers answer issue related to Times and to their responsibility Complete report Not complete or complete Times late require report Company regulations Violation of company Times rules Participate in Absences, tardiness Times meetings, the training except for good reason or courses and activities meetings out of work of the company Source: Author’s research 56 Recommendations to implement KPIs 4.3.1 Recommendation for Leadership Develop KPIs is not the task of a single department of OSB JSC It must be the result of consensus of all department, in particular leadership In fact, it proved that many cases failed to build KPIs because the main reason is this lack of support of the senior management Currently, OSB has quite young management team who are qualified, highly capable and willing to adapt to the change Especially, the Board of Directors have capabilities and good governance are facilitate employees to participate in training to improve professional qualifications or equip to staff the skills to work better This will facilitate the construction and deployment of KPIs for Alibaba's sales staffs at OSB For better developing and using KPI for Alibaba’s sales staffs, Leader teams should improve the leadership role To achieve this, they should be the first ones to perceive and understand clearly the important of developing KPI as well as all definition, content and others relating task to develop and use KPI As leadership role, Leader teams should be the one who provide the master plan with all the required tasks and implementation steps for Alibaba’s sales staffs in order to develop a suitable KPI and use KPI effectively On the other hand, Leader teams should frequently follow up and provide instruction during the time of developing and using KPI They should follow up the implementation and provide guideline and suitable solution for any issues raised during the implementation It is very important that Leader teams should motivate Alibaba’s sales staffs during the time of developing and using KPI They should provide a mechanism for award and penalty to staffs who achieved the target and who fail to their performance A dynamic working environment should also be focused such as organizing contest for monthly or quarterly KPI achievement 57 In addition, Leader teams should provide the best tools for Alibaba’s sales staffs during KPI development and usage such as investing on software application to record staff outputs to later appraisal successfully 4.3.2 Recommendation for HRM The purpose of Human Resource Management (HRM) is to hire, train and develop staff follow KPIs system Through effective training and development, employees at OSB achieve promotion within the company and reach their full potential This reduces the need for external recruitment and makes maximum use of existing talent This is a cost-effective way for a business to manage its people One recommendation would be to consider that some potential (and current) employee may be more private individuals While OSB seeks certain characteristics from employees, (eg enthusiasm, positivity), personal privacy is one theme that may often go overlooked For example, employees are expected to post their personal and professional goals on the bulletin board at work, and often in-store events incorporate activities such as wearing large buttons that the employee has written one of their goals on These types of expectations may cause potentially great employees to not apply for positions, be singled out by supervisors, colleagues or peers, or in extreme cases, quit their job HR department should design and publish the guideline on KPI to all Alibaba’s sales staffs including definitions, KPI criteria and how to sest up criteria, criteria’s definitions, calculation and formular as well as how to use KPI for performance appraisal This guideline should be simple and easy to understand which can be used at all level/positions The guideline can publish throught the intranet to access online or hardcopy During the time of KPI development, HR should have a point of contact to support and answer all the querries of Alibaba’s sales staffs relating to KPI It is 58 important to note that this point of contact should be easy to access with full knowledge which can help Alibaba’s sales staffs for the first time of contact HR can also consider having one page of KPI on the intranet with the entire Q&A to help Alibaba’s sales staffs acess quickly and easily Therefore, those activities above will support and help Alibaba’s sales staffs develop and implement KPI in the effective way 4.3.3 Recommendation for training activities at OSB KPIs are the measures that monitor the performance of key result areas of business activities, which are absolutely critical to the success and growth of the business The development and use of the KPIs should form the basis for the analysis of an organization’s current performance, its future requirements and the improving strategies required for ongoing success It is important to developing KPIs and to give clearly instruction about using KPIs to improve the awareness of Sales teams on KPIs By this way, it helps Alibaba’s sales staffs understand the definitions of criteria and how to measure them from the beginning of KPIs development to using KPIs on appraisal performance This will also help Alibaba’s sales staffs to have a clear direction and they know how to achieve the target and how to use KPI to appraisal their performance With those purpose above, the author recommends some solutions below: - Key performace indicators for Alibaba’s sales staffs should follow the SMART criteria that abbreviated for Specific, Measurable, Achievable, Relevant and Time It means that the measure has a Specific and clearly stated (with clear definition about the standard), it is Measurable to really get a value of the KPI, the defined norms have to be Achievable, the indicators closely Related to the requirement of Alibaba’s sales staffs jobs and responsibilities, and finally it must be Time phased, which means the value or outcomes are shown for a predefined and relevant period 59 The documents was sent to the department to guidelines using KPIs, the company should also organize training classes for all staff using KPIs effectiveness KPIs is needed to help improve job performance evaluation and impact on work performance of the employee and then the staffs understand how to the best assess Use tools such as meeting and working diary to monitors, record and calculate performance more exactly Disagreement about recorded performance result occurs time and again To avoid this situation, OSB Company need a system to recorded, maintain, store performance exactly Help The staffs identify how various type of this KPI could benefit their firm; and help they understand what their company expect One page web help to OSB Company might set standards and measure performance using key performance indicators (KPIs) for staffs see In OSB Company now, weekly or a half-monthly we hold a meeting So that, certain that meeting is often held with higher quality, hold for every position with suitable frequency Employees should write work-diary daily to record all activities and achievement Enlarge information of dashboard besides financial indicators Closely attach KPIs to income, promotion and financial encouragement Employees be interested in KPIs if they not see the linking between KPIs result and financial benefit that they will receive, The frequency of evaluating KPIs Using information technology applications to reduce appraisal costs, Design a software to evaluate that can organize this activity from measure indicators to calculate result, annoucement and store result Use internal email, group mail, communication network to carry out meetings with low cost Information technology (IT) With the leading IT experts working for OSB, it is very convenient to develop KPISs system IT is not only applied for products and services but also internal management system has been standardized With the support of IT, 60 customer transactions, data processing system, storage information and personnel management system are simple, convenient and much more effective With a foundation of available IT systems, the development and implement of KPISs system will be very favorable Employee capacity As above mentioned, human factors are basic and decisive to effective implementation of the KPIs Therefore, capacity, qualifications and awareness of staffs is one of the issues that need to pay attention With a quite young workforce, having bachelor degrees, ability to language, computer skill, master of professional, flexibility and good adaption, Alibaba's sales staffs have favorable precondition for implementation of KPIs system From the evaluation and analysis, we can see basis elements for the development and implementation of the KPIs has a positive effect and favorable conditions for actual branch Therefore, the construction and application of the KPIs at the moment is suitable 61 CONCLUSION Performance appraisal is a very important tool to evaluate and develop employees’ performance It is one of the most difficult human resources techniques which need a special attention by the management This thesis provides the proposal for KPIs of positions of Alibaba’s sales staffs at OSB base on BSC It is expected to help readers a suggestion about evaluating employees effectively through using key performance indicators Using the KPIs in management is a relatively new approach to business in Vietnam Through research at major companies in Vietnam new KPIs applied in recent times, can be seen to have been effective as at present, the company itself must also invest significantly to the project team research, deployment and application of KPIs Through this research, the author recongnizes that it is not easy to build one KPIs system but it is more difficult to improve the current system which is workable and suitable to the company’s culture business and strategies 62 REFERENCES 1) Bernard Marr, What is a key performance indicator, Advanced performance institute, BWMC Ltd 2) Christian Batal, (2002), Human resource management, National Politics Publishing, Hanoi 200… 3) David Parmenter (2007), Key performance indicators – developing, implementing and using winning KPIs, John Wiley & Son, Inc, Hoboken, New Jersey 4) Dale Traxler (2013), 21 Key Performance Indicators for Ecommerce Businesses 5) Gary Dessler (2011), Human Resource Management – Twelfth Edition, Pearson Education 6) Linda Williams (2011), Role of Key Performance Indicators in Successful Business Organizations 7) Rick Suttle (2012), Importance of Key Performance Indicators 8) http://www.aebooks.com 9) http://www.businessdictionary.com 10) http://www.humanresources.hrvinet.com 11) http://osbholding.com/vi/home.osb 12) http://alibaba.osbholding.vn 13) http://blogs.salesforce.com/company/2012/11/the-power-of-key-performanceindicators.html Walter Rogers, The Power of Key Performance Indicators for Sales Teams 14) http://businessrenegade.co.uk/ MARK SALMON, Key Performance Indicators – Tools For Growing Your Business 15) http://www.smartkpis.com/ 63 16) Robert S.Karplan and D.Norton , (1996) the balanced scorecard , Harvard Business press 17) Rick Suttle (2012), Importance of Key Performance Indicators 18) Nguyen Thi Thu Huong (2012), “Key performance indicators for employee at product development department in Maritime Bank”, Thesis EMBA, NEU business school, Ha Noi 19) http://www.luanvan.net.vn 20) The big book of Key Performance Indicators, by Eric T Peterson, first edition publish in January1, 2006 64 APPENDIX SURVEY QUE STIONNAIRES Please take a few minutes to complete this survey Your specific answers will be completely anonymous, but your views, in combination with those of others, are extremely important for me to conduct a research My research aims at improving the KPIs for Alibaba’s Sales Staffs at OSB JSC These data are the important input to the thesis work Your effort and time in doing this survey is greatly appreciated What is your current job? Sales executive Support sales Do you know general objectives of the strategy, mission and vision of Company? Yes No How you know general objectives of the strategy, mission and vision of Company? Company website Documents of Company strategy Leadership Meetings at company Other Do you know the progress of the business targets of Alibaba’s sales staffs at OSB? Do not care To understand the criteria related my task To understand well results of objectives Do you know how you contributed to Company’s achievements? Absolutely no 65 No Yes, not exactly Yes, very clearly How does Company convey strategy to you? No From Team leader Through documents Through meetings Email Do you think current Kpis for Alibaba’s Sales Staffs at OSB JSC is necessary and important? Yes No How you agree with these issues as below (Choose the most suitable answer for one issue) OSB's Strategic Development (Please circle one number for each statement) Strongl y Disagr Disagr ee Strongl Neutral Agree Agree ee I have confidence in the leadership of OSB I know clearly about the development direction of OSB The OSB’s strategic development is suitable with my career development y 5 objectives Your suggestion for improvement: ……………………………………………………… 66 Performance Appraisal System (Please circle one number for each statement) Strongly Disagree Disagr ee Neutral Agree Strongl y Agree 5 5 KPIs process is suitable KPIs method is suitable KPIs system is fair KPIs results accurately reflected my performance reflected my performance KPIs are communicated clearly KPIs are closely linked to my job description Does the KPIs system need to be improved? Yes No If yes, you have any suggestion for improvement? Current Job (Please circle one number for each statement) Strongly Disagree My background and qualifications is suitable with the current job My competence is suitable with the current job My health conditions are suitable with the current job My workload is reasonable I know how well I am performing job I am satisfied with the current job Disagree Neutral Agree Strongly Agree 5 5 5 67 Your suggestion for improvement……………………………………………………… Working Relations and Cooperation (Please circle one number for each statement) Strongly Disagree Work is assigned fairly in Disagree Neutral Agree Strongly Agree fairly and with respect Your suggestion my department My supervisor treats me for improvement: …………………………………………………… Career Development Opportunities (Please circle one number for each statement) Strongly Disagree OSB provided as much initial training as I needed OSB provides as much ongoing training as I need I have opportunities for being promoted I have a clearly established Disagree Neutral Agree Strongly Agree 5 5 career path at OSB Your suggestion for improvement: ………………………………………… 68 APPENDIX IN-DEPTH INTERVIEW QUESTIONS Interview with managers: 1.1 What are the mission /vision of the company? 1.2 What are the goals of the company? 1.3 If you have vision/mission and goals, how you communicate through your employees? 1.4 What is the recruitment process for Alibaba’s sale staffs at OSB JSC? Who is involved in that process? 1.5 Do you conduct any training programs to your employees? If yes, how you train your staffs so that they can perform their job effectively? 1.6 How you monitor the performance of your employees? 1.7 How is performance appraisal carried out for Alibaba’s sale staffs at OSB JSC? And how is it related to salary and compensation? 1.8 According to your opinion, what are effective performance appraisal for Alibaba’s sale staffs at OSB JSC? ... Key Performance Indicators  Chapter – Develop the Key Performance Indicators for Alibaba’s sales staff at OSB JSC  Chapter – Proposed recommendations to use the Key Performance Indicators for. .. What are the performance requirements for Alibaba’s sales staffs at OSB JSC?  What are the KPIs for Alibaba’s sales staffs at OSB JSC base on BSC model?  What are solutions and recommendations... conduct the research named ? ?Key performance indicators for Alibaba’s sales staffs at OSB Investment and Technology Joint Stock Company? ?? with the expectation to contribute OSB JSC development Research