Professional Documents
Culture Documents
Performance Management at
Vitality Health Enterprises, Inc.
1
Forced distribution
(Related to the Vitality Health case study)
2
Forced Distribution on a Bell-Shaped
Curve
3
Freehand Wage Curve
Hourly pay rate (USD/ hr)
Overlap between
ranges
Rate ranges
generally are divided
into a series of steps
that permit
employees to receive
increases up to the
maximum rate for the
range on the basis of
merit or seniority
5
Pay grades
Range Midpoint, Minimum, and Maximum
𝑹𝑹𝑹𝑹𝑹𝑹𝑹𝑹 𝒑𝒑𝒑𝒑𝒑𝒑
Compa-ratio (Position in range) =
𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎 (𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎𝒎 𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓𝒓 𝒑𝒑𝒑𝒑𝒑𝒑)
Excellent 12% 8% 6% 4%
Very effective 8% 6% 4% 3%
Effective 6% 4% 3% 0
Developing 2% 1% 0 0
Poor 0 0 0 0
7
Synopsis of the case
8
Pre-class preparation questions
1. Who should evaluate employees' performance? What
should leaders do when (individual, team, organization)
performance is lacking?
2. Should the new performance review system at Vitality Health
be revised? What changes would you recommend to the
new performance management system? How should the
changes be implemented? Carefully consider the
consequences of your recommendations.
3. Is the revised performance management system better
than the system it replaced? In what ways? In what ways
is it worse?
4. How important is the relative nature of the new performance
management system?
9
In-class Discussion Questions
a. What were the problems with related to performance under
Vitality Health's old the old system?
Performance Management
system? What were the root f. Would an employee with
causes of those problems? superior performance year
after year keep receiving
b. Is this evident from the 2008 higher and higher pay
data in Exhibit 2? increases?
11
Discussion of employee reactions to the
new system
o. Do employees like the new r. What are other aspects of the
system? Why or why not? new system that are likely to
be (or be perceived as)
p. Notice that any change, effective/improvements over
holding the pie (Overall the old system?
Rewards) constant, is bound
to produce losers as well as
winners. Why then, would we
expect all employees to prefer
the new system?
12
Performance management distribution
2008
13
Performance management distribution
2008
14
Performance management distribution
2010
15