1.EMPLOYEE DIFFERENTIATION IN SUCCESSFUL REWARDS MANAGEMENT Case Study, Concepts and Debatable Ideas Kenny Ong CNI Holdings Berhad www.myCNI.com.my www.OOBEY.com

2. Background & Philosophy The anchor for all decisions www.myCNI.com.my www.OOBEY.com 3. About: CNI

19 years old

Core Business: MLM

Others: Contract Manufacturing, Export/Trading, eCommerce, F&B Cafs

Malaysia, Singapore, Brunei, Indonesia, India, China, Hong Kong, Philippines, Italy, Taiwan, Oman, United States

Staff force: 500

Distributors: 200,000

Products: Consumer Goods and Services

www.myCNI.com.my www.OOBEY.com 4. Intro: CNI

CNIs Business Model background

Factory CNIE DC SP Leaders Customers R&D www.myCNI.com.my www.OOBEY.com 5. Background: The Four Desperates 1. Desperate Competition 2. Desperate Consumer 3. Desperate Achievers 4. Desperate Changes www.myCNI.com.my www.OOBEY.com 6. Philosophy Ultimate Objective of Marketing: Get more people, to buy more things, more frequently, at higher prices. Sergio Zyman Retention and Loyalty are useless if No Conversion is happening. www.myCNI.com.my www.OOBEY.com 7. Philosophy Retention and Loyalty are useless if No Conversion is happening. Retention and Loyalty are useless if NoPerformanceis happening. www.myCNI.com.my www.OOBEY.com 8. Philosophy

Loyalty is misleading

Heavy ConsumptionLoyalty

LoyaltyHeavy Consumption

Good PerformanceRetention

RetentionGood Performance

www.myCNI.com.my www.OOBEY.com 9. A. Background & Philosophy Principles HR Philosophy

Equal / Fair

Happy / Productive

Hire Low, Train High

Performance vs Potential

Retention / Engagement

www.myCNI.com.my www.OOBEY.com 10. How Differentiation got started Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model 11. Targeting: Identify and Attract

Who are your Talents?

: A Talent for others does not mean a Talent for you www.myCNI.com.my www.OOBEY.com 12. CNIs 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

www.myCNI.com.my www.OOBEY.com 13. Targeting: Identify and Attract Group I (Talent Pool)

Identify

www.myCNI.com.my www.OOBEY.com 2 3 4 5 PERFORMANCE 2 3 4 5 POTENTIAL 14. Targeting: Identify and Attract Group I (Talent Pool) Group II ( Potential) Group III ( Performance) Group IV (Counseling) 2 3 4 5 2 3 4 5 PERFORMANCE POTENTIAL

Identify

www.myCNI.com.my www.OOBEY.com 15. **Additional Categories

Definition of Premium staff

Specially selected from the TP.

They have in addition, the following attributes:

• High-profile in the field or industry

• Loyalty proven

• Proven high work-rate and great attitude

• Undeniable contribution and efforts

• Highly looked upon and respected by most staff

• Ability to multi-task and assist in various areas

• Key people in CNIs Succession Plans

www.myCNI.com.my www.OOBEY.com 16. **Additional Categories

Definition of Specialist Staff

Has competencies (skills & knowledge) in a particular professional field of work.

A staff is deemed to be a Specialist when all the following occurs:

• The particular Competency (Skills or Knowledge or both) is highly required by CNI

• Supply for the competency in the market is low but demand is high

• The competency is difficult to learn, transfer and/or duplicate

www.myCNI.com.my www.OOBEY.com 17. Targeting: Identify and Attract Retention Experience Swing Ex Oppose www.myCNI.com.my www.OOBEY.com 18. Retention 1: Experience

Loyalty = Experience vs. Expectations

Solution Strategy:Talent Management Plan www.myCNI.com.my www.OOBEY.com 19. Loyalty 1: Experience

Talent Management Plan

Philosophy OJT, Mentoring, Big-5, LP, PDP, SDP, Projects,P/P Grid, SP Table, PDP, Premium,Q12,C&B , ACDP, SCL, Transfers, Events, RecognitionP/P Grid, Q12, PA, SDP, SP Selection www.myCNI.com.my www.OOBEY.com Development Motivation Evaluation 20. 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 www.myCNI.com.my www.OOBEY.com 21. 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

www.myCNI.com.my www.OOBEY.com 22. Dangers of Direct Incentives

lessen internal motivation,

switch to mercenary mode,

do something and do not do something else,

bribe and fraud culture,

easier for competitors to recruit,

lessen teamwork & helpful culture,

less and less impact for same value,

mockery of base salary and employment contract,

rebellion from non-incentivised staff,

end up incentivising everyone for everything?,

www.myCNI.com.my www.OOBEY.com 23. What drives Reward? The driving force behind compensation and benefits strategies www.myCNI.com.my www.OOBEY.com 24. What drives our Reward? Compensation & Benefits Values Strategy www.myCNI.com.my www.OOBEY.com 25. Alignment & Consistency

Mamak stall

www.myCNI.com.my www.OOBEY.com 26. Alignment & Consistency

"Exactly what I need"

Customized products

Personalized communications

"They're very responsive"

Preferential service and flexibility

Recommends what I need

"I'm very loyal to them"

Helps us to be a success

"They are the most innovative" "Constantly renewing and creative" "Always on the leading edge" "A great deal!" Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership "A no-hassles firm" Convenience and speed Reliable product and service Product Leadership Operational Excellence Customer Intimacy www.myCNI.com.my www.OOBEY.com 27. Alignment & Consistency: Market Disciplines Operational Excellence (low cost producer) Ref:The Discipline of Market Leaders , Michael Treacy & Fred Wiersema; 1995 Product Leadership (best product) Customer Intimacy (best total solution) www.myCNI.com.my www.OOBEY.com 28. 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 5 th2007 www.myCNI.com.my www.OOBEY.com 29.

Product Leadership

New, state of the art products or services

Risk takers

Meet volatile customer needs

Fast concept-to- counter

Never satisfied - obsolete own and competitors' products

Learning organization

Alignment & Consistency: Disciplines, Priorities, and KPIs

Operational Excellence

Competitive price

Error free, reliable

Fast (on demand)

Simple

Responsive

Consistent information for all

Transactional

'Once and Done'

Customer Intimacy

Management by Fact

Easy to do business with

Have it your way (customization)

Market segments of one

Proactive, flexible

Relationship and consultative selling

Cross selling

www.myCNI.com.my www.OOBEY.com 30.

Operational Excellence

• • Moveknow-howfrom top performing units to others

• • Benchmarkagainst best in class

• • Ensureoperations trainingfor all employees