1. The ”BP – Centro” Finland Case Our Proposal for ”Implementing the HR Part of the Strategic Plan” Mikkeli, June 2002

2. 1 Whole Agenda General Objectives Structure Planning Needs Job Description Recruitment Selection Training Performance Appraisal Compensation

3. Team 1 Objectives and policies June, 2002 Christina Brehme Cécile Rozuel Evelyn Wee

4. 3 Agenda Mission Statement and Commitments Our philosophy Values and Ethics Legislation and Governments Long Term Organizational Objectives Short Term Organizational Goals Attitude Toward Change Policies

5. 4 Mission Statement and Commitments We are dedicated to providing high quality products and services to our customers 24 hours a day, 7 days a week, 365 days a year. We are involved in the real estate business and aim to develop a concept of shopping complex through Eastern European countries. We are commited to satisfy: - our shareholders guaranteeing performance and profitability - our customers providing a Total Quality Management We are dedicated to work in harmony with: - the community we are operating in - the stakeholders affected by our activities (unions, environmental actors…)

6. 5 Our philosophy We aim to maximize our CAPITAL C ommitment A bility P erformance I mprovement T echnology A bide by the law L oyalty

7. 6 Values and Ethics We believe in: The respect of Human Rights as stated in the UN Declaration of Human Rights The protection of the natural environment High quality service delivery commited to customer satisfaction Innovation and collaboration for continuous improvement Supportive leadership to build a positive organizational atmosphere Fairness and honesty in human relationships BP Centro as a worldwide reference for excellence

8. 7 Legislation and Governments Work legislation - We abide by the legal requirements in terms of work legislation in the countries and regions we are operating - We apply the principle "Equal pay for Equal Work" Governments - We aim to ensure good relationships with both national, regional and local governments - We aim to work closely with local governments in a mutually beneficial relationship - We aim to be fair, direct and adaptable to the political environment we are working in

9. 8 Corporate culture Management style - participative management - supportive leadership A global company in a global world - promote common references ("think global") - manage diversity - be adaptable to changing cultural environments ("act local") - facilitate cultural exchanges through mobility Concern for employees’ development - organize training for all - plan career development and internal promotion - be open, fair and efficient - offer Equal Employment Opportunities and fight work discrimination

10. 9 Long Term Organizational Objectives Promote the BP Centro corporate culture. Build excellence using edge-cutting technology and state-of-the-art HRM methods. Create training centers to develop KSAs, continuously improve service delivery and enhance corporate loyalty. Create an effective organizational structure which encourages initiatives, self-assessment, communication and collaboration. Design an effective compensation policy that advocates pay for performance.

11. 10 Short Term Organizational Goals Corporate language: - English - bilingualism as the rule because hiring local Facility Managers Facilitate the integration of BP Centro values and culture through language, dress and socialization practices Build long-term relationships and enhance efficient communication and collaboration with franchisees Encourage communication among Facility management teams Guarantee effective customer service 24/7 and 365 days a year

12. 11 Attitude toward change Be responsive to change in terms of quality management Adopt a proactive attitude toward change Step 1: - need for some stability and landmarks so as to set up the company’s reputation - a global concept needs established internal rules to be perceived as global by customers - be directive to create coherence Step 2: - adapt to the economic and social environment - anticipate future opportunities

13. 12 Policies 1.Accountabiliy to stakeholders: - relationship management (coordinate relationships with stakeholders to avoid prejudicial activities to environment and the community) - impact assessment to evaluate the consequences of business activities on people (proactive approach) 2. Relationship with employees: - employee empowerment - reward excellence through bonuses or share options - always get the best person for the job, from within if possible - make sure individual goals match corporate goals - provide possibilities to balance work life and family life

14. 13 Policies 3. Internal structure: - favor constant tapping of upcoming technology to: # minimize labor cost # develop a HRIS to enhance communication, improve efficiency of information sharing, manage career development - build a team-oriented organization - develop common project and goals - outsource when feasible 4. Monitoring, Controlling: - measure results regularly against set goals and re-evaluate goals if necessary - benchmark regularly for continuous improvement - encourage structured feedbacks - organize internal social auditing

15. Tan Chong Sun Tuulikki Pöllänen Lena Hoppe-Schumacher Team 2 Creating the H.R. Organizational Structures June, 2002

16. 15 Agenda The Organizational Chart Job Description The Location

17. 16 Organizational Chart Countrymanager Baltic Headquarter BP Senior- management Regional Manager Headquarter Europe ”BP-Centro” (incl. Finland, Russia. Baltic) incl. Marketing, HRM, Finance, Operation ”VP” Countrymanager Finland Countrymanager Russia Regional Manager Regional Manager Facility Manager Facility Manager Facility Manager Facility Manager Contract Employees Contract Employees Contract Employees Middle Management Labour Level AM HRM AM Finance AM Operation AM Marketing Area Specific Officer* * in the first project stage, only one group of Area Managers which are responsible for all three countries (cross function)

18. 17 Job Description Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee CEO Coordinates Finland, Russia and the Baltic Countries Communicates his reports to the US Headquarters Controls and cooperates with VP and managers from different chart levels Assume the strategic movements of the organization outside the US. Team consisting of Americans and locals Workstream Responsibilities VPs Marketing, HRM, Finance, Operations ( in European HQ with the CEO) HRM Multi-cultural (USA, Finland) Selecting experienced and mobile managers Training and development Report to the CEO Responsible for strategic plan implementation

19. 18 Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee Report to the CEO Responsible for the three geographic areas: Finland, Russia, Baltic. Job Description

20. 19 Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee Responsible for site locations and openings (uniformity) Strategy within the different areas Should be locals who know the market Reports to Country Manager Supervise Facility managers Connection between the functional managers and the facility managers Job Description

21. 20 Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee Day-to-day Management Organize the building up Find the most suitable locations for the facilities Find best and the most cost efficient contractors to carry out the construction work. Does the needed outsourcing-contracts Supervise homogeneity of the facilities Report to the Regional manager Marketing and promotion Job Description

22. 21 Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee Commitment with the company Career opportunities Temporary jobs: the ever-changing economic climate and increasingly competitive global market does not enable BP to offer 'jobs for life' Possibility in developing skills: formation courses, seminars, events… Job Description

23. 22 The Regions Locations Red: First year Centers in Helsinki, Tampere, Kuopio, Oulu Green: Following years expansion to the Baltics and Russia Centers in Tallinn, Riga, Vilnius, St. Petersburg, Moscow and some more in Finland and Russia

24. 23 Russia and Baltic Countries First year: Experiences in Finland Second year: Expansion to the Baltics and Russia First not many Americans, but Finns, in the management Local people will be trained and then involved in the management In the following years continuous expansion in all of the regions

25. Team3 Job Requirements Planning-Future Staffing Needs June, 2002 Emily Lim Michael Sauer Marc Hoppichler

26. 25 Agenda Job Requirements Job Analysis Planning Promotion or Job Rotation Plan

27. 26 Job Requirements Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee CEO Coordinates Finland, Russia and the Baltic Countries Top Management People Set the Goals for the Project Built up a Global Team Supervise the project Search for Sponsors (internal) Relation with stakeholders VPs Marketing, HRM, Finance, Operations ( in European HQ with the CEO) Work Hand in Hand with CEO Responsible for strategic plan implementation Specialists in his sector

28. 27 Headquarter Europe Job Requirements Country Manager Ability to coordinate and set priorities Time management and decision quality concerned Excellent communication skills Professional ability to interact with internal and external clients at all levels Regional Manager Facility Manager Contract Employee

29. 28 Headquarter Europe Job Requirements Country Manager Regional Manager Experience in direct contact with clients and negotiation of contracts Knowledge of team motivation techniques Very good knowledge of English and another language (Finnish, Russian, Estonian, Latvian, Lithuanian) Facility Manager Contract Employee

30. 29 Headquarter Europe Country Manager Regional Manager Facility Manager Contract Employee Knowledge about the local region Experience in Business and Techniques Very good knowledge of the local language Motivate the Employees Implement the firm guidelines direct to the customer / end user Gives guidance to facility coordinators Job Requirements

31. 30 Headquarter Europe Job Requirements Openness and Friendliness towards customers Enthusiasm to work and willingness to take responsibility Knowledge of the country’s specific language Service-oriented attitude Country Manager Regional Manager Facility Manager Contract Employee

32. 31 Job Analysis Planning "Job Analysis in a Changing Environment" Finland: test market, movement to another market Dynamic environment: jobs demand rapid change, data won't be outdated

33. 32 Promotion or Job rotation Promotion: Better fit for organization Mixture from internal and external applicants Job rotation: Ability to switch managers to different regions But no rotation in the sense of different functional areas

34. 33 Plan Year 1 Think global (American vision to develop the concept worldwide) Act local (adapt the management style to the local culture and hire local junior managers). Open facilities in strategic locations (4 centers in Finland) Management in Finland is built with the help of US staff Built company objectives and culture through training Test trial in Finnish market with the outsourcing model Establish communication and structure Built brand recognition in Finland Built up a training center and establish own training programs for future managers involved in implementing the concept in Russia and the Baltic countries. Build long-term relationships and enhance efficient communication and collaboration with franchisees Guarantee effective customer service 24/7 and 365 days a year

35. 34 Plan Year 2 - 4 coordinate the single market entries create new teams from intern sources as well as extern recruitment shift pioneer Finnish teams to new markets to guide for built-up phase enhance strong communication between country/regional level of all three regions establish a brand name in the Baltic-Russian region Finland: foster growth in Finnish market smooth operating processes create a lessons-learned guide

36. 35 Plan Year 2 - 4 (continued) Russia: focus on the two big centers St. Petersburg and Moscow after a test case in a smaller city in Russia outside a conurbation establish swiftly a representation expand the organizational structure with Russian Personnel trained in Finland or in the Baltic's Baltic: get feet on big cities: Tallinn, Riga and Vilnius follow a thoroughly planned entry strategy

37. 36 Plan Year 5 - 10 Improve on productivity Total Quality Management Redouble profit Become large provider of hypermarket facilities Human Resource Management forces exchange between regions BP Centro will become the regional center of excellence within 5 years First place on the satisfied customer list

38. 37 Managers needed First Year Country Manager1 (Finland) Area Manager*4 (HR, Finance, Marketing, Operation) Regional Manager2 (South and North Finland) Facility Manager4 (each Station) Following Years (short time) Country Manager3 (Finland, Baltic, Russia) Area Manager4 (HR, Finance, Marketing, Operation) Regional Manager>8 (South and North Finland, Estonia, Lithuania, Latvia, St. Petersburg Area, Moscow Area, Rest of Russia) Facility Manager (at a rough guess)>20 (each Station) * they are already exist in the Headquarter

39. Team 4 Job Description Senior Management June, 2002 Director: Peter Ikhumhen Manager: Alejandra Padilla Lena Hoppe-Schumacher Marko Sarstedt

40. 39 Agenda Job Descriptions  CEO Baltics, Russia and Finland  VP Marketing  VP Human Resources  VP Finance  VP Operations

41. 40 CEO Baltics, Russia and Finland Establish a relationship with private and public sector organizations. Work closely with governments. Determine and formulate policies and business strategies.

42. 41 CEO Baltics, Russia and Finland Direct, and coordinate operational activities at the highest level of management. Plan and implement future expansion. Have final decision power.

43. 42 CEO Requirements Master’s. degree in field of business. 10 years of work experience (internationally). Speak a minimum of two languages fluently (Russian, Estonian, Latvian, Lithuanian). Be able to make decisions.

44. 43 Common Job Requirements Master’s degree. 5-10 years experience (Internationally). Strong analytical and leadership qualities. Managing skills. Languages and computer skills. Commitment to company.

45. 44 VP Marketing Determine the demand for products and services. Develop pricing strategies. Oversee product development or monitor trends that indicate the need for new products and services. Develop an overall marketing budget.

46. 45 VP Human Resources Programs on planning, staffing and recruiting. Motivation and development for mobility. Training modules. Market competitiveness. Develop an overall marketing budget. Advice and counsel workers.

47. 46 VP Finance Provide operational and administrative direction. Ensure balance of company’s financial structure. Implement startegies to improve profitability. Responsible for legal issues. Report to CEO.

48. 47 VP Operations Work closely with senior executives and regional managers. Responsible for flow of organization. Support and development of expansion across Finland and the Baltic region. Achieve short and long-term strategic goals. Set perfomance goals to each division and monitor.

49. Team 5 Middle Management Job Descriptions June, 2002 Jukka Kaitila Peter Ikhumhen Marc Hoppichler

50. 49 Agenda Job Responsibilities / Requirements Job Design Change Management

51. 50 Country Manager JOB RESPONSIBILITIES Reports to CEO Supports, Monitors and Supervises Regional Level Managers Accountable for the Country Budget Country Level Policies and Strategies Contacts with National Franchises Contacts with the Government Sets Standards of Quality Nationwide JOB REQUIREMENTS / QUALIFICATIONS Masters degree in Business / Marketing or Management Sufficient working experience Leadership skills Ability to work under pressure Ability to work flexible / extended working hours Must be ready to move to another country Fluent in Finnish, English and Russian

52. 51 Regional Manager JOB RESPONSIBILITIES Reports to Country Manager Responsible for site locations and openings Supports, Monitors and Supervises Facility Managers within the region Accountable for the regional budget Looking for regional franchises Associates with other Regional Managers JOB REQUIREMENTS / QUALIFICATIONS Bachelor (Master´s) degree in Management or equivalent Some working experience Knowledge of team motivation techniques Preferably ready to move to another country Excellent skills in Communication and Presentation Fluent in Finnish, English, (Russian) Job Responsibilities / Requirements

53. 52 Facility Manager JOB RESPONSIBILITIES Reports to Regional Manager Day-to-day Management Local Outsourcing and Supervising Looking for local companies and keeps contact with them Monitors the site JOB REQUIREMENTS / QUALIFICATIONS Bachelor´s degree (equivalent) Knowledge of the service industry Ability to work individually Local languages skills and basics in English Highly flexible availability

54. 53 Job Design

55. 54 Change Management needs to be an integrated part of the project right from the start to prepare the organization for this journey. Motivate & overcome barriers on all levels. Planning/ Adaptation Preparation of Organization Implementation of measures On-going support Time Productivity, Motivation Integration of Experts from USA Permanent integration of Country Managers Workshops with all Managers from Finland Communica- tion with Neighbour Countries Tight collaboration with key contacts from USA and UK Headquarter CEO,VP Build up a core concept for Russian and Baltic Country visits reflecting all Managers concerned Decision on organizational change Preparation for change Communication of change Multiplication of Know-how Insure acceptance of organizational change HRM Concept

56. Team 6 Recruitment Methods June, 2002 Kaitila Jukka Leppänen Tuukka

57. 56 LABOR MARKET We know: positions to be filled qualifications required We must answer the questions: where? how? ”Area from which applicants are to be recruited”

58. 57 CEO Internal resources HQ personnel (VPs) Job posting and bidding HRIS External resources Globally as long as requirements met Executive Search Firms (head hunters)

59. 58 VICE PRESIDENTS Internal Resources Country level managers HQ personnel Job posting and bidding HRIS External Resources Specialized private employment agencies

60. 59 COUNTRY MANAGER Internal Resources E.g. Regional managers Job posting and bidding HRIS External Resources Executive search firms

61. 60 AREA SPECIFIC MANAGERS Internal Resources E.g. Regional managers Country HQ personnel Job posting and bidding HRIS External Resources Specialized private employment agencies

62. 61 REGIONAL MANAGER Internal resources E.g. facility managers Job posting and bidding External resources Advertisements Private / Public Employment Agencies

63. 62 FACILITY MANAGER External Resources Advertisement Public Employment Agencies Educational Institutions

64. 63 INTERNAL RECRUITMENT vs.EXTERNAL RECRUITMENT Capitalizing on employee investment Improving morale within organization Corporate philosophy already adapted Company blindness Greater pool of canditates Source of new ideas ”Been there” Increased dissatisfaction among existing employees Uncertainty increases Advantages Disadvantages

65. 64 PROCESS Recruitment process: beginning with the top management going down in hierarchy upper level management participates in the process of next level recruitment equal employment opportunity Methods to lower recruiting costs: Internal recruiting Use of bulletin boards Realistic Job Previews (RJP) Centralized recruiting

66. 65 INTERNSHIP PROGRAM Requirements: –Highly motivated –Enthusiastic with new ideas –Interested in working for the company –Positive attitude and good with people Positioning –assistants to middle-level managers –country HQ staff

67. 66 FUTURE Shift more from external to internal recruitment Employee referrals Posting and bidding Replacement charts Promotions

68. Team 7 Selection Techniques Tuukka Leppänen Miia Montonen Tuulikki Pöllänen

69. 68 Steps of Selection Process Initial interview Employment testing Background investigation Supervisory interview Medical testing Preliminary selection Application Review Hiring decision

70. 69 Key Principles All steps of the process are carried out in the selection for every position Candidate can be rejected after each step Several steps oursourced to reduce personnel needs and expenses in HR department

71. 70 The Process in Detail Application review Pre-screening of applications –Candidates are put in order of best qualified –Resume, cover letter, and BPOAmoco application forms are used –Outsourced

72. 71 The Process in Detail Initial interview Objective is to reduce the number of applicants and choose from among those individuals who are qualified to continue in the selection process –Highly structured Interview by HR department Set of standardized questions based on job analysis Situational, job knowledge, and worker requirements questions Established set of answers Several interviewers Documented

73. 72 The Process in Detail The employment tests Objective and standardized measure of a sample of behavior that is used to gauge a person’s knowledge, skills, abilities and other characteristics in relation to other individuals –Personality test (e.g.Myers-Briggs Type Indicator Test) –Outsourced

74. 73 The Process in Detail Backround investigation Purpose is to verify the honesty of the candidate and the information provided –Checking of references credit bureaus school and college history work history –Outsourced

75. 74 The Process in Detail Preliminary selection in the HR department –Applicants ranked by previous processes –Best candidates selected for the second round Supervisory interview Focuses on actual work incidents in the interviewees past which provide in depth information of applicants behavior relevant for the position applied –Panel interview Panel members: closest superior and consults from the HR department –Behavioral description questions –Several interviewers to ensure multiple opinions

76. 75 The Process in Detail Medical testing To ensure that health of applicant adequate to job requirements –Drug testing –Outsourced Hiring decision –Done by the closest superior and consults from the HR department

77. 76 Interviews All the questions are job related to avoid discrimination and gut feelings Sample interview questions: –What special aspects of your education or training have prepared you for this job? –What is your long-term career objective? –What kind of approach do you use when getting your employees to accept your ideas? –Tell us about your experiences in leadership/teamwork from your last job?

78. 77 Steps Emphasized

79. 78 Selection Schedule Position Selection done by CEOBPO Headquarters VPCEO and Headquarters CM & AMHR department of Headquarters RMCM – team FMCM - team

80. 79 Validity and Reliability Selection process should provide as reliable information as possible about applicants so that their qualifications can be carefully matched to the job specifications Predictive validity-method –Involves testing applicants and obtaining data after those applicants have on the job for some time period If problems rise in the performance measurement, the whole selection process should be revised

81. Team 8 Training June, 2002 Pauliina Saresma Cécile Rozuel Christina Brehme Emily Lim

82. 81 Agenda Training Objectives Training Requirements Continuous Improvement Cultural Issue Training Policy Orientation Packet Training Needs per Level

83. 82 Training Objectives 1.Build, develop and maintain a strong corporate culture (BP and BP Centro) 2. Develop loyalty to the organization through employee’s job satisfaction 3.Increase productivity and profitability 4.Manage career advancement and development 5.Ensure up-to-date KSAs to adapt to changing environments and increase flexibility 6.Create an organizational structure opened to changes, improvements and initiatives

84. 83 Training Requirements 1.Be adapted to the needs of the organization (organization analysis) 2.Be adapted to the needs of employees (person analysis, HRIS) 3.Be cost-effective (training centers, videotapes and video-conferences) 4.Be integrated to the management process and objectives 5.Participate in shaping the career development / succession planning 6.Use efficiently the already-existing training programs and capabilities of BP 7.Be both external (consulting services outsourced) and internal (BP or BP Centro trainers)

85. 84 Continuous improvement Enhanced communication between Managers Organize regular meetings with upper Managers and colleagues (i.e. Facility Managers meeting each month with their Regional Manager to share experience  Cooperation) For all employees  reinforce the concept of TQM via conferences and meetings Encourage feedback and employee initiatives at all levels Using IT as often as possible: - to facilitate access to updated data - to act proactively to changes saving costs Benchmarking and regular review of our current position on the market (TQM, market share, productivity, profitability…)

86. 85 Cultural Issue Stage 1: Top Managers come from other BP international division (Country Managers) In charge of recruiting and training their local subordinates (Regional Managers, Facility Managers and their assistants) Top Management training in the UK Headquarters Middle-Management training at the Finnish/Baltic training center On-the-job training in Finnish centers for Russian and Baltic employees (lateral promotion) Stage 2: Middle-Managers from Finland promoted to Top Management positions Both external and internal Managers to implement expansion plans in Russia and the Baltic countries Top Management training in the UK Headquarters Middle-Management training at the Finnish/Baltic or the Russian training center

87. 86 Training Policy Preparation by BP Headquarters HR Managers (set guidelines for training) Coordination by HR Country Managers, with participation of Regional Managers: - needs assessment- post-training evaluation - instructional objectives - training schedule - choice of training methods - integration to career development and succession planning Training Measurement: - encourage feedbacks for future improvement - evaluate the training program (transfer of training, results, learning) - compare pre-training performance and expectations evaluation with post-training performance and appreciation evaluation (Expectations matched? Critics? Remarks for future improvement? )

88. 87 Training Policy Favor on-the-job training methods to: - encourage active participation - maximize cost-efficiency - ease understanding For all employees: - orientation packet - a 2- 4 days compulsory training period on work time per year (TQM, General Management training programs, Communication Improvement programs, Safety…) - 3 other possibilities per year to enroll in a training program (if required  compulsory training to gain specific skills) - possibility to take computers or languages courses at Open Universities on free time (fees paid by the company) For key individuals: - more specifically oriented training programs - lateral promotion - experience as assistant to key functions (« job rotation »)

89. 88 Orientation Packet Purpose: facilitate integration, develop corporate identification and pride For all employees when integrating BP Centro Provided at the Finnish/Baltic training center (stage 1&2) or the Russian training center (stage 2) Set up by HR Managers from BP HQ and BP Centro Top Managers Content: - Presentation of the company (strategic goals, mission, culture, location) - Presentation of the organizational structure (incl. Top Managers) - Behavorial expectations - Explanation of job duties - Performance evaluation criteria - General conditions of employment (EEO, hours, employee benefits) - Safety regulations New employees presented to their direct supervisor in smaller teams

90. 89 Country Management Training Program WHERE? Provided at the UK Headquarters + participation to international meetings when necessaryWHO? - consulting firms - experienced managers from BP, BP Centro US - « professional » trainers (« gurus » i.e. Michael T. Bagley at Ingersoll-Rand) WHAT? - enhance corporate culture - ease information flow and communication (vertically, horizontally) - enhance interpersonal skills - train for crisis management and conflict resolution - assess readiness for transition to Baltic countries and Russia (managing change)HOW? - coaching, mentoring, tutoring - seminars and conferences (emphasis on concern for people) - case studies (assistants  managers) - role playing (voluntary)

91. 90 Regional Management Training Program WHERE? Provided at the training centers + participation to meetings abroad when necessaryWHO? - consulting firms (for key training programs) - experienced managers from BP, BP Centro US WHAT? - enhance corporate culture - specify internal policies and procedures - enhance interpersonal and communication skills - build positive organizational atmosphere - identify future top managers - manage changeHOW? - coaching, tutoring, mentoring - staff meetings - seminars and conferences (emphasis on concern for people) - management games (if possible created for the company) - role playing (voluntary) - lateral transfer (assistant positions)

92. 91 Facility Management Training Program WHERE? Provided at the training centers + participation to meetings abroad when necessaryWHO? - experienced managers from BP, BP Centro - external professional trainers / experts WHAT? - enhance corporate culture - improve relations and communication with franchisees - enhance quality control management - develop / update technological skill - develop leadership skills - identify future top managersHOW? - computer-based training (CAI, CMI) - audiovisual methods i.e. video-conferences (cost- efficient) - management games (develop pride and loyalty) - role playing (incl. lower-skilled jobs)

93. 92 Facility Management Training Program Specific policies to: - develop company’s attractiveness and popularity - recruit and train young managers with potential for future top management - reinforce the commitment to TQM We aim to develop: - internship programs with Business Schools, Colleges and Universities in Finland, the Baltic countries and Russia to recruit students as Assistant to Facility Managers - regular updating training program in computers, hygiene regulation, safety legislation, team management…

94. Team 9 Performance Appraisal June, 2002 Director: Marko Sarstedt Manager: Chong Sun Tan Miia Montonen

95. 94 Agenda Implementation – Who? – What frequency? Sources of Appraisal. Trait Approaches. MBO.

96. 95 Implementation of Performance Appraisal CEO: Annually  MBO Area-specific Officers: Annually  Self-Appraisal  MBO Country and Regional Managers: Annually  Self-Appraisal  360° Appraisal  MBO Facility Managers: Annually ê 360° Appraisal ê MBO Semi-Annually  Self-Appraisal

97. 96 Sources of Appraisal: Self-Appraisal Employees evaluate themselves on a self-appraisal form. Performance interview to discuss job performance and agree on a final appraisal. Sample questions:  What were your most important accomplishments during the appraisal period?  What are you job-related goals for the next period?  How can the supervisor help you in meeting future goals?

98. 97 Sources of Appraisal: 360° Appraisal Evaluated Employee Peer Customer Subordinate Projectleader Supervisor Peer Subordinate Subordinate Performance feedback is received from a full circle of people around the employee:

99. 98 Pros / Cons of 360° Appraisal at BP-Centro More Comprehensive. Higher quality of information. Lessened bias / prejudice. Increased self-development. Administratively complex. Conflicting opinions, which may be accurate from specific standpoints. Possible collusion. Appraisers may not be accountable if evaluation anonymous. - + -

100. 99 Favorable Characteristics of 360° Appraisal Assure Anonymity Make respondents accountable Prevent collusion Use statistical procedures Identify biases

101. 100 Trait Approaches Trait Approaches: Mixed-Standard Scale Method / Forced-Choice Method Not conform with Finnish culture Essay Method Time-consuming to use Costly Quality influenced by writing-skills of appraiser Subjective Graphic Rating Scale  Less subjective bias Degree of performance dimension is less offensive

102. 101 Example Graphic Rating Scale C- Critically important I – Important N – Not appliable E – Exceeds requirements M – Meets requirements O – Opportunity for development Decision Making: Makes timely and effective decisions Considers broader impact of alternatives Delegates appropriately C I N E M O     Communication: Listens well Communicates effectively Gives clear and concrete oral instructions C I N E M O    

103. 102 MBO Definition: Philosophy of management on the basis of employee achievement or goals set by mutual agreement of employees and managers.

104. 103 Pros / Cons of MBO at BP-Centro Less subjective bias Link individual performance to organizational performance Mutual goal setting Basis for reward and promotion decisions + - Time consuming Costly May encourage short-term perspective Goals not always easy to measure

105. 104 MBO Scheme Formulation of goals Formulation of an action plan Final Review Interim Review Implementation

106. 105 Formulation of goals Employee and supervisor decide mutually on expectations for the employee’s performance: Define roles and accountabilities, including whether they are individual, joint or team. Develop objectives that are closely tied to department goals Clarify performance dimensions Set interim review dates Agree on who will provide supplemental input Questions to consider:  How can I improve my contribution to department goals? What objectives will maximize my contribution?  Who can help me achieve my objectives? Whom do I interact with?

107. 106 Definition of goals (cont.) Specific Results-oriented Challenging Commitment Participation TaskEffortTaskPerformance Characteristics of Effective Goal Setting: Adapted from: Mcshane; Canadian Organizational Behavior; 4 th ed.; p # 79

108. 107 Effective goal setting High Task Performance LowModerateChallengingImpossible Area of Optimal Goal Difficulty Goal Difficulty Adapted from: Mcshane; Canadian Organizational Behavior; 4 th ed.; p # 80

109. 108 MBO Example Goal: To deliver high standards of excellence in all services. Objectives: To obtain a minimum score of 3.5 (out of 5) on all Customer Service Evaluation forms.

110. Team 10 Compensation June, 2002 Alejandra Padilla Pauliina Saresma Michael Sauer Evelyn Wee

111. 110 Compensation Objectives 1.Foster corporate culture 2.Lower employee turnover and improve productivity 3.Match employees’ future performance with organizational goals 4.Reward employees past performance 5.To remain competitive in the labour market 6.Employ and retain most talented people 7.Maintain salary equity among employees

112. 111 Compensation Policies 1.Rate of pay is to be above or at the prevailing industry rate 2.Pay at the rate that is fair to both the employer and the employee 3.Pay raises according to MBO and merit 4.Offer sound non-financial compensation program 5.Offer incentives on the basis of individual contributions to organizational success 6.Equal opportunities for compensation at each level 7.Pay expatriates according to their home country’s salary range 8.Pay premium to expatriates to cover the host country’s cost of living 9.Equal Salary policy as long-term objective

113. 112 Point System in Practise

114. 113 Salary schedule based on the Economist salary comparison 2002 Grade 1: Contract Employee Grade 2: Facility Managers Grade 3: Regional Managers Grade 4: Country Managers Grade 5: CEO

115. 114 Compensation Policies - Model CEO COUNTRY MGR REGIONAL MGR FACILITY MGR BASE SALARY MERITBONUSESSTOCK OPTIONS INDIRECT COMPENSATION

116. 115 Factors Influencing Real Wage Rate - Finland Internal factors influencing wage rates: (what the job is worth) -compensation policy (corporate) -worth of a job -employee relative worth -employer ability to pay External factors influencing wage rates: (compared to other employees) -labor market conditions (unemployment rate) -cost of living -collective bargaining (powerful unions) -government and legal requirements

117. 116 Factors Influencing Real Wage Rate - Baltics and Russia government and legal regulations  wage rates  working time cost of living (eg:inflation rate) competitor compensation policies

118. 117 Indirect Compensation: USA vs. Finland USA: health: medical, dental, eye wear insurance: life, pension other benefits Finland benefits; health, dental etc supported by government (taxes) pensions paid by government possible: housing, car, IT equipment, optional pension plan

119. 118 Compensations at BP Centro (indirect) CEO COUNTRY MGR REGIONAL MGR FACILITY MGR COUNTRY CLUB MEMBERSHIP PENSION PLANCHILD CARECOMPANY CAR CAFETERIA PLAN

120. 119 Compensations at BP Centro (non-financial) Food Service Relocation Assistance Special Achievement Awards Country specifics Leave space for flexible handling to Country specific HRM Encourage different non-financial compensation Provide some balance for very low wages in Russia / Baltics

121. 120 End