Performance Management Policy

PURPOSE

The purpose of this policy is to have a clear understanding of the work expected by company from employees, to receive ongoing feedback regarding how they are performing relative to expectations, to distribute rewards accordingly, and to identify development opportunities.

SCOPE

This policy applies to all types of employee except daily wages employee in all business units (BUs) of IGE Group of Companies.

DEFINITION

  1. Performance management is an ongoing process of communication between a superior and an employee that occurs throughout the year, in support of accomplishing the strategic objectives of the organization. The communication process includes clarifying expectations, setting objectives, identifying goals, providing feedback, and reviewing results.
  2. Appraiser Immediate Superior who will appraise performance of subordinates within same department and provide feedback.
  3. Appraisee Employee who is appraised performance.

POLICY

  1. Performance Review is based on principles of openness, objectivity and equity.
  2. The overall performance of the employees must be appraised at the end of the financial year.
  3. This scheme applies to all employees who have satisfactorily completed their probation period.
  4. Human Resources Department (HRD) must organise & facilitate setting Key Performance Indicators (KPIs).
  5. Finance Department must provide required data for financial KPIs.
  6. KPIs which are in line with business plan must be set within two (2) weeks after business plan approved as per below Delegation of Authorities See Figure(1)
  7. KPIs must be mutually agreed by Appraiser and Appraisee.
  8. Overall performance assessment rating must be approved as per Delegation of Authority (DoA) See Figure(2).
  9. Overall performance assessment of the employee must be completed and submitted to HRD by third week of last month of financial year.
  10. Permanent employees who meet overall performance Grade B (Good), A (Very Good) and A+ (Excellent) on their final appraisal will entitle “salary increment” based on employee’s performance grade and business performance and opportunities.
  11. Employees who meet overall performance Grade B (Good), A (Very Good) and A+ (Excellent) on their final appraisal will entitle “yearly bonus” based on BU’s financial performance and employee’s performance grade.
  12. All employees who obtain Performance Grade C (Need Improvement) & Grade D (Unsatisfactory) must follow Performance Improvement Plan (PIP).
  13. KPIs must be adjusted only if Business plan is changed by BU’s Board within financial year.
  14. Performance measurement for Project based Employee
    • If project period is one year and above, overall performance of the employees must be appraised by annually and project plan.
    • If project period is less than one year, overall performance of the employees must be appraised based on project time line and project plan.

PROCEDURES

  1. KPIs will set within two weeks after final approved business plan.
  2. Appraiser will communicate officially to Appraisee and get agreement within one week after approved KPIs.
  3. HRD will get agreed signature on KPIs from both parties and keep as records.
  4. HRD will communicate performance management process to all employees within one week after approved KPIs.
  5. Appraiser will closely supervise on appraisee’s KPIs as interim review and HRD will monitor by monthly/quarterly.
  6. Appraisal Process
    • HRD commences appraisal process by prepared appraisal forms (HRFM-PM-005) for all employees.
    • HRD provides appraisal forms to HoD with timeline as well as deadline for completion within first week of last month of financial year.
    • Appraiser schedule meeting with Appraise to conduct formal performance review for the last financial year to validates ratings and provide feedback.
    • Appraiser and Appraisee sign off on the appraisal forms. Completed forms will be submitted to HRD within third week of last month of financial year.
    • HRD tabulates, updates employees scores into tracking sheet and convert score to performance grades.
    • HRD presents the Performance Appraisal Report to BU’s Head and BU’s Board to review.
    • HRD communicate BU’s Head and BU’s Board’s feedback to HoD and get signs off for approval.
    • Salary Increment and bonus distribution will be calculated based on yearly financial performance and employee’s performance grade.
  7. Performance Improvement Plan (PIP)
    If the employees get overall performance Grade C (Need Improvement) & Grade D (Unsatisfactory) in final performance review, PIP action will be taken as follow.
    • HoD, Appraiser and Appraisee will conduct counselling section to set out the areas where the current performance does not meet the standard required, areas for improvement & time line.
    • Then HoD and Appraiser must set PIP plan (PIP Form: HR-FM-PM006) with following timeline.
      • For Grade C, PIP duration must not exceed 6 months with at least 3 consecutive review.
      • For Grade D, PIP duration must not exceed 3 months with at least 3 consecutive review.
    • Appraiser will coach and review performance within set PIP timeline.
    • All performance review meetings are formally documented. All documents that summarizes employee performance, progress will be sing off and keep it by employee and HRD.
    • If the agreed performance does not improve after PIP duration, employee will be terminated without compensation according to the Employment Contract.

Delegation of Authority (DoA)

  1. Setting Key Performance Indicators
    Position Lastname Acknowledged By Approve By
    BU’s Board Main Board CHR Main Board
    BU’s Head BU’s Board CHR & HRD BU’s Board
    GM/COO BU’s Head HRD BU’s Board
    DGM & Below Immediate Superior HRD HoD/BU’s Head
    Figure(1)
  2. Performance Assessment
    Position Lastname Acknowledged By Approve By
    BU’s Board Main Board CHR Main Board
    BU’s Head BU’s Board HRD BU’s Board
    GM/COO BU’s Head HRD BU’s Board
    DGM & Below Immediate Superior HRD HoD/BU’s Head
    Figure(2)

REFERENCE DOCUMENTS

HR-FM-PM-005 :   Performance Appraisal Forms
HR-FM-PM-006 :   Performance Improvement Plan Form