Performance Management

This article discusses Yahoo's implementation of performance appraisal system, the type of method applied, its possible outcomes and suggestions to improve the performance appraisal and management system. It also includes references.

Running head: PERFORMANCE MANAGEMENT
Performance Management
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1. What was Yahoo trying to achieve with the performance management system it
implemented?
Answer- While there are several different types of human resource activities that could be
combined for helping several companies to keep their best employees, the performance
management was considered to be one of the significant lever that Marissa Mayer, CEO of
Yahoo had decided to use for helping her in achieving her strategic objectives (Mclntire).
Right after joining the company in the year 2012, Mayer had implemented in the company
the employee performance review in order to assess the performance of the employees
working in the organisation. Yahoo was intended to improve the productivity of its
employees and improve their engagement with the business. The company was trying to
promote closer relationship in between the bonus pay-outs and job performance of the
employees. With the same, with the implementation of the performance management system
within the company, the main objective of Mayer is to retain the top talents in the firm while
removing the employees who are ineffective and unproductive.
2. What type of performance appraisal method did Yahoo apply to this case? What are the
strengths and weaknesses of this type of method?
Answer- The types of performance appraisal method that Yahoo applied to this case was of
stack ranking, introduced by GE CEO Jack Welch (Djurdjevic and Wheeler). It is to note that
Mayer was given the task of economizing the strategies of the company and reviving the
deteriorating fortunes of the company. In order to this, Mayer introduced QPR system. The
low ranking employees were fired by the management while the higher ranking ones were
rewarded and retained (Hambrick and Lovelace). The Strength of this system was that
through this method, the company could easily identify the productive employees. On the
other hand, the weakness of this include that it caused employee morale issues.

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3. What are the possible outcomes of Yahoo's implementation of this performance
appraisal system (a) in the short term and (b) in the mid to long term?
Answer- The financial performance of the Yahoo was improved to a significant extent but at
the same time, Mayer could be criticised for polarising management practices. With the same,
very recently, she also drew criticism for micromanaging the process of hiring in the
organisation, single-handedly hiring different new executives without consulting the Human
Resource department of her top management team. The long term possible outcomes could be
the job seekers would no longer be looking for or would not be interested in doing job in the
company as this action of the company has created an impression among the employees and
the people that the QPR system of the firm is biased and is a violation of the California and
the federal laws that governs the bulk layoffs. Overall, the system is going to attract high
criticism and the company might get engaged in several lawsuit as well.
4. What would you suggest to improve Yahoo's (a) performance appraisal system and (b)
performance management system?
Answer- Below are suggested some tips for Yahoo in order to improve its performance
appraisal system and the performance management system:
a) Performance appraisal system- The managers at Yahoo should improve the
performance appraisal system of the company and make it into an effective
communication and developmental tool for the existing employees. They should
ensure that the employees are clear regarding their goals and what are the
expectations of the company from them. With the same, it is also to be noted that
Yahoo must make it certain that any component of the process of the employer that
causes the managers to limit the performance of the employees and to rate or rank
them is minimised. Also, it should be making the discussion a two-way process. It

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should engage the employees in that two-way discussion if their performance is the
main topic.
b) Performance management system- Yahoo should make use of the performance
management tool. The current actions of Yahoo is suggesting that it has made some
really poor strategic choices and then they started up an organisation to implement
those poor strategies (Khan, Meraj and Alam). Hence, Yahoo needs to link its
operational, organisational and strategic processes that it is planning to build in order
to operate in single line with its strategic objectives. It needs to have a performance
management system that motivates and uplifts the right behaviours by the right people
gradually and discourage the remaining others. Lastly, it should follow through the
logical conclusions of the very system.

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References:
Djurdjevic, Emilija, and Anthony R. Wheeler. "A dynamic multilevel model of performance
rating." Research in Personnel and Human Resources Management. Emerald Group
Publishing Limited, 2014. 147-176.
Hambrick, Donald C., and Jeffrey B. Lovelace. "The role of executive symbolism in
advancing new strategic themes in organizations: A social influence
perspective." Academy of Management Review 43.1 (2018): 110-131.
Khan, Rafique Ahmed, Mahwash Meraj, and Sadaf Alam. "iMPaCt OF PErFOrManCE
aPPraisaL sYstEM On EMPLOYEE satisFaCtiOn at karaCHi POrt trust." Journal of
Business Strategies 11.1 (2017): 133.
McIntire, Timothy. "Ouch! That Really Hurts. Pain Management In The Elderly And
Terminally Ill: Is This A Legal Or A Medical Problem?". CUNY Law Review, vol 6,
no. 2, 2003, p. 151. The City University Of New York, doi:10.31641/clr060205.