The article tells the story of the step taken by Vitality Health Care Enterprise to overcome high competition and poor employee performance, which was sinking the company. Since its formation in 19787, Vitality Enterprise was operating successfully across the world until in 2007/2008 when the global crisis hit the company. By then, the company had approximately 1500 employees in headquarter and 5500 in other branches ( Bingham & Beer, 2012) . Emerging markets brought uncertainty in the organization where revenue was being exposed to volatility, creating a need for immediate action. Vitality chose to adopt a new Performance Management System to deal with uncertainty in the market and boost the company’s revenue. However, Hoffman, who was chosen to lead the team, had to first test the suitability of the system before calling for a stakeholder's meeting to explain the new approach.
The first issue was the rating system of Vitality enterprise. By 2008, Vitality had 13 different rating levels, which contributed to abuses by the management. The system made it challenging to identify performing employees from nonperformance ( Bingham & Beer, 2012) . Another issue was the point of the salary system where every position had a base-level monthly salary calculation, and raise was based on performance.
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The situation at Vitality Enterprise is caused by rating and pay system, which d not equally favor employees leading to dissatisfaction. The structure did not reward high performing employees better since the system only looked at the years of experience as opposed to output ( Bingham & Beer, 2012) . The two problems share a common cause of poor structure, which determines the rating and payments. As the new market emerges, there is a need for Vitality to identify top talents and reward them for better performance.
In such a situation, the best action is to change the rating and payment system, which will identify performing and non-performing employees and reward them accordingly. When designing a new system, the company should put in mind the reward for new employees who contributed to the success of the company. Apart from rewarding high performing employees, the system should also consider uplifting employees at the bottom who have the potential to improve.
References
Bingham, J. O. H. N., & Beer, M. (2012). Performance Management at Vitality Health Enterprises, Inc.
