Disrupted Links in the Performance Management Process at “Omega, Inc.”
Omega, Inc., is a small manufacturing company whose sales success or failure rests in the hands of sales representatives employed by franchised dealers operating independently. Omega faces a challenging situation because it does not have control over the people working for the independent dealerships.
It is the performance of these individuals that dictates Omega’s sales success.
To make things more complicated, until recently there was no clear understanding of the role of the sales representatives and there were no formal sales processes in place. Sales representatives varied greatly in terms of their level of skill and knowledge; most put out little effort beyond taking orders, and they did not feel motivated to make additional sales.
Finally, franchises varied greatly regarding their management strategies and follow-up with Omega.
Recently, understanding the need to improve the performance of sales representatives, Omega agreed to partially fund and support a training program for them. The network of franchise owners in turn agreed to work together to implement a performance management system.
As a first step in creating the performance management system, the franchise owners conducted a job analysis of the role of the sale representatives, wrote a job description, and distributed it to all sales representatives. The franchise owners also adopted a franchise-wide mission statement based primarily on the need to provide high-quality customer service.
This mission statement was posted in all franchise offices, and each franchise owner spoke with his employees about the contribution made by individual sales on achieving their mission.
As a second step, the managers set performance goals (i.e., sales quotas) for each employee. Then, all sales representatives attended extensive training sessions. The employees received feedback based on their performance in the training course and then were reminded once again of their sales quotas. Back on the job, managers gave feedback to their employees regarding their standing in relation to their sales quotas.
Since the employees had no way of monitoring their own progress toward their quotas, the performance feedback consisted of little more than a reiteration of monthly sales goals. There was no performance appraisal form in place, so discussions were not documented. This lack of feedback continued, and although sales quotas were being met for the first few months, franchise owners received complaints from customers about the low quality of customer service they were receiving. Subsequently, sales began to decline.
Furthermore, many orders were often incorrect, forcing customers to return items to Omega.
While the new performance management process was an improvement over no performance management (at least initially), the franchise owners were still far from having a system that included a smooth transition between each of the components of the performance management process. Based on Omega’s situation, please answer the following questions.
1. Consider each of the links of the performance management process. Discuss whether each of the links is present, and in what form, in the performance management system described. (2 marks)

The task is to assess each of the 6 links of the performance management system setup by Omega’s network of franchise owners and outline ways to fix/improve the links

1. Prerequisites to Performance Planning: This link exists in a crude form in the current process. Since a job analysis was conducted while establishing the system, prerequisites to achieving the goal of the performance management system have been identified. Also, performance planning seems to be purely in form of sales goals – which is inadequate. The linkage can be improved by integrating two key things – a. creating more evolved job analysis sheets taking into consideration the more aspects than pure sales growth. Qualitative inputs like customer satisfaction, employee satisfaction, career development goals can help refine it. On the linkage to the performance planning front, an employee or a role specific plan targeted at sales and customer service or satisfaction will work best

2. Performance Planning to Performance execution: This process seems to limited to the training given to the sales teams after the advertisement of the mission statement. The sales teams are hardly given adequate tools to achieve customer satisfaction. This link can be vastly improved by including tools to connect performance goals with execution success. For example, establishing goals like Average Quarterly Customer Satisfaction Achieved and then clearly outlining factors which drive and improve satisfaction – like on-time service, order accuracy and measuring against those in the customer surveys will incentivize sales teams to adhere to them diligently and also result in better performance execution,

3. Performance Execution to Performance Assessment: The one-dimensional nature of performance assessment – against sales success creates many issues. Absence of more holistic criteria may be forcing sales teams to ‘sell at any cost’ to achieve the sales numbers for a given performance cycle. This often comes at a cost of customer and employee satisfaction. A simple way to improve this is by creating a good mix of quantitative and qualitative assessment criteria, incorporating customer feedback and analyzing sales success in context of other factors.

4. Performance Assessment to Performance Review: This process seems to be woefully inadequate. Performance review is only in context of sales quotas and feedback consists of reiteration of goals with no focus on personal and professional growth of the sales personnel. One way to develop a refined performance review process is to allow employees to setup their own performance targets – agreed in conjunction with the company’s goals and also set targets for their growth goals – like learning, new skill development etc. A platform or tool for sales employees to set their own performance goals – related to professional and personal growth and monitor progress will also be very effective.

5. Performance Review to Performance Renewal & Re-contracting: This process seems to be absent. The assumption from reading the case study is that sales quota success is the only criteria for re-contracting. However, a formal process needs to be established to connect performance review outcomes to re-contracting. This should integrate a number of factors going beyond sales quotas. For example, new customer acquisition, new capability development, sales asset creation or innovation. The qualitative criteria should be weighed in conjunction with the sales quota success to determine renewal and re-contracting decisions.

6. Performance Renewal & Re-contracting to Pre-Requisites: The feedback loop is a key part of any successful performance management system. It seems to be absent here. Pre-requisites seem to be attached purely to job analysis. Job analysis cannot be a stagnant exercise. The performance review system should be setup to solicit customer feedback and more wide-ranging contributions to customer success, innovation and sales capability enhancement. Finally, the outcomes of measuring against this long list of criteria can be the ideal input in creating new job analysis and kick starting the next performance management cycle

2. Given your answers to question 1, what can be done to fix each of the disrupted links in the process?

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