Your SlideShare is downloading. ×
0
EMPLOYEE DIFFERENTIATION IN SUCCESSFUL REWARDS MANAGEMENT Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings ...
Background & Philosophy The anchor for all decisions www.myCNI.com.my www.OOBEY.com
About: CNI <ul><li>19 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Exp...
Intro: CNI <ul><li>CNI’s Business Model background </li></ul>Factory CNIE DC SP Leaders Customers R&D www.myCNI.com.my www...
Background: The Four Desperates 1. Desperate Competition 2. Desperate Consumer 3. Desperate Achievers 4. Desperate Changes...
Philosophy Ultimate Objective of Marketing:  “ Get more people, to buy more things, more frequently, at higher prices.” Se...
Philosophy “ Retention and Loyalty are useless if No Conversion is happening.” “ Retention and Loyalty are useless if No  ...
Philosophy <ul><li>Loyalty is misleading… </li></ul><ul><li>Heavy Consumption  ≠  Loyalty </li></ul><ul><li>Loyalty  ≠  He...
A. Background & Philosophy Principles HR Philosophy <ul><li>Equal / Fair </li></ul><ul><li>Happy / Productive  </li></ul><...
How “Differentiation” got started Succession Planning (Business Continuity) Talent Management Differentiation Performance ...
Targeting: Identify and Attract <ul><li>Who are your Talents? </li></ul> : A Talent for others does not mean a Talent for...
CNI’s Talent Profile <ul><li>Unwanted by big MNCs </li></ul><ul><li>Small companies </li></ul><ul><li>Boring Environment <...
Targeting: Identify and Attract Group I (Talent Pool) <ul><li>Identify </li></ul>www.myCNI.com.my www.OOBEY.com   2 3 4 5 ...
Targeting: Identify and Attract Group I (Talent Pool) Group II (   Potential) Group III (   Performance) Group IV (Couns...
**Additional Categories <ul><li>Definition of ‘Premium’ staff </li></ul><ul><li>Specially selected from the TP. </li></ul>...
**Additional Categories <ul><li>Definition of ‘Specialist’ Staff </li></ul><ul><li>Has competencies (skills & knowledge) i...
Targeting: Identify and Attract Retention Experience Swing Ex Oppose www.myCNI.com.my www.OOBEY.com
Retention 1: Experience <ul><li>Loyalty = Experience vs. Expectations </li></ul>Solution Strategy:  Talent Management Plan...
Loyalty 1: Experience <ul><li>Talent Management Plan </li></ul>Philosophy OJT, Mentoring, Big-5, LP, PDP, SDP, Projects,  ...
Loyalty 2: Swing <ul><li>Loyalty = Best alternative at the current moment until I find another alternative </li></ul>Solut...
Loyalty 2: Swing <ul><li>Swing Talents are “loyal” because: </li></ul><ul><li>Individual Relationships </li></ul><ul><li>C...
Dangers of Direct Incentives <ul><li>lessen internal motivation,  </li></ul><ul><li>switch to mercenary mode,  </li></ul><...
What drives Reward? The driving force behind compensation and benefits strategies www.myCNI.com.my www.OOBEY.com
What drives our Reward? Compensation & Benefits Values Strategy www.myCNI.com.my www.OOBEY.com
Alignment & Consistency <ul><li>Mamak stall </li></ul>www.myCNI.com.my www.OOBEY.com
Alignment & Consistency <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><li>Pe...
Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Lead...
The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li...
<ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li...
<ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move  know-how  from top performing units to others </li></ul></u...
Alignment & Consistency: Market Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about  c...
<ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce  time  to market </li></ul></ul></ul><ul><ul><ul><li>Commercia...
Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Lead...
Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref:  The Discipline of Market Lead...
Business Situations vs. HRM and their impact on C&B Upturn Flat Downturn Fight Complacency Sharpen Edge Keep Momentum Conq...
Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Carin...
Managing Performance through C&B www.myCNI.com.my www.OOBEY.com
Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Carin...
<ul><li>Beating a Dead Horse </li></ul>www.myCNI.com.my www.OOBEY.com
Most Common Desperate Performance Improvement methods  <ul><li>Send for more Training </li></ul><ul><li>Enforce more Incen...
Mager and Pipe <ul><li>Analyzing Performance Discrepancies </li></ul>www.myCNI.com.my www.OOBEY.com
Alignment: 4-Wheels Model Philosophies Corporate  Objective Performance Objectives www.myCNI.com.my www.OOBEY.com   Struct...
What is Performance Measurement used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.m...
Which system should we use? Behavior-based Knowledge/Skill based Results-based Trait-based Managing Performance = Managing...
Dangers of Best Practice and Benchmarking… “ Abraham Wald’s Work on Aircraft Survivability”, M. Mangel and F.J. Samaniego ...
Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com   Company Performance high low ‘ Best Practice’ ...
Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com   Company Performance high low ‘ Best Practice’ ...
How about Competencies? www.myCNI.com.my www.OOBEY.com   Success high low ‘ Superior’ Competencies low high zero Performan...
Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com   Success high low ‘ Superior’ Competencies low ...
Dangers of Best Practice and Benchmarking… <ul><li>Selection Bias: </li></ul><ul><li>Success Traits = Failure Traits </li>...
Dangers of Best Practice and Benchmarking… <ul><li>Also known as ‘Beware of Consultants’: </li></ul><ul><li>Selection Bias...
Survey Problems… <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just prior to def...
Incentive Problems <ul><li>Problem with C&B in managing performance: </li></ul><ul><li>Most people are confused or unsure ...
What to Pay? <ul><li>“ Performance” is a very subjective word: </li></ul><ul><li>Pay for Service </li></ul><ul><li>Pay for...
Pay for Job www.myCNI.com.my www.OOBEY.com   <ul><li>Competency </li></ul><ul><li>-  Knowledge  </li></ul><ul><li>-  Skill...
Performance and Incentives <ul><li>Internal Equity </li></ul><ul><ul><li>Internal Job Rates </li></ul></ul><ul><ul><li>Per...
What’s the Difference?  <ul><li>Increment </li></ul><ul><li>Bonus </li></ul><ul><li>Promotion </li></ul>www.myCNI.com.my w...
Compa Ratio Table <ul><li>Use this if your company:  </li></ul><ul><li>Pays for  Performance , and  </li></ul><ul><li>Pays...
Compa Ratio Table www.myCNI.com.my www.OOBEY.com   1 2 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
Compa Ratio Table www.myCNI.com.my www.OOBEY.com   1 2 5% 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
Compa Ratio Table www.myCNI.com.my www.OOBEY.com   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....
Compa Ratio Table www.myCNI.com.my www.OOBEY.com   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 ≥...
Employee Differentiation through Relative Performance and Talent Management www.myCNI.com.my www.OOBEY.com
Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Carin...
The 51.28% Theory <ul><li>Resign = Push + Pull > 51.28% </li></ul><ul><li>If staff is Happy: </li></ul><ul><ul><li>=> 0 + ...
Employee Distinction? www.myCNI.com.my www.OOBEY.com   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 ...
Employee Distinction? www.myCNI.com.my www.OOBEY.com   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 >...
Employee Distinction www.myCNI.com.my www.OOBEY.com   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 –...
Employee Distinction Group I (Talent Pool) Group II (   Potential) Group III (   Performance) Group IV (Counseling) 2 3 ...
Talent Strategy: C&B <ul><li>Eliminate Staff Awards </li></ul><ul><li>Eliminate Staff Trips </li></ul><ul><li>Eliminate HO...
SCL: Specialist Career Ladder www.myCNI.com.my www.OOBEY.com   Associate Specialist (2) Specialist (4) Consultant (4) Prin...
SCL: Specialist Career Ladder <ul><li>General incentives & privileges : </li></ul><ul><li>a. Extra monetary incentive </li...
Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff www.myCNI.com.my www.OOBEY.com
Swing Loyalty: Try Your Best… <ul><li>Over Promote </li></ul><ul><li>Loans </li></ul><ul><li>Spot Bonuses </li></ul><ul><l...
Managing Team performance – collaboration, innovation www.myCNI.com.my www.OOBEY.com
Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Carin...
Managing TEAMS <ul><li>Identify the right ‘levers’ </li></ul><ul><li>Set KPIs for the right ‘levers’ </li></ul><ul><li>Man...
TEAM levers C.O.R.E. ÷ W.L. www.myCNI.com.my www.OOBEY.com
Possible TEAM-type KPIs and incentives www.myCNI.com.my www.OOBEY.com   <ul><li>Recognition for exceptional success (usual...
Team Incentive Models <ul><li>1. Fixed Salary Proportion (Fixed Personal, Variable Team) </li></ul>Performance Incentive =...
Team Incentive Models <ul><li>2. Two-tier Multiplier (Variable Personal, Variable Team) </li></ul>Performance Incentive = ...
Team Incentive Models <ul><li>3. Team Ratio Plan (Variable Personal, Fixed Team) </li></ul>Performance Incentive =  Team R...
Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Carin...
Caring www.myCNI.com.my www.OOBEY.com   Loans Loan Subsidies Extensive Training Subsidized  Insurance Health Talks SRC Fre...
What Next? Many things to be improved www.myCNI.com.my www.OOBEY.com
The Wish List <ul><li>Health and Wellness </li></ul><ul><li>Work/Life Balance </li></ul><ul><li>Mobility </li></ul><ul><li...
<ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce  time  to market </li></ul></ul></ul><ul><ul><ul><li>Commercia...
Innovation Levers? <ul><li>Add  10  value increasing properties to each product or service every  90 days </li></ul><ul><l...
Start Up & End Notes The end of the Beginning www.myCNI.com.my www.OOBEY.com
Issues and Challenges (1/2) <ul><li>HODs unclear  </li></ul><ul><li>HODs disagree/unsupportive of TM </li></ul><ul><li>HOD...
Issues and Challenges (2/2) <ul><li>Aligning TM and SP with Business Goals </li></ul><ul><li>“ Once in, always in” predica...
For Starting Up… <ul><li>Get the Business Strategy right </li></ul><ul><li>Link C&B to Strategy (e.g. BSC) </li></ul><ul><...
Problem with C&B… <ul><li>“ Good news for stockholders can be bad news for other stakeholders.”  </li></ul><ul><li>Gregory...
In the end… <ul><li>Great Wall of China </li></ul><ul><ul><li>humans are the weakest link </li></ul></ul><ul><ul><li>bad t...
Other thoughts… <ul><li>Big matters/Small Matters </li></ul><ul><li>Differentiate of Die </li></ul><ul><li>Define “Talent”...
Summary <ul><li>Segmented & Targeted  </li></ul><ul><li>Attraction, Retention and Succession </li></ul><ul><li>STARS ™ </l...
Thank You.  soft copy of slides:   http://totallyunrelatedrandomanddebatable.blogspot.com/
Upcoming SlideShare
Loading in...5
×

Employee Differentiation in Successful Rewards Management

3,613

Published on

Marcus Evans Employee Loyalty & Engagement Conference, Jakarta

* How to differentiate employees through compensation and benefits
* Managing performance through compensation & benefits
* Employee differentiation through relative performance and talent management
* Maintaining consistency with corporate values

Published in: Business, Technology
0 Comments
4 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
3,613
On Slideshare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
548
Comments
0
Likes
4
Embeds 0
No embeds

No notes for slide
  • Transcript of "Employee Differentiation in Successful Rewards Management"

    1. 1. EMPLOYEE DIFFERENTIATION IN SUCCESSFUL REWARDS MANAGEMENT Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com
    2. 2. Background & Philosophy The anchor for all decisions www.myCNI.com.my www.OOBEY.com
    3. 3. About: CNI <ul><li>19 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Export/Trading, eCommerce, F&B Cafés </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 200,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>www.myCNI.com.my www.OOBEY.com
    4. 4. Intro: CNI <ul><li>CNI’s Business Model background </li></ul>Factory CNIE DC SP Leaders Customers R&D www.myCNI.com.my www.OOBEY.com
    5. 5. Background: The Four Desperates 1. Desperate Competition 2. Desperate Consumer 3. Desperate Achievers 4. Desperate Changes www.myCNI.com.my www.OOBEY.com
    6. 6. Philosophy Ultimate Objective of Marketing: “ Get more people, to buy more things, more frequently, at higher prices.” Sergio Zyman “ Retention and Loyalty are useless if No Conversion is happening.” www.myCNI.com.my www.OOBEY.com
    7. 7. Philosophy “ Retention and Loyalty are useless if No Conversion is happening.” “ Retention and Loyalty are useless if No Performance is happening.” www.myCNI.com.my www.OOBEY.com
    8. 8. Philosophy <ul><li>Loyalty is misleading… </li></ul><ul><li>Heavy Consumption ≠ Loyalty </li></ul><ul><li>Loyalty ≠ Heavy Consumption </li></ul><ul><li>Good Performance ≠ Retention </li></ul><ul><li>Retention ≠ Good Performance </li></ul>www.myCNI.com.my www.OOBEY.com
    9. 9. A. Background & Philosophy Principles HR Philosophy <ul><li>Equal / Fair </li></ul><ul><li>Happy / Productive </li></ul><ul><li>Hire Low, Train High </li></ul><ul><li>Performance vs Potential </li></ul><ul><li>Retention / Engagement </li></ul>www.myCNI.com.my www.OOBEY.com
    10. 10. How “Differentiation” got started Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model
    11. 11. Targeting: Identify and Attract <ul><li>Who are your Talents? </li></ul> : A Talent for others does not mean a Talent for you www.myCNI.com.my www.OOBEY.com
    12. 12. CNI’s Talent Profile <ul><li>Unwanted by big MNCs </li></ul><ul><li>Small companies </li></ul><ul><li>Boring Environment </li></ul><ul><li>No Growth/Learning </li></ul><ul><li>No MBA </li></ul><ul><li>Passion, Values, IQ (streetsmart) </li></ul><ul><li>Appreciate Chaos </li></ul><ul><li>Multitask </li></ul><ul><li>Passion to Learn </li></ul>www.myCNI.com.my www.OOBEY.com
    13. 13. Targeting: Identify and Attract Group I (Talent Pool) <ul><li>Identify </li></ul>www.myCNI.com.my www.OOBEY.com 2 3 4 5 PERFORMANCE 2 3 4 5 POTENTIAL
    14. 14. Targeting: Identify and Attract Group I (Talent Pool) Group II (  Potential) Group III (  Performance) Group IV (Counseling) 2 3 4 5 2 3 4 5 PERFORMANCE POTENTIAL <ul><li>Identify </li></ul>www.myCNI.com.my www.OOBEY.com
    15. 15. **Additional Categories <ul><li>Definition of ‘Premium’ staff </li></ul><ul><li>Specially selected from the TP. </li></ul><ul><li>They have in addition, the following attributes: </li></ul><ul><ul><li>High-profile in the field or industry </li></ul></ul><ul><ul><li>Loyalty proven </li></ul></ul><ul><ul><li>Proven high work-rate and great attitude </li></ul></ul><ul><ul><li>Undeniable contribution and efforts </li></ul></ul><ul><ul><li>Highly looked upon and respected by most staff </li></ul></ul><ul><ul><li>Ability to multi-task and assist in various areas </li></ul></ul><ul><ul><li>Key people in CNI’s Succession Plans </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    16. 16. **Additional Categories <ul><li>Definition of ‘Specialist’ Staff </li></ul><ul><li>Has competencies (skills & knowledge) in a particular professional field of work. </li></ul><ul><li>A staff is deemed to be a Specialist when all the following occurs: </li></ul><ul><ul><li>The particular Competency (Skills or Knowledge or both) is highly required by CNI </li></ul></ul><ul><ul><li>Supply for the competency in the market is low but demand is high </li></ul></ul><ul><ul><li>The competency is difficult to learn, transfer and/or duplicate </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    17. 17. Targeting: Identify and Attract Retention Experience Swing Ex Oppose www.myCNI.com.my www.OOBEY.com
    18. 18. Retention 1: Experience <ul><li>Loyalty = Experience vs. Expectations </li></ul>Solution Strategy: Talent Management Plan www.myCNI.com.my www.OOBEY.com
    19. 19. Loyalty 1: Experience <ul><li>Talent Management Plan </li></ul>Philosophy OJT, Mentoring, Big-5, LP, PDP, SDP, Projects, P/P Grid, SP Table, PDP, Premium, Q12, C&B , ACDP, SCL, Transfers, Events, Recognition P/P Grid, Q12, PA, SDP, SP Selection www.myCNI.com.my www.OOBEY.com Development Motivation Evaluation
    20. 20. Loyalty 2: Swing <ul><li>Loyalty = Best alternative at the current moment until I find another alternative </li></ul>Solution Strategy: Improve your Talent Management Plan, Try Your Best, or Live with It www.myCNI.com.my www.OOBEY.com
    21. 21. Loyalty 2: Swing <ul><li>Swing Talents are “loyal” because: </li></ul><ul><li>Individual Relationships </li></ul><ul><li>Convenience (at that point in time) </li></ul><ul><li>Contractually tied-up </li></ul><ul><li>Direct Incentives* </li></ul><ul><li>No better alternative </li></ul><ul><li>Subordinates </li></ul><ul><li>No known alternative </li></ul><ul><li>CV friendly </li></ul>www.myCNI.com.my www.OOBEY.com
    22. 22. Dangers of Direct Incentives <ul><li>lessen internal motivation, </li></ul><ul><li>switch to mercenary mode, </li></ul><ul><li>do something and do not do something else, </li></ul><ul><li>bribe and fraud culture, </li></ul><ul><li>easier for competitors to recruit, </li></ul><ul><li>lessen teamwork & helpful culture, </li></ul><ul><li>less and less impact for same value, </li></ul><ul><li>mockery of base salary and employment contract, </li></ul><ul><li>rebellion from non-incentivised staff, </li></ul><ul><li>end up incentivising everyone for everything?, </li></ul>www.myCNI.com.my www.OOBEY.com
    23. 23. What drives Reward? The driving force behind compensation and benefits strategies www.myCNI.com.my www.OOBEY.com
    24. 24. What drives our Reward? Compensation & Benefits Values Strategy www.myCNI.com.my www.OOBEY.com
    25. 25. Alignment & Consistency <ul><li>Mamak stall </li></ul>www.myCNI.com.my www.OOBEY.com
    26. 26. Alignment & Consistency <ul><li>&quot;Exactly what I need&quot; </li></ul><ul><li>Customized products </li></ul><ul><li>Personalized communications </li></ul><ul><li>&quot;They're very responsive&quot; </li></ul><ul><li>Preferential service and flexibility </li></ul><ul><li>Recommends what I need </li></ul><ul><li>&quot;I'm very loyal to them&quot; </li></ul><ul><li>Helps us to be a success </li></ul>&quot;They are the most innovative&quot; &quot;Constantly renewing and creative&quot; &quot;Always on the leading edge&quot; &quot;A great deal!&quot; Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership &quot;A no-hassles firm&quot; Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy www.myCNI.com.my www.OOBEY.com
    27. 27. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    28. 28. The McPlaybook* <ul><li>Make it easy to eat </li></ul><ul><li>50% drive-thru </li></ul><ul><li>Meals held in one hand </li></ul><ul><li>Make it easy to prepare </li></ul><ul><li>High Turnover </li></ul><ul><li>Tasks simple to learn & repeat </li></ul><ul><li>Make it quick </li></ul><ul><li>“ Fast Food” </li></ul><ul><li>Tests new products for Cooking Times </li></ul><ul><li>Make what customers want </li></ul><ul><li>Prowls market for new products </li></ul><ul><li>Monitored field tests </li></ul>*Adapted from: Businessweek , Februrary 5 th 2007 www.myCNI.com.my www.OOBEY.com
    29. 29. <ul><li>Product Leadership </li></ul><ul><li>New, state of the art products or services </li></ul><ul><li>Risk takers </li></ul><ul><li>Meet volatile customer needs </li></ul><ul><li>Fast concept-to- counter </li></ul><ul><li>Never satisfied - obsolete own and competitors' products </li></ul><ul><li>Learning organization </li></ul>Alignment & Consistency: Disciplines, Priorities, and KPIs <ul><li>Operational Excellence </li></ul><ul><li>Competitive price </li></ul><ul><li>Error free, reliable </li></ul><ul><li>Fast (on demand) </li></ul><ul><li>Simple </li></ul><ul><li>Responsive </li></ul><ul><li>Consistent information for all </li></ul><ul><li>Transactional </li></ul><ul><li>'Once and Done' </li></ul><ul><li>Customer Intimacy </li></ul><ul><li>Management by Fact </li></ul><ul><li>Easy to do business with </li></ul><ul><li>Have it your way (customization) </li></ul><ul><li>Market segments of one </li></ul><ul><li>Proactive, flexible </li></ul><ul><li>Relationship and consultative selling </li></ul><ul><li>Cross selling </li></ul>www.myCNI.com.my www.OOBEY.com
    30. 30. <ul><li>Operational Excellence </li></ul><ul><ul><ul><li>Move know-how from top performing units to others </li></ul></ul></ul><ul><ul><ul><li>Benchmark against best in class </li></ul></ul></ul><ul><ul><ul><li>Ensure operations training for all employees </li></ul></ul></ul><ul><ul><ul><li>Use disciplines like TQM for continuous learning to reduce costs and improve quality </li></ul></ul></ul>Alignment & Consistency: Market Disciplines www.myCNI.com.my www.OOBEY.com
    31. 31. Alignment & Consistency: Market Disciplines <ul><li>Customer Intimacy </li></ul><ul><ul><ul><li>Capture knowledge about customers </li></ul></ul></ul><ul><ul><ul><li>Understand customer needs </li></ul></ul></ul><ul><ul><ul><li>Empower front line employees </li></ul></ul></ul><ul><ul><ul><li>Ensure that everyone knows the customer </li></ul></ul></ul><ul><ul><ul><li>Make company knowledge available to customers </li></ul></ul></ul>www.myCNI.com.my www.OOBEY.com
    32. 32. <ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce time to market </li></ul></ul></ul><ul><ul><ul><li>Commercialize new products fast </li></ul></ul></ul><ul><ul><ul><li>Ensure that ideas flow </li></ul></ul></ul><ul><ul><ul><li>Reuse what other parts of the company have already learned </li></ul></ul></ul><ul><ul><ul><li>Ensure there are multiple sources of funding </li></ul></ul></ul>Alignment & Consistency: Market Disciplines www.myCNI.com.my www.OOBEY.com
    33. 33. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    34. 34. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref: The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com
    35. 35. Business Situations vs. HRM and their impact on C&B Upturn Flat Downturn Fight Complacency Sharpen Edge Keep Momentum Conquer ‘ Change’ mgmt Reduce Fat Continuity Everyone Happy Innovation Acquire Profits Build momentum Sales Cash Flow Talent Mgmt Stack R&D Early wins Slow Down HR Costs Top Talent focus Stack Sales Increase attrition
    36. 36. Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Caring </li></ul>www.myCNI.com.my www.OOBEY.com
    37. 37. Managing Performance through C&B www.myCNI.com.my www.OOBEY.com
    38. 38. Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Caring </li></ul>www.myCNI.com.my www.OOBEY.com
    39. 39. <ul><li>Beating a Dead Horse </li></ul>www.myCNI.com.my www.OOBEY.com
    40. 40. Most Common Desperate Performance Improvement methods <ul><li>Send for more Training </li></ul><ul><li>Enforce more Incentives (positive/negative) </li></ul>www.myCNI.com.my www.OOBEY.com
    41. 41. Mager and Pipe <ul><li>Analyzing Performance Discrepancies </li></ul>www.myCNI.com.my www.OOBEY.com
    42. 42. Alignment: 4-Wheels Model Philosophies Corporate Objective Performance Objectives www.myCNI.com.my www.OOBEY.com Structure Resources Leadership Person
    43. 43. What is Performance Measurement used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.my www.OOBEY.com
    44. 44. Which system should we use? Behavior-based Knowledge/Skill based Results-based Trait-based Managing Performance = Managing Expectations What’s YOUR expectation? Activity based www.myCNI.com.my www.OOBEY.com
    45. 45. Dangers of Best Practice and Benchmarking… “ Abraham Wald’s Work on Aircraft Survivability”, M. Mangel and F.J. Samaniego Where would you focus reinforcement? www.myCNI.com.my www.OOBEY.com
    46. 46. Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com Company Performance high low ‘ Best Practice’ theories low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
    47. 47. Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com Company Performance high low ‘ Best Practice’ theories low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
    48. 48. How about Competencies? www.myCNI.com.my www.OOBEY.com Success high low ‘ Superior’ Competencies low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
    49. 49. Dangers of Best Practice and Benchmarking… www.myCNI.com.my www.OOBEY.com Success high low ‘ Superior’ Competencies low high zero Performance “ Selection Bias and the Perils of Benchmarking”, Jerker Denrell, Harvard Business Review 2005 Trend line
    50. 50. Dangers of Best Practice and Benchmarking… <ul><li>Selection Bias: </li></ul><ul><li>Success Traits = Failure Traits </li></ul><ul><li>Successful Cases + Failure Cases </li></ul><ul><li>Worst effects in ‘Old’ industries </li></ul><ul><li>Overvalue ‘best practice’ theories </li></ul><ul><li>Current accomplishments unfairly magnified by past achievements </li></ul><ul><li>Reverse Causal </li></ul>www.myCNI.com.my www.OOBEY.com
    51. 51. Dangers of Best Practice and Benchmarking… <ul><li>Also known as ‘Beware of Consultants’: </li></ul><ul><li>Selection Bias </li></ul><ul><li>Big vs. Small company </li></ul><ul><li>Selective success stories </li></ul><ul><li>Correlation vs. Causal </li></ul><ul><li>Survey problems </li></ul><ul><li>Practical vs. Glamour-to-have </li></ul><ul><li>Leaders who benchmark </li></ul>www.myCNI.com.my www.OOBEY.com
    52. 52. Survey Problems… <ul><li>“ In business after business, 60% to 80% of lost customers reported on a survey just prior to defecting that they were satisfied or very satisfied .” </li></ul>HBR March/April 1996 www.myCNI.com.my www.OOBEY.com
    53. 53. Incentive Problems <ul><li>Problem with C&B in managing performance: </li></ul><ul><li>Most people are confused or unsure about compensation tools </li></ul><ul><li>Some people misuse compensation tools </li></ul>www.myCNI.com.my www.OOBEY.com
    54. 54. What to Pay? <ul><li>“ Performance” is a very subjective word: </li></ul><ul><li>Pay for Service </li></ul><ul><li>Pay for Job </li></ul><ul><li>Pay for Competency </li></ul><ul><li>Pay for Performance </li></ul>www.myCNI.com.my www.OOBEY.com
    55. 55. Pay for Job www.myCNI.com.my www.OOBEY.com <ul><li>Competency </li></ul><ul><li>- Knowledge </li></ul><ul><li>- Skills </li></ul><ul><li>- Experience </li></ul><ul><li>Problem solving </li></ul><ul><li>- Complex </li></ul><ul><li>- Type of problems </li></ul><ul><li>- Special Problems </li></ul><ul><li>Responsibility </li></ul><ul><li>- Authority </li></ul><ul><li>- Success/Failure </li></ul><ul><li>- Freedom to act </li></ul>
    56. 56. Performance and Incentives <ul><li>Internal Equity </li></ul><ul><ul><li>Internal Job Rates </li></ul></ul><ul><ul><li>Performance differentials </li></ul></ul><ul><li>External Competitiveness </li></ul><ul><ul><li>External Job Rates - Benchmarking </li></ul></ul><ul><ul><li>Demand & Supply </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    57. 57. What’s the Difference? <ul><li>Increment </li></ul><ul><li>Bonus </li></ul><ul><li>Promotion </li></ul>www.myCNI.com.my www.OOBEY.com
    58. 58. Compa Ratio Table <ul><li>Use this if your company: </li></ul><ul><li>Pays for Performance , and </li></ul><ul><li>Pays for Job rates </li></ul><ul><li>Def: </li></ul><ul><li>Mid-Point = Mid Point of Pay Grade </li></ul>Grade E2 Min RM2,000 MID RM2,500 Max RM3,000 www.myCNI.com.my www.OOBEY.com
    59. 59. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 1 2 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    60. 60. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 1 2 5% 3 4 5 > 1.3 ≥ 1.1 - ≤1.3 >0.9 - <1.1 ≥ 0.7 - ≤0.9 < 0.7
    61. 61. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 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
    62. 62. Compa Ratio Table www.myCNI.com.my www.OOBEY.com 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
    63. 63. Employee Differentiation through Relative Performance and Talent Management www.myCNI.com.my www.OOBEY.com
    64. 64. Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Caring </li></ul>www.myCNI.com.my www.OOBEY.com
    65. 65. The 51.28% Theory <ul><li>Resign = Push + Pull > 51.28% </li></ul><ul><li>If staff is Happy: </li></ul><ul><ul><li>=> 0 + Pull > 51.28% </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    66. 66. Employee Distinction? www.myCNI.com.my www.OOBEY.com 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
    67. 67. Employee Distinction? www.myCNI.com.my www.OOBEY.com 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
    68. 68. Employee Distinction www.myCNI.com.my www.OOBEY.com 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
    69. 69. 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 <ul><li>Identify </li></ul>www.myCNI.com.my www.OOBEY.com
    70. 70. Talent Strategy: C&B <ul><li>Eliminate Staff Awards </li></ul><ul><li>Eliminate Staff Trips </li></ul><ul><li>Eliminate HOD trips </li></ul><ul><li>Remove Salary structure limitations for TP </li></ul><ul><li>Premium Group Pay </li></ul><ul><li>Year-round promotions/increment </li></ul><ul><li>Spot Bonus Pool </li></ul><ul><li>Additional Profit Sharing points for TP </li></ul><ul><li>↑ Pay for Performers, ↓ pay for Non-Performers </li></ul><ul><li>Additional % during annual increments </li></ul><ul><li>Special Allowances </li></ul><ul><li>SCL Allowances </li></ul><ul><li>Flexitime </li></ul>www.myCNI.com.my www.OOBEY.com
    71. 71. SCL: Specialist Career Ladder www.myCNI.com.my www.OOBEY.com Associate Specialist (2) Specialist (4) Consultant (4) Principal Consultant (1)
    72. 72. SCL: Specialist Career Ladder <ul><li>General incentives & privileges : </li></ul><ul><li>a. Extra monetary incentive </li></ul><ul><li>b. Official Specialist / Consultant job title. </li></ul><ul><li>c. Higher external training subsidy limit by company. </li></ul><ul><li>d. Tie-pin or pin </li></ul><ul><li>e. Certificate </li></ul><ul><li>f. Additional benefits </li></ul>General qualifying/re-qualifying criteria: a. Meet the competency criteria b. Performance min B, PED c. Min. 40 training hr/year d. Physical contribution: i Mentoring ii Write-up iii Speaking iv Multimedia recording v R&D publication / Thesis www.myCNI.com.my www.OOBEY.com
    73. 73. Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff www.myCNI.com.my www.OOBEY.com
    74. 74. Swing Loyalty: Try Your Best… <ul><li>Over Promote </li></ul><ul><li>Loans </li></ul><ul><li>Spot Bonuses </li></ul><ul><li>Block recruiters </li></ul><ul><li>The Spouse </li></ul><ul><li>Toys </li></ul><ul><li>Glorified Titles </li></ul><ul><li>Forced Ambassador </li></ul><ul><li>“ Position” the competition </li></ul><ul><li>Sell the Dream </li></ul><ul><li>Give them a Best Friend </li></ul><ul><li>Internal Trainer </li></ul>www.myCNI.com.my www.OOBEY.com
    75. 75. Managing Team performance – collaboration, innovation www.myCNI.com.my www.OOBEY.com
    76. 76. Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Caring </li></ul>www.myCNI.com.my www.OOBEY.com
    77. 77. Managing TEAMS <ul><li>Identify the right ‘levers’ </li></ul><ul><li>Set KPIs for the right ‘levers’ </li></ul><ul><li>Manage the ‘levers’ through performance systems </li></ul><ul><li>Balance Individual vs. Team priorities </li></ul><ul><li>Manage conflicting KPIs, but don’t eliminate them </li></ul>www.myCNI.com.my www.OOBEY.com
    78. 78. TEAM levers C.O.R.E. ÷ W.L. www.myCNI.com.my www.OOBEY.com
    79. 79. Possible TEAM-type KPIs and incentives www.myCNI.com.my www.OOBEY.com <ul><li>Recognition for exceptional success (usually not in cash) </li></ul><ul><li>Individual role considered in normal merit increase process </li></ul>Functional <ul><li>Recognition for exceptional individual or team successes in spot awards or share increases </li></ul><ul><li>Venture profit sharing </li></ul>Network/ Partnerships <ul><li>Recognition for exceptional individual contributions in spot wards or salary increases </li></ul><ul><li>Project / programme Phantom Stock or Profit Sharing </li></ul>Project/ Time-based <ul><li>Team competencies recognised in pay for proficiency approach </li></ul><ul><li>Gainsharing or operational progress incentives </li></ul>Process Possible Incentive Type Team Type
    80. 80. Team Incentive Models <ul><li>1. Fixed Salary Proportion (Fixed Personal, Variable Team) </li></ul>Performance Incentive = Fixed Quantum + (Balance Sum In Bonus Pool ÷ Headcount) www.myCNI.com.my www.OOBEY.com
    81. 81. Team Incentive Models <ul><li>2. Two-tier Multiplier (Variable Personal, Variable Team) </li></ul>Performance Incentive = Personal Target Achievement + (Personal Target Achievement x Team Performance Multiplier) www.myCNI.com.my www.OOBEY.com
    82. 82. Team Incentive Models <ul><li>3. Team Ratio Plan (Variable Personal, Fixed Team) </li></ul>Performance Incentive = Team Ratio x Personal Target Multiplier www.myCNI.com.my www.OOBEY.com
    83. 83. Values Driven C&B <ul><li>Performance </li></ul><ul><li>Differentiation </li></ul><ul><li>Teamwork </li></ul><ul><li>Caring </li></ul>www.myCNI.com.my www.OOBEY.com
    84. 84. Caring www.myCNI.com.my www.OOBEY.com Loans Loan Subsidies Extensive Training Subsidized Insurance Health Talks SRC Free Carpark Subsidized Canteen Pocket Allowance Uniform Staff Discounts Caring
    85. 85. What Next? Many things to be improved www.myCNI.com.my www.OOBEY.com
    86. 86. The Wish List <ul><li>Health and Wellness </li></ul><ul><li>Work/Life Balance </li></ul><ul><li>Mobility </li></ul><ul><li>Innovation </li></ul>www.myCNI.com.my www.OOBEY.com
    87. 87. <ul><li>Product Leadership </li></ul><ul><ul><ul><li>Reduce time to market </li></ul></ul></ul><ul><ul><ul><li>Commercialize new products fast </li></ul></ul></ul><ul><ul><ul><li>Ensure that ideas flow </li></ul></ul></ul><ul><ul><ul><li>Reuse what other parts of the company have already learned </li></ul></ul></ul><ul><ul><ul><li>Ensure there are multiple sources of funding </li></ul></ul></ul>Possible Innovation levers www.myCNI.com.my www.OOBEY.com
    88. 88. Innovation Levers? <ul><li>Add 10 value increasing properties to each product or service every 90 days </li></ul><ul><li>Reduce jointly held inventories and lead time required by 90% in 24 months </li></ul><ul><li>Reduce new-product/service development cycle time by 75% in next 2 years </li></ul><ul><li>Copy 10 ideas every 60 days form competitors and noncompetitors </li></ul><ul><li>Target % Revenue from New Products (previous 24 months ) - start with 50% </li></ul>Source: The Innovation Challenge, “ Thriving on Chaos” , by Tom Peters; Alfred A. Knopf Inc. www.myCNI.com.my www.OOBEY.com
    89. 89. Start Up & End Notes The end of the Beginning www.myCNI.com.my www.OOBEY.com
    90. 90. Issues and Challenges (1/2) <ul><li>HODs unclear </li></ul><ul><li>HODs disagree/unsupportive of TM </li></ul><ul><li>HODs not willing to openly differentiate staff </li></ul><ul><li>Incompetent superiors/HODs to TP staff </li></ul><ul><li>Difficult to evaluate Performance </li></ul><ul><li>Difficult to evaluate Potential </li></ul>
    91. 91. Issues and Challenges (2/2) <ul><li>Aligning TM and SP with Business Goals </li></ul><ul><li>“ Once in, always in” predicament </li></ul><ul><li>Criticism of TP selection </li></ul><ul><li>Limited Funds </li></ul><ul><li>‘ Competitor recruitment target! </li></ul>
    92. 92. For Starting Up… <ul><li>Get the Business Strategy right </li></ul><ul><li>Link C&B to Strategy (e.g. BSC) </li></ul><ul><li>Clarify the C&B Philosophy </li></ul><ul><li>Strengthen Performance Management System </li></ul><ul><li>Redirect Funds ($$) </li></ul><ul><li>Design simple processes </li></ul><ul><li>Develop and Reward focused on Talent groups </li></ul><ul><li>Communicate throughout </li></ul>www.myCNI.com.my www.OOBEY.com
    93. 93. Problem with C&B… <ul><li>“ Good news for stockholders can be bad news for other stakeholders.” </li></ul><ul><li>Gregory Miller, Assoc. Prof., Harvard Business School. </li></ul>www.myCNI.com.my www.OOBEY.com
    94. 94. In the end… <ul><li>Great Wall of China </li></ul><ul><ul><li>humans are the weakest link </li></ul></ul><ul><ul><li>bad treatment of staff will lead to weak link i.e. easier to bribe, easier to con, etc; </li></ul></ul><ul><ul><li>bad treatment examples: insulting, lose face, broken promises, no dignity, public criticism, restructure without communication </li></ul></ul>www.myCNI.com.my www.OOBEY.com
    95. 95. Other thoughts… <ul><li>Big matters/Small Matters </li></ul><ul><li>Differentiate of Die </li></ul><ul><li>Define “Talent” </li></ul><ul><li>No “Jerk” rule </li></ul><ul><li>Flat Structure? </li></ul><ul><li>The Jerk Boss </li></ul><ul><li>All aspects </li></ul><ul><li>Hire Strict </li></ul>
    96. 96. Summary <ul><li>Segmented & Targeted </li></ul><ul><li>Attraction, Retention and Succession </li></ul><ul><li>STARS ™ </li></ul>www.myCNI.com.my www.OOBEY.com
    97. 97. Thank You. soft copy of slides: http://totallyunrelatedrandomanddebatable.blogspot.com/
    1. A particular slide catching your eye?

      Clipping is a handy way to collect important slides you want to go back to later.

    ×