Performance Management - Case Studies 353vn

Case 1 Solution Inc. was a leading Car manufacturing company. The company earned an annual income of $5 trillion. It was one of the most successful companies in the country. On 18th January, 2014 the company faced a loss of $ 5 million when 2000 of their employee walked out the company. Solution Inc. approached HR Solution Result Consultant (HSRC) to investigate on the problem. After analysing the situation HSRC concluded that indirect but rapidly destabilizing feature in team dynamics which needed practical investigation and correction. HSRC invited a selected group of leaders from Solution Inc. to attend 3 day workshop which was focused on finding, identifying and correcting the destabilizing features in the team dynamics. The workshop was planned using proprietary, fun but well-provenance techniques for investigating these dynamics, the “survival terrain” of work team at the plant. The workshop addressed how to tackle complicated cultural instability. The workers returned to the company and a similar event never occurred in the company. the confidence among the employees increased. Question 1. What do you understand by team building? 2. What was the problem faced by the Solution inc.? 3. What was the solution HSRC came up with? And what was the result? Answer 1. Team building is defined as “Philosophy of job design in which employees are viewed as of interdependent teams instead of as individual workers” Individual employees are identified, united to form a team that stays and works together to achieve the given task. 2. The company’s problem was that indirect but rapidly destabilizing feature in team dynamics. 3. HSRC conducted 3 day workshop which was focused on finding, identifying and correcting the destabilizing features in the team dynamics. The workshop was planned using proprietary, fun but well-provenance techniques for investigating these dynamics, the “survival terrain” of work team at the plant. The workshop addressed how to tackle complicated cultural instability. As result the such event never occurred in the company. the confidence among the employees increased.

Case 2 Candy Ltd was successful candy manufacturer. In the mid-1990’s the company faced a problem its performance appraisal system. The system was demotivation the employees than motivating them. Employees were discouraged and disgruntled. Candy Ltd appraised its employees once in a year. It required them to document their accomplishment and the managers used to assess and assign rating. The rating was on forced distribution. This system resulted in inequitable rating. The company came up with a new system of performance appraisal the new system focused on appraising employees half yearly and the numerical rating system was removed. Further the company prohibited the appraisal guidelines of the use of subjective assessments of performance. Both employee and the manager had to prepare a written document on how well the employee met present performance target. They meet and discuss the performance and provided the , improvements and resolving any differences between them. The new system emphasized both the positive and negative aspects of employee’s performance. The discussion was focused on the merits, performance, and relationship with peers and position in salary range. Questions 1. What is performance appraisal? 2. Give the meaning of old method of performance appraisal followed by Candy Ltd? 3. What did the new system of PA emphasize on? Answers 1. Performance Appraisal is the systematic evaluation of the performance of employees and to understand the abilities of a person for further growth and development. Performance appraisal is generally done in systematic ways which are as follows:  The supervisors measure the pay of employees and compare it with targets and plans.  The supervisor analyses the factors behind work performances of employees.  The employers are in position to guide the employees for a better performance. The main objective of performance review for employees is to give them a for their work, record their work to give them a few organizational rewards and to provide further development opportunities for their careers.

2. Forced Distribution method This is a ranking technique where superiors are required to allocate a certain percentage of rates to certain categories (e.g.: good, above average, average) or percentiles (e.g.: top 10 percent, bottom 20 percent etc). Both the number of categories and percentage of employees to be allotted to each category are a function of performance appraisal design and format. The workers of outstanding merit may be placed at top 10 percent of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10 % fair. 3. Under the new system both employee and the manager had to prepare a written document on how well the employee met present performance target. They meet and discuss the performance and provided the , improvements and resolving any differences between them. The new system emphasized both the positive and negative aspects of employee’s performance. The discussion was focused on the merits, performance, and relationship with peers and position in salary range

Case 3 Rush Automobile ltd (RAL) was facing issues with its financial performance. Therefore the company wanted to consider restructuring to turn the company around. Even after all the efforts the company was still under the loss due to high manufacturing cost and the price was not priced competitively. These led to job cuts, selling unprofitable business and closing down many units. RAL was finding it difficult to meet the growing competition. RAL realised that in order to survive in the market the company needs to transform into a flexible organisation and focus on sale and high value business. As one measure of improvement the company introduced Balanced Scorecard. This was used to communicate the strategy across RAL to more than 1 lakh employees across its various units spread across the world. The Balanced Scorecard enabled the employees to understand the existing policies and the future plans of RAL. The management and all the division identified the factors that were important to create value. Balanced Scorecard was also used to measure corporate results. Questions 1. What is Balanced Scorecard? 2. What was the need for implementing Balanced Scorecard? 3. What was the benefit of Balanced Scorecard? Answers 1. The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. 2. RAL was facing issues with its financial performance company was still under the loss due to high manufacturing cost and the price was not priced competitively. These led to job cuts, selling unprofitable business and closing down many units. RAL was finding it difficult to meet the growing competition.

3. The Balanced Scorecard enabled the employees to understand the existing policies and the future plans of RAL. The management and all the division identified the factors that were important to create value. Balanced Scorecard was also used to measure corporate results.

Case 4 Moonlight automobiles ltd. Primary is in the field of manufacture of two wheelers. They manufacture and market mopeds. These are available in the brand names 'arrow' and 'double arrow' where 'arrow' is their traditional product and 'double arrow' is the improved version. The company was started about 20 yrs ago. Their product 'arrow' enjoys a reasonably good reputation and they were comfortable in the market. However, with the entry of the new generation of fuel-efficient mopeds the company started losing its market. They immediately started developing the improved 'double arrow' but by the time they came out with this new model the competitors had already strengthened their position in the market. The 'arrow' model was still acceptable by a segment of the market as it was the cheapest vehicle. 'Double arrow' is a new generation vehicle. It was costlier than Jet but its performance was much superior. It is compared favourably with the competitors' products; however it was yet to gain a foot hold in the market.

The company had to refurbish the marketing activities in order to get back their market share. They employed young sales engineers to launch a strong sales drive. Mr. Ramesh Tiwari, Btech and a diploma holder in marketing got selected and was put on the job. Mr. Ramesh Tiwari started well in his new job. He was given a territory to the prospective customers and to book the orders. The company had introduced a new financial assistance scheme. Under this scheme, buyers were given easy loans. It was particularly advantageous for group booking by employees working in an organization. Mr. Ramesh Tiwari was able to people in different organizations, arrange for group bookings and facilitate the loans. His performance was good in the first year and in the second year of his service.

The company had its own system of rewarding those whose performance happened to be good. They usually arranged a paid holiday trip for the good performer along with his wife. Mr. Ramesh Tiwari was accordingly informed by the marketing manager to go to Chennai with his wife on company expenses. Mr. Ramesh Tiwari asked him as to how much it would cost to the company. The marketing manager calculated and told him that it would cost about 8000/-. He quickly asked him whether he could get that 8000/- in cash instead of the trip as he had better plans. The marketing manager countered this saying that it might not be possible to do so. It was not the trading of the company, however he would check with the personnel manager.

After a couple of days, Mr. Tiwari was informed that it would not be possible to give him a cash reward. Mr. Tiwari grudgingly went for the trip and returned. On his return, he was heard complaining to one of his colleagues his little daughter was also along with him. The marketing manager and the personnel manager thought he was a bit too fussy about the money and some of his colleagues also thought so. During the subsequent days Mr Ramesh Tiwari's performance was not all that satisfactory which showed his lukewarm attitude towards his job and the subordinates.1

Questions. 1. Where did the things go wrong? 2. Was Mr. Ramesh Tiwari too much money minded? 3. Was the company too bureaucratic? 4. Did the personnel manager handle the issue properly? 5. What is your recommendation to avoid such situations in future? Answer 1. The company’s reward system went wrong because as per the company’s rule arranged for paid holiday only the employee and their spouse and it was not applicable for the employees children. So therefore the employees as to shell out money from their own pocket if they had to take their kids along with them. 2. No I don’t think Mr. Ramesh Tiwari was money minded. He had asked for cash instead of the trip because the company only sponsored trip for this wife and not his little daughter. 3. Yes the company was bureaucratic because they didn’t wanted do consider the options of their employees nor asked about the reason as to why Mr. Ramesh Tiwari was asking cash instead of trip. 4. According to me the personal manager had not handled the situation. When they heard complaining to one of his colleagues his little daughter was also along with him. They should have called him as sorted out the issue. Should have asked Ramesh what made him so fussy about the trip.

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5. I would suggest the company to pay a monetary benefit as reward than the holiday trip. If the company still wants to follow their existing system then the company need to extended to the employees children’s too.

Case 5 Mrs Rena Zen had ordered two ladies top on ZIP UP and leading online clothes retailer. When the product arrived Mrs Zen felt the tops were not looking good on her and had told her daughter that she intended to return it. Unfortunately before she could return it Mrs Zen ed away in a fatal accident. When her daughter was clearing her mom’s room, found the tops her mom wanted to return. She noticed that the date of retaining as expired. She took a chance and called the customer care of ZIP UP and informed the situation. Next day ZIP UP arranged for a personnel to collect the package and also sent her flowers. This act won the hearts of many customers. The company generated a 5 mn customers and with an astonishing 80% are repeated customers. In an interview to a leading newspaper the CEO of the ZIP UP Mr Sam Rai, that customer- service oriented culture was the first priority to ZIP UP. Mr Rai said that he understood the importance of working on what is truly ionate about. And it is important to for the company to have a strong organisation culture and preserver them. Under Mr Rai, ZIP UP focused on delivering superior customer service over marketing. For the company, customer service was an immense branding opportunity, a unique way to speak directly to your customers. Mr Rai explained “feel that it is very easy to purchase from Zappos. Tony explained, “Our philosophy at Zappos is to WOW with service and experience, not with anything that relates directly to monetary compensation.” ZIP UP concentrated on the providing wide range of product and speed delivery. To remove the hassle of online shopping, Zappos extended their return policy from 30, 60 and 90 days to 365 days. Its fast and accurate free overnight shipping policy ensures that customers who order products as late as midnight also receive their merchandise on the next day. The shipping is free, both ways. Question 1. What is organisational culture? 2. Give your view on why the customer preferred to shop on ZIP UP 3. Explain the organisation culture of ZIP UP Answer 1. Organizational culture is a system of shared assumptions, values, and beliefs, which governs how people behave in organizations. These shared values have a strong influence on the people in the organization and dictate how they dress, act, and perform their jobs. 2. According to me the reason for customers to returns to ZIP UP was it concentrated on the providing wide range of product and speed delivery. To remove the hassle of online shopping, Zappos extended their return policy from 30, 60 and 90 days to 365 days. Its

fast and accurate free overnight shipping policy ensures that customers who order products as late as midnight also receive their merchandise on the next day. The shipping is free, both ways. 3. ZIP UP focused on delivering superior customer service over marketing. For the company, customer service was an immense branding opportunity, a unique way to speak directly to your customers.