SlideShare a Scribd company logo
1 of 16
Download to read offline
PERFORMANCE MANAGEMENT AT
VITALITY HEALTH ENTERPRISE, INC
Syndicate 6
Amalia Sefrina C - 29115364
Dian Sadar Adi P -29115417Dian Sadar Adi P -29115417
Galih Wibowojati - 29115422
Mirna G Insani - 29115395
Silur Sasakawa I - 29115408
Case Background
 Vitality enterprise was founded in 1987 in Ames Iowa by Hikaru “Fred”
Kikuchi. Initially it started with importing products from Japan and
marketing them.
It went success within 3 months and resulting to more than $15,000 in
sales
 In 1989 import tariffs and supply constraints forced vitality to start their
own manufacturing unit. By the Summer 1991, business grown to $3
million peryear.
 In 1994, vitality partnered with several leading pharmacy In 1994, vitality partnered with several leading pharmacy
 retailers to market their products. In 1995, company went global, targeting
markets around the Pacific Rim including Taiwan, China and Japan. In
1997, Vitality acquired
HerbaPure Nutraceuticals. Vitality’s name was changed as Vitality health
Enterprises. Also in this period company went public.
 With the expansion, Kikuchi maintain his vision by matching it to the
corporate strategy to one his favourite sayings: “ Outer beauty can only be
achieved as inner harmony is reached”
Case Background
 By 2007 company had around 5500 employees in HQ and nearly 1500
employees in global offices.
 In mid 2008 , global economic crisis brought relatively stagnation to
Vitality’s growth and Beth Williams was made the CEO of Vitality Health
Enterprises. Williams brought a disciplined operational mindset and was
known troughout the industry for reducing global production cost by 12%
during three years at the helm of B&W Beauty.
 In the first quarter of 2009, Vitality began rolling out its new business
strategy. In addition, Williams organized a committee to review thestrategy. In addition, Williams organized a committee to review the
policies and methods for tracking the performance goals of all non-sales
and non-executive employees across the entire company
 Over the next four months, the performance Management Evaluation
Team (PMET) studied the evaluation and rewards system.
 The PMET discovered that the PMS presented problems for the 2,500
professionals staff
The Problems #1 : The Rating System
• The Company has 13 different rating levels (from A to E
including plus and minuses) which leads to way for managerial
abuses.
• PMET discovered that many managers, gave almost everyone
C or a B, provided D or A ratings, and rarely give Es
• This resulted to a homogenous ratings that failed to sharply
distinguish performers from non performers
The Problems #1 : The Rating System
What Vitality Did to Improve for
Problem #1
• Vitality launched a new rating system where employees were now
rated with respect to one another by differentiating among
employees on the basis of performance.
• There is fifth category, Not Rated, for employees who were too new
to the company or their position to receive an accurate rating
The Problems #2 : The Point and Salary System
 Each position had a base-level monthly salary calculations and
performance based raises. Each position had a base-level
monthly salary that was modified upward along a pay policy
depending on the number of “job evaluation points”
The Problems #2 : The Point and Salary System
 Individual salaries were further modified by a comparative
ratio or ‘compa-ratio” based on individual performance in the
company
What Vitality Did to Improve for
Problem #2
• Compensation was adjusted by the new
program. The new plan incorporated a system
of performance-related short and long-term
equity bonusesequity bonuses
• This also will allow for limited stock options to
upper levels of management and directors as
an incentive to successfully implement the
new PMS
Additional System Vitality Did to
Improve
• All performance reviews were to be
conducted at the start of the calendar year
and delivered to the employees in conjunction
with the annual goal-setting process in
JanuaryJanuary
• The timetable will put the entire company in
the same review cycle for collaborative efforts
and to limit the effect of external factors on
the relative rankings
The Result
• PMET2 was established to review the new PMS
implementation and compare performance ranking data for
review
The Result
• Responses to the employee surveys indicate that only
over half preferred the new system (54%), nearly a
third preferred the old system (31%) and the remainder
indifferent between two.
• Managers felt more difficult to discuss performance
with their team member because the yearly reviewwith their team member because the yearly review
process was tied s closely with merit increases
• Some empoyees and the managers themselves felt that
they were less likely to perform duties outside their job
description because those responsibility weren’t part
of their review.
Questions
1. Diagnose the CEO perception that putting blame on
Performance Management
 The implementation of the new rating systems are not
changing many old practices. It only reduced the number of
criteria and grading. In reality, the distribution of the Top
Performer and achiever are almost similar.
 Even worst the existence of Not Rated criteria for new Even worst the existence of Not Rated criteria for new
employee will drive low enthusiasm and motivation from
new employee.
 This will also impact to the turnover rate amongst the new
talents
 All investment made for trainings, development new
employees are gone along with new appointed employees.
Our Analysis & Recommendation
 As Vitality looks at revising their newer corporate performance
management system, in conjunction with their corporate vision, they
should ensure that the CPM is aligned. The common tools used to
aligned them is the Kaplan & Norton’s Balanced Scorecard
 The BSC framework consist of 4 elements; Financial, Customer, Internal
Process and Learning Development. By cascading these perspective to
the performance review, Managers and Employee will always feel that
what they reviewing and conduct is part of their job responsibility and
measured trough their KPI
Questions
2. If it were justified, develop your own recommendation to
reinvent the performance management system at Vitality
Health Enterprise
 Refreshing and re-communicating the strategy through management
and employee training, the entire organization will be able to
understand the vision that CEO is seeking for continued growth
 Cascading and managing the strategy through the balanced scorecard Cascading and managing the strategy through the balanced scorecard
to ‘connect the dots’ between the various components of strategic
planning and management.
 provide a new system for performance payout that does not include a
confusing forced distribution that only values individual performance
 provide a new system for performance payout that does not include a
confusing forced distribution that only values individual performance
Our Analysis & Recommendation
 It also should be noted that Beth Williams and PMET should be
aware of the correct balance of job motivations of R&D staff, as
opposed to sales and marketing staff. In the case of R&D and
scientists, where work can be extremely complex or creative,
bonuses and other forms of variable pay for performance can
largely undermine employees’ work ethic.”
 Intrinsic motivation or value for it’s own sake versus extrinsic Intrinsic motivation or value for it’s own sake versus extrinsic
motivation or satisfying needs indirectly through monetary
compensation, depends largely on the category that employees
fall into.
 Leadership is also something that Vitality need to develop
amongst their Managers
 On going recognition program, coaching, mentoring can help the
annual appraisal become more meaningful and monitored

More Related Content

What's hot

Recruitment of a Star
Recruitment of a StarRecruitment of a Star
Recruitment of a StarIndiran K
 
Dominion Motor Ltd
Dominion Motor LtdDominion Motor Ltd
Dominion Motor LtdArgha Ray
 
Mrs. fields cookies odc section c_group 9
Mrs. fields cookies odc section c_group 9Mrs. fields cookies odc section c_group 9
Mrs. fields cookies odc section c_group 9Karan Jaidka
 
Cola Wars - Coke Vs Pepsi Harvard Business School Case Study
Cola Wars - Coke Vs Pepsi Harvard Business School Case StudyCola Wars - Coke Vs Pepsi Harvard Business School Case Study
Cola Wars - Coke Vs Pepsi Harvard Business School Case StudyMohan Kanni
 
SG Cowen New Recruits
SG Cowen New RecruitsSG Cowen New Recruits
SG Cowen New RecruitsInes Ha
 
Colgate Palmolive- Salary Offer Case Study
Colgate Palmolive- Salary Offer Case StudyColgate Palmolive- Salary Offer Case Study
Colgate Palmolive- Salary Offer Case StudyTANUSHREE BOSE
 
Pople management fiasco in HMSI case analysis
Pople management fiasco in HMSI case analysisPople management fiasco in HMSI case analysis
Pople management fiasco in HMSI case analysisRoshan Acharya
 
The Microfridge Case
The Microfridge CaseThe Microfridge Case
The Microfridge CaseKaran Jaidka
 
Honda Motorcycles and Scooters India Ltd. (HMSI) case study
Honda Motorcycles and Scooters India Ltd. (HMSI) case studyHonda Motorcycles and Scooters India Ltd. (HMSI) case study
Honda Motorcycles and Scooters India Ltd. (HMSI) case studyVidushiBhageria
 
Flipkart Wired Case Competition 2018
Flipkart Wired Case Competition 2018Flipkart Wired Case Competition 2018
Flipkart Wired Case Competition 2018Bhargava Ram
 
Kanpur Confectioneries Case Analysis
Kanpur Confectioneries Case AnalysisKanpur Confectioneries Case Analysis
Kanpur Confectioneries Case AnalysisJayant Kushwaha
 
CASE STUDY OF Rob Parson
CASE STUDY OF Rob ParsonCASE STUDY OF Rob Parson
CASE STUDY OF Rob ParsonNausheen Hasan
 
Campbell and Bailyn’s Boston Office
Campbell and Bailyn’s Boston OfficeCampbell and Bailyn’s Boston Office
Campbell and Bailyn’s Boston OfficeShahid Ali Dar
 
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Aqualisa Quartz - Simply A Better Shower (HBR Case Study)
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Arjun Parekh
 
Talent acquisition group at hcl technologies
Talent acquisition group at hcl technologiesTalent acquisition group at hcl technologies
Talent acquisition group at hcl technologiesAbhishek Agarwal
 

What's hot (20)

Montreaux (1)
Montreaux (1)Montreaux (1)
Montreaux (1)
 
Recruitment of a Star
Recruitment of a StarRecruitment of a Star
Recruitment of a Star
 
Hrm citibank
Hrm  citibankHrm  citibank
Hrm citibank
 
Dominion Motor Ltd
Dominion Motor LtdDominion Motor Ltd
Dominion Motor Ltd
 
Vitality Health Enterprise
Vitality Health EnterpriseVitality Health Enterprise
Vitality Health Enterprise
 
Managing up
Managing upManaging up
Managing up
 
Mrs. fields cookies odc section c_group 9
Mrs. fields cookies odc section c_group 9Mrs. fields cookies odc section c_group 9
Mrs. fields cookies odc section c_group 9
 
Cola Wars - Coke Vs Pepsi Harvard Business School Case Study
Cola Wars - Coke Vs Pepsi Harvard Business School Case StudyCola Wars - Coke Vs Pepsi Harvard Business School Case Study
Cola Wars - Coke Vs Pepsi Harvard Business School Case Study
 
SG Cowen New Recruits
SG Cowen New RecruitsSG Cowen New Recruits
SG Cowen New Recruits
 
Wrap it up
Wrap it upWrap it up
Wrap it up
 
Colgate Palmolive- Salary Offer Case Study
Colgate Palmolive- Salary Offer Case StudyColgate Palmolive- Salary Offer Case Study
Colgate Palmolive- Salary Offer Case Study
 
Pople management fiasco in HMSI case analysis
Pople management fiasco in HMSI case analysisPople management fiasco in HMSI case analysis
Pople management fiasco in HMSI case analysis
 
The Microfridge Case
The Microfridge CaseThe Microfridge Case
The Microfridge Case
 
Honda Motorcycles and Scooters India Ltd. (HMSI) case study
Honda Motorcycles and Scooters India Ltd. (HMSI) case studyHonda Motorcycles and Scooters India Ltd. (HMSI) case study
Honda Motorcycles and Scooters India Ltd. (HMSI) case study
 
Flipkart Wired Case Competition 2018
Flipkart Wired Case Competition 2018Flipkart Wired Case Competition 2018
Flipkart Wired Case Competition 2018
 
Kanpur Confectioneries Case Analysis
Kanpur Confectioneries Case AnalysisKanpur Confectioneries Case Analysis
Kanpur Confectioneries Case Analysis
 
CASE STUDY OF Rob Parson
CASE STUDY OF Rob ParsonCASE STUDY OF Rob Parson
CASE STUDY OF Rob Parson
 
Campbell and Bailyn’s Boston Office
Campbell and Bailyn’s Boston OfficeCampbell and Bailyn’s Boston Office
Campbell and Bailyn’s Boston Office
 
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)Aqualisa Quartz - Simply A Better Shower (HBR Case Study)
Aqualisa Quartz - Simply A Better Shower (HBR Case Study)
 
Talent acquisition group at hcl technologies
Talent acquisition group at hcl technologiesTalent acquisition group at hcl technologies
Talent acquisition group at hcl technologies
 

Similar to Performance management at vitality health enterprise inc

Improving Your Marketing and Sales.pptx
Improving Your Marketing and Sales.pptxImproving Your Marketing and Sales.pptx
Improving Your Marketing and Sales.pptxROHITDAS279515
 
UNIT II.pptx
UNIT II.pptxUNIT II.pptx
UNIT II.pptxManojMba2
 
Effectiveness of performance measure
Effectiveness of  performance measureEffectiveness of  performance measure
Effectiveness of performance measureShyam Sunder Budhwar
 
Performance appraisal system definition
Performance appraisal system definitionPerformance appraisal system definition
Performance appraisal system definitionlydiawood280
 
PERFORMANCE APPRAISAL AND ASSESSMENT
PERFORMANCE APPRAISAL AND ASSESSMENTPERFORMANCE APPRAISAL AND ASSESSMENT
PERFORMANCE APPRAISAL AND ASSESSMENTAkhilaYaramala
 
Remuneration and Incentive Planning
Remuneration and Incentive PlanningRemuneration and Incentive Planning
Remuneration and Incentive PlanningCraig West
 
Total Quality Management (TQM) for Sustainability
Total Quality Management (TQM) for SustainabilityTotal Quality Management (TQM) for Sustainability
Total Quality Management (TQM) for SustainabilityFundação Dom Cabral - FDC
 
Wholesale Distribution Incentives
Wholesale Distribution   IncentivesWholesale Distribution   Incentives
Wholesale Distribution Incentivespatrickwjones
 
Webinar-What’s Next for Performance-Related Pay?.pdf
Webinar-What’s Next for Performance-Related Pay?.pdfWebinar-What’s Next for Performance-Related Pay?.pdf
Webinar-What’s Next for Performance-Related Pay?.pdfPayScale, Inc.
 
DOs & DON'Ts of Short-Term Incentive Compensation Plans
DOs & DON'Ts of Short-Term Incentive Compensation PlansDOs & DON'Ts of Short-Term Incentive Compensation Plans
DOs & DON'Ts of Short-Term Incentive Compensation PlansCBIZ, Inc.
 
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx0102192528
 
Managing Investment in Employees Strategically
Managing Investment in Employees StrategicallyManaging Investment in Employees Strategically
Managing Investment in Employees StrategicallyPat Wright
 

Similar to Performance management at vitality health enterprise inc (20)

Improving Your Marketing and Sales.pptx
Improving Your Marketing and Sales.pptxImproving Your Marketing and Sales.pptx
Improving Your Marketing and Sales.pptx
 
UNIT II.pptx
UNIT II.pptxUNIT II.pptx
UNIT II.pptx
 
Designing Cash Incentive Plans
Designing Cash Incentive PlansDesigning Cash Incentive Plans
Designing Cash Incentive Plans
 
Effectiveness of performance measure
Effectiveness of  performance measureEffectiveness of  performance measure
Effectiveness of performance measure
 
HRM_7th week
HRM_7th weekHRM_7th week
HRM_7th week
 
Performance appraisal system definition
Performance appraisal system definitionPerformance appraisal system definition
Performance appraisal system definition
 
PERFORMANCE APPRAISAL AND ASSESSMENT
PERFORMANCE APPRAISAL AND ASSESSMENTPERFORMANCE APPRAISAL AND ASSESSMENT
PERFORMANCE APPRAISAL AND ASSESSMENT
 
Ppppppppppppppppp
PppppppppppppppppPpppppppppppppppp
Ppppppppppppppppp
 
Human resource management
Human resource managementHuman resource management
Human resource management
 
Remuneration and Incentive Planning
Remuneration and Incentive PlanningRemuneration and Incentive Planning
Remuneration and Incentive Planning
 
Total Quality Management (TQM) for Sustainability
Total Quality Management (TQM) for SustainabilityTotal Quality Management (TQM) for Sustainability
Total Quality Management (TQM) for Sustainability
 
Wholesale Distribution Incentives
Wholesale Distribution   IncentivesWholesale Distribution   Incentives
Wholesale Distribution Incentives
 
Balanced scorecard
Balanced scorecardBalanced scorecard
Balanced scorecard
 
Balanced scorecard
Balanced scorecard Balanced scorecard
Balanced scorecard
 
Webinar-What’s Next for Performance-Related Pay?.pdf
Webinar-What’s Next for Performance-Related Pay?.pdfWebinar-What’s Next for Performance-Related Pay?.pdf
Webinar-What’s Next for Performance-Related Pay?.pdf
 
Ceo Compensation
Ceo CompensationCeo Compensation
Ceo Compensation
 
Topic 4
Topic 4Topic 4
Topic 4
 
DOs & DON'Ts of Short-Term Incentive Compensation Plans
DOs & DON'Ts of Short-Term Incentive Compensation PlansDOs & DON'Ts of Short-Term Incentive Compensation Plans
DOs & DON'Ts of Short-Term Incentive Compensation Plans
 
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx
7. COST MANAGEMENT ACCOUNTING PROJECT BY GAURANG SHARMA.docx
 
Managing Investment in Employees Strategically
Managing Investment in Employees StrategicallyManaging Investment in Employees Strategically
Managing Investment in Employees Strategically
 

More from DS Adi Pratomo

Leading Change Workshop by Briktru Indonesia
Leading Change Workshop by Briktru IndonesiaLeading Change Workshop by Briktru Indonesia
Leading Change Workshop by Briktru IndonesiaDS Adi Pratomo
 
Beyond the Iron triangle case study
Beyond the Iron triangle case studyBeyond the Iron triangle case study
Beyond the Iron triangle case studyDS Adi Pratomo
 
General motor decides smaller is better Case Study SBM-ITB
General motor decides smaller is better Case Study SBM-ITBGeneral motor decides smaller is better Case Study SBM-ITB
General motor decides smaller is better Case Study SBM-ITBDS Adi Pratomo
 
Airbus's decision to build a380-SBM ITB
Airbus's decision to build a380-SBM ITBAirbus's decision to build a380-SBM ITB
Airbus's decision to build a380-SBM ITBDS Adi Pratomo
 
Scenario planning syndicate 3 - SBM ITB
Scenario planning   syndicate 3 - SBM ITBScenario planning   syndicate 3 - SBM ITB
Scenario planning syndicate 3 - SBM ITBDS Adi Pratomo
 
Royal Bank of scotland case study
Royal Bank of scotland case studyRoyal Bank of scotland case study
Royal Bank of scotland case studyDS Adi Pratomo
 
Shanghai 2014 ACTLO Product Presentation
Shanghai 2014  ACTLO Product Presentation Shanghai 2014  ACTLO Product Presentation
Shanghai 2014 ACTLO Product Presentation DS Adi Pratomo
 

More from DS Adi Pratomo (9)

Leadership Essentials
Leadership EssentialsLeadership Essentials
Leadership Essentials
 
Leading Change Workshop by Briktru Indonesia
Leading Change Workshop by Briktru IndonesiaLeading Change Workshop by Briktru Indonesia
Leading Change Workshop by Briktru Indonesia
 
Syllabus briktru 2017
Syllabus briktru 2017Syllabus briktru 2017
Syllabus briktru 2017
 
Beyond the Iron triangle case study
Beyond the Iron triangle case studyBeyond the Iron triangle case study
Beyond the Iron triangle case study
 
General motor decides smaller is better Case Study SBM-ITB
General motor decides smaller is better Case Study SBM-ITBGeneral motor decides smaller is better Case Study SBM-ITB
General motor decides smaller is better Case Study SBM-ITB
 
Airbus's decision to build a380-SBM ITB
Airbus's decision to build a380-SBM ITBAirbus's decision to build a380-SBM ITB
Airbus's decision to build a380-SBM ITB
 
Scenario planning syndicate 3 - SBM ITB
Scenario planning   syndicate 3 - SBM ITBScenario planning   syndicate 3 - SBM ITB
Scenario planning syndicate 3 - SBM ITB
 
Royal Bank of scotland case study
Royal Bank of scotland case studyRoyal Bank of scotland case study
Royal Bank of scotland case study
 
Shanghai 2014 ACTLO Product Presentation
Shanghai 2014  ACTLO Product Presentation Shanghai 2014  ACTLO Product Presentation
Shanghai 2014 ACTLO Product Presentation
 

Recently uploaded

ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...
ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...
ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...JojoEDelaCruz
 
Integumentary System SMP B. Pharm Sem I.ppt
Integumentary System SMP B. Pharm Sem I.pptIntegumentary System SMP B. Pharm Sem I.ppt
Integumentary System SMP B. Pharm Sem I.pptshraddhaparab530
 
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATION
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATIONTHEORIES OF ORGANIZATION-PUBLIC ADMINISTRATION
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATIONHumphrey A Beña
 
4.16.24 Poverty and Precarity--Desmond.pptx
4.16.24 Poverty and Precarity--Desmond.pptx4.16.24 Poverty and Precarity--Desmond.pptx
4.16.24 Poverty and Precarity--Desmond.pptxmary850239
 
AUDIENCE THEORY -CULTIVATION THEORY - GERBNER.pptx
AUDIENCE THEORY -CULTIVATION THEORY -  GERBNER.pptxAUDIENCE THEORY -CULTIVATION THEORY -  GERBNER.pptx
AUDIENCE THEORY -CULTIVATION THEORY - GERBNER.pptxiammrhaywood
 
Presentation Activity 2. Unit 3 transv.pptx
Presentation Activity 2. Unit 3 transv.pptxPresentation Activity 2. Unit 3 transv.pptx
Presentation Activity 2. Unit 3 transv.pptxRosabel UA
 
Oppenheimer Film Discussion for Philosophy and Film
Oppenheimer Film Discussion for Philosophy and FilmOppenheimer Film Discussion for Philosophy and Film
Oppenheimer Film Discussion for Philosophy and FilmStan Meyer
 
The Contemporary World: The Globalization of World Politics
The Contemporary World: The Globalization of World PoliticsThe Contemporary World: The Globalization of World Politics
The Contemporary World: The Globalization of World PoliticsRommel Regala
 
Transaction Management in Database Management System
Transaction Management in Database Management SystemTransaction Management in Database Management System
Transaction Management in Database Management SystemChristalin Nelson
 
Keynote by Prof. Wurzer at Nordex about IP-design
Keynote by Prof. Wurzer at Nordex about IP-designKeynote by Prof. Wurzer at Nordex about IP-design
Keynote by Prof. Wurzer at Nordex about IP-designMIPLM
 
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdf
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdfGrade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdf
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdfJemuel Francisco
 
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTS
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTSGRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTS
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTSJoshuaGantuangco2
 
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...Postal Advocate Inc.
 
ROLES IN A STAGE PRODUCTION in arts.pptx
ROLES IN A STAGE PRODUCTION in arts.pptxROLES IN A STAGE PRODUCTION in arts.pptx
ROLES IN A STAGE PRODUCTION in arts.pptxVanesaIglesias10
 
How to Add Barcode on PDF Report in Odoo 17
How to Add Barcode on PDF Report in Odoo 17How to Add Barcode on PDF Report in Odoo 17
How to Add Barcode on PDF Report in Odoo 17Celine George
 
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdf
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdfVirtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdf
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdfErwinPantujan2
 
Daily Lesson Plan in Mathematics Quarter 4
Daily Lesson Plan in Mathematics Quarter 4Daily Lesson Plan in Mathematics Quarter 4
Daily Lesson Plan in Mathematics Quarter 4JOYLYNSAMANIEGO
 
Dust Of Snow By Robert Frost Class-X English CBSE
Dust Of Snow By Robert Frost Class-X English CBSEDust Of Snow By Robert Frost Class-X English CBSE
Dust Of Snow By Robert Frost Class-X English CBSEaurabinda banchhor
 

Recently uploaded (20)

LEFT_ON_C'N_ PRELIMS_EL_DORADO_2024.pptx
LEFT_ON_C'N_ PRELIMS_EL_DORADO_2024.pptxLEFT_ON_C'N_ PRELIMS_EL_DORADO_2024.pptx
LEFT_ON_C'N_ PRELIMS_EL_DORADO_2024.pptx
 
ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...
ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...
ENG 5 Q4 WEEk 1 DAY 1 Restate sentences heard in one’s own words. Use appropr...
 
Integumentary System SMP B. Pharm Sem I.ppt
Integumentary System SMP B. Pharm Sem I.pptIntegumentary System SMP B. Pharm Sem I.ppt
Integumentary System SMP B. Pharm Sem I.ppt
 
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATION
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATIONTHEORIES OF ORGANIZATION-PUBLIC ADMINISTRATION
THEORIES OF ORGANIZATION-PUBLIC ADMINISTRATION
 
4.16.24 Poverty and Precarity--Desmond.pptx
4.16.24 Poverty and Precarity--Desmond.pptx4.16.24 Poverty and Precarity--Desmond.pptx
4.16.24 Poverty and Precarity--Desmond.pptx
 
AUDIENCE THEORY -CULTIVATION THEORY - GERBNER.pptx
AUDIENCE THEORY -CULTIVATION THEORY -  GERBNER.pptxAUDIENCE THEORY -CULTIVATION THEORY -  GERBNER.pptx
AUDIENCE THEORY -CULTIVATION THEORY - GERBNER.pptx
 
Presentation Activity 2. Unit 3 transv.pptx
Presentation Activity 2. Unit 3 transv.pptxPresentation Activity 2. Unit 3 transv.pptx
Presentation Activity 2. Unit 3 transv.pptx
 
Oppenheimer Film Discussion for Philosophy and Film
Oppenheimer Film Discussion for Philosophy and FilmOppenheimer Film Discussion for Philosophy and Film
Oppenheimer Film Discussion for Philosophy and Film
 
The Contemporary World: The Globalization of World Politics
The Contemporary World: The Globalization of World PoliticsThe Contemporary World: The Globalization of World Politics
The Contemporary World: The Globalization of World Politics
 
Transaction Management in Database Management System
Transaction Management in Database Management SystemTransaction Management in Database Management System
Transaction Management in Database Management System
 
Keynote by Prof. Wurzer at Nordex about IP-design
Keynote by Prof. Wurzer at Nordex about IP-designKeynote by Prof. Wurzer at Nordex about IP-design
Keynote by Prof. Wurzer at Nordex about IP-design
 
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdf
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdfGrade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdf
Grade 9 Quarter 4 Dll Grade 9 Quarter 4 DLL.pdf
 
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTS
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTSGRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTS
GRADE 4 - SUMMATIVE TEST QUARTER 4 ALL SUBJECTS
 
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...
USPS® Forced Meter Migration - How to Know if Your Postage Meter Will Soon be...
 
ROLES IN A STAGE PRODUCTION in arts.pptx
ROLES IN A STAGE PRODUCTION in arts.pptxROLES IN A STAGE PRODUCTION in arts.pptx
ROLES IN A STAGE PRODUCTION in arts.pptx
 
How to Add Barcode on PDF Report in Odoo 17
How to Add Barcode on PDF Report in Odoo 17How to Add Barcode on PDF Report in Odoo 17
How to Add Barcode on PDF Report in Odoo 17
 
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdf
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdfVirtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdf
Virtual-Orientation-on-the-Administration-of-NATG12-NATG6-and-ELLNA.pdf
 
Daily Lesson Plan in Mathematics Quarter 4
Daily Lesson Plan in Mathematics Quarter 4Daily Lesson Plan in Mathematics Quarter 4
Daily Lesson Plan in Mathematics Quarter 4
 
Dust Of Snow By Robert Frost Class-X English CBSE
Dust Of Snow By Robert Frost Class-X English CBSEDust Of Snow By Robert Frost Class-X English CBSE
Dust Of Snow By Robert Frost Class-X English CBSE
 
INCLUSIVE EDUCATION PRACTICES FOR TEACHERS AND TRAINERS.pptx
INCLUSIVE EDUCATION PRACTICES FOR TEACHERS AND TRAINERS.pptxINCLUSIVE EDUCATION PRACTICES FOR TEACHERS AND TRAINERS.pptx
INCLUSIVE EDUCATION PRACTICES FOR TEACHERS AND TRAINERS.pptx
 

Performance management at vitality health enterprise inc

  • 1. PERFORMANCE MANAGEMENT AT VITALITY HEALTH ENTERPRISE, INC Syndicate 6 Amalia Sefrina C - 29115364 Dian Sadar Adi P -29115417Dian Sadar Adi P -29115417 Galih Wibowojati - 29115422 Mirna G Insani - 29115395 Silur Sasakawa I - 29115408
  • 2. Case Background  Vitality enterprise was founded in 1987 in Ames Iowa by Hikaru “Fred” Kikuchi. Initially it started with importing products from Japan and marketing them. It went success within 3 months and resulting to more than $15,000 in sales  In 1989 import tariffs and supply constraints forced vitality to start their own manufacturing unit. By the Summer 1991, business grown to $3 million peryear.  In 1994, vitality partnered with several leading pharmacy In 1994, vitality partnered with several leading pharmacy  retailers to market their products. In 1995, company went global, targeting markets around the Pacific Rim including Taiwan, China and Japan. In 1997, Vitality acquired HerbaPure Nutraceuticals. Vitality’s name was changed as Vitality health Enterprises. Also in this period company went public.  With the expansion, Kikuchi maintain his vision by matching it to the corporate strategy to one his favourite sayings: “ Outer beauty can only be achieved as inner harmony is reached”
  • 3. Case Background  By 2007 company had around 5500 employees in HQ and nearly 1500 employees in global offices.  In mid 2008 , global economic crisis brought relatively stagnation to Vitality’s growth and Beth Williams was made the CEO of Vitality Health Enterprises. Williams brought a disciplined operational mindset and was known troughout the industry for reducing global production cost by 12% during three years at the helm of B&W Beauty.  In the first quarter of 2009, Vitality began rolling out its new business strategy. In addition, Williams organized a committee to review thestrategy. In addition, Williams organized a committee to review the policies and methods for tracking the performance goals of all non-sales and non-executive employees across the entire company  Over the next four months, the performance Management Evaluation Team (PMET) studied the evaluation and rewards system.  The PMET discovered that the PMS presented problems for the 2,500 professionals staff
  • 4. The Problems #1 : The Rating System • The Company has 13 different rating levels (from A to E including plus and minuses) which leads to way for managerial abuses. • PMET discovered that many managers, gave almost everyone C or a B, provided D or A ratings, and rarely give Es
  • 5. • This resulted to a homogenous ratings that failed to sharply distinguish performers from non performers The Problems #1 : The Rating System
  • 6. What Vitality Did to Improve for Problem #1 • Vitality launched a new rating system where employees were now rated with respect to one another by differentiating among employees on the basis of performance. • There is fifth category, Not Rated, for employees who were too new to the company or their position to receive an accurate rating
  • 7. The Problems #2 : The Point and Salary System  Each position had a base-level monthly salary calculations and performance based raises. Each position had a base-level monthly salary that was modified upward along a pay policy depending on the number of “job evaluation points”
  • 8. The Problems #2 : The Point and Salary System  Individual salaries were further modified by a comparative ratio or ‘compa-ratio” based on individual performance in the company
  • 9. What Vitality Did to Improve for Problem #2 • Compensation was adjusted by the new program. The new plan incorporated a system of performance-related short and long-term equity bonusesequity bonuses • This also will allow for limited stock options to upper levels of management and directors as an incentive to successfully implement the new PMS
  • 10. Additional System Vitality Did to Improve • All performance reviews were to be conducted at the start of the calendar year and delivered to the employees in conjunction with the annual goal-setting process in JanuaryJanuary • The timetable will put the entire company in the same review cycle for collaborative efforts and to limit the effect of external factors on the relative rankings
  • 11. The Result • PMET2 was established to review the new PMS implementation and compare performance ranking data for review
  • 12. The Result • Responses to the employee surveys indicate that only over half preferred the new system (54%), nearly a third preferred the old system (31%) and the remainder indifferent between two. • Managers felt more difficult to discuss performance with their team member because the yearly reviewwith their team member because the yearly review process was tied s closely with merit increases • Some empoyees and the managers themselves felt that they were less likely to perform duties outside their job description because those responsibility weren’t part of their review.
  • 13. Questions 1. Diagnose the CEO perception that putting blame on Performance Management  The implementation of the new rating systems are not changing many old practices. It only reduced the number of criteria and grading. In reality, the distribution of the Top Performer and achiever are almost similar.  Even worst the existence of Not Rated criteria for new Even worst the existence of Not Rated criteria for new employee will drive low enthusiasm and motivation from new employee.  This will also impact to the turnover rate amongst the new talents  All investment made for trainings, development new employees are gone along with new appointed employees.
  • 14. Our Analysis & Recommendation  As Vitality looks at revising their newer corporate performance management system, in conjunction with their corporate vision, they should ensure that the CPM is aligned. The common tools used to aligned them is the Kaplan & Norton’s Balanced Scorecard  The BSC framework consist of 4 elements; Financial, Customer, Internal Process and Learning Development. By cascading these perspective to the performance review, Managers and Employee will always feel that what they reviewing and conduct is part of their job responsibility and measured trough their KPI
  • 15. Questions 2. If it were justified, develop your own recommendation to reinvent the performance management system at Vitality Health Enterprise  Refreshing and re-communicating the strategy through management and employee training, the entire organization will be able to understand the vision that CEO is seeking for continued growth  Cascading and managing the strategy through the balanced scorecard Cascading and managing the strategy through the balanced scorecard to ‘connect the dots’ between the various components of strategic planning and management.  provide a new system for performance payout that does not include a confusing forced distribution that only values individual performance  provide a new system for performance payout that does not include a confusing forced distribution that only values individual performance
  • 16. Our Analysis & Recommendation  It also should be noted that Beth Williams and PMET should be aware of the correct balance of job motivations of R&D staff, as opposed to sales and marketing staff. In the case of R&D and scientists, where work can be extremely complex or creative, bonuses and other forms of variable pay for performance can largely undermine employees’ work ethic.”  Intrinsic motivation or value for it’s own sake versus extrinsic Intrinsic motivation or value for it’s own sake versus extrinsic motivation or satisfying needs indirectly through monetary compensation, depends largely on the category that employees fall into.  Leadership is also something that Vitality need to develop amongst their Managers  On going recognition program, coaching, mentoring can help the annual appraisal become more meaningful and monitored