Effective Performance Management - A Case Study Robert H. Xiao, Ph D HR Director, People & Organization Development Philips China Corp HR PPM 2003 2 Agenda - Why performance management? - What is the process? - How to make it work? - Value alignment / top down drive - Linking rewards and development - Aspects of infrastructure - Communication/education - Part of the culture - Where to start? PPM 2003 3 Why performance management? Basic management cycle Planning, organizing, staffing, leading, and controlling Fundamental corporate infrastructure Consistency in measuring/rewarding Sustainability in business and people PPM 2003 4 What is the process? Annual process Past review and next goal setting Appraisal process: rewards Individual development planning On-going review and documentation Global aligned PPM 2003 5 Philips Way: People Performance Management (PPM) is a process which helps to align personal and business objectives driven by the Philips way: one culture, one brand, one company one global approach for People Performance Management supporting the improvement of business results for Philips PPM 2003 6 PPM: a cyclical process PPM 2003 7 How to make it work? - value alignment & top down drive A performance oriented value system Company value as the core throughout organization Value derived criteria in the organization structure and supporting system (HR) Determination shown from the top Leaders being driven by the same process PPM 2003 8 Our Values Delight customers We delight our customers by anticipating and exceeding expectations thereby creating sustainable market leadership Deliver on commitments We pursue business excellence, being rigorous in delivering on our commitments Develop people We inspire and enable each other to use our creativity and entrepreneurial flair, and to maximize our potential Depend on each other We work as “one Philips” in an environment of transparency and trust to mobilize our collective competence and that of our business partners Values PPM 2003 9 How to make it work? - linking rewards and development Tight linkage between performance outcome and rewards Embedded individual development process PPM 2003 10 Philips Way: Links between PPM and other HR areas Salary & Annual incentive Individual Development PPM 2003 11 How to make it work? - aspects of infrastructures Full range of documentation On-line review system Performance distribution Calibration process PPM 2003 12 Philips Way: Documentation Job description (JD) Business balanced score card (BBS) Personal contribution agreement (PCA) Individual development plan (IDP) On-line PPM PPM is an on-line system Guided distribution 10%, 20%, 50%, 15%, 5% Calibration process Management team discussion PPM 2003 13 How to make it wor