Managing Performance At

8/4/2019 Managing Performance At

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MANAGING PERFORMANCE ATHAIER

SUBMITTED BY

AFIFA NAZIM YASMEEN

PARINA JAIN

SHEENAM SOOD

MAHEK SOOD

KOMAL BHATTI


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INTRODUCTION

Qingdao Haier Refrigerator General Factory, a homeappliance manufacturer in the northeastern Chinese city ofQingdao. Its CEO is Zhang Ruimin.

Since 2002 Haier has been recognized annually as Chinasmost valuable brand,based on its success in introducing

market competition in the whole electric home applianceindustry.

In 2006 Haier was ranked as the worlds sixth largest makerof large kitchen appliances with a 4% global market shareand a particularly strong position in washing machines (#2)

and refrigerators (#3)


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Key success Factors

Product diversification

Product innovation to create nichemarkets

Marketing initiatives that emphasizedproduct quality and market research.

Globalization

Innovative human resourcemanagement practices.


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Performance managementsystem Performance management describes the processes

by which managers improve the performance of

their employees by utilizing their power to

reward, develop or discipline as appropriate. Aperformance management system documents

these processes as company policy and may form

a legally binding contract between the companyand one or more employees.


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Essential Components of aPerformance Management

System are: A performance plan is negotiated between a

manager and employee for a given period (usuallyone year). During the year the manager gives employees

feedback

Performance is appraised at year-end decisions are made to reward, discipline or develop

employees. The cycle is completed with a new performance

plan.


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Haier groups managementphilosophies 1 Zhang remarked on the importance of effective

human resource management policies:An enterprise is like a ball being pushed up a hill

(F1). Under pressure of market competition andinternal stress (F2), the ball needs a strong brakingforce (F) to prevent it from rolling back down. Thisbraking force is the internal managementinfrastucture.


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Continued..2

A Sense of Urgency:Haier was prepared for moving forward in time of

danger. This sense of urgency was heightened byinternal competition as well as external.

OEC: Overall, Every, Control and Clearance

A guiding principle of Haiers management system wasOEC

The term overall meant that all performancedimensions had to be considered.

Every referred to everyone, every day and everything.

Control and clearance referred to Haiers end-of-workprocedure each day, which stated that each employeemust finish all tasks planned for that day before leavingwork.

The concept of OEC laid the groundwork for amanagement system that had both breadth and depth:

It applied to every aspect of work, every employee,every day.


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80:20 Principle

Under Haiers80:20 Principle, the 20% ofemployees who were managers were heldresponsible for 80% of company results (good or

bad). Race Track Model

Every employee in the Haier Group (expect thetop eight senior executives) underwent frequent

and transparent performance appraisals goingagainst the traditional Chinese culture in whichface was extremely important.


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Tracking Individual Profit and Loss

Monthly measures were used to track

performance, according to the revenue and profit

the managers had earned for the company.

DEPOSIT BOOK

Each manager was accountable for only a smallportion of overall profits. Each one could function

as a miniature company (MMC)


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Managing Performance HAIER used several performance and motivational

tools. One involved a set of colored footprints onthe factory floor.

A board placed in the factory workshop thatrecorded workers performance on a daily basis.

Under a system of selfmanagement,employees setclear goals for themselves in a brief meeting withtheir supervisor at the beginning of their shift.

Haier had a formal policy for managing thoseemployees who did not meet set expectations.


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Appraising Managers Each managers performance was reviewed

weekly. The criteria for weekly evaluation involvedboth achieving quantifiable goals and the degree of

Innovation and for improvement.

The results of managers performance ranking wereopenely displayed at the entrance to the companycafeteria with a green or red arrow indicating

whether their score had gone up or down thatmonth.


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Developing talent When new position opened up,Haier ensured that

a wide pool of candidates competed for theposition rather than promiting only from existing

employees.

Job rotation was critical to promote employeedevelopment and avoid territorialism

Monthly management evaluation meetings topperformers were identified and those with the mostwere tranfered into the higher talent pool.


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Dealing with low performance ofmanagers

The low performing manager classified in 3catogories:

a) if minor improvement in managementperformance is necessary mangers were put onmedication,which indicated that they needed tochange and receive training on those specificissues.

b)Most serious under performers were refer to as 4users and demoted.

c)Managers with serious performance issueswerehospitalized, and would be removed from

their position.


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Conclusion

Haiers performer management philosophies wereconsidered not only for chinese companies but alsofor any firm anywhere.

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Managing Performance At