BANK NIAGA PRACTICES ON EFFECTIVE

PERFORMANCE MANAGEMENT: KEY DRIVER IN

ACHIEVING BUSINESS OBJECTIVES
 Presentation
Framework

1 Managing Human Resources in Bank Niaga

to support business performance

2 Bank Niaga practices on implementing

effective performance management as key
driver on achieving business objective
Critical Point: Differentiation on evaluation &
3 rewarding and sourcing for talent
management

2
 Managing HR in Bank Niaga
Supporting Business
1 Managing resources based on core
Performance
values and competency

2 Managing and measuring performance The Premier Retail Bank in

(PM) thru business aligned goals and Indonesia...
continues feedback and development ... with specific focus on
 Mass affluent and
3 Recruit best talent, managing individual affluent consumer
career plan and developing talent and
 Mortgage
leadership
 Middle commercials
4 Organization and culture development to ... with profitable presence
support business focus in other financial services
segments (e.g., corporate)
5 Reward the best and implement
consistent penalty and law enforcement

Developing organizational culture and capabilities in achieving productivity

HR Vision and business objective by focusing on valuing ethics and integrity,
promoting a positive working climate and building knowledge enterprise 3
 Bank Niaga Practices on
Effective PM
1 2 3
Translating business Appropriate decision Keeping staff
strategy into action making understand the
and KPI achievement of
business
authority and
resources needed

4 5 6

Giving frequent Bigger variable

Differentiation in pay and talent
ongoing feedback
evaluation and development
rewarding

Effective performance management will lead

to high employee engagement

and company productivity 4

 Effective PM: Begun by
Business Intent
 Bank Niaga using Balance Scorecard
Finance Customers
(BSC) concept on translating strategic
goals and formulating KPI
Internal
People  KPI cascading to unit and individual and
Process
become theirs goals to be monitored
periodically
Method and Step Asset Size
• Clarify vision and mission
• Validate strategic goals
Cross-sell Customer
• Validate strategy summary retention
Customer
• Formulate strategy map satisfaction

• KPI selection
Customer
• KPI summary services std

• KPI library
Internal
• Cascading to Unit and Individual services std
KPI
Teamwork
• KPI monitoring and dashboard
5
 Heavy Communication on
Business Performance
1
Monthly management meeting 4
Area/branch monthly
involving all managers below meeting discussion on unit
board members informing performance
corporate performance and
discussion on how to improve 5 Weekly branch/unit morning
performance briefing on specific cases
impacting performance
2 Monthly news (thru newspaper
and email) informing all 6 Annually award on
employee on corporate branch/unit performance on
performance finance, customer, process
and people aspects
3 Quarterly publication (for
external and internal purposes)
on corporate performance

6
 On-going Feedback on
Performance and
Development
Individual KPI Individual skill &
and goals competencies

Unit/organization Unit/organization
ONGOING FEEDBACK ON capabilities
KPI and goals
PERFORMANCE AND
DEVELOPMENT

Development
Business strategy Corporate values

Reward &
& intent & capability

Using Balance Scorecard Defining competencies covers

(BSC) Method to formulate corporate values, core
KPI and action competency and functional
competency
7
 Differentiating Employee
Performance and
Through identification & assessment process,
employee are classified into the following map:
HIGH
Potential

HIGH
STAR
POTENTIAL To differentiate reward
POTENTIAL

UNDER
and development, staff
PERFORMER
MEDIUM

HIGH will be classified to three

AVERAGE
PERFORMER
categories:

A : Top Performer/Talent
LOW

DEADWOOD LIMITED CONTRIBUTOR

B : Average
BELOW MEET EXCEED
C : Low Performer/Deadwood
PERFORMANCE

 Performance is actual achievement of goals and

related competency needed to achieve the goals,
measured by performance review process

 Potential is competency required for next level

position (as shown in BN’s Leadership Success
Profile) measured by 3rd party assessment (using
assessment center) 8
 Different Reward for
Different Performance
Level
A Top Performer B Average C Low Performer

15 – 20 % 60 – 70 % 5 – 10 %

 Special Merit Increase  Appreciate and  Identify and decide on

(comparatio mid to affirm them action plan
max)  Average Merit  No MI dan Promotion
 Promotion Accelerate Increase
 Rotation Program
(1-2 year)  Regularly Promotion
 Counsel some to
 Special Bonus (3 year and up)
leave the company
 Cash Reward  Regular Bonus
 LTI (ESOP, etc)


 High Employee
Engagement
Climate Survey by BN Engagement Survey by BCG
27.53
2005 Commitment To
23.45
22.45 Objectives
20.32
18.41
17 Sharp Individual
Accountabilities
13.05
Rigorous Perform
Management

Platforms For
Collaboration

Capable Workforce
dar
d
l a rity i bility Com i b ility ward v e rall
n C ns x e O
Sta spo Te
am Fl e R
R e Performance
Disciplines Average

• Healthy and conducive work climate with 1 2 3 4 5

Strongly Strongly
index 20.35% (norm/target under 25%) and Disagree Agree
better than 2004 (23.75%) (November 2005)
• Focused engagement organization based on
BCG Survey (rating 4.2 versus 3.6 best
practices) (October 2005)
• The Best Employer Choices 2005 in Banking
Industry (SWA, Jan 2006) 10
 Summary: Effective PM
Lead to Productivity
BN’s Growth 2003-2005
103%
 Effective performance management (PM)
74% 77% will affects employee engagement and
66% 64%
commitment to do their best on achieving
their goals, and will lead to business
23%
productivity and performance
 Effective PM not just talking about setting

es
t

individual goals and evaluated annually

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 Effective PM should begin by business
BN’s performance 2003-2005 intent translating into action and KPI,
cascading into unit and individual KPI,
Delta
2003 2004 2005 heavy communication on business
03-05
performance tracking, giving employee
Asset 23.749 30.798 41.362 74%
authority and resources needed, ongoing
Deposit 19.332 24.733 34.389 77% feedback on performance and development,
Loan 14.408 21.092 29.352 103% differentiated in evaluation and reward,
PBT 446 754 740 66%
bigger variable pay and part of talent
management program
People 3,468 5,462 5,691 64%

Branches 181 209 222 23%  Employee engagement should be

measured periodically to track driving
Rp Milyar indicator to business performance
11
Thank You

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