The Role of People Management, Performance and Incentives in more effective Lab Safety and Security

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LAB Design Asia 2008 Conference, Singapore

*The role of proper people management in ensuring lab safety and security
* The ‘People’ problem in lab security and how to deal with it
* Enhancing lab security by proper performance management of lab personnel
* Designing incentive schemes that encourages lab safety
* Using the right management and leadership methods to supervising lab personnel in order to ensure lab security

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  • The Role of People Management, Performance and Incentives in more effective Lab Safety and Security

    1. 1. THE ROLE OF PEOPLE MANAGEMENT, PERFORMANCE AND INCENTIVES IN MORE EFFECTIVE LAB SAFETY AND SECURITY Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com
    2. 2. Intro: CNI <ul><li>19 years old </li></ul><ul><li>Core Business: MLM </li></ul><ul><li>Others: Contract Manufacturing, Export/Trading, eCommerce </li></ul><ul><li>Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan </li></ul><ul><li>Staff force: ± 500 </li></ul><ul><li>Distributors: 250,000 </li></ul><ul><li>Products: Consumer Goods and Services </li></ul>www.myCNI.com.my www.OOBEY.com
    3. 3. 1. The role of proper people management in ensuring Lab Safety and Security www.myCNI.com.my www.OOBEY.com
    4. 4. Alignment: 4-Wheels Model Philosophies Corporate Objective Performance Objectives Structure Resources Leadership Person
    5. 5. Alignment: Why is it important? <ul><li>Mamak stall </li></ul>www.myCNI.com.my www.OOBEY.com
    6. 6. 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
    7. 7. Alignment: Framework <ul><li>Equal / Fair </li></ul><ul><li>Happy / Productive </li></ul><ul><li>Performance vs Potential </li></ul><ul><li>Retention / Engagement </li></ul>Philosophies www.myCNI.com.my www.OOBEY.com
    8. 8. Alignment: Framework <ul><li>Org Structure </li></ul><ul><li>Job Design </li></ul><ul><li>C&B </li></ul><ul><li>Policies & procedures </li></ul><ul><li>Decision making </li></ul><ul><li>Job fit </li></ul><ul><li>Management Systems </li></ul><ul><li>BSC and KPIs </li></ul><ul><li>Decentralized & Empower </li></ul>www.myCNI.com.my www.OOBEY.com Structure
    9. 9. Strategy: Framework <ul><li>Tools </li></ul><ul><li>Physical facilities </li></ul><ul><li>Peer support </li></ul><ul><li>Information </li></ul><ul><li>T&D Programs </li></ul><ul><li>Mentors </li></ul><ul><li>Guides </li></ul><ul><li>ICT </li></ul><ul><li>OJT </li></ul>www.myCNI.com.my www.OOBEY.com Resources
    10. 10. Strategy: Framework <ul><li>Role modeling </li></ul><ul><li>Vision/Mission/Philosophy </li></ul><ul><li>Leadership Style </li></ul><ul><li>Delegation & Empowerment </li></ul><ul><li>C&B, Promotions </li></ul><ul><li>Sense of Urgency </li></ul><ul><li>Speak regularly about Performance </li></ul>www.myCNI.com.my www.OOBEY.com Leadership
    11. 11. Strategy: Framework <ul><li>Recognition </li></ul><ul><li>Recruitment </li></ul><ul><li>Training </li></ul><ul><li>Profit sharing </li></ul><ul><li>Values </li></ul><ul><li>Motivation </li></ul><ul><li>Self Efficacy </li></ul><ul><li>Awareness </li></ul><ul><li>Useful Competencies </li></ul><ul><li>Career aspirations </li></ul><ul><li>Attribution (control) </li></ul>www.myCNI.com.my www.OOBEY.com Person
    12. 12. Alignment: 4-Wheels Model Philosophies Corporate Objective Performance Objectives www.myCNI.com.my www.OOBEY.com Structure Resources Leadership Person
    13. 13. 2. The ‘People’ Problem In Lab Security And How To Deal With It www.myCNI.com.my www.OOBEY.com
    14. 14. The ‘People’ Problem <ul><li>Right Person, Wrong Job (5%) </li></ul><ul><li>Wrong Person, Right Job (20%) </li></ul><ul><li>Wrong Person, Wrong Job (1%) </li></ul><ul><li>Right Person, Right Job, Managed Wrongly (74%) </li></ul>www.myCNI.com.my www.OOBEY.com
    15. 15. Understanding Yourself and Others - Personalities www.myCNI.com.my www.OOBEY.com Closed Open People Task Perfect: Melancholy Powerful: Choleric Popular: Sanguine Peaceful: Phlegmatic
    16. 16. Understanding Yourself and Others - Motives www.myCNI.com.my www.OOBEY.com Power (nPow) Achievement (nAch) Affiliative (nAff)
    17. 17. <ul><li>Beating a Dead Horse </li></ul>www.myCNI.com.my www.OOBEY.com
    18. 18. 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
    19. 19. Mager and Pipe <ul><li>Analyzing Performance Discrepancies </li></ul>www.myCNI.com.my www.OOBEY.com
    20. 20. 3. Enhancing Lab Security by Proper Performance Management of Lab Personnel www.myCNI.com.my www.OOBEY.com
    21. 21. Complaints about Performance Appraisals As an Appraisee As an Appraisor Mgmt/HR www.myCNI.com.my www.OOBEY.com
    22. 22. Complaints about Performance Appraisals <ul><li>Bias </li></ul><ul><li>Different Standards </li></ul><ul><li>Surprise </li></ul><ul><li>Subjective </li></ul><ul><li>No linkage* </li></ul><ul><li>No differentiation </li></ul><ul><li>Secretive </li></ul><ul><li>No follow up </li></ul><ul><li>No control </li></ul>As an Appraisee www.myCNI.com.my www.OOBEY.com
    23. 23. Complaints about Performance Appraisals <ul><li>Cannot remember </li></ul><ul><li>Tedious </li></ul><ul><li>Subjective </li></ul><ul><li>Right targets </li></ul><ul><li>Scoring Competencies* </li></ul><ul><li>Defensive staff </li></ul><ul><li>No $$ to differentiate </li></ul><ul><li>Prejudices </li></ul><ul><li>Results or Activities </li></ul>As an Appraiser www.myCNI.com.my www.OOBEY.com
    24. 24. Complaints about Performance Appraisals - Summary <ul><li>Process problem </li></ul><ul><li>Form problem </li></ul><ul><li>People problem </li></ul>www.myCNI.com.my www.OOBEY.com
    25. 25. What is Performance Appraisal used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.my www.OOBEY.com
    26. 26. Performance Management Performance Appraisal Performance Development Performance Measurement Common terms and definitions www.myCNI.com.my www.OOBEY.com
    27. 27. What is the OBJECTIVE? <ul><li>What is the ultimate objective of a Performance Management System? </li></ul><ul><li>‘ Performance’ – achievement, </li></ul><ul><li>‘ Management’ – controllable, improvement </li></ul><ul><li>‘ System’ – predictable outcome, autorun </li></ul><ul><li>Summary? </li></ul><ul><li>A Predictable process to Improve Controllable Achievements </li></ul>www.myCNI.com.my www.OOBEY.com
    28. 28. What is Performance Appraisal used for? Reward? Discipline? Development? Motivation? Promotion? Monitor? www.myCNI.com.my www.OOBEY.com
    29. 29. 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
    30. 30. Why BSC? <ul><li>Reason 1: Balanced </li></ul><ul><li>Reason 2: Cause-and-Effect </li></ul>www.myCNI.com.my www.OOBEY.com
    31. 31. BSC: Balanced & Cause-and-Effect Financial “ To satisfy our stakeholders, what Financial objectives must we accomplish?” www.myCNI.com.my www.OOBEY.com Internal Process “ To satisfy our customers, in which internal business processes must we excel?&quot; Customer “ Who are our target customers? What is our value proposition?” Learning & Growth “ What capabilities and tools do our employees require to help them execute our strategy?
    32. 32. Performance Management for Change <ul><li>Review Performance & Results </li></ul>o Grievance level o Absenteeism o Discipline issue o Poor work ethics Degree of Clarity of Job Results Vision Led Performance driven High Low High Level of Trust & Commitment (Between Subordinate & Boss) UNCLEAR <ul><li>Discuss & Agree on Account </li></ul><ul><li>Objectives & Key Measures </li></ul><ul><li>Standards for Performance </li></ul><ul><li>Provide Coaching & Counselling </li></ul>RESULTS DRIVEN <ul><li>High Level of employee empowerment </li></ul><ul><li>High Employee Performance </li></ul><ul><li>High Employee Satisfaction </li></ul><ul><li>High Employee Involvement </li></ul><ul><li>Challenging Working Environment </li></ul><ul><li>Optimum HRM Cost Structure </li></ul>
    33. 33. District Engineer, TNB Duties and Responsibilities If stated as Accountabilities then the job must produce : Control, operate and maintain the District Distribution System Ensure uninterrupted supply to consumers in the district by operating the District Distribution System. Manage major supply projects to customers in the district. Ensure satisfaction of the major customers in the district by managing supply and Distribution. Supervise all technical staff in the district. Ensure high performance and Productivity of technical staff by adopting proper human resource management methods on selection, training, coaching, counselling and motivation. Plan and design the High voltage system Ensure availability of adequate supply for future needs of industries in the district by planning and designing the High voltage System
    34. 34. MBO Standards www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent E D C B A
    35. 35. MBO Standards www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent E D Good C B A
    36. 36. MBO Standards www.myCNI.com.my www.OOBEY.com Useless Poor Average Good Excellent Commit Suicide E Not Good D Good C Very Good B Excellent A
    37. 37. MBO Standards www.myCNI.com.my www.OOBEY.com Commit Suicide Not Good Good Very Good Excellent Unacceptable performance E Did not fully meet planned results D Achieved Planned Results C Higher than planned results B Consistently achieved 4 for 3 quarters A
    38. 38. MBO Target Setting - Objectives and Measures <ul><li>SMART Targets </li></ul><ul><li>Specific (definite objective and purpose to be achieved) </li></ul><ul><li>Measurable (by definite observation and a certain time one should be able to tell whether or not it is attained) </li></ul><ul><li>Achievable (Must be within reach of the employees, e.g. to meet stated deadlines, neither too high nor too low) </li></ul><ul><li>Rewarding (Rewarding means it must be satisfying to you, no one else) </li></ul><ul><li>Time phased (per quarter, per year. By end of fiscal year, by 15th of November) </li></ul>www.myCNI.com.my www.OOBEY.com
    39. 39. MBO Target Setting - Objectives and Measures www.myCNI.com.my www.OOBEY.com <ul><li>When is the result to be produced / performed </li></ul>Timeliness <ul><li>At what expense the result is produced / performed </li></ul>Cost <ul><li>How much / many of the results are produced or performed </li></ul>Quantity <ul><li>How well the result is produced / performed </li></ul><ul><li>Errors and Appearance </li></ul>Quality
    40. 40. Lagging and Leading KPIs Historical, Outcome, Results, 1 st Level, Usually Financial or tangible, Quarterly and Annually Current, Indicators, Drivers, 2 nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly www.myCNI.com.my www.OOBEY.com Leading Lagging
    41. 41. Developing ‘Driver’ KPIs www.myCNI.com.my www.OOBEY.com Customer Retention % Lagging, 1 st Level Customer Satisfaction Index Leading, 2 nd Level On time delivery Time to market for new products TNA % Defect levels, warranty claims Leading, 3 rd Level onwards
    42. 42. Competency Target Setting <ul><li>Initiative </li></ul><ul><li>Teamwork </li></ul><ul><li>Problem Solving </li></ul><ul><li>Leadership </li></ul><ul><li>Integrity </li></ul>What’s the problem here? www.myCNI.com.my www.OOBEY.com
    43. 43. Competency Target Setting <ul><li>Initiative </li></ul><ul><li>Minimize problems quickly without needing to be asked </li></ul><ul><li>Seeks personal growth and professional self-development </li></ul><ul><li>Doing more than is required/expected in a job </li></ul><ul><li>Seeks new and improved solutions and approaches to completing assignments </li></ul><ul><li>Looks for opportunities to help others and team </li></ul>www.myCNI.com.my www.OOBEY.com
    44. 44. Competency Standards www.myCNI.com.my www.OOBEY.com Does not meet behavioral standards. Require counseling or disciplinary actions. 1 Meets behavioral standards some of the time. Needs improvement. 2 Meets behavioral standards consistently . Is a good role model for others. 3
    45. 45. 4. Designing Incentive Schemes That Encourages Lab Safety www.myCNI.com.my www.OOBEY.com
    46. 46. Incentive Problems <ul><li>Problem with Incentives 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
    47. 47. What to Pay? <ul><li>Pay for Service </li></ul><ul><li>Pay for Job </li></ul><ul><li>Pay for Performance </li></ul><ul><li>Pay for Competency </li></ul>www.myCNI.com.my www.OOBEY.com
    48. 48. 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
    49. 49. 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
    50. 50. 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
    51. 51. 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
    52. 52. 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
    53. 53. 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
    54. 54. 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
    55. 55. 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
    56. 56. 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
    57. 57. 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
    58. 58. Curse of the Bell Curve ‘ A’ Staff ‘ B’ Staff ‘ D’ Staff ‘ E’ Staff ‘ C’ Staff www.myCNI.com.my www.OOBEY.com
    59. 59. 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
    60. 60. 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
    61. 61. 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
    62. 62. 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
    63. 63. 5. Using The Right Management And Leadership Methods Supervising Lab Personnel In Order To Ensure Lab Security www.myCNI.com.my www.OOBEY.com
    64. 64. Coaching & Counseling www.myCNI.com.my www.OOBEY.com Month 1 Performance Planning Month 12 Performance Appraisal Month 2-11 ?
    65. 65. Removing Obstacles for Improved Performance Philosophies Corporate Objective Performance Objectives www.myCNI.com.my www.OOBEY.com Structure Resources Leadership Person
    66. 66. Situational Management www.myCNI.com.my www.OOBEY.com Directive Behavior Supportive Behavior Low High High D1 D2 D3 D4 Consulting Participating Delegating Telling
    67. 67. PASSE P raise and encourage A sk questions allow the person to S ave Face use S MART goals E ncourage small improvements Performance Evaluation Session: Communication www.myCNI.com.my www.OOBEY.com
    68. 68. Managing People performance: A Summary www.myCNI.com.my www.OOBEY.com
    69. 69. More Problems…. <ul><li>cost of evaluation vs. gains of evaluation </li></ul><ul><li>defer achievements of a good year to next </li></ul><ul><li>barely achieve so that next target is not high </li></ul><ul><li>spread improvements over several years </li></ul><ul><li>value reducing actions to increase performance </li></ul><ul><li>most ratings are 4 or 5, new people are 3 </li></ul>www.myCNI.com.my www.OOBEY.com
    70. 70. The ‘People’ Problem Philosophies Corporate Objective Performance Objectives www.myCNI.com.my www.OOBEY.com Structure Resources Leadership Person
    71. 71. Thank You. soft copy of slides: www.totallyunrelatedrandomanddebatable.blogspot.com

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