CASE STUDY (PERFORMANCE MANAGEMENT)

ABC Software (Pty) Ltd

Mpho Motaung, the HR director of ABC Software (a fictional company), had received a request from the CEO for a meeting to discuss how to manage the performance of the Sales Division. ABC Software is a successful software company which specialises in the design of customised software for the hospitality industry. The head of the Sales Division, Sandy Nel, reported directly to the CEO, who took personal responsibility for overseeing the performance of the Division, as well as for conducting Sandys performance appraisal.

The CEO was from the old school and believed in strong discipline and, as he expressed it, good old-fashioned management principles. His current approach was to meet once a month with Sandy and, in the nicest possible way, to tell her what to do. This process would normally consist of a discussion about the priorities of the company, and then the CEO would give a short list of about five projects that he thought were the most pressing. Once the list had been agreed, the CEO would work with Sandy to devise an action plan with deadlines for the work that had to be done. In the CEOs mind, the way to manage performance was to have crystal-clear objectives and deadlines cast in stone. In this way he could hold people accountable for delivery, and this was particularly important, as in their business quality solutions and speed were all important.

Mpho had spoken to Sandy and was aware of the problems she had with the CEOs performance management approach. Sandy complained that there were no clear goals, the working conditions were cramped and there were no meeting rooms for her Division. She also felt that the CEO had very little understanding of the work that her Division did and the way in which the team members contributed to the eventual solutions. Her concern was that labour turnover was very high and that good people would join the Division and within a year would leave, as they felt that they were not being developed, and that the pay system did not adequately reward them for the contributions they made to the success of ABC Software.

A strange phenomenon that Sandy had observed was that the more effective programmers were the first to leave. In fact, there appeared to be an inverse relationship between the competence of the employees and how long they stayed in the Division. Sandy herself had indicated to Mpho that unless things changed, she would move on as she felt that she had little freedom to contribute, in the way she wanted, to the development of leading-edge software. She had mentioned to Mpho that she had an idea for a software package that would allow receptionists at hotels to bring up guest profiles automatically, based on the use of chip-embedded credit cards. Sandy believed that this software would make a valuable contribution to the product list of ABC Software but was not sure if it fitted into the mainstream of the product offerings of the company.

Questions:

Question 1: {Focus more on general issues}

What would you advise the CEO to do?

Question 2: {Focus more on Sales department}

Imagine that you are Mpho Motaung and that you are going to meet with the CEO to advise him on what he could do to manage Sandy and her division more effectively. (4 marks)

Question 3: {Focus more on the knowledge worker and performance management issues}

Prepare a list of topics that you would want to discuss with the CEO to persuade him to adopt a new approach to managing Sandy as a knowledge worker. In addition, draw up a short check list that would be useful for the CEO to help him implement his new approach to managing Sandys performance. (10 marks)