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CHINAMOBILE(HK)LIMITED

HumanResourceStrategy

Shanghai

February15,200XTHEBOSTONCONSULTINGGROUPCONTENTHypothesesonChinamobilephonemarketBCG’sapproachtoHRstrategyProjectapproachandstructureBCGqualificationandexperienceAppendixSelectedCVsTHEEVOLUTIONOFTHEMOBILEMARKETWILLCREATE

MAJORSTRAINSONHUMANRESOURCESHistorically,thegrowthchallengehasbeensimpleServepent-updemandwithonebasicproduct“Buildthenetwork,activatesubscribers,collectthepayments”IncreasingcompetitionandnewtechnologiesmeandramaticchallengesTremendousemphasisonmarketingandsalesIntensewarfarerequiringstrategyandtacticsIncreasingimportanceofcustomerrelationshipmanagementandserviceTheneedtodeveloppartnershipsandcreatenewbusinessesIncreasingpressureontechnicalabilities--broaderdefinitionoftechnologyIncreasingpressureonoverallcostpositionandproductivityNeedforcommercially-drivenseniormanagement,workingasateamThesestrainscreateaneedforafundamentalrethinkofHRstrategyWITHOUTBUSINESS-DRIVENINPUT,ANHRSTRATEGYDEVELOPMENTEXERCISEWILLFAILThestrategicchangesinthemobilemarketbringrevolutionarychange,notevolutionarychangeOnedominantfactoristhatthesechangeswillrequiretherapidcreationofentirenewjobfamilies,andrapidchangeintherequirementsofexistingjobfamiliesAsaresult,theoverallpeoplemixofthecompanywillbedramaticallydifferentinthefuturethanitistoday.Themixwillalsobequitedifferentthaneitherthe“typicalPRCcompany”orthe“typicaltelco.”Therequiredpaceofchangewillalsobequitedifferent.AnHRstrategythatfailstotakethisintoaccountwillalsofail.IftheHRstrategyfails,thenthecompanywillfail.WrongskillstofacethefuturecompetitivethreatWrongoverallcoststructureThebestemployeesleavingtojointhecompetitorsMajormissedopportunitiestoformnewbusinessesandpartnershipsAtraditionalHRconsultingfirmwillnothaveaclearviewonthestrategicchangesTheirmodelswillbebasedupon“typicalPRCcompanies”and“typicalglobaltelcos.”Neitherwillbesufficient,andbothwillhavemajorflaws.CONTENTHypothesesonChinamobilephonemarketBCG’sapproachtoHRstrategyProjectapproachandstructureBCGqualificationandexperienceAppendixSelectedCVsThecellulartelephonemarketinAsia–inparticularinChina–willcontinuetoshowstronggrowthAsaresultofthisgrowth,thedynamicsofthemarketwillbeincreasinglystrongandwillaffecttheHumanResourcestrategyofChinaMobileBCGhasdevelopedanintegratedHRStrategyFrameworkthatwilllinkexternalmarketfactorstotheinternalrequirementsoftheorganizationWehavesubsequentlyoutlinedbothourHRStrategyFrameworkaswellassomeinitialanalysesonthemostrelevantexternalfactors–specificallytheseare:WTOCompetitionTechnologyBusinessMigrationCustomerServiceCHINAMOBILE’SHUMANRESOURCESTRATEGYWILLBEAFFECTEDBYAPOWERFULSETOFMARKETFACTORS

SummaryofsubsequentProposalSectionSummarySTRONGGROWTHINCELLULARTELEPHONYINASIA...

Asia-PacificCellularSubscribers,1990-2000CellularSubscribers(M)AnnualGrowth~75%AnnualGrowth~40%Note: TheAsia-PacificregionincludesthecountriesofNortheastAsia,SoutheastAsia,SouthAsia,theislandsoftheWesternPacific, AustraliaandNewZealand.Assumesdecreaseinrevenuepersubscriberof5%perannumbetween1996and2000.Source: InternationalTelecommunicationsUnion,MerrillLynch Revenue(US$B)347111727516889118156Asiaclaims36%oftheworld’scellularsubscribersby2000...ANDINPARTICULARINTHEGREATERCHINAREGION

ChinaCellularSubscribers,1991-2000CellularSubscribers(Mn)AnnualGrowth~170%AnnualGrowth~86%Source: CCID0.050.1770.6381.573.636.8513.2324.9843.875CellularSubscribers(Mn)GREATERCHINAWILLREPRESENTANINCREASINGLY

LARGEANDYNAMICMARKETINASIANote: Sub-regionalgroupingsincludeSouthAsia(India,Pakistan,Bangladesh,SriLanka),GreaterChina(China,Taiwan,HongKong,Macau)and SoutheastAsia(Brunei,Cambodia,Indonesia,Laos,Malaysia,Myanmar,Philippines,Singapore,Thailand,Vietnam)Source: InternationalTelecommunicationsUnionJapanAustralia/NewZealandSoutheastAsiaGreaterChinaKoreaSouthAsia0.28.5370.51777GreaterChina(M)TotalANJTotalAsia-Pacific(M)1.233125DistributionOfAsia-PacificCellularSubscribersNEWBUSINESSCHALLENGES,WITHMAJORHRIMPLICATIONSWILLFACEMOBILEPLAYERSINCHINAUpcomingbusinesschallengeEmphasisonmarketingandsalesandintensewarfarerequiringstrategyandtacticsIncreasingimportanceofcustomerrelationshipmanagementandserviceTheneedtodeveloppartnershipsandcreatenewbusinessesIncreasingpressureontechnicalabilities--broaderdefinitionoftechnologyIncreasingpressureonoverallcostpositionandproductivityNeedforcommercially-drivenseniormanagement,workingasateamHumanresourceimplicationsThecreationofnewjobfamilieswitharangeofnewskillsandtalentsTheneedforaclearviewofhowmanynewemployeesareneededineachjobfamilyoverwhattimeframeAnunderstandingofwhatitwilltaketoattract,train,integrateandretaintheseemployeesAnviewoftheneworganizationalstructuresandprocessesthatareneededAviewontheimplicationsfortheexistingworkforce,intermsofproductivity,changingjobdefinition,andretrenchmentAviewofthenewstrategicroleofHR,andtherequiredHRcapabilitiesFIVESPECIFICMARKETFORCESWILLCHALLENGETHEHRSTRATEGYGOINGFORWARDPerformancemanagementRequirementdefinitionSourcing&placementEmployeedevelopmentLeadership&cultureWTOCompetitionTechnologyBusinessMigrationCustomerServiceExternalfactorsaffectingtheorganizationBCGhumanresourcestrategyframeworkBCGHRstrategyframeworklinksexternalmarketfactorstointernalorganizationalrequirements21543DETAILOFMARKETFACTORSIMPACTINGHRSTRATEGYWTOwillfurtheropenthemobilephonemarketDefinedtimetableestablishedNewforeigninvestmentOpenwirelineservicesin6yearsRegionalmarketpositionswillcomeunderpressureRapidintroductionof3GtechnologystandardsTraditionalbordersbetweenbusinesseswillchangeCustomervaluepropositionwillmigrateUnicomalreadygrowingfast3rdoperatorlikelytobeallowedintomarketbygovt.Transitionfrom2Gto2.5Gordirectlyto3GRapidgrowthinwirelessdataservicesWirelessdataallowsgreatershareofwalletTelcoandmediavaluechainsaremigratingChangingsuccessfactorsovertimeBasisofcompetitionshiftstocustomerserviceInternationalHRpracticeswillhavegreaterimpactasforeigninvestmentincreasesIncreasedpressureonemployeeretentionfromentryofnewplayersIncreasedcompetitionfortechnicallyqualifiedstaffNewcapabilityrequirementsaroundserviceandproductdevelopmentIntroductionofcustomerserviceasacoreskillforworkforceWTOCompetitionTechnologyBusinessMigrationCustomerService12345ExternalfactorsindetailCHINA’SWTOAGREEMENTINCLUDESSPECIFICPROVISIONSFORFOREIGNINVESTMENTINTOTHECELLULARMARKETUponWTOaccessionWithin1yearofaccession(originallywithin3yearsunderUSdeal.AcceleratedbyEUagreement)Within3yearsofaccession(originallywithin5yearsunderUSdeal-acceleratedbyEUagreement)BeijingShanghaiGuangzhouChengdu,Nanjing,Xiamen,Chongqing,Ningbo,Xi’’an,Dalian,Qingdao,Taiyuan,Fuzhou,Shenyang,Wuhan,Hangzhou,ShenzhenAllregionsUpto25%Upto35%Upto49%MarketwithCMCCpresenceSource:USTraderepresentative,EU,GoldmanSacksreport,BCGanalysisTimelineAffectedregionalmarketsForeigninvestmentallowedForeignplayeswantingtoinvestintheChinesemobileindustryhavetoinvestinexistingoperatorsWTOATHIRDLOCALPLAYERISLIKELYTOENTERTHEMARKETINADDITIONTOFOREIGNCOMPETITORSCMCCUnicom3rdplayer+IntensifyinternalcompetitiontostrengthenlocalplayerOpeninguptoMNCsCompetitionwillbeintensifiedforCMCCandUnicomevenbeforeforeignplayersenterMNCMarketCNCApprovedCMCCandUnicomtogoIPOinoverseasmarketstoraisecapitalAwardedGreatWall’’sassets(formerPLAownedcellularoperator)toUnicomThirdcellularoperatorlicenseisexpectedtobeissuedanditiswidelyanticipatedthatChinaTelecomwillbethecandidatePLA:PeopleLiberationArmyGovernmentactionssofar...Governmentplansgoingforward...WTOTELECOMOPERATORSELSEWHEREHAVEBEENHITHARDASCOMPETITIONINTENSIFIESSource:MerrillLynch,BCGanalysisSmarToneinHongKongCellnetintheUKSmarToneshareofnewsubscribersCellnetshareofnewsubscribers9/966monthslater3/96OneYearLaterImpactedbylaunchofcompetitor’’sCDMAserviceImpactedbycompetitor’’simprovementofnetworkcoverageandqualityWTOCURRENTLYCMCCDOMINATESTHEMARKETBUTCHINAUNICOMGROWSFAST...CMCCcurrentlytheclearmarketleader...…butChinaUnicomcatchingupfastMarketshare(%)CMCCChinaUnicomOtherSubscribergrowthrate%UnicomCMCCSource:GoldmanSachsReport,BCGanalysisCompetition...HOWEVER,UNICOMHASNOTBUILTUPANYSIGNIFICANTREGIONALSTRONGHOLDSSOFARMarketshareTotal#ofsubscribersChinaUnicomCMCCGuangdongZhejiangJiangsuLiaoningShandongFujianHenanShanghaiHebeiBeijingGuangxiTianjinHainan18%(1)(1)InCMCC(HK)’’smarket,ChinaUnicomtookanaveragemarketshareof12%40%CompetitionALTHOUGHTHEPERSPECTIVEOFSTANDARDMIGRATION

ISVAGUE,CHINAISFASTAPPROACHING3G2G(28.8K/second)GSM(supportedbyEricsson,Nokia)PDCCDMAone(supportedbyQualcomm)3G(384K~2M/second)TD-SCDMA(supportedbyDaTang,Siemens)WCDMA(SupportedbyEricsson,Nokia,NITDoCoMo)CDMA20003X(supportedbyQualcomm)2.5G(64K~144K/second)GPRSCDMA20001XNow2000/20012001/2002ChinaEuropeJapanUSATechnologyWirelessdatagrowthforecastsUSWirelessdatagrowthforecastsEuropeTHEADVENTOFWIRELESSDATAWILLDRIVEGROWTHServiceOfferingsWillBecomeMoreComplexAsaResultUserpenetration

%(1)Userpenetration

%(1)(1)OfTotalPopulationTechnologyEXAMPLE:I-MODESUCCESSINJAPANHASINCREASED

SERVICEANDTECHNOLOGYDEMANDSONHRJava,SSLIMT-200018(Numberofusers,

million)1614121086420Mar.31,1999Mar.31,2000Mar.31,2001Mar.31,2002Note:i-modeusersbaseduponDoCoMoforecast,web&e-mailusersfromNikkeiMarketAccessJan.1999Source: NikkeiNetBusinessMar.2000Mar.199920KusersMar.20004.8Musers

(Actual)Mar.200110Musers(Estimate)Mar.200215Musers(Estimate)E-mailWebi-modeNumberofi-modeusers

exceedthatofwebusersbySpring2001TechnologyALONGWITHTHETECHNOLOGYDEVELOPMENT

WIRELESSAIMSATALARGERSHAREOFWALLETMarketExample:Sweden(1)ThroughoperatorSource:SCB(SwedishStatisticalBureau);BCGanalysisandestimateOtherCommunicationRecreationHealth,transportandeducationHousingandfurnitureFoodandclothingOtherCommunicationRecreationHealth,transportandeducationHousingandfurnitureFoodandclothingOtherCommunicationRecreationHealth,transportandeducationHousingandfurnitureFoodandclothing1G2G3GOperatorOperatorSpecialserviceprovider(1)OperatorServiceprovidersContentprovidersRetailersMainrecipient:(%)(%)(%)BusinessmigrationTRADITIONALBUSINESSBORDERSCHANGE...Middle

layer/packagingInfra-

structure/distributionNetworkdeviceUserdeviceBroadcasting/MediaTelecommunicationPC/InternetOthersContentFilmWebsite/e-commercePCsoftwareMobilephoneTelephoneGamingVisualAudioPC

hardwareSet-

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boxTransmissionSatelliteCATVTerrestrialMobilecarriertodayPhotographyMappingCar(Navigation/ITS)BooksBroadcastingPortalValueaddedservicesInternettelephonyP

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essBusinessmigration...ANDTELCO&MEDIAVALUECHAINSAREMERGING

ANDDECONSTRUCTINGASARESULTServiceprovisionAccessandtransferNetworkServiceproviderAServiceproviderBNetworkBContentAContentBContentCContentDNavigationNetworkPackagingIntegratedoperatorServiceproviders1G2G3GValuechaindevelopmentTypicalcharacteristicsPackagingNetworkOnesupplierLimitedservices(IN-type)ClosednetworkFewsuppliers(usuallyonecoveringwholerange)Limitedservices(voiceIN,basicvoiceandtextmessaging)MostlyclosednetworkwithsomeinteroperabilitySeparationbetweentransportandserviceinherentinarchitectureMultiplesuppliersineachregionTransportcommoditizedOpencommunicationstandardsbetweennetworksandservicesNetworkASource:BCGexperienceBusinessmigrationMARKETSFOLLOWDISTINCTPATTERNSASCUSTOMERPENETRATIONINCREASES*Korea’’sexceptionalforecastedgrowthattributabletoaggressivepromotionofCDMASource: InternationalTelecommunicationsUnion,BCGanalysisForecastedAnnualGrowth(1996-2000)(%)CellularPenetration(per100inhabitants)PHASEIHyperGrowthPHASEIIHighGrowthPHASEIIIModerateGrowthIndonesiaCambodiaPakistanChinaVietnamPhilippinesThailandMalaysiaTaiwanKorea*SingaporeHongKongNewZealandAustraliaIndiaCustomerservice...ANDKEYSTRATEGYISSUESCHANGEOVERTIMECellularpenetrationSubscribergrowth(p.a.)CustomerprofileKeystrategyissues<3%>50%High-valueManagerapidexpansionBuildoutnetworkEstablishbasiccompanyinfrastructureandprocessesCapturemaximummarketshare<10%~40%Medium-valueAcquireandretainthebestcustomersAchieveexcellenceinreliabilityandserviceBegintodifferentiateandsegmentcustomerbaseCultivatethebrand>10%<35%MassmarketIdentifyandownkeysegmentsofcustomerbaseForgestrategicpartnershipsforofferingsthatgobeyondtelephonyUtilizetechnologicalchangestrategicallytoowncustomersPhaseI:HyperGrowth“Getinthegame”PhaseII:HighGrowth“Masterthegame”PhaseIII:ModerateGrowth“Changethegame”CustomerserviceEXAMPLE:MIGRATIONOFHONGKONGCELLULARMARKETSmarTonewithSignificantCustomerServiceDevelopment(1996-2001)1996GreaterChinaroamingRealEstatemessageMobilefaxPrepaidserviceInternational(88countiesroaming)199719981999CNNnewsPrepaidcardroamingStockexchangeWAPbidGPRstest20002001PrepaidvoicemailAutomaticgreaterChinaroamingNorthAmericaroamingJapanroamingBankaccountmessageStockmessageserviceWAPserviceFutureoptionexchangeserviceMedicalonlineWAPbookstoreInterna-tioanlroamingtollfreeNo.WAProamingTechnicalValueaddedCustomerserviceCustomerserviceCONTENTHypothesesonChinamobilephonemarketBCG’sapproachtoHRstrategyProjectapproachandstructureBCGqualificationandexperienceAppendixSelectedCVsBCGHASANINTEGRATEDFRAMEWORKTOHRSTRATEGYTHATWILLBEAPPLIEDTOCHINAMOBILE’SPROJECTSummaryofsubsequentProposalSectionBCG’sconsultingapproachactivatestheindividualHRvalueleversTranslatesstrategytoqualificationrequirementsanddeliberatelyfocuseson(re)alignmentofemployeeportfoliosContinuallyadjuststheHRprogramstothestrategicandbusinessrequirementsUsesorganization,cultureandcommunicationasplatformstostepuptheeffectoftheHRtoolsEstablishestheHRdepartmentasabusinesspartnerofthelineActivatingtheindividualHRvalueleversleadstoimportantresultsPlacestherightemployeesattherightplaceandintherightnumberGuaranteesattractivenesstotopperformersAvoidsunprofitableinvestmentinHRCloselylinksHRmanagementandthelineMaximumeffectbypursuingacomprehensiveapproachHUMANRESOURCEMANAGEMENTMUSTBEDRIVENBYBUSINESSNEEDS...BusinessstrategyImprovedcompetitiveness&marketvalueCoreHumanResourceProcessPerformancemanagementPerformancemeasurementAppraisalprogramCompensationIncentivesRequirementdefinitionSizingJobdescriptionOutsourcingSourcingandplacementRecruitmentPlacementTransfersEmployeedevelopmentJobgradingCareermanagementSuccessionplanningTrainingLeadership&culture...ANDFOLLOWTHROUGHASYSTEMATICPROCEDUREHRPlanningProcessImpactonjobcontentHeadcountplanningWhatimpactdothebusinessgoalshaveontheorganizationalstructure?Whatarethebusinessgoals?Definedgoals/

agreedtargetsdowntojoblevelJobdescription,evaluationHRplanningintermsofquantityHRReview

at"other"divisionsAdditionaland

disappearingpositionsRetirementsTransfersTerminationsResourcemanagementHRplanningintermsofqualityWhatrequirementsarethereforthetargetgroup?professionalpersonalHowwilltheserequirementsdevelop?Actualvs.planned

comparisonTowhatextenthavethepresentandfuturerequirementsbeenmet?EmployeeportfoliosTrackingofnewemployeesEvaluationofpotentialSuccessorplanningCriteriacatalogforrecruitmentevaluation/assessmentResultsoftheevaluationandassessmentWhohaspotential?Forwhichposition(withindivision/cross-divisional)?When?Whichrequirementshavenotbeenmetyet?Whatmeasuresarerequired?Careerintentionofthepotentialcandidates(careerinterviews)ConsequencesTargetgroup-specificdevelopmentprogramsrecruitmentprogramsControllingtheexecutionofagreedconsequencesRecruitmentDevelopmentmeasuresCompensationSTEPI:REQUIREMENTDEFINITIONLeadership&cultureAlignworkforceplanningtostrategicrequirementJobcategorySizebycategorySkills,behavior,capabilityrequirementbycategoryOngoingreviewingandaligningqualificationiscrucialSourcingandplacementRecruitmentPlacementTransfersPerformancemanagementPerformancemeasurementAppraisalprogramCompensationIncentivesRequirementdefinitionSizingJobdescriptionOutsourcingEmployeedevelopmentJobgradingCareermanagementSuccessionplanningTrainingALIGNINGQUALIFICATIONSWITHTHESTRATEGICREQUIRE-MENTSISTHEFUNDAMENTALTASKINHRMANAGEMENT1. Whatqualificationsdoestheimplementationrequireofyourstrategytodayandinthedaystocome?2. Whatcapabilitiesdoyouremployeescurrentlyhaveparticularlycomparedtoyourmaincompetitors?3. Doyouknowwhichgapsinyouremployeesqualificationsarecritical?4. Areyouusingsuitablemeasurestobridgeanystrategicgapsintermsofstaffqualifications?Challenge:

MatchingstrategicrequirementsCurrentrequire-mentsCurrentqualifi-cationsConstantqualifi-cationsFuturerequire-mentsStrategic

realignmentJobcategoriesKeyquestionsSEGMENTATIONANDPRIORITIZATIONOFJOBCATEGORIESKEYPARTOFWORKFORCEPLANNINGCompanyboundaryEachpatternedboxindicatesajobfamilyJobcategoryInternalorganizationExternallaboursourcesManagementEngineersTechniciansOperatorsAccountrepsServicerepsClericalR&DEngineeringOperationsSalesCustomerserviceContractorsTempsSKILLREQUIREMENTDEFINITIONISBASISFORFURTHERHRACTIONPersonalityLeadershipskills?Abilitytolearn? Commitment? Integrity? Stressmanagement?Targetsetting? Problemsolving? Resourcemanagement? RolemodelRecruitingSelectionEvaluationDevelopmentOutplacementSocialskills?Interpersonalskills?OptimisticrealismProfessionalskills?Productknowledge?Salesknowledge?Marketknowledge?EntrepreneurshipSkillrequirementsSTEP2:SOURCINGANDPLACEMENTRequirementdefinitionSizingJobdescriptionOutsourcingWorkforceplanningandstaffingprocessresultinrecruitingneedsRecruitingshouldconsiderallpossiblechannels/approachesInternalpoolcanbeanimportant/sourceoftalentRecruitingprocesscanberefinedtomatchupwithbestpracticeSourcingandplacementRecruitmentPlacementTransfersLeadership&culturePerformancemanagementPerformancemeasurementAppraisalprogramCompensationIncentivesEmployeedevelopmentJobgradingCareermanagementSuccessionplanningTrainingASTANDARDIZEDSTAFFINGPROCESSISCRUCIALCharacteristicsStandardizedprocesswithinyearStrategy-basedstaffingprocessBottom-upandtop-downprocessStaffingofhighpotentialsimportantissueEncouragementofindividualtalentsHighlyinteractiveprocessDecisiontakesinaccountBudgetsTalentsTechnology“Session1:Strategy””“Session3:OperatingPlan””“Session4:Compliance”“Session2:Organization/Staffing”“HRVision:Attraction,DevelopmentandRetentionofBestDiverseandGlobalTalent”StaffingprocessmightresultinrecruitingneedSource:InterviewsatGERECRUITMENTSHOULDCONSIDERALLPOSSIBLECHANNELSPotentialcandidatescoveredbyHRReview?RecruitmentchannelsRecruitmentchannelsInternalrecruitmentExternalrecruitmentResultsoftheHRReview(successorplanningundrecruitmentdecisions)InternalvacancylistYesNoHRReviewresultsforowndivisionOwninformalevaluationofpotentialHRReviewresultsforotherdivisionsDiscussionofpotentialwithotherdivisionsJobadsLaborofficesEducationalinstitutionsHeadhuntersUniversitycontactsInternshipsDoctoratesFoundationsJobexchangesRecommendationsRecruitmentoftemporaryworkersSelectionprocessMethodsPaperscreen/applicationformInterviewsACWorkshopsPresentationsSampleworkTestsPeopleinvolvedLine

supervisorsHRdepartmentCo-workersExternalsAidsCriterialistsInterviewguidesObservationsheetsSelectionmodelRecruitmentmarketingconceptInternalresourceshastobegivenafairchanceMISTAKESANDBESTPRACTICEINRECRUITINGTypicaltrade-offsTypicaltrapsBestpracticeGoalFillthejobquicklyvs.taketimetofindthebestcandidateMissidentifyingthecriticalpositionsHirethefirstbestcandidateinsteadofwaitingfortherightoneProvidethenumberandqualityofemployeesneededtomeettheshort-andlong-termbusinessgoalsResourcesIncludetherightpeopleintheselectionprocessvs.investlittletimeininterviewsToomany,andthewrong,interviewerswhocannotcometoadecisionThoseresponsibleforlinemanage-

mentalsoresponsibleforrecruit-mentandhiring–HRprovidessupportProcessExtensivesearchvs.restrictionsontimeandfinancesAwakentoohighexpectationsvs.beingtoohonestThemosthighlyqualifiedapplicantvs.theonethatfitsbestOverestimateexternalapplicants,underestimateinternalapplicantsWrongexpectationsleadtothepersonleavingagainsoonNeglect"follow-up"afterofferInternalapplicantshaveafairchanceApplicantsaregivenenoughinfor-mationtoknowwhethertoenterorexittheprocessApplicantsarenotselectedonthebasisofonlyexperienceandqualifications,butalsoonthebasis

oftheir"fit"Thewholeprocessisoptimally"orchestrated"IntegrationinHRsystemTakealotoftimeforselectionofemployees,littlefortrainingCandidatesarenotsufficientlyrewardedortrainedSelectionofemployeeslinkedtoplanning,training,...EvaluationTimespentonevaluationvs.valueHighlevelsofinvestmentnotcheckedThesuccessofrecruitmentischeckedregularlySource:BCGanalysesSTEP3:PERFORMANCEMEASUREMENTSourcingandplacementRecruitmentPlacementTransfersRequirementdefinitionSizingJobdescriptionOutsourcingLeadership&culturePerformancemeasurementRegularperformancemeasurementsystemtobeinplaceannualappraisal,mid-yearprogressreview360°feedbackPerformancecriteriavaryagainstbusinessobjectives,pre-determinedtargetagainstskillsetLinkpaytoperformanceCompensation/incentiveIncentivecompensationmodelsdifferalongwhoiseligiblebasisofreward;components,mix,targetsettingPerformancemanagementPerformancemeasurementAppraisalprogramCompensationIncentivesEmployeedevelopmentJobgradingCareermanagementSuccessionplanningTrainingREGULARPERFORMANCEMEASUREMENTSYSTEMNEEDSTOBEINPLACEOwnassessmentManager’sassessmentYearlycareerdevelopmentdiscussion(1)Eachindividualassesseshis/hercurrentlevelforeachcompetencyThemanagerassesseshis/heremployee’scurrentlevelforeachcompetencyDiscussionofcurrentlevelofcompetenciestoestablishdevelopmentneedscomparedtotargetprofileforcurrentand/orpossiblefuturejob(1)Appropriatealsotousethisoccasiontodiscussobjectives/resultsotherthanthoserelatedtocompetencies(2)Shouldagreementnotbepossible,twodifferentscoresarerecordedOutput:Agreed-uponCompetencyprofilefortheemployee(2)

LinemanagementawarenessandownershipofdevelopmentneedsEmployeeinvolvementinowndevelopmentandcareermanagementBESTPRACTICESPERFORMANCEMEASUREMENTANDFEEDBACKObjectivesResourcesGoalsettingPerformancefeedbackEvaluationBestpracticesPerformancemeasurementandfeedbacksystemisdrivenbybusinessgoals- UltimatelystakeholdervaluecreationSystemisownedanddrivenbylinemanagement- HRfunctionsupportswithtraining,guidelines,andtoolsWhileobjectivesneedtobealignedwithstakeholderreturns,theyneedtobesuitableforthelevel/individual- needtobemeasurableandcontrollablebyemployees- needtoidentifyafew,significantobjectivesforeachemployeeGoalsstrikeappropriatebalancebetweenresultsandbehaviour-orientationCombinationoftop-downandbottom-upprocessensureseffectivecommunicationandtranslationofbusinessgoalsWrittenperformancecontractspecifiesafewcriticalgoalstobeusedinformalperformanceappraisalEachemployeeshouldreceiveformalperformancereviewatleastonceayearFeedbackshouldbeongoingandtimely,focusingoncoaching,notcontrolSupervisorsrequiredtosolicitmultiplesourcesoffeedback(upto360°)- self-assessment,supervisor,highersupervisor,subordinates,peers,externalandinternalcustomersNoforcedrankingofemployeesMonitoringofsystemquality,cost,andimpact(surveys,audits)- systemattracts,motivates,andretainsbetterperformance- systemiskeptsimpleanduser-friendlytominimisefullcostsAPERFORMANCE-BASEDCOMPENSATIONSYSTEMINCLUDESTHREECOMPONENTS......andtheRequisiteShiftinWeightingComponentsCharacteristicsChangeinthesignificanceLong-termincentiveFocusonindividualcontributiontovaluecreationStockoptions+Short-termbonusFocusonshort-termtargetattainmentandindividualorteamperformancecontributions+BasesalaryToensurestandardoflivingandprovideforretirementOngoingvaluecreationisencouragedbylong-termincentivesIndividualCountryspecificNon-financial? Dinner,theatre? RecognitionNon-aggressive? Small%salaryShort-term? MonthlySubjective? Supervisor’sopinionINCENTIVECOMPENSATIONDESIGNREQUIRESANUMBEROFIMPORTANTCHOICESParametersDimensionsCompany-wideOneglobalsystemFinancial? Partofsalary? BonusAggressive? Large%salaryLong-term? AnnualStatistical? Specifictargets- %salesDepartmentTeam/GroupRegionsL/TfocusS/TrewardEvaluationsystemRemunerationGroupUniversalityRewardtypeLeverageMeasurementandrewardtimeframeMeasurementBalancedfocusLong-termfocusonlyShort-termfocusonlyRewardspeopleinproportiontotheirrelativecontributiontobothshort-termprofitperformanceandlong-termbusinessdevelopmentIntegratesadvantagesofbothshort-andlong-termfocuswhilemitigatingtheirrisksChallengeistofindtherightbalanceBALANCINGOFLONG-ANDSHORT-TERMOBJECTIVESISIMPORTANTEnsuresallemployeesareencouragedtogivetheirbestatalltimesFacilitates“naturalshedding”ofpeoplewhoareineffectiveButwillbusinessbe““harvested”inshorttermanditslong-termviabilitythreatenedEnsuresachievementoflongtermorganizationalobjectivesFostersdevelopmentofculturethatcansustainlongtermbusinessperformanceButdoesbusinesshavebigenough“bank”tosurviveshorttermandreaplongtermrewards?SETTINGVALUE-BASEDGOAL