Faculty of Engineering

Department of Mechanical and Manufacturing Engineering

Master of Engineering Management
Total Quality Management (EMM5602)
Performance Management
Wei Wei GS60558
Fan Jiaoang GS60191
Suresh Muniappan GS61307
Huang Jinglu GS60260
Shankar Thambiraja GS61646
NavinthiranPillay GS61372
Sivakuru Tharmadurai GS62143
Table Of Contents

▶ 1. Performance management and process

▶ 2. The reasons for formulating and implementing the performance

management process

▶ 3. Tools and technologies for performance management

▶ 4. Performance KPI

▶ 5. Measures for continuous improvement

▶ 6. Monitoring and evaluation methods of the scheme

 1. Performance
management and process

The purpose of performance

management is to realize the strategic
objectives of the organization, promote
the improvement of organizational
efficiency and the growth of employees.
The supervisor and subordinate
employees make work target plans and
achieve the goals, explore the potential
of the development team, and make the
enterprise create more benefits.
 1. Performance
management and process

Apply PDCA cycle (4 + 1) to formulate performance management process.

"1" is "continuous communication", which runs through the whole process

of performance management and even enterprise management.

"4" is the four PDCA links of performance management,

including:

performance objectives and plans,

performance implementation and guidance,
performance evaluation and feedback,
performance encouragement and development;
 1. Performance
management and process
The first link: performance objectives and plans.
Only when the correct goals are set can enterprises and employees move forward towards the
correct goals.
The main work of this link includes:
▶ Defining and decomposing the company's strategic objectives;
▶ Formulating and decomposing the department's performance targets and KPI;
▶ Setting personal performance targets and KPI;
▶ Communicate goals and achieve performance commitments, sign performance contracts or
performance target responsibility books, etc.

The second link: performance implementation and guidance.

This link focuses on the implementation of the objectives and plans of the first link.
The main work of this link includes:
▶ Implementing and improving the performance implementation action plan;
▶ Monitor the progress and completion of performance targets;
▶ Feedback employees' problems in performance implementation and communicate with them.;
▶ Observe, record and collect relevant information.
 1. Performance
management and process
The third link: performance evaluation and feedback.
The assessment link aims to verify the completion of performance objectives and evaluate the
performance results of employees.
The main work of this link includes:
▶ Collecting, counting and sorting out performance data;
▶ Evaluate the performance results of organizations and personnel at all levels by combining
performance data and performance plans;
▶ Feedback the assessment results and conduct face-to-face communication.

The fourth link: performance incentive and development.

The purpose is to motivate employees to better accomplish their performance goals according to
different levels and categories of employees.
The main work of this link includes:
▶ implementing salary incentives, such as bonus distribution and salary adjustment;
▶ providing personnel decisions, such as job promotion and personnel allocation;
▶ Promote career development, such as making a performance improvement plan according to the
assessment results.
 2. HUAWEI company performance
management case

The main business scope of HUAWEI is to exchange, transmit wireless and data communication
telecommunications products, and provide network equipment, services and solutions to customers
all over the world in the telecommunications field. The most commonly seen is Huawei mobile
phones and computers.

In the process of becoming a world-class enterprise, HUAWEI has done a very good job in
performance management, which has injected strong momentum into Huawei. Now let's take a look
at HUAWEI's performance management approach.
 2. HUAWEI company performance
management case

WHY---HUAWEI’s assessment stipulates that “for incompetent employees, training should

be arranged to promote their performance improvement, or to adjust their positions. If they
are still incompetent after training or change of posts, they will be eliminated.” The
company’s goals are tied to the employees’ personal needs and interests through
performance standards centered on responsibilities, employee capabilities, and
contributions, as well as corresponding evaluation methods and value distribution
mechanisms, so as to internalize the company’s goals as employees. Personal mission
and responsibilities.

WHAT--- One is the result evaluation and assessment of the responsibility result
orientation and the personal behavior of key events; the other is the hierarchical and
hierarchical reporting based on the company's strategy, that is, the PBC (Personal
Performance Commitment) commitment and expectation The degree of completion of
performance; The third is to assess whether the actual ability of employees meets the
requirements of the job based on the qualification standards of the positions at all levels.
 2. HUAWEI company performance
management case

HOW---One is to meet the shortage of new products in a certain development department of

the company, and to decompose it from top to bottom from the perspective of the company's
goals to support the company's strategy.

The second is to complete the human resources management work, the responsibilities of the
post, the major feature of the functional department post work is that it is not very closely
integrated with the strategy, but each post still has its outstanding contribution performance
methods, and these performance methods can be used as a key Indicators to assess.

The third is to complete the induction training for new employees in a certain sales
department. Based on the process or customer, the functional department guarantees the
service quality of the production and sales department, and forms a complete process with
these business departments.
 3. Tools and Techniques for
Implementing Performance Management

RICOH (M) Sdn Bhd is a huge trading company for stencil duplicators. RICOH uses Clear
Review’s performance management software and practices the following tools & techniques to
implement performance management:

1. One-on One Performance Check-Ins

2. The 5As Approach to Goal Setting
3. Real-Time Feedback
4. Personal Development Plans (PDPs)
5. Reward and Recognition Schemees
6. A Wellbeing Scheme

1. One-on One Performance Check-Ins

Regular performance discussions throughout the year improve relationships between managers and
employees, while building employee engagement levels and boosting productivity. In contrast, the
traditional approach to performance management has proven to be a serious waste of time and money.
Statistic shows that in a few years, reliance on a single annual appraisal will be a thing of the past.
 3. Tools and Techniques for
Implementing Performance Management

2. 5As Approach to Goal Setting

 ASSESSABLE: This is a goal that can be measured, so it is clear when it’s achieved.
 ASPIRATIONAL: An aspirational goal is stretching, encouraging employees to test themselves and
devel­op, ultimately driving high performance.
 ALIGNED: All goals within the organisation should feed into overall organisational goals and
objectives.
 ACCOUNTABLE: Employees need to know that they are accountable for the goal itself, and they need
to understand if the goal is shared with other team members.
 AGILE: Goals should be nearterm (achievable within four months) and reviewed regularly to keep
them meaningful and relevant.

3. Real-Time Feedback

Realtime feedback has been associated with a number of benefits, including increased retention,
improved recruitment, better performance and an increased ability to handle change. Thankfully, realtime
feedback is achievable these days, with the advent of tablets, laptops and smartphones.
 3. Tools and Techniques for
Implementing Performance Management

4. Personal Development Plans (PDPs)

PDPs aren’t a performance management tool you should simply pay lip service to, and then neglect for
another year. Instead, manager and employee should create SMART PDPs that can be updated and
reviewed online throughout the year. By encouraging this in their employees, companies benefit from a
workforce who possess a sense of direction and focus in relation to their careers.

5. Reward and Recognition Schemes

No employee works just for a paycheck. It has been shown that 80% of employees work harder when they
feel appreciated. Another source shows that 43% of employees would feel more motivated by appreciation
than money, while further evidence suggests that recognition can improve team culture and reduce turnover.

6. A Wellbeing Scheme

Employees can’t perform at their best when they feel at their worst. They can’t be productive when they’re
burnt out, overworked and overwhelmed. A forwardthinking organisation knows this and puts measures in
place to cater to employee wellbeing.
 4. Introduction of
performation KPI
The essence of KPI （ Key Performance Indicator ） assessment lies in:
 From the perspective of management purposes, KPI assessment aims to guide the attention
direction of employees and free them from unimportant trifles, so as to pay more attention to the
overall performance indicators of the company, important work areas of the department and key work
tasks of individuals.

 From the perspective of management costs, KPI assessment can effectively save assessment
costs, reduce the blindness of subjective assessment, shorten the deliberation time of fuzzy
assessment, and use the limited financial resources, material resources and human resources of
the enterprise to develop new products and open up new markets.

 From the perspective of management effectiveness, KPI assessment is mainly used to

detect the key problems existing in management, and can quickly find the crux of the problem,
so as not to be entangled with too many side issues. A practical problem often encountered in
enterprise performance evaluation is that it is difficult to determine objective and quantitative
performance indicators.
 4. Introduction of
performation KPI
According to management themes, performance management can be divided
into two categories:
 Performance management
Focuses on stimulating employees' enthusiasm for work and is more suitable for enterprises in the
growth stage.

 Management-controlled performance management

Focuses on standardizing employees' work behaviors and is more suitable for mature enterprises.

Characteristics of KPI :
 Connect the vision and strategy of the company with the work of employees in the department,
decompose and support each employee layer by layer, so that the individual performance of each
employee, the performance of the department and the overall benefit of the company are directly
linked.
 Ensure the connection between employee performance and internal and external customer value,
and jointly serve to realize customer value.
 4. Introduction of
performation KPI

The assessment process

 The KPI extraction
 Decomposition of KPI
 Feedback mechanism:
• Tracking
• KPI optimization
 The KPI assessment

Advantages and disadvantages of KPI

Advantages:
1. Clear objectives are conducive to the realization of
the company's strategic objectives
2. Put forward the concept of customer value
3. It is conducive to reaching agreement between
organizational interests and personal interests
Disadvantages:
1.KPI indicators are difficult to define
2.KPI will lead examiners into mechanical
assessment methods
3.KPI is not suitable for all positions
 5. Continuous
Improvement Measures
 Continuous improvement, sometimes called continual improvement, is the ongoing improvement of
products, services, or processes through incremental and breakthrough improvements. These efforts
can seek "incremental" improvement over time or "breakthrough" improvement all at once.
 Most operations have some kind of continuous improvement initiative ongoing at any given time.
There are a variety of continuous improvement methodologies: Kaizen, Six Sigma, Lean, and Total
Quality Management. One of the most common improvement models is the PDCA (Plan, Do, Check,
Act). Each step is distinct and intuitive:

 Plan: Identify an opportunity for change and create a plan to reach that goal. 
 Do: Implement that change on a small scale (to start).
 Check: Gather information after each new change and analyze its effectiveness.
 Act: Implement successful changes on a wider scale while continuously assessing your results. If the
changes did not work, begin the cycle again
 5. Continuous
Improvement Measures
 Of these four steps, the third has consistently proved to be the most challenging for operations
environments. Collecting, compiling, and transforming the data into useful metrics can be complex
and overwhelming.
 What metrics are companies using to measure the effectiveness of a continuous improvement
project? How are those changes and improvements affecting their costs? Most organizations will use
observations, time studies, and spreadsheets to evaluate these results. While this can work for some
use cases, it is very labor-intensive and difficult to maintain on an ongoing basis.
 5. Continuous
Improvement Measures
 Cost –An example would be reducing the cost for product delivery from RM5.50 per pick to RM5.25
per delivery, which is RM0.25 per delivery cost improvement.
 Time – Time reduction to perform specific processes. An example would be reducing meeting times
from 2 hours per day to 1.5 hours per day by installing reporting or public display systems that
eliminate the need for meeting time. For a 100-person operation, that is 0.5*100 = 50 hours per day or
12,600 hours saved per year.
 Safety – Number of workplace incidents reported, observations of unsafe acts, observations of unsafe
conditions, hazards reported, and safety corrective actions are all possible safety metrics. An example
would be investing in a pay-for-performance program that reduces incidents reported because
employees are financially incentivized for better performance, causing more engagement and a sense
of accountability.
 ROI – Return on investment % is the financial return of an investment divided by the cost of that
investment for that period of time. An example would be RM2.0M in labor cost savings due to a
RM1.5M equipment investment returns a 133% ROI ((2/1.5)*100).
 Quality – Quality metrics include order picking accuracy, % orders returned, on-time shipment %,
inventory accuracy, and more. An example would be to separate value-added services (VAS) and
kitting into its own department and consistent team. VAS cost to serve by the customer would be
another metric from this example.
 5. Continuous
Improvement Measures

 It’s difficult to measure the success of your outcomes without

first defining a common set of units or metrics to measure.
 By using Root Cause Analysis, we can define the key metrics
and measurements of continuous improvement. For example,
we have a distribution center that’s running high on costs.
Why? The answer might be that they’re losing money on
inefficient picking.
 So why is their picking process inefficient? It could be
because the team must travel unusually long distances for
each unit. Why? Because the physical layout of the facility
isn’t well optimized.
 Now you’ve identified the starting point for improvement and optimization: Travel distance, or feet
traveled per unit. The longer the distance, the higher the cost. You now have your key metric for
measuring your improvement on this specific process. 
 5. Continuous
Improvement Measures
There are many ways to achieve continuous improvement. All of them have one thing in common -
analyzing what can be done better compared to the past. You can sustain continuous improvement by:
•Minimizing the wastes in your process
•Creating a suitable environment for your team to improve
•Implementing the PDCA cycle
•Always looking for the root cause of existing and potential problems
 To systematically manage sustainability risks, Huawei has
created a guide based on the Risk, Governance, and
Control (RGC) methodology. The guide covers risk
identification, risk assessment, target setting, risk control,
risk monitoring, and risk governance. It helps Huawei
business departments improve their sustainability risk
management organization and operations to keep risk
within an acceptable level.
 Sustainability risk management is not just about identifying
risks; it also identifies potential opportunities. This is an Huawei developed Sustainability
important input to our annual sustainability goal setting and Management System using the PDCA
helps improve our sustainability performance. cycle.
 6. Monitoring &
Evaluation Method
Monitoring
Monitoring is the systematic and routine collection of
information from projects and programs.
The purposes of monitoring :

To learn from experiences to improve practices and

activities in the future.

To have internal and external accountability of the

resources used and the results obtained.

To take informed decisions on the future of the initiative. (Adapted from Gage and Dunn 2009,
Frankel and Gage 2007)
To promote empowerment of beneficiaries of the initiative.

Monitoring is a periodically recurring task already beginning

in the planning stage of a project or program.
 6. Monitoring &
Evaluation Method
Process monitoring provides information on the use of resources .
the progress of activities and the way these are carried out. It involves: ·

 Reviewing and planning on a regular basis .

 Assessing whether activities are carried out as planned.

 Identifying and dealing with problems as they come.

 Building on the strengths and taking advantage of the opportunities as they arise.

 Monitoring changes in the target population and in the external environment that are
relevant to the work.
 6. Monitoring &
Evaluation Method
Results monitoring provides information on the progress towards achieving objectives and on
the impact the program is having in relation to the expected results. It involves: ·

 Relating the work being done to the objectives on a continuous basis in order to provide a
measure of progress .

 Reviewing the approaches and strategies in response to the changing circumstances without
losing the overall direction.

 Identifying if there is need to change the objectives.

Identifying further information or research for learning purposes.

Verifying whether the activities will help achieve the stated objectives.
 6. Monitoring &
Evaluation Method

Example:
Monitoring Method

(Baluchistan Partnerships for Sustainable Development’s Monitoring Process 2007-2013)

 6. Monitoring &
Evaluation Method
Evaluation
 Systematic and objective assessment of an ongoing or completed project for example any activities,
projects, programs, strategy, operational areas or institution’s performance.
 Evaluation focuses on expected and achieved accomplishments, examining the results chain (
inputs, activities, outputs, outcomes and impacts), processes, contextual factors and causality, in
order to understand achievements or the lack of achievements.
 Evaluation aims at determining criteria such as relevance, impact, effectiveness, efficiency, and
sustainability of interventions and the contributions of the intervention to the results achieved.

(Adapted from Gage and Dunn 2009,

Frankel and Gage 2007)
 6. Monitoring &
Evaluation Method
Evaluation Criteria
 Evaluations should help to draw conclusions about five main aspects of the intervention. For example, a
program carried out to reduce machine breakdown due to prolonging the regular preventive maintenance.
1. To Determine Relevance
 Whether the intervention is appropriate to the problem at hand.
 For I.e Automate Preventive Maintenance System for F&B Machines
2. To Assess Efficiency
 A measure of the extent to which an aid activity delivering on time and at the lowest cost
 For I.e On-time machine services will improve machine operating performances and efficiencies
3. To Assess Effectiveness
 Efficiency measures the outputs -- qualitative and quantitative. To the extent to which the objectives
were achieved
 For I.e Servicing job on the machine will be carried on time and no postpone on the schedule
4. To Determine Impact
 The positive and negative changes produced by a development intervention, directly or indirectly.
 For i.e Unnecessary breakdown will be eliminated, and productivity will be higher
5. To Assess Sustainability
 Sustainability is concerned with measuring whether the benefits of an activity are sustainable for the
long run.
 For i.e To ensure the applied automated system will be fruitful in longer run
 6. Monitoring &
Evaluation Method

Types of Evaluation
 Formative evaluations
 Performed early in the life cycle of a programme, near the beginning of its implementation.
 These types of evaluations focus on what is working and what is not working with the programme
(and for whom), and what can be learned from its delivery to drive improvement.
 Formative evaluations aim to:
 Improve the programme by examining its purpose and underlying programme theory.
 Identify and monitor possible risks for implementation failure
 Understand the initiative and its implementation, considering contextual constraints.

 Summative evaluations
 Typically occur after a programme has been operating for some time to determine if it is achieving
its intended outcomes/objectives. 
 Although the focus of each sub-type of summative evaluation is slightly different, they both seek to
make a judgement/determination about the value and success of a programme.
6. Monitoring &
Evaluation Method