case study related to performance appraisal

• Browse All Articles
• Newsletter Sign-Up

PerformanceEvaluation →

No results found in working knowledge.

• Were any results found in one of the other content buckets on the left?
• Try removing some search filters.
• Use different search filters.

• Employee Success Platform Improve engagement, inspire performance, and build a magnetic culture.
• Engagement Survey
• Lifecycle Surveys
• Pulse Surveys
• Action Planning
• Recognition
• Talent Reviews
• Succession Planning
• Expert-Informed AI
• Seamless Integrations
• Award-Winning Service
• Robust Analytics
• Scale Employee Success with AI
• Drive Employee Retention
• Identify and Develop Top Talent
• Build High Performing Teams
• Increase Strategic Alignment
• Manage Remote Teams
• Improve Employee Engagement
• Customer Success Stories
• Customer Experience
• Customer Advisory Board
• Not Another Employee Engagement Trends Report
• Everyone Owns Employee Success
• Employee Success ROI Calculator
• Employee Retention Quiz
• Ebooks & Templates
• Leadership Team
• Partnerships
• Best Places to Work
• Request a Demo

Performance Management Case Study: Fossil Group

Jocelyn Stange

February 4, 2021 | 2 minute read

In this blog, we'll share how Fossil Group evolved its performance management process and 3 simple steps.

The Evolution of Fossil's Performance Management Process

Fossil Group was using a complex, 100% paper process for performance reviews and check-ins for more than 15,000 global employees. They wanted to move toward a digital performance management strategy, but knew they needed to simplify the process first.

Fossil Group set up four traditional components that were stretched across three strategic touch points throughout the year. These touch points were supplemented with ongoing performance conversations that could be initiated by any employee, at any time.

As Fossil Group evolved its company-wide performance appro a ch , they were happy to see immediate progress.

92% of employees were participating in goal-setting reviews, setting an average of six goals per employee.

However, when they dug into the data, they found that 35% of individual goals created were misaligned or did not have an impact on the organization and its strategic priorities. They knew they needed to get better at goal alignment if they wanted to meet important business objectives.

Explore the three ways Fossil Group simplified performance management.

1. They scheduled ongoing performance conversations and continuous feedback.

Although the three formal performance touch points in place were working, Fossil Group knew teams needed to have goal conversations more frequently. They implemented informal “check-ins” that could be launched by any employee at any time.

To ensure  adequate time was made for important performance conversations and other performance related activities, Fossil Group implemented "Performance Days" — days strictly dedicated to employee performance. On these days, n o task-related meetings are scheduled, and all work is set aside for the day. Conversations between managers, employees, and teams are all centered on performance.

2. They created intuitive goal conversation templates.

Fossil Group recognized that simply having more performance conversations wasn’t enough — the conversations needed to include healthy dialogue, debate, and collaboration from managers and employees. They created 1-on-1 templates to help guide managers and employees through an effective and productive goal conversation.

Check-in templates could be customized to the needs and work of individual teams and team members. The templates helped ensure conversations were focused on creating clear, aligned, and motivating goals. 

3. They used recognition to keep performance conversations fresh.

Fossil Group wanted to bring performance conversations full circle by recognizing employee performance daily. They created recognition toolkits for managers including fun notecards, gift cards, and employee recognition tips. They  also  launched an online, peer-to-peer recognition program that generated an average of 140 recognition stories each week.

By  taking time to uncover the needs of its employees, and delegating time for managers to focus on perf ormance,  Fossil Group  was able to listen and act on employee voices and evolve their performance strategy f or  succes s .

Download our latest ebook: Making Time for Performance Management to get more tips for simplifying your performance management process.

Published February 4, 2021 | Written By Jocelyn Stange

Related Content

14 One on One Meeting Topics You Should Be Discussing With Employees

Quick links, subscribe to our blog.

View more resources on Performance Management

14 Culture-Boosting Remote Working Tools

4 minute read

Coaching to Engage: 12 Rules to Effective, Ongoing Employee Coaching

How to Drive Focus for Goal Alignment and Performance Expectations

2 minute read

• All Resources
• Privacy Policy
• Terms of Use
• Terms of Service

Clear Review has joined Advanced - Discover our full suite of powerful and innovative people management solutions

Performance Management Case Studies: Revolutionaries and Trail Blazers

Five com­pa­nies that have led the way in set­ting new per­for­mance man­age­ment trends

Note: This blog post was updat­ed in July 2019 for accuracy.

Per­for­mance man­age­ment is an ever-evolv­ing field. The more we learn, the bet­ter we can adapt our per­for­mance man­age­ment sys­tems to make our com­pa­nies health­i­er, more moti­va­tion­al places to work. This is why it is so impor­tant to keep up with the lat­est per­for­mance man­age­ment trends . Com­pa­nies who fall behind lose out to their com­peti­tors. They also run the risk of los­ing their best per­form­ers along the way.

Since 2012 , com­pa­nies all over the world have been mov­ing away from old-fash­ioned annu­al appraisals and towards con­tin­u­ous per­for­mance man­age­ment . More than ever before, human resources exec­u­tives and line man­agers alike under­stand the human need for reg­u­lar feed­back, effec­tive coach­ing and human interaction.

A num­ber of rev­o­lu­tion­ary com­pa­nies have led the way in dra­mat­ic changes to how organ­i­sa­tions — both For­tune 500 multi­na­tion­als and SMEs — con­duct their per­for­mance reviews and moti­vate their employ­ees. In their wake, com­pa­nies the world over are adapt­ing their per­for­mance man­age­ment prac­tices and read­just­ing their once-fir­m­­ly held beliefs regard­ing per­for­mance rat­ings and annu­al per­for­mance appraisals. Here at Clear Review, we have helped over 200 organ­i­sa­tions effort­less­ly shift away from tra­di­tion­al annu­al appraisals.

Below, we have col­lat­ed five notable per­for­mance man­age­ment case stud­ies. These organ­i­sa­tions have shak­en up their exist­ing process­es and have reaped sig­nif­i­cant ben­e­fits in terms of pro­duc­tiv­i­ty, employ­ee engage­ment, morale and performance.

1 . Adobe Intro­duced Con­tin­u­ous per­for­mance Man­age­ment in Place of Per­for­mance Appraisals

Adobe was the fore­run­ner of change when they aban­doned annu­al per­for­mance appraisals back in 2012 . They felt that while they were forg­ing ahead and evolv­ing as a com­pa­ny, their per­for­mance man­age­ment sys­tem was archa­ic and inef­fec­tive. It was a waste of time and had, ulti­mate­ly become a box-tick­ing exer­cise. Adobe esti­mat­ed annu­al appraisals con­sumed 80 , 000 man­age­ment hours each year . This was the equiv­a­lent of near­ly forty full-time employ­ees work­ing year-round. Clear­ly, a change was needed.

Adobe replaced annu­al appraisals with reg­u­lar one-on-one check-ins , sup­port­ed by fre­quent feed­back  — both pos­i­tive and con­struc­tive. There are no per­for­mance rat­ings or rank­ings and they allow dif­fer­ent parts of the organ­i­sa­tion to deter­mine how fre­quent­ly they should hold check-in con­ver­sa­tions, based on their work cycles. Now that forced rank­ing has been abol­ished, employ­ees at Adobe are assessed based on how well they meet their goals . Man­agers are also trained on the nuances of giv­ing and receiv­ing feedback.

The result has been a marked increase in employ­ee engage­ment, with vol­un­tary turnover decreas­ing by 30 % since check-ins were intro­duced. This makes Adobe a per­for­mance man­age­ment case study we should all be aware of.

Take a Tour of Our Con­tin­u­ous Per­for­mance Man­age­ment Soft­ware .

2 . Deloitte Saved 2  Mil­lion Work­ing Hours per Year with Week­ly Employ­ee Check-Ins

In 2015 , Deloitte was the first big name to announce it was scrap­ping once-a-year per­for­mance reviews, 360 -degree feed­back and objec­tive cas­cad­ing. This change occurred after the com­pa­ny cal­cu­lat­ed these process­es were con­sum­ing a remark­able two mil­lion hours a year across the organisation.

Deloitte’s new per­for­mance man­age­ment process requires every team leader to check in with each team mem­ber once a week to dis­cuss near-term SMART goals and pri­or­i­ties, com­ment on recent work and pro­vide coach­ing. The check-ins are ini­ti­at­ed by the team mem­bers, rather than the team lead­ers to ensure these check-ins take place fre­quent­ly. This also serves to give employ­ees a sense of own­er­ship over their work, role and time.

These week­ly employ­ee check-ins are sup­port­ed by quar­ter­ly reviews when team lead­ers are asked to respond to four future-focused state­ments about each team mem­ber. Rather than ask­ing team lead­ers what they think of the team mem­ber — which is what tra­di­tion­al per­for­mance rat­ings do — they ask what the team leader would do with the team member.

3 . Gen­er­al Elec­tric ( GE ) Put an End to​Forced Rank­ing per­for­mance Management

Under the reign of its for­mer CEO , Jack Welsh, Gen­er­al Elec­tric was the most well-known pro­po­nent of annu­al per­for­mance rat­ings and forced dis­tri­b­u­tion curves. 

For decades, GE oper­at­ed a ​ “ rank and yank ” sys­tem, where­by employ­ees were appraised and rat­ed once a year. After­wards, the bot­tom 10 % were fired. Not exact­ly a recipe for employ­ee engage­ment! Such an envi­ron­ment is a breed­ing ground for unhealthy com­pe­ti­tion, reduced team­work and employ­ee burnout.

In 2015 , under CEO Jeff Immelt, GE announced it was replac­ing this approach with fre­quent feed­back and reg­u­lar con­ver­sa­tions called​” touch­points ” to review progress against agreed near-term goals. This new approach was sup­port­ed by an online and mobile app, sim­i­lar to our own Clear Review per­for­mance man­age­ment tool , which enables employ­ees to cap­ture progress against their goals, give their peers feed­back and also request feedback.

Man­agers will still have an annu­al sum­ma­ry with employ­ees, look­ing back at the year and set­ting goals. But this con­ver­sa­tion is more about stand­ing back and dis­cussing achieve­ments and learn­ings, and much less fraught than annu­al reviews.

4 . Accen­ture Aban­doned Rat­ings for per­for­mance Development

As of Sep­tem­ber 2015 , Accen­ture, one of the largest com­pa­nies in the world, dis­band­ed its for­mer rank­ing and once-a-year eval­u­a­tion process . Like GE , Accen­ture has decid­ed to put fre­quent feed­back and con­ver­sa­tions at the heart of its new process and focus on per­for­mance devel­op­ment, rather than per­for­mance rating.

As Accenture’s CEO , Pierre Nan­terme, stat­ed at the time ​ “ It’s huge, we’re going to get rid of prob­a­bly 90 per cent of what we did in the past.”

As Ellyn Shook, Chief HR Offi­cer at Accen­ture , stat­ed:​“Rather than tak­ing a ret­ro­spec­tive view, our peo­ple will engage in future-focused con­ver­sa­tions about their aspi­ra­tions, lead­ing to actions to help them grow and progress their careers.”

5 . Cargill Intro­duced Coach­ing Con­ver­sa­tions in Place of Annu­al Appraisals

Like Adobe, Cargill, the US food pro­duc­er and dis­trib­u­tor, start­ed to trans­form its tra­di­tion­al per­for­mance man­age­ment process­es back in 2012 , when it intro­duced ​ “ Every­day Per­for­mance Man­age­ment ”.

Cargill removed per­for­mance rat­ings and annu­al review forms and instead focused on man­agers hav­ing fre­quent, on-the-job con­ver­sa­tions and giv­ing reg­u­lar, con­struc­tive feed­back. They have made this work by:

• Reg­u­lar­ly reward­ing and recog­nis­ing man­agers who demon­strate good day-to-day per­for­mance man­age­ment practices.
• Shar­ing the expe­ri­ences and tips of their suc­cess­ful managers.
• Hold­ing teams account­able for prac­tis­ing day-to-day per­for­mance management.
• Build­ing the skills need­ed to suc­ceed at Every­day Per­for­mance Man­age­ment, includ­ing effec­tive two-way com­mu­ni­ca­tion, giv­ing feed­back, and coaching.

The out­come has been impres­sive, with 70 % of Cargill employ­ees now say­ing they feel val­ued as a result of their ongo­ing per­for­mance dis­cus­sions with their manager.

Per­for­mance Man­age­ment Lessons to Be Learned from These Per­for­mance Man­age­ment Case Studies

When we look at what these five organ­i­sa­tions have imple­ment­ed, we can see some evi­dent trends emerg­ing, which are like­ly to form the basis of per­for­mance man­age­ment for the years to come. These trends are:

• Reg­u­lar one-to-one per­for­mance con­ver­sa­tions, or ​ “ check-ins ”, ini­ti­at­ed by the employee.
• Fre­quent, in-the-moment, pos­i­tive and con­struc­tive feed­back from peers and man­agers Near-term objec­tives rather than annu­al objec­tives. Set­ting and review­ing objec­tives reg­u­lar­ly, rather than once a year.
• For­ward-look­ing per­for­mance reviews, focus­ing more on devel­op­ment and coach­ing and less on assessment.
• Drop­ping per­for­mance rat­ings .
• Per­for­mance process­es sup­port­ed by mobile-friend­­ly, online per­for­mance man­age­ment soft­ware .

Move away from annu­al appraisals to con­tin­u­ous per­for­mance management

Find out how our sim­ple, effec­tive per­for­mance man­age­ment soft­ware can help you move away from annu­al per­for­mance appraisals towards a more agile, intu­itive per­for­mance man­age­ment sys­tem. Book a free demo of Clear Review where our expert team will take you through the platform. 

Relat­ed articles 

5 great examples of agile organisations, why is performance management important.

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

Employee performance management

• Leadership and managing people
• Managing people

Five Ways to Measure Performance

• Stacey Barr
• June 25, 2015

How Much Time and Energy Do We Waste Toggling Between Applications?

• Rohan Narayana Murty
• Sandeep Dadlani
• Rajath B Das
• August 29, 2022

Research: Why Gender Bias Persists, Even When Organizations Try to Curb It

• Alison Wynn
• Emily K. Carian
• Sofia Kennedy
• JoAnne Wehner
• December 20, 2023

How to Decide Whether to Fire Someone

• Rebecca Knight
• January 28, 2019

Will You Help or Heave Your Underperformers?

• Harvard Management Update
• February 28, 2008

Quiet Quitting Is About Bad Bosses, Not Bad Employees

• Jack Zenger
• Joseph Folkman
• August 31, 2022

Whether You’re Qualified Depends on How You’re Quantified

• Michael Schrage
• October 12, 2015

What Makes a 360-Degree Review Successful?

• December 23, 2020

Negative Feedback Rarely Leads to Improvement

• Scott Berinato
• From the January–February 2018 Issue

Job Sculpting: The Art of Retaining Your Best People

• Timothy Butler
• James Waldroop
• From the September–October 1999 Issue

The Making of an Expert

• K. Anders Ericsson
• Michael J. Prietula
• Edward T. Cokely
• From the July–August 2007 Issue

Making Star Teams Out of Star Players

• Michael Mankins
• From the January–February 2013 Issue

Kick-Ass Customer Service

• Matthew Dixon
• Lara Ponomareff
• Scott Turner
• Rick DeLisi
• From the January–February 2017 Issue

Fear of Feedback

• Jay M. Jackman
• Myra H. Strober
• From the April 2003 Issue

How Will You Give Tough Feedback?

• Harvard Business Publishing
• January 22, 2024

When Do You Show Underperformers the Door?

• Paul Michelman
• June 18, 2007

How the Best of the Best Get Better and Better

• Graham Jones
• From the June 2008 Issue

Those Who Can't, Don't Know It

• Marc Abrahams
• From the December 2005 Issue

The Best-Performing CEOs in the World

• HBR Editors
• From the November 2016 Issue

Co-Creating the Employee Experience

• Diane Gherson
• Lisa Burrell
• From the March–April 2018 Issue

Teracom Limited: Appointing a Consumer Distributor

• Rajeev Kumra
• July 18, 2016

Becton Dickinson: Designing the New Strategic, Operational, and Financial Planning Process

• Robert Simons
• Antonio Davila
• Afroze Mohammed
• July 12, 1996

HBR's 10 Must Reads on Reinventing HR (with bonus article "People Before Strategy" by Ram Charan, Dominic Barton, and Dennis Carey)

• Harvard Business Review
• Marcus Buckingham
• Reid Hoffman
• Peter Cappelli
• June 11, 2019

Rob Parson at Morgan Stanley (B)

• M. Diane Burton
• February 13, 1998

Executive Remuneration at Royal Dutch Shell (A)

• Jay W. Lorsch
• Kaitlyn Simpson
• June 15, 2009

ATH Technologies (C)

• Jennifer Packard
• May 18, 2017

WeaveTech: High Performance Change

• Michael Beer
• Paul Swiercz
• June 13, 2014

Sears Auto Centers (A) (Abridged)

• Lynn Sharp Paine
• December 18, 2003

Mary Caroline Tillman at Egon Zehnder: Spotting Talent in the 21st Century

• Francesca Gino
• Bradley R. Staats
• September 09, 2015

MacAfee Building Supply: Improving Performance Across Retail Stores (C)

• Rachel Griffith
• Maria Guadalupe
• Andrew Neely
• January 14, 2011

Performance Reviews (HBR 20-Minute Manager Series)

• May 05, 2015

Wolfgang Keller at Konigsbrau-TAK (B)

• John J. Gabarro
• December 15, 1997

Johansen's: The New Scorecard System

• Luann J. Lynch
• Jennifer Forman
• Graham Gillam
• March 17, 2016

Performance Development at GE: Shaping a Fit-For-Purpose Performance Management System (B)

• Anand Narasimhan
• Jennifer Jordan
• Shih-Han Huang
• August 21, 2018

Rob Parson at Morgan Stanley (C) (Abridged)

• February 09, 1998

Accounting Red Flags or Red Herrings at Catalent? (B)

• Joseph Pacelli
• January 02, 2024

Cafes Monte Bianco: Building a Profit Plan

• January 26, 1998

Indian Premier League

• Sonali Gupta
• Diptiprakash Pradhan
• Pranav Garg
• September 01, 2018

JERRY - Confidential Instruction for the Supervisor

• Bruce Patton
• January 01, 1982

Rob Parson at Morgan Stanley (A)

• February 12, 1998

Accountability

• Steve Reilly
• May 01, 2017

Harvard Management Update, February 1999, Volume 4, Number 2

• R. Brayton Bowen
• Edward Prewitt
• Adrian J. Slywotzky
• February 15, 1999

Teracom Limited: Appointing a Consumer Distributor, Teaching Note

Popular topics, partner center.

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

The Performance Appraisal System and Analysis: A Case Study

Related Papers

Favourity Veps

Shane J Ralston

Both in the public and private sectors, the process of evaluating job performance can appear highly subjective and conditioned upon personal tastes, biases, prejudices, philosophies and management styles. Widespread perception that evaluations are based on criteria irrelevant to merit can adversely affect the morale and productivity of employees. Because it is the largest provider of services, the public sector is even more reliant on the performance of its employees. So, it is critical that performance appraisal systems be considered legitimate by public sector employees. Yet, rarely are job performance appraisal systems designed with any input from their users. Job descriptions, on the other hand, are typically designed by human resource managers in conjunction with end-users, including management and their subordinates. Overall, the difficulty of designing an appraisal system in a public sector organization that is, one, closely tailored to job descriptions and, two, represents an objective, not an arbitrary and capricious, measure of employee performance, is a matter of much concern. The thesis of this paper is that job performance appraisal systems ought to be cooperatively designed by managers and their subordinates in much the same way that job descriptions are. If the evaluative instrument is a product of such collaboration, employees who are regularly evaluated will be more likely to agree that the results fairly and objectively measure their performance.

Tabitha Meyer

Maniruzzaman Tanvir

DR.C.KARTHIKEYAN DR.C.KARTHIKEYAN

This book prepares students of management who specializes in HRM, or HR related subjects, HR practitioners, Researchers in HR, and includes the dynamic concepts of newer HR paradigms happening across the world, and also caters to the syllabus for BBA and MBA of all the leading Indian Universitities specifically to Anna University, Bharathiar University, Kerala University, Calicut University, and other Indian Universities This concepts in this book will prepare all HR professionals who are evolving into a higher level professionals who can use this book for their challenging and rewarding career. The readers can apply these concepts in their day to day HR functions to have effective practical advancements in their career. Who will benefit from this Book All students and practitioners of HR management and practioners of HR at various levels in any kind of organization will benefit form learning to manage Human Resources. This includes all the students, faculties in colleges and universities, and those who already have HRM and want to become more effective and other professionals who want an improved understanding of managing human resource. This book also fits to the non-business organization like the nongovernment organizations (NGOs), Government Organisations, Health Care Administrative HR Professionals, and non-profit enterprises. The HR functions though occasionally are dynamic as well intriguing, the basics remain the same related the Human nature. The dynamics of HR are now more glocalised in nature as the culture and work practices are almost multicultural and multinational in nature, and hence updating of newer and practically evolving HR practices are required for the HR managers, and this Advances in HRM will definitely fit in. The dynamism in the newer paradigms will soon become the secondary skill for the practicing as well as budding HR practioners.

USAID/Ghana Technical Report produced by Quality Health Partners

Catherine G Schenck-Yglesias , Kwadwo Mensah

The main objective of the assessment was to evaluate the human resources management (HRM) capacity of the Ministry of Health and Ghana Health Service (GHS) in terms of systems effectiveness and efficiency, identifying strengths and highlighting areas in need of improvement. The specific objectives were to: - Review current HRM policies, plans and procedures. - Assess HR data management systems, including personnel filing systems. - Assess staff performance management capacity and systems. - Assess the roles and responsibilities of stakeholders in the HRM systems and their impact on the efficiency and effectiveness of the management systems. - Assess pre-service and in-service training systems including policies, plans and procedures for managing intake and outcomes, and assess the linkages between pre-service and in-service training. - Assess the role of women in the GHS and their opportunities for job advancement. - Provide recommendations for streamlining and strengthening HRM systems in the GHS.

Abrhaley Tewelemedhin

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Performance Management and Appraisal: A Case Study of Gap Inc.

The performance management system is a key process in any given organization. Through the process, firms are able to communicate organizational objectives, promote individual accountability, and track and evaluate the performance of employees (Gruman & Saks, 2011; Selden & Sowa, 2011). With the increased changing competitive business environment, organizations require to regularly review the system, with the aim of improving various points to keep up with the market demand and competitors (Moynihan, & Pandey, 2010). Being a competitive firm, Gap Inc. required to review its performance management for a number of reasons. To begin with, both managers and subordinates disliked the cumbersomeness of the existing method. Notably, they did not like the frequent briefing meetings that required them to explain their contributions to the performance of the company. Moreover, management considered the “nice” culture to be a favorite; however, it was not an honest approach to performance appraisal. Resultantly, there was a need to transform the culture from “nice” to “nice and honest.”

“Traditional” Performance Management System

A performance management system is a method used by a corporation to measure the results of the employees. A traditional performance management system is characterizedwith aspects that have attracted many critics, such as its focus on employee weaknesses, reliance on annual reviews, failure to provide timely feedback, setting of goals that do not align with workers’ needs, and its tendency to reward annual performance and the duration of serving the company (Becker, Antuar, & Everett, 2011). Notably, these aspects make the system to rank some employees highly, yet their productivity may not commensurate with the award they receive. For example, a method such as forced ranking inherently requires that only a few employees rank at the top and bottom while concentrating the rest in the middle (Cascio, 2016; DeNisi & Murphy, 2017). Therefore, this method often fails to fairly reward some of the employees, while rewarding others excessively.

Process Adopted in Setting up GPS System

In the creation of a new performance management system, it is crucial to follow certain steps. Ollander-Krane, the employee tasked with the development of the new policy adopted three stages in the development of the new system, including defining performance, facilitating performance, and encouraging performance. In defining performance, he ensured that every employee understands his or her role in the company. To achieve this, he ascertained that there were clear goals, measures, and assessment methods. According to Cascio (2016), goals direct employees to the achievement of the specific performance target. For example, Gap Inc. had goals of increasing the market share. In addition, the company should be able to determine the level of attainment of the set goals. Vague aspects, such as the success of a company are not measurable; hence, they are not useful in the creation of a performance management system. Moreover, once the measurement is determined, it is necessary to assess how progress is made toward accomplishing the set goals. It is essential to have regular performance appraisals to direct the employees toward the achievement goals.

In facilitating performance, the manager ensures that there are no limiting factors towards the achievement of the set goals. For instance, Ollander-Krane established that the current system demotivated the employers. In particular, they focused on their grades after evaluation instead of their actual performance (Margolis, McKinnon, and Norris, 2015). Therefore, setting up a new system would eliminate hindrance. All the steps were facilitatedby researching and reading books. Specifically, the manager read books such as  Get Rid of the Performance Review ,  Coaching with the Brain in Mind , and  Mindset . The books had unique lessons which aided Ollander-Kane to set up a new performance management system.

Four Main Components of the New System

The new performance appraisal method Gap Inc. adopted had four components: performance standard, goals, touch base, and rewards. The four approaches form the core-components of Grow, Perform, Succeed (GPS) – the new performance management system.

Performance Standard

The performance standard replaces the annual reviews that characterized the traditional system. Instead of the traditional ratings and rankings, employees would adhere to a set performance standard on a daily basis. Notably, the new system set tough objectives that will motivate employees to work hard to achieve the set targets. In such a way, the company will probably increase its market share owing to its hard work, company values. Furthermore, the standard allows the corporation to learn from its failures whenever employees are unable to meet the set targets (Bolden, 2016). In addition, managers can train their employees to equip them with skills that will aid them to effectively achieve the set targets. Feedback will also be provided to employees; hence, providing a basis on which to improve upon their weaknesses and strengths.

To set goals, the new system ensured that employees settled on few goals that are easy to attain. Goals provide a sense of direction for the employees because it dictates what is to be achieved (Pulakos, Hanson, Arad, & Moye, 2015). The goal setting process will be capped at eight, with some goals having a short time spun while the rest lasting for a few years. The company also encourages the employees to evaluate their targets more than once in a year, as opposed to the rigid year-end reviews that characterized the old system.

GPS intended to change the traditional way of discussing performance amongst employees with “touch base” sessions which focused on their performance instead of informal business discussions of reports. Rather than taking notes in these meetings, Ollander-Krane discouraged managers from taking notes during the session, but to concentrate in the meetings. In this way, he hoped to achieve a well-motivated workforce. Interestingly, employees were given an equal responsibility as their managers to ensure they met regularly. In 2014, a survey by the human resource department found out that there were regular touch base meetings (Margolis et al., 2015). Therefore, the regular meetings resulted in better performance of the company.

Employees in Gap Inc. used to receive awards on a yearly basis in the old system. Currently, employees are given rewards on account of how much they contribute to the output levels. When every employee is awarded individually, they are motivated to improve their performance (Arnaboldi, Lapsley, & Steccolini, 2015). Consequently, personal output amount will result in increases in the general performance of the firm. Annual bonuses given to employees will change to a clear structure that identifies company performance as the most critical reward determiner, accounting for 75% of the total bonus. The remaining 25%will be based on individual performance. In this way, the firm’s employees strive to improve the business results of the company since they account for most of the rewards. Moreover, the company increased its delegation of bonus allocation to the managers (Margolis et al., 2015). Since rewards will not be pegged on the annual evaluations, the organization’s reward system offers incentives to employees, eliminating the need for regular update meetings characterizing the traditional system.

Challenges that Faced Gap Inc. in Implementing GPS

Although the management accepted the proposal of Ollander-Krane, its implementation, as is the case with any change in an organization,was not without challenges. The adoption of GPS as a replacement to the traditional appraisal method began in 2014 and was characterized by a few issues. For example, some managers were not aware of the need for a new management system. In fact, some did not understand the rationale of GPS. Even though the managers disliked the “traditional” method that conducted reviews at the end of the year, it is what they understood. However, this challenge was overcome by educating all the managers about the old and new system, aiding their understanding. It turned out that the new system would create freedom for them to manage their employees. The system would promote the acknowledgment of top and low performers.

In addition, even after understanding the new system, some managers considered GPS as a new method by the management to reduce their ability to earn bonuses. They thought the new method would limit their avenues of obtaining more income(Margolis et al., 2015). Regardless of the attitude of the managers, the system proved to be effective in increasing the market share and company performance. It is common for humans to resist any change due to the uncertainties it presents.

Furthermore, managers faced difficulty in adopting and getting accustomed to the new system. In other words, the new system involved a different approach to giving and receiving feedback, which is vital in notifying employees about their performance levels (Sargeant et al., 2015). In fact, discussions about the year performance were easier in the “traditional” system. The previous system allowed managers to give feedback to employees about specific measures that made their performance to be evaluated at a certain level. Nevertheless, this challenge would be overcome with the right amount of training, time, and effort in using the GPS system.

Another challenge is the fact that the regular touch base meetings posed their unique problems, such as disruptions in the course of the year. As a result, the affected employee misses some meetings. When they resume, it becomes difficult for them to be at par with their colleagues because they might have lost a sense of the future strategic direction of the company or department. In such a way, the implementation of the system is hampered directly by even its components.

Performance Management Systems and the Effectiveness of GPS

Most managers mistakenly use the performance appraisal and performance management interchangeably. Unlike the former which is used to identify the strengths and weaknesses of employees in the execution of their job description, the latter is a method applied by the human resource department to give direction to subordinates or seniors. In fact, the adoption of GPS as a new performance management system is a move in the right direction. Ollander-Krane reports that in the first year, the new system had achieved some positive changes in the company. For example, some employees stated that their touch base had increased, while others acknowledged that they had not spoken with their superiors for several months before the adoption of GPS. The increased meetings amongst the employees probably increased the working relationship of the subordinates and their superiors (Selvarajan, Singh, & Solansky, 2018; Duncan, & Malini, 2016; Forrester, 2011). Therefore, the new method was impactful to the organization’s performance.

Moreover, the system is linked to the company’s ticker symbol, reminding employees that their performance is evaluated by the share prices of the company. As a result, they will direct their efforts in the growth of the company’s financial performance. The system also enhances objectivity and honesty in the sharing of feedback between managers and employees. Moreover, it provides employees with a sense of direction. For instance, it gives them their current performance level while providing the expected output from their efforts for the future.

If I were to recommend a new performance management system to a company that is still traditional, I would suggest GPS as a better alternative. The new system is easier to implement than other systems. It requires little participation by the management in deciding the amount of bonus to give to employees. Moreover, the method allows managers to determine how to allocate bonuses amongst their employees. Consequently, some business units were able to invent their own incentive scheme that motivated employees to provide overwhelming performance. The method also increased the efficiency of service delivery within the company and reducing the workload for the human resource personnel tasked with performance appraisal (Tziner & Rabenu, 2018; Tziner & Rabenu, 2018). In this way, the time will be used in other equally important tasks.

The new system is also effective because it has reduced the number of customer complaints. In particular, the complaints reduced to one from between 30-40 calls in previous years. Owing to this, it is possible that the system will blend well in other organizations increasing their customer satisfaction. Since customers are contented, the firm is able to retain customers while growing its market share.

In summary, performance management should not be confused with performance appraisal. The former promotes the strengths of employees by providing an avenue to direct their efforts in meeting the company objectives, while the latter is used to measure performance and offer bases for which promotions and firings in an organization are done. It is important for the management to adopt a good management system since it aids in increasing the productivity of employees and the profitability of the firm.

Arnaboldi, M., Lapsley, I., & Steccolini, I. (2015).Performance management in the public sector: The ultimate challenge.  Financial Accountability & Management ,  31 (1), 1-22.

Becker, K., Antuar, N., & Everett, C. (2011). Implementing an employee performance management system in a nonprofit organization.  Nonprofit Management and Leadership ,  21 (3), 255-271.

Bolden, R. (2016). Leadership, management and organizational development. In  Gower handbook of leadership and management development  (pp. 143-158).Routledge.

Cascio, W. F. (2016).  Managing human resources: productivity, quality of work life, profits  (10th ed.). New York: McGraw-Hill.

DeNisi, A. S., & Murphy, K. R. (2017).Performance appraisal and performance management: 100 years of progress?  Journal of Applied Psychology ,  102 (3), 421.

Duncan, M. S., & Malini, N. (2016). Best practices of sales force compensation within small, to medium sized enterprises: The metrics associated with performance appraisal.  The Association of Collegiate Marketing Educators ,  123 , 120-127.

Forrester, G. (2011). Performance management in education: milestone or millstone?.  Management in Education ,  25 (1), 5-9.

Gruman, J. A., & Saks, A. M. (2011).Performance management and employee engagement.  Human Resource Management Review ,  21 (2), 123-136.

Margolis, J., McKinnon, P., and Norris, M. (2015).Gap Inc.: Refashioning Performance Management. Harvard Business School

Moynihan, D. P., & Pandey, S. K. (2010). The big question for performance management: Why do managers use performance information?.  Journal of Public Administration Research and Theory ,  20 (4), 849-866.

Pulakos, E. D., Hanson, R. M., Arad, S., & Moye, N. (2015). Performance management can be fixed: An on-the-job experiential learning approach for complex behavior change.  Industrial and Organizational Psychology ,  8 (1), 51-76.

Sargeant, J., Lockyer, J., Mann, K., Holmboe, E., Silver, I., Armson, H., …& Power, M. (2015). Facilitated reflective performance feedback: developing an evidence-and theory-based model that builds relationship, explores reactions and content, and coaches for performance change (R2C2).  Academic Medicine ,  90 (12), 1698-1706.

Selden, S., & Sowa, J. E. (2011).Performance management and appraisal in human service organizations: Management and staff perspectives.  Public Personnel Management ,  40 (3), 251-264.

Selvarajan, T. T., Singh, B., & Solansky, S. (2018). Performance appraisal fairness, leader member exchange and motivation to improve performance: A study of US and Mexican employees.  Journal of Business Research ,  85 , 142-154.

Tziner, A., & Rabenu, E. (2018). Ways to improve the performance appraisal system 2: Alternative strategies for assessing and evaluating performance. In  Improving Performance Appraisal at Work .Edward Elgar Publishing.

Cite this page

Similar essay samples.

• Study on Role of Political Parties in Campaign
• Essay on Current Development in Software Security
• Essay on Clinton Avenue School
• Essay on International Finance
• Child Sexual Abuse in the Contemporary Era: Exploring Prevalence Level...
• Essay on Roman and Chinese History

MBA Knowledge Base

Business • Management • Technology

Home » Management Case Studies » Case Study on New Performance Appraisal System at Xerox

Case Study on New Performance Appraisal System at Xerox

In the mid-1980s Xerox corporation was faced with a problem–its performance appraisal system was not working. Rather than motivating the employees , its system was leaving them discouraged and disgruntled. Xerox recognized this problem and developed a new system to eliminate it.

The original system used by Xerox encompassed seven main principles:

• The appraisal occurred once a year.
• It required employees to document their accomplishments.
• The manager would assess these accomplishments in writing and assign numerical ratings.
• The appraisal included a summary written appraisal and a rating from 1 (unsatisfactory) to 5 (exceptional).
• The ratings were on a forced distribution, controlled at the 3 level or below.
• Merit increases were tied to the summary rating level.
• Merit increase information and performance appraisals occurred in one session.

This system resulted in inequitable ratings and was cited by employees as a major source of dissatisfaction. In fact, in 1983, the Reprographic Business Group (RBG), Xerox’s main copier division, reported that 95 percent of its employees received either a 3 or 4 on their appraisal. Merit raises for people in these two groups only varied by 1 to 2 percent. Essentially, across-the-board raises were being given to all employees, regardless of performance.

New Performance Appraisal System

Rather than attempting to fix the old appraisal system, Xerox formed a task force to create a new system from scratch. The task force itself was made up of senior human resources executives; however, members of the task force also consulted with councils of employees and a council of middle managers. Together they created a new system, which differed form the old one in many key respects:

• The absence of a numerical rating system.
• The presence of a half-year feedback session.
• The provision for development planning.
• Prohibition in the appraisal guidelines of the use of subjective assessments of performance.

The new system has three stages, as opposed to the one-step process of the old system. These stages are spread out over the course of the year. The first stage occurs at the beginning of the year when the manager meets with each employee. Together, they work out a written agreement on the employee’s goals, objectives, plans, and tasks for the year. Standards of satisfactory performance are explicitly spelled out in measurable, attainable, and specific terms.

The second stage is a mid-year, mandatory feedback and discussion session between the manager and the employee. Progress toward objectives and performance strengths and weaknesses are discussed, as well as possible means for improving performance in the latter half of the year. Both the manager and the employee sign an “objectives sheet” indicating that the meeting took place.

The third stage in the appraisal process is the formal performance review, which takes place at year’s end. Both the manager and the employee prepare a written document, stating how well the employee met the preset performance targets. They then meet and discuss the performance of the employee, resolving any discrepancies between the perceptions of the manager and the employee. This meeting emphasizes feedback and improvement. Efforts are made to stress the positive aspects of the employee’s performance as well as the negative. This stage also includes a developmental planning session in which training, education, or development experiences that can help the employee are discussed. The merit increase discussion takes place in a separate meeting from the performance appraisal, usually a month or two later. The discussion usually centers on the specific reasons for the merit raise amount, such as performance, relationship with peers, and position in salary range. This allows the employee to better see the reasons behind the salary increase amount, as opposed to the summary rank, which tells the employee very little.

A follow-up survey was conducted the year after the implementation of the new appraisal system. Results were as follows:

• 81 percent better understood work group objectives
• 84 percent considered the new appraisal fair
• 72 percent said they understood how their merit raise was determined
• 70 percent met their personal and work objectives
• 77 percent considered the system a step in the right direction

In conclusion, it can be clearly seen that the new system is a vast improvement over the previous one. Despite the fact that some of the philosophies, such as the use of self-appraisals, run counter to conventional management practices, the results speak for themselves.

• What type of performance appraisal is central to new system at Xerox? Which, if any, of the criteria for a successful appraisal does this new system have?
• Given the emphasis on employee development, what implications does this have for hiring and promotions?
• How do you think, management feels about the new performance appraisal system? Why?
• Are there any potential negative aspects of the new performance appraisal system?

Related Posts:

• Analyzing Toyota's Recipe for Success - The Toyota Way
• Case Study: General Electric's Two-Decade Transformation Under the Leadership of Jack Welch
• Case Study of Apple Inc: "Think Different" Branding Campaign
• Case Study on MIS: Information System in Restaurant
• Marketing Strategy of Sony Corporation
• Case Study: Human Resource Management at BMW
• Case Study of Burger King: Achieving Competitive Advantage through Quality Management
• Case Study: Cisco Systems Inc.'s ERP Implementation
• Case Study of Apple: Competitive Advantage Through Innovation
• Case Study of Zara: Use of Technology to Improve Operational Responsiveness

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *