Critically evaluate the new performance evaluation system of Henkel. Which advantages and disadvantages can you identify? Which are the implications of the new system for employee motivation?
The new performance system designed by Kasper Rostred and his young team included both performance targets and financial targets to enhance company performance, sales and revenue. Ambitious Targets: After taking over as CEO, Kasper Rostred in 2008 announced challenging targets for the next four years which will enhance performance and also energies and motivate organization by creating a sense of urgency. The targets included increased pre-tax profit margins up to 14-15 percent in earnings per share, for the sales he intended to above the average of market. Moreover, sales in emerging market were set to increase with a rise of 33 percent to 50 percent by year 2012.
● Efficiency and focus: Henkel in 2008 had a list of 1000 brands which were manufactured in 200 plants globally, along with three units for business; therefore Henkel was all set to grow bigger. Initially, what Rostred decided was to cut down the brands into those are giving profits and can be carried forward in chewing a sales growth for the year 2012. For this purpose he had to cut resources, shut-down manufacturing plants, etc.
New vision and values: Going forward Henkel had a mission and a vision to set new values for all the employees under Kasper Rostred. In 2010, Rostred replaced a set of 10 value list with a revised new list of five values. The new list included
Henkel had a vision statement and a set of company values. But they were neither well-known nor relevant to either day-to-day decision-making or evaluation of employee performance. “We put our customers at the center of what we do.” Rostred made sure that every employee is aligned to these values he organized and managed more than 500 workshops to train the workforce of more than 48,000 employees. The training sessions were held to...
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