PERFORMANCE MANAGEMENT AT BABOO

Baboo is a medium$-$sized technology company, with a staff complement of $105$ employees. Recently Baboo, which does

not have an HR Department, came under the spotlight when newly appointed CEO, Jack Rakabe, revealed the company$$s

new quarterly performance appraisal system.

Shortly after joining the company in July $2023,$ Rakabe implemented an employee performance appraisal process, which

had managers scoring their employees and ranking them into $$exceptional$,$highly successful$,$successful$,$

$$inconsistent$$ and $$unsatisfactory$$ categories, with a target percentage of employees to be distributed into each category.

Those employees who were ranked as $$exceptional$$ received high bonuses and a $15\%$ salary increase, while those that

were ranked as $$highly successful$$ received a $10\%$ salary increase and no bonus. Those employees who received a

$$successful$$ ranking received a $5\%$ salary increase and no bonus. Employees who were ranked as $$inconsistent$$ received

no bonus and no salary increase. Those ranked as $$unsatisfactory$$ received no bonus and no salary increase, and

corrective action was taken through, for example, rectifying a performance problem that resulted from a lack of ability

through training and development. Employees were dismissed if they received an $$unsatisfactory$$ ranking across three

consecutive quarterly performance appraisals.

Various stakeholders criticised Rakabe$$s management style and approach to performance management. Former Baboo CFO, Thandi Motseki, accused Baboo of implementing its performance appraisal process knowing that ranking had been

criticised and rejected by larger companies because it was $$subject to abuse, often resulted in claims of discrimination,and needed to be closely monitored in application and effect.$$ Motseki stated that the procedures of the appraisal process

were vague, were communicated on a need$-$to$-$know basis, differed from department to department and would change quarterly to achieve organisational objectives. Motseki further alleged that even if all employees in the department or team were performing well or at the same level, their managers were required to place them in $$inconsistent$$ and

$$unsatisfactory$$ categories, ultimately resulting in good employees being let go$.$ According to her, this was because only a small percentage of employees, typically about $10\%,$ could be designated as top performers.Given the criticism which Rakabe has received about the employee performance appraisal process, he has realised that Baboo needs the expertise of an HR manager. Earlier this week, Krishni Pillay was appointed into the position of HRManager. Rakabe has tasked Krishni to put in place a new performance management system which will be animprovement on the last one, and which will be well received by employees and other stakeholders.

Discuss the extent to which Baboo$$s new performance management system is strategically integrated with a range of HR

activities within the organisation, and make recommendations for its improvement in this regard.