Reference no: EM133134609

Case Study: Performance Management at Fashion Star

Fashion Star is an Australian chain of fashion stores, selling clothes for women, men and children. The company is family-owned and prides itself on traditional values and excellence in service. However, sales have been declining over the past year and there has been a high turnover of staff. The owner and CEO of the business, Mary, is concerned that her business won't survive if things don't change and have hired you as an HR consultant, to give her advice. 

You discover very quickly that there are many weaknesses with the performance management system at Fashion Star. After speaking to several store managers, you find that both senior and junior staff are unclear of their roles and responsibilities. Staff were aware that traditional service was expected, as Fashion Star marketed themselves with this tagline, but staff were not sure what "traditional service" meant in terms of their behaviour. There was a simple rating system at Fashion Star, and in the annual performance review staff were rated and ranked on "Excellence" according to dollar sales (calculated as an average of $ sales/hours worked). However, there was no easy way to track their sales and so it was not until the end of the year that staff knew how they were performing. This ranking system also caused a lot of competition between staff, as sales members would race to get to the customer first. In many stores, senior staff were given priority to serve customers while junior staff were expected to do cleaning and tidying, thereby missing out on sales. 

Staff at all levels complained to you that they had few informal opportunities to discuss their performance and only one formal review at the end of the year where they were presented with their bonus based on their ranking in relation to others across all stores. You also discover that there is no formal training provided to staff if they needed or wanted to improve.

Question: Now that Mary understands the problems with her performance management system, she is keen to implement an effective performance management system at Fashion Star. What should be done to improve the performance management system at Fashion Star.