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    Performance Management

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    Akshay
    Hiram took several actions as the new COO of Rainbarrel to improve performance, including reducing headcount, increasing productivity targets, and changing sales commission structures. However, these actions had unintended negative consequences like declining morale. A performance management review found issues like a lack of clear strategic goals and communication between management. Rainbarrel needs to repair damage by engaging employees, clearly defining goals, and holding managers accountable while also providing support and discretion. An effective performance management system includes setting organizational and departmental objectives, individual goals and standards, ongoing monitoring, and rewards and recognition to motivate employees.

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    Performance Management

    Uploaded by

    Akshay
    55 views18 pages
    Hiram took several actions as the new COO of Rainbarrel to improve performance, including reducing headcount, increasing productivity targets, and changing sales commission structures. However, these actions had unintended negative consequences like declining morale. A performance management review found issues like a lack of clear strategic goals and communication between management. Rainbarrel needs to repair damage by engaging employees, clearly defining goals, and holding managers accountable while also providing support and discretion. An effective performance management system includes setting organizational and departmental objectives, individual goals and standards, ongoing monitoring, and rewards and recognition to motivate employees.

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    Hiram took several actions as the new COO of Rainbarrel to improve performance, including reducing headcount, increasing productivity targets, and changing sales commission structures. However, these actions had unintended negative consequences like declining morale. A performance management review found issues like a lack of clear strategic goals and communication between management. Rainbarrel needs to repair damage by engaging employees, clearly defining goals, and holding managers accountable while also providing support and discretion. An effective performance management system includes setting organizational and departmental objectives, individual goals and standards, ongoing monitoring, and rewards and recognition to motivate employees.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    55 views18 pages

    Performance Management

    Uploaded by

    Akshay
    Hiram took several actions as the new COO of Rainbarrel to improve performance, including reducing headcount, increasing productivity targets, and changing sales commission structures. However, these actions had unintended negative consequences like declining morale. A performance management review found issues like a lack of clear strategic goals and communication between management. Rainbarrel needs to repair damage by engaging employees, clearly defining goals, and holding managers accountable while also providing support and discretion. An effective performance management system includes setting organizational and departmental objectives, individual goals and standards, ongoing monitoring, and rewards and recognition to motivate employees.

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    © All Rights Reserved
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    of 18

    Managing People and Performance in Organization(MPPO)

    Gopal P Mahapatra
    E S Srinivas
    Vasanthi Srinivasan
    Pearl Malhotra
    1
    MANAGING PERFORMANCE
    Why is Managing Performance important?

    • Organizations exist for a purpose and create strategies to


    translate the purpose in to reality
    • When executing strategy there are multiple objectives that
    they have to straddle : profitability, innovation, customer
    satisfaction, employee engagement
    • These multiple objectives help the organization to exist in
    perpetuity and the objectives are translated in to
    departmental, team and individual objectives.
    • With this background, let us look at the case
    What can we say about Rainbarrell as an organization?

    • Healthy and successful company


    – Two quarters of not so good performance (industry wide phenomenon)
    – Struggling to adjust compared to competitors
    – Randall : an inspiring leader focused on innovation
    – Mission : Customer service as a value
    – Organizational culture: idea driven, collegial, community oriented (sales to
    former employees)
    – Organization became lax… needed some focus on tightening its belt
    (budget integrity low, ideas received funding, lacks discipline) “Fat and
    Happy” (potential for greatness, Ferrari engine that needed an expert
    mechanic)
    What actions did Hiram undertake?

    • Reduction in labour cost


    – exiting poor performers through severance packages
    – Forcible headcount reduction of 10% across the board with no
    financial assistance
    • Higher productivity in call centre
    – New targets
    – Monitoring and peer pressure
    – “Wall of Shame”
    What actions did Hiram take?

    • Increase in on time shipments


    – Lack of clarity on what “on time” and “shipped meant” within the
    organization
    – Using an objective measure –shipped is leaving the company property; on
    time is promise made
    • Commission on sales to employees
    – Current and retired employees to buy products at discount
    – Sales people earned commission on full price (straightforward rules and
    simple reward system: reduced it to actual price)
    – Earlier a complex system consisting of sales, mentoring, prospecting new
    clients and keeping the account information current were used. All of this
    was subjective.
    Hiram’s Intended consequences

    • Reduce cost
    • Increase productivity
    • Make all performance metrics objective
    • Keep it simple
    • Focus is on money
    Unintended consequences

    • Negativity in R&D department


    • Bean counting rather than creativity – filing patents but commercialization
    • Breakthrough product but no budget
    • Complaints from current and retired employees –shabby treatment while
    placing orders
    • Managers fired low level people and protected at higher levels.
    • Sales people dissatisfied with the territories and no mentoring
    • Shipping not done and employees avoiding responding to customers
    • Morale decline
    What are the other aspects that we need to look at?

    • CEO oversight and governance weak– no common and shared


    understanding of what is performance?
    • No coordination between the senior management team
    • No interdependencies across the actions taken by Hiram
    • Communication of goals, expectations of the metrics changes?
    • Role of consultants?
    What should Rainbarrel do now?

    • Immediate damage control by identifying high performing leaders to drive the appropriate
    performance culture.
    • Management team needs to define clearly the strategic goals for the organization that align
    with its culture – both short term and long term
    • Two key questions to ask: what do we want employees to do differently to support the
    business? Why aren’t they already doing it?
    • Seek inputs from employees on ways to reach the goals.
    • Communicate the expectations of the organization at different levels
    • Align and cascade goal across levels
    • Free up budgets with some discretion to managers.
    • Hold managers accountable for the goals. Provide support and assistance to do the same.
    • Go beyond pay for performance and look at recognition like praise, appreciation
    How does
    11
    a Performance Management System look?

    Organisationa
    l
    objectives

    Departmental/team
    objectives

    Individual
    Goals and competencies

    Setting of
    performance standards

    Monitoring and Assessment

    Career
    Developmen Reward planning
    t
    Components of Performance Management
    Rewards &
    recognition
    How do rewards & recognition work?

    How are people motivated? How do organisations motivate


    their employees?
    Motivation
    Compensation

    Recognition
    Motivating Work
    environment
    Employees

    Career
    development
    CHALLENGES IN COMPENSATION DESIGN

    • Emphasis on individual or team


    • Emphasis on monetary and non monetary
    • Emphasis on current and deferred
    • Emphasis on global to particular (cafeteria)
    • Emphasize short term or long term
    • Emphasis on performance or potential
    • Emphasis on fixed or variable component

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