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Read the Case: “Performance Appraisal at Telespazio: Aligning Strategic Goals to People Development”

Case Objectives: The case focuses on the design of a performance management system in an international company. It underscores how critical these systems are for aligning corporate and employee values, and fostering cultural and organizational change. Further, it focuses on the assessment of employees operating within project-based and matrix organizations.

At the end of this assignment, students will:

• Understand alternatives to design appraisal systems in project-based matrix organizations.
• Have acquired an awareness of evaluator biases in performance appraisal.
• Appreciate the links between performance appraisal, training and development.
• Understand the pros and cons of forced distribution in order to reduce rating errors.
• Learn about the complexities of harmonizing HR practices in MNCs and acquire awareness of the difficulties of transferring an appraisal system across foreign subsidiaries.

Case Study Questions:

1. Why has Telespazio adopted a double-rater system to evaluate the employees who work on projects on a regular basis?
2. In a context where the company is evolving into a matrix organization, should Telespazio adopt a double-rater system, or should responsibility for performance appraisal be given to only one supervisor (e.g., the Business Unit Manager or the Country Manager)? What are the advantages and disadvantages of each approach? If a two-rater system were adopted, how would you allocate responsibility for the evaluation between the two managers?
3. Why is the Telespazio HR team concerned about equity and the selectivity of managers’ evaluations? What actions would you suggest to improve managers’ rating skills?
4. Which features of the PAT program contribute to strengthening the relationship between performance appraisal, training and development? How does the appraisal system support Telespazio’s decision making with respect to employee training and development?
5. Why didn’t Telespazio adopt a standard forced distribution method? Do you consider the decision to require managers to respect a maximum percentage (15%) of outstanding evaluations to be an effective way of improving the equity of the appraisal process?
6. How does Telespazio plan to address the transfer of the appraisal system to its foreign subsidiaries? What strategies would you suggest to facilitate this process?