Exercise: Performance based review in National Retail Ltd
National Retail Ltd has stores all over the UK and sets targets for its branch managers against four performance objectives:
• Increase in store takings
• Increase in spend per customer
• Increase in product availability
• Increase in customer satisfaction
There have been many criticisms by managers of the current arrangements for performance management in terms of how their performance review is conducted (and consequently how their performance-related rewards are allocated). They feel that too many things are outside of their direct control - marketing activity, pricing and discounting, supply and logistics are all managed by Head Office - and so they should only be judged on their performance related to activities within their direct control.
They also have complained about how they are required to conduct staff appraisals with their own staff in store. They have no authority to offer any financial rewards or incentives, even to their top performers, and so they feel they can only do anything about poor performers i.e. take disciplinary action.