Gamification - New Performance Management Mantra

Traditional Performance Management Systems

There are many reasons why the traditional performance management systems fail. One of the most common reasons for these performance management systems to fail is the in ability to objectively measure a person’s performance, because performance is measured by people and human subjectivity can play a significant role in the accuracy of performance predicaments.

There are many evolved concepts of performance management systems like 360 degree appraisals, Balance Score card which attempts to minimize the subjectivity towards a certain individual. These performance evaluation systems are further strengthened through concepts like performance normalization which eventually increases the number of people who evaluate a single person’s performance leading to lower levels of subjectivity.

But still with all these evolved performance management systems in place don’t we still hear conversations, “He got a better ranking due to this manager and not because of he is a great performer”. Still these performance management systems have not been able to accurately diminish the top down approach to performance evaluation and possible subjective appraisals.

Concept of Gamification

Gamification is the new buzz word in the field of performance evaluation. Gamification techniques strive to leverage people's natural desires for competition, achievement, status, self-expression, altruism, and closure. For example game players play to earn more points and get a  good rank amongst the other game players. They are concerned about a socially engineered brand. Likewise evolved version of this concept is used in performance management.

Gamification utilized for Performance Evaluation

This challenges the traditional performance measuring mechanisms and takes performance measurement to a next level optimizing social networking dynamics. Rather than a manager evaluating the performance, the whole society evaluates the performance. For example an employee helps another employee on finishing some task where the manager would not have the exposure of this. Hence aspects like team working may  not be taken into consideration. But what if the second employee who was helped by the first employee goes and thanks him on a social network for helping him with the task. The concept of like’s, raves, badges are utilized by the gamification performance management system.

Through concepts like gamification a person is socially evaluated and also this encourages organizational wide appreciation. This will eventually mould the workforce into social team workers constructively contributing towards company growth.

Pricing your Product Accurately

In few of the previous blogs, I discussed a number of theories around strategy, strategic directions of the company and competitive strategies. Whichever strategy a company adapts, Pricing plays a significant role in adapting a differentiation or a cost leader strategy.  (Porter, M.E., "Competitive Strategy: Techniques for analyzing industries and competitors" New York: The Free Press (1980))

Buying behavioral analysts affirms the point that majority of lower, middle and middle upper class market segments are highly concerned on the price tag, and price plays a significant role in purchase decision making. From a seller’s perspective having the right price on the product will ultimately determine the successful sale or the product

There are three main views on Pricing strategies,

Economist View on pricing

In understanding the economists’ view to pricing, please see the graph which highlights the movement in supply and demand with Price and Quantity as key variables. As it is inevitable when the price is low there will be a significant demand on the product and as the price increase the demand goes down with affordability.

When the price is low, supply will be low and as the price increases there will more suppliers with the possible margin improvements due to price increases. Thus the ultimate price will be defined by the equilibrium of supply and demand.

Marketers View

Pricing plays a significant role in the marketers view towards pricing. As you already may know marketing tactical strategies are built around four main pillars which are knows as the 4P’s in marketing. 4P’s include Product, Price, Place and Promotions.  Pricing is the second most important pillar in marketing and as per marketers view the pricing is defined by the customer. As per the marketers view a product should be priced at an amount which the customer is willing to pay.

This is also in line with the Japanese concept of target pricing. Where the pricing for the product is first defined and then manages the cost structure to have an acceptable margin for the product.

Accountants View

 Accountant’s view to pricing is does not work on a hypothetical framework as the economist or the marketer’s view. Accountants view to pricing considers the total expenditure (Both Variable and Fixed) for the product and adds a standard profit mark up to arrive at the pricing for the product.

Three main pricing views takes into account different dynamics, a company to leverage on pricing as a key market strategy should take into consideration all these three views in deciding the correct price for the product. 

Managing your Personal Finances 1

There are so many discussions around defining an optimum equation to manage personal finances. Managing personal finances has become so difficult nowadays and many are drowned in huge debts. This vicious debt cycle starts right at the point a person starts earning money.

Second day at Work

The very first day we start working in our first job, the next day we will be getting a call from a fancy reputed bank offering a credit card. We think that these banks love us so much and they perceive us as wealthy men and the next thing we know, we end up with multiple credit cards. Credit cards nowadays come with fancy credit limits and into the bargain they couple credit cards with very attractive credit card shopping offers. All of a sudden we start spending forgetting whether we can afford or not.  Spending money Vs. paying using a plastic card psychologically affects the spending patterns and credit card companies successfully leverage on this. And this continues, then they offer us car loans, then housing loans and by the time we are in mid age all we will be having would be huge debts and higher percentage of income is spent on interest.

Overcome the Vicious Credit Cycle

How to overcome this vicious cycle? What are the specialist views on this vicious cycle? Rich Dad Poor Dad defines the ultimate finance freedom is where your investments generate earnings similar to your investments. Warren Buffet advises, that we should never depend on a single source of income.

Majority after reading these statements will say it is easy said than done. The starting point is to know what an investment is. In very basic terms it is an asset which will generate an income. The common assets that can generate income are publicly traded shares, savings accounts, fixed deposit accounts.

Do we need huge capitals to start investing? It could be 5% of the monthly salary or even 1% of the monthly salary.  If we start investing the investment would accumulate monthly and grow monthly. 

Increasing your net wealth can be done in two ways. You can increase the income, through multiple sources of income, investments increasing your asset base. Or you can reduce your costs. Reduce credit card expenditure which will result in decreasing both interest and debt costs. 

Personal Branding as a Rocket Science

There are so many discussions over the concept of personal branding. I did some research on this concept of personal branding to understand the underlying principles over it. Well it does not sound rocket science at all if you have a goal and an action plan to achiever the goal. 

What is your Brand?

If you take a brand like Body Shop for an example. What is the first impression that you get. It is a brand with a social purpose. Body Shop never use animals to test their cosmetics products. For us to perceive Body Shop as a philanthropic brand with a social purpose every time we see or hear about it, is a result of years and years worth of work. They knew how they want to position themselves in the market and they did it over the years keeping to its key principal never to test cosmetics on animals. 

Personal branding process is also similar. Its about how you want yourself to be perceived others. What values you want to be represented by. It is simple, for example if "Being Macho" is how you want others to perceive you, you better start going to a gym and karate classes so that you build your physical appearance to suit how you want others to perceive your self.

Action Plan 

First step,  is that you have to know exactly how you want others to perceive you.  These are called brand values. The key messages your personal brand represents. Next step is you need to have an action plan. The time span will vary based on the deviation from the current brand positioning. The time span will be longer if there is a significant deviation from the current brand positioning.

Well congratulations, with the amount of social networking in the modern days life makes easy to launch a good communication plan for your personal brand. Each and every post, each every page you like, each and every status update that you put represents what you are. You can take control of this. You can purposely ensure that your posts are in line with your brand values. 

Accepting the Motivation Cycle

What is the mantra for the optimal performance? Day in and day out management theories will talk about how to optimize performance, and there is a science supporting effective performance measurement systems. But at the end of the day it all boils down to motivating the workforce to perform at their best capacity.

One of the key weaknesses that I see nowadays is the whole practice of bench marking  I think we all should agree with the fact that different people are of different skill levels, different competencies. In my personal opinion a good manager should not push his team members to be someone they are not, a benchmark figure. A good manager will motivate an employee to reach their personal best, and will leverage on his abilities performing at his personal best. I have been lucky enough to be led by best managers in my short career span. They have adapted many different leadership styles to motivate their workforce and all of them were experienced and mature enough to know motivating the team is the only way to succeed, and they invest both financial and time resources in building the team with a long term view to exceling as a team.

But there are instances where your team is hyper motivated but you feel that your motivational levels are less than zero. This feeling forced me to do some research on the concept of self-motivation.

Whether we like it or not life is a cycle filled with ups and downs. Unless you learn to accept the life cycle and the cycle of motivation it will be difficult to succeed in the corporate life. At certain times you will be motivated with challenge and you will seek for responsibility and it will motivate you. But at times you will not want to take any responsibility and not face any challenge.

I had a discussion with a life coach regarding this matter. The simple advice he gave me Sajith accept the motivation cycle. The other important question he asked me was how bad I wanted to be successful and he asked me to watch this video http://www.youtube.com/watch?v=dPsnqwmn21g.

Most of us so badly want to succeed; we have our own interpretation of success. But do we actually do anything about it. He went into explain many people want to succeed but they do not take any actions to succeed. Desire to succeed without an action plan can demotivate anyone, hence it is the small actions that we take will make the difference. Accept the motivation cycle, have small executable actions which will keep on pushing you for success. Make things happen, do little changes to your life that will help you to succeed. 

Emergent Strategy

What is Strategy?

There have been many discussions

over the past years around the concept of strategy. Management Guru, Michael Porter defines strategy as the direction  a company should take. This definition expands the scope of strategy into wider array of possible sub definitions. Lets try to break this definition into understandable elements.

1) Long Term view on the future of the company
2) Does not cater to a set of actions but governs where actions should lead to
3) Strategic Apex (Top Management) must drive strategy

Examples of Strategies

Let us see some examples of strategies companies have adapted to get an understanding of the practical adaptation of the strategy concept. 

3M's Strategy is to Innovate.

3M is known for innovation. It has been among the top 5 most innovative companies for years. This strategy is governed by underlying strong KPIs like, 33% of the company revenue should be from products introduced in the last three years. These types of KPIs, directs the company towards the strategy to Innovate

Facebook strategy is to connect people. Any new project Facebook team undertakes will be driven with the direction to connect people. When they introduced the social tag, the intention was to connect people in the photograph. Like wise the strategy provides direction to a company.

Emergent Strategy

The traditional definition of strategy was challenged when Mintzberg came up with the concept of Emergent Strategy. Today's environment is highly volatile, no company can have a strict strategy. So Mintzberg view was strategy is not a hard and fast rule. It can vary depending on the environmental conditions.

Hard economic conditions would push a company to revise the Pricing policy, the product policy. In Sri Lanka during the times Economic Turmoil most of the packet products which used to be 500g or 1kg went into sachet small packets to make it affordable to the wider majority of people. I am taking Rin as an example. Rin is mainly targeted to medium class and it is considered as a high end product compared to other washing products. But with the economic turmoil it went with sachet products which expanded its market grasp to lower income families. 

Like wise Mintzberg insisted on the concept of strategies being emergent. Honda introducing bikes is another classical example of emergent strategy. PESTEL factors will have an impact on the trajectory of the modern organization and these factors will influence the modern organization to sway from the original destination to continue with the organizations effort to maximize shareholder wealth. 

Game On - Fight Your Competition

How do you manage your competition? This is the money question. If you are clever enough to manage, fight, and fight back your competition that is the success mantra to survive in the modern environment. There are many theories around how you fight offensive warfare against your competition. 

This post contemplates on revealing this accepted theories. Most of the theories have evolved with the evolution military strategy. Military strategies have been cleverly adapted in a corporate environment in fighting competition.

a. Frontal Attack

Frontal Attack focuses on direct attack, Head-on attack with your competition. You go ahead with same products fighting on functional benefits, similar prices tightening for cost advantage and fighting head on with promotional tactics. This strategy attacks competition in all 7 P's tactics. Adaptation of a Frontal Attack has so many risks associate with it since with this strategy they are competing with strengths. Hence Frontal attack is not the most advised strategy in competing.

In a Sri Lankan Context Munchee biscuits adapted a frontal attack on the "Cracker Market Segment", Malliban was the market leader in the cracker market with its superior Maliban Cream Cracker product. Munchee went with a frontal attack with an improved product (Heavy Investment on Manufacturing Methodology), in par pricing with a huge investment in promotions Munchee was able to attract the market in an accelerated rate. And now Munchee is the market leader in the Cracker market. 

2. Flanking Attack

Flanking attack is direct adaptation of military strategy. In war attack is first done on the weakest point the competitor. In a corporate environment too the same strategy is adapted companies attack on a weakness. A weakness could be an untapped market, Product benefit not offered.

This was inevitable in the Dialog and Mobitel (Sri Lankan Communications Service Providers) battle grounds. Mobilte launched this huge marketing campaign targeting the governmental sector, state employees. Dialog is the market leader in the communications market in Sri Lanka. Although Dialog had an excellent product portfolio catering to a wider spectrum market segments. But this state sector market segment was un-touched. Mobitel Acquired this market segment with their "Upahara" Package and was successfully able to strengthen the Mobitel brand with many values in positioning the brand as a brand which serves the community. 

3. Encirclements Attack

This is a multi-pronged attack aimed at Diluting the defender's ability to leverage on its strengths. In this strategy the competitor is ready with to head on the defender in any aspect. The attacker is one step ahead all the time and is has the flexibility to adapt to any action which is taken by the competitor. 

4. Bypass Attack

Adapting this strategy attempts to avoid confrontation with the competition by moving into new and as yet contested field. This might be developing new products, diversifying into new Geographies. This strategy attempts to avoid competition and seek to capture market through by passing. 

5. Guerilla Warfare 

With this strategy the attacker attempts to do as much as damage in a limited time frame. Involves in small attacks in different locations. In applying this in the hospitality industry a Guerilla Strategy would be 5 star hotel which has less market share announcing a significantly reduced price for a buffet for a short period of time. This will surprise the market leader keeping him in question whether to retaliate, whether to wait, whether to attack. 

Choose your battlegrounds wisely and adapt these well practiced and accepted strategies.