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Case Study On The Company Vitality Health Enterprise

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This Harvard Business Review case is about the company Vitality Health Enterprise. The new CEO, Beth Williams brought in new ideas to revitalize the company and launch it into a new era of growth. The company switched over to relative performance grading from an absolute one. The case give clear insights of the pros and cons of both the systems. The satisfaction for some employees were a reason of discontent for others. Questions and Answers 1. What were the problems with Vitality Health's old Performance Management System? What were the root causes of those problems? The old Performance Management system was ineffective and did not lead to a fair incentive or salary raise for the employees of the company. Employees who worked hard and did well for the company received the same rating as low performing employees. There was frustration among the scientists for getting the …show more content…

What are the key features of Vitality Health's revised program? The new system was a forced distribution model of performance rankings. A) Employees were rated with respect to others unlike the old system where there was absolute ranking. B) All performance reviews were to be conducted at the start of calendar year and delivered to employees in January. C) The performance had to be forced in a bell curve like curve where high performers could be maximum of 14%; Achievers (A) min 70%; Low Achievers (L) min 7% and Unacceptable (U). D) There was one more category of Non Rated, for employees who were too new to the company for their positions to receive an accurate rating. E) Managers were instructed to develop specific goals with their individual employees and use those goals as a secondary component in the performance management process. 4. What problems under the old system are solved or mitigated by the new system? The new system was solving a problem where a bulk employees were getting high rating when their department was failing to achieve production goals and time-to-market

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