Performance Rankings at Portland Events Planners

Rob is the founder and owner of Portland Events Planners, a company that plans events for a wide variety of companies in and around the Portland area. The events include trade shows, product demonstrations, business conferences at hotels, and videoconferences. A staff of five professionals performs the activities necessary for selling the company's services to businesses and for doing the event planning. Rob is involved in the same activities of obtaining new business and event planning. The six professionals are assisted by an administrative staff of four people. After five years of operation without one, Rob decides that it is time to implement a formal performance evaluation system. After studying the idea of performance evaluation and speaking to a talent management professional in his network, Rob decides that most performance-evaluation systems are too topdown. He thinks that he would like a more democratic system of performance evaluation, particularly because the staff work closely together as a team. Rob decided on a performance evaluation method that focused on each team member rating the contribution of all other team members, supplemented by his own rating. Next, Rob sent an e-mail to all staff members explaining his evaluation system. The e-mail was followed up by a staff meeting to discuss the new system before its implementation. Rob began the meeting with a brief explanation: "As described in my e-mail, the new evaluation system is quite simple. Each of you will anonymously rate the contribution of each staff member to our company's success on a 1-to-10 scale, with 10 indicating a super contribution. I will also give a rating, so the maximum rating anyone could have would be 60, a score of 10 from each of the six raters. The minimum score you could receive would be a six. I will allocate salary increases based somewhat on the results of the evaluation. What do you think, gang? I want you to react one by one." The five staff members of Portland Event Planners reacted as follows: Linda: "I like the system because it is objective. Of course, the ratings tell us nothing about what each of us is doing right or wrong." Tom: "Rob, I like the idea of peer input. But I'm afraid that your ratings will simply reflect how much we like each other. So, I'm expecting to receive 59 points." [Laughter from the team.] Kitty: "I see some good things about this new system. The system seems objective because we wind up with numerical ratings. But the system is really subjective; you will not be making salary decisions based on tangible, measured accomplishments." José: "I disagree with Kitty. Most of our sales and our planning is really a joint effort. It is difficult to pin down who among us really accomplished what on his or her own. I'd say, let's give the new system a chance." Laura: "Rob, I see some merit in this system. But before endorsing it, I want your assurance that you will sit down with us one by one and discuss the ratings. I think you should also give each of us your personal feedback." With a reflective look, Rob replied, "I've really learned a lot this morning about your high level of professionalism and your interest in performance evaluation. Let me think about what you have told me, and I will get back to you."

Discussion Questions

1. What is your evaluation of the system of performance evaluation Rob is proposing?

2. Explain which two suggestions from the team members you think are the most valid.

3. Considering the nature and size of Portland Events Planners, what type of performance evaluation system do you recommend Rob implement?