Performance Management System at Novartis Essay

2237 WordsAug 14, 20139 Pages
I. The description of the performance management system at Novartis. 1. Overview of the PM system at Novartis An international employee PM system is a designed, implemented, and evaluated intervention of an MNE for the purpose of managing the performance of its global workforce so that performance at all levels contributes to the attainment of strategic global objectives and results in overall MNE desired performance (GHRM Performance Management & Novartis Part II, PPT, Schuler, 2013). In 1998, Novartis established a performance management system that evaluated employees and matched their compensation to both business results and certain values and behaviors (Jordan Siegel, 2008). Before 2002, most divisions at Novartis used…show more content…
The company also encouraged managers to compare the performance of their direct reports to other employees with similar positions in the company so that the ability of these managers for discerning talent differences will be improved (Jordan Siegel, 2008). As showed in Exhibit 2, about 20% of all the evaluated employees are put into the poor performance category, 50%-70% are assigned to the satisfied performance category, and 20%-25% employees are in the superior performance category. The normal distribution eliminates the leniency bias and centrality bias, clearly differentiating the top performance from normal and poor ones and identifying who can be promoted and rewarded. 4. Uniformity of PM System Novartis uses a uniform anonymous online surveys system to assess the results of its performance evaluation across the world. This uniform system allows Novartis to review, measure and differentiate performance of associates in a structured and consistent way (GHRM Performance Management & Novartis Part II, PPT, Schuler, 2013). As a result, this universal system gained the acceptance of more and more employees at Novartis with its outstanding design and implementation
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