Performance Management in Temasek Holdings

It is interesting to note that Temasek Holdings has a compensation structure where all the staff share in both positive and negative results of the company which in essence having an owner’s approach to the business and operations. When Temasek achieves above-target returns,there is the Wealth Added and reported in the annual Temasek Review,it will have gains to share with its staff.

Reported recently Ho Ching (57),CEO of Temasek Holdings has announced that the entire staff from CEO to office attendants of Temasek will be receiving “negative bonuses.” where besides the annual bonuses being slashed due to poor performance over the past year and also,the staff will not get any money from the pool,or the value of the overall pool shrinks. If based on this negative bonus concept,it looks like there will be more negative bonuses for this year performance.

Details:

• Part of every Temasek employee’s bonus goes into a pool that is paid out over a number of years rather than at the end of each year.

• When Temasek meets its internal performance benchmarks with higher-than-targeted returns,the pool of bonuses to be distributed grows and each employee gets a bigger slice.

• But when it fails to do so,employees get ‘negative bonuses’

• This compensation structure is based on a key principle of having staff ‘share in the institution’s performance,both for positive and negative results’,

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