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POLICY PERFORMANCE MANAGEMENT NHPC-HRDVO-POL-008 REVISION DETAILS Page No. Revision No. Description of previous and current revision Effective Date All 00 Initial Issue Feb. 5, 2020 Document Approval Role Name Position Prepared by Isaiah B. Bangkong HR Manager Signature Date Feb. 5, 2020 Endorsed by Isaiah B. Bangkong HR Manager Feb. 5, 2020 Approved by Jialin Zhang CEO Feb. 5, 2020 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION P a g e 1 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 2 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. CONTENT: 1. 2. 3. 4. 5. 6. 7. 8. 9. OBJECTIVE SCOPE OWNERSHIP DEFINITION OF TERMS POLICY 5.1. General Policy 5.2. Five Levels of Performance 5.3. Trainees (3 Months Training Period) 5.4. Probationary Employee 5.5. Regular Employee 5.6. Promotion 5.7. Performance 5.8. Performance Appraisal 5.9. Performance Improvement Plan (PIP) 5.10. Consequences Management 5.11. Unsatisfactory Performance, Non-Performance, Underperformance DEVIATION CLAUSE REFERENCES TABLES / FIGURES FORMS 9.1. Performance Appraisal Form P a g e 2 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 3 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 1. OBJECTIVES 1.1 1.2 1.3 N. H. Philippines Corporation upholds the philosophy of building a performancedriven culture where each is accountable in delivering individual goals (Tier 3) committed and performing the role and responsibilities in the Job Description (JD) as integral in enabling the Company to sustain and attain its strategic goals and objectives. This shall guide all employees in the conduct of delivering acceptable work performance, identifying and addressing performance gaps and applying consequence management process in an event of unacceptable output. Performance appraisal provides both, Management and employees, the opportunity to discuss job tasks, identify developmental needs, encourage and recognize strengths, discuss positive and purposeful approaches in meeting goals. To summarize, the objectives of the performance appraisal are:- 1.4 to set expectations and goals between the employee and employer to determine if training is needed, to identify areas where improvement may be needed, to revise or update individual/department goals, to evaluate job performance in terms of meeting goal and job responsibilities, to compensate for merit or promotional increase, to discuss courses of action in case of underperformance, and to ensure that the Company has a clear, consistent, and fair approach to appraisal. The company seeks to ensure a high caliber workforce that would support the attainment of business strategies by developing them through periodic monitoring and evaluation of work and job performance. 2. SCOPE 2.1 This guidelines applies to all employees and trainees. P a g e 3 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 4 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 3. OWNERSHIP 3.1 President / CEO 3.1.1 Shall be accountable for establishing governance to this guideline. 3.1.2 Shall approve all terms and conditions of employment, including job assignments, transfers, promotions, increase in salary / wage including demotions and other courses of actions. 3.2 HR Manager 3.2.1 Shall be responsible for ensuring compliance to this guideline. 3.2.2 Shall monitor the performance appraisal procedure and ensure consistency in application throughout the Company. 3.2.3 Shall ensure that all Department Managers and Supervisors or Team Leaders do have the necessary training, skills, and information to carry out an appraisal discussion. 3.2.4 Shall provide device, support, and train Managers / Supervisors if needed. 3.2.5 Shall ensure the observance of Due Process in the administration of Disciplinary Action relative to repetitive poor performance or non-performance evaluation results. 3.3 The Department Head / Team Leaders 3.3.1 Shall be accountable for establishing controls to this guideline. 3.3.2 Shall ensure that the performance of each employee is reviewed and recorded in accordance with the approved procedure. 3.3.3 Shall be responsible for ensuring that each Team Member is clear about what is expected of them in achieving agreed personal (Tier 3) and departmental objectives (Tier 2) form the beginning of their employment and every year. 3.3.4 Shall be responsible in recommending other courses of action in case of repetitive unsatisfactory or non-performance (below 3.0 performance rating). 3.4 Appraisee 3.4.1 Shall be responsible in achieving all agreed and targeted objectives. P a g e 4 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 5 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 3.4.2 Shall demonstrate the right working attitude amongst employees, show commitment in the observance of the Employee Code of Discipline and willingness to continually improve based on appraisal discussion. 3.4.3 Shall participate fully in the appraisal and in the preparation and execution of Performance Improvement Plan (PIP). 4. DEFINITION OF TERMS 4.1 4.2 4.3 4.4 4.5 4.6 Direct Team Leader - Team Leader to whom a Team Member is directly reporting. The direct TL is the overall responsible for the development of the Team Member. Functional Team Leader - Team Leader to whom a Team Member is functionally reporting. The functional TL is responsible for setting the TM's KRA, KPIs, and development that is related to his/her function. Appraiser – Refers to the Team Leader (Supervisor, Manager and above) who rates particular employee Appraisee – refers to the Team Member whose performance is being evaluated. Equity Adjustment – Refers to an adjustment made to ensure that an employee’s salary appropriately reflects one’s skills, knowledge, responsibilities, and performance. Equity adjustment may be made at the same time as annual, semi-annual and quarterly increase, but should be clearly communicated as such to the employee to avoid confusion. Habitual Neglect of Duty – refers to repeated failure to perform one’s duties over a period of time, depending upon the circumstances. 5. POLICY 5.1 General Policy 5.1.1 It is the policy of N. H. Philippines Corporation to utilize performance management program and maximize employee’s overall job performance and professional development. 5.1.2 All changes in employment will continue to be documented on each employee’s 201 file. 5.1.3 All documented performance appraisal will be submitted to HRD on or before fifteen (15) days from end of the appraisals. P a g e 5 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 6 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.1.4 The employee’s job description, principal duties and responsibilities, objectives or target are to be discussed with the employee during performance appraisal one on one meeting. 5.1.5 In the case of unsatisfactory performance, the Team Leader should inform HRD for assistance in advance of conducting the performance appraisal meeting. 5.1.6 Concerned Team Leader shall schedule a date that is acceptable to the employee and that will permit adequate and uninterrupted time for discussion. 5.1.7 Encourage open and free discussion during the appraisal discussion to maximize beneficial results of the appraisal. 5.1.8 An effective performance management process enables managers to evaluate and measure individual performance and optimize productivity by: 5.1.8.1 Aligning individual employee’s day-to-day actions with strategic business objectives (Tier 1 & 2). 5.1.8.2 Providing visibility and clarifying accountability related to performance expectations. 5.1.8.3 Documenting individual performance to support compensation and careers planning decisions. 5.1.8.4 Establishing focus for skills development and learning activity choices especially on areas for improvement. 5.1.8.5 Creating documentation for legal purposes, to support decisions and reduce disputes. 5.1.8.6 Low performing employees may be subjected to any immediate and fruitful courses of action including training, development plans, PIP, and possibly disciplinary actions to enable them to bounce back. 5.1.9 Final Summary of the appraisals shall be reviewed by HRD for further assessment of training needs, compensation and benefits design and other courses of action. 5.1.10 Managing Underperformance and Basis for Disciplinary Action: 5.1.10.1 Where a Team Leader is concerned with aspect of an employee’s underperformance, the Team Leader must discuss these concerns with the employee, and in consultation with the employee, develop and document strategies to address the performance concerns. The plan to correct performance, the immediate corrective measures installed, P a g e 6 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 7 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. including timelines, must met outlined and monitored to measure progress. 5.1.10.2 Performance against all installed and agreed corrective measures shall be evaluated based on agreed timelines and/or commitments. 5.1.10.3 Where strategies have been developed, documented, and implemented and the employee’s performance continues to be unsatisfactory. Disciplinary action process which include termination of employment as a last resort, can be an option in accordance with our Company Code of Conduct and Regulations 5.5.21.4 (Neglect of Duty) and 5.5.9 Carelessness / Negligence in the Performance of Duties. 5.1.10.4 All records evidencing the Management has accorded the concerned employee enough opportunity to recover and perform at least at par with the pre-agreed objectives / goals shall be kept and maintained. 5.2 Five (5) Levels of Performance 5.2.1 In rating the overall performance of a trainee / an employee, the Team Leader will assess the employee based on the following performance ratings: 5.2.1.1 Work Output (70%) (Quantity 40%, Quality 30%) - (5.0) Exceptional Performance (4.0) Exceeds Expectations (3.0) Meets Expectations (2.0) Improvement Required (1.0) Unsatisfactory Performance / Acts in conflict Behavioural (30%) - (5.0) Role Model (4.0) Influencer (3.0) Aligned (2.0) Inconsistent (1.0) Challenged / Acts in Conflict P a g e 7 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 8 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.3 Trainees (3 Months Training Period) 5.3.1 All Trainees will receive monthly performance appraisals according to the following guideline: 5.3.1.1 Trainees should have at least three (3.0) performance ratings on 1 st and 2nd month and an Over-all performance rating of three (3.0) during the 3rd month to be endorsed for Probationary. 5.3.1.2 Extension of 3 Months Training Period. 5.3.1.2.1 5.4 Extending the 3 Months Training Period is only applicable if the trainee itself requested for it through formal letter / email and if the management agrees given that the trainee did not meet the company's set of standards and performance ratings of three (3.0). Probationary Employee 5.4.1 Team Leaders, Supervisor, Manager and up will conduct a written performance appraisal on all their probationary employees at the 3rd and 5th Month probationary period of employment. 5.4.2 Probationary employee should have at least three (3.0) performance rating on the 3rd month and an Over-all performance rating of four (4.0) during the 5 th month to be regularized. 5.5 Regular Employee 5.5.1 Team Leader, Supervisor, Manager and up will conduct a written performance appraisal on all their regular employees. 5.5.2 At least twice (2) a year for all regular employees with period coverage from January to June and July to December, respectively. 5.5.3 Regular employee should have at least three (3.0) performance rating on the 6th and 12th month Over-all Performance rating. P a g e 8 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 9 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.6 Promotion 5.6.1 A written performance appraisal is required with every promotion or equity adjustment requested during the year. Review and approval by the Top Management must be given prior to any changes being made. 5.6.2 Employee being considered should consistently meet expectation especially in essential areas of responsibility, at time exceeding expectations, the quality of work is very good and the most critical annual goals are met. 5.6.3 Performance Appraisal score should be above four (4). 5.6.4 Another Performance Appraisal for New Assignments (e.g. transfer and/or promotion) may be required after three (3) months. 5.7 Performance 5.7.1 Individual goals (Tier 3), employee work deliverables, competencies required to do the job and other expectations during the performance period shall be discussed and agreed by the Team Leader and Team Member following the Performance Appraisal (PA) cycle. 5.7.2 The individual objectives should be aligned to the Tier 2 (departmental) objectives and the job description of the position. The approved individual objectives should be communicated at the start of each year (finalized goals by January) to ensure that employees are prepared and aware of their deliverables. 5.7.3 Performance Ratings shall follow the prescribed 5-point appraisal scale, where five (5) means exceptional performance or role model and three (3) meets expectation or aligned. Employee performance ratings must be communicated after each PA cycle or every 6 months. 5.7.4 Low or Non-Performance is the failure to obtain a general weighted average (GWA) rating of three (3.0) in either or both the Work Output, Job Knowledge, skills and abilities, and Behavioural sections of the Performance Appraisal Form. Employees with low or non-performance must be subjected to a Performance Improvement Plan (PIP) and consequence management process as applicable. P a g e 9 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 10 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.8 Performance Appraisal 5.8.1 All employees shall undergo a minimum of semi-annual performance discussion with their immediate Team Leader. 5.8.2 The regular performance discussion has the following objectives: 5.8.2.1 To review the established goals and behaviour vis-à-vis the accomplishment. 5.8.2.2 To address any performance deviations in a timely manner. 5.8.2.3 To identify developmental areas for employees to help them attain their and the Company’s immediate and / or future goals. 5.8.2.4 To ensure the attainment of organization’s strategic plans and direction. 5.8.2.5 Overall performance shall be based on the approved Individual Objectives and Behaviour. 5.8.2.6 In rating the employee, special emphasis is given to results obtained against established goals. In order to attain a more objective and accurate appraisal, the appraiser is required to record specific instances of superior and inferior performance. In this way, the recording of factual information assists in keeping coaching sessions on firm ground. 5.8.2.7 Before the actual rating/appraisal, it is suggested that the appraiser reviews all relevant documents to ensure an objective assessment. 5.8.2.8 The immediate Team Leader of the employee is responsible for conducting the appraisal and coaching session. 5.8.2.9 The final rating should have the concurrence of the next higher superior when applicable. Generally, President / CEO is the final approver of performance appraisals for managers and below. 5.8.2.10 The year-end performance appraisal rating is determined by getting the average of the 1st half and 2nd half performance appraisal ratings. P a g e 10 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 11 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.9 Performance Improvement Plan (PIP) 5.9.1 The Performance Improvement Plan (PIP) is the company’s platform in providing support and development to employees who have incurred a performance gap hereby identified as low or non-performer. 5.9.2 The purpose of PIP is to analyse, understand and correct the factor/s affecting employee non-performance by providing the necessary interventions (experience, exposure, education) towards a targeted performance and timeline. 5.9.3 Team Leaders and Team Members play crucial roles in the PIP. Hence, it must be jointly created to ensure understanding and agreement of both in the success of the execution. During the PIP, Team Leaders must provide the necessary support, motivation and opportunities for Team Members to help attain the targeted performance within the agreed timeline. Team Members must likewise do their part by committing openness to the PIP and ensuring delivery of expected results. 5.9.4 The PIP is executed from one (1) to six (6) months. The PIP documentation and agreement must be reflected and officially signed-off in the employee’s Performance Appraisal. A duplicate copy must be provided to HR for monitoring. 5.9.5 All employees who obtained an overall performance rating of less than three (3.0) within a prescribed period of consecutive PA cycles shall be subjected to go through due process for employee retention / termination. 5.9.6 All employees identified as low or non-performers after completion of PIP shall be issued a Notice to Explain (NTE), refer to Discipline Guidelines. 5.10 Consequence Management 5.10.1 All employees who obtained an overall performance rating of less than three (3.0) at any given performance appraisal cycle shall be subjected to go through a Performance Improvement Plan (PIP). 5.10.2 All employees who obtained an overall performance rating of less than (3.0) in two (2) consecutive performance appraisal cycles or in an incurrence of two (2) less than three (3.0) performance ratings in a period of two (2) years shall P a g e 11 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 12 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. be subjected to go through due to process employee retention / termination, refer to the Discipline Guidelines. 5.10.3 All employees who obtained an overall performance rating of less than three (3.0) at any given performance appraisal cycle not acted upon three (3) months from time of appraisal shall no longer be used as reference to subject the employee for investigation and due process for employee retention / termination. 5.10.4 All employees who obtained an overall performance rating of less than three (3.0) for a given calendar year shall not be entitled to any-initiated merit increase. 5.10.5 An employee may be dismissed because of inefficiency, neglect or carelessness. The contract implies stipulation or undertaking by an employee in entering into contract of employment that he / she is competent to perform the work undertaken and is possessed of the requisite skill and knowledge to enable him / her to do so, and that he / she will do the work of the employer in careful manner. 5.10.6 It is in good faith and understanding of both the employee and the management that to do the work which the employee undertakes, if he / she is incompetent, unskilful or inefficient, or if he /she executes his work in a negligent manner or is otherwise guilty of neglect of duty, he may lawfully be discharged to his post. 5.11 Unsatisfactory Performance, Non-Performance, Underperformance are often used interchangeably and involve an employee failing to perform their duties within the Company standard. 5.11.1 Underperformance or Poor Performance can be exhibited in the following ways: 5.11.1.1 Unsatisfactory work performance, that is, failure to perform the duties of the position or failure to perform them according to required standard. 5.11.1.2 Non-compliance with workplace policies, rules and procedures. 5.11.1.3 Unacceptable behaviour in the workplace. 5.11.1.4 Disruptive or negative behaviour that has impact on co-workers. P a g e 12 | 13 N. H. PHILIPPINES CORPORATION DOCUMENT CODE: REVISION NO. : NHPC-HRDVOPOL-008 0 PERFORMANCE MANAGEMENT EFFECTIVE DATE: Feb. 5, 2020 PAGE NO. : 13 of 13 THIS IS A COMPANY PROPERTY. NO PART OF THIS DOCUMENT MAY BE COPIED, PRINTED OR DISTRIBUTED WITHOUT WRITTEN APPROVAL FROM N.H. PHILIPPINES CORPORATION. 5.11.1.5 A series of minor issues that, when taken together, make for a difficult working environment. 6. DEVIATION CLAUSE 6.1 Any proposed deviation or exemption from any provisions of this company policy and guideline shall be endorsed by HR Manager, recommended by the Managers or equivalent, and subject to formal approval of the President – CEO 7. REFERENCES- Appendix - Corrective Actions for Violations of Company Rules and Regulations. Labor Code of the Philippines, series of 2015, Book VI, Article 295 (280) Labor Code of the Philippines, series of 2015, Book VI, Article 296 (281) Labor Code of the Philippines, series of 2015, Book VI, Article 297 (282) The Labor Code with Comments and Cases by Azucena, Title 1, Termination of Employment (Part. 3 Management Rights and the Just Causes of Termination), Article 297, 4th Paragraph, pp. 845. 8. TABLES / FIGURES 8.1 Not Applicable 9. FORMS 9.1 Performance Appraisal Form P a g e 13 | 13