GEARING TOWARDS A PERFORMANCE-BASED REWARDS SYSTEM

During the year, Keppel Land embarked on a review of its performance management system with the aim of cultivating a more performance-based reward culture.

Existing procedures and policies were reviewed and streamlined to eliminate the inefficiencies of the old system. Feedback obtained from both management and the Union were incorporated into the new performance system so as to enable the Company to keep pace with the increasingly competitive marketplace for new skill sets.

At the strategic level, Keppel Land is adopting the Balanced Scorecard (BSC) as a tool to align employees’ goals to the Company’s strategies. The four perspectives of financial, process, customer, and people and learning used in BSC provide a good platform for setting targets. The Company’s strategies are thereby cascaded to all departments so that individual workplans and assessment criteria become a derivation of the department scorecard.

Rewards will be linked directly to employees' contribution, responsibility and accountability. Under the new system, management of staff performance will be carried out in three phases, namely, target-setting, competence development, and performance review and appraisal. This involves assigning staff targets for the year, with constant review throughout the year to ensure their relevance and achievement. To help staff meet their goals, they will be assessed on their potential and developmental needs for the job. Individual performance will then be reviewed against the targets set for the year. This not only establishes greater transparency in performance evaluation but also provides staff with a sense of self-awareness to undertake training and development activities that will improve their skills and abilities.

To familiarise staff with the new system, a series of training and communication workshops on target-setting and competency assessment were held. Conducted by an external consultant and Keppel Land's own Human Resources personnel, the training and workshops for all staff will be completed in 2003.

Recognising that the development of an accurate and objective performance management system is a continual process to ensure the system's relevance to the Company's strategic goals, Human Resources will continue to seek employees’ feedback and fine-tune the performance management system. This will ensure that it reflects accurately the skills and abilities of its staff, assists them in developing in areas where they have the greatest potential, as well as provides attractive incentives for individuals who excel well in this new operating environment.

The new performance management system demonstrates Keppel Land’s continuing commitment to its intellectual capital. It also forms part of an overall remuneration strategy aimed at fostering consistent and outstanding performance. The Company hopes to work towards being an employer of choice, an organisation that people aspire to join and where employees feel proud to be affiliated with.