Siebel Case Study

1.      A forced-ranking system can have either be a positive or negative effect on an organization wherein on the pro side of the equation provide managers and the HR department with a “logical means to appraise, develop, and effectively utilize the knowledge and ability of employees” (pg 348); but, on the con side of the equation “a growing number of observers point out that performance appraisals frequently fall short of their potential” (pg 348).  As stated on pg 349 the most common uses of performance appraisals include:

Developmental:

·         Provide performance feedback

·         Identify individual strengths/weaknesses

·         Recognize individual performance

·         Assist in goal identification

Administrative:

·         Document personnel decisions

·         Determine promotion candidates

·         Determine transfers and assignments

·         Identify poor performance

·         Decide retention or termination

·         Decide on layoffs

Performance appraisals might not be effective include the following:

·         Inadequate preparation on the part of the manager

·         Employee is not given clear objectives at the beginning of the performance period

·         Manager any not be able to observe performance or have all the information

·         Performance standards may not be clear

·         Rating personality rather than performance

·         Inappropriate time span (either too short or too long)

·         Manager may not be trained at evaluation or giving feedback

In the case of Siebel, having a large personnel structure (over 8,000 employees) and with a 15 day evaluation of quarterly objectives and personal self-assessment may find some employees not wishing to over-evaluate themselves or they don’t realize themselves that they may not be fitting the job description themselves.  Self-assessment is extremely difficult to engage in a large organization with many different personalities.  Some managers may also believe that their staff may have had a particularly bad quarter and is not a true reflection of an overall yearly score.

2.       It may only make a difference for Siebel developing and selling performance management software if the software is based on a large corporate structural scenario and not using the same grading system within a smaller organization where a company may have different desire required from their employees.  Many times a smaller organization has a different perception of their objectives and how they want to have this met.

3.      If I were the owner/CEO of Siebel’s I would have a hard time with a quarterly forced ranking system, as I don’t think a company can engage in a true picture of how a department and individual team members perform.  There may be a bad quarter that is not any individual employee’s fault, or, perhaps there was a personal problem that is the employee has not yet chosen to approach the HR department with to obtain assistance.  I think, as stated in the previous answer, a half-year performance review would be the minimum time frame, but, have more of a probationary period for those employees that may be within that 5% culling section.  I think the system should be changed to a 360-degree appraisal system.

4.      Deighton’s claim that some of the star performers at Siebel will leave if the bottom 5 percent of employees aren’t cut is fallible.  By using the forced ranking system, it does not take into account peer and teamwork performance evaluations.  If a company does not use alternate appraisal systems company objectives cannot possibly be met adequately and effectively.  It is also more effective if an extensive amount of factors are taken into consideration when looking at the bottom five percent as there are mitigating factors that need to be taken into consideration such as: motivation, environment and ability.  Top performers generally do not look at fellow employees as a factor in leaving a company, but, rather being looked over for promotion and management style.  If a manager is not effective in identifying problems within the team or organization and looking to fix the identifying problems prior or just after evaluations, then top performers will look at alternate employment.  Also, cutting the bottom 5 percent without looking at the reason they are failing the grade is detrimental to the organization as a whole, as the performance problem could simply be remedied through job transfers in which the employee may then rate much higher on the performance scale.

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