Valley Wide Utilities
Valley Wide Utilities is facing a lot of problems currently. Some of these problems are macro while others are micro in nature. One of the macro problems is that the company is financially inefficient as a result of its plan for expansion of its facilities. Another problem is that three years ago company implemented a performance evaluation method with the help of an outside consulting firm. There are some negative reactions towards this approach because it was not perceived as fair. Dissatisfaction among employees is one of the micro challenges faced by the company. As a result of dissatisfaction employees have threatened to quit their jobs. Employees are facing problems with the performance evaluation methods and they feel standards are unfair and tight.
The potential causes for these problems are, one the President asked John and Hilda to provide an outline of MBO performance standards. They both may have the knowledge on MBO standards, but might not have knowledge about various skills to evaluate and change performance levels of individuals. They are outsiders and may not be fully aware of the job of the individuals of the company and what is best for the company. Second, employees started to feel that Hirsh was only looking for failures to report. And the third cause is standards were set as if employees were working at a normal pace without taking into consideration any provision for contingency. Circumstances can happen as a company operates in a very volatile and unpredictable environment.
After reviewing the problems and their probable causes, following recommendations can be made. Managers and line supervisors should also
participate in MBO programs. They can assist in setting reasonable standards and identifying deficiencies. Goals should be set which are achievable. There is no point in setting unattainable goals as they only cause dissatisfaction and affect morale of employees negatively. The real need and purpose for setting the standards should be clear. Before giving any department “red line” one should find out the overall cause.