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The following are some example of KPIs for Sales & Marketing department:

Marketing

• Objective: To complete X project on time

• Measure: Completion day / Deadline
• Target: 30 days / <date>
• Stretch Target: 21 days / <date>

Objective: To complete consumer profiling and hotel feasibility studies on time

• Measure: Average completion day per study
• Target: 180 days
• Stretch Target: 165 days

Objective: To complete quality service delivery to partners

• Measure: Product brief
• Target: 4
• Stretch Target: 5

Sales

• Objective: To improve sales performance

• Measure: Success rate - sales launch
• Target: 20%
• Stretch Target: 30%

Objective: To improve customer satisfaction

• Measure: Sales & Purchase Agreement Processing Period (Work Standard (WS) - X day)
• Target: 60% of WS
• Stretch Target: 80% of WS

Objective: To motivate sales team

• Measure: Processing sales commissions (Work Standard (WS) - x days)
• Target: y% of WS
• Stretch Target: z% of WS

Sales Administration

• Objective*: To improve operation efficiency

• Measure: Document collection
• Target: 90 days
• Stretch Target: 75 days

Objective*: To improve operation efficiency

• Measure: Purchasers database availability
• Target: 90%
• Stretch Target: 95%

Objective: To increase purchaser value

• Measure: Response time
• Target: Y%
• Stretch Target: X%

*One objective may have few measures / KPIs.

Outpatient medical benefit, although is not specified in the Employment Act of Malaysia that it is a must to be provided by the employer, most employers in Malaysia are providing this benefit to their employees, or some even to the employees’ family members, with different annual limit.

There are two common ways of outpatient medical plan administration, which is, either managed by the employer itself, or outsource. There are two common types of outsourcing, which the first one, is to insure the employees under outpatient medical benefit with an insurance company, and an annual premium is paid. The other one is to engage an external company (some insurance company also provide this service) to manage all administration work of outpatient medical benefits, whereby the employers will pay all outpatient medical expenses incurred to its employees, and on top of that, pay a percentage of administration fees to the external company.

As a HR person, if your outpatient medical benefit is managed by your own, perhaps you may include the following exclusion and limitation into your outpatient medical plan policy, as a way of controlling your cost, besides having the annual limit.

1. Acne treatment or cosmetic treatment;
2. Care and treatment that is experimental, investigative and not according to accepted professional standard and care that is not medically indicated;
3. Treatments or injuries sustained while committing a crime or felony, or while under the influence of alcohol, narcotics, or mind altering substance or injuries which are self inflicted while sane or insane;
4. House calls by doctors for any reasons;
5. Any expenses in respect of pregnancy, confinement, miscarriage, contraceptive medications and devices, sterilization procedures, or treatment for complications;
6. Conditions related to sexually transmitted diseases, AIDS and AIDS Related Complex or its sequelae;
7. Alternative therapies such as Acupuncture, Chiropractic, Osterpathy, Reflexology, etc;
8. Vitamins, food supplements, herbal cures and anti obesity / weight reducing agents including any off the counter medications;
9. Soaps, shampoos, vitamin creams and vitamin ointment;
10. Psychotic, mental or nervous disorders and behavioral conditions including any neurosis and their physiological or psychosomatic manifestations;
11. Treatment or therapy for congenital or hereditary diseases, deformities and disabilities and any medical or surgical complication arising therefrom e.g. childhood hernias, clubfoot, Thalassemia, etc;
12. Diseases or disabilities of a newborn child contracted prior to or during birth;
13. Blood and topical allergy testing;
14. Routine physical examination, health check-ups or tests;
15. Spectacles, lenses, any process solely for determination of eye refraction and the correction of the same by radial keratotomy, orthoptic or visual training or by other means, optician’s fees;
16. Any dental treatment or surgery;
17. Use or acquisition of all external appliances (e.g. artificial limbs, hearing aids, etc.) and the rental charges of such devices;
18. Outpatient physical therapy or physiotherapy;
19. Preventive vaccinations;
20. Any expenses incurred in respect of illness, injury or disablement arising from any proven faults, carelessness, participation in any hazardous sport, pursuit or pastime.

In Malaysia, three types of group insurance are commonly provided by employers to employees as part of their staff benefits. These three types of insurance are Group Hospitalisation and Surgical Insurance (GHS), Group Personal Accident Insurance (GPA) and Group Term Life Insurance (GTL).  

Some companies will handle such insurance administration, inclusive of getting quotation, negotiation, claim administration and appeal, etc, directly with the insurance companies. The staff who is in-charge in this matter must then possess some insurance knowledge in order to carry out his job efficiently, especially being able to negotiate with the insurance companies to minimise the cost and widen the coverage.

However, some companies will be using insurance broker to handle their staff insurance or general insurance. The benefits of using insurance broker are as follows:

• They are able to obtain competitive rates and terms because of their expertise and bulk purchasing power.
• They are able to provide unbiased professional opinion, as they are not tied to any particular insurance company.  
• They do not charge the employers any fees as they earn their brokerage from the Insurer with whom they placed their business.
• They are a one-stop centre for all types of insurance.
• They are able to provide the information of the latest trend and advise the best coverage of insurance within certain budget.
• They handle all insurance claims administration on behalf of the companies, which would reduce paper work and perhaps manpower cost of the companies.  

Insurance broker would be a good source if you are serious about saving your company’s cost on insurance and widen the coverage.

In view of the economy slowdown that resulted from supreme crisis in year 2008, Malaysian Government has been making efforts to mitigate the impact of economic downturn to its Rakyat (citizen). One of the efforts is to reduce the impact of the higher living costs as a result of inflation, by reducing the tax burden of its Rakyat, via 2009 Budget. Among them are: tax relief on interest paid on housing loan, tax exemption for interest income received by individual from deposits in approved financial institution, and tax exemption on some benefits / allowances paid by the company to the employees.

Among the benefits / allowances given to the employees which are tax-exempted for Year of Assessment (YA) 2008 are (more direct related to the above subject ones are spelt out):

• Petrol card, petrol allowance or travel allowance between home and workplace, up to RM2,400 per year (valid until YA 2010);   
• Petrol card, petrol allowance or travel allowance and toll card for official duties, up to RM6,000 per year;
• Allowance or fees for parking;
• Meal Allowances; Allowances or subsidies for childcare of up to RM2,400 per year;
• Telephone and mobile phone, telephone bills, pager, personal data assistant (PDA) and internet subscription;
• Others

The benefits provided can be in the form of cash allowances or benefits-in-kind (benefits with monetary value but not convertible into cash). If cash allowances are given, no proof is required for tax exemption. The employer is required to declared such tax-exempted allowances in the EA form of the employees. However, if tax-exempted benefits-in-kinds are given, supporting documents may be needed to substantiate such claim. Example of benefit-in-kind is handphone set provided by the company with company registered line, and the supporting documents will be handphone bills.

The above effort by the Government will only benefit individuals who are eligible for the allowances or benefits-in-kinds as mentioned above. The issue now is, for individuals who are getting basic salary only, will the employers incorporate the above into their remuneration package in order to reduce their tax. *For example, an employee who is getting basic salary of RM5,800 per month, and in the 13% tax bracket. The employer may restructure his remuneration package by giving him basic salary of RM5,300 per month and, say, travel allowance of RM500 per month. RM6,000 would then be exempted from tax, and this amounts to a RM780 saving. Employer will at the same time, eligible for full tax deduction by providing these benefits. However, both the employer and employee might want to reach to an agreement of re-look into the remuneration package again after a period of time, as some of the above-mentioned tax-exempted benefits are valid for a certain period of time only.

*The above example is based on simple illustration. The employer is advised to discuss with the company’s tax consultant before implementing any restructuring of remuneration for employees for the purpose of tax planning, in order to achieve a win-win situation.  

Salary scale consists of range of salaries, which serves as a guideline for salary payout to different levels of employees.

The following are the steps of developing salary scale:

1. Establish Job Description

- A standard format of job description which include a description of the field of responsibilities as well as a listing of duties under one or more areas of responsibilities shall be developed.

2. Analysis of Job Categories

- Once Job Description is done, the next step is to analyse all the positions and try to categorise them into groups. It could be by level, e.g. non-executive, junior executive, senior executive, etc; or by job grading, e.g. E1-E2 for Senior Manager level, E3-E4 for Manager level, E5 for Middle Management level, etc.

3. Determine Salary Scale for Each Job Categories

- It could be done by performing salary benchmarking within the market, and work out the salary scale by setting the minimum, median, or maximum salaries.

4. Determine where an employee would fall within the salary scales. The following are some guides for this purpose:  

a. Minimum Salary - This is the entry level for the given portfolio, which means the person filfills the minimum requirements for the job.

b. Salary between Minimum and Median - The employee has the experience and knowledge to master most of the duties related to the job in an independent manner. The employees in this category are in the development phase because they are still learning their job.

c. Salary between Median and Maximum - The employee is highly experienced and their level of productivity exceeds the job requirements. The employees in this category are in maturity phase because they are mastering their job.

d. Maximum Salary - The employee is continuously producing results that are well above the requirements of the job. The employees in this category are in the leadership phase because they have demonstrated superior leadership skills and a strong commitment to the organisation. They could propably move into the next level of job category.

Key Performance Indicators (KPI) is a measurement tool that used to measure the success factors of an organisation, in quantitative way.

The KPIs must reflect the organisation’s goals, usually in long-term; must be keys to its success; and must be measurable. The goals for a particular KPI may change as the organisation’s goals change, however, the KPIs definition and the ways they are measured do not change often.

In selecting KPIs, it is critical to limit them to those factors that are essential to the organisation reaching its goals. It is also important to keep the number of KPIs small just to keep everyone’s attention focused on achieving the same KPIs.

The below is an example of KPI:

Company’s KPI: Increased profit

Human Resource department, for instant, may support the above company’s KPI with the following departmental KPIs:

1. To improve employees’ performance - in order to increase profit, it is essential to make sure that the employees are performing

KPI:  % of employees receiving regular performance review (more than a time a year)

Target: 20% from the total number of employees within an organisation are reviewed at least 2 times a year

2. To improve recruitment efficiency

KPI #1: % of reduction in average recruitment cost

Target: To reduce *average recruitment cost by 10% as compared to previous year. (*total recruitment cost / number of new recruit)

KPI #2: % of *turnover rate of new employees. (*number of new staff leaving within 12 months / number of total new hire)

Target: 5% of new employees turnover rate

3. To improve employees’ satisfaction

KPI: % of employees receiving disciplinary actions

Target: 5% of employees receiving disciplinary actions.

4. To improve employees’ skills

KPI: average number of training hours per employee

Target: average 16 training hours per employee

Once the KPIs are set, they can be used as a performance management tool, as well as a carrot. KPIs give everyone in the organisation a clear picture of what is important, of what they need to make happen. Show the target for each KPI, and show the progress towards the target. People will be motivated to reach those KPIs.

It’s year end performance appraisal time. The Human Resource Department would view this as an opportunity for appraisers and the appraisees to review the whole year both individual’s and company’s performance, to determine any reward or punishment, and to set next year’s objectives and key performance indicators (KPIs). Most importantly, it is a communication session for both appraisers and appraisees. However, most appraisers will not take this opportunity to do so. They take the attitude that the good / outstanding performance is "what the appraisees are supposed to do" or "what we pay the appraisees for"; or the appraisers always want to be Mr. Nice Guy, for not punishing the non-performance appraisees.

Therefore, it is very important to create awareness that, the right performance appraisal process will benefit both the company as much as the employee. For the company, it is a mechanism for improving performance and rewarding achievement on a predictable, scheduled basis. It also offers on-going feedback from employees on how the organisation’s parts are operating. Employees, meanwhile, get both rewards for past efforts and directoins for the future, as well as a chance to be heard on how to improve things in the workplace. Appraisers need to be reminded that the whole performance appraisal idea is improvement, not fault-finding or blame-placing.

Secondly, the performance appraisal must be done in an objective way, which means by using a uniform rating scale (often numerical) and keeping non-business, personal opinions aside. Appraisers should be seemed to present a balanced portrait of the staff that includes both positive and negative observations.  

Thereafter, appraisers and appraisees should come to an agreement to set goals that are measurable and achievable. If past goals have not been met, appraisers should provide guidance to assist the appraisees to achieve them in the future.

The above provide a guideline for a right conduct of performance appraisal, which will sure improve the performance of the employees, superiors and company!

In an organisation, company car is usually provided, either as a fringe benefit, or based on job requirement of an employee. When a company car is provided, the maintenance fees, annual insurance and road tax, as well as petrol expenses will be borne by the organisation.

Nowadays, in order to reduce the administration work of maintaining company cars, most organisations provide car allowance, in place of company cars. When car allowance is considered to be given, it is usually the Human Resource’s responsibility to come out with the amount. How can HR determine a fair amount for car allowance? Here are some tips:

When an organisation provides a company car, the expenses will include the purchased price of the car, the total interest incurred from car loan (if it is hire-purchased), the annual insurance and road tax of the car, as well as the maintainance fees, petrol expenses, etc.

To come out with a fair car allowance, the Human Resource Department can convert the estimated expenses incurred on company car during a certain period of time, into monthly car allowance. In order to do this, the following expenses shall take into consideration:

1. Car Purchased Price

If there are employees with different job grades, different car budget shall be allocated to different grades. Therefore, there will be different amount of allowance for different job grades.

2. Car Annual Insurance

3. Car Annual Road Tax

4. Total Interest Incurred from Car Loan

5. Maintenance Cost

The above expenses (2-5) shall be based on a certain number of years, for example, 6 years. 

For interest, it shall also be based on the estimated loan amount, for example, 90% from the car purchased price.

Maintenance cost could be based on historical record, or information obtained from any car service centre. Different cc of car will have different maintenance cost.

6. Car Re-sale value, provided company car is sold after certain years.

The total expenses incurred for company car shall be the total of item (1) to (5), minus item (6). The monthly allowance shall derive from the total expenses divided by total number of months, which the total number of month shall be the period that used to estimate the total expenses.

Besides the above, depending on the tax structure of a country, the company might take part of the additional tax imposed on the employees, as a result of the car allowance given, into expenses. In this case, the company will bear part of the tax via car allowance given.

Group insurance is one of the basic staff benefits provided by most organisations in Malaysia. Group Insurance may include Hospitalisation & Surgical, Personal Accident and Term Life.

While considering Group Hospitalisation & Surgical Insurance, besides premium and annual coverage, the following criterias shall also be taken into consideration:

1. Pre-existing Illnesses

Pre-existing illnesses mean any illnesses that existed before the effective date of the insurance policy. Some insurance companies waive the pre-existing illnesses clause, which if an employee is hospitalised for any illnesses existed before the effective date of the insurance policy, shall be covered and claimable. However, some companies impose a minimum of period of time for pre-existing illnesses coverage.  

2. Specific Illnesses

There are specific illnesses that are not covered for a period of time (e.g. 6 months, 12 months, etc.) from the effective date of the insurance policy. When the insurance companies waive this clause, all illnesses are covered as long as the insurance policy takes effect.

3. Waiting Period

Waiting period shall mean a period of time between the beginning of the insured person’s disability and the commencement date of the insurance policy. This clause will usually applicable to new employees only.

4. Co-payment

Co-payment means if the insured person is hospitalised at a room & board rate which is higher than his / her eligible benefit, the insured person shall bear a certain percentage of the other eligible benefits described in the Schedule of Benefits. Co-payment will be able to control the hospitalisation expenses and prevent the hike of insurance premium in the coming year.

5. Underwriting Exclusion

Underwriting exclusion clause disallows the insured person to claim for the same illnesses, which are occurred in the previous year, upon renewal.

6. Long-term Illnesses Coverage

Long-term illnesses include outpatient cancer treatment, outpatient kidney dialysis, organ transplant, and outpatient physiotherapy treatment. The annual limits imposed on these long-term illnesses coverage shall be compared when considering Group Hospitalisation & Surgical Insurance.

7. Administration

Whether the insurance companies provide free administration (issuing guarantee letters, etc.), or with charge (medical card, usually on per head basis).

A good insurance company shall be able to provide the basic coverage to the employees, meanwhile take care of the interest of the company.

Panel Clinics Appointed by the Company

Pros:

1. Medical Certificate and medical expenses could be controlled.

Cons:

1. Administration Works

If a company appoints panel clinics for its outpatient medical plan, administration works start from identifying and appointing panel clinics. The company (usually Human Resource Department) will need to make sure panel clinics are available, at least within a certain radius of distance, for all employees. This would be problems for big organisation (>500 employees).

If the company appoints many panel clinics, there will be a lot of paper work of administering invoices from panel clinics.

2. Controls

Panel clinics might take advantage from the company, by charging high charges, due to the personnel in-charge of the company might lack of knowledge in medical matters. Also, staff might take advantage as well by incurring some medical costs which they are not supposed to claim (differ according to companies’ policy).

Outsource of Outpatient Medical Plan

Outsource of Outpatient Medical Plan means to appoint a company (in Malaysia, usually an insurance company) to handle all outpatient medical related matters.

Pros:

1. Lack administration work for the company, in appointing panel clinics and handling billings.

2. Number of medical certificates issued by every clinics is monitored by the outsource company, and investigation will be carried out if necessary.

3. The outsource company will check every claims made by the panel clinics. This will be done by the panel medical practitioners who have medical knowledge.

Cons:

1. The panel clinics might be “instructed” / tend to give lower quality medicine, as cost control imposed by the outsource company.  

2. The premium paid might be high, as compared to the actual expenses incurred, as the premium of the current year will usually based on the previous year’s actual medical expenses incurred, plus the percentage of inflation rate of the current year.   Technorati Profile