Case Study Assignment on VP of Human Resources for a Fortune 100 Company
Imagine you are the VP of human
resources for a fortune 100 company. You have spent your entire career
attempting to enhance the workplace for employees to support their productive
work in the organization. While you understand that bottom-line decisions often
dominate many of the matters you have to address, you have worked hard to
ensure that employees were treated with respect and dignity in all interactions
that affected them. You aligned the hiring process to serve the strategic needs
of the organization, as well as implemented an effective performance management
system. You truly believe in the progress you have made in helping the
organization achieve its goals. You simply couldn't imagine doing things
differently. However, a concern that the performance management process is
becoming less effective because managers are inflating employee ratings has led
15 percent of all large organizations to adjust their performance management
process to what is frequently called "rank and yank."
Under such a system, managers are
evaluated as a 1, 2, 3 or 4, with 1 being the highest rating and 4 the lowest.
In many cases, managers are required to give a 4 rating to the lowest 10 percent
of employees each year. Those individuals receiving a rating of 4 for two
consecutive years are often let go from the organization. The intent behind
this system is that throughout the two-year process, evaluators are to
frequently meet with the four employees, counsel them, and provide necessary
development opportunities. Employees in an organization that employ such a
performance management system often view this process as unbearable. They view
the performance management process as punitive, one in which the organization
is attempting to rid itself of higher-paid older workers. In at least one case,
Ford Motor Company employees have filed a lawsuit to stop this practice - and
prevailed. Ford removed the punitive nature of its evaluation system-and focused
it more on counseling and performance improvement of the lowest-rated employees
rather than elimination from the organization.
What long-term effect does a
performance management system that focuses on rank and yank have on the
organization?
Only time will tell.
Questions:
- 1What type of evaluation process would you say is being used in this case? Describe the elements to support your position.
- What effect, if any, do you believe the rank and yank evaluation systems have on managers? Do you see these effects as positive or negative? Defend your position.
- What role does such a system have in distorting performance appraisals?
