Performance measurement needs work: Faulty assessments may hurt Thai firms

Oct 26, 2009 (Bangkok Post - McClatchy-Tribune Information Services via COMTEX) -- WW | Quote | Chart | News | PowerRating -- Thai companies should manage employee performance better to keep talented staff and reduce turnover, according to the human resources consultancy Watson Wyatt.

Bubphawadee Owararinth, managing director at Watson Wyatt (Thailand), said Thai companies still measure employees' performance inaccurately.

"Many employers don't actually differentiate high performers and low performers," she said. "Sometimes it's about having good or bad employers who may not give their subordinates the actual performance results."

She said key performance indicators should measure real factors and employers should base decisions on them without bias.

According to Watson Wyatt's survey of 278 companies from 12 Asia-Pacific countries, the most important issue for HR professionals in Thailand was improving performance management -- while countries such as China, India and Vietnam are more concerned about attraction and retention.

But controlling costs in light of tighter corporate budgets in the downturn is the challenge most often mentioned by respondents.

Andrew Heard, regional practice director for Asia-Pacific, said the HR function faces intense pressure to deliver more value on a tighter budget.

"Employee benefits in Thailand are becoming an important issue as Thailand is facing rising health-care costs and an ageing workforce," he said.

More than 40 percent of organisations in the survey spend more than 20 percent of their payroll cost on benefits.

Companies are slowing down on salary increases while spending on employee benefits grows by 20 percent each year, Mr Heard said.

The survey also shows that one-third of employees do not recognise or value benefits provided by their companies and half of organisations lack communication programmes about their benefits.

"Organisations should invest in their communication programmes to make employees understand how much companies are paying for their benefits and what benefits companies are providing for them," he said.

Mr Heard says companies should look into flexible benefit schemes that serve employees' differing needs. For example, younger staff might be less enthusiastic about life insurance than benefits such as gym membership, additional leave or travel vouchers.

Although traditional benefits still dominate, flexible benefit schemes are gaining favour due to diverse workforces. The survey revealed that 30 percent of respondents in the region are using or considering implementing flexible benefit programmes.

Employers across the region are planning to implement or further increase the provision of benefits including retirement schemes, medical screening, additional annual leave, life insurance and company cars. The most popular benefits are retirement saving, health care and annual leave.

Ms Bubphawadee said companies should focus more on improving bonuses and benefits, which would help retain talent and attract employees.

"Bonuses should be performance-driven, which will be a way to get employee engagement and performance back on track after being hit by the downturn," she said.

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