Performance Management at

Vitality Health Enterprises,

Inc.
Performances Management System

GROUP 4
 01
PMET discovered that the PMS presented problems for nearly 2,500 professional staff.
It had 13 different rating levels which created chaos and managerial abuses.

Q1. Identify the 02

major challenges Homogenous ratings for all the employees by managers,lead difficulty to distinguish
faced by the performers from non-performers

existing PMS
03
(PMET1) at
Employees felt undervalued financially, recognizing that they received similar rewards
Vitality. as their less-productive co-workers.
There was an imbalance in recognition and rewards to employees.

04
Due to an absolute ranking system and not a forced distributed model, many employees
received high rankings even when their department failed to meet development and
production goals and schedules.
05
The point system used for salary calculations and performance-based
raises was not well accepted. Employees with consistently higher
performance sometimes even received smaller raises than their less-
productive colleagues.

06
System wasn't trustworthy. It was claimed that the system was
complex and unreliable.
There were 13 distinct rating levels (From A to E, Including pluses
and minus). Unfortunately, this rating system allowed for management
abuses because it was unstable and could be manipulated to promote
employees.
Q2. Design a performance management
system (other than 360-degree) to
address the issues identified in
Question 1, and better help the
organization achieve its strategic goals.
Explain which of the shortcomings are
addressed and what new issues can
potentially arise with each
recommendation you make.
MARCH 17, 2025
 NEW PM SYSTEM:

ORGANISATION

Department A Department B
30 % 45 %

Department C
Team A Team B Team C 25 % Team A Team C
Team D Team B
4 Members 3 Members 6 Members 4 Members 6 Members 8 Members
3 Members
30 % 10% 40% 20% 30% 25% 45%

Forced Distribution in between :

• Departments
Team A Team B Team C
• Teams within a Department
4 Members 3 Members 6 Members • Within a Team
35 % 25% 40%
02
• No inter or intra-departmental comparison of KRAs.
Issue Addressed

• Introduction of a objective dashboard in the new PMS showing the

outputs of different departments.

• In the new PMS, no team would be judged on their pre-defined

KPIs/KRAs.
• The evaluation system will not bind the employees in different
departments to fulfill their pre-defined targets.

• New PM system will set a date (for e.g., 1st October), after which if
any employee joins the organization, he/she will not be a part of the
PM system.
• New employee will be evaluated on his/her individual KPIs.
• Sometimes it is very difficult to map a team's performance 03
with the organization's goals. Which new Issues could arise:

• If the team does not perform. It affects Individual

performance

• Heavy implementation of an information system is

required. So the project will be capital intensive.
Thank you!!