Performance Management at
Vitality Health Enterprise.
Syndicate 9
- Ghina Athaya (29119159)
- Siti Nuur Fatinah Megasari (29119073)
- Muhammad Apriandito (29119004)
- Yegi Esarianita (29119139)
PMS1: Performance Management System (A-E
Rank)
by Beth Williams (75% percentile)
Ranking # of Employees % Distribution Average Pay Increase by Compa-Ratio
80-95 95-110 110-120 120+
A 21 0.29% 8.2% 7.8% 5.8% 3.5%
A- 18 0.25%
B+ 210 2.91% 6.2% 5.2% 5.0% 4.5%
B 2282 31.63%
B- 1813 25.13%
C+ 1054 14.61% 5.8% 4.1% 3.3% 3.4%
C 1131 15.68%
C- 547 7.58%
D+ 74 1.03% 3.5% 1.2% 0.0% 0.0%
D 29 0.40%
D- 35 0.49%
E+ 0 0.00% - - - -
E 1 0.01%
PMS1 : Strength and Weakness
Strength :
● Low Turnover
● Tenure with the company would inevitably result in high salary, regardless of overall
performance.
weakness:
● Homogenous ratings that failed to sharply distinguish active (top performers) from passive (non-
performers). Since managers were fear of upsetting a sense of teamwork.
● The system focused on pay stability, the salaries depended on the tenure for which employees
worked regardless of overall performance.
● Top employee feeling underappreciated for their effort (undervalued financially), and the result
is the low turnover that occur tend to happen among more productive employee (top employee).
Is the new system effective for improving
performance management?
● In the new system, there are 5 categories, which is created differentiation among employees on
based on their performance. This system eliminate problem of rating bias where the employees
still got high rating even though their departement was failing to meet the production goal.
● The new system also modified the pay policies depending on the number of “Job Evaluation
Point”
PMS2: Performance Management System (Top
Achiever)
by 2010 (continued) (75% percentile)
Ranking # of Employees % Distribution Average Pay Increase by Compa-Ratio
80-95 95-110 110-120 120+
Top Achiever 799 11.07% (min 12.1% 10.3% 7.7% -
(T) 10% max 14%)
Achiever 5401 74.86% 7.3% 5.5% 3.6% -
(A)
Lower 747 10.35% 2.9% 1.5% 0.0% -
Achiever
(L)
Unacceptable 114 1.58%
(U)
Not Rated 93 1.29%
(NR)
PMS2 : Strength and Weakness
Strength:
- Higher compensation
- The system clearly identified poor performers who could be subjected to coaching and training from their
managers.
- 54% of employee gave a positive response to this new system.
- The system included performance related short term and long term cash and equity bonuses.
Weakness:
- Due to the concept of “Relative Ranking” every team would have some top achievers and some poor performers
hence even if the team was performing “Poorly”. (vice versa)
- Employees are more defensive and less open to coaching.
- Rather than identifying top talent, the managers simply tried to maintain uniform rangking, by ensuring that no
employees was left behind, but also that no employee was identified and rewarded as a top performer.
Some Comments about New system
“The Achiever category simply covers many people. There’s no way to show an employee he’s
the high en or low end”
“I used to remember my anniversary by when my performance review came around. Seriously.
in any case though, i don’t think my boss spends much time on it now that he has to do
everyone’s in the same month. I don’t mind the new system but the timetable was better for”
“labels are problem. People were in the middle before, but they didn’t know it. it’s the discovery
that they’re in the middle that is unsettling to them”
Analysis
➔ There’s no specific criteria for each ranks in both system.
➔ Managers has a low awareness of how important the performance management system and tend
to make subjective evaluation.
➔ Different assessment for each department leads into unfair assessment of rank for each
employees.
➔ The current system is good, but need to be revised in order to satisfy the employee about their
performance evaluation system.
RECOMMENDATION
Vitality Health’s current performance management system is quite accurate in order to evaluating
employee performance, but due to some of the misleading interpretation from some of employee, our
PMS (Performance Management System) couldn’t be able to evaluating overall each employee
performance management. Hence, in order to solve this problem, it is quite a good decision if we
decided to revised our PMS or fully-changed the method. But of course, any kind of decision that will
be made need to be guided by the HR Team in the process of evaluating performance. Our
suggestion to improve the the result of the PMS are :
- More training for managers about the performance management system to evaluate employee
performance management better
- Make a piece of individual performance around 20-30% of evaluation is based of team
accomplishment
Suggestion for new Performance Management Evaluating System is using Graphic Rating Scale
(GRS).
