Changing a Promotion System

Bioglass Inc. specializes in sales of a wide array of glass products. One area of the company, the commercial sales division (CSD), specializes in selling high-tech mirrors and microscope and photographic lenses. Sales associates in CSD are responsible for selling the glass products to corporate clients. In CSD there are four levels of sales associates, ranging in pay from $28,000 to $76,000 per year. There are also four levels of managerial positions in CSD; those positions range in pay from $76,000 to $110,000 per year (that’s what the division president makes).

Tom Caldwell has been a very effective sales associate. He has consistently demonstrated good sales techniques in his 17 years with Bioglass and has a large and loyal client base. Over the years, Tom has risen from the lowest level of sales associate to the highest. He has proved himself successful at each stage. An entry-(first-) level management position in CSD opened up last year, and Tom was the natural candidate. Although several other candidates were given consideration, Tom was the clear choice for the position.

However, once in the position, Tom had a great deal of difficulty being a manager. He was not accustomed to delegating and rarely provided feedback or guidance to the people he supervised. Although he set goals for himself, he never set performance goals for his workers. Morale in Tom’s group was low, and group performance suffered. The company felt that demoting Tom back to sales would be disastrous for him and present the wrong image to other employees; firing such a loyal employee was considered unacceptable. Therefore, Bioglass decided to keep Tom where he was, but never promote him again. It was also considering enrolling Tom in some expensive managerial development programs to enhance his management skills.

Meanwhile, Tom’s replacement, although successful at the lower three levels of sales associate positions, was having a great deal of difficulty with the large corporate contracts that the highest- level sales associates must service. Two of Tom’s biggest clients had recently left Bioglass for a competitor. CSD was confused about how such a disastrous situation had developed when they seemed to make all the right decisions.

Based on this application and your reading of this chapter, answer the following questions:

1. What is the likely cause of CSD’s problems?

2. How might CSD, and Bioglass more generally, make better promotion decisions in the future? Be specific.

3. In general, what role should performance appraisals play in internal selection decisions? Are there some cases in which they are more relevant than others? Explain.

Please use references and be very thorough and lengthy with responses.