This report presents an independent analysis addressing the insights for important management issues associated with performance appraisal and performance management in the Capital Market Services of Morgan Stanley. The analysis will be focused on identifying the major problems, analyzing the situations, and making feasible and thorough recommendations for the board of Morgan Stanley to improve the existing situations. 2. Problem Statements. Rob Parson was a star producer in the Capital Market Services Department who had been recruited from a competitor two years ago and had generated substantial revenues since joining the firm. I would like to address more specific and surface problems for this situation as follows: 2.1 Problem 1 -Rob Parson's Performing Issues.
Parson's success at generating business was offset by performance reviews from internal co-workers that painted him as a poor fit in the firm's collaborative culture. Parson's performance issues had been making his two immediate supervisors, Paul Nasr, the senior managing director in early 1996 and Gary Stuart, the just promoted managing director in early 1997 faced the dilemma whether to promote Rob Parson as managing director. 2.2 Problem 2 -Rob as Irreplaceable Staff.
Stuart felt certain that Parson would leave the firm if he was not promoted in 1997. This would mean losing a valuable employee and a star producer and creating an empty seat in an area important for the firm's business. Morgan Stanley needed Parson to attain the firm's strategic business objectives and even Stuart felt strongly that Parson would be impossible to replace. 2.3 Problem 3 - Little consensus for the 360-degree evaluation process The purpose of 360-degree evaluation is to emphasize teamwork, cooperation, and cross selling. However, there was little consensus on what the 360-degree evaluation actually meant in practice since its implementation in 1993. 3 Issues / Problem Analysis. It is doubt that the 360 degree performance evaluation process at Morgan Stanley yield data that were valid and reliable. It is critical to figure out whether the 360 degree performance management system well aligned with Morgan Stanley's strategic objectives. It is also important to verify the two performance evaluation results and objectively induce the implications so that Gary or the board could effectively manage the situation. 3.1 Not a real 360 degree performance review @ Nasr's time.
The performance comment "raw data" including the quantitative, qualitative, and anecdotal -- none of which is perfectly consistent from the 360 process. It is doubt that raters knew how to effectively participate in the process and the Paul knew how to use the data. There was no indication of rater's interaction with Parson and how each rater's rating contributed to the average scores shown on Summary of Performance Ratings. The arithmetic average for the collage average score is 3.6, how ever the overall rate is at 2.8. It seems that quiet a number of Parson's supervisor and colleagues were admiring his cross-selling skill but it was hard to tie to the result of Downward Average 3.0 and colleague Average of 3.7. What were the criteria to evaluate item 4A in the Summary of Performance Ratings.-Team Player Skill and how the comments from Parson's supervisors and colleague tied to the average rating. Rater Parson E's comments in the "Development Recommendation" sections did not include concrete example but just stating rather subjective observations and feelings. The rates were not interpretable and there was no scale identification for the rates. What a 2.0 different was from a 4.0 average score? What were the benchmarks? There was no explicit indication of management's expectations for Parson, such as specific sales target and customer satisfaction index that are measurable and be able to described in concrete terms. It seems that there was no prior communication of the expectations of the key performance...