PART II SOLUTIONS FOR EMPLOYEE PERFORMANCE
CHAPTER 3: DRIVERS TO ENHANCE EMPLOYEE PERFORMANCE SYSTEM
V. INCENTIVES & REWWARDS/ RECOGNITION SYSTEM
It is important to communicate a pay philosophy that clarifies the relationship between pay and performance. The company should have a development structure that clearly allows the employees to see how they can move up the ranks.
This upward move in rank also comes with increase in rewards. This is to show the company is fair to employees and appreciate their works, but the pay rise is not the main and most important elements.
For employee performance and engagement to be maintained, we need to recognize employees’ successes. And there are significant rewards for organizations who make employee recognition a priority. A study by Bersin & Associates found that companies that practice a “high-recognition” culture have 30% lower voluntary turnover than average, which would help AGM a lot with its high staff turnover.
Whilst organizations have put significant time and effort over the last decade into perfecting their performance related reward processes, giving a regular
“thank you” has been shown to be much more powerful than a bonus or pay rise.
Today’s employees want to be acknowledged for their achievements and have their successes celebrated, feeling that they contribute to the company and feel valuable.
We will need to incorporate processes that encourage this into our performance management system.
CONCLUSION
Managing people in general or managing employee performance has been never an easy job. It is normally complicated to solve and requires constant and vast effort put in many aspects. Once AGM recognize the criticality of poor employee performance to their business survival and growth, such big effort to change shall be paid off. Starting from the root with its vision, missions, and strategies, which should be well-established and communicated to all employees in a language that they can comprehend, and in a committed way from the top management. Showing them first where the company wants to be, then calling for collective intelligence and joint effort is vital to enlighten the ways to be there with the right tool – process system. And in order to know whether the company operates effectively, efficiently, and forwards to its goals or not, the current system of PMS must definitely be replaced. With the proposed PMS system, which is congruent to its strategic objectives, thorough, fair and reliable, AGM will be able to manage the employee performance more effectively. Properly designed and implemented performance management system will enhance employee motivation, engagement, satisfaction, reduce employee turnover, and provide valid information for appropriate decision-making which will result in increases in turnover, profits, customer satisfaction and of course, more sustainable growth.
According to a model developed from the big survey findings of the Advanced Performance Institute (a research, consulting and training organization in business performance), AGM is at level 2 now, which means we have some facts and performance data but the collection and usage are just ad hoc and uncoordinated.
Companies at this level often create more confusion rather than useful and structured insights because the data are not generated regularly and in a systematic manner.
Therefore, with proposed solutions, AGM is expected and supposed to upgrade to Level 3 of maturity where there are more structured approaches to collecting and
reporting data. The data are also more relevant and allow the company to produce regular performance reports and dashboards to support management decision- making, and gradually step up to highest benefits level.
Figure 11: Business Performance Management Maturity Model
Noted that there is no one or no company that can change overnight. It is, in fact, a continuous journey. Everything including mission, strategies, process, system should not be a fixed document, and built once upon the time. They all should be updated, revised, improved, changed according to implementation and adaptability, to the business environment, the industry changes, and the company itself.
Finally, there is no need to set such a far-reaching target right away, too hustle for too ambitious goals, which may cause resistance and fear for non- achievability. Yet, we can just be better than we were yesterday. 1% better every day, meaning that we are 365% better in 1 year. I think this is already a good growth rate.
REFERENCE LIST
1. Herman Aguinis (2013), Performance Management, Pearson Education, US.
2. John S. Oakland (2003), Total Quality Management: Text with Cases, Oxford.
3. James R. Evens, William M. Lindsay, (2011), The Management and Control of Quality, Canada.
4. Paul Falcone, Winston Tan (2013), The Performance Appraisal Tool Kit, Amacom, US.
5. Robert S. Kaplan, David P. Norton (1996), The Balanced Scorecard:
Translating Strategy into Action, Harvard Business School Press, Boston, Massachusetts.
APPENDIX
1. Exit Interview Questionnaire Form
2. KPI Form
Name Level/
Grade 2 D
Position Basic
Salary 3,400,000 50.00%
Dpt in charge
Weight Key Performance Measure Sub.W
eight Target Bonus
I/ QUANTITATIVE Hit TOTAL SALES TARGET 20%
70% Hit TOTAL SALES of DRY 25%
Hit TOTAL SALES of NON FOODS 5%
Hit TOTAL SALES of DHP 5%
Hit CAMPAIGN SALES TARGET (AMERICAN) 5%
Reach the Target of Damage/Expired – DRY FOODS 4%
Reach the Target of Damage/Expired – DHP 1%
Reach the Target of Damage/Expired – NON FOODS 1%
Reach the Target of Sampling/Tasting – DRY FOODS 1%
Reach the Target of Shrinkable Inventory/Stock-take w/
full involvement – DRY FOODS 4%
Reach the Target of Shrinkable Inventory/Stock-take w/
full involvement – DHP 2%
Reach the Target of Shrinkable Inventory/Stock-take w/
full involvement – NON FOODS 2%
Decrease the number of Out of Stock – DRY FOODS
< 11% : 100%
<15%: 50%
10%
Decrease the number of Out of Stock – DHP & NON FOODS
< 11% : 100%
<15%: 50%
3%
Increase the number of customers w/ high standard of hospitality & services:
Q1:+ 15%
Q2: +14%
Q3: +15%
5%
Increase Average Basket:
Q1:+ 5%
Q2: +4%
Q3: +5%
5%
EXPENSES 2%
Cooperate with your Supervisor to reach the results of Accounting P&L (optimization of Water, Air Con., Electricity, Non Goods Purchase, Maintenance, etc.)
2%
100% 100%
Annam Gourmet Market KPI Sales & Operations Team
NGUYEN VAN A
DRY SELLER
GROCERY + NF + DHP DEPT. Potential Bonus Review Quarterly or Monthly
TURN OVER 60%
MARGIN 15%
STOCK 13%
CUSTOMERS 10%
II/ QUALITATIVE - Good hospitality: welcoming, greetings, smile, etc.
- No complain from customer
- Uniform: neat & tidy, followed AGM standard - Good services: Delivery service, Raclette/Fondue, Promo Campaign. Good advice on products, new arrivals
- Make the good tasting as being trained by your
20%
30% Achieve a score of 100 on OPE Audits
- 100-80: 100%
- <80: 50%
- <50: 0%
3%
Achieve a score of 100 on MYSTERY SHOPPER Audits - 100-80: 100%
- <80: 50%
- <50: 0%
3%
Achieve a score of 20 on MKT Audits - 20 - 15: 100%
- <15: 50%
- <10: 0%
3%
Achieve a score of 20 on the part “Notation of the DRY from OPE audits made in store every month - 15 - 20: 100%
- 14.5 – 10: 50%
- <10: 0%
6%
ORGANIZATIO N &
PLANNING 15%
- Respect the Duty Roster organized by Supervisor - Follow the Supervisor's assessment regarding to Inventory/Stock-take
- Join the OPE training & manage w/ Supervisors to 15%
Respect the process of ordering: Schedule,
Cadencia/Mercurial 5%
Record all Expired, Damaged, shelves, Sampling, etc.
to the form correctly w/ the control of Supervisor 5%
Pricing:
- Full price tags w/ AGM standard
- Good prices on the shelves compared w/ POS/AX 6%
Shelf-life control:
Respect FIFO, no expired items on the shelves - Follow strictly AGM NED Discount Policy
7%
Respect the Merchadising rules (Item classification,
Plannogram) 7%
CONTROL &
MONITORING 20% Respect Hygiene & Cleanliness in Dept. you're in
charge 20%
100% 100%
Seller: Supervisor: Store Manager: Business Director:
sign over printed name sign over printed name sign over printed name sign over printed name
Date: Date: Date: Date:
TOTAL POINTS HOSPITALITY
&
CUSTOMER SERVICE
35%
PROCESS &
PROCEDURES 30%
3. Annual Appraisal Form
4. Process of Stock Management