Gilent Technologies is a premier test and measurement company. In its previous avatar before 1999, it was the test and measurement division of Hewlett Packard (HP). Now, a fully independent measurement company, Agilent is in a position to lead the test and measurement industry into the 21st century with its innovation and excellence. Its strategic intent is to be a measurement solutions partner to every engineer, service provider, and scientist in the electronics and bio-analytical market. The company's three businesses - Electronic Measurement, Life Sciences and Chemical Analysis, provide customers with products and services that make a real difference in the lives of people everywhere.

The company has approximately 18,500 employees worldwide and customers in more than 110 countries. Its competitive advantage rests on leadership in innovation, creativity, problem-solving and organisational flexibility. For this, Agilent addresses work-life balance challenges and leverages diverse perspectives, talents and teams. Agilent has realised that its global competitiveness will be achieved not only by designing, manufacturing, marketing and selling superior products but also by developing and applying excellent global people skills around the world.

As an organisation, Agilent continues to draw upon the values that made Dave Packard and Bill Hewlett's company a success: dedication to innovation; trust, respect and teamwork; and uncompromising integrity. Added to these are speed, focus and accountability to meet customer needs and a culture of performance that draws on the full range of its employees' skills and aspirations.

To achieve its objective of developing and applying excellent people skills around the world in order to gain competitive advantage, Agilent discovered the need to develop a high performance work environment that recognises individual contributions. It acknowledged a need to foster initiative and creativity by allowing individual freedom to attain well defined objectives. The company wanted to make their employees believe that their work is valued and makes a difference to the world.

With that, compensation at Agilent needed to link tightly with an individual's performance. Sometimes managers agreed on paying employees at the lower end of the compensation band. In some cases, high performing employees could end up receiving lower salaries than employees who were not performing well. The company realised that paying right was a priority, which came ahead of other intrinsic motivators. Hence, they needed to build a culture of differentiation with Performance-Based-Pay as their Compensation strategy.

Agilent initially had an intensive focus on training. All employees were given classroom training on periodic basis. It realised that this generic training did not have the desired impact. The company instead wanted to come up with a framework in which they would be able to measure the competencies where an employee actually required development and provide training accordingly.

Other challenges Agilent faced were, a high attrition rate, need to increase employee engagement, plan for employee development and most importantly, to make HR think like the business and get involved in the strategic decision making process. For that it needed to measure employee engagement on an ongoing basis. This required developing a transparent, accountable and measurable Performance Management System which drives outstanding results.

Question :

In order to gain competitive advantage, Agilent had the need to develop a robust performance appraisal system Identify a method of performance appraisal to suit their requirements, explain in detail this method with reference to the information given in the case, list the performance dimension that will be evaluated and also clarify how this method will be successful in overcoming some common errors evident in other methods?