E1FFIRS 11/09/2009 12:26:14 Page1 E1FFIRS 11/09/2009 12:26:14 Page3 E1FFIRS 11/09/2009 12:26:15 Page4 Copyright 2010JohnWiley&Sons(Asia)Pte.Ltd. Publishedin2010byJohnWiley&Sons(Asia)Pte.Ltd. 2ClementiLoop,#02-01,Singapore129809 Allrightsreserved. Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,or transmittedinanyformorbyanymeans,electronic,mechanical,photocopying, recording,scanning,orotherwise,exceptasexpresslypermittedbylaw, withouteitherthepriorwrittenpermissionofthePublisher,orauthorization throughpaymentoftheappropriatephotocopyfeetotheCopyrightClearance Center.RequestsforpermissionshouldbeaddressedtothePublisher,John Wiley&Sons(Asia)Pte.Ltd.,2ClementiLoop,#02-01,Singapore129809,tel: 65-6463-2400,fax:65-6463-4605,e-mail:[email protected]. Thispublicationisdesignedtoprovideaccurateandauthoritativeinformation inregardtothesubjectmattercovered.Itissoldwiththeunderstandingthat thepublisherisnotengagedinrenderingprofessionalservices.Ifprofessional adviceorotherexpertassistanceisrequired,theservicesofacompetent professionalpersonshouldbesought. Neithertheauthornorthepublisherareliableforanyactionspromptedor causedbytheinformationpresentedinthisbook.Anyviewsexpressedherein arethoseoftheauthoranddonotrepresenttheviewsoftheorganizations theyworkfor. OtherWileyEditorialOffices JohnWiley&Sons,111RiverStreet,Hoboken,NJ07030,USA JohnWiley&Sons,TheAtrium,SouthernGate,Chichester,WestSussex,P019 8SQ,UnitedKingdom JohnWiley&Sons(Canada)Ltd.,5353DundasStreetWest,Suite400, Toronto,Ontario,M9B6HB,Canada JohnWiley&SonsAustraliaLtd,42McDougallStreet,Milton,Queensland 4064,Australia Wiley-VCH,Boschstrasse12,D-69469Weinheim,Germany LibraryofCongressCataloging-in-PublicationData ISBN978-0-470-82414-6 Typesetin11/13ptNew-BaskervillebyThomsonDigital PrintedinSingaporebyInternationalPressSoftcomLimited 10 9 8 7 6 5 4 3 2 1 E1FFIRS 11/09/2009 12:26:15 Page5 Tomywife,GeckLuan;mysons,Yu En and Yu Ee;mydaughter-in- law,Grace;and mysister,SallyChew;for their faith in me and for prompting me to leave something for posterity. To Emeritus Professor You Poh Seng, former Executive Director ofthe Singapore Institute ofManagement, who appointed me in 1984topioneercorporatetrainingasanotherservice,afterhehad developed the Institute asan eminent institution providing man- agement education for working adults. It wasmyyearsofwork in corporate trainingat the Singapore Institute ofManagement that enabled me to learn concepts and develop applications that are useful to practicing managers. E1FTOC 11/09/2009 12:32:11 Page7 Acknowledgments ix Anote to the reader xi Foreword xiii Preface xv Introduction xix 1 Overview:The Results-Management System 1 2 Performance Measurement 11 3 Performance Management and Review 39 4 Performance Appraisal 93 5 Compensation System 111 6 Talent-Management System 125 7 Implementingthe Results-Management System 149 Index 161 E1FBETW01 11/09/2009 12:35:41 Page9 To Ms. Jolynn Chowof BeyondWordsTraining and Consultancy, who did the illustrations and trimmed my long and unwieldy sentencestomakethem readableandcomprehensibleforediting. Without her able and professional assistance in business writing, coupled with infinite patience, this book would not have been completed. To copy editor John Owen, who painstakingly shaped and pruned the whole manuscript into a convenient and readable form for the reader. To mytraining workshop participantsofall nationalities, from different organizations and levels of management, who have contributed so richlyto myown learning and who have encour- aged me to commit this to print for future generations of managers. Last, but not least, to my relatives, corporate clients, close friendsand associateswho have suggested varioustitlesculminat- ing in one that encapsulates what all individual managers and organizations aspire to do well—manage for results. E1FBETW02 11/30/2009 12:12:15 Page11 is written for practicing managers who want to enhance the productivityofthose under their charge. It trans- lates basic management concepts into practice for the busyline manager who wants to learn from other managers how to be more efficient and effective in achieving results through and with people. Itisbased on thereal-lifemanagingexperiencesand insightsof many line managers who have attended the author’s training workshops on managing for results. The reader is taken inside afictionallargecompany(Resu Co.) thatisrepresentativeofmost companies selling products or services to customers. The author, as workshop leader, shares with the reader how he facilitates the training workshops on aspects of the results- management system. The reader is also an observer at the work- shops listening to what the participants are saying as they learn how to apply the critical concepts and processes needed to implement a results-management system. These concepts and processes include strategic focus; functional linkages; perform- ance expectations, measurement, management, and appraisal; assessment of potential; compensation; and talent management. At each training session,participantscomprising managersand directors from human resources, production, sales, marketing finance,facilities,IT,and engineering are presented with familiar situationsrelatedtothemanagementconceptsandpracticeswithin the results-management system. They are invited to share their understanding and past approaches to the topic. The workshop leader consolidates their observations and responses, and uses these to introduce newperspectivesto the topicunder discussion. The participants’commentsand perspectivesare based on the typical responses the author has come across in his training E1FBETW02 11/30/2009 12:12:15 Page12 RESULTSMANAGEMENT programs. Theyrepresent a mix of keyoperational and support personnel who learn fast and are fairlyreceptive to newideas. The following are the key personnel in the company who, onceconvincedofitsmerits,willberesponsibleforimplementing the results-management system. Their job designations indicate theperspectivestheytakeduringthetrainingworkshops.Theyare either more results-oriented or people-oriented,or both,accord- ing to their educational background and work experience. The results-management system requires people to be both results- focused and people-oriented. Henry: Human Resources Director Tracy: Training Manager Ravi: Recruitment Manager Beatrice: Compensation and Benefits Manager Frank: Finance Director Paul: Production Director Eugene: Engineering (QA) Manager Martin: Marketing Director Sally: Sales Manager Felix: Facilities Manager Imran: IT Manager E1FBETW03 11/30/2009 12:13:10 Page13 It ismypleasure to write thisforeword. Thisisa topic dear to my heart. Perhaps I should sayit addresses one of the most vexing dilemmas in mywork life as a leader and manager. How do you move your organization forward, keeping your employees positive, committed and focused on continuous im- provement? An effective manager needs to identify areas for improvement, to have them understood, accepted and imple- mented with zest. This is an ideal state. But what is the real state in most organizations? I’ve supervised unitsat two universitiesin the United Statesfor morethan 30years. Theannualperformanceevaluationshappen in the last quarter of the year when we are involved in the budgeting process for the next year and in the final rush of student recruitment. The performance evaluation process dis- rupts the positive energy developed with staff during the year and worse;Isuspect no one at senior levelshastime to reallyread the evaluations and the forms thoroughly. In the end, salary is really the most important symbol of achievement to the employee – the percentage increase is really determined bya gross ranking of employees bythe supervisor. In a rush, the percentage increase is determined without effective communication between senior managersand line man- agers. Manyfactorsimpacting on performance and resultsfail to come into playin the process. More often than not, the employee gets a decent raise, but is perturbed by a few words pointing out areas for improvement, written perhapsin a rush, that irritate more than motivate. One resultofthisisan employeemayreactbydisagreeingwith much of the evaluation or ask for examples, putting the manager in a defensive position. Alternatively, he or she may act as if any E1FBETW03 11/30/2009 12:13:10 Page14 RESULTSMANAGEMENT negative feedbackdoesnot matter and willharbor strongfeelings about fairness. Some individualswho are too reticent to speakup due to shyness or cultural norms are clearlyhurt in this process because supervisorsmayrespond to assertive staffmembersmore. It is often said that people in business schools ‘‘can teach but cannot do.’’ I have a hunch too that manypeople in businesses alsoread and think,butseldom do. Wehaveyettodevelop agood system that connects corporate strategyand measurement at the operational level with performance management, evaluation and an equitable reward determination process based on real per- formance results. Let’shopethispragmaticbookandtheideasin itcan invigorate someorganizationstore-lookatthewayindividualperformersare measured and managed in a supportive systematic wayto avoid a year-end rush. Hopefully managerial time can be more effectively used and negative vibesfrom valued employeesin our organizationscan be reduced by designing feedback loops that do not undermine morale and the line manager’s credibility. I am proud that Ong Teong Wan, one of our highlyregarded graduates, hasmade such a clear-headed and experience-backed effort to refresh us all. This seeminglybasic but important book needs to be taken seriously. Jack G. Lewis, Ph.D. Associate Dean, IBEAR MBA& International MBAOutreach Marshall School of Business Universityof Southern California