Talent & Reward management – Performance assessment at Mercury Couriers

Case study

Delivering fairness

Performance assessment at Mercury Couriers

Mercury Couriers is a capital-city-based mid-sized firm that employs 600 people in its rapidly growing commercial parcel collection and distribution business, which it has operated successfully throughout Australia since the firm’s establishment seven years ago. The firm has separate departments covering customer service, parcel collection and distribution, vehicle maintenance, accounts, legal, marketing and human resources. Most of its line employees and supervisors work in customer call centres, distribution centres and vehicle maintenance facilities located strategically across the country. The firm could best be described as having a cost-defender competitive strategy, a mechanistic organisational structure and a traditional management culture.

Don Cobb, Mercury’s human resources manager, is proud of his and the firm’s achievements. When it comes to people management, Don’s approach is down-to-earth and pragmatic. Previously a despatch driver himself, Don has little time for managers who spend their time reading the latest management books, chasing university degrees or agonising about the options for ‘best practice’ people management. Don also believes in ‘buying’ rather than ‘building’ skilled staff. In-house training and development, he says, is just a waste of everyone’s time – and of the firm’s money.

He is especially proud of the one-page form that he has designed for use in the firm’s once-a-year performance assessment round. The form, which is reproduced below, is applied to all of Mercury’s non-managerial employees, including call centre staff, parcel despatch people, drivers, vehicle maintenance workers and administration staff. The form is straightforward and can be completed in just a few minutes, so that supervisors are not tied down in unproductive paperwork. The assessment outcomes are then used to determine which employees will receive the $5,000 annual bonus that the firm pays to its best performers and which employees will be dismissed. Under Don’s system, the top 20 per cent of employees get the bonus and the bottom 10 per cent are ‘let go’.

But this year’s performance assessment round did not go as smoothly as Don might have hoped. This year, for the first time, three employees, all known to each other and all recruited from the same competitor firm less than eighteen months before, challenged the accuracy of their assessments, wrote a letter of complaint to the managing director, and threatened legal action unless changes were made to the way in which they and their fellow employees are assessed.

To Don’s astonishment, the problem, they argued, lay in the form itself. Don’s initial inclination was to dismiss the complaints as nothing more than sour grapes, since none of the complainants has made it into the bonus cut. Then, feeling that his integrity had been challenged, he decided to commission a human resources consulting firm to confirm the worth of his assessment form.

The firm he chooses is none other than the one for which you happen to work and for which you are the resident expert on performance management systems. So the task of providing an expert opinion on Don’s form falls naturally to you. Specifically, you agree to provide brief (1,500 word) written response that covers each of the following four questions:

  1. What are the specific type or types of performance management technique(s) present in the instrument?
  2. What are the instrument’s main strengths?
  3. Are there any features in the instrument that may compromise assessment validity, reliability and felt-fairness?
  4. Are there any ways in which the instrument, and the approach to performance management that it reveals, might be improved?

Don is keen to receive your report. After all, his reputation as a ‘can-do’ manager has been called into question. So what do you report? Will your analysis be to Don’s liking?

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