Vitality Health Enterprises
Vitality Health Enterprises, Inc. 1
Nova Southeastern University
H. Wayne Huizenga School of Business & Entrepreneurship
Assignment for
(Course number and title)
Course:
Submitted to:
Dr. Eleanor Marschke
Submitted by:
Lashea Reaves N01388313 11354 Carabelee Circle Orlando FL 32825 5615960951 HRM 5365 Talent Management
Date of Submission: October 21, 2012
Title of Assignment: Case #1 Performance Management at Vitality Health Enterprises, Inc. by
Michael Beer, John B. Bingham (2012) CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted …show more content…
directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student's Signature:
Instructor's Grade on Assignment:
Instructor's Comments:
Section One
Introduction
Vitality Health Enterprises, Inc. 2
The importance of an employee that contributes substantial work to an organization is a valuable commodity. If those results are incalculable, then the employee’s work becomes futile to the company’s objectives’. Performance management is used to eliminate that issue of non measurable results and provides a “systematic process aimed at helping achieve an organization’s mission and strategic goals” (Castellano, Young & Roehm, 2004). The main objective of performance management and employee evaluations are to open communication channels between the employee and employer while monitoring the “desired outcomes or outputs needed from each employee’s job and defines how they will be measured” (Itnner & Larcker,
2003); particularly increasing value to the organization.
What makes this a unique situation is the variety of diverse companies and the products and services provided. There isn’t a “one size fits all” performance management system for corporations. For that reason, flaws and obscured variables will always exist. The question is how to minimize the error ratio on important metrics that yield results, and if errors have to be present, ensuring it is related to goals with a smaller price. An important miscalculation is the effects to the company and how it stands to lose time, financial gain, and potential increases in market shares.
In the case study of Performance Management at Vitality Health Enterprises, Inc., we will review the state of the company’s issues with measuring quality employee performance and the steps taking to try and rectify the looming problems. The case study will uncover why the relationship between an effective performance management metric is required and how it impacts employee turnover.
Vitality Health Enterprises, Inc. 3
Identifying the Problem and Summary of the Case
The case study provided by the Harvard Business School depicts the predicament of
James Hoffman, the newly appointed Senior Vice President of Human Resources, and his task with revamping the company’s current performance management system. The company is experiencing the success of steadfast quarterly results, and may slump into the path of complacent growth. If the perceived pattern continues, Vitality Health Enterprises could jeopardize their gained market share and allow competitors to takeover and become the leaders in health and personal care products. As it stands now, a realistic and measurable system is not available to capture performance goals executed “by nonsales and nonexecutive employees from across the company” (Beer & Bingham, 2012). As a result, Vitality has been faced with a gradual increase in turnover among the company's most profitable research scientists. The direct correlation is linked to the performance management system and the lack of resources to accurately create a uniformed rating system. Valuable research scientists that contribute to the bottom line of research and development do not feel appreciated or recognized by the organization. The company tried different attempts to rectify the problem and save top performs while holding less performers accountable towards performance goals; the organization instituted a forced bell curve of performance rankings, but escalated the initial questionhow to keep quality producing employees. “Hoffman and his performance management evaluation team must assess the strategic usefulness of the new system and present their findings and recommendations to the Board” (Beer, 2012).
Vitality Health Enterprises was not always faced with this quandary. The company began by providing a solution for the wife of Hikaru (Fred) Kikuchi finding quality skincare in the
Vitality Health Enterprises, Inc. 4
United States as compared to Japan’s products. Having an entrepreneurial mindset, Kikuchi seized the opportunity and Vitality was founded in 1987. Through several creative performance strategies and adapting to turbulent marketing conditions, the young company was able to thrive and acquire relevant companies which lead to the transition and name change to Vitality Health
Enterprises. The 2008 global economic crisis led to abrupt changes and a new face for the company. Beth Williams became the newly appointed CEO and bought a new style of management and control variables to the company (Beer, 2012).
As change was put into action, so was the need to reevaluate the operational inefficiencies of maximizing performance qualities of all employees. Certainly it is easier to define performance metrics for sales orientated positions as it is linked to substantial revenue produced. The real question lies with positions that influence sales, but does not have a direct connection with performance evaluations and ensuring quality standards are met. Thus, how can the company find equal performance measures and shared wallets amongst nonsales employees and retain top performers (Beer, 2012)?
Vitality Health Enterprises, Inc. 5
Section Two
The Examination and Solution for Vitality Health Enterprises Vitality’s Performance Management System has been effective with identifying problems within specific divisions of the company. What is interesting is the company never mentioned what the benchmark is contingent upon. When top management sets targets, these metrics represent what management, wants the specifications or results to be. This targetsetting process is predicated on management’s determination to align employee behavior and motivation to achieve some predetermined result or best practice. “Unfortunately, most of these same organizations’ design and use performance measurement systems that treat component units as independent of each other. Such attempts not only ignore the system view of an organization but also are counterproductive. (Castellano, Young & Roehm, 2004).
Regardless of the industry or company, few individuals will not carry their required workload for performance standards; a deeper dive will focus on the reasons why employees do not meet benchmark requirements. Several studies have included top reasons for poor performances are: gap in skills, lack of motivation/interest, external life factors, design of an employee's job, and proper expectations are not set at the beginning (Er, S. R., Walia, et. al,
2011). In order for Vitality to manage those who ranked consistently at the bottom of the distribution curve, the company should find the connection to the top reasons given. “If any of the obstacles relate to a skill gap, skills can be developed through training plans or identifying additional resources available for the employee to overcome the difficulties and become more successful” (Er, S. R., Walia, et. al, 2011). By identifying the true reason for poor performance,
Vitality Health Enterprises, Inc. 6
Vitality Health can make provisions for an action planning and properly coach the associate if applicable. Companies automatically make the assumption poor performance is linked to being lazy. Thus overlooked employees will continuously repeat poor performance choices as coaching
& development were never presented as an option.
To encourage superior performance qualities, it is imperative for Vitality Health Enterprise,
Inc. to make changes to the overall Performance Management Evaluation System and the quantitative structure to retain top performing talent. The top suggestions for implementing change and the expected outcome are:
● Remove the forced distribution curve and institute a pay for performance matrix. The normal grading system promotes employee turnover and does not accurately measure the overall performance system. Each individual will be award on their individual contributions to the division (Based upon predetermined career objectives), and have the potential to receive a hyperbonus if the overall division meets scorecard for all performance matrix.
Expected Outcome:
1. If the entire division exceeds performance goals, then everyone will benefit as the organization has. If the overall division or team doesn’t meet expectation, top contributors will still receive individual bonuses and recognition.
2. Increase overall morale and engagement for the job duties and functions.
Retain top performers and shows appreciation towards their involvement.
● 90 days prior to drastic revisions within the evaluation system, mandatory online training
Vitality Health Enterprises, Inc. 7
is required for all managers, and recommended for employees with time vested of six months and more.
Expected Outcome:
3. The company’s culture and unconstructive outlook towards the performance matrix should decrease as awareness amongst all employees increase.
4. Provides an acceptable time allotment to digest the change and written examples on how to articulate written performance assessment for employees.
● Change the yearly evaluations to quarterly assessments. In conjunction with manager’s performance assessments, employees are required to complete self evaluations for each quarterly review.
Expected Outcome:
1. Allows employees to have a weighted judgment on their career success and future paths with the company.
2. Decrease employee surprises with overall evaluations and resentment from offended employees.
● All new hires in probation/orientation phase will receive a comprehensive overview of career objectives, expectations, and benchmark goals as it relates to quarterly reviews.
Expected Outcome:
1. This will ensure all expectations are known and met prior to beginning a fully vested contributing employee.
2. The company’s culture and unconstructive outlook towards the performance
Vitality Health Enterprises, Inc. 8
matrix should decrease as awareness increase.
Conclusion
Hoffman is expected to give recommendations and a list of improvements to the board of directors regarding the future of performance management for the company. Vitality Health
Enterprises missed the mark to identify employees with higher performance skills vs. the mediocre performers. With the current system, the company is forced to continuously degrade efficient employees with a forced distribution curve. “The proper role of measurements should be seen in the context of helping employees connect with the overall aim of the organization.
Management must gather and analyze information that will help employees become better contributors to the firm’s purpose. In too many organizations just the reverse happens: Measures define what is meaningful instead of letting the work itself define the measures” (Castellano,
Young & Roehm, 2004). By altering the current system with suggestions made in the case …show more content…
study,
Vitality Health Enterprises with have an opportunity to maintain their current market share, retain top talent, and coach mediocre performers to excel with the newly defined divisions
objectives.
As the new SVP of HR, Hoffman would restore the hunger to exceed its position as the industry leader for innovation.
Vitality Health Enterprises, Inc. 9
References
Beer, M., & Bingham, J. (2012). Performance Management at Vitality Health Enterprises, Inc.
Harvard Business School, Case 913(501), 14. Castellano, J., Young, S., & Roehm, H. (2004). The seven fatal flaws of performance measurement. The CPA Journal, Retrieved from http://www.nysscpa.org/cpajournal/2004/604/essentials/p32.htm Er, S. R., Walia, N., & Parveen, K. G. (2011). Developing an integrated information system to enhance employee performance. Global Business and Management Research, 3(1), 720.
Retrieved from http://search.proquest.com.ezproxylocal.library.nova.edu/docview/900995350?accountid =6579 Itnner, C., & Larcker, D. (2003). Coming up short on nonfinancial performance measurements.
Harvard
Business
Review,
10.
Retrieved
from http://hbr.org/2003/11/comingupshortonnonfinancialperformancemeasurement/ar/1 Vitality Health Enterprises, Inc.
10
Grade Rubric for Case Study States Problem Effectively and identifies the crucial
Points 3
3
problem of the case
Analyzes the Situation of the Case and has insightful into
3
3
3
2
Effectively Proposes Changes in Policies and Procedures
3
3
Writes at the Graduate Level, APA and references
3
3
TOTAL
15
14
key factors of the case
Answers effectively questions and solutions that are specifically related to the issue of the case
Grade Rubric for Case Study
Additional Notes:
Perfect paper: 14 points
Vitality Health Enterprises, Inc. 11
Your case analysis was very thorough and the time you spent researching really proved to be an excellent results orientated paper. Your summary of the case was clear and concise and I was able to quickly identify the problem presented. You clearly defined significant advantages and disadvantages in the set up of the PMET. You carefully and clearly stated the changes in which you would make if you were improving the PMS. I also enjoyed reading your suggestions for change and evaluation of
PMET2. Your point-of-view with regards to the bell-shaped grading distribution was really not carefully thought out or explained in detail, but explaining how Vitality should manage those ranked consistently at the bottom of the distribution, as well as explaining effectiveness of Vitality’s
Performance Management System was there and good. Your consistent writing skills are what have earned you a very positive grade for this case study.
There were no guidelines in the syllabus referring to how many references but in my opinion I would like to see for a ten page case analysis at least five quality reference’s. Your APA was good!!
You really only had 7 pages of main text, when the Syllabus stated 10 pages of main text.
Nova Southeastern University
H. Wayne Huizenga School of Business & Entrepreneurship
Assignment for
(Course number and title)
Course:
Submitted to:
Dr. Eleanor Marschke
Submitted by:
Lashea Reaves N01388313 11354 Carabelee Circle Orlando FL 32825 5615960951 HRM 5365 Talent Management
Date of Submission: October 21, 2012
Title of Assignment: Case #1 Performance Management at Vitality Health Enterprises, Inc. by
Michael Beer, John B. Bingham (2012) CERTIFICATION OF AUTHORSHIP: I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledged and disclosed in the paper. I have also cited any sources from which I used data, ideas or words, either quoted …show more content…
directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.
Student's Signature:
Instructor's Grade on Assignment:
Instructor's Comments:
Section One
Introduction
Vitality Health Enterprises, Inc. 2
The importance of an employee that contributes substantial work to an organization is a valuable commodity. If those results are incalculable, then the employee’s work becomes futile to the company’s objectives’. Performance management is used to eliminate that issue of non measurable results and provides a “systematic process aimed at helping achieve an organization’s mission and strategic goals” (Castellano, Young & Roehm, 2004). The main objective of performance management and employee evaluations are to open communication channels between the employee and employer while monitoring the “desired outcomes or outputs needed from each employee’s job and defines how they will be measured” (Itnner & Larcker,
2003); particularly increasing value to the organization.
What makes this a unique situation is the variety of diverse companies and the products and services provided. There isn’t a “one size fits all” performance management system for corporations. For that reason, flaws and obscured variables will always exist. The question is how to minimize the error ratio on important metrics that yield results, and if errors have to be present, ensuring it is related to goals with a smaller price. An important miscalculation is the effects to the company and how it stands to lose time, financial gain, and potential increases in market shares.
In the case study of Performance Management at Vitality Health Enterprises, Inc., we will review the state of the company’s issues with measuring quality employee performance and the steps taking to try and rectify the looming problems. The case study will uncover why the relationship between an effective performance management metric is required and how it impacts employee turnover.
Vitality Health Enterprises, Inc. 3
Identifying the Problem and Summary of the Case
The case study provided by the Harvard Business School depicts the predicament of
James Hoffman, the newly appointed Senior Vice President of Human Resources, and his task with revamping the company’s current performance management system. The company is experiencing the success of steadfast quarterly results, and may slump into the path of complacent growth. If the perceived pattern continues, Vitality Health Enterprises could jeopardize their gained market share and allow competitors to takeover and become the leaders in health and personal care products. As it stands now, a realistic and measurable system is not available to capture performance goals executed “by nonsales and nonexecutive employees from across the company” (Beer & Bingham, 2012). As a result, Vitality has been faced with a gradual increase in turnover among the company's most profitable research scientists. The direct correlation is linked to the performance management system and the lack of resources to accurately create a uniformed rating system. Valuable research scientists that contribute to the bottom line of research and development do not feel appreciated or recognized by the organization. The company tried different attempts to rectify the problem and save top performs while holding less performers accountable towards performance goals; the organization instituted a forced bell curve of performance rankings, but escalated the initial questionhow to keep quality producing employees. “Hoffman and his performance management evaluation team must assess the strategic usefulness of the new system and present their findings and recommendations to the Board” (Beer, 2012).
Vitality Health Enterprises was not always faced with this quandary. The company began by providing a solution for the wife of Hikaru (Fred) Kikuchi finding quality skincare in the
Vitality Health Enterprises, Inc. 4
United States as compared to Japan’s products. Having an entrepreneurial mindset, Kikuchi seized the opportunity and Vitality was founded in 1987. Through several creative performance strategies and adapting to turbulent marketing conditions, the young company was able to thrive and acquire relevant companies which lead to the transition and name change to Vitality Health
Enterprises. The 2008 global economic crisis led to abrupt changes and a new face for the company. Beth Williams became the newly appointed CEO and bought a new style of management and control variables to the company (Beer, 2012).
As change was put into action, so was the need to reevaluate the operational inefficiencies of maximizing performance qualities of all employees. Certainly it is easier to define performance metrics for sales orientated positions as it is linked to substantial revenue produced. The real question lies with positions that influence sales, but does not have a direct connection with performance evaluations and ensuring quality standards are met. Thus, how can the company find equal performance measures and shared wallets amongst nonsales employees and retain top performers (Beer, 2012)?
Vitality Health Enterprises, Inc. 5
Section Two
The Examination and Solution for Vitality Health Enterprises Vitality’s Performance Management System has been effective with identifying problems within specific divisions of the company. What is interesting is the company never mentioned what the benchmark is contingent upon. When top management sets targets, these metrics represent what management, wants the specifications or results to be. This targetsetting process is predicated on management’s determination to align employee behavior and motivation to achieve some predetermined result or best practice. “Unfortunately, most of these same organizations’ design and use performance measurement systems that treat component units as independent of each other. Such attempts not only ignore the system view of an organization but also are counterproductive. (Castellano, Young & Roehm, 2004).
Regardless of the industry or company, few individuals will not carry their required workload for performance standards; a deeper dive will focus on the reasons why employees do not meet benchmark requirements. Several studies have included top reasons for poor performances are: gap in skills, lack of motivation/interest, external life factors, design of an employee's job, and proper expectations are not set at the beginning (Er, S. R., Walia, et. al,
2011). In order for Vitality to manage those who ranked consistently at the bottom of the distribution curve, the company should find the connection to the top reasons given. “If any of the obstacles relate to a skill gap, skills can be developed through training plans or identifying additional resources available for the employee to overcome the difficulties and become more successful” (Er, S. R., Walia, et. al, 2011). By identifying the true reason for poor performance,
Vitality Health Enterprises, Inc. 6
Vitality Health can make provisions for an action planning and properly coach the associate if applicable. Companies automatically make the assumption poor performance is linked to being lazy. Thus overlooked employees will continuously repeat poor performance choices as coaching
& development were never presented as an option.
To encourage superior performance qualities, it is imperative for Vitality Health Enterprise,
Inc. to make changes to the overall Performance Management Evaluation System and the quantitative structure to retain top performing talent. The top suggestions for implementing change and the expected outcome are:
● Remove the forced distribution curve and institute a pay for performance matrix. The normal grading system promotes employee turnover and does not accurately measure the overall performance system. Each individual will be award on their individual contributions to the division (Based upon predetermined career objectives), and have the potential to receive a hyperbonus if the overall division meets scorecard for all performance matrix.
Expected Outcome:
1. If the entire division exceeds performance goals, then everyone will benefit as the organization has. If the overall division or team doesn’t meet expectation, top contributors will still receive individual bonuses and recognition.
2. Increase overall morale and engagement for the job duties and functions.
Retain top performers and shows appreciation towards their involvement.
● 90 days prior to drastic revisions within the evaluation system, mandatory online training
Vitality Health Enterprises, Inc. 7
is required for all managers, and recommended for employees with time vested of six months and more.
Expected Outcome:
3. The company’s culture and unconstructive outlook towards the performance matrix should decrease as awareness amongst all employees increase.
4. Provides an acceptable time allotment to digest the change and written examples on how to articulate written performance assessment for employees.
● Change the yearly evaluations to quarterly assessments. In conjunction with manager’s performance assessments, employees are required to complete self evaluations for each quarterly review.
Expected Outcome:
1. Allows employees to have a weighted judgment on their career success and future paths with the company.
2. Decrease employee surprises with overall evaluations and resentment from offended employees.
● All new hires in probation/orientation phase will receive a comprehensive overview of career objectives, expectations, and benchmark goals as it relates to quarterly reviews.
Expected Outcome:
1. This will ensure all expectations are known and met prior to beginning a fully vested contributing employee.
2. The company’s culture and unconstructive outlook towards the performance
Vitality Health Enterprises, Inc. 8
matrix should decrease as awareness increase.
Conclusion
Hoffman is expected to give recommendations and a list of improvements to the board of directors regarding the future of performance management for the company. Vitality Health
Enterprises missed the mark to identify employees with higher performance skills vs. the mediocre performers. With the current system, the company is forced to continuously degrade efficient employees with a forced distribution curve. “The proper role of measurements should be seen in the context of helping employees connect with the overall aim of the organization.
Management must gather and analyze information that will help employees become better contributors to the firm’s purpose. In too many organizations just the reverse happens: Measures define what is meaningful instead of letting the work itself define the measures” (Castellano,
Young & Roehm, 2004). By altering the current system with suggestions made in the case …show more content…
study,
Vitality Health Enterprises with have an opportunity to maintain their current market share, retain top talent, and coach mediocre performers to excel with the newly defined divisions
objectives.
As the new SVP of HR, Hoffman would restore the hunger to exceed its position as the industry leader for innovation.
Vitality Health Enterprises, Inc. 9
References
Beer, M., & Bingham, J. (2012). Performance Management at Vitality Health Enterprises, Inc.
Harvard Business School, Case 913(501), 14. Castellano, J., Young, S., & Roehm, H. (2004). The seven fatal flaws of performance measurement. The CPA Journal, Retrieved from http://www.nysscpa.org/cpajournal/2004/604/essentials/p32.htm Er, S. R., Walia, N., & Parveen, K. G. (2011). Developing an integrated information system to enhance employee performance. Global Business and Management Research, 3(1), 720.
Retrieved from http://search.proquest.com.ezproxylocal.library.nova.edu/docview/900995350?accountid =6579 Itnner, C., & Larcker, D. (2003). Coming up short on nonfinancial performance measurements.
Harvard
Business
Review,
10.
Retrieved
from http://hbr.org/2003/11/comingupshortonnonfinancialperformancemeasurement/ar/1 Vitality Health Enterprises, Inc.
10
Grade Rubric for Case Study States Problem Effectively and identifies the crucial
Points 3
3
problem of the case
Analyzes the Situation of the Case and has insightful into
3
3
3
2
Effectively Proposes Changes in Policies and Procedures
3
3
Writes at the Graduate Level, APA and references
3
3
TOTAL
15
14
key factors of the case
Answers effectively questions and solutions that are specifically related to the issue of the case
Grade Rubric for Case Study
Additional Notes:
Perfect paper: 14 points
Vitality Health Enterprises, Inc. 11
Your case analysis was very thorough and the time you spent researching really proved to be an excellent results orientated paper. Your summary of the case was clear and concise and I was able to quickly identify the problem presented. You clearly defined significant advantages and disadvantages in the set up of the PMET. You carefully and clearly stated the changes in which you would make if you were improving the PMS. I also enjoyed reading your suggestions for change and evaluation of
PMET2. Your point-of-view with regards to the bell-shaped grading distribution was really not carefully thought out or explained in detail, but explaining how Vitality should manage those ranked consistently at the bottom of the distribution, as well as explaining effectiveness of Vitality’s
Performance Management System was there and good. Your consistent writing skills are what have earned you a very positive grade for this case study.
There were no guidelines in the syllabus referring to how many references but in my opinion I would like to see for a ten page case analysis at least five quality reference’s. Your APA was good!!
You really only had 7 pages of main text, when the Syllabus stated 10 pages of main text.