Description
Topic - Performance Management
Company - IBM
Recommendation - Recommendation to the stacking of employees (Comparative System)
Page Layout:
Issues with the company - 2 pages
Recommendation - 2 pages
Explanation & Answer
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Running Head: IBM PERFORMANCE MANAGEMENT
IBM Performance Management
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IBM PERFORMANCE MANAGEMENT
Issues with IBM
Performance management is very important to any business organization. For IBM
Corporation, performance management is very essential in aligning its diverse employees and
resources in order to meet the strategic objectives of the global organization (Murphy, Cleveland
& Hanscom, 2018). Performance management is also essential for identifying potential problems
in the operation of the organization. As such, through performance management, managers can
make important adjustments that align the organization towards set objectives (Adler, 2011).
However, the performance management system employed by an organization determines
the effectiveness of performance management in leveraging the success of the overall
organization (Adler, 2011). A poor performance management system can demoralize employees
instead of motivating them. IBM’s performance assessment framework had a similar problem.
The main issue of IBM’s performance assessment system is that the framework ranks the
employees in what is commonly known as stack ranking (Chandler, 2016). The company then
used the ranks of the Performance Business Commitments (PBC) system to identify
underperforming employs and lay them off when IBM failed to reach its expected revenue
growth. For instance, in 2015 the company recorded one f the gravest layoffs in history when it
lay off 26% of its employees. The mass layoffs affected at least 100,000 employees globally.
Since the ranking was based on a single measure and largely relied on the decision of the
managers, the ranking was unfair. The PBC system gave managers a chance to suppress
employees (Chandler, 2016). Some managers used their relationships with employees as a means
of determining which employee to lie off. Employees, therefore, become fearful of their
relationship with the managers other than their job performance and skill development. Instead
of focusing on job growth, employees focused on rubbing shoulders with departmental heads to
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IBM PERFORMANCE MANAGEMENT
protect their job positions. Personal growth among employees was particularly difficult
(Chandler, 2016). Additionally, employees were subjected to band categorization in which case
new employees were classified under a lower band regardless of their qualifications. The
implication was that employees in the lower band were most likely to fall among the bottom 5%
of underperforming employees. Consequently, new employees were highly likely to be laid off
regardless of their talent and expertise (Adler, 2011). Senior employees on the other hand
occupied the upper bands. As a result, it was difficult for senior employees to fall among the
underperforming bottom 5% even when their performance was poor.
The PBC system regarded employees as any other resource that could be replaced
(Chandler, 2016). The system placed the value of the company in the process definitions rather
than within the employees. With a system where employees can easily be replaced, the system
creates an environment where employees compete with each other. When employees begin to
compete with each other creativity and innovation as well as professional growth is greatly
hampered (Chandler,...