Reference no: EM132943509

Situation:

Network Solutions is a worldwide leader in hardware, software and services essential to computer networking. Until recently, various offices across the world used more than 20 different systems to measure employee performance. Furthermore, up to 15% of employees did not receive a review; only 2% 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 adequately addressed, and tough pressure from competitors was increasing the costs of managing human performance ineffectively. Network Solutions also realized that to improve its ability to meet its organizational goals it was necessary to link these to each employee's goals. Given this situation, Network Solutions' CEO announced that he wanted to implement a forced distribution performance management system 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). A global cross-divisional HR performance management team was put in place to design and implement the new system.

The first task for the performance management team was to build a business case for the new system by showing that if organizational strategy was carried down to team contributions and team contributions were translated into individual goals, then business goals would be met. Initially the program was rolled out as a year-round people management system that would raise the bar on performance management at Network Solutions by aligning individual performance objectives with organizational goals by focusing on the development of all employees. 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. Network Solutions also wanted the performance expectations for all employees to be clear. Before implementing the program, the performance management team received the support of the CEO who communicated that the performance management system was the future of Network Solutions. The CEO also encouraged all senior leaders to ensure that those reporting directly to them understood the process and also accepted it. In addition, the CEO encouraged senior leaders to use the system with all of their direct reports and ensure that the system was used throughout their respective divisions. The CEO also instructed 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 and global offices. Finally, the CEO asked senior leaders to promote the new program by communicating about it to employees and by assessing any needs in their divisions that would not be addressed by the new system. The Network Solutions global performance management cycle consisted of the following processes: Training resources were made available on Network Solutions' intranet for managers and employees, including access to all necessary forms. In addition to the training available on the intranet, conference calls took place before each phase of the program was begun. 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 on preparing for meetings, and finalizing all development.

1. Goal cascading and team building

2. Performance planning

3. Development planning

4. Work execution with support from managers and / or colleagues, where required

5. Ongoing discussions and updates between managers and employees

6. Annual performance review plans. Individual employees are responsible for documenting the development planning preparation forms and attending the meetings.

With forced distribution systems, there is a set number of employees that have to fall into set rating classifications. As noted, in the Network Solutions system, employees are given a rating of 1, 2 or 3. Individual ratings are determined by the execution of annual objectives and job requirements as well as by a comparison rating of others at a similar level at Network Solutions. For employees receiving a 3, the lowest rating, a performance improvement plan is discussed and agreed to by the manager and respective employee. Employees who achieve a rating of a 3 do not qualify for salary increases or bonuses. Employees with a rating of 2 receive average salary increases as well as average bonuses. Employees receiving the highest rating of 1 receive high salary increases and large bonuses. These employees are treated as "high potential" employees and are given extra development opportunities by their managers. The company also makes significant efforts to retain all individuals who receive a rating of 1. Looking at the future, Network Solutions plans to continue reinforcing the needed cultural change to support forced distribution ratings. The performance management team continues to educate employees about the system to ensure that they understand that Network Solutions still rewards good performance; they are just measuring it in a different way than in the past. There is also a plan to monitor for and correct any unproductive practices and implement correcting policies and practices.

To answer this, Network Solutions plans on continued checks with all stakeholders to ensure that the performance management system is serving its intended purpose.

The appeal of locally-produced or regional craft beers during the early-2010s had given a dramatic boost to the long-mature beer industry. Craft breweries, which by definition sold fewer than 6 million barrels (bbls) per year, had expanded rapidly with the deregulation of intrastate alcohol distribution and retail laws and a change in consumer preferences toward unique and high-quality beers. The growing popularity of craft beers had allowed the total beer industry in the United States to increase by 6.7 percent annually between 2011 and 2016 to reach $39.5 billion. The production of U.S. craft breweries had more than doubled from 11.5 million bbls per year to about 24.5 million bbls per year during that time. In addition, production by microbreweries, which produced less than 15,000 bbls per year, had almost tripled to 4 million bbls from 1.5 million bbls between 2011 and 2016. Much of this impressive industry growth had come at the expense of such well-known brands as Budweiser, Miller, Coors, and Bud Light, which experienced sluggish sales during the early-2010s because of a growing perception of mediocre taste.

This case is meant to provide the opportunity to explore competition within an established, yet growing market as found in craft beer. Many facets of competition and business may be found within, including expansion attributed to smaller, entrepreneurial brewers (referred to as nano- and micro- breweries) as well as acquisitions and consolidation by incumbent competitors. The case describes the market size both through production and segmentation. It also provides a brief overview as to the process of brewing beer. It should be noted that the case introduces production and brewing to illustrate how beer may be both mass produced, as well as highly differentiated-two aspects that resonate well when discussing strategic positioning. The case then discusses macro-environmental factors, specifically the legal environment and suppliers. Finally, the case closes with discussion of consolidation and profiles of competitors.

Questions provided:

1. What do you think is the overlap between Network solutions and an ideal system?

2. What could be the factors or features of the system implemented at Network Solutions correspond to what is described as ideal characteristics?

3. What could be the use of misleading information in this case study?