Innovative Trends and Strategies in

Compensation and Performance Management

18th July 2006

About Us

! 5 years

! 23 processing units

! 56 countries

! 4000 employees

! >90 Million Transactions

! 10% of Standard Chartereds manpower

! Placing people first

 Changing Paradigm

The Changing face of the Indian HR

Key Drivers People Implications
! Global Competition
! Brand & Value proposition
! Burgeoning Global Opportunities
! New Work Ethics ! Sensitivity and Inclusion

! Shift in loyalty from organisation to ! Acculturisation

profession and function
! Complex employee expectations
! Hierarchies to collaborative
! Strong People management
partnerships
! Younger and impatient workforce capabilities

! Global work culture ! High Performance Culture

Companies that manage people well will have a competitive business

advantage
 It Makes Business Sense

1000% 901%
900%
756%
800% 682%
700%
600%
Organisation w ith Performance
500% Enhancing Culture
400% 282% Organisation w ithout Performance
300% Enhancing Culture
166%
200% 74%
36% Difference in Productivity of High vs.
100% 1%
Average Performers by Complexity of Job
0%
Revenue Employment Stock Price Net Income

Difference in Productivity
125%
Grow th Grow th Grow th Grow th 120%

of High Performers
100%

Corporate Culture & Performance -John Kotter and James Haskett

75%

50%
48%
25% 32%
19%
0%
Low Moderate High High-Sales
Complexity of Job
Clear understanding of Performance Standards
Increases individual performance by 36.1% J.E. Hunter, et al., Individual Differences in Output Variability as a
Function of Job Complexity, Journal of Applied Psychology, 1990
Managing Performance
Internal Complexities and External Realities

Managing people performance is complex

" Delivering on performance standards enough
" Its more complex to perform
" Not just restricted to achieving targets or meeting deadlines
" How to work in collaborative partnerships and to manage
stakeholder expectations
" Innovation and creating the difference
Measuring performance is even more complex
" Failure in evaluating effectiveness of measurement tools and
practices
" Validity, consistency and frequency of performance reviews
" Building managerial capabilities
 Elements of High Performance

Performance Mgmt. System

Performance Culture

Manager Employee Interaction

High Performing
Workforce Formal Review

Informal Feedback

Connection with Rewards

Job Opportunities

Corporate Leadership Council Performance Management Survey

Emerging Trends & Strategies

! Managers Key to Performance Invest in People

Management Capabilities
! Keep what matters in Sharp Focus

Difference in % of Employees Responding FavorablyDDG vs. SDG

I have a clear understanding of what I can do to help the company become more successful
+18%
My manager clearly communicates expectations for me
+16%
I have a good understanding of goals for:
" Myself
+11%
" My team
+16%
" My department
+18%
" My business unit
+10%

* Joint research of Hewitt Associates and Michael Treacy, Author

Double-Digit GrowthHow Great Companies Achieve It No Matter What, 2004

! Aggressively Differentiate Performance and Rewards

 Differentiating Rewards Based on
Results

Effects of Successful Pay-for-Performance Programs on

Making the
best better! High Performers Mid-Range Performers Low Performers

No No No
Up Down Up Down Up Down
Change Change Change
Engagement 78% 0% 22% 63% 2% 34% 21% 26% 54%
Innovation 80% 3% 18% 45% 5% 51% 11% 21% 68%
Productivity 88% 0% 13% 65% 0% 35% 31% 18% 51%
Quality of work 80% 0% 20% 60% 3% 38% 28% 21% 51%
Teamwork 65% 3% 33% 67% 3% 31% 23% 21% 56%
Turnover 20% 50% 30% 20% 34% 46% 54% 15% 32%

Keeping more These and more of Underperformers

of the right employees get them stay start looking
people stronger too elsewhere

HewittWorldatWork, Joint Research on Pay-for-Performance, 2004

 Changing Face of Rewards

Pay, Benefits,
Total
Pay and Recognition
Employment
Experience

Pay and Total

Benefits Rewards

Employee Value
Proposition
A Holistic Rewards Approach

Career Planning
Individual Development
Career

Flexible work
Work - Life Practices

Fusion Club
Work / Affiliation
KFC Week

Awards and not just

Non Financial Rewards rewards!!

Smart Work, Smart Rewards

Financial Rewards Future marking, not benchmarking

Employee Value Proposition = Pay + Benefits + Careers + employee

experience
 Lessons Learnt

! Robust methodologies and Consistent HR practices

! Simple Stuff is the Difficult Stuff
! Know when to Build or Buy Talent
! Broad-based or Critical Few
! Connect the dotsfrom strategic intent to individual
goals
! Think Holistic Rewards
! Managers as key to performance: invest in people
managers
! Build Employee Value Proposition
Our HR Roadmap
Thank You Questions?