Vitality Health Enterprise

Assignment of MM6012

Acintya Pramudhita [email protected]

(This document is created for educational required)

Case:Performance management at vitality health enterprise, inc, 9-913-501 (July 12, 2012).

Note: • Author plays a role of HR Departments which should present the problem solution in front of board.• Logo which used to represent Vitality Enterprise is only an ilustration from other enterprise’s logo.

And also some pictures used is downloaded from some website without watermark.

@acintya.mananomaacintyamananoma.

wordpress.com

HR TransformationAS STRATEGIC PATNER, HR DEPARTMENT RECOMEND SOME CHANGING ACTION S IN EMPLOYEE PERFORMANCE MANAGEMENT IN ORDER TO HELP THE SUCESS OF VITALITY HEALTH ENTERPRISE’S STRATEGIC GOALS.

Prepared by HR Departement(Presentation to Board)

Content

4

1

2

3

Brief of PMET 1&2 (Performance Management Evaluation Team)

Key-Solution

Evaluation for PMET 1&2

New PMET 35

Our Financial Condition

The Implementation6




Our Financial Condition

0

500

1000

1500

2000

2500

3000

2009 2010 2011 (expected)

Revenue and Net Income (in millions, USD$)

Revenue Net Income

2009-2011 our revenue and net income increased.

Shortly, our Financial Condition is in health level, so that this is become the right time to do the transformation.


0

0,1

0,2

0,3

0,4

0,5

0,6

2009 2010 2011 (expected)

ROA



4 rating levelsForced distribution ranking

13 rating levelsAbsolute ranking

Brief of PMET 1&2

2008-2009 2009-2011


Manager as a raterMerit pay; Job evaluation points; Compa-ratio

Pay policy in 75th percentile (7-8% higher than competitor)



Evaluation of PMET 1&2 (1/5)

Employee Turnover

• Happen among the highly talented research scientists.

ComplainRaterUnlinked Survey




• Unlinked between team and individual performance.

• A failing department would still have a number of high individual performance.


Employee Turnover RaterUnlinked SurveyComplain




• “A failing department would still have a number of high individIt’s not worth my time. It would be greate for my team but there are too many fires

to put out. Especialy now that I have to do all of them in January. I’ve got more important, more productive things to do.”

• “Who am I to pick between these guys? They’re all good at their jobs. I dont want to pick the winners and losers just to satisfy some arbitary

curve. I’m gonna do the same thing I always did. If it’s that important to HR, let them decide”

• Keep submit uniform ranking rather than following the new guidelines and then forcing HR to fit the distribution curve.

• Some managers submit ranking that fit the curve but then lie and tell their employees they had submitted something higher.

• Rather than identyfying top talent, managers simple tried maintain uniform ranking.

• Assign a Not Rated ranking to any new entry employee ( < 1 year)

• Some managers feels PMET 2 is too rigid.






• “I cracked the code for the latest generation of Ocucream [Vitality’s leading anti-aging eye cream] and what do I get? A pat

on the back and a 2% raise. If your go just down the hall you’ll find two guys who get 5% just for showing up. I can’t tell

what else they’ve done all year.”

• “I do woork for this company but I see nothing special for it. Sometimes I think I would be better off just coasting like some

of the Ivy League guys. You know, the product engineers. They seem to produce nect to nothing but still get the same

ratings as me and my team members. Sometimes even better.”






• Majority (more than 50%), employees prefered PMET 2

• The second largest (31%) preffered PMET 1

• And the rest employee feels indifferent between PMET 1&2



54%31%

15% Survey Result

Preferred newsystem

Preferred oldsystem

Indifferent




Key-Solution

The big picture by Milkovich’s Compensation books.




New PMET 3 (1/5)


PMET 3

BARS

Individual Reward

Team Reward

Special Reward

Cash Profit

Sharing

Specific Individual and Team Goal SettingRnD Strategic Goals

Company Strategic Goals

Output

Customer Focus Good Collaboration Less Competitive Employee Retention

for High Performance



BARS and Individual Reward (2/5)


List of Skills RequiredBased on Job Competencies

List of Company’s Value

Rating Scale

41 2 3

Average Score Pay Increase

> 4,6 8%

3,8 - 4,5 5%

< 3,8 0%

5

The rater is Manager



Cash Profit Sharing (3/5)


List of Team Strategic Goals

For Example:• Product

Development• Specification

Development• Government Policy

Making

The Progress

1 2 3

Total Bonus which received by team will be laid on the

project category

Achieved



Cash Profit Sharing (4/5)


List ofProject Result

For Example:• Lipstick 24hours• Eyeliner

Waterproof

Maximizing Profit

Profit Sharing will be a number of percentage from the project which effect to

financial result either maximizing profit or

minimizing cost.

Minimizing Cost

In million USD $



Special Reward (5/5)


This special reward is given as gratitude for excellence employee which:- Leads an idea of best seller product- Leads an idea of outmost minimizing cost



RaterTraining

Implementation (1/2)

The training will helps the raters which is managers in order to:

• Increases the ability of managers in terms of use performance management

• Increases the engaging between managers and performance management

• Inceases the effectiveness of PMET 3

HR




Implementation (2/2)

Training

Training Modul:I. Purpose of

Employee Performance

II. New PMET 3

Offline Guidance Book of New PMET 3

Accomodation:- Meeting room in

Hotel

(in order to tackle the issue: self-unworthy of performance management and attract the attention of RnD Managers)

Trainers:HR Manager and Head of PMET 3 Comitee




Business

Vitality Health Enterprise