creating performance based culture trough performance management systems

CREATING A PERFORMANCE-BASED CULTURE SESSION 1: THROUGH PROPER PERFORMANCE MANAGEMENT SYSTEMS CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong CNI Holdings Berhad Intro: CNI 18 years old Core Business: MLM Others: Contract Manufacturing, Export/Trading, eCommerce Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan Staff force: ± 500 Distributors: 250,000 Products: Consumer Goods and Services Why we hate Performance Appraisals Complaints about Performance Appraisals As an Appraisee As an Appraisor Mgmt/HR Complaints about Performance Appraisals As an Appraisee • • • • • • • • • Bias Different Standards Surprise Subjective No linkage* No differentiation Secretive No follow up No control Complaints about Performance Appraisals As an Appraiser • • • • • • • • • Cannot remember Tedious Subjective Right targets Scoring Competencies* Defensive staff No $$ to differentiate Prejudices Results or Activities Complaints about Performance Appraisals Mgmt/HR • • • • • • • • • Flexible or Control? MBO or Character? Best Practice or Fit Culture? Backward or Forward? Quarterly Results or Long-term? No $$ to differentiate* Perfect System, Bad performance Recency and Halo effects Untrained Appraisers Complaints about Performance Appraisals - Summary Process problem Form problem People problem What is Performance Appraisal used for? Monitor? Reward? Discipline? Development? Motivation? Promotion? Common terms and definitions Performance Management Performance Appraisal Performance Development Performance Measurement MBO Target Setting Objectives and Measures SMART Targets • Specific (definite objective and purpose to be achieved) • Measurable (by definite observation and a certain time one should be able to tell whether or not it is attained) • Achievable (Must be within reach of the employees, e.g to meet stated deadlines, neither too high nor too low) • Rewarding (Rewarding means it must be satisfying to you, no one else) • Time phased (per quarter, per year By end of fiscal year, by 15th of November) MBO Target Setting Objectives and Measures Quality • How well the result is produced / performed • Errors and Appearance Quantity • How much / many of the results are produced or performed Cost • At what expense the result is produced / performed Timeliness • When is the result to be produced / performed MBO – Sources of KRAs and KPIs, Targets Department Scorecard [E3], Employee’s Job Description, Department SOP, Department Quality Objectives, Corrective Action Requests (CAR), Preventive Action Requests (PAR), or Special Projects relevant to the employee MBO Standards A Excellent B Good C Average D Poor E Useless MBO Standards A Excellent B Good C Average D Poor E Useless Good MBO Standards A Excellent Excellent B Good Very Good C Average Good D Poor Not Good E Useless Commit Suicide MBO Standards A Excellent B Very Good Higher than planned results C Good Achieved Planned Results D Not Good Did not fully meet planned results E Commit Suicide Unacceptable performance Consistently achieved for quarters Competency Target Setting Initiative Teamwork Problem Solving Leadership Integrity What’s the problem here? Competency Target Setting Initiative Minimize problems quickly without needing to be asked Seeks personal growth and professional selfdevelopment Doing more than is required/expected in a job Seeks new and improved solutions and approaches to completing assignments Looks for opportunities to help others and team Competency Standards Meets behavioral standards consistently Is a good role model for others Meets behavioral standards some of the time Needs improvement Does not meet behavioral standards Require counseling or disciplinary actions Coaching & Counseling Month Performance Planning Month 2-11 ? Month 12 Performance Appraisal Performance Setting & Review Schedule Step One - August Senior Management – Facilitate BOD Strategic Planning process by studying & producing appropriate papers from BOD • Macro economic data and observations • Emerging business conditions • CNI’s strategic considerations/needs Step Two - August BOD consideration & consensus on: • Macro economic information • Emerging business conditions • SWOT • Strategic Needs • Broad business goals & operating philosophy Step Three September - October Sr Mgmt Strategic Planning Process Study BOD observations and directions & review: • Corporate vision / mission • Change dimensions • Strategic initiatives • Corporate key results Step Four - November Sr Management Annual Management Plan for Board of Directors Approval Step Five - November Approved Annual Management execution Plan Step Six - December • Senior managers performance objectives and standards • Performance vs management review plans for for plans, top Quarterly performance review reports of the Board of Directors Step Seven - January • Review annually performance plans vs results Performance Review processes 10 11 12 Result Planning schedule inc BSC, Budget Quarterly Performance Appraisals EMC – sales performance QMS – non-sales performance Divisional meetings Annual Appraisals Specialized KPI committees CAR, PAR, SCAR KPI improvements Internal Audit & MSD – process problems HRM & TND – people problems Supervisor Induction – PM training Talent Management Summary… What went Wrong? Wrong Business Model – blame PM Systems Having a good PM System cannot correct a bad business model Focusing on the Process (Best Practices), instead of the Business (Customization) Good strategy, Bad Implementation, No Linkage No Alignment – PMS is treated a single, separate process System Weaknesses - Process, Form, People Thank You soft copy of slides: www.totallyunrelatedrandomanddebatable blogspot.com