Vitality Health Enterprises Inc.

Alex Johnson, Evea Kaldas, Domonicka Moore

 Presentation Overview
● Vitality Health Enterprises Inc.

● Implementation Issues

● Recommendations

● Additional Considerations

● Conclusion
Vitality Health Enterprises Inc.

Outer beauty can only be achieved as inner harmony is reached.

-Ancestral Sayings
Vitality Health Enterprises Inc.

Startup: 1987

Founder: Hikaru “Fred” Kikuchi

Vitality Health Enterprises Inc.

Rapid Growth: 1991-2007

● 1989- Private Manufacturing Facility
● 1994- Distribution Agreement
● 1995- Launch Into Global Markets
● 1997- Acquisition of HerbaPure
● 2007- 7,000 Employees

Growth Stagnation: 2008

Beth Williams as CEO: 2008

Vitality Health Enterprises Inc.

James Hoffman Begins: 2009

New Business Strategy: 2009

New PMS: June 2009 (Developed in 4 Weeks)

Evaluation of PMS: December

2011

Product R&D Increase: 2011

Opportunities For PMS Improvement
Purpose of Performance Management:

Strategic Decisions Based on Purpose

How frequently should we do reviews? How formal is our system?
▪ Are formal annual reviews conducive to the purpose?
Should we use reviews for administration or development?
▪ How are goals being established? Cascading goals?
Are we rewarding for what we want the org to accomplish?
▪ Innovation is a strategic goal, is it encouraged?
Who will conduct the appraisal?
▪ Management is an obvious choice, is a strategic choice?
Implementation Issues

▪ Lack of Strategic Decisions

▪ Implementation Issues
▪ Poor Initial Rollout
▪ Low Rating Accuracy
▪ Use of Forced Distribution
▪ Lack of Manager Accountability
Implementation Issues: Initial Rollout

▪ Company-wide notification of immediate PM change

▪ Backlash
▪ No time for feedback

▪ Only briefing in the form of a guidebook

Implementation Issues: Low Rating Accuracy

▪ Refusal to submit accurate ratings

▪ Previously: Everyone gets B or C from the 13 rating levels (A to E)
▪ Currently: Rotating rankings

▪ Fear of offering feedback

▪ The “not-rated” option
Implementation Issues: Use of Forced Distribution

Currently:
Implementation Issues: Lack of Manager Accountability

▪ Lack of management training

▪ Lack of management rating
▪ No reward system in place for performance
 Recommendations

Adjustments to the
Performance Implementation of
Management System
System

Create Rewards
Incentivize
through Stock
Management
Options

(London and Smither, 2002), (Weatherly, 2004), (Kerr, 1995), (Gatewood, Field, & Barrick, 2010), (Curtis, 2005), (Gorman, 2009)
 Recommendations

Adjustments to the ▪ Use of BARS and structured criteria

Performance ▪ Based on job analysis
Management Implementation

System
of System
▪ Separate development and merit
appraisals
Create Rewards
Incentivize
through Stock
Management
Options ▪ Reward for innovation

(London and Smither, 2002), (Weatherly, 2004), (Kerr, 1995), (Gatewood, Field, & Barrick, 2010)
 Recommendations

▪ Strategic process to guide change

Implementation of
Adjustments to
the Performance System
▪ Can be used to gain buy-in,
Management
System
implement successfully
Incentivize
Create Rewards
through Stock
▪ Training for proper use of system
▪ Train managers in usage of BARS
Management
Options

▪ FOR Training

(Gatewood, Field, & Barrick, 2010), (Curtis, 2005), (Gorman, 2009), (Burke, 2014)
 Recommendations

Adjustments to ▪ Implement assessment of management

the Performance
Management
Implementation
of System
reviews
System
▪ Use of multiple sources
Create Rewards ▪ Accountability & reward for accuracy
through Stock
Incentivize Options ▪ Current system rewards skewing
Management ▪ Culture supporting management
▪ Improve attitude toward delivering
feedback
▪ Strategic Manager Involvement
(Kerr, 1995), (Gatewood, Field, & Barrick, 2010), (Curtis, 2005), (Gorman, 2009)
 Recommendations

Adjustments to
the Performance
Management
Implementation
of System
▪ Should be offered in all levels of the
System company
▪ Can be appreciated in lower
Incentivize
Create Rewards
Management
through Stock
levels too
Options ▪ Stock options as rewards can create
buy-in and loyalty
▪ Employees become invested
(Milkovich, Newman, & Gerhart, 2013)
Additional Considerations

Management Training

Readjustment of the
Merit System

Costs and Benefits

Is PM the Right Solution?

Additional Considerations

Management Training ▪ Complementary to training on ‘use’

▪ Address the issue of not valuing feedback

Readjustment of the Merit System

▪ Teach how to have “tough conversations”

Costs and Benefits

Is PM the Right Solution?

Additional Considerations

Management Training ▪ Current system is unsustainable

▪ 7-8% higher than competitors
Readjustment of the
Merit System ▪ Considered unfair

Costs and Benefits ▪ Not particularly easy to grasp

Is PM the Right Solution?

Additional Considerations

▪ Costs
▪ Additional training
Management Training

▪ Change management efforts

Readjustment of the Merit System ▪ Uncertainty about the future
▪ Benefits
Costs and Benefits ▪ Encourages performance
▪ Retain top performers
Is PM the Right Solution?
▪ Avoid decline stage
Additional Considerations

Management Training ▪ Alternatives:

▪ Culture realignment
Readjustment of the Merit System

▪ Training alone
Costs and Benefits ▪ Changing manager selection strategy

Is PM the Right Solution?

Conclusions