Case | HBS Case Collection | July 2012

Performance Management at Vitality Health Enterprises, Inc.

by John Bingham and Michael Beer

Abstract

Vitality Health Enterprises, a medium-sized firm that manufactures health and personal care products, has experienced six straight quarters of strong revenue growth. James Hoffman, the new Senior Vice President of Human Resources, fears that the chain of success is shifting the company's focus away from effective performance management. Recently, Vitality has been faced with increasing turnover among the company's talented research scientists that may be due to a performance management system that leaves top performing employees slighted by the practice of uniform ratings. In an effort to retain top employees, the company institutes a forced distribution model of performance rankings, moving from an absolute ranking system to a relative one. Hoffman and his performance management evaluation team must assess the practical and strategic effectiveness of the new system and present their findings and recommendations to the Board.

Keywords: Performance Evaluation; Motivation and Incentives; Compensation and Benefits; Talent and Talent Management; Health Industry; Consumer Products Industry; Manufacturing Industry; United States;

Citation:

Bingham, John, and Michael Beer. "Performance Management at Vitality Health Enterprises, Inc." Harvard Business School Brief Case 913-501, July 2012.