THE MANNAT CASE

In 2018, Mannat Enterprise, one of the largest network solutions needed to improve their performance. Mannat Enterprise allowed employees to proactively, rather than retroactively increase morale. Meanwhile turnover remained low and as a result, involuntary departure increased by 50%. With forced distribution systems, there are some employees that have to fall into set rating classifications. As noted, in the Mannat Enterprise system, employees are given a rating of 1, 2, or 3. Individual ratings are determined by the execution of annual objectives and job requirements as well as by a comparison rating of others at a similar level at Mannat Enterprise. Employees who received a rate of 3, which is the lowest rating, have a specified time period to improve their performance. If their performance does improve, then they are released from the plan, but they are not eligible for stock options or salary increases. If performance does not improve, they can take a severance package and leave the company or they can start on a performance improvement plan, which has more rigorous expectations and time lines than the original action plan. If performance does not improve after the second period, they are terminated without a severance package. Individuals with a rating of 2 receive average-to-high salary increases, stock options and bonuses. Individuals receiving the highest rating of 1 receive the highest salary increases, stock options and bonuses. These individuals are also treated as high potential employees and are given extra development opportunities by their managers. The company also makes significant efforts to retain all individuals who receive a rating of 1. Employees with low performance sometimes make employers within Mannat Enterprise worried, depressed and angry. This is why they are considering redesigning staff appraisal forms.