Improving KPI evaluation system a study of donga money transfer company

Figure 3: KPI Results of Customer Service Department in 2019 Figure 4: Potential Cause Figure 5: Cause – Effect map Figure 6: Alternative Solutions LIST OF CHARTS Chart 1: The propor

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Nguyen Hoang Cuong

IMPROVING KPI EVALUATION

SYSTEM: A STUDY OF DONGA

MONEY TRANSFER COMPANY

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – 2020

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-Nguyen Hoang Cuong

IMPROVING KPI EVALUATION

SYSTEM: A STUDY OF DONGA

MONEY TRANSFER COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Asscoc.Prof Tran Ha Minh Quan

Ho Chi Minh City – 2020

TABLE OF CONTENTS

LIST OF ABBREAVIATION 4

LIST OF FIGURES 4

LIST OF CHARTS 5

LIST OF TABLES 5

I ACKNOWLEDGEMENT 6

II EXECUTIVE SUMMARY 6

III INTRODUCTION 7

3.1 COMPANY BACKGROUND 7

3.2 INDUSTRY OVERVIEW 8

3.2.1 Remittance market overall 8

3.2.2 Competitor landscape 9

IV PROBLEM CONTEXT 10

4.1 BUSINESS CONTEXT 10

4.2 DONGA MONEY TRANSFER ORGANIZATIONAL STRUCTURE 12

4.2.1 Company organizational chart 12

4.3 SYMPTOMS 13

4.3.1 SYMPTOM 01: Business performance of DongA Money Transfer does not reach the target in 2019: 13

4.3.2 SYMPTOM 02: Low employee performance of Customer Service Department in 2019 15

V PROBLEM IDENTIFICATION 18

5.1 PROBLEM 01: KPI Evaluation system is unsuitable 19

5.2 PROBLEM 02: Lack of motivation 22

5.3 PROBLEM 03: Low employee satisfaction 23

5.4 PROBLEM 04: Personal issues 24

5.5 Problem validation 25

VI CAUSES VALIDATION 27

6.1 CAUSE 01: KPI without SMART Goals 28

6.1.1 Sub-cause 01: Unrealistic targets (R) 28

6.1.2 Sub-cause 02: Lack of detailed quantitative operation criteria (S) 29

6.1.3 Sub-cause 03: Hard to Achievable with Financial Indicators (A) 30

6.2 CAUSE 02: Lack of Learning and Development Indicators 30

6.2.1 Sub-cause 01: Less Training courses for employees 31

6.2.2 Sub-cause 02: Lack Employee Development Programs 31

6.3 CAUSE 03: Lack of recognition with high results 32

6.4 Causes Validation 33

6.5 Cause – Effect map 34

VII ALTERNATIVE SOLUTIONS 34

7.1 ALTERNATIVE SOLUTION 01: Building detailed operation criteria for Customer Service Department 35

7.2 ALTERNATIVE SOLUTION 02: Building suitable financial indicators 37

7.3 ALTERNATIVE SOLUTION 03: Employees Reward Program 38

7.4 Action plan 40

VIII CONCLUSION 42

IX SUPPORTING INFORMATION 44

APPENDIX A – INTERVIEW GUIDE 44

APPENDIX B – INTERVIEW SCRIPT 44

Interview 01: Problem identification 44

References 49

LIST OF ABBREAVIATION

LIST OF FIGURES

Figure 1: Organization chart of DongA Money Transfer Company

Figure 2: KPI Results of DongA Money Transfer Company in 2019

Figure 3: KPI Results of Customer Service Department in 2019

Figure 4: Potential Cause

Figure 5: Cause – Effect map

Figure 6: Alternative Solutions

LIST OF CHARTS

Chart 1: The proportion of sales of DongA Money Transfer’s services from 2017 to 2019

LIST OF TABLES

Table 1: Results of implementing targets of DongA Money Transfer Company

Table 2: Total revenue results of DongA Money Transfer Company in 2019

Table 3: Problem identification – Interviewees list

Table 4: Solution 01 – Evaluation

Table 5: Solution 01 – Cost structure

Table 6: Solution 02 – Evaluation

Table 7: Solution 03 – Evaluation

Table 8: Solution 03 – Cost structure

Table 9: Roll – out plan of building detailed operation criteria for Customer Service

Department

Table 10: Interview transcript for justification on Problem identification

Table 11: Interview transcript for Cause validation

I ACKNOWLEDGEMENT

Firstly, I would like to send my appreciation to Asscoc.Prof Tran Ha Minh Quan who has always supported me with helpful advice, clear instructions and provided in-depth knowledge for me to complete this thesis

In addition, I would like to express my sincere thanks to managers and employees of DongA Money Transfer Company who are ready to help, advise and provide the necessary support during the process of conducting research for my thesis

II EXECUTIVE SUMMARY

Remittances are an important source of capital for the economy to develop and stabilize the foreign exchange market In Vietnam, remittances are sent to support families, health care, education, business investments, real estate and personal shopping

DongA Money Transfer Company, under DongA Bank, has had 18 successful years operating in the field of Remittance in Vietnam However, at present, the employee performance of the Company is at a low level, affecting business performance

According to Bhatti et al (1), employee performance management has an important role in creating a competitive advantage compared to competitors As a result, organization checks whether it is complying with the orientation, plan and achieving the set goals For this purpose, employee performance measures are used to assess and monitor the organization's overall business activities In addition, they are also used to measure and compare the effectiveness of different organizations Performance assessments are comparable in departments, groups and individuals

Examining external and internal factors and internal data, the researcher identified unsuitable KPI Evaluation System as the main problem To solve these problems, Dong A Money Transfer Company needs to set up KPI SMART Goals This thesis will bring insight into the organization in a realistic, objective and accurate way The thesis aims to accurately identify symptoms, problems and causes, effectively identify feasible and practical solutions to solve problems

III INTRODUCTION

3.1 COMPANY BACKGROUND

DONGA MONEY TRANSFER COMPANY - A SUBSIDIARY OF DONGA BANK - one

of the famous remittance/ bank brand in Vietnam

Since its establishment in November 2001, DongA Money Transfer Company has always led the remittance market about the revenue, highly appreciated and trusted by both domestic and foreign customers In order to achieve such results, DongA Money Transfer has continuously invested in developing the system, applying modern technology to daily operations with payment network of over 220 locations nationwide Each employee is trained professionally

to deliver remittance to customers fast and safe

In addition to focusing on improving the quality of services, DongA Money Transfer Company also builds and implements customer care programs regularly Promotions with high value prizes are held regularly

Besides, the company has continuously expanded its cooperation with global partners to help customers transfer money from more than 180 countries and territories around the world, through 350,000 transaction locations to Vietnam through DongA Money Transfer Company

At present, the company has continuously made efforts to develop its network of overseas partners and promoted the promotion of DongA brand in potential markets The company has connected with more than 40 major partners in 170 countries, such as RIA, MoneyGram, Xpress Money, Sigue,

The company has received prestigious awards as follows: "Excellent brand providing financial services in Vietnam" by Global Banking & Finance and Finance Digest in London (2017, 2018, 2019), “Strong brands in Vietnam” by Economic Times (2018), “Excellent brand of remittance service in Vietnam” by Finance Digest in London (2019)

3.2 INDUSTRY OVERVIEW

3.2.1 Remittance market overall

According to the World Bank, in 2017 the amount of remittances transferred to Vietnam was 13.8 billion USD, up 16% compared to 2016 and surpassed Bangladesh to reach the top 10 countries with the largest amount of remittances in the world In 2018, the number of remittances sent to Vietnam reached US $ 15.9 billion, 100 times more than in 1993

In particular, according to the World Bank, Vietnam ranked 9th in the top 10 countries receiving the most remittances in the world in 2019 The amount of remittance transferred to Vietnam reached 16.68 billion USD, accounting for 6.4% of GDP

The most attractive field of remittance in recent years is production and business, accounting for 60 to 65% of the total remittance transferred to Vietnam Besides, real estate also attracted a large amount of remittances, reaching 21%

The leading remittance countries for Vietnam are the United States, Canada, Australia, Europe, Malaysia, Taiwan, Korea and Japan According to data from the Vietnam

Association of Manpower Supply (VAMAS), in 2018, more than 131,000 Vietnamese workers went to work abroad, an increase of 10.28% compared to 2017

The main sources of money transfer to Vietnam are Vietnamese labor export workers and Vietnamese living abroad living in other countries In particular, the United States accounted for 60% of remittances sent to Vietnam, the remaining 20% was from Europe, Korea, Japan and other regions

The official channels most commonly used to remit remittances to Vietnam are via commercial banks, economic organizations, customs and post offices, of which commercial banks account for 72% of remittances to Vietnam

This brings many opportunities for competition among remittance companies, demonstrating their strength to develop in the remittance industry

However, DongA Money Transfer Company still has the optimal competitive advantages, helping the market share always to the top of remittance payment in Vietnam

Firstly, with 18 years of experience in the field of remittances, DongA Money Transfer Company has cooperated with many major partners with the number of annual sales leading the market Besides, DongA Money Transfer Company also receives many valuable international awards in the remittance market, which helps to increase the reliability of partners and customers

Second, Dong A Money Transfer Company fully develops three remittance payment services for customers in Vietnam, namely home delivery, cash-backup and Bank transfer service Therefore, DongA Money Transfer Company has fully met the needs of customers when they use remittance services

Thirdly, the creativity in developing smart applications to facilitate transactions with customers has made the service more professional, fast and safe

These competitive advantages help promote the trust of partners and customers to develop DongA Money Transfer Company in such competitor landscape

IV PROBLEM CONTEXT

4.1 BUSINESS CONTEXT

DongA Money Transfer Company is a remittance company in Vietnam, head office’s location in district 3 in Ho Chi Minh City

DongA Money Transfer provides the following services:

Home Delivery Service: for the home delivery service, DongA Money Transfer Company

employees deliver the remittance to hand at the designated beneficiary’s address with the appointment time in advance

 Beneficiaries receive money safely, quickly, saving travel time

 Beneficiaries staying in the center of the provinces will receive money within 3 hours

 Beneficiaries who live in suburban or remote areas will receive money within 24 -

36 hours

 DongA Money Transfer Company’s home delivery network covers 57 provinces and cities nationwide

 Friendly, reputable home delivery staffs are always on time and enthusiastic

Cash pick-up Service: With 220 transaction pointes nationwide, beneficiary will easily and

conveniently received remittances

Bank Transfer Service: deposits will be transferred in VND directly to the recipient’s

account with DongA Bank system and inter-bank in Vietnam

Benefits of service:

 Beneficiaries can withdraw money (Vietnam dong) at more than 1,400 ATMs and over 100 counters in Banking System at Vietnam

 Enjoy all financial services, cardholder preferential policies from Dong A Bank

 Special beneficiary service policies from DongA Money Transfer Company

According to Customer Service Department’s Annual Report, the proportion of sales of the DongA Money Transfer's services from 2017 to 2019 shows that home services always account for the highest proportion from 62 to 68% of total sales This shows that, in order to develop in the coming time, Dong A Money Transfer Company needs to focus on developing into main service and bringing many profits In addition, people development is a resource to perform services with customers to bring reliability, quality and professional With the current competitive advantage of professional services, efficient and advanced technology, DongA Money Transfer has the potential to further develop in future compared to competitors

Chart 1: the proportion of sales of DongA Money Transfer's services from 2017 to 2019

4.2 DONGA MONEY TRANSFER ORGANIZATIONAL STRUCTURE

4.2.1 Company organizational chart

The organizational structure of the company is presented as below:

Figure 1 Organization chart of DongA Money Transfer Company

The organizational structure of DongA Money Transfer Company is divided into section: business and operating divisions including the head office in Ho Chi Minh City and its branches in Nghe An, Quang Binh, Thanh Hoa For Customer Service Department, the employees work at head office (Ho Chi Minh City) and DongA Bank's 43 branches nationwide

There are 336 employees in DongA Money Transfer’s total organizational structure These

336 people are divided into 6 departments and 3 branches, each department, branch plays a crucial role in the organizational process producing product outcomes

4.3 SYMPTOMS

4.3.1 SYMPTOM 01: Business performance of DongA Money Transfer does not

reach the target in 2019:

Targets Unit Plan

Actual in

2019

+/- compare with plan

1 Sales payment turnover mil USD 1,705 1,485 87.1%

2 Home delivery service

turnover

3 Foreign currency exchange mil USD 36.0 46.8 130.0%

4 Revenue before tax Billion VND 12 10.4 86.7%

Table 1: Results of implementing targets of DongA Money Transfer in 2019

According to data from Business Development Department of DongA Money Transfer, sales payment turnover only achieved 1,485 million USD that was equal 87.1% plan in 2019 Although home delivery is main service, this turnover remarkably achieved 97.4% of plan with 974 million USD Profit in 2019 was VND 10.4 billion, only reached 86.7% of the plan Foreign currency exchange is only index exceeding the plan with 46.8 million USD reaching 86.7%

Actual in

2019

+/- compare with plan

1 Home delivery service

Total revenue mil USD 1,705 1,485 87.1%

Table 2: Total revenue results of DongA Money Transfer in 2019

Ignoring to the elements of business strategy and economic situation, human resource factors and performance of employees are also evaluated as factors that contribute to the reduction of business efficiency

4.3.2 SYMPTOM 02: Low employee performance of Customer Service Department

in 2019

Figure 2: KPI Results of DongA Money Transfer Company in 2019

According to above figure, the highest number of people meet low performance belonged to Customer Service Department (15 headcount target lower than 50%, 125 headcounts reach 50% - below 70% KPI, 75 headcounts get performance from 70% - below 90% KPI, 75

headcounts get performance from 70% - below 90% KPI, 52 headcounts reach from 100%, and just only 02 headcount fulfill 100% commission in KPI)

90%-Customer Service Department includes employees who work directly with customers such as payment transactions for customers through company's services (cash at counters, home delivery and account banks), resolving inquiries and complaints from customers via call center, acting as a focal point to handle customers' transaction information with partners, supervising service quality of tellers So this is considered the most important parts in the company because it is directly contact with customers, creating the reputation and service of the company

Customer Service Department has 269 employees, accounting for more than 80% of the company's total employees This shows that the performance of Customer Service Department’ employees can affect to Company's business results

Figure 3: KPI Results of Customer Service Department in 2019

According to this figure, Home Delivery Staff and Teller have low KPI results compared to other position In which Home Delivery Staff has 14 people reaching KPI from 90% to below 100%, 107 people achieving from 50% to 70% and 15 people under 50%, especially without people reaching 100% For Teller, there are 8 people reaching result from 90% to below 100%, 22 people achieving from 50% to 70% At DongA Money Transfer Company, Home Delivery Staffs and Tellers are the main force for direct communication and dealing with customers Therefore, the performance of this team is also a measure of customer satisfaction

According to Parasuraman, Zeithaml & Berry as cited by Angelova et al (2) indicated that the profitability and customer satisfaction are closely related, the higher satisfaction will bring

the higher profits for the company Therefore, Customer Service Department’s employees have an important role to bring satisfaction when they work and communicate directly with customers With low KPI result of Customer Service Department’s employee is one of factors leading to business results not reach the target in 2019

V PROBLEM IDENTIFICATION

With the limit of time and cost of the solving problem project, this study will find the main reason of Customer Services Department’s KPI Results (focus on Home Delivery Staffs and Tellers) and suggest solutions and prove them efficient in applying into company’s problem

I conducted in-depth interviews (appendix 1) with the related employee of different groups such as: Head of Customer Services Department, HR Manager and some low performance employees It is included:

Table 3: Problem identification - Interviewees list

1 Mr Nguyen Tuong Tan Head of Customer Service Dept Customer Service

2 Ms Tran Thu Hang Customer Transactions Team leader Customer Service

3 Ms Bui Tuong Oanh Customer Care Team leader Customer Service

6 Mr Chau Quoc Dat Home Delivery Staff Customer Service

7 Ms Nguyen Dinh Ly Home Delivery Staff Customer Service

5.1 PROBLEM 01: KPI Evaluation system is unsuitable

At DongA Money Transfer Company, financial indicators in KPI evaluation system will be built based on the strategic goals and assigned by DongA Bank every year

The KPI template is built with the following key criteria: financial, operational and compliance For each major criterion, there are detailed measurement levels for each position However, Customer Service Department’s positions have not detailed quantitative criteria to evaluate similar to business division

Based on Mr Ngo Hoa Huy said that financial indicators of sales allocated to employees in

2019 increased 15% compared to 2018 though the sales results in 2018 did not reach the target

Ms Nguyen Dinh Ly shared that results of individual’s tasks: there are no detailed evaluation criteria for employees There is no additional reward offered when results exceed the target

According to Paramenter (3), a feasible KPI must ensure SMART criteria:

Specific: Indicators when elaborating need to explain three aspects: meaning, reasons for

selection and methods of measurement The clearer KPI makes it easier for employees to know what to do and how to achieve the desired job performance

Measurable: For KPIs that do not measure the performance of the work, the evaluation will

become emotional and not objective

Achievable: There are many KPIs that are measured but not feasible that will create

frustration and lack of motivation to work when employees find it hard to achieve the goal despite trying their best

Relevant: This is a measure of the balance between the ability to perform against the

resources of the business (time, personnel, money )

Timed: Defining deadlines will motivate employees to get the best work done

Besides, I also asked about the process of setting up and assigning KPIs to employees with

HR Manager Ms Le Thi Hong Nhung confirmed that the KPIs evaluation process and criteria as following:

KPI implementation steps at DongA Money Transfer

Step 01: Set up KPI of company

 KPI will be built based on the strategic goals, financial targets assigned by DongA Bank every year After receiving the company's targets from DongA Bank, BOD will require HR team to set the financial indicators in KPI evaluation

Step 02: Set up KPI for departments and individual

 HR team with managers will set goals and KPIs of department and individual associated with the description of functions, tasks of the department, job description

of each position on the basis of goals and KPIs of company KPIs are set and unified clearly demonstrating the roles of middle management, professional / implementation staff, related persons

Step 03: Implement KPI for employees

 HR team sends KPI assessment form and approved criteria to departments and employees for monthly implementation The implementation of KPI ensures compliance with the corporate governance principles associated with compliance with the processes

Every month, managers review KPI of the staff then sends it to HR team for synthesis as a basis for year-end reward Managers are responsible for monitoring, reevaluating and improving the criteria and recommending required human resources, finance, tools and equipment needed to make these tasks more efficient

KPI Evaluation Criteria

Financial Indicators

Company often concerned about the profits business achieves in certain periods Therefore, financial measures are always first Financial indicators in DongA Money Transfer often focus on:

Sales payment turnover;

Home delivery service turnover;

Foreign currency exchange

Revenue before tax

The proportions of the above indicators are assessed differently with the influence of each position The positions of the operating division have lower financial proportion than business division

Operation Indicators

There are two main evaluation criteria: Results of the department’s tasks and Results of individual’s tasks

Results of the department’s tasks are evaluated based on the work plan completion

percentage of that department / branch Each position has a different proportion based on rank

Results of individual’s tasks are assessed based on the completion percentage of the

employee’s tasks

Compliance Indicators

This indicator is used to measure & monitor the indicators and requirements of critical

processes within the enterprise towards customers, including: Regulatory compliance of business processes and Compliance with Company Rules and Policies

5.2 PROBLEM 02: Lack of motivation

Currently, KPI Evaluation form of DongA Money Transfer only has three key criteria (financial, operational and compliance) and lack of training and development indicator Employee training courses will be assessed based on the test result score but not apply in KPI criteria Besides, HR Department has not yet established evaluation criteria to upgrade positions so career path of each position is still unclear

Ms.Tran Thuy Vy said that “For me, the current KPI assessment form does not have training and development indicators so I don't have motivation to focus on corporate training programs.”

Beside, Ms Nguyen Dinh Ly shared that there are not development criteria in the KPI form

so we don't know which criteria to evaluate to upgrade our job position There are no clear standards for evaluating staff, senior executive or management levels

According to R.Kaplan (4), the aspect of learning and development includes three key elements: Employee capacity; Capacity of information systems; Motivation for developing, assigning responsibility, connecting ability The element of learning and development is vitally important for employee adaptation to change in present and prepare for future

Employee satisfaction is the foundation to improve employee productivity and retain employees in order to bring greater output to the company

5.3 PROBLEM 03: Low employee satisfaction

Based on Mr Chau Quoc Dat: “Employees are not allowed to discuss and exchange ideas with management before assigning targets of the year”

Ms Tran Thu Hang: “Manager does not communicate details about the evaluation of sales and financial indicators”

Ms Bui Tuong Oanh: “Our salaries have not been paid at KPI rates and no other additional benefits if the target is exceeded”

Management often tends to deliver many targets and requirements at a high level While employees expect to assign few targets that are easy to implement and have attractive remuneration when completing the targets The negotiation process aims to:

Ensure employees in the organization understand the meaning of KPIs and assign responsibilities to each relevant level

Ensuring the implementation of the strategy and goals of the company is supported by employees and increases the motivation to complete the targets

Balancing the interests of the enterprise with the capacity, responsibility and interests of the individual (management level, implementer and stakeholders);

Consistent with the actual internal conditions (resources, mechanisms, .) and external business environment (opportunities, challenges, …) of the business

Employee satisfaction relates to attitude and emotion, defined as a pleasurable or positive emotional state resulting from the appraisal of one’s job or job experiences (5)

Communication, group dynamics, and teamwork between departments are important components for teamwork effectiveness and the decision-making process (6) Such communication barrier decreases workflow efficiency, consequently, impact internal performance, including timeliness with unnecessarily lengthened steps or errors during the workflow As a result, an agency’s performance in the client’s mindset is affected, increasing customer dissatisfaction and complains (7) Similar to an easily won tug of war, one side pulling for information and one side letting go of the rope towards active sharing, it creates a negative situation in some teams under supervision, affecting KPI achievement

5.4 PROBLEM 04: Personal issues

According to Shah (8) claimed that personal reasons defined as several causes relate to health, family issues, education conditions of children and social status which can lead to performance of employee in individual organization In terms of this criteria, health matter, relocation, attending military service, start-up or another family issue are the main drive Personal reasons also showed ability adapt with new working conditions if employees cannot fit with this environment, they will easily to change job

Mr Nguyen Tuong Tan said that home delivery employees are often on the go, so their health is also affected by the quality of their work In addition, most of the company's tellers are female, so they are also influenced by families (eg taking care of children, housework, etc.)

Ms Tran Thu Hang conformed that customer care staffs rarely have conversations with manager or team leader about the ability to perform the assigned tasks or the difficulties that need guidance to be highly effective at work

Work-life balance management is vital in maintaining and increasing mental healthier and working spirit It also has serious effects on retention, commitment, absenteeism, and productivity (9), consequently decreasing engagement and performance to the job

- Employees do not satisfaction

- Personal issues of employees

KPI evaluation system unsuitable could have negative impact to employee performance result of DongA Money Transfer Company

According to interview, KPI evaluation is the main factor lead to low performance result A key performance indicator is a measurable value to demonstrate how effectively a company

is achieving key business objectives Organizations use KPIs at multiple levels to evaluate their success at reaching targets High-level KPIs may focus on the overall performance of the business, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others

Organizations succeed or fail based on their capability to set, track, and enforce key performance indicators (KPIs) KPIs are widely considered as measures by which businesses evaluate whether their actual performance is in line with their strategic business goals However, if an organization’s KPIs can’t be easily tracked, quantified, and tied to an organization’s bottom line, then it will not deliver the intended result

According to Dartey-Baah and Amoako (10), the motivational factors are the environment of work, the potential of achievement, the recognition, the responsibility that is granted to them, and chances for personal growth which helps employees to find their strength Moreover, this can enhance motivational level of staffs Hygeine factor can only cause external happiness but they are not powerful enough to convert dissatisfaction into satisfaction but still its presence is too much important According to them the Herzberg Two Factor Theory, “both Hygiene and Motivation factors are linked with each other, as Hygiene factors move employee from Job dissatisfaction to No Job dissatisfaction, whereas motivation factors moves employees from no job dissatisfaction to job satisfaction (10)

According to Schwab (11), Sheridan (12), Shaw (13), performance correlates to performance rate and retention rate, which is a critical challenge at workplace, it is a barrier of enterprises and employees can exploit thoroughly their full potential There was a reasonably firm relationship between performance and productivity and argued that the findings supported human capital theory (14) Performance has the relationship to performance, according to the human capital view (15) High performance causes corporation to neglect the necessary activities so as to produce basic result and redirect resources and energy away from lowering in-role performance of the process (Price (16); Shaw (13)) High performance means the basic level of experience across your organization is lower than it otherwise would be Employees with less knowledge and less experience in your business and with their jobs won't produce as well as those who know more about what they are doing In a production job, the efficiency of production is likely lower In sales and service jobs, sales results and service satisfaction ratings are affected The major challenge is that high performance contributes to a downward spiral that is tough to get out of, since poor performance leads to