Creating Performance Based Culture through proper people management
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This document discusses managing performance through proper performance management. It covers key challenges in achieving organizational goals, aligning performance objectives, analyzing performance discrepancies, using incentives to manage performance, distinguishing employees based on relative performance, and managing team performance through collaboration and innovation. Some of the lessons discussed include aligning individual objectives with corporate goals, avoiding common desperate performance improvement methods, and managing the dangers of direct incentives.
Creating Performance Based Culture through proper people management
- 1. CREATING A PERFORMANCE-BASED CULTURE SESSION 2: THROUGH PROPER PERFORMANCE MANAGEMENT OF PEOPLE CNI’s Journey, Mistakes, and Lessons Learned Kenny Ong CNI Holdings Berhad
- 2. Contents Key Workforce challenges to achieving organization performance Managing Performance through People: Support and Philosophy How to really manage Performance Managing Performance through Incentives Employee Distinctions through Relative Performance Managing Team performance – collaboration, innovation
- 3. Workforce Challenges Key Workforce Challenges in Achieving Organizational Goals (Extremely Simplified Version): Right Person, Wrong Job (5%) Wrong Person, Right Job (20%) Wrong Person, Wrong Job (1%) Right Person, Right Job, Managed Wrongly (74%)
- 4. Managing Performance through People: Support and Philosophy
- 5. Alignment: 4-Wheels Model Philosophies Corporate Objective Performance Objectives Structure Resources Leadership Person
- 6. Alignment: Framework Equal / Fair Happy / Productive Performance vs Potential Retention / Engagement Activities / Results Leading / Lagging Macro / Micro Philosophies
- 7. How to really manage Performance
- 8. Beating a Dead Horse
- 9. Most Common Desperate Performance Improvement methods Send for more Training Enforce more Incentives (positive/negative)
- 10. Mager and Pipe Analyzing Performance Discrepancies
- 11. Managing Performance through Incentives
- 12. Incentive Problems Problem with Incentives in managing performance: Most people are confused or unsure about compensation tools Some people misuse compensation tools
- 13. What to Pay? Pay for Service Pay for Job Pay for Performance Pay for Competency
- 14. Performance and Incentives Internal Equity Internal Job Rates Performance differentials External Competitiveness External Job Rates - Benchmarking Demand & Supply
- 15. What’s the Difference? Increment Bonus Promotion
- 16. Compa Ratio Table Use this if your company: Pays for Performance , and Pays for Job rates Def: Mid-Point = Mid Point of Pay Grade Grade E2 Min RM2,000 MID RM2,500 Max RM3,000
- 17. Compa Ratio Table 1 2 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 18. Compa Ratio Table 1 2 5% 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 19. Compa Ratio Table 0 1 2 2 3 4 5% 7 9 3 7 4 9 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 20. Compa Ratio Table 0 0 0 2 4 1 0 1 2 4 6 2 3 4 5% 7 9 3 3 5 7 9 12 4 7 8 9 12 15 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 21. Dangers of Direct Incentives lessen internal motivation, switch to mercenary mode, do something and do not do something else, bribe and fraud culture, easier for competitors to recruit, lessen teamwork & helpful culture, less and less impact for same value, mockery of base salary and employment contract, rebellion from non-incentivised staff, end up incentivising everyone for everything?,
- 22. Employee Distinctions through Relative Performance
- 23. Employee Distinction? 1 2 3 4 5 1 2 3 4 5 6 2 3 4 5% 6 7 3 4 5 6 7 8 4 5 6 7 8 9 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 24. Employee Distinction? 0 0 0 0 0 1 0 0 1 1 1 2 3 4 5% 7 9 3 3 5 9 12 18 4 5 8 12 15 20 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
- 25. Employee Distinction 0% 1.0 0 1 ≤ 1.3 0.9% 1.8 0.5 2 > 1.3 – 2.3 2.1% 2.8 0.75 3 > 2.3 – 3.3 4.2% 3.5 1.2 4 > 3.3 – 4.1 8.4% 4.2 2 5 > 4.1 Example Increment Example Rating Multiply Factor Rating Average Rating
- 26. Employee Distinction Group I (Talent Pool) Identify 2 3 4 5 PERFORMANCE 2 3 4 5 POTENTIAL
- 27. Employee Distinction Group I (Talent Pool) Group II ( Potential) Group III ( Performance) Group IV (Counseling) 2 3 4 5 2 3 4 5 PERFORMANCE POTENTIAL Identify
- 28. Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff
- 29. Managing Team performance – collaboration, innovation
- 30. Managing TEAMS Identify the right ‘levers’ Set KPIs for the right ‘levers’ Manage the ‘levers’ through performance systems Balance Individual vs. Team priorities Manage conflicting KPIs, but don’t eliminate them
- 31. TEAM levers C.O.R.E. ÷ W.L.
- 32. Possible TEAM-type KPIs and incentives Recognition for exceptional success (usually not in cash) Individual role considered in normal merit increase process Functional Recognition for exceptional individual or team successes in spot awards or share increases Venture profit sharing Network/ Partnerships Recognition for exceptional individual contributions in spot wards or salary increases Project / programme Phantom Stock or Profit Sharing Project/ Time-based Team competencies recognised in pay for proficiency approach Gainsharing or operational progress incentives Process Possible Incentive Type Team Type
- 33. Team Incentive Models 1. Fixed Salary Proportion (Fixed Personal, Variable Team) Performance Incentive = Fixed Quantum + (Balance Sum In Bonus Pool ÷ Headcount)
- 34. Team Incentive Models 2. Two-tier Multiplier (Variable Personal, Variable Team) Performance Incentive = Personal Target Achievement + (Personal Target Achievement x Team Performance Multiplier)
- 35. Team Incentive Models 3. Team Ratio Plan (Variable Personal, Fixed Team) Performance Incentive = Team Ratio x Personal Target Multiplier
- 36. Product Leadership Reduce time to market Commercialize new products fast Ensure that ideas flow Reuse what other parts of the company have already learned Ensure there are multiple sources of funding Possible Innovation levers
- 37. Innovation Levers? Add 10 value increasing properties to each product or service every 90 days Reduce jointly held inventories and lead time required by 90% in 24 months Reduce new-product/service development cycle time by 75% in next 2 years Copy 10 ideas every 60 days form competitors and noncompetitors Target % Revenue from New Products (previous 24 months ) - start with 50% Source: The Innovation Challenge, “ Thriving on Chaos” , by Tom Peters; Alfred A. Knopf Inc.
- 38. Managing People performance: A Summary
- 39. More Problems…. cost of evaluation vs. gains of evaluation defer achievements of a good year to next barely achieve so that next target is not high spread improvements over several years value reducing actions to increase performance most ratings are 4 or 5, new people are 3
- 40. Contents Key Workforce challenges to achieving organization performance Managing Performance through People: Support and Philosophy How to really manage Performance Managing Performance through Incentives Employee Distinctions through Relative Performance Managing Team performance – collaboration, innovation
- 41. Before I forget… Re-train Appraisers Train new Appraisers
- 42. Alignment: 4-Wheels Model Philosophies Corporate Objective Performance Objectives Structure Resources Leadership Person
- 43. Thank You. soft copy of slides: www.totallyunrelatedrandomanddebatable.blogspot.com