Performance Management Playbook

PERFORMANCE
MANAGEMENT

Playbook

Group Human Capital Division
FGV Holdings Berhad

CONTENT 3
7
 What, Why and Who 11
 The Framework 12
 The Cycle 13
33
 Performance Management Cycle 38
 Performance Planning 40
 Quarter Review 44
 Mid-Year Review 52
 Year-End Assessment 54
 Calibration
 Rewards & Consequences
 Related Documents

2

PERFORMANCE MANAGEMENT:

WHAT, WHY AND WHO ?

3

What is Performance Management?

An ongoing, continuous process of communicating and clarifying job responsi-
bilities, priorities and performance expectations in order to ensure mutual un-
derstanding between manager and employee in support of accomplishing the
strategic objectives of the organization.

Why do we need it?

Effective performance management is essential to businesses. Through both
formal and informal processes, it helps organization to align employees, re-
sources, and systems to meet the strategic objectives. It works as a dash-
board too, providing an early warning of potential problems and allowing man-
agers to know when they must make adjustments to keep a business on track.

4

Shared Ownership

Where do Things Go wrong?

5

Applicable to whom?

The performance assessment is applied to all employees.

Employee Status Conditions and Eligibility

All employees except Based on current performance year
those
Performance assessment and appraisal will be based
 Who is serving no- on employee’s service tenure as follows:
tice of termination  Appraiser who supervises an employee for more

 Temporary employee than nine (9) months shall be the sole appraiser of
Transfers / secondment the said employee for that year
during the current perfor-  Less than nine (9) months
mance year (including to  Both current and previous Appraisers to as-
JV companies)
Matrix reporting sess
 Performance score to be prorated accordingly

Bold line Appraiser will be responsible to assess Ap-
praisee’s performance in consultation with the dotted
line Appraiser

Under Probation Employees under probation will undergo a probation
assessment process and shall only be assessed un-
der PMS upon confirmation

Long leave of absence Employees who are on long leave of absence for
more than nine (9) months in the current performance
year shall be excluded from the PMS cycle

6

PERFORMANCE MANAGEMENT:

THE FRAMEWORK

7

The Framework

The Performance Management Framework is designed to help de-
velop HIGH PERFORMANCE CULTURE with the following objec-
tives :
 to raise both individual and organization's performance
 to enhance the capacity and competency of individuals to meet

organizational expectations
 to promote a 2-way communication for clarifying expectations

on roles and accountability
 to encourage empowerment, motivation & effective rewards

8

Evaluation

Evaluations are based on two components:
 Key Performance Indicator (KPI) : C.O.D.E. Perspective
 Leadership Competency (LC) : P.R.I.D.E. Elements

Tool for monitoring the strategic busi-
ness objectives/ goals approved by
the FGV's Board based on indicators
previously established and that
should permeate through four per-
spectives:
 Cost (C)
 Operational Excellence (O)
 Development (D)
 Engagement (E)

There are eighteen items of LC which are grouped into five known as PRIDE.

 Partnership (P)  Dynamism (D)
 Respect (R)  Enthusiasm (E)
 Integrity (I),

9

Weightage

10

PERFORMANCE MANAGEMENT:

THE CYCLE

11

Performance Management Cycle

The cycle of Performance Management starts with Annual Business Plan
Approval and GMC KPI Challenge. After the KPIs being cascaded down,
all employees will have to do Performance Planning. The Quarter 1 Review
will then takes place before the KPI Audit is being carried out. Then, the
Feedback & Coaching Audit will be done right after the Mid-Year Review
ends. Finally, employees will be assessed for the current performance year
during the Year-End Assessment after the Quarter 3 Review. Each Sec-
tor / Division / Company / will then carry out Calibration process before it is
presented at HC Steering Committee. The Rewards / Consequences Man-
agement will be based on the final score.

12

Performance Planning

The Performance Planning is the initial stage where Appraiser and
Appraisee review Appraisee’s performance expectations (KPI)
including both the behaviors (Leadership Competency) they are ex-
pected to exhibit and the results they are expected to achieve.

Key Performance Indicator (KPI)

Categorised into two groups:
1. Non-Executive
2. Executive and above

13

For Non– Executive:
Pre-Determined KPI is used. The elements to be measured are as follows:

14

For Executive and above:
Appraisee and Appraiser plan and set the targets / objectives to
be achieved by the Appraisee which must be:
aligned to the Group/ Sectors/ Divisions/ Companies/ Depart-
ments goals, objectives, initiatives and projects
aligned to the position, roles, accountability and responsibility
of the Appraisee
based on the C.O.D.E perspective
expressed using S.M.A.R.T criteria and standards
measured by correct Unit of Measurement (UOM)

C.O.D.E Perspective

15

SMART Element

Soft Reminder for Further Actions

Minimum 4 items and maximum 10
items only
 Minimum 5% and Maximum 30%
 Must be in accordance to Appraisee’s
position, roles, accountability and re-
sponsibility

16

Example of Target Setting using SMART

(Human Resource Manager)

Example of KPI Setting :

KPI Statement
Target Distribution

17

Example of Target Setting using SMART

(Mill Manager)

Example of KPI Setting :

KPI Statement
Target Distribution

18

Example of Target Setting using SMART

(Finance Manager)

Example of KPI Setting :

KPI Statement
Target Distribution

19

Example of KPI Cascading

(Cost Perspective)

20

Example of KPI Cascading

(Operational Excellence Perspective)

21

Example KPI Setting (PMS Form)

(Operation Head : Replanting )

No Scorecard KPI UOM Threshold Min On-Target Maximum Stretch Weightage
Perspective
On-Target On-Target %

Replanting cost to maturity (CTM) - RM18,000

1 Cost per hectare (exclude GC) Percent 105.00 102.50 100.00 97.50 95.00 20
The cost to maturity for replanting 2018 (PR18) - (%) 97.50 100.00 20
92.5 95.00 20
Year 0 to year 3

2 Operational Multi-crop completion Percent 95.00 102.50 105.00
Excellence Durian, Jackfruit & coconut - 100 ha (%)

Completion of 2021 replanting program (Felling

22 & Planting) - 10,000 Hectare

3 Operational Percent 90.00 97.50 100.00

Excellence The completion of planting work for 2021 replant- (%)

ing program - the hectare targeted is referring to

seedling availability until December 2021

Production of seedling

4 Operational Production of oil palm seedling for the require- Percent 90.00 92.5 95.00 97.50 100.00 20
Excellence ment of 2022 replanting program (15,247.26) - to (%)

receive 3,528,708 seeds/seedlings as sched-

uled.

Completion of self manage replanting & EMLID Percent 90.00 92.5 95.00 97.50 100.00 20
(%)
5 Development % of completion for self-manage and EMLID at
Palong Timur 04 - Y2021

Total 100

Example KPI Setting (PMS Form)

(Manager : Estate)

No Scorecard KPI UOM Threshold Min On-Target Maximum Stretch Weightage
Perspective
On-Target On-Target %

Estate Production Cost RM/MT (Actual vs

1 Cost Budget) Percent 110.00 105.00 100.00 95.00 90.00 20
(%)

Budget RM229.78/Tan

2 Operational FFB Yield MT/HA (Actual vs budget) Percent 90.00 95.00 100.00 105.00 110.00 25
Excellence Budget 19.89 tan/hec (%)

GAP Compliance (Agronomy)

Target Distribution : Quality /
Grade /
23 3 Operational Threshold = C- (65%-69%); Rating 1.00 2.00 3.00 4.00 5.00 20
Excellence Min On-Target = C+ (70%-74%);
90.00
On-Target = B- (75%-84%); 80.00
50.00
Maximum On-Target = B+ (85%-89%); 9.00
5.39
Stretch = A (90%-100%)

4 Operational FFB Quality – Ripeness Percent 92.50 95.00 97.50 100.00 10
Excellence (%)

Completion Of Replanting Work

5 Operational Percent 85.00 90.00 95.00 100.00 10
Excellence Ladang Palong Timur 04, Pkt PR21W seluas (%)

311.65 hectare

6 Development Replication of Model - Year 2021 Percent 60.00 70.00 80.00 90.00 5
(%) 7.00 5.00 3.00 1.00 5
4.89 4.39 3.89 3.39 5
7 Engagement 2R ( Retain & Repatriate) - Year 2021 Percent Total 100
(%)

8 Engagement Incidence Rate (Industrial Related) - Year 2021 Percent
(%)

Example KPI Setting (PMS Form)

(Operation Head : Mill)

No Scorecard KPI UOM Threshold Min On- Maximum Stretch Weightage
Perspective On-Target Target On-Target %

Mill's Production Cost - Year 2021 RM / MT 55.00 52.00 49.00 46.00 43.00 15
1 Cost

Mills processing cost –RM/MT 49.00

2 Cost Earning Before Interest & Tax (EBIT) - Year 2021 RM 40.00 50.00 60.00 70.00 80.00 15
Operating income - RM60 Mil (Million)

Revenue @ Saving CIP Project - Year 2021

3 Cost Completion of CIP project - Cost saving @ revenue RM 100,000 200,000 300,000 400,000 500,00 10
per mill - RM 300K 0

4 Operational Mill's OER - Year 2021 Percent 20.00 20.15 20.30 20.45 20.60 10
Excellence Improvement of core operation productivity - 20.30% (%) 20
24

Operational By product & Renewable Energy RM

5 Excellence Maximize revenue generation from by-product & bio- (Million) 100.00 110.00 120.00 130.00 140.00

mass projects - RM120 Mil

6 Operational Mill's UF Percent 63.00 64.00 65.00 66.00 67.00 10
Excellence Improvement of core operation productivity - 65% (%)

7 Operational Mill's KER Percent 4.90 5.00 5.10 5.20 5.30 10
Excellence Improvement of core operation productivity - 5.10% (%)

Legal Compliance to Local Authorities

8 Engagement Reduction in Legal Compliance by Local Authorities Percent 5 10 15 20 25 10
(Year 2021 vs Year 2020). Notice/ Summon/ Com- (%)
pound by Local Authorities (e.g. DOE, DOSH, Bom-
ba)

Total 100

Example KPI Setting (PMS Form)

(Manager : Mill)

No Scorecard KPI UOM Threshold Min On-Target Maximum Stretch Weightage

Perspective On-Target On-Target %

Annual average processing cost as 2021 budget

1 Cost RM / MT 61.36 59.63 57.90 56.17 54.44 20

Budget processing cost 2021 RM/Mt 57.90

2 Operational Annual average KER as 2021 budget Percent 5.20 5.30 5.40 5.50 5.60 15
Excellence Budgeted KER 2021 5.40% (%)

3 Operational Annual average SRR as 2021 budget Percent 1.28 1.44 1.60 1.76 1.92 10
Excellence Budgeted SRR 2021 1.60% (%)

25 4 Operational Annual average mill UF as 2021 budget Percent 80.83 85.32 89.81 94.3 98.79 15
Excellence Budgeted mill UF 2021 89.91% (%)

5 Operational Annual average OER as 2021 budget Percent 19.48 19.89 20.30 20.71 21.12 15
Excellence Budgeted OER 2021 20.30% (%)

Completion of Continuous Improvement Project (CIP)

6 Development Achieve the Target Saving (RM500k/year/mill) Percent 80 90 100 110 120 10
(%)

Completed Projects;- Achieved the targeted values

Legal Compliance to Local Authorities

7 Engagement Reduction in Legal Compliance by Local Authorities Percent 5 10 15 20 25 5
(Year 2021 vs Year 2020). Notice/ Summon/ Com- (%) 5.39 4.89 4.39

pound by Local Authorities (e.g. DOE, DOSH, Bomba)

8 Engagement Incidence Rate (Industrial Related) - Year 2021 Percent 3.89 3.39 10
(%) Total 100

Example KPI Setting (PMS Form)

(Head : Finance)

No Scorecard KPI UOM Threshold Min On-Target Maximum Stretch Weightage
%
Perspective On-Target On-Target

Profit Before Tax Year 2021 - RM239 Mil Percent
(%)
1 Cost Adjusted consolidated PBT including without M&A effect 90.00 95.00 100.00 105.00 110.00 10

and Management Fee

Department cost savings (FGV Company Accounts) - Percent 0.00 2.50 5.00 7.50 10.00 10
Savings against Budget - Year 2021 (%)
2 Cost
All divisions with the holding companies affecting FGVH
Company Accounts

Maintain healthy retained earnings level (FGV Co) to

3 Cost ensure financial stability and sustainable going concern RM 50.00 75.00 100.00 125.00 150.00 10
(Million) 15
10
26 Retained earning balance as at 31 December 2021 Month/ Dec/2021 Nov/2021 Oct/2021 Sep/2021 Aug/2021
4 Development Enhancement to Group Finance Policy - Oct 2021 Year 1.00 2.00 3.00 4.00 5.00

Assessment of the Effectiveness of the Financial Report- Quality /
5 Development ing Process Grade /
Rating
Average achievement on FY2020 Audit
Development of Consolidation System - Year 2021

6 Development Phase 1 - Development of consolidation system (by Au- Percent 80 90 100 110 120 20
gust 2021) (%) 15
Phase 2 - Stage of development (30% progress)
Month/ Dec/2021 Nov/2021 Oct/2021 Sep/2021 Aug/2021
Expansion of Finance Function by SSC - Oct 2021 Year
7 Development

Development of RPA within SSC services offering

Increase in the number of Qualified Staff - Year 2021

8 Engagement No of finance staff completing professional exam and Numbers 1.00 2.00 3.00 4.00 5.00 10

actively currently pursuing with less than 2 papers

Total 100

Example KPI Setting (PMS Form)

(Manager : Finance)

No Scorecard KPI UOM Threshold Min On-Target Maximum Stretch Weightage
Perspective
On-Target On-Target %

1 Cost Variance of Group PBT management reported numbers
vs audit/reviewed numbers
Percent 20.00 15.00 10.00 5.00 0.00 10
Adjusted Consolidated PBT excluding LLA and impair- (%)
ment
2 Cost Profit Before Tax Year 2021 - RM239 Mil

Adjusted consolidated PBT including without M&A effect Percent 90.00 95.00 100.00 105.00 110.00 10
and Management Fee (%)
10
3 Operational Number of days to financial closing Days 1.00 2.00 3.00 4.00 5.00 10
Excellence 10
27 No of days submitted to BPC system (t + x) Days 2.00 1.00 0.00 -1.00 -2.00 10

4 Operational Monthly submission of Finance Report to GMC Days 3.00 2.00 1.00 0.00 -1.00
Excellence 0 is the date submission to CoSec
Days 1.00 2.00 3.00 4.00 5.00
5 Operational Quarterly announcement (AC paper)
Excellence Percent 80 90 100 110 120 20
Submission of AC paper benchmark against PWC date (%)

6 Operational Provide Quarterly FGV Group Consolidation (IS, BS, Month/
Excellence SOCE) Year(

No of days presented from (t+x)
7 Development Development of Consolidation System - Year 2021

Phase 1 - Development of consolidation system (by Au-
gust 2021)
Phase 2 - Stage of development (30% progress)
8 Development Enhancement to Group Finance Policy - Oct 2021

Dec/2021 Nov/2021 Oct/2021 Sep/2021 Aug/2021 10

9 Engagement No of professional exam attempted / passed and qualified

Exam and Pass - 3 Numbers 1.00 2.00 3.00 4.00 5.00 10
Qualified - 1

Total 100

Example of Common KPI Setting Mistakes

28

Example of Common KPI Setting Mistakes

29

Leadership Competency (LC)

Appraisee and Appraiser come into an agreement on the Leadership Com-
petency (LC) of which the Appraisee’s need to improve within the current per-
formance year. Appraisee to :

identify 1 competency from each PRIDE element
fill in the competency gap of each element chosen
come out with an action plan to close the gap for each of the competency
chosen
Example of PRIDE Setting :

30

Are you ready?
Lets begin with setting up and
filling in of KPI (CODE) & LC
(PRIDE)!

Where are we supposed
to fill in the Performance

Planning?

31

For More Info :

User Guide Performance Planning
- Non Executive

User Guide Performance Planning
- Executive and Above

Video on Performance Planning

Infographic on Performance Planning

User Guide Leadership Competency (LC)

Video on 5 Common KPIs Mistakes

32

Quarter Review

Appraisee and Appraiser hold a formal performance assessment discus-
sion to review and assess the Appraisee’s achievement for the quarter
of the performance year.
During the discussion, the Appraiser must provide feedback & coaching
to the Appraisee.

What Need to be Done?
Appraisee to :
 Update KPI (CODE) and Leadership Competencee

(PRIDE) via the Extended HR Apps under Perfor-
mance Review
 Fill in Status and Remark for Situation (S), Task (T),
Action (A) and Results (R)

33

Feedback and Coaching

Feedback is an on-going process between Appraisee and Appraiser
where information is exchanged concerning the performance expected
and the performance exhibited while coaching is a process where Ap-
praiser facilitates the development and action planning of Appraisee in or-
der to bring positive changes.
During the Feedback and Coaching session between Appraisee and Ap-
praiser, B.E.S.T process is used to help remove the barriers in communi-
cation that enables engagement between the Appraisee and Appraiser.

B.E.S.T Method

34

When providing feedback, both of the Appraisee and Appraiser must use the
STAR model. This model helps Appraisee and Appraiser to visualize a
pattern in providing good positive feedback that encourage Appraisee to take
initiative and complete her/ his tasks efficiently.

S.T.A.R Model

Example of Quarter Review Assessment : KPI (Executive)
Executive Sales : Cost Perspective - To achieve sales RM4 Million
Sample of Appraisee's Feedback and Coaching:
ST/T : Unable to achieve the targeted sales
A : Provide feedback form to sellers and customers

to identify issues. An intervention plan taken to
ensure increase in sales
R : The % of sales increases compared to months
before

Sample of Appraiser's Feedback and Coaching:
ST/T : Appraisee fails to achieve the targeted sales
A : Advice Appraisee to take initiative by distrib-

uting feedback form to sellers and customers
R : Expected to increase sales within two months

period after the intervention plan carried out

35

Example of Quarter Review Assessment : KPI (Non-Executive)

Pre-Determined: Absenteeism (Missing at Work Place)

Sample of Appraisee's Feedback and Coaching:
ST/T : Found missing during working hours and

received warning from Appraiser to not repeat
it again
A : Discuss with Appraiser on problems faced and
come into solution to always be at work place
during working hours
R : Understand the consequences if found miss
ing again and permission is required in case of
emergency to leave working place during
working hours

Sample of Appraiser's Feedback and Coaching:
ST/T : Appraisee was found missing during working

hours
A : Remind and warned Appraisee and explain the

consequences he might get if found missing
again
R : Appraisee is at work place during working
hours

WHY IS IT IMPORTANT TO GIVE
CONTINUOUS FEEDBACK IN THE

WORKPLACE?

1. ENCOURAGES GROWTH
2. BUILDS A COACHING CULTURE
3. FACILITATES DATA DRIVEN DECISION MAKING

36

Example of Quarter Review Assessment : LC (PRIDE)

Enthusiasm (Resilient)

Sample of Appraisee's Feedback and Coaching:
ST/T : Having difficulties in adapting to the new

policy enforced by the management

A : Consult Appraiser on its implementation and
find ways to make it easier

R : Use of free source apps to increase sales
and adapting well to the new policy

Sample of Appraiser's Feedback and Coaching:
ST/T : Appraisee is struggling to adapt to the new

implemented policy.

A : Explained and described why and how to en
sure the new policy is enforced

R : Appraisee uses free apps and develops online
method to ensure he complies to the new poli
cy and to be able to increase sales and attract
new customers

Partnership (Collaborates)

Sample of Appraisee's Feedback and Coaching:
ST/T : Work in silo

A : Was assigned by Appraiser with a task that
require team works. Conduct series of meet
ings and brainstorm together solutions.

R : Better result due to collaboration with other
departments

Sample of Appraiser's Feedback and Coaching:
ST/T : Appraisee having difficulties to collaborate with

other people from different departments

A : Assigned task to Appraisee that required him
to also include other people from different
departments

R : The output of the task was good because of
involvement from others and Appraisee man
aged to overcome his weaknesses

37

Mid-Year Review

Appraisee and Appraiser shall hold a formal performance and competency as-
sessment discussion to review and assess the Appraisee’s achievement on the
first half (1H) of the performance year. During the discussion, the Appraiser
must provide feedback and coaching to the Appraisee.

Mid-Year Review Video User Guide for Non-Executive

User Guide for Executive Mid-Year Review Guideline

38

For Executive and Above Group:

Want to make changes to Do not want to make any
KPI changes to KPI

Go to menu Amend Performance Proceed to Mid-Year Review via
Plan via ePerformance ePerformance

Make amendment to the KPI Update progress status on KPI

Get approval from Appraiser Proceed to Performance Review
via Extended HR Apps for Feed-
Proceed to Mid-Year Review via
ePerformance back and Coaching input

Update progress status on KPI

Proceed to Performance Review
via Extended HR Apps for Feed-

back and Coaching input

For Non- Executive Group:

Proceed to Mid-Year Review via ePerformance
& Update progress status on KPI

Proceed to Performance Review via Extended HR Apps for Feedback and
Coaching input

39

Year-End Assessment

Year-End Assessment is the final performance appraisal stage where the Ap-
praisee and Appraiser shall hold a formal performance assessment discus-
sion on Appraisee’s KPI and PRIDE (LC) to assess the Appraisee’s overall
performance of the current year. During the discussion, the Appraiser must
provide feedback and coaching to the Appraisee.

What Need to be Done?

 Update overall achievements and justifications for KPI and PRIDE (LC)

based on actual performance of the current performance year via ePer-
formance under Year-End assessment.

 Proceed to Performance Review via Extended HR Apps for Feedback

and Coaching input

Appraisee Checklist

√ Prepare supporting document according to KPI & PRIDE (LC) items
√ Provide clear justification and rating for each KPI and PRIDE (LC)

items

√ Set an appointment with Appraiser to review the Individual Achieve-

ment

40

Appraiser / Reviewer Evaluation

Shall we talk? Getting the most out of performance dialogues

How Have progress check-in dialogues (regular, structured,
face-to-face conversations between managers and
Employees and direct reports) focused on:
Managers  performance against goals and behavior expecta-

tions
 building capabilities through development discus-

sions

Manager to provide feedback and coaching on employee’s current year perfor-
mance, discuss their longer-term development, and establish development ob-
jectives.

“All growth depends upon activity. There is no devel-
opment physically or intellectually without effort, and

effort means work.”

Calvin Coolidge

41

Appraiser / Reviewer Evaluation

Good performance dialogues share a number of qualities

Fact Based Making conversation fact based – based on credible data
understood by both parties

Action oriented Ensuring that dialogues lead to action – set expectation,
Constructive and clarify accountabilities and gain commitment to deliver.
challenging
Targeted Managers use dialogue to provide coaching and support, as
well as to create tension & pressure to improve perfor-
mance.
Dialogues have an explicit purpose and agenda, focusing
on the most important issues rather than trying to cover too
much ground

Common Rating Errors
Rating errors are factors that mislead or blind managers in the appraisal
process

42

For more info :

User Guide

Infographic

Charles Darwin

43

PERFORMANCE MANAGEMENT:

CALIBRATION

44

Calibration

Why calibration process is needed?

45

Calibration Committee

46

How it is done?

Step 1 : Identification of Employees
According to :
 Position
 Movement
 Status of employment

No Position Grade
1 Group Management Committee (GMC) GMC
2 Senior Vice President (SVP)
3 Vice President (VP) 2
4 Senior General Manager (SGM) 3
5 General Manager (GM) 4
6 Senior Manager (SM) 5
7 Manager (M) 6
8 Senior Executive (SE) 7
9 Executive (E) 8
10 Assistant Executive (AE) 9
11 Non-Executive 10
12 Non-Scale G1-G7
NS

Step 2 : Identification of Rating & Range of Scores

Rating Range of Score

5 4.80 - 5.00
4 4.00 – 4.79
3 3.00 – 3.99
2 2.00 – 2.99
1 1.00 – 1.99

47

Step 3 : Check the Bell Curve
Compare and balance the percentage of before calibration based
on the percentage of bell-curve distribution which has been given by
the Management

Employees’ overall score

Guided Bell-Curve Distribution
Step 4 : Scores Adjustment
According to employees’ level of :
 Responsibility
 Accountability
 Effort
 Contribution

48

Step 5
Provide complete and clear justification for employee’s score adjust-
ment in case it was added or deducted.

49

Step 6

50