KFC (Kentucky Fried Chicken) “We Do Chick Right”
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KFC PRESENTED TO:
Ms. Toima Raza PRESENTED BY: Ms. Fatima Sughra ID # 074032-033 Ms. Hafsa Ayoub ID # 074032-051 Mr Muhammad Waqas ID # 074032-003 Mr Hassan Sabir ID # 074032-060 PERSENTED ON:
January 5,2010
University of Management & Technology (UMT) Lahore 3
DEDICATION We would like to dedicate all of our efforts to complete this report to our beloved Parents and respected teacher Ms. Toima Raza.
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Acknowledgement We would like to say thanks to our teacher Mrs. Toima Raza for her guidance and her precious thoughts which helps us to complete this work in a proper and efficient manner. We would like to say thanks Mr. Furqan (Allumnies) who help us to arrange a meeting with KFC Managers. We also like to say thanks to Mr. Rana Naveed (HR Manager) who provided us all the necessary information about the Performance management system of KFC to complete this report.
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Table of Contents
MISSION.........................................................................................................................................................6 HISTORY........................................................................................................................................................7 KFC IN PAKISTAN.....................................................................................................................................11 ........................................................................................................................................................................13
Mission To establish in Pakistan our position as leading WQSR (Western Quick Service Restaurant) chain, serving good value innovative chicken-based products, consistently providing a pleasant dining experience, with fast friendly service, in a clean and convenient location. At all times, we must be dedicated to providing excellent service and delighting customers.
Goals •
Build an organization dedicated to excellence.
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Consistently deliver superior quality, and value in our product and service.
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Maintain a commitment to innovation for continuous improvement and growth, striving always to be the leader in market place challenges.
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Generate consistently superior financial returns and benefit our owners and employees.
Values for KFC • Focus all our resources to our restaurant operations because that is where we serve our customers.
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Reward and respect the contributions of each
individual at KFC. •
Expand and update training with time and be the best
we can be and more. •
Be open, honest and direct in our dealing with one
another. • Encourage new and innovative ideas because they are the key to our competitive growth. • Reward result and not simple efforts. • Dedicate ourselves to continuous growth in sales, profit and size of organization. • Work as a team.
HISTORY 9/9/1890-Harland Sanders, the founder
of
KFC was born just outside Henryville, Indiana. 1900-1924-Harland Sanders holds a variety of jobs including: farm
hand, streetcar conductor, and army private in Cuba, blacksmith's helper, railyard fireman, insurance salesman, tire salesman and service station operator for Standard Oil. 1930-In the midst of the depression, Harland Sanders opens his first
restaurant in the small front room of a gas station in Corbin, Kentucky. Sanders serve as station operator, chief cook and cashier and name the dining area "Sanders Court & Café." 1936-Kentucky Governor Ruby Laffoon makes Harland Sanders an
honorary Kentucky Colonel in recognition of his contributions to the state's cuisine. 7
1937-The Sanders Court & Café adds a motel and expands the
restaurant to 142 seats. 1939-The Sanders Court & Café is first listed in Duncan Hines'
"Adventures in Good Eating." Fire destroys The Sanders Court & Café, but it is rebuilt and reopened. The pressure cooker is introduced. Soon thereafter Colonel Sanders begins using it to fry his chicken to give customers fresh chicken, faster. 1940-Birth date of the Original Recipe 1949-Sanders marry Claudia Price. 1952-The Colonel begins actively franchising his chicken business by
traveling from town to town and cooking batches of chicken for restaurant owners and employees. The Colonel awards Pete Harman of Salt Lake City with the first KFC franchise. A handshake agreement stipulates a payment of a nickel to Sanders for each chicken sold. 1955-An interstate highway is built to bypass Corbin, Kentucky.
Sanders sells the service station on the same day that he receives his first social security check for $105. After paying debts owed, he is virtually broke. He decides to go on the road to sell his Secret Recipe to restaurants. 1957-Kentucky Fried Chicken first sold in buckets 1960-The Colonel's hard work on the road begins to pay off and there
are 190 KFC franchisees and 400 franchise units in the U.S. and Canada.
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1964-Kentucky Fried Chicken has more than 600 franchised outlets in
the United States, Canada and the first overseas outlet, in England. Sanders sell his interest in the U.S. Company for $2 million to a group of investors headed by John Y. Brown Jr., future governor of Kentucky. The Colonel remains a public spokesman for the company. 1965-Colonel Sanders receives the Horatio Alger Award from the American Schools and Colleges Association. 1966-The Kentucky Fried Chicken Corporation goes public. 1969-The Kentucky Fried Chicken Corporation is listed on the New
York Stock Exchange. 1971-More than 3,500 franchised and company-owned restaurants
are in worldwide operation when Heublein Inc. acquires KFC Corporation.
1976-An independent survey ranks the Colonel as the world's second
most recognizable celebrity. 1977-Colonel Sanders speaks before a U.S. Congressional
Committee on Aging. 1979-KFC cooks up 2.7 billion pieces of chicken. There are
approximately 6,000 KFC restaurants worldwide with sales of more than $2 billion. 12/16/1980-Colonel Harland Sanders, who came to symbolize quality
in the food industry, dies after being stricken with leukemia. Flags on all Kentucky state buildings fly at half-staff for four days. 1982-Kentucky Fried Chicken becomes a subsidiary of R.J. Reynolds
Industries, Inc. (now RJR Nabisco, Inc.) when Heublein, Inc. is acquired by Reynolds. 1986-PepsiCo, Inc. acquires KFC from RJR Nabisco, Inc.
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1997-PepsiCo, Inc. announces the spin-off of its quick service
restaurants - KFC, Taco Bell and Pizza Hut - into Tricon Global Restaurants, Inc. 2003-Tricon Global Restaurants, Inc., the world's largest restaurant
company, changes its corporate name to YUM! Brands, Inc. In addition to KFC, the company owns A&W® All-American Food® Restaurants, Long John Silvers®, Pizza Hut® and Taco Bell® restaurants. 2006-More than a billion of the Colonel's "finger lickin' good" chicken
dinners are served annually in more than 80 countries and territories around the world. 2007-KFC proudly introduces a new recipe that keeps the Colonel's
11 herbs and spices and finger-lickin' flavor, but contains Zero Grams of Trans Fat per serving thanks to new cooking oil.
KFC Today • Today, KFC is the world’s largest and most well known chicken
restaurant chain, with more than 10,000 locations worldwide, in 78 countries. KFC and its franchises employ more than 20,000 people worldwide. •
KFC serves more than 4.5 billion kilo grams of chicken annually, to approximately 7 million customers a day, worldwide.
The Cupola Family
Found in 1994, headquartered in Dubai and offices in Middle East, London, Washington and Karachi. Turnover of $200 million with operating staff of 1660.
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Activities Focus on 4 Sectors:
Retail: spinney’s (ME and Lebanon), Max (SA) Consumer: Oman United Agencies (Oman & Jordan) Engineering: Cupola Engineering Group (Oil, gas & water industry) Information: Cupola plastic Cards LTD (Jable Ali), Cupola Teleservices (USE) THE Yum Family
Yum! Brands, Inc., based in Louisville, Ky., is the world's largest restaurant company in terms of system restaurants with more than 36,000 restaurants in over 110 countries and territories and more than 1 million associates. Yum! is ranked # 239 on the Fortune 500 List, with revenues in excess of $11 billion in 2008. Four of our restaurant brands – KFC, Pizza Hut, Taco Bell and Long John Silver's – are the global leaders of the chicken, pizza, and Mexicanstyle food and quick-service seafood categories.
KFC in Pakistan South Region including Karachi and Hyderabad (interior Sindh). North Region including Lahore, Rawalpindi and Islamabad (Punjab). They have a total of 63 outlets working in Pakistan. 1 outlet is in Islamabad, 2 in Rawalpindi,21 in Karachi, 11 in Lahore and other in others city of Pakistan like Faisalabad, Hyderabad, sakhar, Gujranwala, Sialkot, Multan, Peshawar and Jhelum.
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KFC say that for the last seven years they stand as the market leader in the fast food category and our strength lies in the mass appeal of our products and great service.
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Hierarchy Chart (Operational Level) Area Manager
Territory Manager
Restaurant manager
Assistant Manager
Trainee Manager
Shift Supervisor/Customer Relation Officer
All Stars
Two Stars
Star Staff
Customer Service Team Member
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Food Service Team Member
Trainee Team Member
Hierarchy Chart (Cooperate Level in North region) CEO
Head of North
Associate Regional Manager
Finance
Administration
Human Resource
Operation
Department
Brand
Audit
New Concept
Area Manager
Territory Manager
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Territory Manager
Territory Manager
Territory Manager
What is the existing performance management system of KFC? Performance management – A management process for ensuring employees are focusing their work efforts in ways that contribute to achieving the company’s mission. It consists of three phases: (a) Setting expectations for employee performance (b) Maintaining a dialogue between supervisor and employee to keep performance on track, (c) Measuring actual performance relative to performance expectations. The purpose of the performance management system is to ensure •
The work performed by employees accomplishes KFC’s goals
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Employees have a clear understanding of the quality and quantity of work expected from them
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Employees receive ongoing information about how effectively they are performing relative to expectations
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Awards and salary increases based on employee performance are distributed accordingly
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Opportunities for employee development are identified.
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Employee performance that does not meet expectations is addressed.
KFC started its operations in 1996 and till 4 to 5 years there was no human resource department in KFC and then in the 5th year of its operation in pakistan it developed its human resource department. When KFC started its performance management system so at that it used 360 degree feedback to evaluate its employees in which every employee was evaluated by his supervisor and his peers. The also launched their own ranking scale named by “My Growth Body” and details of their feedback system and “My Growth Body” are given below ; What is 360 degree feedback? 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them. This typically includes the employee's manager, peers, and direct reports. A mixture of about eight to twelve people 15
fill out an anonymous online feedback form that asks questions covering a broad range of workplace competencies. The feedback forms include questions that are measured on a rating scale and also ask raters to provide written comments. The person receiving feedback also fills out a self-rating survey that includes the same survey questions that others receive in their forms. Managers and leaders within organizations use 360 feedback surveys to get a better understanding of their strengths and weaknesses. The 360 feedback system automatically tabulates the results and presents them in a format that helps the feedback recipient create a development plan. Individual responses are always combined with responses from other people in the same rater category (e.g. peer, direct report) in order to preserve anonymity and to give the employee a clear picture of his/her greatest overall strengths and weaknesses. How is 360 Degree Feedback Used? KFC uses 360 feedback systems in two ways which are given below: 1. 360 Feedback as a Development Tool to help employees recognize strengths and weaknesses and become more effective When done properly, 360 is highly effective as a development tool. The feedback process gives people an opportunity to provide anonymous feedback to a coworker that they might otherwise be uncomfortable giving. Feedback recipients gain insight into how others perceive them and have an opportunity to adjust behaviors and develop skills that will enable them to excel at their jobs. 2. 360 Feedback as a Performance Appraisal Tool to measure employee performance These things are most appropriately addressed by an employee and his/her manager as part of an annual review and performance appraisal process. It is certainly possible and can be beneficial to incorporate 360 degree feedback into a larger performance
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management process, but only with clear communication on how the 360 feedback will be used. What a 360 Feedback Survey Measures? •
360 feedback measures behaviors and competencies
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360 assessments provide feedback on how others perceive an employee
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360 feedback addresses skills such as listening, planning, and goal-setting
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A 360 evaluation focuses on subjective areas such as teamwork, character, and leadership effectiveness
“My Growth Body” This was the rating scale introduced by the HR department of KFC in 2000-01 which they used to measure the performance of their employee. The information which they collected from 360 degree feedback it provided them a base on which they can rank their employee as a good performer or a bad performer. So basically in MGB there were 5 five points, the employee who was a low performer is ranked on 3 and the good performer who achieved his targets was ranked on 5. • Performance documentation – A letter, memo, completed form, or note on which the supervisor indicates the extent to which the employee is currently meeting expectations and provides evidence to support that conclusion.
The flow of activities involved in the existing system Supervisors and managers are responsible for managing the performance of their employees. As 90% to 95 % of the staff working in KFC is of operations and only 4 to 5% people are working on the managerial positions .Operational staff require regular check and balance on their performance so their performance is measured quaterly means 4 times in a year and performance of managerial staff is measured annually.
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1. Communicating employee performance expectations Since KFC has two main cycles on which it assesses its employees the three months cycle for operational staff and the twelve month cycle for managerial staff, so at the start of each cycle the supervisors meet with their employees, establish expectations regarding their employees’ performance, specify how employees’ actual performance will be measured and their success determined, and impart to them an understanding of how meeting these expectations will contribute to the achievement of the KFC’s mission. b. Performance expectations shall be written at the “meets expectations” level and shall be documented on a form defined by the KFC – the “work plan c. Work plans are signed and dated by both the supervisor and the employee. 2. Maintaining ongoing performance dialogue a. Employees shall be responsible for meeting their performance expectations. b. Progress toward meeting expectations shall be measured, reported, discussed, and documented throughout the work cycle. c. Supervisors are expected to use appropriate supervisory techniques to support employee efforts to meet or exceed their performance expectations. d. When expectations change during the course of the work cycle, supervisors communicate these changes and modify work plans as necessary. Modifications are signed and dated by both the supervisor and the employee. 3. Conducting performance appraisals a. Appraisal of operational staff after every 3 months and of managerial staff after every twelve months. b. At the end of the work cycle, supervisors shall evaluate employees’ performance during the past work cycle compared to their performance expectations. They use verifiable information collected and documented throughout the cycle to determine the extent to which actual performance has met the expectations defined in the work plan. c. The evaluation shall be documented on a standard form defined by the KFC – the “appraisal.” which is “My Growth Body” which is a form of questionnaire.
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d. The performance appraisal shall use a 5-level rating scale for reporting overall performance. A rating at the midpoint of the scale shall indicate that an employee’s performance has met expectations. e. Prior to discussing a completed performance appraisal (that is, an appraisal containing ratings and descriptions of actual performance) with an employee, a supervisor reviews the appraisal with the next-level manager to ensure that ratings are appropriate and consistent. f.Supervisors discuss the appraisals with their employees. Both supervisor and employee sign and date the completed performance appraisal indicating that the discussion has taken place. 4. Rewarding good Performance Most employees love recognition for a job well done. Consistently good performance and a willingness to take on more responsibility might make you consider an employee for promotion. Employees are motivated by both intrinsic and extrinsic rewards. To be effective, the reward system must recognize both sources of motivation. So reward system of KFC is based on the assumptions of attracting, retaining and motivating its people. HR manager told us that they know the the fact that financial rewards are an important component of the reward system, but there are other factors that motivate employees and influence the level of performance so they keep on identifying those other factors that can motivate their employees. . The competitive reasons for the growing emphasis on performance-based compensation are companies cutting costs, restructuring, and boosting performance. To ensure the reward system is effective and motivates the desired behaviors, KFC carefully considers the rewards and strategies utilized and ensure that rewards are linked to or based on performance. To make it more effective, KFC’s performance measurement system is tied to compensation or some sort of reward. 5. Addressing Poor Performance When an employee’s performance falls below expectations at any time during the performance cycle, the supervisor shall document the performance deficiency and take 19
actions, including (if appropriate) disciplinary action, to assure that performance expectations will be met within a reasonable period of time. 1. The supervisor documents the performance that falls short of expectations by preparing a corrective action plan or other documentation. The documentation will specify (a) the performance problem, (b) the steps to be taken to improve performance, including the timeframe for improvement, (c) the consequences of failure to improve, and (d) a followup date. 2. A corrective action plan is considered successfully completed only when the employee’s actual performance has improved to the point where expectations are being met. 6. Transitions When employees move into or out of their positions, relevant performance information shall be communicated in a timely way. 1. Probationary employees have work plans within a certain number of days of their date of employment. To remove an employee from probationary status, the supervisor provides performance documentation. 2. Employees in training progressions also have work plans, or an equivalent document that describes performance expectations, within a certain number of days of the date of employment. The supervisor provide performance documentation before each salary increase is granted within the progression. 3. Employees whose responsibilities are changed substantially, either within their current position or by transfer (promotion, lateral transfer, or demotion), shall have work plans established within a certain number of days following the new assignment. 7. Access and Use of Performance Information Properly informed personnel decisions – KFC takes measures to ensure performance information is appropriately and consistently used and that personnel decisions are based on appropriate performance information. Decisions involving promotions, performancebased disciplinary actions, performance-based salary increases, and reductions in force are supported by a current appraisal on file.
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Confidentiality of Appraisal - agencies shall clarify which of the documents used for performance management purposes are confidential and which are not, as well as define what “confidential” means. Completed performance appraisals (with ratings, supporting information, and signatures and dates) shall be treated as confidential. How the appraiser and apprises are linked together? Kfc uses the 360 degree which is also knows as “multi-rater feedback” appraisal system to evaluate the performance of its employees and this is the basic method which links the appraiser and appraises. In this system the human resource department of the organization reviews the appraisee’s job and job satisfaction. The important thing is that explore the problems the appraisee might have or factors which might prevent the appraisee from improving his/her job performance. This system gives the appraisee an opportunity to set and work towards achieving agreed objectives and also identify the appraisee’s personal development needs. This system involves all the employees at KFC and the feed back is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders.The results from 360-degree feedback are often used by the person receiving the feedback to plan training and development. Results are also used by some organizations in making administrative decisions, such as pay or promotion. When this is the case, the 360 assessment is for evaluation purposes, and is sometimes called a "360-degree review. Appraisal is concerned with the performance and development of individual members of staff. Human resource department at KFC evaluate the performance of is employees when the performance is evaluated then the department identify the development needs of employees and then provide the training and coaching according to it. During all this, the appraiser that is the members of human resource department and the appraises, who are the employees are linked with each other.
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KFC gives value to its employees. The senior manager always linked with the subordinates and identifies the needs of improvement and then directs them through the right path. If the operational staff is lacking in something or their efficiency is going down then they are warned at the spot but managerial staff is evaluated and assessed by using some proper evaluation method. If some operational staff member is working well then reward is giving to him or her at the spot in the form of employee of the day. The appraisal process is separate from the disciplinary process and has a different purpose. The emphasis of the appraisal process is on finding ways to improve performance and resolve problems through joint discussion. KFC uses the 360 degree evaluation method because it provides the following advantages: •
It provides the opportunity for regular communication between managers and their staff, mutual feedback and a clearer view of the responsibilities of their staff, possible areas for development and how these relate to departmental plans and the Organization's Strategic Plan.
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Staff member are encouraged to become directly involved in setting their own job related objectives and finding out when they need support in order to achieve them.
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Appraisal provides the opportunity for the work, abilities and achievements of staff to be recognised and recorded.
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All staff (appraisers and appraisees) has the opportunity to give and receive feedback on their role, performance and contribution.
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Staffs are able to express their opinions, feelings and suggestions in a confidential atmosphere.
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All staff has the opportunity to discuss any problems and agree solutions.
How goals and objectives are linked with performance management system? Both the two terms goals and objectives are often used interchangeably, confusion sometimes arises. Although both goals and objectives use the language of outcomes, the characteristic that distinguishes goals from objectives is the level of specificity. Goals express intended outcomes in general terms and objectives express them in specific terms. Goals are written in broad, global, and sometimes vague, language. Objectives are statements that describe the intended results of instruction in terms of specific student behaviors. KFC links its goals and objectives with performance management. The HR manager of KFC explains this with an example. He said, assume we have three employees and we assign them a target of 6 million sales. Two workers achieved above the target means 10 million that is very good but third one achieved only 6 million that is exact target. Then we will give reward which may be in any form to first two employees although the third one also achieved the target but his performance is not at the same level. In the end He said “performance speaks for itself”. This is the only criteria on which they are measuring the performance of the employees that’s why the performance of the employees are not very clear. This thing creates biasness because there are some employees who are very introvert and there performance is not so much clear. At KFC the goals and objectives are linked with the performance management system, it provides the following advantages to the company: What Appraisal system is used? Performance appraisal systems are designed to serve the company's and employee's interests. They are used to inventory the abilities and resources of employees and to let an employee know where he stands so that he will be stimulated to improve his performance. Companies implement appraisal system to determine whether the employee is doing according to the requirement of the organization or not. Companies can determine the behavior of employee towards the related objective.
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There are different types of appraisal system used by different companies; KFC use 360 degree feedback (“refers to the 360 degrees in a circle, with an individual figuratively in the center of the circle. Feedback is provided by subordinates, peers, and supervisors. It also includes a self-assessment and, in some cases, feedback from external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with "upward feedback,”) they were also using the online feedback, they place questionnaires on a log in of an each employee and communicate them to fill that and reply over their results. Through this process they keep the documentation and can give the proof of their out put at the time of review of their performance. Then on the basis of that feedback they give numbers to those employees and rank them between 3 to 5 and assess whether he or she is a good employee or not and then take a decisions related to his or her objective setting and any bonuses if he or she deserve. How the existing Appraisal system is implemented. Appraisal of employee performance is one of the most important responsibilities of managers. Existing performance management system is implemented approximately in 2001 to 2002, but KFC started its operations in 1996, so there was the gap of about 5 to 6 years between KFC operations and introduction of its performance management system. According to Mr. Rana Naveed, HR manager of KFC barkat market, north region Pakistan, HR department, (which consist of THREE people) of north region is controlling and evaluating about 2200 employees of KFC in this region. These north regions consist of Punjab and NWFP. As they are using 360 degree feedback system to get the feedback from each and every employee as every employee has an access to these three people any time and can communicate his or her problem to them. Most often they control and solve matters through telephonic discussion and sometimes they visit to particular area to solve their problems. Implementation of online appraisal system is going through questionnaires and gets feed back very soon through their online feed back. Appraisal reviews of manager’s takes place once in a year and on another sides performance appraisal of operational staff takes place quarterly.
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Objectives which are assigning to them are review at the time of appraisal. If these objectives are SMART then HR department reinforce to do that objectives and if there is a gap between their performance and actual expectations of the company then they find out whats the problem with the employee. KFC do not review its Objective as they say that we have set these objectives according to the past achievements and if any one can achieve that objective then every one have capabilities to achieve those objectives.
What is the formal reward system? Employees are motivated by both intrinsic and extrinsic rewards. All rewards systems are based on the assumption of attracting, retraining and motivating the employees of the organization. Financial rewards are important components of the reward system on the bases of the employee’s performance. But there are other factors that motivate employees like to organize the training program for them giving them the certification on the bases of these training, because for some employees money is not the most important motivator. KFC also reward there employees in terms of promotion, incentive, payoff free meals depending on the level of the employee and how much they perform there job good. At management level they award them in the form of promotion, performance sheets. For example if the employee have a target to increase the sale with in the given time period. And if he achieves this target, the some percentage of his/her salary will increase in the form of reward from the company on his/her performance. Operation level activities play a big role the growth of the KFC. So at operation level motivation factor have importance for the employees, at operation level they have prizes you can win for being best employee that month, like a free meal or a day off with pay. Bounces are given to the employees on the basis of “My growth body” points. If the person has 5 points he or she can get benefits in term of financial bonuses, they also consider those persons has lass then 5 but more then 3 points and give them incentives by offering free meals with in a month in term of coupons.
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How the existing system of KFC is linked with its performance management system? As we discussed above, about the performance management system, as it is a management process for ensuring employees are focusing their work efforts in ways that contribute to achieving the company’s mission. It consists of three phases: (a) Setting expectations for employee performance (b) Maintaining a dialogue between supervisor and employee to keep performance on track. (c) Measuring actual performance relative to performance expectations. So if we talk about the appraisal system of KFC in term of linkage with its performance management system we determine that at first step they set objectives of a employees, at the time of start of each performance management cycle. These objectives are SMART and communicated to each employee before he or she has to start work then they also maintain a dialogue between employee and supervisor in case of any problem. As we discussed above that appraisal of each employee starts after 3 months and review their performance whether they are doing according their requirement or not. They measure actual performance relative to expected performance. For the measurement of performance they get feed back by different appraisal systems. Like 360 degree feedback system and “MY GROWT BODY”. So these processes help them to find out those people with good performance. According to Mr. Rana Naveed, HR manager of KFC north region, we are running our whole system with these two appraisal systems and assign them weight of good and bad on the basis of “My growth body”. He says that this system is really supporting and leading us towards a good performance organization but it is not a system which is a perfect. We can make this better and more effective to get an excellent performance and cost effectiveness.
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Develop your own performance management system for that company keeping the above-mentioned points. Proposed performance management system for KFC Currently their Human resource management system is not that much strong and it is obvious because when we asked from the HR manager of KFC that rate your company’s HR then he said that I will give 3 points out of 5 to my company.If we take the example of north region which includes Punjab and NWFP ,only three people are managing the performance of 2200 employees so it is not possible for them to efficiently manage people. Because there are so many issues that arise when people are working together. Using a 360 degree feedback system for Performance Appraisal is a common practice, but not always a good idea. It is difficult to properly structure a 360 feedback process that creates an atmosphere of trust when you use 360 evaluations to measure performance. Moreover, 360 feedbacks focus on behaviors and competencies more, than on basic skills, job requirements, and performance objectives. Currently they are using 360 feedback which has following drawbacks
What 360 Feedback Surveys do not assess: •
360 feedback is not a way to measure employee performance by objectives (MBOs)
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360 feedback is not a way to determine whether an employee is meeting basic job requirements
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360 feedback is not focused on basic technical or job-specific skills
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360 feedback should not be used to measure strictly objective things such as attendance, sales quotas, etc.
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Organizational and employee objectives One of the first steps in developing an effective performance evaluation system is to determine the organization’s objectives. These are then translated into departmental and then individual position objectives –working with employees to agree their personal performance targets. This allows the employee to know “up front” the standards by which his/her performance will be evaluated. Currently their performance management system has no proper method to evaluate the performance because we asked several times the HR manager about their evaluation method he told us that “performance speaks for itself”, so on the basis of this conception they reward and penalize their employees, no certain ranking criteria they are using so their employees are unaware of the criteria on which their performance is evaluated. If employees are unclear about these criteria how can they perform well? This process involves clarifying the job role, job description and responsibilities – explaining how the role and responsibilities contribute to wider goals, why individual and team performance is important and just what is expected within the current planning period. Objectives developed in this way should be reflective of the organizational goals and provide linkages between employee and organizational performance. Within a given department some objectives will be shared within a team or standardized across a number of similar employees. However, it is important to ensure that, where necessary, an individual focus is maintained: within any group of employees performing the same job function there may be wide gaps in experience and technical knowledge. In order to keep each individual employee motivated and committed to performing at his/her best, some objectives need to be customized to allow for continued growth. A significant portion of an employee’s performance should be based on these jointly developed objectives.It is important that the process ensures that employees understand how their personal job performance contributes to the overall performance of the company. This direct linkage helps to create team working and shared responsibility. Team effort stems from shared objectives reflecting organizational goals and clarification and understanding of the roles and responsibilities of each member Within such a framework, performance appraisal has higher acceptability. Although performance objectives should be individual and agreed between employee and supervisor, this does not mean that they should be easy to attain.
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All objectives, while being attainable, should challenge the employee to extend him/herself to exceptional levels.
Training A major aspect of developing an effective performance system is training for those individuals involved as raters. Currently KFC is not focusing on the training of its people and it can suffer from some problem in future. This training should start with a focus on providing the manager with a systematic approach to the practice of effective people management. This training needs to focus on the process of managing, motivating and evaluating employee performance because if the people who are going to assist others and they are accountable for the management of people working in the organization are not properly trained then how can they
carry out good management? Performance
appraisal is only a part of this overall process and it is important that managers see it within its wider context and not as a simple “quick fix” solution. Thus training should begin those levels of management that will be involved in administering the programme and providing training for lower levels of supervision. Once the senior managers have “bought into” the system, skills training are needed for junior managers and supervisors. This specific training should include at least the following: •
supervision skills;
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coaching and counseling;
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conflict resolution;
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setting performance standards;
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linking the system to pay providing employee feedback
Once an individual rater has been through the necessary training, periodic refresher courses will be required to help the rater maintain necessary skills in performance assessment. Raters involved in the appraisal process should also be evaluated on how they conduct performance appraisals. This will help to make sure that evaluations are performed in a similar and consistent manner throughout the organization. Since we are asking employees to contribute to the process (by being involved in the setting of
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personal objectives – and obviously in the review process), some training is required for all employees. This training should include how to set objectives, how to keep accurate records, and how to communicate all aspects of performance.
Frequency of appraisal Employee reviews should be performed on a frequent and ongoing basis. The actual time period may vary in different organizations and with different aims but a typical frequency would be bi-monthly or quarterly. Eliminating surprises in the appraisal process is also important. Both the supervisor and employee need to know that there is a performance problem prior to any major annual review. Currently they review the performance of operational staff after every three months and that of managerial staff after one year and this is not right they should at least review the performance of managerial staff twice in a year means after every six months. The longer a problem is allowed to continue, the more difficult it is to take corrective action and not always problem is with the operational staff and they should regularly evaluate the performance of managerial staff. Frequent performance appraisals should eliminate the surprise element and help to modify performance prior to any annual review. Of course, if there is a good relationship between supervisor and employee, informal reviews of an employee’s performance may be undertaken almost continually. Poor performance should not go unchallenged just because the quarterly review is not due for two months. Frequent reviews also allow for clarification and revision of objectives. This leads to better informed employees who are better equipped to perform their job satisfactorily. In addition frequent reviews give supervisors more opportunity to assure that progress is being made in developmental objectives. Job demands can frequently prevent employees from achieving specified objectives. In this case the supervisor must either re-assign work to allow the completion of this objective or modify the objective to reflect the changing conditions of the job. Maintaining records is another key to ensuring the effective use of a performance appraisal scheme is keeping and maintaining accurate records of employee’s. Carefully maintained, they establish patterns in an employee’s behavior that may be difficult to spot 30
by typical incident- by-incident supervision .Careful review of the records helps avoid the selective memory mentioned earlier and helps plot appropriate actions. Of course, well maintained Records are essential if the need arises to discipline, demote or dismiss an employee. It is particularly helpful if employees are themselves responsible for part of the process of record-keeping: this helps reinforce the fact that a major part of the process is devoted to employee development – and that employees have a responsibility for their own development. Such an approach to dual documentation also helps in the elimination of surprises.
“Launch a 540 degree feedback” To ensure the proper assessment of the employees we launch a new system so that the draw
backs
which
current
system
has
can
be
removed.
The range of feedback on the performance of an employee is generated from the stakeholders - Superiors, Subordinates. Peers, Internal and External Customers, Clients or Suppliers
are
known
as
540
Degree
feedback
or
appraisal.
In this, the customers and suppliers also evaluate the performance which helps us to differentiate from the 360 degree performance appraisal. General Electric Company, USA, was the first to tryout this concept in early 1990s.This is an emerging technique and since customer plays a major role in the success or failure of business and for KFC customer satisfaction is the key so their feedback will play a major role in assessing employees. Since 90 to 95% of their staff is relate with operations so suppliers feedback is also very important.
“Launch Proper Measurement system” Currently their managers are using own criteria “My Growth Body” to evaluate employees in which there are 5 points and on the basis of performance they allocate points. The actual measurement or grading system used to rate employee’s performance needs to be designed carefully. A performance appraisal system which ranks employees according to a numerical rating tends to lead to a great deal of average performers. For example, if a 1-5 scale is used, five being best, a majority of employees will be rated a three. While this may be reflective of their actual performance, few people take gratification in being called average. Another problem arises when it is made extremely 31
difficult to perform at a level greater that a three or average. A company in this situation tends to breed mediocre performance even from its outstanding performers. A possible solution to the average rating problem is to have an even scale, for example or not to have numeric ratings at all. In developing a rating system, a clear definition of each level of performance must be provided and disseminated to all employees. Employees and all supervisors must clearly believe that a rating higher than average is achievable and attainable. Of course, they should also clearly believe that ratings lower than average is achievable and will be given if appropriate. This again will help the employees to clearly understand that the measurement system is accurately reflecting the true level of performance for every employee.
Use Multiplier rating while conducting the performance appraisal In many systems, the front-line supervisor is responsible for conducting the performance review. However, a multiple rater system should be considered. So here we suggest that KFC should use “Multiple rater systems” because they provide a form of “triangulation’ that results in ratings in which employees and managers have greater confidence. It may also be necessary to restrict the number of employees rated by any one individual – especially in todays new, flatter organization in which spans of supervision may be 60 people or more. With large spans of control, several supervisors may work with an individual employee. The input from all supervisors about the employee’s performance is required to complete a thorough performance review. Currently Multiple rater systems can be computerized to allow statistical analysis to identify bias – this can be particularly important where an organization is keen to avoid real or perceived bias with respect to race, gender or age. Another advantage of multiple rating systems is that they can shift the supervisor’s role from that of judge to performance coach. An individual supervisor will no longer be responsible for a single employee’s review. This in turn lifts the burden of “policing” from the supervisor and allows him/her to focus on coaching and developing the employee. Some multiple rater systems go as far as involving the use of subordinates in the evaluation process. This is especially effective in a work environment which is self-governing. General Foods Corporation has used this
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approach in some of its plants utilizing self governing work groups. Subordinate evaluations have generally shown to be more accurate than supervisors in truly reflecting employee performance. This system of evaluation allows employees to participate in the decisions that affect them directly. This helps the employee to be less defensive and passive in the appraisal review. Self-appraisals can lead to self-improvement. The employee’s self appraisal can also be helpful for the supervisor in opening a communication link and allowing for comparison of performance results. Self-appraisals give the supervisor helpful insight as to how the employee views his/her performance. Generally speaking people will be at least as tough on themselves as the formal rater. A proper process of employee and supervisor (or multiple rater) review can help employees agree on areas for development and how the organization can help.
Some suggestions for developing an appraisal Developing an appraisal system that accurately reflects employee performance is a difficult task. Performance appraisal systems are not generic or easily passed from one company to another; their design and administration must be tailor-made to match employee and organizational characteristics and qualities. Performance appraisals are most commonly undertaken to let an employee know how his/her performance compares with the supervisor’s expectations and to identify areas that require training or development. Employees have a legitimate need to know how their performance is viewed. At a basic level, without adequate communication between the employee and the supervisor, undesirable work habits may be formed or good work habits may be modified. Lack of such communication may be viewed by the employee as approval of their current work habits and performance.The supervisor also has a legitimate reason to conduct performance appraisals. Unsatisfactory performance needs to be conveyed in order to arrange for improvement. Indeed, if performance is satisfactory the supervisor wants to promote continued satisfactory performance. In either case, it helps to have a systematic framework to ensure that performance appraisal is “fair” and consistent.
Reward system based on Performance
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In the system which we proposed for the KFC the reward system is based on performance. Not only the pay but other benefits and allowances also relate with the performance of the employees of the organization. In the proposed new system that is 540 degree the performance of the employees is strongly linked with the rewards system. Although the existing system also linked the performance with the rewards system but in the existing there is no accurate method for measuring the performance of the workers that’s why rewards are not accurately linked with performance workers are not getting what exactly they are doing. But 540 degree evaluation system has a proper method for measuring the performance and employees are rated according to their performance. They get point if they perform well. This thing will increase the competitiveness among the workers and increase the productivity and help the organization to achieve its objectives in the specific time frame. This thing also motivates the employees to work hard because it is the natural thing that every one worked for some reward which may be in any form and it varies form person to person. If at KFC the new system is launched then it will provide the following advantages. •
It motivates the workers of the organization. Because they know that when they perform well only then they are given benefits and allowances.
•
It builds a good image of the organization in the industry.
•
It helps to achieve the goals of the organization in the time frame.
•
Improves employee engagement because everyone understands how they are directly contributing to the organizations high level goals.
•
At KFC the goals and objectives are linked with the performance management system, it provides the following advantages to the company:
• •
It motivates the workers of the organization. Because they know that when they perform well only then they are given benefits and allowances.
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•
It builds a good image of the organization in the industry.
•
It helps to achieve the goals of the organization in the time frame.
•
Improves employee engagement because everyone understands how they are directly contributing to the organizations high level goals.
Linkage of current system with the performance management system of KFC Developing an appraisal system that accurately reflects employee performance is a difficult task. As we have looked at the appraisal system of KFC and it’s linkage, with the performance management system of KFC. Now we will look at the new appraisal system or the system which will also help the organizations to increase the performance and efficiency of employees and its linkage with the performance management system of KFC. First of all if we set the objective of an individual and departments and then take the acceptance from them or ownership from them, it mean to find out whether they are willingly ready to do these task or not. If they take ownership then allow them to start work. Now supervisors are going to monitor their performance frequently through observations and feedbacks from them. On the other hand frequency of appraisal of managerial staff with in 6 month will help to determine the competencies of manager himself. If managers find out that there is any weakness in term of skills, capabilities and competencies then they can arrange coaching and counseling for them and training session for them to make competent. This will bring the employee on the right path and he or she can achieve the expected task. A different criterion’s of measuring performance, like 540 degree feedback will help to feedback from the stakeholders - Superiors, Subordinates. Peers, Internal and External
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Customers, Clients and Suppliers. Every body that is related to the organization is giving feedback about the employee and after getting a feed back from all people, managers will give them weight and the input from all supervisors about the employee’s performance is required to complete a thorough performance review. Reward will be given to them according to their achievement, these can be great motivational factors for the employees to perform task honestly and properly. From objective setting to reward paying system, each and every effort included in a performance management system is to increase the performance of the organization and develop individual performance towards the success of the organization.
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