 James Hoffman was recently appointed Vice President of Human Resources at

Vitality Health Enterprises, and is worried that the successful run of the company
would lead to complacency among the employees. Beth Williams, the CEO had the
same concerns
 Beth Williams proposes to Hoffman a meeting with the council at the end of the
month to present the analysis of the performance management system.
 For 4 months, the way in which equipment evaluations (PMET) and the
compensation system are carried out will be evaluated.
 
Challenges:
 
 Lack of efficient communication between managers and the PMS team in the
method of using performance assessments and in turn being able to align the
objectives of the department with the individuals.
 There was still a lack of career growth and development plan for the employees.
 Lack of adequate training for managers, where they are given the necessary tools to
be leaders and take into account the management of human capital and thus be able
to carry out objective assessments.
 The new system aims to ‘force’ managers to be fit the employees into a bell curve.
This is a structural change and requires time and training.
 There was no room to exhibit organizational citizenship behaviour, thus no incentive
for taking up anything beyond one’s job description

Issues Old System Consequences New System Consequences

 Performance 13 levels (A to  Vaguely defined 4 categories  A relative
Ratings E) – Absolute KPIs and KRAs (T, A, L, U) – system was
ratings model  Homogenous Forced setup
ratings in the name Distribution  Clear KPIS and
of egalitarianism Model KRAs were
and teamwork, thus defined for
individual employees in
contribution wasn’t conjunction with
focused on. their managers
 Indistinguishable  The review cycle
performance ratings of all the
leading to similar departments
rewards and a pool were synced.
of unsatisfied good
performers
Compensation Based on  Flawed distribution Performance  Performance-
Compa-ratio of raises; they were linked Comp based short and
bereft of given on the basis & Ben long term
performance of level of compa- System rewards were
ratio at which an introduced
employee/position  Company equity
has been assigned became a part of
 Rewards not the bonus
commensurate to  Stock options for
performance upper
management

Insights
  Older system had 57% of employees stuck at B and B minus. The resultant
distribution resembled a left-leaning normal distribution.


Recommendations

Plans should be completed with the supervision and advice of human resources generalists.

Create a leadership academy that is aimed at managers, which should cover HR issues,
difficult situation management and performance assessments. Following this plan, the HR
area should provide monitoring, monitoring and advice to all leaders taking this course.

Personnel evaluation plan: carry out self-assessments where attitudes can be identified and
future objectives of each collaborator can be determined. This makes you create a trust with
the process and in turn it can detect what your areas of improvement are. This test can be
done at the end of 3 times a year.