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Employee Differentiation in Successful Rewards Management

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Marcus Evans Employee Loyalty & Engagement Conference, Jakarta * How to differentiate employees through compensation and benefits * Managing performance through compensation & benefits * Employee differentiation through relative performance and talent management * Maintaining consistency with corporate values
  • 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

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