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

THE ROLE OF PEOPLE MANAGEMENT, PERFORMANCE AND INCENTIVES IN MORE EFFECTIVE LAB SAFETY AND SECURITYCase Study, Concepts and Debatable Ideas

Kenny OngCNI Holdings Berhad

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

http://www.mycni.com.my/

http://www.oobey.com/

Intro: CNI

1. 19 years old

2. Core Business: MLM

3. Others: Contract Manufacturing, Export/Trading, eCommerce

4. Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan

5. Staff force: ± 500

6. Distributors: 250,000

7. Products: Consumer Goods and Services




1. The role of proper people management in ensuring Lab Safety

and Security




Alignment: 4-Wheels Model

Philosophies

Corporate

ObjectivePerformance Objectives

StructureResources

Leadership

Person

Alignment: Why is it important?

• Mamak stall


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


Alignment: Framework

• Equal / Fair• Happy / Productive • Performance vs Potential • Retention / Engagement

Philosophies


Alignment: Framework

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

Structure


Strategy: Framework

• Tools• Physical facilities• Peer support• Information• T&D Programs• Mentors• Guides• ICT• OJT

Resources


Strategy: Framework

• Role modeling• Vision/Mission/Philosophy• Leadership Style• Delegation & Empowerment• C&B, Promotions• Sense of Urgency• Speak regularly about Performance

Leadership


Strategy: Framework

• Recognition• Recruitment• Training• Profit sharing• Values• Motivation• Self Efficacy• Awareness• Useful Competencies• Career aspirations• Attribution (control)

Person


Alignment: 4-Wheels Model

Philosophies

Corporate


StructureResources

Leadership

Person


2. The ‘People’ Problem In Lab Security And How To Deal With It




The ‘People’ Problem

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%)


Understanding Yourself and Others - Personalities

Closed Open

People

Task

Perfect: Melancholy Powerful: Choleric

Popular: SanguinePeaceful: Phlegmatic




http://upload.wikimedia.org/wikipedia/commons/4/41/Four_temperament_b.PNG




Understanding Yourself and Others - Motives

Power (nPow)

Achievement(nAch)

Affiliative(nAff)




• Beating a Dead Horse




Most Common Desperate Performance Improvement methods

1. Send for more Training

2. Enforce more Incentives (positive/negative)




Mager and Pipe

• Analyzing Performance Discrepancies




3. Enhancing Lab Security by Proper Performance Management of Lab

Personnel




As an Appraisee

As an Appraisor

Complaints about Performance Appraisals

Mgmt/HR




As an Appraisee


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




As an Appraiser


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




Complaints about Performance Appraisals - Summary

1. Process problem

2. Form problem

3. People problem




What is Performance Appraisal used for?

Reward?

Discipline?

Development?

Motivation?

Promotion?

Monitor?




Performance Management

Performance Appraisal

Performance Development

Performance Measurement

Common terms and definitions




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




What is Performance Appraisal used for?

Reward?

Discipline?

Development?

Motivation?

Promotion?

Monitor?




Behavior-based

Knowledge/Skill based

Results-based

Trait-based

Which system should we use?

Managing Performance = Managing Expectations

What’s YOUR expectation?

Activity based




Why BSC?

• Reason 1: Balanced

• Reason 2: Cause-and-Effect




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?

BSC: Balanced & Cause-and-Effect




Performance Management for Change

o Grievance levelo Absenteeismo Discipline issueo Poor work ethics

Deg

ree

of

Cla

rity

of

Job

Res

ult

sV

isio

n L

ed

Pe

rfo

rma

nc

e d

rive

n

High

Low HighLevel of Trust & Commitment (Between Subordinate & Boss)

UNCLEAR

Discuss & Agree on Account

Objectives & Key Measures

Standards for Perform

ance

Provide Coaching & Counselling

RESULTS

DRIVEN

High Level of employee

empowerment

High Employee Performance

High Employee Satisfaction

High Employee Involvement

Challenging Working

Environment

Optimum HRM Cost Structure

Review Perform

ance & Results

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

MBO Standards

A Excellent

B Good

C Average

D Poor

E Useless




MBO Standards

A Excellent

B Good

C Average Good

D Poor

E Useless




MBO Standards

A Excellent Excellent

B Good Very Good

C Average Good

D Poor Not Good

E Useless Commit Suicide




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




MBO Target Setting - Objectives and Measures

SMART Targets• Specific (definite objective and purpose to be

achieved)• Measurable (by definite observation and a certain time

one should be able to tell whether or not it is attained)• Achievable (Must be within reach of the employees,

e.g. to meet stated deadlines, neither too high nor too low)

• Rewarding (Rewarding means it must be satisfying to you, no one else)

• Time phased (per quarter, per year. By end of fiscal year, by 15th of November)




MBO Target Setting - Objectives and Measures

Quality How well the result is produced / performed

Errors and Appearance

Quantity How much / many of the results are produced or performed

Cost At what expense the result is produced / performed

Timeliness When is the result to be produced / performed




Lagging and Leading KPIs

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




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




Competency Target Setting

1. Initiative

2. Teamwork

3. Problem Solving

4. Leadership

5. Integrity

What’s the problem here?




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




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.




4. Designing Incentive Schemes That Encourages Lab

Safety




Incentive Problems

Problem with Incentives in managing performance:• Most people are confused or unsure about

compensation tools• Some people misuse compensation tools




What to Pay?

• Pay for Service

• Pay for Job

• Pay for Performance

• Pay for Competency




Performance and Incentives

1. Internal Equity1. Internal Job Rates

2. Performance differentials

2. External Competitiveness1. External Job Rates - Benchmarking

2. Demand & Supply




What’s the Difference?

• Increment

• Bonus

• Promotion




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




Compa Ratio Table

< 0.7 ≥0.7 - ≤0.9

>0.9 - <1.1

≥1.1 - ≤1.3

> 1.3

5

4

3

2

1




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




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




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




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




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




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?,




Curse of the Bell Curve

‘A’ Staff

‘B’ Staff

‘D’ Staff

‘E’ Staff

‘C’ Staff


http://upload.wikimedia.org/wikipedia/commons/8/8c/Standard_deviation_diagram.svg

Possible TEAM-type KPIs and incentives

Team Type Possible Incentive Type

Functional •Recognition for exceptional success (usually not in cash)•Individual role considered in normal merit increase process

Process •Team competencies recognised in pay for proficiency approach•Gainsharing or operational progress incentives

Project/ Time-based

•Recognition for exceptional individual contributions in spot wards or salary increases•Project / programme Phantom Stock or Profit Sharing

Network/ Partnerships

•Recognition for exceptional individual or team successes in spot awards or share increases•Venture profit sharing


Team Incentive Models

1. Fixed Salary Proportion (Fixed Personal, Variable Team)

Performance Incentive = Fixed Quantum + (Balance Sum In Bonus Pool ÷ Headcount)



2. Two-tier Multiplier (Variable Personal, Variable Team)

Performance Incentive = Personal Target Achievement + (Personal Target Achievement x Team Performance Multiplier)



3. Team Ratio Plan (Variable Personal, Fixed Team)

Performance Incentive = Team Ratio x Personal Target Multiplier


5. Using The Right Management And Leadership

Methods

Supervising Lab Personnel In Order To Ensure Lab Security




Coaching & Counseling

Month 1

Performance Planning

Month 12

Performance Appraisal

Month 2-11

?




Removing Obstacles for Improved Performance

Philosophies

Corporate


StructureResources

Leadership

Person




Situational Management


Directive Behavior

Sup

port

ive

Beh

avio

r

Low High

High

D1D2D3D4

ConsultingParticipating

Delegating Telling



PASSE

Praise and encourage

Ask questions

allow the person to Save Face

use SMART goals

Encourage small improvements

Performance Evaluation Session: Communication




Managing People performance: A Summary




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




The ‘People’ Problem

Philosophies

Corporate


StructureResources

Leadership

Person




Thank You.

soft copy of slides: www.totallyunrelatedrandomanddebatable.

blogspot.com

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

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