individual-based take-home assessment.

INSTRUCTIONS:

  • This is an individual-based take-home assessment.

 

  • This take-home assessment contains THREE questions. Answer ALL questions.

 

  • This take-home assessment carries 30 marks.

 

  • Marks allocated to parts of questions are indicated in brackets.

 

  • Give labeled diagrams where these will make the answers clearer.

 

  • Please submit your answers only to the Moodle (do not submit the case and questions to avoid a high similarity rate reported by Turn-It-In). Indicate your Name and Student ID on your Answer Paper.

 

  • Word requirement: no less than 1,500 words.

 

 

You are reminded of the necessity for a clear and orderly presentation in your answers.

 

Performance Management in M&N Furniture Company

 

M&N is a large private furniture company with the integrated value-creating functions of research and development, production, sales, and service. This company ranks top 10 in the furniture industry in China, and it specializes in home furniture, office furniture, and home design and decoration service. M&N group now has 21 subsidiaries, 1500 distributors, 2,000 retailing stores, and 3,000 employees, with 2 billion annual sales. Its targeted market is customers from the second- and third-tier cities of China.

 

Since 2006, M&N Group has engaged in strategic transformation from a traditional furniture product manufacturer to a whole-house home solution provider. The strategic goal of M&N is rapid expansion: It aims to achieve annual sales of 2.5 billion sales this year and opens 400 new stores nationwide. To support its rapid-expansion strategic goal, HR has to strategically focus on (1) recruitment and retention of talents; (2) improvement of its performance management system to develop the performance of its employees; (3) building of a strong organizational culture to support organizational change and expansion.

 

Table 1 shows the job structure in M&N Group. The job structure is aligned with the company’s organizational structure. It specifies the job responsibilities and requirements for employees at different job levels.

 

Table 1. Job Structure in M&N Group

Job Category Level
Management (M) M6-M11
Technical group (T) T4-T9
Sales (S) S4-S8
Professional (P) P4-P8

 

The company relies on a large group of sales employees to achieve its sales goal. Tables 2 and 3 show the performance measurement approaches for store sales managers and district sales director. For store sales managers, their main job duties are to enhance sales and profitability of the stores that they are in charge of. They are also expected to assist district sales directors to open new channels (that is, retail stores), manage in-store displays to attract customers, and attend training and development courses. For district sales directors, similarly, their main job duties are to enhance sales and profitability of the stores that they oversee. They also take the key responsibility of opening new stores to support the organizational strategic goal of rapid expansion. In addition to quantity, they are also responsible for quality in terms of customer satisfaction. As middle-level management, they are expected to retain key employees and attend training and development courses to enhance their management and leadership competencies.

 

Table 2. Performance Appraisal for Store Sales Managers

Key result areas Key Performance Indicator Target Weight
Store sales Store annual sales figure 10 million 40%
Gross margin Store gross margin 20% 30%
Channel development Supervisory rating of support channel development in the region 85 (out of 100) 10%
Store display The average rating of internal and external customers 85 (out of 100) 10%
Personal development The average score of the development courses attended 85 (out of 100) 10%
 

Table 3. Performance Ap

praisal for District Sales Directors    
Key result areas Key Performance Indicator Target Weight
District sales District annual sales figure 80 million 25%
Gross margin District gross margin 20% 15%
Channel development

 

The number of new stores opened annually in the district 10 15%
  Area of these new stores 20,000 square meters 10%
Customer satisfaction Average rating of mystery customer 85 (out of 100) 15%
Retention of key employees The annual turnover rate of key employees 5% 10%
Personal development The average score of the development courses attended 85 (out of 100) 10%

 

M&N ties its performance evaluation results to its training and development system, which is shown in Figure 1. The purpose of the talent review is to identify the key employees and support their career development. If a sales employee obtains the top 5% in the performance evaluation for three consecutive quarters, he/she will be considered as a star performer. Then, the employee will be selected into a talent pool and will be considered a candidate who will become a manager in the near future. Moreover, the company will provide the employee with more development opportunities, such as training program. Finally, the employee will receive a challenging task based on the company’s business needs, such as developing a new market. If the employee finishes the task well, he will be promoted. If he fails, he/she can try again next year. Top performers will also have the opportunity to become a business partner, running a store, and sharing profit with the company. If the result of the performance appraisal is just qualified, the direct supervisor will work with him/her to develop a developmental plan at the performance feedback meeting and cooperate with the training department to support him/her. For the employees whose performance is bottom 5%, they will be required to improve performance within a fixed period or be fired.

 

Figure 1. From Performance Evaluation to Training and Development

 

 

 

The company provides salaries for its sales personnel above the industry average. Performance evaluation results will also be tied to bonuses for sales personnel. Every month, the top 5% performers obtain one-month salary as a bonus, and top 6-10% performers obtain half-a-month salary as a bonus. Salespersons performing at the average level or above get a

year-end bonus of 3 to 6-month salary.

 

 

Answer ALL of the following three questions (30 marks)

 

  1. Analyze the performance evaluation approach(es) that are used for the store sales managers and district sales directors of M&N; Evaluate the strengths and weaknesses/problems of the performance evaluation approach(es); Suggest ways to improve the performance evaluation approach(es). (10 marks)

 

  1. How do you evaluate the training and development program in M&N? Provide practical suggestions to the Human Resource Department to help it increase the effectiveness of its training and development program. (10 marks)

 

  1. M&N Group seeks to further improve the pay-for-performance system for its sales personnel to support the company’s strategic goals. What suggestions can you give to this company? (10 marks)

 

(Total 30 marks)

 

 

-THE END-