Evaluate the effectiveness of the Morgan Stanley performance assessment and management system.
A critical factor related to an organization's long-term success is its ability to measure how well employees perform and to use that information to ensure that performance meets present standards and improves over time . In 1993, Morgan Stanley's newly elected president John Mack was instrumental in implementing one such measurement tool and process - 360-degree performance evaluation. This evaluation process was implemented through out Morgan Stanley. The process had been in place for two years but there seem to be very little buy-in from the employees regarding what it actually meant in their day-to-day job activities.
Below are few issues (or, issue spotting") that are evident in Morgan Stanley's performance assessment and its process:.
• Purpose of 360-Degree Performance Evaluation Tool. 360-degree performance evaluation tool is one of the most valuable tools to assist employees improve their performance. However, there are some limitations. Several researches show that the tool is best when used for employee development and feedback purposes rather than salary, promotion, termination and other administrative decisions . But in this case, Morgan Stanley's approach of using the 360-degree evaluation for promotion is quite biased.
• Elements of 360-degree tool. Morgan Stanley's 360-degree tool did not include any job specific criteria to evaluate. For example, employees at Morgan Stanley were evaluated on criteria: Professional Skills, Commercial Orientation, Management Skills, and One Firm Contribution , but nothing on the specific job function and/or divisional goals, i.e. Capital Market Services (CMS) division in this case.
Some of the criteria even lacked clear definition, which lead to misinterpretation. Additionally, there was no performance standard that measured individual when compared to the performance of the whole group.