HRM Highlights PBA's Human Resource Policy

01 Feb 08

PBA's excellent Human Resource policy was highlighted by HRM. HRM cites PBA's focus on STAFF DEVELOPMENT and the unusually high STAFF REMUNERATION SCHEME. Stepping out of the traditional family business stereotype, PBA illustrates examples in which the staffs of the dynamic fast growing PBA GROUP is managed solely by work merit. Below is the article.

Originally Published HRM Issue 8.1

New Generation Leader

At the age of 28, Derrick Yap has accumulated a fair bit of business experience. During every holiday since he was in secondary school, his father, Tony Yap, founder and CEO of PBA, would bring him to business meeting. On Sundays, when both father and son played golf and had dinner together, Yap Senior shared his business experiences with his son and explained the rationale behind certain actions he made. Graduating from NUS at the age of 23, Derrick immediately joined PBA Industries Singapore and was asked to improve the operational systems of PBA. On his third year, Yap was asked to manage and head PBA Malaysia. Contrary to perceptions that often veil the potentials of young leaders, Yap proved everyone wrong on his very first overseas assignment. PBA Malaysia's headcount and turnover doubled in the first year under Yap's management. Having set the system in place for PBA Malyasia, he returned to work on PBA Industries Singapore. But was it smooth sailing all the way, especially managing employees that were once his father's colleagues and friends? How difficult was it for a Gen Y manager to lead a team of mature workers? Initially, Yap admits, it felt a "little stifling" as it was hard to convince his fellow colleagues. "But, as they say, every problem is an opportunity. I realised that my competitors were probably also mostly mature workers. Hence, if I were to structure and position PBA properly, we would be in a very advantageous position. I was thus motivated to turn the situation into PBA's advantage. I was determined to use the strength of the mature workers' experience and the zeal of the younger workers to take PBA to a new level." Further defending his rationale, Yap adds, "Gen Y leaders have to work doubly hard and be infinitely more sensitive to garner the support of colleagues. I devoted my time and effort to structure the work in a way that we'd maximise each employee's strengths and minimise the need to utilise their weaker points."

Initial hiccups at people management

Balancing the needs of the young employees against the mature and experienced managers was the biggest hurdle that Yap faced when he assumed his role, he recalls. "The younger employees always wanted to move at a much faster pace. More often than not, they were too reckless. The mature employees, on the other hand, were not so receptive to change and were often frustrated with the need for tweaks in the old systems." Also, the push from the young employees to go more into IT and the slower adoption rate (which cancels the benefit) of IT from the mature employees came forth as an issue. Further, mature employees, Yap found, were reluctant to coach and hand over tasks to the younger employees, and "the fragile ego of the younger employees" did not help much either. In addition was the high demand of the young employees and the need to comparatively increase the compensation of the mature managers. To cope, Yap put the younger employees in the front line, while the mature employees stood guard at the goal post. "Young employees are often put into sales, field support, and other positions that require more running around and interaction with customers and suppliers. Mature employees hold the positions of project manager, technical manager, and other positions that are more advisory and non-interactive with others. In every team there is thus a good mix of mature and younger staff members. Therefore, the interaction between the two allows a good mix of ideas and a better understanding for the need to slow down, or the need to change. Also, the mature staff will feel assured that the company is valuing their contribution, while the younger staff has the chance to have their opinions heard and implemented." To deal with the IT issue, PBA started PBA Solutions (an IT company) and constantly drummed the benefits of IT. "Initially there was a lot of resistance, but we just stuck behind the IT department. Unfortunately, in management, sometimes we have to be autocratic and stick firmly behind our beliefs against all odds. The blame was always pushed to IT when anything went wrong. But subsequently, everyone realised that IT was a necessary evil and accepted it. PBA Solutions implemented our own ERP, our own MESSENGER, and our own CRM. We have our own e-mail server (hence our own e-mail firewall), etc." Next step was to ensure that the mature workers shared knowledge and adequately coached the younger employees. "We assured the more mature employees that the handing over was by no means a step to replace them; rather, it was done so that they could then be tasked to do more important things and hold positions of higher responsibilities. We gained the trust of the employees when one of the managers handed over and we did exactly as we promised. The manager is now doing tasks that he prefers, and the younger staff had the proper handing over that was needed. We also started a pay scheme that has a KPI linked to succession planning." To address the pay issue, PBA structured a very transparent pay scheme to allow the staff to know exactly why they were getting a certain amount for a bonus. "We planned their career paths in PBA; we gave senior managers equity in our subsidiaries or/and our main company. We also gave managers profit sharing instead of just a fixed salary increment. It helps that our company is growing every year and hence their profit sharing is always comparatively more than they would've gotten from a fixed salary increment."

Fighting perceptions

Most people would assume that Gen Y leaders are born with a silver spoon in their mouth and stereotype them to be rich brats who were born into power rather than ever having earnt it, says Yap. If ignored, this attitude would affect staff morale as they would feel that the company is run like a dynasty, and their efforts and achievements would not be noticed, he points out. "I feel that one of the most common issues in companies is that employees feel they're unfairly treated and their voices aren't heard. This situation is amplified when a family member takes over the helm. My dad made it a point that I had to work from bottom up and be promoted based solely on merits. We run PBA in a very professional manner and make sure that we our promotions and pay schemes are very result oriented. We make the schemes transparent, and managers have constant sessions with their employees so that any unhappiness can be attended to before it manifests itself into something bigger. Any individual, be it family member or not, will be treated similarly and given the same opportunity," he shares. Further, Yap tells us that it is PBA's policy never to recruit a manager. "All our managers must be groomed from within. All our overseas subsidiaries and sister companies are run by non-family members." The case is similar for all high managerial roles in the headquarters.

First hand experience: Winning trust

Yap volunteered for a position as a GM in Malaysia as the local GM had to return to his hometown for personal reasons and abruptly left PBA. "I viewed this as an opportunity for me to implement many of the ideas I had that would've been viewed as radical in Singapore. Malaysia was a subsidiary, and a smaller set up. Hence change could be implemented sooner and results would also show earlier." When Yap went to Malaysia, he unknowingly put himself in a "sandwiched position" he says. "PBA has a profit-sharing scheme in which a fixed percentage of our profits will be shared with all our employees as a year-end bonus. I faced resistance from both sides because of this. Singaporean staff felt that I wanted to prove my worth and therefore, I was lowering the profits of Singapore to increase the profits of Malaysia. Malaysian staff also felt negatively towards me. They felt that I was a Singaporean HQ spy sent to set up protocols to monitor them, and they also felt that I was helping Singapore HQ increase profits at the expense of the subsidiary. To top it all, both sides felt that I was a Gen Y leader who was inexperienced. Again, when I was in Malaysia, I worked doubly hard. Many of the tasks that I asked them to do, I would volunteer to do so, too. In some cases, when I knew they were very reluctant as they had some doubts on my judgment, I worked over the weekends or late into the night alone. With luck on my side, after a while, the staff realised that most of my decisions were correct due to my unbashful "marketing" and began to have confidence in me. Whenever a decision to change was being made, regardless of magnitude, I would make it a point to announce the rationale for the change, and allow a healthy debate. I also took time to listen to them about their unhappiness with HQ's service or company's treatment, and set that as my priority. When they realised that they were being heard, and changes were made by me because of their feedback, despite my packed schedule, they started to open up more and trust me." Most interesting experience in people management We once had a sister company that was managed by a group of people. PBA was just a passive investor and attended the AGMs periodically for updates. An unfortunate discovery was made about the managers in this company, and actions were being taken to freeze operations pending further discoveries. "A week later, the managers and a bunch of the staff members jumped ship to our competitor. I learnt that people managers are like cancer doctors. We have to remove the infected part before the cancer manifests, spreads itself and is uncontrollable. When issues are left unsettled for too long, when rumours and lies are left unattended for too long, it doesn't matter what the truth is anymore. The perception of truth becomes so much stronger.Most managers are able to manage people in rosy times, only a good manager can make tough decisions in dire conditions fast," Yap shares.

DERRICK YAP, regional general manager, PBA Industries Graduating from NUS at the age of 23, Derrick Yap immediately joined PBA Industries Singapore. His first posting was in the sales team. On his third year, he was tasked to manage and head PBA Malaysia. He returned to work on PBA Industries Singapore a year later. Yap is currently in his fifth year with PBA and is working on PBA Systems, the linear motor manufacturing department of PBA.