* Case: 360° Performance Evaluation at Morgan Stanley
Vision Statement: “Connecting people, ideas and capital, we will be our clients’ first choice for achieving their financial aspirations.” This vision draws on essential skills in connecting the brightest people with the most powerful ideas and the capital to help clients succeed on their own terms. (Letter to Shareholders) -------------------------------------------------
Strategic Goals| Needed Capabilities| Culture & Values| 1. Increase revenues +10% 2. Maintain a strong Return on Equity (+15%) 3. Diversify source of earnings: Increase Market Share in Derivatives, Global Investments businesses 4. Be known as “best in class” for Innovation and Intellectual Leadership| 1. Capture client “wallet share” 2. Develop/maintain broad and deep product knowledge 3. Build unique product solutions for complex client problems 4. Replicate solutions for different client segments with similar needs 5. Gain operating efficiency through superior execution| * Innovation * Intellectual excellence * Client driven: “That is what gets us the first call when a client has a problem that needs a solution and the last call after he has surveyed the competition.” * Value diverse perspectives: “A corporate culture that is open and inclusive is fundamental to our role as a global leader constantly striving for excellence in all that we do.”|
1. The stated main objective of Morgan-Stanley’s performance management system: Morgan-Stanley’s objective of this system is to provide every employee with quality performance feedback which was not available to its employee before. The bottom-line of this system is to encourage “continuous professional development of its employees” which will lead to a higher level of company’s performance.
2. Assessing the effectiveness of Morgan Stanley’s 360-degree system, using the criteria below: a. Strategic Congruence: alignment with strategic goals, capabilities and culture/value This newly adapted performance system motivates behaviors that are congruent with Morgan Stanley’s culture & value and some of its capabilities needed. However, I assess this system doesn’t motivates its employees to match up with company’s strategic goals. * Areas of match: 1) Culture & Value, 2) Strategic goal of “innovation and intellectual leadership” and 3) Capabilities, such as “develop/maintain broad and deep product knowledge” and “Replicate solutions for different client segments with similar needs” * The 360 degree feedback assists each individual to understand his or her strengths and weaknesses, and to contribute insights into aspects of his or her work needing professional development. The evaluation form covers four categories; professional skills, commercial orientation, management skills and one firm contribution. Specifically, Morgan-Stanley’s system captures 23 soft qualities, entailing from product knowledge and creativity to external relationship management. Therefore employees can verify what they need to improve in regards to the value that Morgan-Stanley emphasizes and be motivated to seek for development in these soft skills that are fundamental to its strategic goals and needed capabilities. * Areas of mismatch: 1) Strategic goals 1-2-3, 2) needed capability of “operating efficiency” * Although this feedback system encourages employees’ progress in company competencies in most of the needed capabilities and culture/value, it is inconsistent in regards to strategic congruence with Morgan-Stanley’s goals. The evaluation form is firmly planted in behaviors needed to meet customer expectations, but does not touch company’s strategic goals and needed capability of operating efficiency. Soft skills are essential for such a company that relies on customer relationship/project and teamwork. However, at the end of the day, it is...