PMS

PERFORMANCE

MANAGEMENT REVIEW

A CASE STUDY

By Abdul Gafoor

PERFORMANACE MANAGEMENT – A CASE STUDY.

Panacea Pharmaceuticals Company is one of the big and good companies in the continent. Company

has got performance management system (PMS). Management fixes goals at the beginning of the

year and annual review will be done for bonus and salary increment. Each goal got some points to

get final performance score.

The below is one country’s organisation chart.

COUNTRY MANAGER

BUSINESS MANAGER

SALES MANAGER MARKETING MANAGER KEY ACCOUNTS MANAGER

5 COMMERCIAL DELEGATES 5 MARKETING DELEGATES 5 KAY ACCOUNTS DELEGATES

Sales manager, marketing manager & key accounts manager sent annual review of their delegates.

Business manager sent the reviews of sales manager, marketing manager and key accounts manager

to his country manager. Country manager sent his review about business manager to top

management in Dubai.

Management declared the performance bonus and salary increment based on review and

performance. The below are the details.

Designation Present salary $

Salary after increment $

Bonus $

Country Manager 10000 15000 25000

Business Manager 5000 6500 10000

Sales Manager 3000 3500 6500

Marketing Manager 2000 3000 4500

Key accounts Manager 3000 4500 5000

Delegates

1 500 600 1000

2 600 650 1800

3 400 550 1200

4 300 400 900

5 500 550 1000

6 400 600 1000

7 600 650 1200

8 400 400 500

9 300 400 600

10 500 500 1000

11 300 300 600

12 400 600 1200

13 700 800 2100

14 650 700 1300

15 450 550 1000

Total 30000 40750 67400

Are the above calculations are justifiable?

HR department is very important in any organisation and plays very important role. Its decision must

be calculative and logical. HR department decisions must motivate employees. Bad HR managers are

very bad for an organisation.

Sales manager’s achievement is his delegate’s achievement. All delegates achievement put together

is marketing manager’s achievement. Like for key accounts manager also. It is team work. Some

delegates achieve more and some less but all put together is manager’s achievement and team

achievement.

With the above increment and bonus some employees are demotivated and said some partiality

shown. They also said that some must have done extra ordinary jobs, but so much discrimination is

not motivating.

Now the question is how to calculate manager’s increment and bonus when some delegates

exceeded the target, some just achieved and some did only 80%. We should not forget the team

achievement is their boss achievement.

A little more analysis about increment and bonus.

Designation Present salary $

Salary after increment $

salary increment %

Bonus $ Bonus ( Months)

Country Manager 10000 15000 50.00 25000

2.50

Business Manager 5000 6500 30.00 10000

2.00

Sales Manager 3000 3500 16.67 6500

2.17

Marketing Manager 2000 3000 4500

50.00 2.25

Key accounts Manager 3000 4500 50.00 5000

1.67

Sales delegates

1 500 600 20.00 1000

2.00

2 600 650 8.33 1800

3.00

3 400 550 37.50 1200

3.00

4 300 400 33.33 900

3.00

5 500 550 10.00 1000

2.00

Total 2300 2750 19.57 5900

2.60

Marketing delegates

1 400 600 50.00 1000

2.50

2 600 650 8.33 1200

2.00

3 400 400 - 500

1.25

4 300 400 33.33 600

2.00

5 500 500 - 1000

2.00

Total 2200 2550 15.91 4300

1.95

Key accounts delegates

1 300 300 - 600

2.00

2 400 600 50.00 1200

3.00

3 700 800 14.29 2100

3.00

4 650 700 7.69 1300

2.00

5 450 550 22.22 1000

2.22

Total 2500 2950 18.00

6,200

2.44

Some facts after above analysis.

Sales manager’s delegates got an average increment of 19.57% and 2.60 months’ salary on

an average. But sales manager got 16.67% salary increment and 2.17 months’ salary as

bonus. In this case sales manager’s salary and bonus are less than his team average. How

come boss gets less and subordinates got more. Team works under the guidance of boss.

When boss is under performer, how come subordinates perform more?

Marketing manager’s delegates got an average increment of 15.91% and 1.95 months’ salary

on an average. But marketing manager got 50% salary increment and 2.25 months’ salary as

bonus. In this case manager’s salary and bonus are more than his team average. How come

boss gets more and subordinates got less. Team works under the guidance of boss. How

come boss performs well without his team support?

Key accounts manager’s delegates got an average increment of 18% and 2.44 months’ salary

on an average. But manager got 50% salary increment and 1.67 months’ salary as bonus. In

this case manager’s salary increment is more than his team average and bonus is less than

his team. How come boss gets more salary then subordinates and less bonus?

Sales manager, marketing manager & key accounts manager got an average increment of

41.30% and 2.22 months’ salary on an average. But business manager got 30% salary

increment and 2.0 months’ salary as bonus. In this case business manager’s salary

increment and bonus is less than his team. How come boss gets less salary increment and

bonus than his team?

Business manager got an average increment of 30% and 2.0 months’ salary as bonus. But

country business manager got 50% salary increment and 2.50 months’ salary as bonus. In

this case country manager’s salary increment and bonus are more than his team. How come

boss gets less salary increment and bonus than his team?

Further analysis.

Total country performance except country manager, the average salary increase is 28.75%

and 2.12 months bonus. In this case country manager’s salary increment and bonus are

more than country average. Business manager’s salary increment is more than the country

average and bonus is less than country average.

Total country performance including country manager, the average salary increase is 35.83%

and 2.25 months bonus. In this case country manager’s salary increment and bonus are

more than country average. Business manager’s salary increment and bonus is less than

country average.

Findings.

No scientific calculation of increment and bonus.

No way matching manager’s increment and bonus with their teams.

For some motivating and some demotivating.

How to do the calculation.

Management can decide that managers will get some more percentage (ex 2 0r 3%) salary increment

then his team average and some percentage (ex 1 or 2%) more for achieving extra goals given. Like

this for every team leader in organisation. Not so much difference as in above case.