Procter & GambleProcter & GamblePerformance Management Performance Management

Feb. 21, 2002Feb. 21, 2002

D.E. SongD.E. SongKorea Human ResourcesKorea Human Resources

Procter & Gamble• Established in Cincinnati, Ohio, US in 1837• A global leader in consumer goods• $40 billion sales• 110,000 employees worldwide• Operations in 70+ countries• Products sold in 140+ countries• Procter & Gamble stands for

– brands– marketing– innovative products– progressive HR practices– ethical conduct of business– high performance organization– developing highly capable managers– and more . . . .

Procter & Gamble in Korea• History

– Joint venture (P&G-STC) in 1989– Local manufacturing in 1989 (Pyungtaek Plant)– 100% ownership in 1992– SsangYong Paper Company acquired in 1998

• $360 million sales• 1000 employees• General Office in Seoul • Plants in Chochiwon, Chonan, and Osan• Brands

– Cosmetics : SKII – F&HC : Febreze, Joy– Food/Beverage : Pringles– Haircare : Pantene, Vidal Sassoon– Paper : Whisper, Cutie, Codi, Bounty

Business Situation

BusinessStrategy

Structure Reward

DecisionMaking

InformationPeople

TaskCulture

BusinessResults

Organization Performance Model“All organizations are perfectly designed

to get the results they get.”

Dimensions of Organization Performance

Dimension Outcome Intervention

Individual Maximize contribution Performance developmentemployee by each individual and management

Work Maximize efficiency Work process changeprocess and effectiveness

of each work process

Organization Optimize the way Organization assessment, the organization design and redesignis structured todo the work

Performance Management

• Corporate Culture• Corporate Strategy • Performance Development• Performance Measurement• Reward Systems

1. Corporate Culture

• Corporate Values and Principles represent the Corporate Culture.

• VALUES are the core concepts that define the character of the Company and its people.

• PRINCIPLES are the guidance by which choices, decisions, and behaviors are determined.

?? See handSee hand--out for details.out for details.

1. Corporate Culture

Core ValuesP&G is its people and the values by which they live.• P&G People• Leadership• Ownership• Integrity• Passion for Winning• Trust

1. Corporate Culture

Core ValuesP&G is its people and the values by which they live.

• P&G People: We attract and recruit the finest people in the world. We build our organization from within, promoting and rewarding people without regard to any difference unrelated to performance. We act on the conviction that the men and women of Procter & Gamble will always be our most important asset.

• Leadership• Ownership• Integrity• Passion for Winning• Trust

1. Corporate Culture

PrinciplesThese are the Principles and supporting behaviors which flowfrom our Purpose and Values.

• We show Respect for All Individuals.• The Interests of the Company and the Individual are

Inseparable.• We are Strategically Focused in our Work.• Innovation is the Cornerstone of our Success.• We are Externally Focused.• We Value Personal Mastery.• We Seek to be the Best.• Mutual Interdependency is a Way of Life.

1. Corporate Culture

PrinciplesThese are the Principles and supporting behaviors which flowfrom our Purpose and Values.

• We show Respect for All Individuals.– We believe that all individuals can and want to

contribute to their fullest potential.– We value differences.– We inspire and enable people to achieve high

expectations, standards, and challenging goals.– We are honest with people about their performance.

• The Interests of the Company and the Individual are Inseparable.

• We are Strategically Focused in our Work.• Innovation is the Cornerstone of our Success.• We are Externally Focused.• We Value Personal Mastery.• We Seek to be the Best.• Mutual Interdependency is a Way of Life.

2. Corporate Strategy

• Corporate strategies are deployed to all organizations and individual employees to achieve business objectives and goals.

• Individual contribution or performance is measured against Corporate OGSM.

2. Corporate Strategy

Deployment of Strategies to Organizations & Individuals

CorporateOGSM

BU OGSM, Action Plan, “R” Chart

Scorecard & “R” chart• Corporate• STAR• BU

Your Organization’s Action Plan• Driving OGSM• Driving Scorecard• Other Actions unique to

Your Organization

W&DPs for Individuals in your Organization

Career Career PlanningPlanning

Reward & Reward & RecognitionRecognition

Development Development ProgramProgram

1:1 1:1 RelationshipRelationshipCoachingCoachingFeedbackFeedback

Work Plan for Work Plan for the year aheadthe year ahead

Personal Personal Development Development

PlanPlan

Career Career InterestsInterests

Review of Review of ResultsResults

Business Business DirectionDirection

Business Business ResultsResults

Recruit the Finest PeopleRecruit the Finest People

Retain the Finest PeopleRetain the Finest People

Performance Performance ManagementManagement

3. Performance Development

3. Performance Development

Onboarding

Functional College

Corporate College

On the Job Training

e-Learning

Group 1Group 1

Group 2

Group 3

Time on the Job

Learning CurveLearning Curve

Performance

5Years55

YearsYears

8Years88

YearsYears

Learning Curve

3. Performance Development

Onboarding• Fast start (Vertical startup)• Early responsibility• Company fundamentals for new hires • Job fundamentals for new hires & transferees

Corporate College• Global programs• BU programs• Country programs

3. Performance Development

Functional College • Functional mastery (e.g., HR, Finance, Marketing, etc.)• Functional College Programs

– Classroom– Self study– Function Net– OJT– COP (or Community of Practice)

3. Performance Development

e-Learning• Rapid Learn• Global Knowledge Database• Global Team Space

OJT• OJT • Assignment Planning

4. Performance Measurement

Performance Rating System

• Annual performance review with Manager• Annual rating calibration by upper level managers• Rating based solely on performance• Relative rating

Rating Percent Pay Band1 15 65-1002 70 35-653 15 0-35

5. Reward Systems

• Reward for performance– Pay– Promotion – Assignment– Recognition

• Poor performance management

5. Reward Systems

Rating 1Rating 1

Rating 2Rating 2

Rating 3Rating 3

MaxMax

MinMin Years at LevelYears at Level

Annual Salary

100

65

35

0

Pay for Performance

5. Reward Systems

Pay for performance

Short TermShort Term

Base Base SalarySalary

STARSTAR

Stock Stock OptionsOptions

LEAPLEAP

+ + Long Term =Long Term = TotalTotalCompensationCompensation

5. Reward Systems

Pay for performance

Item Eligibility MeasurementSalary All Performance ratingOption B3+ Performance ratingSTAR AD+ BU PerformanceLEAP VP+ TSR Performance

PeopleSupply &Growth

AccountManager

PeopleSupport

Site/Plant/Org. UnitHR/SPOC

Specialist for a Business Unit

BUHR Mgr.

HRLeaders

Global/ BUSpecialist

3 3 -- 4 4 assignmentsassignmentsin first 6 in first 6 -- 8 years8 yearsLevels 1 Levels 1 -- 33

1 - 2 assignments8 - 10 years in Co.Levels 3 and 4

1 - 2 assignments10 - 15 years in Co.Levels 4 and 5

Must have workedoutside home region;must have worked inat least 2 Bus. Units

Must have had T&Bassignments in otherfunctions; must havehad min. ONE assign-ment outside homecountry

5. Reward Systems

Promotion in HR Function

5. Reward Systems

Poor performance management• Coaching and feedback• Counsel out poor performers

Business Situation

BusinessStrategy

Structure Reward

DecisionMaking

InformationPeople

TaskCulture

BusinessResults

Organization Performance Model“All organizations are perfectly designed

to get the results they get.”