Hershey Foods: May Melt Your Heart

This activity is important because, as a manager, you must be able to determine whether your employees are performing effectively and efficiently, with a minimum of errors and disruptions. In order to do this, you will need to conduct a performance appraisal, an evaluation that measures employee performance against established standards. Performance appraisals allow managers to make informed decisions about promotions, compensation, training, and termination.

The goal of this activity is to demonstrate your understanding of the performance appraisal process by aligning examples of each step and placing them in the appropriate order.

Read the case and answer the questions that follow.

Milton Hershey was not only interested in innovative candy making; he also wanted to help the members of the community. An example of his concern for the community was the founding of a home for orphan children, the Hershey Industrial Schools (now called the Milton Hershey School) in 1909. Many of the children who attended the school became Hershey employees, including former Hershey chairman William Dearden (19761984). Today, the 10,000-acre campus houses and provides education for nearly 2,100 financially and socially disadvantaged children. In 2020, they expanded their impact with the Catherine Hershey Schools for Early Learning, a subsidiary of MHS focused on early education.

Over the years, board members who control Hershey's estate invested in land, stocks, and bonds, including the Hershey Entertainment and Resort Company which operates a number of Hershey's nonchocolate properties. These include the Hershey Park theme park, the Dutch Wonderland theme park for younger children, the Hershey Hotel, the Hershey Lodge and Convention Center, the Hershey Bears (a minor league hockey team), Hershey's zoo, a four-course golf club, an outdoor sports stadium, and an indoor sports arena. All are now part of the school's endowment, which includes a controlling stake in the chocolate company. The School Trust owns over 3.8 million shares of The Hershey Company common stock, as well as over 60 million shares of B stock, providing the Trust with over 80 percent of the total shareholder vote for The Hershey Company.

Because Milton Hershey's original funding was wisely managed by the trust managers, the assets of the Milton Hershey School Trust have grown substantially. Over the last 20 years, the number of students doubled and the school's endowment increased nearly fourfold and is now worth more than $17 billion. Milton Hershey was a visionary in terms of using a public corporation to support his philanthropic dreams.

Question 1: Hershey Trust has equity in the corporation, which means

a. the trust owns shares of stock in the company.

b. the liabilities of the company are in the name of the trust.

c. a loan was made to the company from the trust.

d. the trust is in charge of business operations.

Question 2: The Hershey Trust can earn money on its equity investment in the company through the increase of each share's market value and

Multiple Choice

a. change in par value.

b. interest paid on money invested.

c. direct profit sharing through compensation.

d. the payment of dividends.

Question 3: Funds that are generated internally in the firm, in the form of profits that are not distributed to shareholders, are known as

Multiple Choice

a. equity financing.

b. accounts receivable.

c. short-term assets.

d. retained earnings.

Question 4: The selling of stock generates ________blank for the firm.

Multiple Choice

a. retained earnings

b. capital

c. loans

d. liabilities

Question 5: Large corporations, such as Hershey, have a client relationship with a(n) ________blank that can provide advice about financing plans, dividend policy, or stock repurchases.

Multiple Choice

a. law firm

b. investment banking firm

c. accounting firm

d. marketing firm

e. stock firm