Syndicate 6 - Vitality Health Enterprise Case

Performance Management at
Vitality Health
Enterprise.Inc
Syndicate 6
Joseph Gunawan - 29121036

Mitranti Anindya Ayu - 29121020
Simon Erick - 29121289
Background Case
□ Vitality growth since it was founded until 1995.

□ In 1995, the company tried to reach international market, and targeting
markets around Pacific Rim including Taiwan, China, and Japan
□ By 2007, Company had around 1500 employees in global offices, and
5500 employees in HQ
□ In the first quarter of 2009, Vitality started a new business strategy.
Beth William create a new committee to review method and policies for
tracking the performance goals from all non sales and non executive
employees across the entire company
□ The Performance Management Evaluation Team studied the evaluation
and reward system for over the next 4 months
□ PMET discovered that Performance Management System presented
problems for the 2500 professional staff
2
Performance Management System Problems in 2009
Performance rating determine

13 different ratings levels
wage increases and rewards
This rating system abuse by managerial Employee felt undervalued financially.
and resulted a homogenous ratings Similar reward with the less productive
spread. It failed to sharply distinguish coworkers.
performers and non performers.
Point system for salary The pay policy line at about the
calculation and performance- 75th percentile
based raises The system focused on the pay stability
The base-level monthly salary that was of a flat salary and made little to no
modified upward along a pay policy line provision for bonuses or alternative
depending on the number of “job forms of compensation. The tenure
evaluation points” would inevitably result in a high salary,
regardless of the performance.
Employee who felt underappreciated
left for brighter opportunities.
3
Revitalizing the Performance System in 2009
Rolled our a new performance management and incentive system
Specific goals Same review cycle

Fifth rating category
Managers were instructed to develop To better measure collaborative efforts and
With fewer ranking categories, it would be specific goals with their individual to limit the effect of external factors on the
easier to determine which category each employees and use those goals as a relative rankings.
employee fit into secondary component in the performance
management process.
Clarify the ratings process Manager gets feedback Compensation adjusted
The Evaluation Team researched the core Managers were to be rated on their Incorporated a system of performance
competencies and key duties of the performance in meeting staffing needs, related short- and long-term cash and
different jobs and job families. Create their effectiveness in training, development equity bonuses. The goal was to incentivize
matrix by codifying the responsibilities and and employee relations, their clarity in top talent to stay in order to “vest” and
measures for each job class. communication, and their implementation receive payout on some of their bonus
of corporate initiatives compensation.
4
Review Performance Management System & Challenges in
2011
The employee surveys indicated that just over half of the affected employees preferred the new
system (54%) while nearly a third preferred the old system (31%) with the remainder indifferent
between the two systems (15%).
Forced distribution system was too Uniform rangkings

More difficult to discuss
performance with employee rigid
Managers avoided differentiating between
The yearly review process was tied so The system lead to a constant allotment of their employees and left the process up to
closely with merit increases. With the Top Achiever rankings to give to their people who were less familiar with the
added burden of compensation on the employees. Even a failing department individual situations of the employees.
table, managers felt employees were more would still have a number of Top Achiever
defensive and less open to coaching. ranking.
Employee only focus on their duty Automatically assign new employee Rotate the highest ranking
to Not Rated category
Some employees were less likely to Some managers did this to avoid the
perform duties outside their job Regardless of the actual performance of relatively unrewarded time and effort of
description because those responsibilities the new hire, managers tend to save the performing effective reviews, but some
weren’t part of their review and less likely higher rankings for their veteran did it simply to avoid angering their
to be rewarded employees. teams.
5
Analysis & recommendations
As the CEO, after the several times revision of As HR Leader,

Performance Management System indicated that □ Finding and analyze the root cause
the HR Leader couldn’t find and solve the root cause □ Recheck the relevancy of the company value,
problem. We suggest Williams to ask and demand adjust the company value if not align with
the next action plan, goals and timeline of the HR current the company current situation or
leader. Assess the possibility and give 2nd chance. goals
If the proposed plan didn’t make sense and align □ Ensure every division has an align KPIs with
with the company goals, the recommendation is the the company goals and values
CEO might have to look for a new HR Leader that □ Define goals on the Performance
have high skill in this area. Management
□ Try to differentiate approach for different
position
□ Find the best technique & strategy for
appraising performance

Syndicate 6 - Vitality Health Enterprise Case

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Syndicate 6 - Vitality Health Enterprise Case

Uploaded by

Copyright:

Available Formats

Performance Management at

Joseph Gunawan - 29121036

□ Vitality growth since it was founded until 1995.

Performance rating determine

Rolled our a new performance management and incentive system

Specific goals Same review cycle

Clarify the ratings process Manager gets feedback Compensation adjusted

Forced distribution system was too Uniform rangkings

As the CEO, after the several times revision of As HR Leader,

You might also like