Reference no: EM133397301

Short-Case-situation. Explain as comprehensively as possible- provide an introduction, body, and conclusion for each question. Avoid the use of bullets or outline format. Attempt all the questions below.

Creativity Inc. is a worldwide leader in hardware, software, and services essential to computer networking. Until recently, Creativity Inc. used more than 45 different systems to measure performance within the company, many employees did not receive a review, fewer than 5% of all employees received the lowest category of rating, and there was no recognition program in place to reward high achievers. Overall, it was recognized that performance problems were not being addressed, and tough pressure from competitors was increasing the costs of managing human performance ineffectively. Creativity Inc. wanted to improve its ability to meet its organizational goals and realized that one way of doing this would be to ensure that they were linked to each employee's goals. Given this situation, Creativity Inc.'s CEO announced that he wanted to implement a new performance management system based on the rule of forced distribution, in which a set percentage of employees were classified in each of several categories (e.g., a rating of 1 to the top 20% of performers; a rating of 2 to the middle 70% of performers; and a rating of 3 to the bottom 10% of performers). Employees rated 1 get the highest salary increases and bonuses, those rated 2 receive average to high salary increases, and bonuses, while employees rated 3 do not get salary increases and bonuses. They receive an improvement plan with new goals, if not achieved they leave the company.

A global cross-divisional HR team was created to design and implement the new system. The desired outcomes of the new system included raising the performance level of all employees, identifying and retaining top talent, and identifying low performers and improving their performance. Creativity Inc. also wanted the performance expectations for all employees to be clear. Before implementing the program, the HR team received the support of senior leadership by communicating that the performance management system was the future of Creativity Inc. and by encouraging all senior leaders to ensure that those reporting directly to them understood the process and accepted it. They also encouraged senior leaders to use the system with all of their direct subordinates and to demand and utilize output from the new system. Next, the HR team encouraged the senior leaders to stop the development and use of any other performance management system and explained the need for standardization of performance management across all divisions. Finally, the team asked senior leaders to promote the new program by involving employees in the training of talent management and by assessing any needs in their divisions that would not be addressed by the new system. Creativity Inc.'s global performance management cycle consisted of the following process: 1. Goal cascading and team building, 2. Performance planning, 3. Development planning, 4. Ongoing discussions and updates between managers and employees, 5. Annual performance summary.

Training resources were made available for managers and employees, including access to all necessary forms. Today, part of the training associated with the performance management system revolves around the idea that the development planning phase of the system is the joint year-round responsibility of managers and employees. Managers are responsible for scheduling meetings, guiding employees in preparing for meetings, and finalizing all development plans. Employees are responsible for documenting the developmental plans. Both managers and employees are responsible for preparing for the meeting, filling out the development planning preparation forms, and attending the meeting. With forced distribution systems, there is a set number of employees that have to fall into set rating classifications. Looking to the future, Creativity Inc. plans to continue reinforcing the needed cultural change to support the new performance appraisal system. There is also a plan to monitor for and correct any unproductive practices and implement correcting policies and practices.

Questions

1. Critically analyze the case-situation and discuss the features of the system implemented at Creativity Inc., by comparing them with the ideal PM system characteristics. Identify and explain those that correspond to the ideal system as well as those that are missing. AND discuss which of the ideal characteristics we need additional information on to evaluate whether they are part of the system at Creativity Inc.

2. Based on your analysis, discuss the advantages and disadvantages that you anticipate from the implementation of the new system.