26 PARTI. Strategic and General Considerations Case Study 1-2 PERFORMANCE MANAGEMENT AT NETWORK SOLUTIONS, INC. Network Solutions, Inc. is a worldwide leader desired outcomes of the new system included rais in hardware, software, and services essential to ing the performance level of all employees, identi computer networking. Until recently, Network fying and retaining top talent, and identifying low Solutions, Inc., used more than 50 different systems performers and improving their performance. to measure performance within the company, many Network Solutions also wanted the performance employees did not receive a review, fewer than 5% expectations for all employees to be clear of all employees received the lowest category of Before implementing the program, the design rating, and there was no recognition program in team received the support of senior leadership by place to reward high achievers Overall, it was rec communicating that the performance manage- ognized that performance problems were not being ment system was the future of Network Solutions addressed, and tough pressure from competitors and by encouraging all senior leaders to ensure was increasing the costs of managing human per that those reporting directly to them understood formance ineffectively. In addition, quality initia the process and also accepted it. In addition, they tives were driving change in several areas of the encouraged senior leaders to use the system with business, and Network Solutions decided that these all of their direct subordinates and to demand and initiatives should also apply to "people quality" utilize output from the new system. Next, the Finally, Network Solutions wanted to improve its design team encouraged the senior leaders to stop ability to meet its organizational goals and realized the development and use of any other perfor that one way of doing this would be to ensure that mance management system and explained the they were linked to each employee's goals need for standardization of performance manage- Given this situation, in 2001 Network ment across all divisions. Finally, the team asked Solutions' CEO announced that he wanted to senior leaders to promote the new program by implement a forced distribution performance involving employees in training of talent manage- management system in which a set percentagement and by assessing any needs in their divisions of employees was classified in each of several that would not be addressed by the new system. categories (eg, a rating of 1 to the top 20% of per The Network Solutions global performance man- formers; a rating of 2 to the middle 70% of per- agement cycle consisted of the following process formers; and a rating of 3 to the bottom 10% of 1. Goal cascading and team building performers). A global cross-divisional HR team 2. Performance planning was put in place to design and implement the new 3. Development planning system. The first task for the design team was to 4. Ongoing discussions and updates between build a business case of the new system by showing managers and employees that if organizational strategy was carried down to 5. Annual performance summary team contributions and team contributions were translated into individual goals, then business goals Training resources were made available on would be met. Initially the program was rolled out Network Solutions intranet for managers and as a year-round people management system that individual contributors, including access to all would raise the bar on performance management necessary forms. In addition to the training avail at Network Solutions by aligning individual per- able on the intranet, 1- to 2-hour conference calls formance objectives with organizational goals by took place before each phase of the program was focusing on the development of all employees. The begun. "This op study is based in part, on actual information Network Solutions, Inc., is a pseudonym which is