It has been two years since CNOOC SES Ltd. implemented the new Performance Management System (PMS). Driven primarily by the dissatisfaction from the employees toward the old PMS that in their opinions had failed to promote fairness with its forced ranking approach, the CNOOC HR team and Hay Group engaged in a project to develop a new PMS that was expected to promote more objectivity. In tenDS of the design, the new PMS measures not only what people achieve (key accountabilities) but also how they achieve it (competencies). The competencies are measured using Behaviorally-anchored rating scale (BARS) where the rating is represented by examples of expected behavior rather than a scale of number to minimize subjectivity and misinterpretation. Using a user-friendly web-based design, the new system also encourages the interaction between the appraiser and the appraisee to get the mutual agreement during planning and reviewing. Unlike the old system, the forced ranking is no longer used.

Eventhough the new PMS is much improved in terms of the competency model and the ease of use, and also receives good acceptance from the Unions and employees in general, the overall effectiveness is still questionable. Regarding the focus of the PMS itself, from the general perceptions of the employees, the PMS is still strongly associated with pay rather than development and performance improvement. Further from the employee survey results, interviews, and benchmarks with other companies, there were also some highlighted issues, such as: Alignment between the company objectives and team/individual objectives; Link between performance and pay; Objectivity, especially related to reducing the rater error; Differentiation between top performers and the mediocres; Coaching effectiveness to minimize the performance gap; And some other problems in the implementation, such as the confusion over the notion of "performance management" and "performance appraisal", and whether the PMS has already been "owned" by the line managers and employees, not just by the HR.

In addition to identifying the above issues and rooms for improvements in the PMS, this OFP paper offers in-depth analysis and recommendations by referring to various PMS literatures, third-parties' surveys, and best practices, with the hope that the effectiveness of the CNOOC's new PMS towards the achievement of company's objectives, higher productivity, and retention rate will improve.





Research Location : CNOOC SES Ltd.

Supervisor : K. Rajendran

Accepted Date : April 30, 2008



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