“We don’t have a proper performance management system and I think we can do better, our people are not motivated and our goals are not clear and we hardly discuss our people development. Could you please share your recommendation with the management team in 2 weeks’ time?”
Assumptions: Bank(Banking) Industry
A. Company does not have any Performance Management Model/Tools.
B. Company does not have a good Pay structure
C. Assume the current culture is quite open
1. Recommendations
a. Intro a proper ‘Performance Management Model’
b. Role & Goal Alignment (Match Individual to company goals) + Direction (Planning)
2. ON-going activities
a. Quarterly Review? IDP (Individual Development Program)
b. 1:1 Monthly (Allow Skip level 1:1: Session)
3. Coaching & Support (Annual)
a. In-house, extend, Support (Counsellor)
b. Communication Channels.
4. Development & Goal Setting
(SMART Objectives/Goals)
S: Specific/Stretching
M: Measurable
A: Achievable
R: Relevant
T: Time framed
(e.g.) Become a Manager in 5 years
Become a subject matter, Expert in Learning & Development
5. Rewards, Recognition & Compensation + Performance Appraiser
(e.g.) Bonus pay structure
Pay by performance
6. Workflow + Pros /Cons & Return
a. (e.g.) Meeting with Managers, 1 hour (Workflow)
Process / Control – Coach your mangers to coach their staff.
b. Budget, timeline, cost : Benefit, Analysis + Impact (Conclusion)
Components of an Effective Performance Management Process
A. Direction sharing
Role clarification
B. Goal Alignment
Development goal setting
C. SKIP [ACTION]
D. On-going performance monitoring
On-going feedback
Coaching and support
E. Performance assessment (appraiser)
Rewards, recognition, and compensation
Workflow and process control and return
Performance, Management cycle(Armstrong, 2001)
A: Role Definition
E: Review B:Plan
Performance agreement
Performance Review Personal Development Planning
Performance
D: Monitor C :Act
5. Rewards, Recognition & Compensation + Performance Appraiser
(e.g.) Bonus pay structure
Pay by performance
: NOT Specific job / or tile -> Recommend GENERAL BANK INDUSTRY
FYR : Example
[Development Bank of Singapore (DBS)] :Sales position
Headquartered and listed in Singapore, DBS is a leading financial services group in Asia, with over 280 branches across 18 markets. Its presence extends beyond Singapore and Southeast Asia into China and even South Asia. As a strong leader in the region, the commercial bank prided itself on being named the “Safest Bank in Asia” by Global Finance for 7 consecutive years from 2009 to 2015.
DBS delivers a wide range of financial products and services to its customers. The customers have been broadly categorised into the following three main groups: personal banking, wealth management and business banking.
1. Personal Banking
Divisions: DBS and POSB
Products: Saving, retirement, insurance, fixed deposits and credit cards
Sales pay structure: Fixed Base + Team Bonus
The nature of the products and services offered in this category requires the sales employees to reach out to the masses to promote. Team bonus will help to encourage them to work together, to share knowledge within the team to attain the desired volume of sales, as well as to encourage them to work on a long-term basis in the company. The team bonus will also act as a motivator for employees to work hard and improve productivity (by 14%) to not to disappoint the team and deprive them of their bonuses.
2. Wealth Management
Divisions: DBS Treasures, DBS Treasures Private Client, DBS Private Client
Products: Investments, purchase of shares and bonds
Sales pay structure: Fixed Base + Stock options (Long term incentive) + Commission
The customer base for wealth management is fluid. Strong and capable sales employees are necessary to attract new customers, as well as build and maintain relationships with their clients to sustain and improve the business. Hence, commission that allows them to benefit from their better performance will incentivise them to bring in more businesses for the company. The contacts and networks the salespersons have are their assets too. They bring their clients with them as they move from companies to companies. Outstanding sales personnels with high profile contacts are constantly in high demand in the market. Hence, long term incentives in the form of shares allocation would be useful to retain them in the company while encouraging better performance.
3. Business Banking
Divisions: SME Banking, Corporate Banking & Institutional Investor
Products: Corporate loans
Sales pay structure: Fixed Base Salary + Bonus
Customers in this category are SMEs, MNCs and institutional organisations. They are generally less fluid due to the long term contracts put in place. With bonus as a long term incentive, the pay structure will provide an opportunity for sales employees with exceptional performance to be rewarded and at the same time, encourage company loyalty.