Bridge Knowle "YEAR END PERFORMANCE APPRAISAL" Workshop

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Bridge Knowle "YEAR END PERFORMANCE APPRAISAL" WorkshopNovember, KL• Know the Importance of planning, preparing, and structuring the performance appraisal• Learn how to listen, question and give clear and specific feedback• Handle performance problems and sensitive issues effectively• Review performance objectives so you can provide specific feedback describing the gap between expected and actual performance• Avoid common pitfalls when conducting the appraisal• Create Individual Development Plans with your staff• Monitor and review progress of objectives and development plans between review meetings• Develop your feedback skills to motivate staff between appraisal meetings

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EMPLOYEE YEAR END PERFORMANCE APPRAISAL[Matching Employee KPI to Company Goals & Benefits Structure]Training Session and Workshop

Kenny Ong

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Intro

What is your objective?

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Managing Expectations

• Exercise: Please note down one important item you want to learn or get out from this workshop

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The McPlaybook*

Make it easy to eat• 50% drive-thru• Meals held in one

hand

Make it easy to prepare• High Turnover• Tasks simple to learn

& repeat

Make it quick• “Fast Food”• Tests new products

for Cooking Times

Make what customers want• Prowls market for new

products• Monitored field tests

*Adapted from: Businessweek , Februrary 5th 2007

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Why do we hate Performance Appraisals?

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As an Appraisee

As an Appraisor

Complaints about Performance Appraisals

Mgmt/HR

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As an Appraisee

Complaints about Performance Appraisals

• Bias• Different Standards• Surprise• Subjective• No linkage*• No differentiation• Secretive• No follow up• No control

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As an Appraiser

Complaints about Performance Appraisals

• Cannot remember• Tedious• Subjective• Right targets• Scoring Competencies*• Defensive staff• No $$ to differentiate• Prejudices• Results or Activities

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Complaints about Performance Appraisals

• 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

Mgmt/HR

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Complaints about Performance Appraisals - Summary

1. Process problem

2. Form problem

3. People problem

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What’s the Difference?

Performance Appraisal Performance Management

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Coaching & Counseling

Month 1

Performance Planning

Month 12

Performance Appraisal

Month 2-11

?

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What is the OBJECTIVE of a Performance Management System?

• What is the ultimate objective of a Performance Management System?

• ‘Performance’ – achievement, • ‘Management’ – controllable, improvement• ‘System’ – predictable outcome, autorun

Summary?• A Predictable process to Improve Controllable

Achievements

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What’s In Between Planning and Execution?

Succession Planning (Business Continuity)

Talent Management

Differentiation

Performance Management System

Budgeting + Planning

KPIs

BSC

Business Model

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What is the OBJECTIVE?

Succession Planning (Business Continuity)

Talent Management

Differentiation

Performance Management System

Budgeting + Planning

BSC and KPIs

Strategy

Business Model

Business Strategy Execution

Talent Management

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Intro

• Performance Management System = Business Plan Implementation

• Succession Planning = Business Continuity Planning

• Talent Management = Sustainable Business Performance Management

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1. Using Performance Appraisals in Performance Management

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“…in the past 18 months, we have heard that profit is more important than revenue,

quality is more important that profit, people are more important than profit,

customers are more important than our people, big customers are more important than small customers, and that growth is the key to our success. No wonder our

performance is inconsistent"CEO, Anonymous

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Before we start…

In the old days of HR…• Average training hours per staff• % of staff attending training• # of training programs• % of training programs conducted• Training needs analysis conducted• Competency models developed• Training budget as % of payroll

What’s wrong with this picture?

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Before we start…

Moral of the story…

1. Innovation:– Business models– Products– Services

2. Market Leadership

3. Competitive differentiation

Get the picture?

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“What is the moral of the story?”

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Which Company?

American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index (ACSI) E-Business Report

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Which Company?

American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector

companies

• 500 million customers

2010 American Customer Satisfaction Index (ACSI) E-Business Report

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Popularly Unpopular

Popularity

Affection

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The Integrated and Holistic Performance Management System

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Why Performance Appraisal?

Performance

ManagementDevelopment

Motivation

Selection

Evaluation

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Talent Segmentation

Group I

(Talent Pool)

23

45

PE

RF

OR

MA

NC

E

2 3 4 5

POTENTIAL• Identify

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Employee Differentiation

Group I

(Talent Pool)

Group II

( Potential)

Group III

( Performance)

Group IV

(Counseling)

2 3 4 5

23

45

PE

RF

OR

MA

NC

E

POTENTIAL• Identify

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Selection and Identification

PERFORMANCE APPRAISAL

1. Results

2. Values

3. Special Contributions

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Selection and Identification

POTENTIAL EVALUATION

1. Capacity

2. Competencies

3. Culture

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Selection and Identification

POTENTIAL EVALUATION

1. Capacity

Learn

Next Level

Ambition

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Selection and Identification

POTENTIAL EVALUATION

2. Competencies

Competent

Reliable/Consistent

Pressure

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Selection and Identification

POTENTIAL EVALUATION

3. Culture

Demonstrate

Improve

Influence

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Exercise

Define ‘Performance’ Define ‘Potential’

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Exercise

• Exercise:

1.Factors for Performance Appraisal

2.Factors for Potential Appraisal

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2. Getting Performance Appraisal Objectives Right

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What is Performance Appraisal used for?

Reward?

Discipline?

Development?

Motivation?

Promotion?

Monitor?

www.myCNI.com.my www.OOBEY.com

No wonder our employees are

confused!

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What is the OBJECTIVE?

• What is the ultimate objective of a Performance Management System?

• ‘Performance’ – achievement, • ‘Management’ – controllable, improvement• ‘System’ – predictable outcome, autorun

Summary?• A Predictable process to Improve Controllable

Achievements

www.myCNI.com.my www.OOBEY.com

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What is the OBJECTIVE?

Succession Planning (Business Continuity)

Talent Management

Differentiation

Performance Management System

Budgeting + Planning

KPIs

BSC

Business Model

Business Plan Implementation

Talent Management

www.myCNI.com.my www.OOBEY.com

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What is Performance Measurement used for?

Reward?

Discipline?

Development?

Motivation?

Promotion?

Monitor?

www.myCNI.com.my www.OOBEY.com

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• Exercise: How would your Evaluation System look like for these different objectives?

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Behavior-based

Knowledge/Skill based

Results-based

Trait-based

Which system should we use?

Managing Performance = Managing Expectations

What’s YOUR expectation?

Activity based

Refer: Which Performance

Management System should we use?

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3. Performance Management

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Alignment: 4-Wheels Model

Culture

Business

Model

Strategic Planning

StructurePerson

Leadership

Resources

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Alignment: Framework

• Org Structure

• Job Design• C&B• Policies & procedures• Decision making• Job fit• Management Systems• BSC and KPIs• Decentralized & Empower

Structure

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Strategy: Framework

• Role modeling• Vision/Mission/Philosophy

• Leadership Style• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about Performance

Leadership

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Strategy: Framework

• Recognition• Recruitment• Training

• Attitude• Values

• Motivation• Self Efficacy• Awareness

• Useful Competencies• Career aspirations• Attribution (control)

Person

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Strategy: Framework

Enablers or Obstacles• Technology• Equipment• Materials• Human• Intellectual Property• Partners• Property

Resources

Funding • CAPEX• OPEX

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Alignment: Framework

• Focus point• Alignment• Quality• Innovation & Differentiation• Risk taking• Performance Management• Corporate obsession• Decision making

Culture

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4-Wheels Model

Culture

Business

Model

Strategic Planning

StructurePerson

Leadership

Resources

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Performance Management Cycle

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• Refer to pages 8-9 of the Performance Management Workshop –Workbook-

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Performance Planning

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

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Results Driven

Activity vs. Accountability

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Exercise: Results Description

Key Result Key Activities

1.1.2.3.4.

2.1.2.3.4.

3.1.2.3.4.

4.1.2.3.4.

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• Exercise: Results Description Questionnaire

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Sources of Goals and KPIs

• Exercise: List down the sources of Goals and KPIs available in your company:– E.g. Job Description (RDQ)

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MBO – Sources of KRAs and KPIs, Targets

1. Department Scorecard [E3],

2. Employee’s Job Description,

3. Department SOP,

4. Department Quality Objectives,

5. Corrective Action Requests (CAR),

6. Preventive Action Requests (PAR), or

7. Special Projects relevant to the employee.

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Performance Planning: KPIs and Critical Goals

• Refer to pages 19-23 of the Performance Management Workshop –Workbook-

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Basics of the Balanced Scorecard

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Reminder: Why BSC?

• Reason 1: Balanced

• Reason 2: Cause-and-Effect

www.myCNI.com.my www.OOBEY.com

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Revenue

Base Retention

Share Gain Positioning Adjacent Market

New Business

Financial

Learning & Growth

Internal Process

Customers

Cost Margin

Cause and Effect

Cash Flow Asset

Operational Excellence

Product Leadership

Customer Intimacy

Investment Strategy

Competencies Information Systems Motivation, empowerment,

alignment

Satisfaction

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Financial

Learning & Growth

Internal Process

Customers / Distributors

Revenue GrowthProductivityMarket Value

Department Operations

Supplier & Alliances

External Involvement

Target Markets

Products/ Services

Channel Strategies

Human Resources

Technology

Information & IntelligenceSystems &

Processes

Cause and Effect: An Example

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Financial

Learning & Growth

Internal Process

Customers / Distributors

Example: 1st Level BSC & KPIs

Profit after Tax. Revenue. Cash-to-cash cycle. Operating cash flow

Customer Complaints. Customer Acquisition Rate. Product Availability. Product Quality & Service. Renewal Annual Subscription. Distributor Rank Achievement. No. of Active Distributor. No. DC/Regional Sales. Distributor with commission

Customer Database Availability. Accuracy of Forecast Planning. Continuous Improvement. Response Time to Customer Needs. Perfect Order Fulfillment. Inventory Turnover. Number of Effective Sponsoring Program. On Time Delivery. No. of Effective Training. Number of Effective A&P

% of staff evaluated on Core Competency Framework. % of staff with Career Development Plans. No. of training hours completed per staff. % of staff with access to strategic information. Q12 Index. % staff evaluated on Culture alignment

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Leading and Lagging KPIs

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Cause and Effect

Goal:Healthy!

What are my Vital Signs?•Blood Pressure?•Temperature?•Cholesterol?•Fever?•Chest Pain?•Dizziness?

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Cause and Effect

Also known as:

Leading vs. Lagging Indicators

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Exercise: Leading vs. Lagging

Lagging?

• Monthly Sales• Customer Retention• Project success • Event attendance• ARPU• Customer Satisfaction• Dealer Satisfaction

Leading?

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Financial“To satisfy our stakeholders, what Financial objectives must we accomplish?”

Internal Process“To satisfy our customers, in which internal business processes must we excel?"

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?

Cause & Effect: Strategy

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Top Performers and the ‘No Contribution’ Problem

Lagging

Leading

Historical, Outcome, Results, 1st Level, Usually Financial or tangible, Quarterly and Annually

Current, Indicators, Drivers, 2nd Level onwards, usually non-financial or intangible, Weekly, Monthly and Quarterly

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Developing ‘Driver’ KPIs

Customer Retention % Lagging, 1st Level

Customer Satisfaction Index

Leading, 2nd Level

On time delivery

Time to market for new products

TNA %

Defect levels, warranty claims

Leading, 3rd Level onwards

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What is the Objective?

‘Do-or-Die’ KPIs for CNI• Revenue• ARPU

• Sponsoring• Retention

• Commission Plan (BDP)• Product• Corporate Image

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• Exercise: What are the Key 1st Level KPIs for your Industry?

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• Exercise: Developing your own Leading and Lagging KPIs

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B2B/B2G BSC Matching

Revenue

Base Retention

Share Gain Positioning Adjacent Market

New Business

Financial

Learning & Growth

Internal Process

Customers

Cost Margin Cash Flow Asset

Operational Excellence

Product Leadership

Customer Intimacy

Investment Strategy

Competencies Information Systems

Motivation, empowerment,

alignment

Satisfaction

Customer/Client/ Government BSC

Revenue

Base Retention

Share Gain Positioning Adjacent Market

New Business

Financial

Learning & Growth

Internal Process

Customers

Cost Margin Cash Flow Asset

Operational Excellence

Product Leadership

Customer Intimacy

Investment Strategy

Competencies Information Systems

Motivation, empowerment,

alignment

Satisfaction

Your BSC

1. Draw your ‘customer’s’ BSC

2. Match their CP/IP with your CP

3. Identify IPs that support/conflict

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Performance Planning: KPIs and Critical Goals

• Refer to pages 24-25 of the Performance Management Workshop –Workbook-

• Refer to “Attachments” for examples of KPIs

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Performance Standards

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MBO Standards

A Excellent

B Good

C Average

D Poor

E Useless

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MBO Standards

A Excellent

B Good

C Average Good

D Poor

E Useless

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MBO Standards

A Excellent Excellent

B Good Very Good

C Average Good

D Poor Not Good

E Useless Commit Suicide

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MBO Standards

A Excellent Consistently achieved 4 for 3 quarters

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

Refer: Priority, Targets and Standards

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Performance Planning: Performance Standards

• Refer to pages 24-25 of the Performance Management Workshop –Workbook-

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Performance Planning and KPIs: Cascading from Company-Department-

Individual

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E3 – Department BSC

Financial Perspective

Goals Measures Targets CAPEX OPEX

Quality

Innovation

On Time Delivery

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Individual Performance

1.0 Key Results

Area (Max 6)

2.0 Goals and

Targets for Q1

3.0 Achievements and

Efforts for Q1

4.0 Merit* 5.0 Rating (Merit x Weight)

6.0 Appraiser

Overall Comments/ Feedback

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Cascading

Customer Perspective

Goals Strategies Targets Direct Indirect

Base Retention

Mkt

Share Gain Mkt

New Business

BD

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E3 – Department BSC

Customer Perspective – Marketing Department

Goals Strategies Targets CAPEX OPEX

Base Retention

Share Gain

Budgeting

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Individual MBO

Employee A – Marketing Executive

KRAs Action Plans

Targets Weight (%)

Score

Class A Customer Retention

Class B Customer Retention

Competition Crossovers

Re: Base Retention

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Competencies

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Position: SecretaryResponsibilities + Tasks + Activities

Personal Competencies Differentiating Competencies

The Job Person Characteristics The Superior Performer

•Typing•Manages communications•Keeps short-hand notes•Makes appointments•Uses the computer•Filing•Takes minutes•Follow-up•Makes coffee•Keeps secrets•Drafts letter•Screens calls

•Pleasant•Accurate•Is able to take notes on shorthand and typing memo effectively•Presentable

•Appearance•Behaviours

•Good manners•Courteous•Diligent

•Proactive•Initiative•Independent•Integrity (trust)•Creative•Resourcefulness•Always excel•Unwavering dedication and commitment•Ability to make simple decisions•Sensitive to people•Positive attitude

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Competencies: Intro

• Refer to page 27 of the Performance Management Workshop –Workbook-

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Competencies

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Competencies: An Explanation

• Refer to pages 47-51 of the Performance Management Workshop –Workbook-

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Superstar Competency Model

• Exercise: Develop Your Own “Superstar” Competency Model

• Refer to page 52 of the Performance Management Workshop –Workbook-

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Competency Target Setting

1. Initiative

2. Teamwork

3. Problem Solving

4. Leadership

5. Integrity

What’s the problem here?

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Competency Target Setting

Initiative

1. Minimize problems quickly without needing to be asked

2. Seeks personal growth and professional self-development

3. Doing more than is required/expected in a job

4. Seeks new and improved solutions and approaches to completing assignments

5. Looks for opportunities to help others and team

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• Exercise: Competency Dictionary

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Competency Dictionary: An Example

• Refer to pages 53 of the Performance Management Workshop –Workbook-

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Competency Standards

3 Meets behavioral standards consistently. Is a good role model for others.

2 Meets behavioral standards some of the time. Needs improvement.

1 Does not meet behavioral standards. Require counseling or disciplinary actions.

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Exercise: Competency Standards

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Performance Coaching

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Coaching & Counseling

Month 1

Performance Planning

Month 12

Performance Appraisal

Month 2-11

?

Refer: Coaching Self-Assessment

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Performance Coaching

• Refer to pages 29-33 of the Performance Management Workshop –Workbook-

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Performance Coaching

• Exercise: Refer to pages 34 of the Performance Management Workshop –Workbook-

• Competencies of a Good Coach

• Self Evaluation

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4. Putting it all together

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Designing Your Own Performance Appraisal Form

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Performance Appraisal Form

• Exercise: Performance Appraisal Form - Critical Components – What Do you Want to Evaluate?– What are Your Objectives?

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Performance Appraisal Form

• Refer to Sample Performance Appraisal Forms: Non-Executives and Executives

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Performance Evaluation

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Performance Evaluation

• Exercise: Refer to pages 38-42 of the Performance Management Workshop –Workbook-

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Evaluation: Key Steps

• Exercise: Refer to pages 43-45 of the Performance Management Workshop –Workbook-

1.Attitude2.Seating3.Begin4.Review5.Comments6.Future7.Performance vs. Person8.Closing

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5. People Skills and Performance Appraisals

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Before we start

“You can get anything in life that you want if you can help enough people

get what they want”

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Law of the Ping-Pong Ball

a.k.a. Law of Cause and Effect

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Managing your Relationships

Basics of Relationships

1. Why?

2. Good performance & skill won't get you very far. You need others to succeed

3. You cannot get people to listen to you if they don't like you.

4. And if they don’t listen to you, you won’t accomplish anything!

5. Relationships = Expectations.

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But first…Do you know yourself?

Strengths? Limitations?

Good listener?

Emotionally stable?

Biases or Prejudices?

What is “Fair”?

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Managing your Relationships: People Skills

1. People are interested in themselves, not in you

2. What is the most interesting subject in the world to them? THEMSELVES

3. Take four words out of your vocabulary: “I, me, my, mine” and substitute for the most powerful word: “YOU”

4. Remember that the more important you make people feel, the more they will respond to you.

5. Avoid arguing.

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LINA

Listen with interest and praise

make the person feel Important

use their Name

Ask questions

Communication SF

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PASSE

Praise and encourage

Ask questions

allow the person to Save Face

use SMART goals

Encourage small improvements

Influence SF

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S + FH + C

Smile

Firm Handshake

Compliment

Personality SF

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Communication Styles

Assertive

Passive-Aggressive

Aggressive

Passive

Comm

Refer to Handout for detailed explanation

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How to be Assertive

1. Describe

2. Express

3. Specify

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Three Steps to Assertive Communication:

1. Describe the situation or idea as clearly and specifically as you can.

2. Express how you feel about the situation. (Note: Use "I" or "My" statements to refer to how you are feeling and what you are thinking.)

3. Specify what you want. Include a specific deadline.

Refer to Exercise: Practicing Assertive Behavior

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Exercise: Assertive Communication

• Someone has pushed into the queue/line in front of you. • Someone you respect has expressed an opinion with

which you strongly disagree. • Someone in your organisation has a specific complaint

that they won’t let go, even though it has been dealt with several times.

• A friend has betrayed your confidence or hurt you. • A person in your organisation is constantly talking about

another member behind her back. This is divisive and destructive to your organisation.

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Active Listening

1. Attending

2. Paraphrasing

3. Speaking

4. Clarifying

5. Asking

6. Encouraging

7. Reflecting

8. Summarizing

Personal Tip: ‘Picking’

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Active Listening Techniques

• Attending: using non-verbal indicators such as leaning forward, nodding your head, sitting in an open, receptive posture

• Paraphrasing: repeating in your own words what the other person has said; the restatement should not judge in any way

• Speaking from the self: using "I" statements, rather than speaking for others (we all think) or speaking in the passive tense. Do not make assumptions about others, their opinions, and feelings.

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Active Listening Techniques

• Clarifying: asking for further clarification or an example to illustrate often helps find clarity in the meaning.

• Asking: probing questions; identify and explore options and alternatives e.g., use probes - short, open questions to dig deeper into issues. May be non-verbal such as a look that asks "Then what/ How?” Silence can be used to encourage the speaker to continue.

• Encouraging: asking person to “tell me more about” or give them a supportive comment like “good idea” or “I like that approach”.

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Active Listening Techniques

• Reflecting: playing back the communication as you hear and feel it, e.g., “you seem to feel very strongly about that”

• Summarizing: giving back a review or summary of what you heard. This helps make sure the communication is

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Asking Questions?

1. Ask to clarify viewpoints, values or beliefs1. Would you like a drink?

2. What further info do you need?

3. Is it the <problem>, or is there something else?

4. What exactly do you mean?

5. What do you think are the pros and cons?

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Asking Questions?

2. What’s most important to you in…

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Asking Questions?

3. Convert instructions into Questions

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• Exercise: Role Play

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Understanding Conflicts

What is…, Sources of…,

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Why do Conflicts happen?

UnrealisticExpectations

InadequateResources

CONFLICTS

Lack of Cooperation

Reduce Energy

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Why do Conflicts happen?

UnrealisticExpectations

1. ‘I am always right’ opinion

2. Do not understand ourselves

3. Do not understand others

4. Different backgrounds

5. Aggressive, Selfish, Stubborn

6. Win-lose mentality

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Conflict: Good or Bad?

Good1.Clarification

2.Release emotions

3.Release stress

4.Understand each other

5.Build cooperation & trust

6.Develop problem solving

7.Create energy

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Conflict: Good or Bad?

Bad1.Diverts energy

2.Polarizes groups

3.Deepens differences

4. ‘Either-Or’ positions

5.Always right mentality

6.Develop negative feelings

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Conflict: Good or Bad?

Very Very Bad

1. Informal discussions

2.Mis-information

3.Positions

4.Factions

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Sources of Conflicts

Instrumental

InterestPersonal

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Sources of Conflicts

Instrumental1. Goals

2. Means

3. Procedures

4. Structures

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Sources of Conflicts

Interest

1. Money

2. Time

3. Staff Space

4. Importance

5. Ownership

6. Competence

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Sources of Conflicts

Personal

1. Identity

2. Self-image

3. Loyalty

4. Confidence breach

5. No respect

6. Friendship Betrayal

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Managing Conflicts and Difficult People

The world is full of people who don’t like you… live with it.

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But First…

Do you want to maintain the relationship?

Yes? No?

1. Compromise, if possible

2. Win-win, if possible

3. Adapt, to different people

4. Hide your Ego

5. Lower your Expectations

6. Find Common Ground

7. Same Destination, Different Paths

8. “I understand …”

9. Accept the fact

10. Face

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Difficult People

Handling Difficult People:

1. The word ‘Difficult’ has different meanings

2. Difficult can mean different Personality:1. Refer to “Managing Different Personalities”

3. Difficult can mean Rude and Obnoxious1. Listen, Ask Questions

2. FAI (forget-about-it)

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6. The Performance Management Handbook

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Performance Management Handbook

• Refer to the Performance Management Handbook

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7. Managing Performance and Motivation

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Root Causes for Performance Problems

1. Right Person, Wrong Job (5%)

2. Wrong Person, Right Job (20%)

3. Wrong Person, Wrong Job (1%)

4. Right Person, Right Job, Managed Wrongly (74%)

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Analyzing and Solving Performance Discrepancies

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• Beating a Dead Horse

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Most Common Desperate Performance Improvement methods

1. Send for more Training

2. Enforce more Incentives (positive/negative)

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Dangers of Direct Incentives

1. lessen internal motivation, 2. switch to mercenary mode, 3. do something and do not do something else, 4. bribe and fraud culture, 5. easier for competitors to recruit, 6. lessen teamwork & helpful culture, 7. less and less impact for same value, 8. mockery of base salary and employment

contract, 9. rebellion from non-incentivised staff, 10.end up incentivising everyone for everything?,

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Mager and Pipe

• Analyzing Performance Discrepancies

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Alignment: 4-Wheels Model

Philosophies

Corporate

Objective

Performance Objectives

StructureResources

Leadership

Person

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Performance and Motivation

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Understanding Personalities

Closed Open

People

TaskPerfect: Melancholy Powerful: Choleric

Popular: SanguinePeaceful: Phlegmatic

Handouts: Personality Types & Getting Tasks Done

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The Motive Profile

Power (nPow)

Achievement(nAch)

Affiliative(nAff)

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Motive Profile vs. Job Description

Achievement Affiliation Power

• Continually improve his/her performance

• Personally produce work of excellent quality

• Be creative & innovative

• Accomplish tasks or projects personally, start to finish

• Set own performance

• Monitor own progress & know results of work immediately after work is completed

•Work cooperatively

•Frequently help others with their problems

•Socialize much on an informal basis

•Empathize with others

•Be interested in others

•Depend on others’ work

•Maintain others’ morale

•Be sensitive to his/her impact on others

•Tell others what has to be done & manage them

•Respond to others’ requests for decisions, & make decisions that affect others

•Make things happen through others

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The Motive Profile shown below has been constructed using a non-conscious response instrument (Picture Story Exercise - McClelland)

The typical superior performing manager profile:

High

Med

Low

Ach Aff Pow

Person

Job

Person

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Profile Mismatches

Mentoring, coaching and counselling helps people consciously develop job related responses.

Engineer in Managerial job

Ach Aff Pow

H

M

L

Teacher in Managerial Job

Ach Aff Pow

H

M

L

Ach Aff Pow

Managerial job

H

Ach Aff Pow

EngineerH

M

L

M

L

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Motivating Talent

Hope

Control

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Motivating Talent

Passion Job

GrowthTalent

Minimum Motivation Target: 2 out of 4

Delegation

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8. Performance and Reward

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‘Basic Values’ Driven C&B

1. Performance

2. Differentiation

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What to Pay?

• Pay for Service

• Pay for Job

• Pay for Competency

• Pay for Performance

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•Competency- Knowledge

- Skills - Experience

•Problem solving - Complex

- Type of problems - Special Problems

•Responsibility - Authority

- Success/Failure - Freedom to act

Pay for Job

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Performance and Incentives

1. Internal Equity1. Internal Job Rates

2. Performance differentials

2. External Competitiveness1. External Job Rates - Benchmarking

2. Demand & Supply

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What’s the Difference?

• Increment

• Bonus

• Promotion

Exercise: How does your company define the difference?

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What to Pay?

• Pay for Service

• Pay for Job

• Pay for Competency

• Pay for Performance

Exercise: Which ones does your company use for Pay?

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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

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Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5

4

3

2

1

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Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5

4

3 5%

2

1

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Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 9

4 7

3 9 7 5% 4 3

2 2

1 0

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Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 15 12 9 8 7

4 12 9 7 5 3

3 9 7 5% 4 3

2 6 4 2 1 0

1 4 2 0 0 0

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• Exercise:• Determine your pay grades and salary points

(internal or external benchmark?)• Draw your Compa Ratio Table

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Employee Differentiation through Relative Performance and Talent Management

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Values Driven C&B

1. Performance

2. Differentiation

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Employee Distinction?

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 9 8 7 6 5

4 8 7 6 5 4

3 7 6 5% 4 3

2 6 5 4 3 2

1 5 4 3 2 1

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Employee Distinction?

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5 20 15 12 8 5

4 18 12 9 5 3

3 9 7 5% 4 3

2 1 1 1 0 0

1 0 0 0 0 0

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Employee Distinction

Average Rating

Rating Multiply Factor

Example Rating

Example Increme

nt

> 4.1 5 2 4.2 8.4%

> 3.3 – 4.1 4 1.2 3.5 4.2%

> 2.3 – 3.3 3 0.75 2.8 2.1%

> 1.3 – 2.3 2 0.5 1.8 0.9%

≤ 1.3 1 0 1.0 0%

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Employee Distinction

Group I

(Talent Pool)

Group II

( Potential)

Group III

( Performance)

Group IV

(Counseling)

2 3 4 5

23

45

PE

RF

OR

MA

NC

E

POTENTIAL• Identify

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Curse of the Bell Curve

‘A’ Staff

‘B’ Staff

‘D’ Staff

‘E’ Staff

‘C’ Staff

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9. Performance Management: Issues and Challenges

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Other Performance Review processes

1. Result Planning schedule inc. BSC, Budget2. Quarterly Performance Appraisals3. EMC – sales performance4. QMS – non-sales performance5. Divisional meetings6. Annual Appraisals7. Specialized KPI committees8. CAR, PAR, SCAR KPI improvements9. Internal Audit & MSD – process problems10. HRM & TND – people problems11. Supervisor Induction – PM training12. Talent Management

www.myCNI.com.my www.OOBEY.com

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More Problems….

1. cost of evaluation vs. gains of evaluation

2. defer achievements of a good year to next

3. barely achieve so that next target is not high

4. spread improvements over several years

5. value reducing actions to increase performance

6. most ratings are 4 or 5, new people are 3

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Before I forget…

• Re-train Appraisers• Train new Appraisers

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Issues and Challenges

1. HODs unclear

2. HODs disagree/unsupportive

3. HODs not committed

4. Functional silos

5. HODs not willing to openly differentiate

6. Incompetent superiors/HODs

7. Difficult to evaluate

8. Aligning with Business Goals

9. Unsynchronized and unmonitored training and development

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End Point

The end of the Beginning

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Your Business Model

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What is the Business Model?

USP

Market Discipline

Profit Model

•Google

•Tata Nano

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Business Model: USP

USP(How do I

position my organization?)

External

Customer

**Internal

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Business Model: Profit Model

Revenue

Cost

MarginCash Flow

Assets

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Intro: Market Discipline

"They are the most innovative"

"Constantly renewing and creative"

"Always on the leading edge"

"A great deal!"

Excellent/attractive price

Minimal acquisition cost and hassle

Lowest overall cost of ownership

"A no-hassles firm"

Convenience and speed

Reliable product and service

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

Product Leadership

OperationalExcellence

CustomerIntimacy

•Air Asia

•LV

•Ramly

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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)

Alignment & Consistency: Market Disciplines

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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)

Strategy: Market Disciplines

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Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Operational Excellence

• Competitive price

• Error free, reliable

• Fast (on demand)

• Simple

• Responsive

• Consistent information for all

• Transactional

• 'Once and Done'

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Customer Intimacy

• Management by Fact

• Easy to do business with

• Have it your way (customization)

• Market segments of one

• Proactive, flexible

• Relationship and consultative selling

• Cross selling

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Product Leadership

• New, state of the art products or services

• Risk takers

• Meet volatile customer needs

• Fast concept-to- counter

• Never satisfied - obsolete own and competitors' products

• Learning organization

Alignment & Consistency: Disciplines, Priorities, and KPIs

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Sample KPIs for Each Discipline

Operational Excellence

• Price• Selection• Convenience• Zero Defects• Growth

Operational Excellence

• Price• Selection• Convenience• Zero Defects• Growth

Customer Intimacy

• Customer Knowledge

• Solutions Offered• Penetration• Customer Data• Customer-success

focus

Customer Intimacy

• Customer Knowledge

• Solutions Offered• Penetration• Customer Data• Customer-success

focus

Product Leadership

• Marketing• Functionality• # of Successes• # of Failures• Learn from key

users• Interdisciplinary

teams• Pipeline

Product Leadership

• Marketing• Functionality• # of Successes• # of Failures• Learn from key

users• Interdisciplinary

teams• Pipeline

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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)

Alignment & Consistency: Market Disciplines

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Operational Excellence(low cost producer)

Product Leadership(best product)

Customer Intimacy(best total solution)

Alignment & Consistency

HP well-balanced portfolio, mass customization

Acer super lean cost structure, aggressive pricing

Apple powerful products, premium

pricing, limited range

Still Doing well in

2009/2010

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Other thoughts…

1. Big matters/Small Matters

2. Differentiate of Die

3. Define “Talent”

4. No “Jerk” rule

5. Flat Structure?

6. The Jerk Boss

7. All aspects

8. Hire Strict

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Don’t forget…

“The business of business is Business,

not Performance Management”

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QUESTIONS, ANSWERS, COMMENTS

forum

Thank You.

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