WELCOME TO THE EU SME CENTRE WEBINAR SERIES

A project funded by the European Union

How to Structure a Performance

Management System Best Practices for SMEs Who Want to

Proactively Retain Their Talent in China

A project funded by the European Union

Cindy L. Jensen, May 27 2014

www.eusmecentre.org.cn info@eusmecentre.org.cn

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Purpose

• The EU SME Centre in Beijing is a project funded by the European Union

• To assist European SMEs to export to China and establish, develop and maintain commercial activities in the Chinese market

• Free, confidential information and advice, and practical support services

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www.eusmecentre.org.cn info@eusmecentre.org.cn

Speaker Biography

Cindy Jensen

• EU SME Centre Expert for Human Resource Management

and Training

• Experienced consultant advising organisations from the

Asia Pacific, Europe and North America

• More than 10 years in senior leadership roles for Frito-Lay,

a division of PepsiCo Foods Canada and TELUS Mobility,

leading teams in human resources, sales and marketing

• As regional HR Director for Frito-Lay responsible for all HR

issues, including the development of a performance

management system

• During her 12 years in China, she has advised and worked

with MNCs and SMEs developing and facilitating leadership

programs along with providing executive coaching to

senior leaders working in a global context in industries

including IT, banking, automotive, pharmaceutical, food and

beverages and mining

• Developing a performance management

system

• The starting point

• Defining roles and responsibilities

• Providing performance feedback

• Structuring a salary structure and

compensation plan

Agenda

• Case studies represent 4 SMEs in China

• 2 European established in China

• Company size 13

• Company size 145

Background

Initial Challenge:

Can you take best practices from a large multi-

national and apply to an SME?

Developing a Performance Management Process

The Starting Point

• Involve staff by creating a task force

• Include a variety of departments

• Reflect on the past... “What worked and what didn’t”

• Link to your business strategy

• Reinforce cultural values and behaviours

Why Talent Stay in a Job

Source: 2014 MRIC Talent Report

China Data 1. Opportunity to increase responsibility (32%)

• motivated by challenges

2. Work-life balance (29%)

3. Better leadership/strategic direction (25%)

4. Immediate reporting line (19%) • who my boss is

How to Keep Employees Engaged

Source: Towers Watson, Keeping Employees Engaged: What does it take? Nov.7, 2013

• Effective communication and empowerment

• Chinese employees who are informed of the

company’s values, goals and performance are more

engaged

• Manager’s role has shifted from technical expert to

people manager

• Employees are motivated by a boss

who manages by coaching

Retaining employees has more to do with the

quality of the work experience overall

Source: Towers Watson, 2012 Global Workforce Study

Defining Roles & Responsibilities

Roles and Responsibilities

Strategy

What is your brand known for?

Have core values been defined?

What competencies, skills & experience

are a must?

To what extent are broader roles

required?

Consider Your Organisation’s

Business Strategy

• As you develop roles & responsibilities . . .

• What will your organisation look like in 2 – 3 years?

• Will the role change or evolve over the next couple of years?

• What will be the skill set requirement for the future?

What People

Know

Knowledge

What People

Can Do

Experience

Competencies

What People

Have Done

Personal Attributes

Who People

Are

Identify the Knowledge, Experience,

Competencies Required for Job Success

Source: DDI White Paper , Success Profiles SM

Sales Finance

Government relations

Mandarin Legal/Industry

Accounting

Problem solving Client relations Drive for results

Team work Entrepreneurial

Self starter

Next Steps:

Develop a Job Description

Job Description

Position Business Development Manager

Job Objective Serves as… expert on the China market including identifying

current and future market needs. Develops business plans,

strategies, objectives to maximise the short and long term

potential of…

Experience 5 to 7 years in a business development role

Industry experience

Managing a P&L

Knowledge Mandarin and English

Budgeting and forecasting

Competencies Problem solving, customer focus, drive for results, managing

others, analytical, collaboration

Personal Attributes Team player, self starter, responsible

As you Develop Roles and Responsibilities

Constantly Consider the Future Business

• What will your organisation look like in 2 – 3 years?

• Will the role change or evolve over the next couple of years?

• What will be the skill set requirement for the future ?

How do You Objectively Evaluate

Competencies?

Customer Focus

• Seeks to meet the expectations of internal & external

stakeholders

• Builds and maintains effective relationships

• Establishes and nurtures relationships regularly inviting

feedback and suggestions

Source:www.microsoft.com/educations

A Clear Understanding

of Roles Enables…

• The company to develop clear goals/targets for individuals

• Provides an objective means for discussing an employee’s

performance

Performance Feedback

Providing Performance

Feedback

30/11/10

• Be well prepared

• Ensure no interruptions

• Be objective

• Have well prepared facts

• Provide balanced feedback

• Collaboratively work toward a

solution

Employee Performance Feedback

Employee Name:

Development Areas:

Strengths:

Action Plans:

Include in your feedback

What? Why?

Structuring Your Compensation

Higher Salaries – Not a Solution

Source: Predictions for 2014 - Building A Strong Talent Pipeline for The Global Economic Recovery . Bersin by Deloitte

83% of Asian businesses see labor-market competition

putting an upward pressure on wages, creating the need to

enhance their brand.

Compensation

How do you create

a point of differentiation?

Defining Compensation

• Salary

• Social benefits (pension, medical, UI, work related injury,

maternity insurance)

• Holidays (public)

• Vacation

• Training and education funds

• Travel

• Non-monetary incentives

Monetary vs. Non-Monetary

• Understand your

demographics

• What works for some, does

not work for all

• Keep it fair and flexible

• Regardless of choice… it must

integrate with total

compensation plan

Determining Salaries

• Use your network for evaluating salaries

• Salary surveys can be a reliable reference for

compensation:

• Robert Walters

• Hay Salary Guide

• J.M. Gemini's

• payscale.com

• Hudson China Salaries

• Salary Explorer

• Professional Associations

• Recruitment websites

Salary Surveys a Good Benchmark

Annual Salary (RMB) Source

200k – 300k Kelly Services*

200k – 350k Hays Salary Guide**

330k – 700k Gemini China Guide***

200k – 400k Hudson Salary Guide****

* Tier 1 city, 7 to 10 years ** SME salary range *** Manager/controller with professional designation **** SME with 8 years experience

Accounting Manager

Factors in Designing a

Compensation Plan

• Who are your employees?

• What will the plan look like?

• How will you implement the plan?

• Ensure it fits with your budget

• Targets must be attainable but

with some stretch

Guiding Principles

• Fair & equitable

• Rewards attaining stretch targets

• Rewards based on organisational success

• Does not conflict with the corporate values

• Easy to track and measure

• Easy to communicate & understand

Example of Compensation

Framework

• Salary: determine $ amount

• Vacation: follow standard legislation requirements

• Public Holidays: Is there really a requirement to work on holiday weekends leading into a holiday

• Team Bonus: for delivering business results

• Flex Time where Possible: i.e. an accountant working on month end working from home for the day

• Team Events: The team planned quarterly outings i.e. given a budget

Gauging Success

• Communicate, communicate,

communicate

• Understand your organisational

pulse

• Round tables

• Lunch

• Team outings

• Be prepared to change

Steps for Developing a

Performance Management Process

Step 1: Involve staff – form a

task force

Step 2: Define Role &

Responsibilities

Step 3: Develop Job

Descriptions Employees create the

first draft

Step 4: Make Giving Feedback a

Workplace Practice

Step 5: Decide on a Compensation

Framework

Step 6: Link Monetary and Non Monetary

incentives to Business Results

Step 7: Keep a Pulse on the Organization ask for

feedback in informal settings

Guidelines for Registered Users

1. Internal Labour Rules and Social Insurance • http://www.eusmecentre.org.cn/content/internal-labour-rules-and-social-

insurance

2. Labor Laws in China • http://www.eusmecentre.org.cn/content/labour-laws-china

3. How to Cope with HR Challenges in China:

Recruiting and Employing Foreigners • http://www.eusmecentre.org.cn/content/webinar-how-cope-hr-

challenges-china-recruiting-and-employing-foreigners-china

At the End of the Day…

• Be clear about your strategy before

defining roles and responsibilities

• Provide regular, objective feedback

• Always keep in mind the

demographics of your team

• Develop a culture of learning and

growth

• Value the contributions of your team

• Keep a pulse on the organisation

• Celebrate successes

www.eusmecentre.org.cn info@eusmecentre.org.cn

www.eusmecentre.org.cn info@eusmecentre.org.cn