track 10 dedi prawira
TRANSCRIPT
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the road to high performance organization by improving PERFORMANCE MANAGEMENT
system
Presented in the Forum of HR EXPO 2009 by : DEDI PRAWIRA MM Dec. 9, 2009
Contents of Presentation
THEORY of PERFORMANCE MANAGEMENT
BUSINESS CASE BAT Indonesia
- DEFINITION- FUNCTION - PERF. DIMENSION - PROCESS
- Perf. Alignment- Perf. Dimension &
Leadership Framework - Performance & Reward
QUESTIONS &
ANSWERS
20 min 40 min 30 min
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THE THEORY of PERFORMANCE MANAGEMENT
DEFINITION of Performance Management
The Process of Evaluating on how well employees perform their jobs when compared to a set of standard and then communicating that information to employees
Sources : Society for Human Resources Management
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The FUNCTION of Performance Management
5
COMPANY PURPOSE
1. As a Management Tools : • To empower the employee to achieve organization objective • To improve employee performance & motivate them • To provide award to employee and compensate them for their contribution• For Promotion / Demotion / Termination purpose
EMPLOYEE PURPOSE1. To provide constructive feed back to employee performance2. For counselling purpose when employee do not perform3. For development purpose (Training & Development)4. Employee expectation when having good and oustanding performance to get higher
salary & bonus
Performance Management System SHOULD HAVE direct relationship with COMPENSATION STRATEGY
1 2 3
Performance Dimension
PRODUCTION‐ Quantity ‐ Quality MARKETING‐ No of product sold‐ Customer Satisf. FINANCIAL‐ Profit‐ Cash Flow
‐ Professionalism
‐ Team Work
‐ Leadership
‐ Time Mangt.
‐ Code of Conduct
‐ Emotional Int (EI)
‐ Know How
‐ Integrity & Fairness
‐Work Passion
‐ Initiative
RESULT WORK BEHAVIOUR PERSONAL HABIT
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Quiz – 1 (PERFORMANCE DIMENSION)
RESULT
Work Behaviour
PersonalHabit
PD Blue Collar
How many % the composition of each Performance Dimension for the position of Blue Collar ?
RESULT = xx % WORK BEHAVIOUR = xx % PERSONAL HABIT = xx %
Quiz – 2 (PERFORMANCE DIMENSION)
RESULT
Work Behaviour
PersonalHabit
PD Communication
Manager
How many % the composition of each Performance Dimension for the position of Communication Manager ?
RESULT = xx % WORK BEHAVIOUR = xx % PERSONAL HABIT = xx %
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DEVELOPMENT• Mentoring • Training• Career Devt
HOW• Competencies • Behaviour • Development Plan
ORGANIZATION MISSION
• Strategy• Corporate Objective • Division Objective
PLANNING of PERFORMANCE MANAGEMENT
WHAT • Accountability • Objective• Standard
IMPLEMENTATION ofPERFROMANCE MANAGEMENT
INDIVIDUAL RESPONSIBILITIES• Commitment , Feedback & • Devt Plan, Open Comm, • Data Gathering, Preparation
for discussion
RATING of PERFORMANCE MANAGEMENT
NEW CONTRACT ofPERFORMANCE MANAGEMENT
PROCESS of Performance Management
Sources : Grote : 1996
MANAGER RESPONSIBILITIES• Create an environment
to motivate emp., Observe emp, Align the Objective,
• Provide Feedback & Devt Plan , • Strengthen emp behaviour
RATING• Compensation, Career Devt, • Promotion/Demotion• Termination
Accuracy of Information5
In appropriate Procedures1
Not clear of Performance Standard 2
Limited of Supporting Data3
Politic & Conflict Mngt in the Org.4
What’s wrong could be happen during Performance Review
Heart Feeling of the Supervior6
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Job Performance Model
Job Performance Model
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BUSINESS CASE BAT Indonesia Tbk
OUR VISION
What we work to achieve
The way we behave
The way we run our business
What we do as a company
What we do as a function
What we do as individuals
WINNING ORGANISATION
MUTUAL BENEFITRESPONSIBLE
PRODUCTSTEWARDSHIP
GOOD CORPORATECONDUCT
GROWTH PRODUCTIVITY RESPONSIBILITY
INDIVIDUAL OBJECTIVES and MOSs
LEADERSHIP CAPABILITIES LEADERSHIP PASSAGE PERF. DIMENSIONS
FUNCTIONAL OBJECTIVES and MEASURES OF SUCCESS
COMPANY CHARTER
COMPANY PLAN
GUIDING PRINCIPLES
No.1
To be the no. 1 Company within the white cigarette segment in the Indonesian Tobacco Industry
Aligning People Competencies with Aligning People Competencies with BATIBATI’’ss VisionVision
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THE THE INPUTSINPUTS
from the leadership behaviours we expect from everybody and is a holistic perspectives on the effectiveness of a Manager that are required at each and every one of the passages in the pipeline and focus on development (leadership capabilities)
and how we differentiate the work of leaders at different levels with emphasising & defining leadership requirements in every role (leadership passages/pipeline – the contexts).
to focus on Performance in comparison with the objectives you have set in context of the Performance Dimensions
THE THE CONTEXTSCONTEXTS
THE THE OUTPUTSOUTPUTS
Performance & Leadership Framework
Leadership framework was established with defining & differentiating leadership requirements for managers at all level ;
BAT Leadership Framework
“the inputs”Leadership Capabilities
focus on development
PEOPLE COMPONENTSBuilds self awareness & listensEngages and inspiresSupports high performing teams
STRATEGIC COMPONENTS
“the context”Leadership Passages
“the outputs”Performance Dimensions
focus on performance
Business/Technical/ objective
Leadership objective
Management objective
Relationships objective
Innovation objective
Manage Self
Manage Others
Manage Managers
Manage Function
Manage Business
Manage Group
Time x Values x Skill
BUSINESS COMPONENTSActs commercially & consumer centricLeverages risks & opportunityEngages stakeholders proactivelyThink & Act Globally
BAT Leadership FrameworkBAT Leadership Framework
Provides direction and focusDrives for innovation & changeDrives for results
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Leadership Capabilities - behaviour expectation
PEOPLE Components
BUILDS SELF AWARENESS AND LISTENSDemonstrates awareness of and maximises own impactActively listens and builds positively on others ideas Seeks, listens to and acts upon feedback from managers, team members and peers
ENGAGES AND INSPIRES Builds enthusiasm and drives momentum for change with passion and beliefCommunicates in simple and clear termsExhibits trust, fairness and ethical awarenessPromotes ideas and influences in a matrix structure without having direct control or authority
SUPPORTS HIGH PERFORMING TEAMSLeverages complementary strengths of teams, valuing different approaches, experiences, expertiseImplements and visibly supports team decisions and team’s “ground rules”Shows high commitment to personal and team development, allocating meaningful time and resources to coach, plan and
deliver on theseIdentifies, recognises and celebrates individual and team accomplishmentsManages poor performance and behaviour effectively, providing clear, timely and constructive feedbackEncourages a balance between work and outside interests
Leadership Capabilities The Core Curriculum Map for Strategic Component
ITEM Manage Self Manage Others Manage ManagersBusiness Awareness(Provides direction and focus)
New Employee InductionProduct Knowledge 1Language of Finance
Product Knowledge 2Leaf Appreciation
Horsley awareness programmesGeneral Management programme (available from a business school)
Strategy and Focus(Provides direction and focus; Drives innovation and change)
Line of Sight Strategy Formulation(available from a Business School or other consultancy, non-priority)
Process Improvement and innovation (Drives innovation and change)
Prince 2 Project ManagementISO / MRP II workshopsPADM (from Achieve Global)Creativity! (available from Citadel, suggested priority)Adapting to Change (available from Citadel. For a start, may want to avoid differentiation from Managing Others)
ISO / MRP II workshopsMaking Change Work for You(available from Citadel)
ISO / MRP II workshopsChange Leadership (available from Citadel, non-priority)
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Leadership Capabilities - technical expectation
Functional Success Criteria
MarketingBrandTradeMarketing Research
Operations
PlanSource Make MoveResearch DevelopmentFacilitiesSecurity
HR/IT/ Finance/
CORA/Legal
Passage Three
Manage self
Manage others
Manager of Manager
Functional Manager
Business Manager
Group Manager
Passage One
Passage Two
Passage Four
Passage Five
Enterprise Manager
Passage Six
Lead
ersh
ip Ca
pabil
ities
Leadership Passages / Pipeline
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Defines 6 passages of leadership complexity in organisationsDefines changes in job requirements at each level :
Not related to JOB GRADE
Not dependent on JOB TITLE
Not dependent on number of subordinates you have
Does not matter if your subordinates hold managerial titles or grades
Defines changes in skills, time application and values required to make the transition between levels
A model for Leadership Development that :
Leadership Passages / Pipeline - definition
SKILL REQUIREMENTS – the skills you need
TIME APPLICATIONS – the way you spend your time
WORK VALUES – what people believe is important & so becomes
the focus of their effort.
What Differentiates the Levels
Leadership Passages / Pipeline - definition
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Leadership Passages – Manages Self
Definition : Leads self and peers, acts as role model, no formal leadership responsibilities, individual contributor (i.e. expert)
Time : self-planning to deliver projects- scheduling own work
Values : - accepting Company culture- adopting professional standards- getting things done quickly and effectively
Skills/ : - technical / professionalCapabilities - collaborate well with others
- complete assigned work in given parameters
Definition : First Leadership layer, direct reports in Manage Self, essential part of job is leadership
Time : - Complete own work- Help others perform effectively- Shift to work done through others
Values : - Value leadership work not just tolerate it- Other directed’ work is seen as mission critical- Cease thinking about self – start thinking about others
Skills/ : - Planning work, filling jobs, assigning work, motivating, Capabilities coaching and measuring work of others
- Establishing good relationship with boss, peer, support group- Reports (to build open dialogue and trust)
Leadership Passages – Manages Others
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Definition : Leads team of managers, who themselves lead peopleTime : - Almost entirely about others
- Repeating the instruction – performance – feedback cycleValues : - identify value based resistance to leadership work
- be prepared to return people to individual contributor work if they can’t make the shift in values/ capabilities
Skills/ : - pure leadershipCapabilities - selecting people to take passage one
- assigning managerial and leadership work- measuring and coaching managers- thinking beyond function for the first time- holding first line managers accountable for managerial work- managing the boundaries between own and other units
Leadership Passages – Manages Managers
Manage Self Manage Others Manager of Managers
Time:-Self-planning to deliver projects-scheduling own work
Time:-complete own work-help others perform effectively-shift to work done through others
Time:-almost entirely about others-repeating the instruction-performance-feedback cycle
Values:-accepting Company culture-adopting professional standards-getting things done quickly and effectively
Values:-value leadership work not just tolerate it-‘other directed’ work is seen as mission-critical-cease thinking about self – start thinking about others
Values:-identify value-based resistance to leadership work-be prepared to return people to individual contributor work if they cant make the shift in values/capabilities
Capabilities: -technical-professional-collaborate well with others-complete assigned work in given parameters
Typical Pitfalls1.Resists constraints on time, doesn’t want to be rushed2.Focus on completion rather than quality3.Operate independently of others4.Disagrees with company policies and procedures
Capabilities: -planning work, filling jobs, assigning work, motivating, coaching and measuring work of others-establishing good relationships with boss, peers, support groupsand reports – to build open dialogue and trust.
Typical Pitfalls 1.Want to keep doing the stuff that made them successful before2.Time allocation shows they don’t view coaching, planning, spending time with others as mission critical3.Overpower reports with their own expertise4.Compete with reports to do assignments5.Fix direct report’s mistakes rather than coaching them to do job properly
Capabilities: -pure leadership-selecting people to take passage one.-assigning managerial and leadership work-measuring and coaching managers-thinking beyond function for the first time-holding first line managers accountable for managerial work-managing the boundaries between own and other units
Typical Pitfalls1. Difficulty delegating – single minded focus on
getting the work done.2. Hold first line managers accountable for
individual contributor work, versus their principal role of leading others
3. Choose high technical achievers for first line manager roles, rather than true potential leaders.
4. Give direct orders to individual contributors –rather than going via their direct reports.
5. Fail to build strong and diverse teams
Leadership Passages – summary
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Performance at each Passage
Imagine every role in the organisation is a circle. Each of jobs has key areas of performance which are represented as five lines in the circle
Busines
s/Profe
ssional
/
Operatin
g Resu
lts
Leader
ship R
esults
Managem
ent Resu
lts
Relation
ship R
esults
Innova
tion Resu
lts
Performance Dimension
Functional / Operational Objective
Leadership Objectives
Management Objective
Relationship Objective
InnovationObjective
• Focus on Functional / Professional output• Key activities / result within own job / function unit which build on
technical & functional expertise of the incumbent.
• Focus on optimising effective internal and external network & relationship to get things done and to improve performance within unit.
• Optimising synergies though cooperation, communication and network
• Focus on continuous improvement, smarter working & value added innovation• Meeting customer and consumer needs better (internal & external) includes
benchmarking, documentation and sharing new approach
• Focus on aligning self / team to strategy & vision ; building leadership capability of self & team.
• Enabling and inspiring people and unit to perform in line with the company strategy and vision. Leadership objective include :
teamwork, personal development & setting strategy for own job & team.
• Focus on making best use of resources to meet objective, increase effectiveness and efficiency.
• Management of resources and process : budget, system, work process, setting milestones, priorities and plans.
• Management result set the frame in which good operational result can be achieved.
Performance Dimension - definition
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Performance Dimensions Required Work Values Full Performance* Operational / Business Results• Effective Analysis, Procurement, Transactions• Productivity/Efficiency Gains• Project Execution• Strategy Contribution
Quality bar continuously raised. Results through others.
• Ensures self and team always meets targets, due dates and quality standards.• Produces predictable results by holding employees to agreed-upon methods and
measures.• Provides operational/technical/professional advice to assure achievement of
goals and results.
Leadership Results• Tactical Support for Strategy• Employee Technical Skill Growth and Career Preparation• Teamwork and Team Building• Company Values• Potential Identification
Success of others.Values-based results, self & other.
• Produces viable successor.• Communicates vision, business direction and department goals and assures
every employee accepts and can articulate them.• Leads by example; lives the Guiding Principles consistently.• Seeks opportunities for growth and development as a leader.• Demands discipline of self and others to raise standards and deliver stretch
results.• Gives recognition where it is due, & proactively deals with performance issues.• Provides clear and timely feedback and ongoing coaching for others.
Management Results• Tactics and Career Preparation Plans• Resource and Process Optimization• Budget Management• Measurement and Feedback (Individuals)• Individual Guidance
Work that they are good at, and enjoy doing, done through other people.
Managerial work - embracing versus tolerating.
• Conveys a clear picture of current performance to team members.• Puts right people in right job.• Requires all employees to work on their development plan.• Tracks progress and sets milestones to ensure things happen as planned.• Is available and approachable for direct reports.
Relationships Results• Working Relationships with Customers (Internal and
External)• Connection with Other Teams• Broad Relationships (Outreach)
Needs and expectations of others. • Seeks full understanding of customer needs.• Proactively builds network to understand big picture.• Displays fairness, exhibits trust and gains respect through own behaviour and
actions.
Innovation Results• Processes, Practices, Methods• More with Less• New Ways of Doing Existing Work• Complexity Reduction
Innovation in others. • Leverages the abilities of other teams (no duplication)• Designs user-friendly programs and processes from conception to
implementation.• Gathers ideas wherever they exist.• Regularly reviews what’s done, why and how.• Embraces and promotes change.
Performance Dimension & Leadership Passage (Manage Others)
Performance Standards to Develop Leaders & Define Devt GAPS
Think of jobs in BAT as five ‘LINES’ within a circle. Each ‘line’ represents outcomes around each performance standard. Everything inside the circle is the responsibility of job holder, everything outside circle is someone else’s responsibility.
`Full Performance
Not YetFull Performance
Inappropriate Performance
ExceptionalPerformance
Performance Result - individual
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Using the Model to Diagnose Issues Causing Underperformance
NB START WITH THE BOSS – NOT THE DIRECT REPORT
Micro Management
Only One ThingCounts
Abdication
PerfectAlignment
Performance Result - relationship
How to prepare Performance Objective
2. Organise them into the logical (best fit) Performance Dimension heading Operations / Technical / Professional results, Leadership etc
3. Write your PO and Measure of Success for your Leadership Level ›› SS pecificpecific , , MM easurableeasurable, , AA greed, greed, RR ealisticealistic, , TT imeime--boundbound
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Performance Management Cycle
EXCEEDS SUCCEEDSNEARLY THERE
INADE-QUATE
The individual has significantly and consistently exceeded performance
The individual has consistently achieved performance expectations
The individual has met expectations in most areas but not fully met expectations consistently in some
The individual has not met performance expectations
Performance Rating
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• Create focus and alignment– Use of LOS processes to show individual objectives linked to the Unit’s objectives.– Improving the quality of individual performance objectives.
• Drive performance– Strong emphasis on rewarding performance.– Clearly differentiating between levels of performance.– No tolerance for sustained weak performance
• Maximise the impact of reward– Package should be communicated on a Total Remuneration basis.– More flexibility for managers to reward their staff.
Performance & Reward strategy
Superior leadership todeliver operational
performance
Operational performance supporting strategy
Results :• Operational• Leadership• Management• Relationship• Innovation
Performance Measurement based on 5 indicators :
Operating ProfitVolume ShareCash Flow (Region) Net TurnoverGDB Volume
Base Pay Variable Bonus
Performance & Reward strategy
Individual Dept & Company
Role of Element
Measures of Success
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Rating/ CR 65-74 75-84 85-94 95-104 105-114 115-124 125-134 >135
MaxLump-Sum
E 22.0 21.5 21.0 20.5 20.0 19.5 19.0 18.5 18.5
S 15.0 14.5 14.0 13.5 13.0 12.5 12.0 11.5 11.5
NT 11.5 11.0 10.5 10.0 9.5 9.0 8.5 8.0 8.0
IA
Line Involvement = plus or minus 5% from above matrix
Pay Matrix
Performance Measurement
Weighting Threshold Target Normal Max Extra Max
Profit 20% 0% 2.5% 5.0% 7.5%
Volume 20% 0% 2.5% 5.0% 7.5%
Cash Flow 20% 0% 2.5% 5.0% 7.5%
Turnover 20% 0% 2.5% 5.0% 7.5%
GDB 20% 0% 2.5% 5.0% 7.5%
Total 100% 0% 12.5% 25.0% 37.5%
Performance Measurement Weighting Achievement Percentage
Profit 20% Below Target 1.5%Volume 20% On Target 2.5%
Cash Flow 20% Below Normal 3.5%Turnover 20% Below Normal 3.5%
GDB 20% Normal Max 5%Total 100% 16%
EXAMPLE : VB payout calculation for Grade 34-35
Variable Bonus
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How good a job is your company doing in matching people’s pay to their performance?
2005
Internal Survey
73
How satisfied are you with these aspects of your current job: Recognition for Superior Performance.
69
2007
70
75
40
Questions & Answers
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