...evaluating their employees. The performance management system is usually used for annual employee evaluations. The performance management system can be performed in various formats such as rating employees on a scale of 1 to 10 or giving a rating of excellent, good, average, or poor. Now, that I have discussed what performance management system is, it’s time that I elaborate on an example of this system. I would like to discuss the “rank and yank” philosophy and if I agree or disagree with it. I will also discuss Burger King’s performance appraisal. According to the textbook, “rank and yank requires managers to force-rank employees according to some preset distribution” (Milkovich, Newman, and Gerhard, 2011, p.376). With this process, an organization ranks their employees against each other and then terminates the lowest end of the rankings. The terminating component of this process is considered as the yank. I have read that more than 50 percent of the Fortune 500 companies used a form of this system. But some companies use rank and yank only to get rid of their lowest performing employees in times of financial crisis. The allege purpose of this management system is that by terminating the low performers, and replacing them, the organization will end up with a better personnel. I disagree with this philosophy because it’s a controversial and cruel rating system. I believe that identifying and terminating the bottom performers is not only unreasonable, but also unethical...
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...Appraisal Case Rank and Yank at General Electrics Forced ranking is a performance appraisal system popularized by Jack Welch when he was CEO of General Electric. It was a system that has been the derogatory label of “rank and yank” by its critics. The intend of the forced-ranking system is to improve the performance level of an operation by getting rid of the bottom 10 percent of performers and hiring replacements who will perform at a high level. Ranking judgments can be made in a variety of ways. For example, a forced distribution can pre-assign a set of percentage of employees that must be placed into categories such as “most effective”, ”average” and “needs improvement”. Alternatively, a simple ranking of workers from best to worst can be used. Top performers may be rewarded and offered promotion or training. Low performers may be given a warning or terminated. Forced ranking has been employed by a number of companies, but some legal challenges have been made. For example, Microsoft successfully defended several discrimination suits challenging its use of a forced ranking system. Ford Motors campany implemented a forced ranking system in January 2000 and ended up paying an award of 10.5 million dollars as a result of class action suits charging that the system has a disparate impact on some subgroups of employees. Ford has since shelved its forceranking system. Overall however, there have been relatively few legal challenges to the forced-ranking system...
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...this was not the case. In the launching of the firm, Chairman Ken Lay and CEO Jeffrey Skilling were efficient in growing their company from a small gas and oil pipeline firm directly into a of the largest entities in its industry. As the company began to expand and prosper, the requirements of upper management became more assertive and disparate. Mr. Ken Lay was never fulfilled along with his efforts to obtain increasingly more monetary good gains; he implemented coercive power to shape his corporate culture. This power was most prevalently seen in the company’s employee program review process; shrewdly nicknamed “rank and yank” if employees of Enron ranked among the bottom 20% in regards to performance they would be conveniently railroaded out from the company (Ferrell, 2013, pp. 395-405). Rank and Yank is a phrase used to describe a process by which a company ranks its employees against each other, and fires out the occupation of the people at the lowest end of the ranking. Mr. Lay wanted the best executives contributing on him, with a target to encourage individuals to be the best they could have been, however in my opinion, he created conflicts of great interest that drove the company out of business. 2. Did Enron’s bankers, auditors, and...
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...People saw how these men took risk in their own stock so they followed. Ken Lay also wanted to let everyone know that what they did was always for the stock holders and he showed sensitivity to his followers with that claim. 2. Communication was one of the big problems with Enron’s problems. There was rarely any downward communication that was real. The major leaders of Enron kept all the problems with profits to themselves and left the shareholders with no information. This barrier of communication they put up was filtering since they only put out the good information which wasn’t necessarily true information. The upward communication that was occurring was usually filtered as well since many of the traders wanted to be in the higher rank so that they could keep their jobs. 3. The power that was displayed was a lot of expert...
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...Essentially, it tells us about one of the biggest fraud ever performed in the US. It tells us of the downfall of Enron: its scandals, the prosecution of its perpetrators, as well as its role in California electricity crisis. The film describes the biggest names on the fraudulent corporation. First is Kenneth Lay, the founder of Enron. Kenneth, nicknamed ‘Kenny Boy’ by his spouse, got the company into scandal in just two years after its establishment, after Enron’s managers bet on oil markets. The second is Jeffrey Skilling, the man who utilized mark-to-market accounting, which allow Enron to appear as being a profitable company, even if the reality might not be so. He also applied the Darwinian philosophy on Enron by establishing a ‘rank and yank’ system, a system of which a group of review commitees grades employees and fires the bottom fifteen percent. Skilling was also described as having a soft spot for “guys with spikes”; which made him recruit J. Clifford Baxter, a manic-depressive; and Lou Pai, the CEO of Enron Energy Services which was known for using shareholder money to pay strippers. Enron managed to get a myriad of profits during the dot-com bubble by using the process known as “pump and dump”: pushing up their stock prices and taking the massive options. Enron also tried to get public’s attention by launching a series of PR campaign, which gave it the impression of being a profitable company, although performing poorly elsewhere. Enron failed in several projects...
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...Asdasadasdasdasdsa Sfsddddddddddddddddddfds adssss Case 7.1 Etik Meşrulaştırılmış performans artırımı mı ? yoksa acimasızca ve etik olmayan bi yönetim mi ? Güçle sıralama yapma Jack Welch’in General Electric’in CEO’suyken populerlik kazandırdığı bir performans sistemi. Sisteme detaylarından ötürü literatürde “rank and yank” ismi verilmiş. Sistemin temelindeki performans artışı performans sıralamasında alttaki %10’luk kesimden kurtulmak ve yerlerine daha yüksek performansla çalışıcak kişileri işe almak ile sağlanıyor. Sıralama yapılırken , karar verilirken çeşitli yollar var mesela işçileri kategorize etmek “en etkili”, “ ortalama”, “geliştirme lazım” gibi. Buna alternatif olarak en basitçe en iyi’den en kötüye olarak da sınıflandırılabilir. En iyi performans gösterenler ödüllendirilir kötüler ise uyarı alabilir yada işlerine son verilebilir. Bu Güçle sıralama bi sürü firma tarafından bazı yasal değişiklikler yapılarak kullanılıyor.--------------------------------------------------------örnekler var buraya 2-3 tane çevirisi kolay yapıcam onlarıda yarın en geç ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Güçle sıralamanın olası dezavantajı işçiler arasında rekabeti arttırması olabilir.Güçle sıralama yapılan yerde işçiler ortak yapılan işlere daha az odaklanıp bireysel yaptıkları...
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...Enron case analysis: Occurred because: Leaders’ obsessive attention for the pursuit of profits: The issues that capture the attention of the leader (i.e. what is criticized, praised or asked about) will also capture the attention of the greater organization and will become the focus of the employees. If the leaders of the organization focus on the bottom line, employees believe that financial success is the leading value to consider and traits like integrity became a non-factor within the culture at Enron. One former executive of Enron has describe Skilling as a leader driven by the almighty dollar. “… Skilling would say all that matters is money. You buy loyalty with money”. Enron executives’ attention was clearly focused on profits, power, greed and influence. They wanted their employees to focus on today’s bottom line. Skilling communicated his priorities, “Profits at all costs” to his employees overtly, both in word and deed. Top executives developed a strong success-oriented culture at Enron and the compensation and performance appraisal systems that supported it encouraged employees to exaggerate results and help hide the company’s growing debt. According to Sherron Watkins, a previous employee of Enron, “Enron’s unspoken message was, ‘Make the numbers, make the numbers, make the numbers—if you steal, if you cheat, just don’t get caught. If you do, beg for a second chance, and you’ll get one.’” Enron’s corporate culture did little to promote the values of respect and...
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...and their ranks in the troop. Sapolsky learned the multiple social dominances like fighting to be top ranked and mating strategies the troop participated in. He also learned the nature and instinct created a complex social hierarchy for the baboons. Throughout the book Sapolsky gives multiples ways that baboons show social dominance. Generally, the males show the social dominance during Sapolsky’s time in the troop. There are a few females that do show...
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...“Top 100 Places to Work For” by Fortune magazine. By all outside perspectives, Enron seemed to be a growing, thriving company with ever expanding technologies and possibilities. No one could have predicted what would so quickly take place that would change the credibility and ethics of the business world forever. CORPORATE CULTURE Enron’s corporate culture can be simplified to one word; ‘Risky.’ Enron had a deep-seated belief their people could handle increasing risk without danger. Risk was rewarded and pushing the envelope was standard procedure. Enron’s culture was responsible for unethical behavior. Job competition was fierce. Employees were recruited from top universities. Skilling implemented a “rank and yank” system. In the “rank and yank” system...
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...This paper summarizes the article listed in reference that reported on the demise of Enron and the contributing factors that led to the financial downfall of a great company. The roles of the corporate culture, Enron’s financial staff, and even the chief financial officer are all to blame for the events that lead to the finality of the company that resulted in bankruptcy. While Enron boasted about being “The World’s Leading Company”, it was anything but that. The corporate culture of a company is supposed to describe how the stakeholders and employees, think, feel, and act. If Enron’s financial record is example of that, then the company should change the banner that hangs in the lobby at headquarters. CEO Skilling instituted a “rank and yank” system that would weed out lower ranked employees every six months. . (L. Ferrell, O.C. Ferrell, & Fraedrich, 2011). This alone caused a competitive environment amongst the employees. While he hoped this would help people reach their full potential, it ended up being a breeding ground for unethical practices within the company walls. Rather than a culture that focused on integrity and increasing profits for stakeholders, Enron was soon overcome with arrogance and the executives’ needs to fill their own pockets. Ignoring the rules was quickly integrated for the pursuit of profits and happiness, or so they thought. Enron’s bankers, auditors and attorneys eventually helped to lead to company to a financial demise with their collective...
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...Reflexion I: Es ist unglaublich welche Gier, Macht und Selbstübereinschätzung damals bei Enron vorgeherrscht hat. Jahrelang konnte das Unternehmen Bilanzverfälschungen, Betrug und dubiosen Geschäften geheim halten. Doch letztendlich ging Enron bankrott und alle Geheimnisse des Konzerns kamen ans Licht. Regulierungsphase (- 1985) 1926 wurde der Vorgänger von Enron, Houston National Gas, gegründet. Es war ein regionales Pipeline-Unternehmen mit einem guten Ruf. Aufgrund der Wirtschaftskrise in den späten 1920ern und frühen 1930ern fand sich die Firma in einem sehr stark regulierten Markt mit Preiskontrollen. Ken Lay brachte mit seiner Anstellung bei Enron neue Werte basierend auf der freien Marktwirtschaft in das Unternehmen mit. Durch die Deregulierung und Liberalisierung der Energiemärkte in den 80igern hatte der Konzern seine Anfangsschwierigkeiten sich im freien Markt zu positionieren. Während die Kernziele des Unternehmens sich nicht änderten, hat sich mit Lay das Einsatzumfeld des Unternehmens gewandelt. Freie Markt Phase (1985-1997) Im Jahre 1985 fusionierten die Unternehmen Natural Gas und InterNorth. Der neue Konzern Enron entstand. Während 1986 der Betrieb mit Gas-Pipeline rote Zahlen schrieb, machte das Trading Office (ein Teil von InterNorth) in diesem Jahr einen Gewinn von 28 Millionen Dollar. Das Unternehmen war dadurch ermutigt in diesem Feld weiter zu machen. Ziel war es Weltmarktführer im Energiesektor zu werden. Im Jahre 1990 trat Jeffery Skillings in...
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...Comm101 Tutorial 1) What were the individual factors that contributed to the failure of Enron? Briefly explain two key factors. Enron collapsed in large part because of the unethical practices of its executives. Egoism (Self interest) was one of the major factors contributed to the failure of Enron. Enron’s executives put their own interests above those of their employees, company and the public, and failed to exercise proper oversight or shoulder responsibility for ethical failings. They allowed themselves to be motivated much more by what would benefit themselves than what would truly benefit the company. Money, greed, arrogance and hubris led company executives to lose focus on working for the good of the company and to act unethically (Gini,2004). Abuse of power to make decisions which were beneficial economically and politically to themselves and the company, was one of the key factors that led to Enron’s failure. Company leaders used insider information and traded millions of dollars in company stock, borrowed from subsidiaries with no intent to repay the loans (Wilke, 2002) , and avoiding federal taxes even though some of its subsidiaries, like Portland General Electric, collected tax payment from customers (Manning & Hll, 2002). Such behaviors of moral failure at the top and irresponsible behaviors led to the collapse of Enron. The unethical behavior of Enron’s leaders appears to be the product of both individual and situational factors. Greed was the primary...
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...leader with a good head on his shoulders. Lay said that he was fully exposed to not only legal behaviour but moral and ethical behaviour and what that meant from the standpoint of leading organisations and people. Lay also wrote in an introductory statement to the revised Enron Code of Ethics that they (officers and employees of Enron Corp.) were responsible for conducting the business affairs of the companies in accordance with all applicable laws and in a moral and honest manner. Lay mentioned that the Enron enjoyed a reputation for being fair and honest and that the company was highly respected. Jeff Skilling, on the other hand, implemented a very rigorous and threatening evaluation process for all Enron employees. Known as the “rank and yank” – this process was aimed at getting rid of the lowest ranking employees – probably an attempt to get rid of all the bad apples. But this too backfired when employees intentionally ranked peers lower to enhance their own position and ranking. So with leaders like these, who harboured only “good intentions” for the company… Enron was sure to be headed for success. Along with Enron’s ethic codes based on respect, integrity, communication and excellence; Enron looked like an excellent corporate citizen, with all the corporate social responsibility (CSR) and business ethics tools and status symbols in place. A company heralded as a paragon of corporate responsibility and ethics – successful, driven, focused, philanthropic and environmentally...
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...How did the corporate culture of Enron contribute to its bankruptcy? The corporate Culture at Enron could have contributed to its bankruptcy in many ways. Its corporate culture supported unethical behavior without question for as long as the behavior resulted in monetary gain for the company. It was describe as having a culture of arrogance that led people to believe that they could handle increasingly greater risk without encountering any danger. Its culture did little to promote the values of respect and integrity it instead rewarded ‘innovation’ and punished employees deemed week. The performance evaluation process for employees that was dubbed “rank and yank” utilized peer evaluations, and each of the company’s divisions was forced to fire the lowest ranking employees. This created cut-throat competition not only against Enron’s external competitors but also within the organization. It pitched employees against each other. The internal rivalry created in turn contributed to less communication between operations for fears of being fired. The “survival for the fittest” atmosphere reached the point where illegal activity was deemed necessary to stay on top of the game. Enron’s compensation plans also seemed less concerned with generating profits for shareholders than with enriching officer wealth. Its culture encouraged flaunting the rules and even breaking them. Each Enron division and business unit was kept separate from the others and as a result very few people in the...
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...Anytime you are dealing with money and accounting there is always a myriad of ethical issues. Some people will do anything to propel themselves into financial wealth. However in today’s accounting world I believe there are numerous standards and policies that lend themselves to create an ethical rich environment. One endeavor known as the Sarbanes-Oxley Act revolutionized the accounting industry adding such measures as requiring the leadership of corporations to certify the accuracy of each individual financial statement to restore the faith of investors in a time period that was rocked with scandals from Enron to Tyco. The act primarily prescribed “disclosure as the cure” for a troubled economy implementing numerous independent checks and balances designed to provide appropriate oversight, transparency, and objectiveness. Another part of this disclosure concept was the increased protection afforded to whistle-blowers which is key for getting an ethical breach to the public or appropriate officials. (Kuschnik, 2008) Proof that Sarbanes-Oxley Act is making a difference today is in a survey conducted by Protiviti Risk and Business Consulting which found that “nearly 70 percent of respondents in our survey reported that the internal control over financial reporting structure in their organizations has improved since compliance with Sarbanes-Oxley Section 404 became a requirement.” (Cohn, 2012). Enron is a perfect example of a pre-Sarbanes-Oxley Act company which had wide...
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