(Key Performance Index)

Human Capital Development & Compensation by Performance Basis

(HRM Group 14 02)
1. Background
Statement of Company is changed, so HR Paradigm innovation needed
Evaluation + Compensation + Promotion based Age, joined period NOT by performance basis
evaluation with clear Criteria, so MBO application needed
As growth as company to be Glocalization Construction Company, performance must be a basis of HR
paradigm for Evaluation + Compensation + Promotion
1996 2009 2011 2013
Global
E&C
50
100
300
400
700
T/O
$M
Global HR apply
KPI apply
Steel
Structure
HR Stable
No KPI
2020
Evaluation Criteria
Age
Joined Experience
No clearly E. Tool
Performance &
Capability
KPI
Evaluation Compensation Promotion
(To be) MBO Model Application
KPI set up
(year)
Jan Dec
Management by
Objective
Key Talent
Compensati
on
Promotion
Tracking, Evaluate
Monitoring
Year end
Evaluation
For increasing the effectiveness of business operation,
the MBO monitoring is needed
- KPI set up Quarterly Evaluation Year end
evaluation Guide line set up
- Set up Competency Framework for Capacity
Evaluation and Education
Clearly Evaluate by Monitoring Process on quarterly of
MBO result
- Set up Monitoring Standard (Process/Contents/Ability)
- Provider feedback of Monitoring Result by Group Unit
2. KPI and Its characteristic?

KPIs is: (Key Performance Index)
- The Index which is able to
measure the Key Performance (Target)
Helping corporate monitoring and evaluate the
Actual Performance compared with Target has set
Objectives is SMART
- Specific with Detail Action
- Measurable
- Achievable
- Relevant
- Time Phased
Why KPI is needed?
- Leading employee performance
close to Organization Target
- Evaluate Clearly
performance of employee
- Compensate rightly
- Key person select
- Career Developing

Clarify Groups KPI
for Set up Teams KPI
- Group Target
- Scope & Responsibility
- Leader Target
Teams KPI = T. Leaders KPI

Clarify Companys KPI
for Set up Group KPI
- Company Objectives
- Scope & Responsibility
- Leader Target(want to achieve)
Groups KPI = Gr. Leaders KPI

Clarify Teams KPI for
set up members KPI
- Team Target
- Scope & Responsibility
- Member Target
Member KPI = 1 part of
Teams KPI
3. How to set up KPI? Process(1)
Member KPI is set up based on related to Dept KPI, Scope Work and Responsibility
Process KPI sharing Session for review and provide feedback before report for approval
Member
KPI

Member Target set up

Select KPI and action
Plan

KPI sharing session

Discuss to manager
& Modify Approval
KPI sharing Session Process
KPIs Operation
KPI set up Process
Start
Orgs KPI clarify for
individual KPI set up
3. How to set up KPI? Process(2)
Step 1: Clarify and Decide a Key Performance
No Action
1
Clarify Job Responsibilities
2
Make a list of Top function and
Responsibilities which are critical one to
achieve
3
Make Final List of Key performance
among Top Critical One
4
Decide the Final of Key Performance
(Target)
Step 2: Determine the Standards for implement
No Action
1
Make List of the Criteria for evaluation
for select KPI and its Unit
2
Determine the Formula/ Definition of
each KPI for evaluation
3
Comparing the Present Result with each
KPI
4
Determine the Level of each KPI
Step 3: Make action Plan and Schedule
No Action
1
Make a specific action plan which are
able to achieve the KPI
2
Review the action plan with KPIs result
to make sure its feasible to achieve KPIs
3
Make schedule of each KPIs
Step 4: Process session for sharing KPIs
No Action
1
Individual present own KPIs to make sure
that individual KPIs is set up as Smart
regulation
2 Discuss with Line Manager for KPIs
3
Modify and report to Line Manager for
approval
4 KPIs operation
Divide Kind Target (KPI)
Target
Level
Ratio Detail Action Plan
Job
Objective

Strategy
Job
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Individual
Owned
Work
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Spot Job ..
General
Objective
Cost
Saving
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
HM
Manage(*)
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Self Develop
Languages
Duty ( TOEIC
Level)
<Pre>..
<Plan>..
3. How to set up KPI?(Form)
MBO set up Form( Sample)
1 2 3 4 5 6
Individual KPIs is including: Job Objective(Target): Strategy Job , Individual Owned Job, Spot Job
General Objective: Cost Saving, HR Control, Self Development
7
3. How to set up KPI?(Components Definition)
Divide: KPI including 2 kind of Target
- Job Objective: KPI related of Function and
Responsibility of Individual
- General Objective: General Duty of all
member(indirect related to individual owned job)
HR control is KPI for Manager Level only
Kind: Divide basing on Works Characteristic of
each function including:
- Strategy Job: it related with company Strategies,
Vision, Philosophy, KPI
- Individual Owned Job: related to duty of member
- Spot Job: Target arising out of KPI setting
period
- Cost Saving: KPIs of Cost saving related to
implement Process of Individual Owned Job
- HM Manage: Staff control and development
(apply for from Team Leader to above)
- Self Development: Knowledge management/
development/ Training: Languages Duty (TOEIC)
5
KPI: The index which is able to measure and
evaluate clearly the completion of Target ( KPI )
KPI should be quantitative
4
6
7
Target Level:
- The challenging standard of KPIs compared with
actual KPI result
- Level is KPIs Unit which is able to calculate the
achievement of KPI
Ratio: The Important Standard of Target.
Unit: from 5%
(Total 100%, The 1
st
Evaluator confirm the Ratio when
evaluate)
Detail action plan: The specific action plan for
achieving the KPIs on Schedule has set
( Action Plan is set up base on Quarter Unit)
1
Target: The Priority Target selected among Targets
which want to do
2
3
How it definite?
Divide Kind Target (KPI)
Target
Level
Ratio Detail Action Plan
Job
Objective
Strategy
Job
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Individual
Owned
Work
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Spot Job ..
General
Objective
Cost
Saving
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
HM
Manage(*)
.. ..
<Pre>..
<Plan>..
..
1~2Q ..
3~4Q ..
Self Develop
Languages Duty
( TOEIC Level)
<Pre>..
<Plan>..
Attached: KPI Form
Attached: KPIs Pool
Business Field
No Kind KPI Formula Unit
1 Biz PJT Pool Collection Number and Level of Orderable Project (A,B,C) Level
2 Biz Won Project Amount The Size of Project Amount
3 Biz New Market Share Rate The % of Market Share %
4 Biz
High Class Potential Customer
Pool
The Rate of High Potential Customer in Total Customer %
5 Biz Failure PJT rate The Rate of Failure PJT in Total Tender PJT %
6 Biz PJT Profit Rate The % of Profit of PJT ( After completed) compared with Same PJT %
7 Biz % Of Lost The % of Lost of PJT compared with PJT Cost %
8 Biz Customer Retention rate The Rate of Loyal Customer in Total Customer %
9 Biz Sales per employee Annual Sales per employee Amount
10 Tender % Gross Margin Gross Margin = Profit/ Selling Price*100 %
11 Tender % of Awarded Tender The Rate of Awarded Tender in Total of Tendering PJT %
12 Tender
Average time to complete
tendering
Average of from Start day to Close Tender Day
13 Tender
Difference between tender
Price and Actual price
Tender ability to price/ estimate correctly and pridict future shifts %
Target Key Performance (KPI)
.. ..
.. ..
Using a key performance index which is able to
measure the completion of Target
- KPI and Formula can be revised to actual Biz
- In case Pool have no reference KPIs, create new KPI
- KPI Pool will be update and sharing as Dictionary Tool
Construction
No Kind KPI Formula Unit
1 Const
Average Delay Delivery
Schedule
Actual delivery date Plan of Delivery date Day
2 Const
EPC Project Execution
Experience Rate
EPC Project Execution Number/EPC Project X 100 %
3 Const Estimate Error Rate (I- I/ PJ) %p
4 Const
The rate schedule of Basis
Estimation Completion
{if(- 0, 100%, 0%/ } %
5 Const Original Profit Rate ( ---)/ X100 %
6 Const Schedule Obey Rate (/)X100 %
7 Const Schedule Rate (/)X100 %
8 Const
Technical Main power secure
rate
( / )X100 %
9 Const Prize awarded from out side
10 Const Increase of Sub contract Price Increasing of Sub Contract Amount
11 Const Turnover (Sub contract Price X Rate of Construction Progress)
12 Const / X100 %
13 Const ( /)X100 %
Human Resource Management
No Kind KPI Formula Unit
1 HRM Productivity for each staff Number and Level of Orderable Project (A,B,C) Amount
2 HRM Languages Level The increasing level in compared with previous Level
3 HRM Key Talent Pool Rate The Rate of Key Talent/ Total Employee * 100 %
4 HRM Employee Happiness Index Basing on the employee survey result %
5 HRM Employee Loyalty Index Basing on the Survey of Employee from Outside %
6 HRM Return on Recruitment Total Number of qualified candidate/ Investment for Recruitment Amount
7 HRM Time of Recruitment
The Average time of success recruitment from date of received Request to
date of Offer Letter
days
8 HRM Labor Cost Index The Average % of Labor Cost/ Revenue * 100 %
9 HRM Business Expert Pool The Rate of Expert on each Function/ Total Employee * 100 %
10 HRM Experienced Resign Rate Total experienced employee resign/ Total employee *100 %
11 HRM
Compensation
Competitiveness Rate
The Average Compensation Index in compared with Competitor %
12 HRM Staff Rate Total Staff Function/ Total employee * 100 %
13 HRD
Career Development
Satisfaction Rate
The Survey Result of employee on Training Program Level
14 HRD Rate of Education(Develop) The educate hour of each employee/ total employee hr