About the Download

In 1995, Money4U Finance Limited was established in Western Australia as a subsidiary of another Western Australian Company, West Coast Investments Limited (WCIL). WCIL’s core business was superannuation fund management – and it did it very well. When the federal government of the day (in order to promote competition), eased restrictions on the banking industry, the board of WICL saw an opportunity to expand. Money4U Finance Limited was duly established with the aim of providing mortgage broking services, personal loans and business loans. The business model was based on small shop fronts in locations not normally serviced by the ‘big four’ banks but eventually grew to include branches in all major towns and suburban Perth. By 2010, Money4U had cemented its place as a small, reliable and, importantly, profitable subsidiary and based on its success, WCIL was considering the merits or otherwise of Money4U becoming a bank in its own right. This, however, represented a big step because both culturally and structurally, if the new venture was to be successful, it had to compete against formidable opposition.
Like many of the senior employees at Money4U, Sam Mulgrew, Senior Manager (Human Resources), had first worked for WCIL where, as an accountant, he had been responsible for overseeing the integrity of the company’s investments. Sam was also a good people person and it was this quality that prompted WCIL to offer him a management role at Money4U. As Money4U expanded, so, too, did Sam’s responsibilities and he soon found himself taking on roles and responsibilities beyond his expertise, notably, formulating strategic and operational plans. To his credit, Sam attended as many courses as he could to familiarise himself with the various aspects of human resource management and for the most acquitted himself well. However, one aspect of his role, performance management, proved difficult from the start. In Sam’s opinion, all that was needed was a quick chat once a year, tick the boxes, that sort of thing. For Sam, a good employee was one who received no complaints and who met targets.
To Sam, performance management as espoused by the experts was irrelevant to the running of his department, or any other department for that matter. He knew who the good performers were and, equally, he knew the poor performers. What more did one need to know? So why have regularly scheduled, formal meetings to confirm the obvious? He had also been to enough courses to be familiar with what was happening in the world of performance management – peer appraisal, 3600 feedback, self-reflection, competency frameworks, training needs assessment – all very nice in theory but totally impractical and too time consuming. Sam was also of the opinion that because the majority of employees at Money4U were women who worked part-time, anything more than a ‘ticking the boxes’ approach was superfluous. The fact that so many of the female employees took maternity leave and/or left after a short while only confirmed in Sam’s mind that performance management was an overrated aspect of organisational performance. Consequently, Sam’s attitude permeated Money4U to the extent that his oversight extended to simply accepting each branch manager’s verbal confirmation that performance management was occurring.
Six months ago, as a precursor to becoming a bank, WCIL poached two key staff from one of the big four banks. One was Sandy Shaw and the other was Penny Wise. Sandy was appointed to the newly created position of Assistant Manager (Human Resources) and Penny was parachuted in as the new state manager (the previous state manager, having seen the writing on the wall, took early retirement) thereby upsetting some senior staff who thought it should have been an internal appointment. Penny was answerable to the board of WCIL whereas Sandy was answerable to Sam who, in turn, was answerable to Penny. The problem Sam had with Sandy Shaw had a lot to do with performance management because when employed by one of the ‘big four’ banks, she was part of a team of performance management gurus responsible for developing leading edge performance management systems. To his consternation, Sam was very much aware that many of the staff seemed keen to listen to what Sandy had to say. It also annoyed Sam that Sandy seemed to have the ear of Penny. This, however, was not surprising considering both had worked for the same bank and had many mutual friends and acquaintances whereas Sam’s network was decidedly non-banking. The bombshell came two weeks ago when Penny called Sam to her office to discuss performance management at Money 4U and ‘other matters’. In fact, it was less a discussion than a directive.
As Senior Manager (Human Resources), Sam was told to lift the standard of performance management at Money4U to make it more meaningful and to ensure it was aligned with the organisation’s strategic direction and with best practice. Where had Sam heard this before? To add to the pressure, Penny told Sam that one of her major tasks was to oversee the viability of the transition of Money4U to bank status and to facilitate this she had established an Organisational Review Unit (ORU) – and had appointed Sandy to lead it. Sam’s experience told him that such reviews invariably meant that restructuring was a real possibility.
Sam was given three months to review all aspects of performance management and to devise a performance management strategy tailored to all levels of the organisation. Being so out of touch with current trends, Sam realised he had no choice but to eat humble pie and approach Sandy for assistance.
1. How do you think Sam should go about revamping performance management at Money4U?
2. When Penny Wise told Sam to ‘come up with a plan tailored to all levels of the organisation’ what did she mean? Give examples of such plans.

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