Case Analysis: Vitality Health
Ervin Shanazary, [email protected]
September 28, 2018
The main issue in this case is how Vitality can maintain being the industry leader in innovation. For Vitality to maintain their position as industry leader, innovation is an important for them to succeed. Several other factors also play a key role in the management process at Vitality Health Enterprises Inc. There is a high turnover rate of some of the best performing employees at the company. The evaluation process in which management scores individuals on their performance is poorly executed.
Analyzing the Problems
Some of the lead scientists who decide to leave the company have a voice that stands out towards other lower-level employees. Once the upper-level employees leave due to how discouraged they feel, it causes a chain reaction for other employees to leave as well. Although not all low-level employees will leave the company, they are left with some feelings of discouragement in the workplace and mistreatment from the upper management. These feelings of doubt within the employees can lead them to thinking why they are still working in a company that does not treat them fairly.
The management system that they had in place had a very complex and inadequate evaluation process. This poorly executed system of evaluating employees caused for employees to feel discouraged of the work they are doing within the company. Exhibit 2 in the case shows a 13-level rating system that has potential for abuse by management. The graph shows that management assigns most employees with “B’s” and “C’s” and in some cases “D’s”. This rating system fails to show how well certain employees improve within a given time frame. It also does not identify the poor performers within the company.
There are several ways that Vitality can improve upon their business methods to make sure that they stand as an industry leader. One major issue within the company is the evaluation process that they have implemented to see the performance of all the employees. It would be better to increase the time in which managers have to make performance reviews to allow for employees to show their potential within the company. Removing the 13-level ranking system is a step in the right direction but not the solution to the problem entirely.
Managers need a better way of tracking employee performance both individually and in groups. Making sure to score performance in both ways can show management who is doing their jobs and who is slacking. A two-step performance review would have two separate performance reviews, one at the beginning and one at the end. Instituting a two-step performance review will allow for managers to see how much an employee has improved, stayed the same or been performing poorly. This is a more advantageous method of evaluating employees because it identifies the people that are performing well individually and in teams while also identifying the employees that are performing poorly.
Motivation is a key component in a company to making sure that employees are satisfied with the jobs they are assigned to. The company must make sure that all employees have a reason to stay motivated at work. Certain incentives and bonuses can lead to better work productivity and reduce any employee turnovers. Every employee wants to feel appreciated for the work they are doing whether it is in a form of compensation or benefits.
Many companies that offer employees benefits have a higher employee satisfaction rate than those that do not. Offering some type of benefits can always persuade employees to stay within the company which will reduce the employee turnover rate and keep existing ones happy. With a new performance review system, the company can also offer bonuses at the end of the year to the most improved employees. This will serve as a tool to motivate employees to perform well both individually and in groups. Any abuse my management who is trying to scam or reap benefits from this ordeal can be a great disadvantage. However, it is important to make sure that even the mangers are kept at a code of ethics and closely watched to make sure there is no misconduct.
My recommendations for improving the company wide performances are based upon the failing aspects within Vitality. The Performance rating system they have in place is a failure to due its poorly organized manner. Making sure to remove any bracket system such as the 13-level performance review is greatly necessary. A system like this will only cause for abuse by management and dissatisfaction by employees. The two-step performance review method I mentioned is the most optimal because it better measures the improvement of all employees within a given time and clearly identifies the poor performing employees within the company.
In addition, by offering employees with greater incentives such as benefits and bonuses, upper management can motivate employees to do well and to stay with the company in any difficult times. Motivation in any work environment is the major factor that contributes towards employee performance. Employees that are motivated to work hard will earn more in terms of compensation, bonuses and benefits. This will cause for every employee to improve upon their job both individually and while working with other team members.