The Case Study of the Hewlett-Packard Company’s (HP)

Performance Management System

            Hewlett-Packard (HP) is known as a multinational IT company that provides quality software, technologies, products, services, and solutions intended for the use of small to large-scale business enterprises, consumers, and institutions in various other business sectors (Malone, 2007). Currently, HP offers numerous product lines and services, including printers, digital cameras, scanners, servers, PDAs, calculators, computers/laptops, and applications for both business and end-consumer use. Its products typically include software and hardware applications that are being utilized by many large corporations and businesses (Securities and Exchange Commission, 2010). Given the relatively wide range of products and services that HP offers, the company is also known as one of the largest employers in the United States. HP also currently maintains large business operations in the US, such as in San Diego, Colorado, Texas, and Idaho, aside from its headquarters in California (Securities and Exchange Commission, 2010).

            At present, HP employs thousands of employees who help manufacture the core products and services and manage the different facilities that HP acquired to run its business more efficiently. Interestingly, the working culture at HP is guided by the so-called “HP Way.” The HP Way pertains to the principal ideology that centers on respect for the employees, commitment to providing reliable and quality products and services to consumers, and recognition of the company’s responsibility to the outside communities (Malone, 2007). And under the HP Way ideology, the performance management system of the company has been anchored.

The Performance Management System at HP

            Given the tremendous business success of Hewlett-Packard in recent years, it is only logical to consider measuring the effectiveness of its current performance management system. Based on the initial findings concerning the existing performance management system at HP, it was found out that 11 out of the 14 characteristics of an ideal system are present. This means that HP’s performance management system is strategically congruent, thorough, practical, meaningful, specific, reliable, valid, acceptable, fair, open, standardized, and ethical. The only missing characteristics of HP’s current performance management system include the following: (1) identification of effective & ineffective performance, (2) correctability, and (3) inclusiveness (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006). Evidence suggests that the existing performance management system at HP does not distinguish between effective and ineffective behaviors of employees and is lacking in terms of measuring varying degrees of employee performance effectiveness (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006).

            In addition, the current performance management system at HP is not inclusive as the employees are not given the opportunity to participate in the process of creating the system. The system has been established by the top management based on “The HP Way” ideology. Another characteristic that is lacking in the performance management system of HP is correctability as the employees are not given proper avenues to challenge incorrect or unjust decisions of the top management. Although HP has a feedback system for its employees, correcting management decisions in the context of evaluating the performance of employees remains currently lacking (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006). With regard to the top two characteristics that are not present at all in the system, these were identified as “correctability” and “inclusivity.” These two are somewhat related, as given that employees at HP are not encouraged to participate in the process of creating and facilitating the performance management system in their own company, then it only explains why they do not have the chance to correct unjust or incorrect management decisions concerning their performance (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006). One direct implication of this in the HP organization is that more employees will grow dissatisfied with their job performance evaluation as they are not given a proper avenue to defend their job tasks and accomplishments effectively. Once they have been given a rate or grade for a specific performance evaluation period, it is already final, and employees can no longer change that (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006).

            On the other hand, with regard to the characteristic that is clearly present in the performance management system of HP, it is the thoroughness of the performance evaluation system of the company. According to Malone (2007), the system of HP has proven its effectiveness for many years because it is thorough, complete, and comprehensive, covering all major and minor job responsibilities of each employee, specifically outlined and assessed with corresponding feedback. This, therefore, served as one of the keys to the effective evaluation of the company on each and every individual employee that it manages. Finally, with regard to the characteristic that is farthest from the ideal, it would be “reliability.” Certainly, many years of implementing HP’s performance management system proved its effectiveness, thoroughness, and practicality. However, its reliability as a system is still being questioned as it could not be claimed to be “free from error” and “consistent.” The only solution to improve the reliability of the performance system is to evaluate the system itself based on employee perception. It is important to involve and include employees in the process of creating an ideal performance management system as it is they who know how they may be better assessed in terms of their work performance effectiveness (Malone, 2007; Rudman, 2003; Nelson & Quick, 2006).

Conclusion

            The existing performance management system at HP is almost close to the ideal, except that it lacks correctability and inclusivity, two of the most important characteristics of an ideal system. The fact that HP does not provide proper avenues for its employees to correct unjust management decisions and allows employees to participate in the process of creating a better performance management system may possibly lead to unexpressed concerns and dissatisfaction among HP employees. Thus, the HP management committee must consider addressing the lack of correctability and inclusivity characteristics of the organization’s current performance management system and think of ways to involve the employees in the process of crafting a better and improved version of its existing management system. Certainly, it is not enough for HP to simply stick to its existing performance management system, especially as there are certain areas that call for an improvement in the said system.

References

Malone, M. (2007). Bill & Dave: How Hewlett and Packard built the world’s greatest company. Portfolio Hardcover.

Nelson, D., & Quick, J. (2006). Organizational behavior: Foundations, realities and challenges. Thomson South-Western.

Rudman, R. (2003). Performance planning and review: Making employee appraisals work. Crow’s Allen and Unwin.

Securities and Exchange Commission. (2010). Hewlett-Packard Company . Retrieved from http://www.sec.gov/Archives/edgar/data/47217/000104746910010444/a2201180z10-k.htm