creating performance based culture trough performance management systems

CREATING A PERFORMANCE-BASED
CULTURE
SESSION 1: THROUGH PROPER
PERFORMANCE MANAGEMENT
SYSTEMS
CNI’s Journey, Mistakes, and Lessons Learned
Kenny Ong
CNI Holdings Berhad


Intro: CNI
1. 18 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


Why we hate Performance Appraisals


Complaints about
Performance Appraisals
As an
Appraisee

As an

Appraisor

Mgmt/HR


Complaints about
Performance Appraisals
As an Appraisee

•
•
•
•
•
•
•
•
•

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

Complaints about
Performance Appraisals
As an Appraiser

•
•
•
•
•
•
•
•
•

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


Complaints about
Performance Appraisals
Mgmt/HR

•

•
•
•
•
•
•
•
•

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


Complaints about Performance
Appraisals - Summary

1. Process problem
2. Form problem
3. People problem


What is Performance
Appraisal used for?

Monitor?
Reward?
Discipline?
Development?
Motivation?
Promotion?


Common terms and
definitions
Performance Management
Performance Appraisal
Performance Development
Performance Measurement


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


Summary… What went
Wrong?
1. Wrong Business Model – blame PM Systems.

Having a good PM System cannot correct a
bad business model
2. Focusing on the Process (Best Practices),
instead of the Business (Customization)
3. Good strategy, Bad Implementation, No
Linkage
4. No Alignment – PMS is treated a single,
separate process
5. System Weaknesses - Process, Form, People


1. Get the right Business Model first


Summary… What went
Wrong?
1. Wrong Business Model – blame PMS.
Having a good PMS cannot correct a bad
business model
2. Focusing on the Process (Best Practices),
instead of the Business (Customization)
3. Good strategy, Bad Implementation, No
Linkage
4. No Alignment – PMS is treated a single,
separate process
5. System Weaknesses - Process, Form, People


1. Wrong Business Model

• How to fail without trying


The Roadmap to Failure
Fred Wiersema and Mike Treacy

The Moment of
Truth

Performance

Downpresure of
Unclear Strategy

X
ctic
a
T
c
o
h
Ad

s

Today’s
performance
Doom
Projections

Clear Sailing

Denial & Defense

Performance
Freefall

Tomorrow’s
actual
performance

Overdue Failure
Time


Denial and Defense
• “It’s not really good value our competitor is
offering, because it doesn’t include a lot of
our features.” - ABC vs Air Asia
• “It’s good value but not in our preferred
customer market.” - ABC vs Toyota
• “Sure they’re hurting us, but with their unfair
advantage, what can we do?” – ABC vs MILO
• “The rules we are playing by have always
worked before” – AMEX vs VISA


The Roadmap to Failure
Fred Wiersema and Mike Treacy
The Moment of

Truth

Performance

Downpresure of
Unclear Strategy

X
ctic
a
T
c
o
h
Ad

s

Today’s
performance
Doom
Projections

Clear Sailing

Denial & Defense

Performance
Freefall

Tomorrow’s
actual
performance

Overdue Failure
Time


Ad Hoc Tactics
• Selectively hold discounts to hold business that has
started to go elsewhere
• Introduce new promotions, terms, conditions, and offers to
confuse and cloud the market
• Beef up customer service by adding people to fix messups and quicken delayed shipments
• Delay capital investments and adjust accounting methods
to portray quarterly financial results more favorably
• Introduce “new and improved” products that are new in
form, but not in substantive ways that are of consequence
to purchasers
• Introduce Balanced Scorecards and Performance
Management Systems


The Roadmap to Failure
Fred Wiersema and Mike Treacy

The Moment of
Truth

Performance

Downpresure of
Unclear Strategy

X
ctic
a
T
c
o
h
Ad

s

Today’s
performance
Doom
Projections

Clear Sailing

Denial & Defense

Performance
Freefall

Tomorrow’s
actual
performance

Overdue Failure
Time


“What is the moral
of the story?”


2. Focusing on the Business
Strategy and Intent


Summary… What went
Wrong?
1. Wrong Business Model – blame PMS. Having
a good PMS cannot correct a bad business
model
2. Focusing on the Process (Best Practices),
instead of the Business (Customization)
3. Good strategy, Bad Implementation, No
Linkage
4. No Alignment – PMS is treated a single,
separate process
5. System Weaknesses - Process, Form, People


“…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


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?