Marie Stopes International (MSI) is one of the largest family planning organisations in the world, delivering contraception, safe abortion, and mother and baby care in 42 countries, often working with the poorest and most vulnerable people in the world.

MSI describes its culture as ‘more commercial than a lot of people would expect – It’s driven, it’s professional, and it’s a faster pace than a normal NGO or charity’. Describing itself as a “social enterprise” – a commercial business that is driven to address need through its success’, MSI stresses a ‘progressive and collaborative work environment’ a workforce of ‘passionate, focused, intelligent, high-achieving, talented individuals’.

            MSI’s core values are:

• Mission-driven
• Customer-focused
• Results-orientated
• Pioneering
• Sustainable
• People-centred

            To support the corporate ‘vision’ encompassed in these values, in 2009, MSI introduced a new performance management system to replace a system deemed dysfunctional and which was widely disliked across the organization. This new system – Performance Plus – was initially rolled out in the UK, where MSI has 350 team members across the country, but has subsequently been adopted across many of its international offices to the extent that the process is now well embedded and has become part of the wider organisation’s culture.

Performance Plus is based around a compulsory end-of-year review for all employees, as well as a mid-year review designed to provide employees with an opportunity to discuss their development and career. Employees are asked to set no more than six objectives, agreed with their manager, to be assessed at their year-end review as either ‘achieved’, ‘partially achieved’ or ‘not achieved’. However, in acknowledgement that performance is not always encapsulated within the six agreed objectives, managers are also advised to make a note of any other employee achievements during the year.

Reflecting the importance of both ‘how’ employees achieve their objectives as well as ‘what’ they have achieved, employees are also assessed on how they have demonstrated in the course of their work a range of behaviours that underpin the core values of MSI. To this end, MSI introduced a competency framework identifying 13 ‘team member’ behaviours and 11 core ‘leadership’ behaviours. Employees are expected to identify incidences of how they demonstrated these behaviours but also to be reflective about where they have failed to do so.

The performance review also considers information on performance collected through an automated system 360-degree feedback collected from a range of colleagues and direct reports (agreed between manager and team member) to help the recipient identify what they are doing well and should continue to do and what they need to do more of or less of. Again, questions are linked to the behaviours set out in the competency framework.

Based on the assessment against both objectives and behaviours, managers are asked to consider what the team member’s main achievements have been and what has gone particularly well during the review period. Managers must also consider what could have gone better, what has been particularly challenging or difficult, and the skills and abilities that have been developed in the previous year. Considering all of the evidence collated during the review period, and upon reviewing the rating definitions, managers must identify an appropriate indicator of the individual’s overall performance. The ratings are: ‘exceptional’, ‘commendable’, ‘successful’ or ‘improvement required’. MSI expects 10 per cent of employees to fall into the ‘exceptional’ rating; 30 per cent into ‘commendable’; 50 per cent into ‘successful’; and 10 per cent into ‘improvement required’.

Managers are asked to calibrate performance ratings across their team to ensure there is consistency in application of the ratings, both for fairness and equity but also so that reward is commensurate with levels of performance’. Any individual who disagrees with the rating can raise the issue using the organisation’s formal grievance procedure.

Reflecting the view of performance management as a continuous process, rather than one of periodic review, MSI expects managers to hold regular one-to-ones with their employees. Employees are also encouraged to arrange mid-year review with a focus on development and career progression. In 2012, MSI introduced a new talent management framework to be incorporated into its performance management system. The mid-year review provides managers with an opportunity to assess individual potential against the organisation’s ‘potential model’ that measures aspiration, commitment, engagement and performance track record. This assessment informs the employee’s development plan and is also collated centrally to inform talent management activities by classifying employees into a range of groups from ‘under-performer’ (low potential and low performance) to ‘exceptional potential’ (high on both measures).

The Adidas Group ‘strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle’. To this end, the group places emphasis on ‘creating a work environment that stimulates innovation, team spirit, engagement and achievement… by unlocking the talent of our workforce, we bring to life our company’s strategy and drive business results’.

Informing an ‘employer of choice’ approach to people management is a set of core values: Performance, Passion, Integrity and Diversity. This approach reflects recognition that to fulfill the ambition of becoming market leader ‘depends on the potential, dedication, knowledge and performance of our employees and the excellence of our leaders’.

The global performance management system in place at Adidas Group is called ‘The Score’ was rolled out in 2013 and represents ‘the cornerstone of our performance culture’ with the aim of facilitating open and honest feedback on performance and growth opportunities. In its first year, over 91 per cent of eligible employees completed their year-end appraisals. Employees receive regular feedback based on individual business targets, job tasks and further expectations in line with the key principles regarding the way employees are expected to work with the company.

Building on defined development goals, we offer and support employees with targeted development activities both on and off the job that ‘seek to build on their strengths, grow their skills and help them to overcome individual challenges’. Overall, the firm claims that ‘our highest priority is to match individual employee aspirations with our organisational needs’.

Beach House Software develops computer software for the entertainment industry, including that used in film animation and to create computer-generated images. Beach House was one of the early pioneers in the industry and is still highly regarded both as a provider of innovative new products and as an employer. However, as the demands of film and programme makers grow and competition in the market intensifies, Beach House has begun to see its market share and its reputation in the industry diminish. Broadly speaking, new business for Beach House is generated in two ways. First, it provides custom software designed to the specification of customers. This is typically through the modification of existing products. Second, it develops new, improved and occasionally ground-breaking products which it seeks to establish as industry standards. The former tend to be the company’s ‘bread and butter’, providing the majority of its revenue. The latter, however, is how the company develops prestige in the industry but it provides much more sporadic return for the company. The last significant ‘breakthrough’ product it produced was three years ago and, as a result, the company has seen its competitive edge gradually erode over this time.

As an employer, Beach House typifies the ‘collegiate’ approach to people management that is common in the ICT industry. The company employs 35 workers, approximately two-thirds of whom are directly involved in the core activity of software development. There are two vaguely defined work groups: the first producing customized products to customer specification (locally known as the ‘tweakers’); the second, developing new products from scratch (who refer to themselves as the ‘A Team’). A development manager has oversight of the two work groups but they are largely self-managed. Both groups of workers are highly skilled, possess scarce skills and knowledge and tend to have similar educational backgrounds. Working styles, however, differ between the two departments. New product developers typically work independently on their own ideas, occasionally sharing their work informally or jointly problem-solving. In the past, however, where new ideas have shown potential, much of the team becomes involved in development and share in bonus payments for successfully taking the product to market, although the originator typically takes a greater share of the bonus pot. In the custom product team, knowledge and ideas are shared more widely and workers collaborate extensively, partly out of necessity in order to get the job done. Reflecting this, working patterns are also distinct. Workers in the new product team are very relaxed about timekeeping, often starting late in the morning and working late into the night, although there is no real way of knowing individual working hours. They also make extensive use of the company’s chill-out rooms, often playing pool or videogames for long stretches of time. In contrast, the custom team keeps relatively regular hours and makes more limited use of recreation facilities. This reflects the fact that their work is constrained by tight deadlines. At present, all developers, regardless of the team to which they belong, are paid on the same salary scale and salary tends to reflect length of service.

Despite the laissez-faire management style and the relaxed approach to work at Beach House, rivalry between the two groups has intensified over recent months and usually collaborative working between the groups, previously characterized by a fluid exchange of ideas, has begun to disappear. The ‘tweakers’ have become increasingly dissatisfied with the ‘A Team’, both over their failure to make any substantial breakthroughs in new products over the past few years and resentful of the fact that senior managers appear to treat the ‘A team’ with ‘kid gloves’ and give them preferential treatment despite this failure, particularly the MD and finance director, neither of whom have any substantial technical expertise in the area of software design. They feel that their contribution to the business is largely taken for granted, despite them providing 100 per cent of revenue over recent years.

The development manager has some sympathy with the perception of the ‘tweakers’, yet recognizes the potential of the new product team to make a huge impact on company performance through the development of a single innovation; without such innovation, the demand for custom products would soon begin to decline. He also recognizes that successful new products that make it from development to market are difficult and time-consuming to create.

Task

Senior managers have expressed concern about the lack of new product ideas that have come out of the development team and, subsequently, about the long-term viability of the company. As an HR consultant, they have asked you to design a performance management system for workers in this department.