Leadership Done Right

Brandon W. Jones

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Compensation and Performance Review at Arrow Electronics

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In the case study, “Compensation and Performance Review at Arrow Electronics,” the performance review and compensation systems at Arrow Electronics were broken. There are two specific aspects of the system that are broken: the employees are rated on a bell curve type system for their evaluations and the compensation system for the sales force isn’t competitive for the market.

Compensation and Performance Review at Arrow Electronics

Performance Review System

First, the CEO, Steve Kaufman, has required that the employees are rated on a bell curve type system for their evaluations. Since the evaluation system is set up as a bell curve, the supervisors and managers must always be comparing their employees against each other. Once the employees realize that they are being compared against each other, they will stop working as a team and begin competing against each other rather than viewing the group as a team that works together. [Read more…] about Compensation and Performance Review at Arrow Electronics

Get Rid of the Performance Review

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The main point in the article was that performance reviews are a waste of time and don’t promote progress within an organization. I agree with some of his points but disagree with others.

Get Rid of the Performance Review

Downfalls of the Performance Review

It is true that a performance review is completely ineffective when the boss doesn’t give the employee any specific targets/goals for performance. When the boss just does a performance review on abstract principles and not on concrete metrics, it is an ineffective performance review.

On the other hand, when an employee has a very specific job description with very specific tasks, such as a factory worker, a performance review can be very effective. When the employee has a set of responsibilities that are clearly outlined, it is very easy to do a performance evaluation. Either the employee completed their work or they didn’t and there isn’t much room for interpretation. For an evaluation system to be very effective, the metrics need to be very specific for both the evaluator and the person being evaluated.

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SAS Institute

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SAS Institute is a good example of how to run an organization effectively and smoothly. They were quite different from their competitors in several ways. They were very different in the way that they did their outsourcing, recruiting, compensation, and benefits. They set up a system helped the employees to work effectively and efficiently. The system wasn’t too stringent on the employees. It gave them freedom to set their own schedules.

SAS Institute

SAS Institute

SAS Institute did very little outsourcing which helped to provide more opportunities for new employees within the company. By avoiding outsourcing, they were able to retain more control over every aspect of the work that they did. Temporarily it is fine to avoid outsourcing, but in the long run it becomes very expensive to do all processes in house. They could also run into problems with entering markets that are unrelated to their core processes. [Read more…] about SAS Institute

Dissension in the Ranks at Nordstrom

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The system at Nordstrom was a failed system. It did not reward the employees based on the hours that the employees put in. There are three areas that the company went wrong.

Three Downfalls of Nordstrom’s Approach

First, it didn’t let the employees know upfront what kind of hours they would be expected to work. Second, it had an overly strong competition between the sales associates within the stores. And third, their pay structure was broken. All three of the above points illustrate that the system was broken.

Dissension in the Ranks at Nordstrom

1. Nordstrom’s Compensation System

As the first point indicates, Nordstrom would hire people under a specific set of duties and responsibilities and expect a completely different set. The managers wouldn’t explain how the compensation system was going to be set up based on the sales per hour structure. Once the employee was hired on, they would then expect them to work extra hours without pay or they would give them bad reviews as not being a team player. [Read more…] about Dissension in the Ranks at Nordstrom

Specialty Medical Chemicals

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In the case study, Specialty Medical Chemicals, there are some significant systemic problems. There were three main areas of problems that were occurring in the case. The three areas were: the management approach taken by CEO Carl Burke, the response of the existing vice presidents, and the system as a whole.

Specialty Medical Chemicals

Specialty Medical Chemicals

When Carl Burke became the CEO, he was an outsider to the company. He first took the approach of, “I am just going to ride the wave for a little while and see where it takes me before I make any drastic changes.” As he did this, he found that the company wasn’t performing as he felt it should. Because he had spent his entire career with a single company, his overall outlook was very narrow-minded. He felt that all companies should operate the same way that he was used to operating at Merck. Although it was important for him to come in with his own ideas, it was equally as important that he come in with a little more flexibility. [Read more…] about Specialty Medical Chemicals

Lessons From Tony Dungy And Lovie Smith

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Tony Dungy and Lovie Smith

As was demonstrated by both Tony Dungy and Lovie Smith, yelling at people isn’t the only way to get them to do what is expected. Both of these men have set up a system that sets expectations for individuals and then holds them responsible for reaching those expectations.

Tony Dungy and Lovie Smith

In these systems, there are specific consequences depending on whether or not the individuals meet the expectations. If the person does not live up to the expectation there is a negative consequence, but if they do live up to the expectation there is a positive consequence.

In reality, the success or failure of an individual or group is significantly determined by the way the system/environment is set up. Tony Dungy and Lovie Smith have set up a system that helps those involved to succeed. The athletes in their systems know what they can and cannot do at all times and are able to act accordingly.

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