KFC(Kentucky Fried Chicken)

“We Do Chick Right”

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KFCPRESENTED TO:

Ms. Toima Raza PRESENTED BY:

Ms. Fatima Sughra

ID # 074032-033

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Ms. Hafsa Ayoub

ID # 074032-051

Mr Muhammad Waqas

ID # 074032-003

Mr Hassan Sabir

ID # 074032-060

PERSENTED ON:January 5,2010

University of Management & Technology (UMT) Lahore

DEDICATION

We would like to dedicate all of our efforts to complete this report to

our beloved Parents and respected teacher Ms. Toima Raza.

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Acknowledgement We would like to say thanks to our teacher Mrs. Toima Raza for her

guidance and her precious thoughts which helps us to complete this

work in a proper and efficient manner.

We would like to say thanks Mr. Furqan (Allumnies) who help us to

arrange a meeting with KFC Managers.

We also like to say thanks to Mr. Rana Naveed (HR Manager) who

provided us all the necessary information about the Performance

management system of KFC to complete this report.

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Table of Contents

MISSION.................................................................................7KFC TODAY..............................................................8HISTORY..................................................................9KFC IN PAKISTAN...................................................11ECONOMICS...........................................................12

DEMAND OF KFC PRODUCTS.......................................12SUPPLY OF KFC PRODUCTS......................................................13

MANAGEMENT........................................................14PLANNING............................................................................16SWOT ANALYSIS................................................................18BCG MATRIX......................................................................22ORGANIZING.........................................................................23CONTROL.............................................................................25TYPES OF CONTROL................................................................25MARKETING ENVIRONMENT:..............................................26TARGET MARKET:..............................................................27MARKETING MIX:...............................................................30

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FINANCE................................................................40RECOMMENDATIONS AND SUGGESTIONS.................42Bibliography.........................................................................43

Mission To establish in Pakistan our position as leading WQSR

(Western Quick Service Restaurant) chain, serving good value innovative

chicken-based products, consistently providing a pleasant dining experience,

with fast friendly service, in a clean and convenient location. At all times, we must

be dedicated to providing excellent service and delighting customers.

Goals Build an organization dedicated to excellence.

Consistently deliver superior quality, and value in our product and

service.

Maintain a commitment to innovation for continuous improvement and

growth, striving always to be the leader in market place challenges.

Generate consistently superior financial returns and benefit our owners

and employees.

Values for KFC

Focus all our resources to our restaurant operations because that is where

we serve our customers.

Reward and respect the contributions of each individual at KFC.

Expand and update training with time and be the best we can be and more.

Be open, honest and direct in our dealing with one another.

Encourage new and innovative ideas because they are the key to our

competitive growth.

Reward result and not simple efforts.

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Dedicate ourselves to continuous growth in sales, profit and size of

organization.

Work as a team.

HISTORY9/9/1890-Harland Sanders, the founder of

KFC was born just outside Henryville,

Indiana.

1900-1924-Harland Sanders holds a variety of jobs including: farm hand, streetcar conductor, and army private in Cuba, blacksmith's helper, railyard fireman, insurance salesman, tire salesman and service station operator for Standard Oil.

1930-In the midst of the depression, Harland Sanders opens his first restaurant in the small front room of a gas station in Corbin, Kentucky. Sanders serve as station operator, chief cook and cashier and name the dining area "Sanders Court & Café."

1936-Kentucky Governor Ruby Laffoon makes Harland Sanders an honorary Kentucky Colonel in recognition of his contributions to the state's cuisine.

1937-The Sanders Court & Café adds a motel and expands the restaurant to 142 seats.

1939-The Sanders Court & Café is first listed in Duncan Hines' "Adventures in Good Eating."

Fire destroys The Sanders Court & Café, but it is rebuilt and reopened.

The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh chicken, faster.

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1940-Birth date of the Original Recipe

1949-Sanders marry Claudia Price.

1952-The Colonel begins actively franchising his chicken business by traveling from town to town and cooking batches of chicken for restaurant owners and employees.

The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake agreement stipulates a payment of a nickel to Sanders for each chicken sold.

1955-An interstate highway is built to bypass Corbin, Kentucky. Sanders sells the service station on the same day that he receives his first social security check for $105. After paying debts owed, he is virtually broke. He decides to go on the road to sell his Secret Recipe to restaurants.

1957-Kentucky Fried Chicken first sold in buckets

1960-The Colonel's hard work on the road begins to pay off and there are 190 KFC franchisees and 400 franchise units in the U.S. and Canada.

1964-Kentucky Fried Chicken has more than 600 franchised outlets in the United States, Canada and the first overseas outlet, in England.

Sanders sell his interest in the U.S. Company for $2 million to a group of investors headed by John Y. Brown Jr., future governor of Kentucky. The Colonel remains a public spokesman for the company.

1965-Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges Association.

1966-The Kentucky Fried Chicken Corporation goes public.

1969-The Kentucky Fried Chicken Corporation is listed on the New York Stock Exchange.

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1971-More than 3,500 franchised and company-owned restaurants are in worldwide operation when Heublein Inc. acquires KFC Corporation.

1976-An independent survey ranks the Colonel as the world's second most recognizable celebrity.

1977-Colonel Sanders speaks before a U.S. Congressional Committee on Aging.

1979-KFC cooks up 2.7 billion pieces of chicken. There are approximately 6,000 KFC restaurants worldwide with sales of more than $2 billion.

12/16/1980-Colonel Harland Sanders, who came to symbolize quality in the food industry, dies after being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days.

1982-Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds.

1986-PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.

1997-PepsiCo, Inc. announces the spin-off of its quick service restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc.

2003-Tricon Global Restaurants, Inc., the world's largest restaurant company, changes its corporate name to YUM! Brands, Inc. In addition to KFC, the company owns A&W® All-American Food® Restaurants, Long John Silvers®, Pizza Hut® and Taco Bell® restaurants. 2006-More than a billion of the Colonel's "finger lickin' good" chicken dinners are served annually in more than 80 countries and territories around the world.

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2007-KFC proudly introduces a new recipe that keeps the Colonel's

11 herbs and spices and finger-lickin' flavor, but contains Zero Grams

of Trans Fat per serving thanks to new cooking oil.

KFC Today Today, KFC is the world’s largest and most well known chicken

restaurant chain, with more than 10,000 locations worldwide, in 78

countries. KFC and its franchises employ more than 20,000 people

worldwide.

KFC serves more than 4.5 billion kilo grams of chicken annually,

to approximately 7 million customers a day, worldwide.

The Cupola Family Found in 1994, headquartered in Dubai and offices in Middle East,

London, Washington and Karachi.

Turnover of $200 million with operating staff of 1660.

Activities Focus on 4 Sectors:Retail: spinney’s (ME and Lebanon), Max (SA)

Consumer: Oman United Agencies (Oman & Jordan)

Engineering: Cupola Engineering Group (Oil, gas & water industry)

Information: Cupola plastic Cards LTD (Jable Ali), Cupola

Teleservices (USE)

THE Yum FamilyYum! Brands, Inc., based in Louisville, Ky., is the world's largest restaurant company in terms of system restaurants with more than

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36,000 restaurants in over 110 countries and territories and more than 1 million associates. Yum! is ranked # 239 on the Fortune 500 List, with revenues in excess of $11 billion in 2008. Four of our restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver's – are the global leaders of the chicken, pizza, and Mexican-style food and quick-service seafood categories.

KFC in Pakistan South Region including Karachi and Hyderabad (interior Sindh).

North Region including Lahore, Rawalpindi and Islamabad

(Punjab).

They have a total of 63 outlets working in Pakistan. 1 outlet is in

Islamabad, 2 in Rawalpindi,21 in Karachi, 11 in Lahore and other in

others city of Pakistan like Faisalabad, Hyderabad, sakhar,

Gujranwala, Sialkot, Multan, Peshawar and Jhelum.

KFC say that for the last seven years they stand as the market

leader in the fast food category and our strength lies in the mass

appeal of our products and great service.

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Hierarchy Chart (Cooperate Level in North region)

CEO

Head of North

Associate Regional Manager

Finance Administration Human Resource Operation Department Brand Audit New Concept

Area Manager

Territory Manager Territory Manager Territory Manager Territory Manager

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What is the existing performance management system of KFC?Performance management – A management process for ensuring employees are focusing

their work efforts in ways that contribute to achieving the company’s mission. It consists

of three phases:

(a) Setting expectations for employee performance

(b) Maintaining a dialogue between supervisor and employee to keep performance on

track,

(c) Measuring actual performance relative to performance expectations.

The purpose of the performance management system is to ensure

The work performed by employees accomplishes KFC’s goals

Employees have a clear understanding of the quality and quantity of work

expected from them

Employees receive ongoing information about how effectively they are

performing relative to expectations

Awards and salary increases based on employee performance are distributed

accordingly

Opportunities for employee development are identified.

Employee performance that does not meet expectations is addressed.

KFC started its operations in 1996 and till 4 to 5 years there was no human resource

department in KFC and then in the 5th year of its operation in pakistan it developed its

human resource department. When KFC started its performance management system so

at that it used 360 degree feedback to evaluate its employees in which every employee

was evaluated by his supervisor and his peers. The also launched their own ranking scale

named by “My Growth Body” and details of their feedback system and “My Growth

Body” are given below ;

What is 360 degree feedback?

360 Degree Feedback is a system or process in which employees receive confidential,

anonymous feedback from the people who work around them. This typically includes the

employee's manager, peers, and direct reports. A mixture of about eight to twelve people

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fill out an anonymous online feedback form that asks questions covering a broad range of

workplace competencies. The feedback forms include questions that are measured on a

rating scale and also ask raters to provide written comments. The person receiving

feedback also fills out a self-rating survey that includes the same survey questions that

others receive in their forms.

Managers and leaders within organizations use 360 feedback surveys to get a better

understanding of their strengths and weaknesses. The 360 feedback system automatically

tabulates the results and presents them in a format that helps the feedback recipient create

a development plan. Individual responses are always combined with responses from other

people in the same rater category (e.g. peer, direct report) in order to preserve anonymity

and to give the employee a clear picture of his/her greatest overall strengths and

weaknesses.

How is 360 Degree Feedback Used?

KFC uses 360 feedback systems in two ways which are given below:

1. 360 Feedback as a Development Tool to help employees recognize strengths and

weaknesses and become more effective

When done properly, 360 is highly effective as a development tool. The feedback process

gives people an opportunity to provide anonymous feedback to a coworker that they

might otherwise be uncomfortable giving. Feedback recipients gain insight into how

others perceive them and have an opportunity to adjust behaviors and develop skills that

will enable them to excel at their jobs.

2. 360 Feedback as a Performance Appraisal Tool to measure employee

performance

These things are most appropriately addressed by an employee and his/her manager as

part of an annual review and performance appraisal process. It is certainly possible and

can be beneficial to incorporate 360 degree feedback into a larger performance

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management process, but only with clear communication on how the 360 feedback will

be used.

What a 360 Feedback Survey Measures?

360 feedback measures behaviors and competencies

360 assessments provide feedback on how others perceive an employee

360 feedback addresses skills such as listening, planning, and goal-setting

A 360 evaluation focuses on subjective areas such as teamwork, character, and

leadership effectiveness

“My Growth Body”

This was the rating scale introduced by the HR department of KFC in 2000-01 which

they used to measure the performance of their employee. The information which they

collected from 360 degree feedback it provided them a base on which they can rank

their employee as a good performer or a bad performer. So basically in MGB there

were 5 five points, the employee who was a low performer is ranked on 3 and the

good performer who achieved his targets was ranked on 5.

• Performance documentation – A letter, memo, completed form, or note on which the

supervisor indicates the extent to which the employee is currently meeting expectations

and provides evidence to support that conclusion.

The flow of activities involved in the existing systemSupervisors and managers are responsible for managing the performance of their

employees. As 90% to 95 % of the staff working in KFC is of operations and only 4 to

5% people are working on the managerial positions .Operational staff require regular

check and balance on their performance so their performance is measured quaterly means

4 times in a year and performance of managerial staff is measured annually.

1. Communicating employee performance expectations

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Since KFC has two main cycles on which it assesses its employees the three months

cycle for operational staff and the twelve month cycle for managerial staff, so at the start

of each cycle the supervisors meet with their employees, establish expectations regarding

their employees’ performance, specify how employees’ actual performance will be

measured and their success determined, and impart to them an understanding of how

meeting these expectations will contribute to the achievement of the KFC’s mission.

b. Performance expectations shall be written at the “meets expectations” level and shall

be documented on a form defined by the KFC – the “work plan

c. Work plans are signed and dated by both the supervisor and the employee.

2. Maintaining ongoing performance dialogue

a. Employees shall be responsible for meeting their performance expectations.

b. Progress toward meeting expectations shall be measured, reported, discussed, and

documented throughout the work cycle.

c. Supervisors are expected to use appropriate supervisory techniques to support

employee efforts to meet or exceed their performance expectations.

d. When expectations change during the course of the work cycle, supervisors

communicate these changes and modify work plans as necessary. Modifications are

signed and dated by both the supervisor and the employee.

3. Conducting performance appraisals

a. Appraisal of operational staff after every 3 months and of managerial staff after every

twelve months.

b. At the end of the work cycle, supervisors shall evaluate employees’ performance

during the past work cycle compared to their performance expectations. They use

verifiable information collected and documented throughout the cycle to determine the

extent to which actual performance has met the expectations defined in the work plan.

c. The evaluation shall be documented on a standard form defined by the KFC – the

“appraisal.” which is “My Growth Body” which is a form of questionnaire.

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d. The performance appraisal shall use a 5-level rating scale for reporting overall

performance. A rating at the midpoint of the scale shall indicate that an employee’s

performance has met expectations.

e. Prior to discussing a completed performance appraisal (that is, an appraisal containing

ratings and descriptions of actual performance) with an employee, a supervisor reviews

the appraisal with the next-level manager to ensure that ratings are appropriate and

consistent.

f.Supervisors discuss the appraisals with their employees. Both supervisor and employee

sign and date the completed performance appraisal indicating that the discussion has

taken place.

4. Rewarding good Performance

Most employees love recognition for a job well done. Consistently good performance and

a willingness to take on more responsibility might make you consider an employee for

promotion. Employees are motivated by both intrinsic and extrinsic rewards. To be

effective, the reward system must recognize both sources of motivation. So reward

system of KFC is based on the assumptions of attracting, retaining and motivating its

people. HR manager told us that they know the the fact that financial rewards are an

important component of the reward system, but there are other factors that motivate

employees and influence the level of performance so they keep on identifying those other

factors that can motivate their employees.

. The competitive reasons for the growing emphasis on performance-based compensation

are companies cutting costs, restructuring, and boosting performance.  To ensure the

reward system is effective and motivates the desired behaviors, KFC carefully considers

the rewards and strategies utilized and ensure that rewards are linked to or based on

performance. To make it more effective, KFC’s performance measurement system is tied

to compensation or some sort of reward.

5. Addressing Poor Performance

When an employee’s performance falls below expectations at any time during the

performance cycle, the supervisor shall document the performance deficiency and take

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actions, including (if appropriate) disciplinary action, to assure that performance

expectations will be met within a reasonable period of time.

1. The supervisor documents the performance that falls short of expectations by preparing

a corrective action plan or other documentation. The documentation will specify (a) the

performance problem, (b) the steps to be taken to improve performance, including the

timeframe for improvement, (c) the consequences of failure to improve, and (d) a follow-

up date.

2. A corrective action plan is considered successfully completed only when the

employee’s actual performance has improved to the point where expectations are being

met.

6. Transitions

When employees move into or out of their positions, relevant performance information

shall be communicated in a timely way.

1. Probationary employees have work plans within a certain number of days of their date

of employment. To remove an employee from probationary status, the supervisor

provides performance documentation.

2. Employees in training progressions also have work plans, or an equivalent document

that describes performance expectations, within a certain number of days of the date of

employment. The supervisor provide performance documentation before each salary

increase is granted within the progression.

3. Employees whose responsibilities are changed substantially, either within their current

position or by transfer (promotion, lateral transfer, or demotion), shall have work plans

established within a certain number of days following the new assignment.

7. Access and Use of Performance Information

Properly informed personnel decisions – KFC takes measures to ensure performance

information is appropriately and consistently used and that personnel decisions are based

on appropriate performance information. Decisions involving promotions, performance-

based disciplinary actions, performance-based salary increases, and reductions in force

are supported by a current appraisal on file.

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Confidentiality of Appraisal - agencies shall clarify which of the documents used for

performance management purposes are confidential and which are not, as well as define

what “confidential” means. Completed performance appraisals (with ratings, supporting

information, and signatures and dates) shall be treated as confidential.

How the appraiser and apprises are linked together?

Kfc uses the 360 degree which is also knows as “multi-rater feedback” appraisal

system to evaluate the performance of its employees and this is the basic method

which links the appraiser and appraises. In this system the human resource

department of the organization reviews the appraisee’s job and job satisfaction. The

important thing is that explore the problems the appraisee might have or factors

which might prevent the appraisee from improving his/her job performance. This

system gives the appraisee an opportunity to set and work towards achieving agreed

objectives and also identify the appraisee’s personal development needs. This system

involves all the employees at KFC and the feed back is provided by subordinates,

peers, and supervisors. It also includes a self-assessment and, in some cases, feedback

from external sources such as customers and suppliers or other interested

stakeholders.The results from 360-degree feedback are often used by the person

receiving the feedback to plan training and development. Results are also used by

some organizations in making administrative decisions, such as pay or promotion.

When this is the case, the 360 assessment is for evaluation purposes, and is

sometimes called a "360-degree review.

Appraisal is concerned with the performance and development of individual members

of staff. Human resource department at KFC evaluate the performance of is

employees when the performance is evaluated then the department identify the

development needs of employees and then provide the training and coaching

according to it. During all this, the appraiser that is the members of human resource

department and the appraises, who are the employees are linked with each other.

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KFC gives value to its employees. The senior manager always linked with the

subordinates and identifies the needs of improvement and then directs them through

the right path. If the operational staff is lacking in something or their efficiency is

going down then they are warned at the spot but managerial staff is evaluated and

assessed by using some proper evaluation method. If some operational staff member

is working well then reward is giving to him or her at the spot in the form of

employee of the day. The appraisal process is separate from the disciplinary process

and has a different purpose. The emphasis of the appraisal process is on finding ways

to improve performance and resolve problems through joint discussion. KFC uses the

360 degree evaluation method because it provides the following advantages:

It provides the opportunity for regular communication between managers and

their staff, mutual feedback and a clearer view of the responsibilities of their

staff, possible areas for development and how these relate to departmental

plans and the Organization's Strategic Plan.

Staff member are encouraged to become directly involved in setting their own

job related objectives and finding out when they need support in order to

achieve them.

Appraisal provides the opportunity for the work, abilities and achievements of

staff to be recognised and recorded.

All staff (appraisers and appraisees) has the opportunity to give and receive

feedback on their role, performance and contribution.

Staffs are able to express their opinions, feelings and suggestions in a

confidential atmosphere.

All staff has the opportunity to discuss any problems and agree solutions.

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How goals and objectives are linked with performance management system?

Both the two terms goals and objectives are often used interchangeably, confusion

sometimes arises. Although both goals and objectives use the language of outcomes, the

characteristic that distinguishes goals from objectives is the level of specificity. Goals

express intended outcomes in general terms and objectives express them in specific

terms. Goals are written in broad, global, and sometimes vague, language. Objectives are

statements that describe the intended results of instruction in terms of specific student

behaviors.

KFC links its goals and objectives with performance management. The HR manager of

KFC explains this with an example. He said, assume we have three employees and we

assign them a target of 6 million sales. Two workers achieved above the target means 10

million that is very good but third one achieved only 6 million that is exact target. Then

we will give reward which may be in any form to first two employees although the third

one also achieved the target but his performance is not at the same level. In the end He

said “performance speaks for itself”. This is the only criteria on which they are

measuring the performance of the employees that’s why the performance of the

employees are not very clear. This thing creates biasness because there are some

employees who are very introvert and there performance is not so much clear.

At KFC the goals and objectives are linked with the performance management system, it

provides the following advantages to the company:

What Appraisal system is used?

Performance appraisal systems are designed to serve the company's and employee's

interests. They are used to inventory the abilities and resources of employees and to let an

employee know where he stands so that he will be stimulated to improve his

performance.

Companies implement appraisal system to determine whether the employee is doing

according to the requirement of the organization or not. Companies can determine the

behavior of employee towards the related objective.

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There are different types of appraisal system used by different companies; KFC use 360

degree feedback (“refers to the 360 degrees in a circle, with an individual figuratively in

the center of the circle. Feedback is provided by subordinates, peers, and supervisors. It

also includes a self-assessment and, in some cases, feedback from external sources such

as customers and suppliers or other interested stakeholders. It may be contrasted with

"upward feedback,”) they were also using the online feedback, they place questionnaires

on a log in of an each employee and communicate them to fill that and reply over their

results. Through this process they keep the documentation and can give the proof of their

out put at the time of review of their performance.

Then on the basis of that feedback they give numbers to those employees and rank them

between 3 to 5 and assess whether he or she is a good employee or not and then take a

decisions related to his or her objective setting and any bonuses if he or she deserve.

How the existing Appraisal system is implemented.

Appraisal of employee performance is one of the most important responsibilities of

managers. Existing performance management system is implemented approximately in

2001 to 2002, but KFC started its operations in 1996, so there was the gap of about 5 to 6

years between KFC operations and introduction of its performance management system.

According to Mr. Rana Naveed, HR manager of KFC barkat market, north region

Pakistan, HR department, (which consist of THREE people) of north region is controlling

and evaluating about 2200 employees of KFC in this region. These north regions consist

of Punjab and NWFP. As they are using 360 degree feedback system to get the feedback

from each and every employee as every employee has an access to these three people any

time and can communicate his or her problem to them. Most often they control and solve

matters through telephonic discussion and sometimes they visit to particular area to solve

their problems.

Implementation of online appraisal system is going through questionnaires and gets feed

back very soon through their online feed back.

Appraisal reviews of manager’s takes place once in a year and on another sides

performance appraisal of operational staff takes place quarterly.

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Objectives which are assigning to them are review at the time of appraisal. If these

objectives are SMART then HR department reinforce to do that objectives and if there is

a gap between their performance and actual expectations of the company then they find

out whats the problem with the employee. KFC do not review its Objective as they say

that we have set these objectives according to the past achievements and if any one can

achieve that objective then every one have capabilities to achieve those objectives.

What is the formal reward system?

Employees are motivated by both intrinsic and extrinsic rewards. All rewards systems are

based on the assumption of attracting, retraining and motivating the employees of the

organization. Financial rewards are important components of the reward system on the

bases of the employee’s performance. But there are other factors that motivate employees

like to organize the training program for them giving them the certification on the bases

of these training, because for some employees money is not the most important

motivator. KFC also reward there employees in terms of promotion, incentive, payoff

free meals depending on the level of the employee and how much they perform there job

good. At management level they award them in the form of promotion, performance

sheets. For example if the employee have a target to increase the sale with in the given

time period. And if he achieves this target, the some percentage of his/her salary will

increase in the form of reward from the company on his/her performance. Operation level

activities play a big role the growth of the KFC. So at operation level motivation factor

have importance for the employees, at operation level they have prizes you can win for

being best employee that month, like a free meal or a day off with pay.

Bounces are given to the employees on the basis of “My growth body” points. If the

person has 5 points he or she can get benefits in term of financial bonuses, they also

consider those persons has lass then 5 but more then 3 points and give them incentives by

offering free meals with in a month in term of coupons.

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How the existing system of KFC is linked with its performance management

system?

As we discussed above, about the performance management system, as it is a

management process for ensuring employees are focusing their work efforts in ways that

contribute to achieving the company’s mission. It consists of three phases:

(a) Setting expectations for employee performance

(b) Maintaining a dialogue between supervisor and employee to keep performance on

track.

(c) Measuring actual performance relative to performance expectations.

So if we talk about the appraisal system of KFC in term of linkage with its performance

management system we determine that at first step they set objectives of a employees, at

the time of start of each performance management cycle. These objectives are SMART

and communicated to each employee before he or she has to start work then they also

maintain a dialogue between employee and supervisor in case of any problem. As we

discussed above that appraisal of each employee starts after 3 months and review their

performance whether they are doing according their requirement or not. They measure

actual performance relative to expected performance. For the measurement of

performance they get feed back by different appraisal systems. Like 360 degree feedback

system and “MY GROWT BODY”. So these processes help them to find out those

people with good performance.

According to Mr. Rana Naveed, HR manager of KFC north region, we are running our

whole system with these two appraisal systems and assign them weight of good and bad

on the basis of “My growth body”. He says that this system is really supporting and

leading us towards a good performance organization but it is not a system which is a

perfect. We can make this better and more effective to get an excellent performance and

cost effectiveness.

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Develop your own performance management system for that company keeping the above-mentioned points.

Proposed performance management system for KFC

Currently their Human resource management system is not that much strong and it is

obvious because when we asked from the HR manager of KFC that rate your company’s

HR then he said that I will give 3 points out of 5 to my company.If we take the example

of north region which includes Punjab and NWFP ,only three people are managing the

performance of 2200 employees so it is not possible for them to efficiently manage

people. Because there are so many issues that arise when people are working together.

Using a 360 degree feedback system for Performance Appraisal is a common practice,

but not always a good idea. It is difficult to properly structure a 360 feedback process that

creates an atmosphere of trust when you use 360 evaluations to measure performance.

Moreover, 360 feedbacks focus on behaviors and competencies more, than on basic

skills, job requirements, and performance objectives.

Currently they are using 360 feedback which has following drawbacks

What 360 Feedback Surveys do not assess:

360 feedback is not a way to measure employee performance by objectives

(MBOs)

360 feedback is not a way to determine whether an employee is meeting basic job

requirements

360 feedback is not focused on basic technical or job-specific skills

360 feedback should not be used to measure strictly objective things such as

attendance, sales quotas, etc.

Organizational and employee objectivesOne of the first steps in developing an effective performance evaluation system is to

determine the organization’s objectives. These are then translated into departmental and

then individual position objectives –working with employees to agree their personal

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performance targets. This allows the employee to know “up front” the standards by which

his/her performance will be evaluated.

Currently their performance management system has no proper method to evaluate the

performance because we asked several times the HR manager about their evaluation

method he told us that “performance speaks for itself”, so on the basis of this

conception they reward and penalize their employees, no certain ranking criteria they are

using so their employees are unaware of the criteria on which their performance is

evaluated. If employees are unclear about these criteria how can they perform well?

This process involves clarifying the job role, job description and responsibilities –

explaining how the role and responsibilities contribute to wider goals, why individual and

team performance is important and just what is expected within the current planning

period. Objectives developed in this way should be reflective of the organizational goals

and provide linkages between employee and organizational performance. Within a given

department some objectives will be shared within a team or standardized across a number

of similar employees. However, it is important to ensure that, where necessary, an

individual focus is maintained: within any group of employees performing the same job

function there may be wide gaps in experience and technical knowledge. In order to keep

each individual employee motivated and committed to performing at his/her best, some

objectives need to be customized to allow for continued growth. A significant portion of

an employee’s performance should be based on these jointly developed objectives.It is

important that the process ensures that employees understand how their personal job

performance contributes to the overall performance of the company. This direct linkage

helps to create team working and shared responsibility. Team effort stems from shared

objectives reflecting organizational goals and clarification and understanding of the roles

and responsibilities of each member Within such a framework, performance appraisal has

higher acceptability. Although performance objectives should be individual and agreed

between employee and supervisor, this does not mean that they should be easy to attain.

All objectives, while being attainable, should challenge the employee to extend

him/herself to exceptional levels.

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TrainingA major aspect of developing an effective performance system is training for those

individuals involved as raters. Currently KFC is not focusing on the training of its people

and it can suffer from some problem in future. This training should start with a focus on

providing the manager with a systematic approach to the practice of effective people

management. This training needs to focus on the process of managing, motivating and

evaluating employee performance because if the people who are going to assist others

and they are accountable for the management of people working in the organization are

not properly trained then how can they carry out good management? Performance

appraisal is only a part of this overall process and it is important that managers see it

within its wider context and not as a simple “quick fix” solution. Thus training should

begin those levels of management that will be involved in administering the programme

and providing training for lower levels of supervision. Once the senior managers have

“bought into” the system, skills training are needed for junior managers and supervisors.

This specific training should include at least the following:

supervision skills;

coaching and counseling;

conflict resolution;

setting performance standards;

linking the system to pay providing employee feedback

Once an individual rater has been through the necessary training, periodic refresher

courses will be required to help the rater maintain necessary skills in performance

assessment. Raters involved in the appraisal process should also be evaluated on how

they conduct performance appraisals. This will help to make sure that evaluations are

performed in a similar and consistent manner throughout the organization. Since we are

asking employees to contribute to the process (by being involved in the setting of

personal objectives – and obviously in the review process), some training is required for

all employees. This training should include how to set objectives, how to keep accurate

records, and how to communicate all aspects of performance.

Frequency of appraisal

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Employee reviews should be performed on a frequent and ongoing basis. The actual time

period may vary in different organizations and with different aims but a typical frequency

would be bi-monthly or quarterly.

Eliminating surprises in the appraisal process is also important. Both the supervisor and

employee need to know that there is a performance problem prior to any major annual

review. Currently they review the performance of operational staff after every three

months and that of managerial staff after one year and this is not right they should at least

review the performance of managerial staff twice in a year means after every six months.

The longer a problem is allowed to continue, the more difficult it is to take corrective

action and not always problem is with the operational staff and they should regularly

evaluate the performance of managerial staff. Frequent performance appraisals should

eliminate the surprise element and help to modify performance prior to any annual

review. Of course, if there is a good relationship between supervisor and employee,

informal reviews of an employee’s performance may be undertaken almost continually.

Poor performance should not go unchallenged just because the quarterly review is not

due for two months. Frequent reviews also allow for clarification and revision of

objectives. This leads to better informed employees who are better equipped to perform

their job satisfactorily. In addition frequent reviews give supervisors more opportunity to

assure that progress is being made in developmental objectives. Job demands can

frequently prevent employees from achieving specified objectives. In this case the

supervisor must either re-assign work to allow the completion of this objective or modify

the objective to reflect the changing conditions of the job.

Maintaining records is another key to ensuring the effective use of a performance

appraisal scheme is keeping and maintaining accurate records of employee’s. Carefully

maintained, they establish patterns in an employee’s behavior that may be difficult to spot

by typical incident- by-incident supervision .Careful review of the records helps avoid the

selective memory mentioned earlier and helps plot appropriate actions. Of course, well

maintained

Records are essential if the need arises to discipline, demote or dismiss an employee.

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It is particularly helpful if employees are themselves responsible for part of the process of

record-keeping: this helps reinforce the fact that a major part of the process is devoted to

employee development – and that employees have a responsibility for their own

development. Such an approach to dual documentation also helps in the elimination of

surprises.

“Launch a 540 degree feedback”To ensure the proper assessment of the employees we launch a new system so that the

draw backs which current system has can be removed.

The range of feedback on the performance of an employee is generated from the

stakeholders - Superiors, Subordinates. Peers, Internal and External Customers, Clients or

Suppliers are known as 540 Degree feedback or appraisal.

In this, the customers and suppliers also evaluate the performance which helps us to

differentiate from the 360 degree performance appraisal. General Electric Company,

USA, was the first to tryout this concept in early 1990s.This is an emerging technique

and since customer plays a major role in the success or failure of business and for KFC

customer satisfaction is the key so their feedback will play a major role in assessing

employees. Since 90 to 95% of their staff is relate with operations so suppliers feedback

is also very important.

“Launch Proper Measurement system”Currently their managers are using own criteria “My Growth Body” to evaluate

employees in which there are 5 points and on the basis of performance they allocate

points. The actual measurement or grading system used to rate employee’s performance

needs to be designed carefully. A performance appraisal system which ranks employees

according to a numerical rating tends to lead to a great deal of average performers. For

example, if a 1-5 scale is used, five being best, a majority of employees will be rated a

three. While this may be reflective of their actual performance, few people take

gratification in being called average. Another problem arises when it is made extremely

difficult to perform at a level greater that a three or average. A company in this situation

tends to breed mediocre performance even from its outstanding performers. A possible

solution to the average rating problem is to have an even scale, for example or not to have

numeric ratings at all.

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In developing a rating system, a clear definition of each level of performance must be

provided and disseminated to all employees. Employees and all supervisors must clearly

believe that a rating higher than average is achievable and attainable. Of course, they

should also clearly believe that ratings lower than average is achievable and will be given

if appropriate. This again will help the employees to clearly understand that the

measurement system is accurately reflecting the true level of performance for every

employee.

Use Multiplier rating while conducting the performance appraisalIn many systems, the front-line supervisor is responsible for conducting the performance

review. However, a multiple rater system should be considered. So here we suggest that

KFC should use “Multiple rater systems” because they provide a form of “triangulation’

that results in ratings in which employees and managers have greater confidence. It may

also be necessary to restrict the number of employees rated by any one individual –

especially in todays new, flatter organization in which spans of supervision may be 60

people or more. With large spans of control, several supervisors may work with an

individual employee. The input from all supervisors about the employee’s performance is

required to complete a thorough performance review. Currently

Multiple rater systems can be computerized to allow statistical analysis to identify bias

– this can be particularly important where an organization is keen to avoid real or

perceived bias with respect to race, gender or age. Another advantage of multiple rating

systems is that they can shift the supervisor’s role from that of judge to performance

coach. An individual supervisor will no longer be responsible for a single employee’s

review. This in turn lifts the burden of “policing” from the supervisor and allows him/her

to focus on coaching and developing the employee. Some multiple rater systems go as far

as involving the use of subordinates in the evaluation process. This is especially effective

in a work environment which is self-governing. General Foods Corporation has used this

approach in some of its plants utilizing self governing work groups. Subordinate

evaluations have generally shown to be more accurate than supervisors in truly reflecting

employee performance. This system of evaluation allows employees to participate in the

decisions that affect them directly. This helps the employee to be less defensive and

passive in the appraisal review. Self-appraisals can lead to self-improvement. The

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employee’s self appraisal can also be helpful for the supervisor in opening a

communication link and allowing for comparison of performance results. Self-appraisals

give the supervisor helpful insight as to how the employee views his/her performance.

Generally speaking people will be at least as tough on themselves as the formal rater. A

proper process of employee and supervisor (or multiple rater) review can help employees

agree on areas for development and how the organization can help.

Some suggestions for developing an appraisalDeveloping an appraisal system that accurately reflects employee performance is a

difficult task. Performance appraisal systems are not generic or easily passed from one

company to another; their design and administration must be tailor-made to match

employee and organizational characteristics and qualities. Performance appraisals are

most commonly undertaken to let an employee know how his/her performance compares

with the supervisor’s expectations and to identify areas that require training or

development. Employees have a legitimate need to know how their performance is

viewed. At a basic level, without adequate communication between the employee and the

supervisor, undesirable work habits may be formed or good work habits may be

modified. Lack of such communication may be viewed by the employee as approval of

their current work habits and performance.The supervisor also has a legitimate reason

to conduct performance appraisals. Unsatisfactory performance needs to be conveyed in

order to arrange for improvement. Indeed, if performance is satisfactory the supervisor

wants to promote continued satisfactory performance. In either case, it helps to have a

systematic framework to ensure that performance appraisal is “fair” and consistent.

Reward system based on Performance

In the system which we proposed for the KFC the reward system is based on

performance. Not only the pay but other benefits and allowances also relate with the

performance of the employees of the organization. In the proposed new system that is

540 degree the performance of the employees is strongly linked with the rewards system.

Although the existing system also linked the performance with the rewards system but in

the existing there is no accurate method for measuring the performance of the workers

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that’s why rewards are not accurately linked with performance workers are not getting

what exactly they are doing. But 540 degree evaluation system has a proper method for

measuring the performance and employees are rated according to their performance.

They get point if they perform well. This thing will increase the competitiveness among

the workers and increase the productivity and help the organization to achieve its

objectives in the specific time frame. This thing also motivates the employees to work

hard because it is the natural thing that every one worked for some reward which may be

in any form and it varies form person to person. If at KFC the new system is launched

then it will provide the following advantages.

It motivates the workers of the organization. Because they know that when they

perform well only then they are given benefits and allowances.

It builds a good image of the organization in the industry.

It helps to achieve the goals of the organization in the time frame.

Improves employee engagement because everyone understands how they are

directly contributing to the organizations high level goals.

At KFC the goals and objectives are linked with the performance management

system, it provides the following advantages to the company:

It motivates the workers of the organization. Because they know that when they

perform well only then they are given benefits and allowances.

It builds a good image of the organization in the industry.

It helps to achieve the goals of the organization in the time frame.

Improves employee engagement because everyone understands how they are

directly contributing to the organizations high level goals.

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Linkage of current system with the performance management system of KFC

Developing an appraisal system that accurately reflects employee performance is a

difficult task. As we have looked at the appraisal system of KFC and it’s linkage, with the

performance management system of KFC. Now we will look at the new appraisal system

or the system which will also help the organizations to increase the performance and

efficiency of employees and its linkage with the performance management system of

KFC.

First of all if we set the objective of an individual and departments and then take the

acceptance from them or ownership from them, it mean to find out whether they are

willingly ready to do these task or not. If they take ownership then allow them to start

work. Now supervisors are going to monitor their performance frequently through

observations and feedbacks from them. On the other hand frequency of appraisal of

managerial staff with in 6 month will help to determine the competencies of manager

himself. If managers find out that there is any weakness in term of skills, capabilities and

competencies then they can arrange coaching and counseling for them and training

session for them to make competent. This will bring the employee on the right path and

he or she can achieve the expected task.

A different criterion’s of measuring performance, like 540 degree feedback will help to

feedback from the stakeholders - Superiors, Subordinates. Peers, Internal and External

Customers, Clients and Suppliers. Every body that is related to the organization is giving

feedback about the employee and after getting a feed back from all people, managers will

give them weight and the input from all supervisors about the employee’s performance is

required to complete a thorough performance review. Reward will be given to them

according to their achievement, these can be great motivational factors for the employees

to perform task honestly and properly.

From objective setting to reward paying system, each and every effort included in a

performance management system is to increase the performance of the organization and

develop individual performance towards the success of the organization.

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