HRM3183: Omega, Inc., is a small manufacturing company whose sales success or failure rests in the hands: Performance Management Case Study, UPTM, Malaysia

CASE STUDY: Disrupted Links in the Performance Management Process
at Omega, Inc

Omega, Inc., is a small manufacturing company whose sales success or failure rests in the hands of sales representatives employed by franchised dealers operating independently. Omega faces a challenging situation because it does not have control over the people working for the independent dealerships.

In fact, it is the performance of these individuals that dictates Omega’s sales success. To make things even more complicated, until recently, there was no clear understanding of the role of the sales representatives, and there were no formal sales processes in place.

Sales representatives varied greatly in terms of their level of skill and knowledge; most put in little effort beyond taking orders, and they did not feel motivated to make additional sales. Finally, franchises varied greatly regarding their management strategies and follow-up with Omega.

Recently, understanding the need to improve the performance of sales
representatives, Omega agreed to partially fund and support a training program for them. In turn, the network of franchise owners agreed to work together to implement a performance management system. As a first step in creating the performance management system, the franchise owners conducted a work analysis of the role of the sales representatives, wrote a job description, and distributed it to all sales representatives.

The franchise owners also adopted a franchise-wide mission statement based primarily on the need to provide highquality customer service. This mission statement was posted in all franchise offices, and each franchise owner spoke with his employees about the contribution made by individual sales in achieving their mission. As a second step, the managers set performance goals (i.e., sales quotas) for each employee. Then, all sales representatives attended extensive training sessions.

The employees received feedback based on their performance in the training course and were reminded of their sales quotas. Back on the job, manager gave feedback to their employees regarding their standing in relation to their sales quotas. Since the employees had no way of monitoring their own progress toward their quotas, the performance feedback consisted of little more than a reiteration of monthly sales goals. No performance appraisal form was in place, so discussions were not documented. This lack of feedback continued, and although sales quotas were being met for the first few months, franchise owners received complaints from customers about the low quality of customer service they were receiving. Subsequently, sales began to decline.

Furthermore, many orders were often incorrect, forcing customers to return items to Omega. While the new performance management process was an improvement over no performance management (at least initially), the franchise owners were still far from having a system that included a smooth transition between each component of the performance management process.

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