Vitality Health Enterprises Inc Essay examples

1464 Words Aug 4th, 2014 6 Pages
POLYTECHNIC OF NAMIBIA
HAROLD PUPKEWITZ GRADUATE SCHOOL OF BUSINESS

Performance Management at Vitality Health Enterprises, Inc Case Report

By

Leonardo Imerne

Strategic Human Resources Management (SHM910M)

Date: 21 June 2014

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EXECUTIVE SUMMARY

This report will focus on the performance management at Vitality Health Enterprises, Inc, which is a cosmetics and beauty products oriented business. The business started off well with a fast expansion approach. As the company grows, performance management of its staff was necessary to reward top performers as a motivation factor, and also to identify poor performers so they could be trained further or relieved from their positions. The report will therefore highlight the problems associated
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The performance management system had 13 different rating levels (from A to E, including minutes and pluses). This system had later proved to be less effective since managers who used it were dishonest, and rather rated employees averagely rather than deservedly. Since this system was developed to reward top performers, they ended up feeling under-appreciated because they were rated as average as any other employee, regardless of productivity. According to Bingham & Beer (2012), the employees frustration was caused by the point system of calculating salaries and performance-based raises.

The formula that was used was: pay policy line = Base Salary + (Job Evaluation Points * Increase per Point, which was later modified by a comparative ration, or “compa-ratio”, based on individual performance in the company. Comparative ratio analysis is a method companies use to assess their financial performance, http://www.wisegeek.org/what-is-comparative-ratio-analysis.htm. With compa-ratio, the employees with consistently higher performance sometimes even receive smaller raises than their less productive colleagues. The Vitality Health Enterprises Inc had later decided to increase the salaries across the entire workforce, with no provision for bonuses or alternative forms of compensation. This resulted in all employees receiving high salaries regardless of their overall performance. In response to these issues, the