Case Analysis: Rob Parson at Morgan Stanley (A)
1. Evaluate the effectiveness of the Morgan Stanley performance assessment and management system. The primary source of performance assessment at the firm is a multi-source 360 degree feedback tool. The secondary source is an employee’s self assessment. There are a number of issues as to why the primary tool is not effective in truly assessing the performance of an employee at Morgan Stanley. The first issue surrounds the reliability of the raters in the 360 degree process. The raters are from the Capital Markets group and other groups within the firm with little definition if the raters are all at the same organizational level. This calls into question inter-rater reliability as reliability tends to be low when the raters are not from the same level. The second issue is one of freedom from bias. As the 360 degree feedback tool is highly subjective with regard to the comments it records, it does not address how a manager would assess either leniency or severity errors within the comments. Each of the raters may experience peak-end utility at the time they provide their comments. Unfortunately, this clouds their commentary. Instead of focusing comments on their complete experience with an employee, they may focus only on their last experience. A third issue involves the employee assessment tool. It vaguely addresses the concepts of goal-setting and employee development. In its current form, the tool is mainly used for administrative purposes (promotion and compensation). The sign of a good assessment tool is that it ties the goals of the employee with the goals of the organization. It also provides feedback on areas in which an employee needs to develop their skills and establishes an action plan. Lastly, the intended behaviors of the organization are not formally defined in the 360 degree tool and are not well understood by the company employees including the managing directors. If the...
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