Case Analysis: Performance Management at Vitality Health Enterprises, Inc
Case Analysis
Performance Management at Vitality Health Enterprises, Inc
Situational Analysis:
Introduction:
Vitality Health Enterprises initially started its business as Vitality by importing small quantities of cosmetics from Japan. Initially it started marketing in its neighbourhood and to local organizations. Slowly it started expanding and in 1989 it changed its business model by establishing its own manufacturing facility in the US. Its business continued to grow into various markets as it leveraged its unique supplier connections and technological superiority. Its venture of acquiring HerbaPure Nutraceuticals helped it expand into a new domain of health care and Vitality became Vitality Health Enterprises.
It continued its growth by expanding into new geographies until 2008 when its growth began to stagnate. This led to the formation of its new business strategy where a committee was appointed to review the policies and methods of tracking the performance goals of all non-sales and non-executive employees of the company.
Drawbacks of previous PMS:
PMS scale had 13 different levels of ratings. This scale posed a problem as managers avoided either the pain of evaluating or offending their sub ordinates by giving average rating of ‘B’ or ‘C’ to most of the employees. They avoided giving ‘A’ even to the top performers with a fear of upsetting the spirit of teamwork among others. Therefore the top performers lacked motivation to continue performing better as they received similar kind of merit based incentives and rewards as their less productive co-workers.
Also there were flaws in the current methods used to measure performance. The compa-ratio takes into account the number of years an employee has worked with the company. Hence the tenure brings them with high incentives even though their performance wasn’t up to the mark. For example an employee with larger work experience at Vitality would be paid more when compared to other employee who had
Performance Management at Vitality Health Enterprises, Inc
Situational Analysis:
Introduction:
Vitality Health Enterprises initially started its business as Vitality by importing small quantities of cosmetics from Japan. Initially it started marketing in its neighbourhood and to local organizations. Slowly it started expanding and in 1989 it changed its business model by establishing its own manufacturing facility in the US. Its business continued to grow into various markets as it leveraged its unique supplier connections and technological superiority. Its venture of acquiring HerbaPure Nutraceuticals helped it expand into a new domain of health care and Vitality became Vitality Health Enterprises.
It continued its growth by expanding into new geographies until 2008 when its growth began to stagnate. This led to the formation of its new business strategy where a committee was appointed to review the policies and methods of tracking the performance goals of all non-sales and non-executive employees of the company.
Drawbacks of previous PMS:
PMS scale had 13 different levels of ratings. This scale posed a problem as managers avoided either the pain of evaluating or offending their sub ordinates by giving average rating of ‘B’ or ‘C’ to most of the employees. They avoided giving ‘A’ even to the top performers with a fear of upsetting the spirit of teamwork among others. Therefore the top performers lacked motivation to continue performing better as they received similar kind of merit based incentives and rewards as their less productive co-workers.
Also there were flaws in the current methods used to measure performance. The compa-ratio takes into account the number of years an employee has worked with the company. Hence the tenure brings them with high incentives even though their performance wasn’t up to the mark. For example an employee with larger work experience at Vitality would be paid more when compared to other employee who had