1

CASE STUDY-2

Bristol-Myers Squib (BMS) is one of the world’s largest pharmaceutical firm and
widely known for its innovative research. But the firm has not limited its
innovations to products. Several years ago, BMS leaders decided that the
company’s performance management system needed to be re-invented.
Specifically, they determined that the existing performance appraisal process
was not working. Managers were “form focused,” meaning that they are so
concentrated on filling out the performance review forms; the content of the forms
was not being used for employee coaching and based on development. Also,
most of the attention of managers and employees was historical and based on
what employee had done in the past. Little attention was being given to how
employees could develop and improve in the future.

The most radical steps taken were to totally eliminate the appraisal forms and
their rating scales and to request that managers not discuss pay increases during
performance review sessions. Instead, a new “performance partnership” became
the focus. At all levels of BMS, managers were trained to hold regular meetings
with their employees. At these meetings, managers and employees review
performance goals expectations. Together they set expectations and timelines
for accomplishing the goals. Rather than meeting just once a year, the
performance partnership update occurs throughout the year. The changes in the
performance management system have led to several positive results. First,
employees are more active participants, rather than just getting their ratings on
forms and then passively listening to the managers. Also, a greater amount of
time is spent on coaching’s because managers were trained on use of a guided
feedback approach. This approach has led to more discussions in which
employees and managers emphasize joint problem solving and goal
achievements. Although the system takes more managerial and employee time,
 2

the coaching and employee involvement have created a more positive

relationship and improved individual and managerial performance.

QUESTION-1
Discuss how this case illustrates the contrasts between the administrative and
developmental use of appraisals?

SUGGESTED ANSWER
Using the developmental plan, managers were trained to hold regular meetings
with their employees, focusing on a new “performance partnership”, at which time
the manager and the employee would review performance goals and
expectations. With the administrative use plan, attention was mainly based on
historical data - what the employee had done in the past. Not much attention was
given to the employee’s future developments or improvements.

The developmental use also results in more active participation between the
manager and the employee. In addition, more time is devoted to coaching and
has led to more interaction which, in many cases results in a better and more
comfortable working relationship between manager and employee.
 3

QUESTION-2
Identify which of the performance appraisal they have used after switching from
old method of appraisal and how it does work?

SUGGESTED ANSWER
They used the Performance Partnership appraisal system. It is a performance
management system incorporating a positive approach to solving performance
problems as well as recognizing and encouraging good performance. This
programme emphasizes the following:-

• Mutual Respect
• Effective Communication
• Constructive Feedback
• Employee Responsibility
• Commitment to High Work Standards
• Positive Reinforcement

This way of appraisal corrects performance deficiencies and builds commitment

through coaching and counseling in a respectful, non-threatening way. It
eliminates the use of punishment as a means to correct problems. Ultimately, it
creates an environment that is conducive to employees making positive changes
in their performance and sustaining those changes.
 4

QUESTION-3
In terms of the criteria for effective performance management, what advantages
does BMS gain and lose by shifting its methods from rating individuals the new
method identified?

SUGGESTED ANSWER
The main advantage of eliminating the use of appraisal forms and rating is that
employees are more active participants in their job. Another advantage of
elimination is that more time is being spent on coaching and training, while using
the feedback approach. This approach will create more communication between
managers and the employees, which in return creates a more effective workplace
environment. The feedback approach will also help with joint problem solving and
goal achievement between the manager and the employee.

The disadvantage to eliminating the use of appraisal forms and rating is that
some employees may not take to change easily. Change will upset the way
employees work until they are use to the new ways. This may cause a difficult
obstacle for the whole company as a whole to get over. Using the appraisal
forms and rating is almost like using a check list. And sometimes a check list can
have a "lot of check" to cover. With all these changes of eliminating and
establishing new rewards programs it is essential that employees are given
priority to know what is happening. Taking new risks is part of having
entrepreneur skills because you have to apply and grow a vision.