MICG NATIONAL HRM, LABOUR LAW UPDATES AND COMPLIANCE SEMINAR FOR THE PUBLIC AND PRIVATE SECTOR 2012
Effective Strategies on How to Identify, Develop and Sustain High Performance Human Capital to Drive Business Results
• Key characteristics and capabilities of high-performing organizations
• Steps to foster development of high-performing organisations
• Analysing organisational structures and climates in order to maximise the satisfaction and effectiveness of individuals and work groups
• Cultivating loyalty by aligning employees’ career growth with company goal
• Evaluate the links between systems of high performance work practices and strategic business planning
• How can HR practices add value to business performance?
MICG - Effective Strategies on How to Identify, Develop and Sustain High Performance Human Capital to Drive Business Results
1. EFFECTIVE STRATEGIES ON HOW TO
IDENTIFY, DEVELOP AND SUSTAIN HIGH
PERFORMANCE HUMAN CAPITAL TO
DRIVE BUSINESS
Case Study, Concepts and Debatable Ideas
Kenny Ong
Takaful IKHLAS Sdn Bhd
2. TAKAFUL IKHLAS CORPORATE PROFILE
• Shareholder : MNRB Holdings Berhad (100%)
• Established Date : 18 September 2002
• Operational since : 2 July 2003
• Takaful Model : Al-Wakalah
• Business Portfolio : General and Family Takaful
• Number Products : More than 90
• Number of Participants : More than 1,800,000
• Number of Agents : More than 6,000
• Number of Staff : 490
• Regional Offices : 11
• Paid Up Capital : RM295 million
3. IKHLAS Medical/Health (EB/GHS)
Solutions
CLIENT PANEL CLINICS
•Processing Bills
•Payment
EASY ACCESS TO CARE •Appointment and
•Panel of 2000 clinics removal
nationwide •Policies & Procedures
•All major hospitals recognises •Tracking Entitlements
our GLs TISB •Issues & Complaints
•Appointment & management of •Overcharging & Abuse
•MC Verification
medical panel
Panel GP Clinics
1 CLASS SERVICE
st
•Benefit & Procedure briefing Specialist
Referral
& Hospitals
•Help Desk
•Tri-annual Cost & Utilization SPECIALIST & HOSPITALS
Employees •Issuance of GL
Report
•Hosp. Bank
•Benchmarking EMPLOYEES & DEPENDANT Guarantee/Deposit
•Analysis & Recommendations • Claims Submission •Appointment and removal
• Tracking of eligibility •Tracking Entitlements
• Enquiries & Complaints •Processing Bills
• Employee benefit materials •Payment
PEACE OF MIND
• Unions •Hospital Reports
•24/7 LOG Issuance • Abuse of benefits
•Cashless Admission
•Comments
4. The New World…
13th April 2009
•Two Domino’s employees
•YouTube
•Apology from Domino’s after
48 hours
•1 million hits
•Twitter: questions on silence
•LinkedIn: suggestions by users
in forum
BusinessWeek, May 4, 2009
5. Question 1: Human Capital - Who?
Excellent
Very Good
Average
Not Good
Commit Suicide
7. Intro
Ultimate Objective of Marketing:
“Get more people, to buy more
things, more frequently, at higher
prices.”
“Retention and Loyalty are useless if
No Conversion is happening.”
Sergio Zyman
8. Intro
“Retention and Loyalty are useless if
No Conversion is happening.”
“Retention and Loyalty are useless if
No Performance is happening.”
9. Intro
Loyalty is misleading…
• Heavy Consumption ≠ Loyalty
• Loyalty ≠ Heavy Consumption
• Good Performance ≠ Retention
• Retention ≠ Good Performance
10. Principles and Objectives
Principles Company’s Needs
1. Succession Planning of Key Leaders –
Founding Directors (perpetual business theory)
2. Retention of Key Staff – especially younger
ones
3. Transform into a Performance-based
organization
11. Principles and Objectives
Principles HR Philosophy
1. Equal / Fair
2. Happy / Productive
3. Hire Low, Train High
4. Performance vs Potential
5. Retention / Engagement
18. The McPlaybook*
Make it easy to eat Make it easy to prepare
• 50% drive-thru • High Turnover
• Meals held in one • Tasks simple to learn
hand & repeat
Make it quick Make what customers want
• “Fast Food” • Prowls market for new
• Tests new products products
for Cooking Times • Monitored field tests
*Adapted from: Businessweek , Februrary 5th 2007
19. What is the Business
Model?
•Google
•Tata Nano USP
Market
Profit Model
Discipline
21. Market Discipline
Product "They are the most innovative" •LV
Leadership "Constantly renewing and creative"
"Always on the leading edge"
•Air Asia Operational
•Ramly Customer
Intimacy
Excellence "Exactly what I need"
"A great deal!"
Customized products
Excellent/attractive price
Personalized communications
Minimal acquisition cost and "They're very responsive"
hassle
Preferential service and
Lowest overall cost of flexibility
ownership Recommends what I need
"A no-hassles firm" "I'm very loyal to them"
Convenience and speed Helps us to be a success
Reliable product and
service
22. Alignment & Consistency:
Market Disciplines
Product Leadership
(best product)
Operational Excellence Customer Intimacy
(low cost producer) (best total solution)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
23. Strategy: Market Disciplines
Product Leadership
(best product)
Operational Excellence Customer Intimacy
(low cost producer) (best total solution)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
24. Strategy: Market Disciplines
Product Leadership
Apple powerful (best product)
products, premium
pricing, limited range
Still Doing
well in
2009-201
Acer super lean 1 HP well-balanced
cost structure, portfolio, mass
aggressive pricing customization
Operational Excellence Customer Intimacy
(low cost producer) (best total solution)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
25. Strategy: Market Disciplines
Operational Product Leadership Customer Intimacy
Excellence
• New, state of the • Management by
• Competitive price art products or Fact
• services
Error free, • Easy to do
reliable • Risk takers business with
• Fast (on • Meet volatile • Have it your way
demand) customer needs (customization)
• Simple • Fast concept-to- • Market segments
• counter of one
Responsive
• • Never satisfied - • Proactive,
Consistent
obsolete own and flexible
information for
competitors'
all • Relationship and
products
• consultative
Transactional
• Learning selling
• 'Once and Done' organization
• Cross selling
26. Alignment & Consistency:
Market Disciplines
• Operational Excellence
• Move know-how from top performing
units to others
• Benchmark against best in class
• Ensure operations training for all
employees
• Use disciplines like TQM for continuous
learning to reduce costs and improve
quality
27. Alignment & Consistency:
Market Disciplines
• Customer Intimacy
• Capture knowledge about customers
• Understand customer needs
• Empower front line employees
• Ensure that everyone knows the
customer
• Make company knowledge available to
customers
28. Alignment & Consistency:
Market Disciplines
• Product Leadership
• Reduce time to market
• Commercialize new products fast
• Ensure that ideas flow
• Reuse what other parts of the company
have already learned
• Ensure there are multiple sources of
funding
31. Business Model vs. Talent &
Performance Management
Organization, jobs,
skills
Culture, values,
norms Operationa Product Customer
l Leadership Intimacy
Information and
systems Excellenc
e
Management
systems
32. Business Model vs. Talent &
Performance Management
Operational Excellence
Organization, • Central authority, low level of empowerment
jobs, skills • High skills at the core of the organization
• Disciplined Teamwork
Culture, values,
norms • Process, product- driven
• Conformance, 'one size fits all' mindset
Information and • Integrated, low cost transaction systems
systems • The system is the process
Management • Command and control
systems • Quality management
33. Business Model vs. Talent &
Performance Management
Product Leadership
Organization, jobs,•Ad hoc, organic and cellular
skills •High skills abound in loose-knit structures
Culture, values, •Concept, future-driven
norms •Experimentation and 'out of the box' mindset
Information and
•Person-to-person communications systems
systems •Technologies enabling cooperation
Management •Rewarding individuals' innovative capacity
systems •Risk and exposure management
•Product Life Cycle profitability
34. Business Model vs. Talent &
Performance Management
Customer Intimacy
Organization, jobs,• Empowerment close to point of customer
skills contact
• High skills in the field and front-line
Culture, values,
norms • Customer-driven
• Variation and 'have it your way' mindset
Information and
systems • Strong customer databases, linking internal
and external information
• Strong analytical tools
Management
systems • Customer equity measures like life time value
• Satisfaction and share management
• Focus on ‘Share of Wallet’
35. Alignment: 4-Wheels Model
Business
Model
Person
Structure
Strategic
Planning
Culture
Leadership
Resources
43. Background: The Four
Desperates
1. Desperate 2. Desperate
Competition Consumer
3. Desperate 4. Desperate
Achievers Changes
44. Targeting: Identify and
Attract
• Who are your Talents?
: A Talent for others does not mean a
Talent for you
45. Example: ABC’s Talent Profile
• Unwanted by big MNCs
• Small companies
• Boring Environment
• No Growth/Learning
• No MBA
• Passion, Values, IQ (streetsmart)
• Appreciate Chaos
• Multitask
• Passion to Learn
46. Targeting: Identify and Attract
• Identify POTENTIAL
2 3 4 5
PERFORMANCE
Group I
5
(Talent Pool)
4
3
2
47. Targeting: Identify and Attract
• Identify POTENTIAL
2 3 4 5
PERFORMANCE
Group II Group I
5
( Potential) (Talent Pool)
4
Group IV Group III
3
(Counseling) ( Performance)
2
49. MBO Standards
A Excellent
B Good
C Average Good
D Poor
E Useless
50. MBO Standards
A Excellent Excellent
B Good Very Good
C Average Good
D Poor Not Good
E Useless Commit Suicide
51. 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 Unacceptable performance
Suicide
52. Top Performers and the ‘No
Contribution’ Problem
Historical, Outcome, Results, 1st
Lagging Level, Usually Financial or
tangible, Quarterly and Annually
Current, Indicators, Drivers, 2nd
Leading Level onwards, usually non-
financial or intangible, Weekly,
Monthly and Quarterly
53. Top Performers and the ‘No
Contribution’ Problem
Customer Retention % Lagging, 1st Level
Customer Satisfaction Leading, 2nd Level
Index
On time delivery
Time to market for new products
Leading, 3rd Level
TNA % onwards
Defect levels, warranty claims
54. Linking Business Model,
Strategy and Building Blocks
Financial
Revenue Growth Productivity Market Value
Customers
Base Share Gain Positioning Adjacent New
Retention Market Business
Internal
Process
Operational Product Customer Investment
Excellence Leadership Intimacy Strategy
Learning & Growth
Competencies Information Motivation,
Systems empowerment,
alignment
56. Before we continue …
Which comes first?
• Strategies -> KPI?
• KPI -> Strategies?
•already know our priorities, aware of all
strategy options available
•creating something UNIQUE, INNOVATIVE
and DISRUPTIVE e.g. Air Asia
•conducting a business Turnaround e.g. MAS
57. Before we continue …
Which comes first?
• Strategies -> KPI?
• KPI -> Strategies?
•want to find out possible strategies,
•determine our priorities first thru selection of
important KPIs;
•growing through ‘normal’ business, not a
Turnaround.
58. Competency Target Setting
1. Initiative
2. Teamwork
3. Problem Solving
4. Leadership
5. Integrity
What’s the problem here?
59. Competency Target Setting
Initiative
2. Minimize problems quickly without needing to
be asked
3. Seeks personal growth and professional self-
development
4. Doing more than is required/expected in a job
5. Seeks new and improved solutions and
approaches to completing assignments
6. Looks for opportunities to help others and team
60. 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.
69. Loyalty 2: Swing
Loyalty = Best alternative at the current
moment until I find another alternative
Solution Strategy: Improve your
Talent Management Plan, Try Your
Best, or Live with It
70. Loyalty 2: Swing
Swing Talents are “loyal” because:
• Individual Relationships
• Convenience (at that point in time)
• Contractually tied-up
• Direct Incentives*
• No better alternative
• Subordinates
• No known alternative
• CV friendly
71. Post-Recession
Retention
Experience Swing Ex
Oppose
Post-Recession
72. Swing Loyalty: Try Your
Best…
• Over Promote 1. “Position” the
• Loans competition
• Spot Bonuses 2. Sell the Dream
• Block recruiters 3. Give them a Best
• Friend
The Spouse
• Toys 4. Internal Trainer
• Glorified Titles
• Forced Ambassador
78. For Starting Up…
1. Get the Business Model right
2. Link HRM to Strategy (e.g. BSC)
3. Clarify the HRM Philosophy
4. Strengthen Performance Management System
5. Redirect Funds ($$)
6. Design simple processes
7. Develop and Reward focused on Talent groups
8. Communicate throughout
79. 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
80. 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
83. Thank You.
soft copy of slides:
http://totallyunrelatedrandomanddebatable.
blogspot.com/
Hinweis der Redaktion
CNI is very concerned about the subjectivity of the word ‘Customer Loyalty’… with the same concerns that Sergio Zyman has. Loyalty has to Equal business results and Changes in the Life of others.
Now let’s look at it from a HR perspective...
Just a thought… are we in business for loyalty or for consumption? Actually = BOTH are important and must be in balance. But today’s conference is on one side of the Equation and we must be mindful of that. We are still in the topic of Philosophy. So… are we in business for Retention or Performance?
Example of successful customer loyalty strategy focusing on Operational Excellence and Product Leadership while maintaining market standard on Customer Service without indulging in it
The Business Model is made up of three components – Unique Selling Proposition, Profit Model and Market Discispline Each business is unique depending on how the Business Model is configured Each organization’s PMS has to follow the Business Model If your Business Model is wrong (or inferior), a better PMS cannot help you. Change your Business Model first Example: Google vs Yahoo USP – Simplicity, Search-focused, Free! Profit Model – Ad revenue MKt Discipline – Operational Excellence Example: Tata Nano vs. GM (Proton vs. Kia, Hyundai, Cherry) USP – Cheap (below USD2,500), no-frills Profit Model – Motorcycle (as opposed to Automobile manufacturing model)
The Profit Model is the total interaction between fives components: revenue (how to get money), cost, margin, cash flow, and asset utilization & velocity All five components must be aligned, otherwise a business cannot survive financially A PMS must ensure that all five KPIs are accounted for and have leading KPIs attached to each of the five Example: Google, Tata Nano Local example: Courts Mammoth, Jusco (Aeon)
How does the Customer define “Great Experience”? - It depends on their own perceptions. Problem is…this differs depending on the Customer! If you are very good in something that the Customer does not value, it will not improve the Experience.
To Excel – Must be a Leader in ONE of the disciplines but the other two must be at least at industry standard
A leading business organization can only afford to focus on ONE, at the most TWO of the disciplines If you try to accomplish all three at once, you will end up with: an average business confused employees mixed up product lines too many KPIs wasted funds To Excel – Must be a Leader in ONE of the disciplines but the other two must be at least at industry standard
Quick slide to show that the Market Discipline approach is practical and proven
Each Market Discipline requires different operational emphasis This means that each Market Discipline requires a different Performance Management System in order to achieve results Trying to accomplish or benchmark all three (even two) will confuse and dilute your PMS effectiveness
Many people go around setting up PMS without clear understanding of Business Directions… (sometimes its hidden from lower management & consultants)… End up HR and FAC getting beat up by Management by now implementing PMS ‘properly’ and everyone over-zealous on KPIs and BSC and processes, without anyone looking at the business. Sometimes the Business itself is unclear, in this case, do not put in a PMS – it will worsen the situation.
The next four slides explain how an organization’s Business Model should affect the definition of ‘Talent’ , and the role of PMS in differentiating and highlighting them
Different Talents are attracted and motivated by different cultures, systems and norms Your Business Model (executed through your PMS) will decide which Talents you attract and keep The right Talent will help to execute the right Business Model
Resources happen to be ONE part of the alignment process in an organization. Resource allocation will very much depend on the other variables illustrated here. Resources must follow the Business Model: USP, Profit Model, Market Discipline
CNI:
Resources happen to be ONE part of the alignment process in an organization. Resource allocation will very much depend on the other variables illustrated here.
Note: Refer to Handout 1: Analysis of Retention
B. Adopting creative approaches and models to attract and identify right talents There are many definitions of Talent. Don’t listen blindly to Consultants nor simply trust books nor MNC practices.
Performance The ability of a person to meet current expectations Key Words: Results, Targets, KPIs, Achievement, Expectations, Training, Job Concentrates on the Past i.e. what the person has done Potential The capacity of a person to meet future expectations Key Words: Competencies, Learning, Fit, Adversity, Failure rate, Development, Career Concentrates of the Future
Group 1: High Potential, High Performance (Talent) Staff this category will automatically be placed in the company’s Succession Plans. Be the first priority to be considered for any promotions or upgrading exercises. Career Acceleration + Specialist Career Paths. Group 2: Average Potential, High Performance (Leadership Issues) Leadership, motivational and cultural development would be given to these staff while they perform in their current positions. Group 3: High Potential, Average Performance (Potential) Should not be given career advancement unless performance improves. Good targets for transfers or job rotations to departments that require urgent manpower. Group 4: Average Potential, Low Performance (Issues) Staff in this group should be monitored closely by HR. They should be eventually moved out of their current work function, department or even the company entirely.
Example: What do you mean by Good? A, B, or C? Achieve 5 tasks, what is your rating? You mean if I achieve all, I only get AVERAGE? You must be crazy
This looks better for the ‘achieved all’ category But… the ratings still look ambiguous, right?
This looks better for the ‘achieved all’ category But… the ratings still look ambiguous, right?
This looks better right? But… also still not good enough, right? Refer to Handout 4: 1. Priority, Targets and Standards
Strategies -> KPI? : If we already know our priorities and are aware of al the strategy options available; we are creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia or… conducting a business Turnaround e.g. MAS KPI -> Strategies? : If we want to find out possible strategies, and determine our priorities first thru selection of important KPIs; when we are gorwing through ‘normal’ business, not a Turnaround.
Strategies -> KPI? : If we already know our priorities and are aware of al the strategy options available; we are creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia or… conducting a business Turnaround e.g. MAS KPI -> Strategies? : If we want to find out possible strategies, and determine our priorities first thru selection of important KPIs; when we are gorwing through ‘normal’ business, not a Turnaround.
Strategies -> KPI? : If we already know our priorities and are aware of al the strategy options available; we are creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia or… conducting a business Turnaround e.g. MAS KPI -> Strategies? : If we want to find out possible strategies, and determine our priorities first thru selection of important KPIs; when we are gorwing through ‘normal’ business, not a Turnaround.
Example: Define ‘Initiative’ How do rate Initiative on a 10-pt scale?
Example: Define ‘Initiative’ How do rate Initiative on a 10-pt scale? Exercise: Determine 1 core Competency/Values you want to evaluate Create a list of 5 ‘observable’ behaviors of that competency
To CNI, there are two definitions and therefore two types of Employee Retention or employees who stay with you, both whom we have to treat differently.
*Strategy means concentrating all energy and all aspects of the organization for the purpose of Talent Management. In fact, it’s a mistake to call it “Talent Management” program. Very un-business like So… let’s call it “ Business Continuity Plan ” or “ Business Opportunity Planning ”?
Swing happens because of either: You cannot meet the basic expectations, or You are simply not the permanent choice **For the purpose of this Seminar, I am only taking number 1: Providing the Experience to Meet Expectations
*Be very very careful about using Direct Incentives:
To CNI, there are two definitions and therefore two types of Employee Retention or employees who stay with you, both whom we have to treat differently.
Red Underlined: Related to either Compensation or Benefits