OL 600 Milestone Two Guidelines and Rubric For your final project, you will analyze the WeaveTech: High Performance Change case study in order to develop a proposal. You will have to consider the important aspects of the company within the case study when formulating the proposal. When developing your proposal, make sure that all elements align with the mission, vision, and goals of the organization. Be sure to support your proposal with appropriate scholarly sources. For Milestone Two, you will develop a draft of a performance management system and total rewards plan for WeaveTech. You must consider individual employee and organizational needs as well as federal laws and regulations in the development of your performance management plan. In addition to the performance management plan, you will devise a total rewards system and compensation and benefit strategies that are appropriate for the organization. At this point, you should be considering the implementation of self-service technologies at WeaveTech and preparing a message to stakeholders on issues regarding self-service technologies as they relate to benefit programs. Your submission should contain all of the elements for Section II of your final product, including all of those listed below. Your instructor will grade your submission using the rubric below and will provide feedback to be applied to the final project. Begin by using the following guiding questions for your analysis. Then, once your analysis has been completed, draft a performance management system and total rewards plan that thoroughly covers each of the critical elements listed in A through F below the guiding questions. 1. Based on the data presented in Exhibit 5 in the WeaveTech case study, what are some of the potential flaws with the performance management system at WeaveTech? 2. How would you change the performance management system to enhance the organization’s strategy, mission, and support for employees? 3. How can the performance management system best enable the workforce to meet individual and organizational goals? 4. What performance appraisal methods could be applicable to this organization? 5. What are some of the legal and regulatory issues to consider in regard to the performance management methods? 6. How can WeaveTech use its total rewards programs to encourage proper behavior and reward employees? 7. How can self-service technologies be used by WeaveTech to communicate to stakeholders and enhance the strategic focus of human resources? Specifically, the following critical elements must be addressed: II. Performance Management Systems and Total Rewards: In this part of the assessment, you will develop a performance management system and total rewards plan for this organization. A. Develop a performance management system designed to enhance the organization’s strategic mission of quality support for employees. B. Evaluate how your developed performance management system complies with federal laws and regulations. In other words, are there any concerns about compliance issues? C. Evaluate how your developed performance management system enables the workforce of the company to meet individual and organizational needs now and in the future. D. Determine appropriate performance appraisal methods that could be applicable to this organization. In other words, what method do you propose, how does it relate to compensation, and so on. E. Develop a total reward system that encourages proper behavior and rewards appropriate employees. F. Develop compensation and benefit strategies to include job evaluation strategies, pay programs (variable or merit), and benefit programs. Explain how you would communicate to appropriate stakeholders issues regarding self-service technologies as they relates to benefit programs. In other words, how would you write a memorandum or other appropriate message to stakeholders on issues regarding self-service technologies as it relates to benefit programs? Guidelines for Submission: Your performance management system should be an approximately 3- to 4-paged (not including your cover page and references) Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and at least three sources cited in APA format. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value Performance Management and Total Rewards: Performance Management Develops a performance management system designed to enhance the organization’s strategic mission and support for employees Develops a performance management system but developed system is cursory or inappropriate Does not develop a performance management system 13 Performance Management and Total Rewards: Federal Laws and Regulations Evaluates how the developed performance management system complies with federal laws and regulations Evaluates how the developed performance management system complies with federal laws and regulations but evaluation is cursory or contains inaccuracies Does not evaluate how the developed performance management system complies with federal laws and regulations 13 Performance Management and Total Rewards: Individual and Organizational Needs Evaluates how the developed performance management system enables the workforce of the company to meet individual and organizational needs now and in the future Evaluates how the developed performance management system enables the workforce of the company to meet individual and organizational needs now and in the future but evaluation is cursory or inappropriate Does not evaluate how the developed performance management system enables the workforce of the company to meet individual and organizational needs now and in the future 13 Performance Management and Total Rewards: Performance Appraisal Methods Determines appropriate performance appraisal methods that could be applicable to this organization Determines performance appraisal methods that could be applicable to this organization but determination is inappropriate Does not determine appropriate performance appraisal methods that could be applicable to this organization 13 Performance Management and Total Rewards: Total Rewards Develops a total reward system that encourages proper behavior and rewards appropriate employees Develops a total reward system but developed system is cursory or inappropriate Does not develop a total reward system 13 Performance Management and Total Rewards: Compensation and Benefit Develops compensation and benefit strategies to include job evaluation strategies, pay programs, and benefit programs Develops compensation and benefit strategies to include job evaluation strategies, pay programs, and benefit programs, but developed strategy is cursory Does not develop compensation and benefit strategies to include job evaluation strategies, pay programs, and benefit programs 13 Performance Management and Total Rewards: Communicate Explains how to communicate to appropriate stakeholders issues regarding self-service technologies related to benefit programs Explains how to communicate to appropriate stakeholders issues regarding self-service technologies related to benefit programs, but explanation is cursory or inappropriate Does not explain how to communicate to appropriate stakeholders issues regarding self-service technologies related to benefit programs 13 Articulation of Response Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 9 Earned Total 100%

________________________________________________________________________________________________________________ HBS Professor Michael Beer and George Washington University Professor Paul Swiercz prepared this case solely as a basis for class discussion and not as an endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite occasional references to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental. Copyright © 2014 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized, photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School. M I C H A E L B E E R P A U L S W I E R C Z WeaveTech: High Performance Change Frank Jennings was hired as vice president of human resources at WeaveTech in 2010. WeaveTech was the modern incarnation of the century-old Johnson-Ware apparel company. CVX Partners, a private equity firm,1 had bought Johnson-Ware in 2007 and rechristened it WeaveTech shortly thereafter. Jennings’s first two years with the company were relatively uneventful, with most of his time devoted to administering its data-driven HR processes. Over the past year, top executives from CVX had invited Jennings with increasing frequency to strategic planning presentations, where Jennings learned more about the plan to change WeaveTech’s customer base. This plan would reorient the firm away from its focus on military (70%) and security (30%) customers and toward the high-end performance clothing market.2 (See Exhibit 1 for WeaveTech’s 2012 mission statement.) Despite his knowledge of the impending changes, Jennings was shocked by the assignment he got on the first Thursday of October 2013: CEO Ron Gilford informed him that 20% of WeaveTech’s managers needed to be cut from the company’s payroll by January 2014. Gilford said, “WeaveTech must change and grow, and we can’t do either with the skill set of our current managers. We’re moving into a new league. A high-performance past does not guarantee a high-performance future.” Gilford told Jennings to deliver his recommendations on the following Monday. Apparently, his assignment was not as secret as Jennings had believed. On Friday, he received a copy of the “confidential” Five-Year Plan Summary from Gilford. (See Exhibit 2.) On Saturday, he received an email with a subject line that read “Mr. HR Guy Read This.” The message was a copy of the “No Layoff” memo that Jack Davidson, WeaveTech’s previous CEO, had written in 2005. (See Exhibit 3.) Jennings’s mind was unsettled as he struggled to sort out the demands being placed on him. It was time to craft his recommendations. Monday wasn’t going to be easy. WeaveTech History Johnson-Ware Headquarters for WeaveTech were located just outside Gloversville, New York. WeaveTech employed 315 managers and 1,835 employees at its headquarters and at three plants within a hundred-mile radius of Gloversville. The company intentionally cultivated a low profile and had long embraced the informal motto “Survival before Pride.” 9-914-553 J U N E 1 3 , 2 0 1 4 This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 2 BRIEFCASES | HARVARD BUSINESS SCHOOL During the industrial expansion after World War II, WeaveTech began to specialize in clothing for workers in heavy-manufacturing industries and the military. The company produced clothes such as jackets, coats, overalls, coveralls, vests, shirts, jeans, and fire-resistant clothing. Retailers like Sears, Woolworth, and J.C. Penney sold these items under a variety of brand names. Civilians (approximately 75% of revenues) and the military (25%) were drawn to the company’s expertise in the manufacturing of durable, high-quality apparel. Major Change in the 1980s When Jack Davidson, a retired U.S. Navy rear admiral, became CEO in 1983, the future of the privately held company looked bleak. The recession of 1981–1982 had been severe. Further, the U.S. apparel industry had been on a downward trajectory for two decades. 3 Davidson had left the service looking for a new challenge in the private sector. He believed that Johnson-Ware could capitalize on recent increases in military spending because of its expertise in apparel manufacturing. He created a two-pronged survival strategy. The first prong stressed valuedriven design (i.e., the idea that the right price was not often the lowest price). He felt that customers would pay a “fair” price for garments crafted to meet specific performance demands. To meet this goal, he invested in both the high-tech machines and the management systems required to produce garments from advanced materials. The second prong of his strategy was “procurement mastery.” Davidson believed selling to the U.S. Department of Defense required a technique he dubbed “right process/right people, right people/right process.” His point was that success in sales required both technical mastery of the complex federal procurement process and the cultivation of personal relationships. He viewed all selling as “personal” because it involved one person interacting with another person, face to face. He created the Federal Services Unit, informally known as “D-Corps,” and focused on hiring service veterans throughout the firm. From the 1990s to 2013 Over the next two decades, the firm’s performance varied widely. The 1990s were lean as reductions in the defense budget and the military’s focus on technology shrank the number of military personnel—and, hence, the amount of apparel these individuals needed. Overall income remained steady because the firm’s more sophisticated, high-tech garments commanded high prices. Nonetheless, actual production volumes were consistently below capacity. The events of September 11, 2001 then changed everything. Between 2001 and 2008, the company prospered. The wars in Iraq and Afghanistan, and the coincident increase in non-military security spending, allowed the company to operate at full capacity. CVX Partners purchased the firm in 2007 when a third generation of family heirs decided to divest. As part of the purchase agreement, Jack Davidson agreed to a five-year executive retention plan. Davidson’s agreement included three provisions: 1) the core business model would remain under his direction; 2) the company would retain its commitment to the principles of total quality management (TQM) and performance-based pay; and 3) an incentive pay agreement that promised Davidson a generous severance bonus if he remained as CEO for the full five-year term. From 2008 onward, two events changed the landscape yet again. First, the subprime mortgage crisis almost led to a worldwide economic collapse. Because it had used debt aggressively to finance its acquisitions, CVX Partners fell in the industry rankings for private equity firms, even though orders at WeaveTech remained steady. By 2012, CVX had dropped twelve places in the annual This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. WeaveTech: High Performance Change | 914-553 HARVARD BUSINESS SCHOOL | BRIEFCASES 3 ranking of the top thirty private-equity firms. This drop posed a problem for CVX because private equity firms are always raising capital, and their ability to do so is closely associated with this ranking. Second, after Barack Obama was elected president in 2008, he began unwinding the foreign policy approach of President Bush, which had favored active military engagement abroad. Although annual military spending continued to increase, the number of active military personnel was projected to decline for the foreseeable future. Compensation and Performance Appraisal at WeaveTech Early in his tenure, Jack Davidson adopted two managerial innovations: total quality management (TQM) and performance-based pay. Total quality management can be described as a customer-focused, data-driven production system that involves all employees in continuous improvement. It uses strategy, data, and communications to integrate “total quality” into the culture and activities of the organization. In short order, Davidson had the company positioned at the forefront of the quality revolution. Performance-based pay (PBP) is an incentive-based form of compensation wherein monetary rewards are directly linked to measurable performance outcomes. Davidson’s interest in wage design was driven by his admiration of fellow navy veteran F. Kenneth Iverson, who revolutionized the U.S. steel industry. Davidson also embraced Iverson’s related practices: 1) a lean corporate staff with no perquisites that denoted differential status; 2) decentralized leadership, with most decisions happening at the plant level; and 3) performance-based pay throughout the organization. It had taken several years to refine PBP and integrate it into the firm’s culture. WeaveTech’s employees earned three forms of compensation: 1) regular hourly/salary base pay and 2) quarterly bonus checks based on unit performance. Although the base pay levels at WeaveTech were lower than the industry averages were, employees could make significantly more than their peers did because of the bonuses. For instance, the average annual compensation per production employee in 2012 was $40,020, compared to an industry median annual wage of $25,930. This emphasis on performance also reduced absenteeism, which was just 0.2 percent of scheduled worker days. The VP for operations, working with the compensation manager, crafted formulas for translating productivity and efficiency into quarterly bonus awards. The formulas, reviewed by the VPs for finance and human resources, were the foundation for all internal wage determinations. All WeaveTech employees, ranging from senior officers to hourly employees (except those in D-Corps), 4 were covered under one of four compensation plans. Hourly employees received bonuses for meeting individual and group objectives, and senior managers received bonuses for meeting corporate objectives. In recent years, the bonuses for senior managers had decreased far more than had those for hourly employees. Felix Myers, WeaveTech’s longtime compensation manager, worked hard to make compensation policies as fair and transparent as he could. With expertise in engineering and accounting, Felix’s efforts put him at the center of the firm’s effort to integrate total quality management and performance-based pay. Reporting to the VPs of operations and human resources, Felix liked to call himself the “Formula Guy.” He described his work by saying, “It’s my job to write the formulas that turn production numbers into take-home dollars.” He took great pride in the fact that over 80% of WeaveTech’s employees were satisfied or highly satisfied with the firm’s compensation system. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 4 BRIEFCASES | HARVARD BUSINESS SCHOOL Felix played no role in the managerial performance-appraisal process; his formulas were based exclusively on operational performance. WeaveTech believed it had a very effective approach to performance appraisal. It was especially proud that pay did not depend on subjective measures of individual performance. Instead, performance appraisals were used exclusively for performance counseling, training and development, and promotion decisions. The WeaveTech approach to individual performance appraisal emphasized three beliefs. Doctrine #1 Fix the System First, WeaveTech followed the recommendation of TQM expert W. Edwards Deming. Deming believed improvement efforts should not focus on individual workers. In the introduction to the Team Handbook, Dr. Deming is quoted as saying: “The fact is that the system that people work in and the interaction with people may account for 90 or 95 percent of performance.” 5 Doctrine #2 Hire Right WeaveTech invested heavily in background checks and personal interviewing, especially for managers. Its interviews focused on the job and the company, as well as the job candidate’s technical skills. As one WeaveTech manager said, “Not every interviewee appreciates what WeaveTech is about. Some people feel threatened by our practices. The true value of the interviews is to allow for a mutual assessment of whether or not the candidate can embrace and ultimately enrich the values and practices that define WeaveTech.” Doctrine #3 Fire Fast WeaveTech rarely fired employees. Nonetheless, when the occasional poor hire did occur, WeaveTech intentionally cultivated a bias for action. Upfront, all employees were told that although productivity depended primarily on process and organizational design, every employee was expected to contribute, individually and fully, to the firm’s success. To ensure that employees had every opportunity to succeed, WeaveTech invested heavily in training. For example, when it decided to use SalesForce for its customer-relationship management (CRM) infrastructure, everyone affected received training in it. In addition, employees with unique or complex requirements received customized training and access to personal tutors. However, once the training period was complete, mastery of the software was expected. Managers at WeaveTech WeaveTech’s managers worked either at corporate headquarters in Gloversville or in a managerial, supervisory, or staff capacity at one of the firm’s plants. Ninety-seven managers worked in D-Corps. This unit focused on government contract compliance and business development with agencies in the Department of Defense. The unit’s nickname was derived from the fact that all but three members of the unit were former military officers from the armed services. In addition, all members of D-Corps had both graduate degrees and credentials from the Defense Acquisition University, a training institution of the Department of Defense. (See Exhibit 4 for an overview of WeaveTech’s managers.) Morale in the D-Corps group was exceptionally high. Its members took pride in their mastery of the government’s 6,550 pages of regulations and formal competitive bidding process, as well as their product knowledge. WeaveTech’s “high-tech, high-quality” strategy required D-Corps members to educate military officers and procurement officials about how WeaveTech’s products were critical to mission success. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. WeaveTech: High Performance Change | 914-553 HARVARD BUSINESS SCHOOL | BRIEFCASES 5 WeaveTech’s other managers came from cities and small towns across the United States. A minority (15%) had advanced degrees, and others had degrees from various online and military partnership universities. Their backgrounds differed significantly from those of the typical WeaveTech employee. Production, clerical, and staff employees tended to come from the Upstate New York region, and most had not earned college degrees. When Jennings’s predecessor was still on the job, she hired a consulting firm to design and install a managerial Performance Appraisal System (PAS). This system was intended to help each manager define his or her goals within the organization, review their subordinates (developmental review), and evaluate and review salary levels. The system was initially applied to all managers. Development of the PAS revealed two things. First, the total quality management system meant that quantitative performance indicators were built into the system. Performance bottlenecks were quickly identified and resolved. Second, performance problems that TQM processes could correct arose from two sources. One could be addressed by the PAS, and one could not. The first type of individual performance deficiency arose from a relative decline of knowledge and skills. WeaveTech products changed quickly, as did customer expectations. Retraining was a constant requirement; those who failed to keep current lost ground quickly. To address this concern, WeaveTech recast the managerial PAS into an instrument focused on development. The instrument had 18 standard performance indicators. (See Exhibit 5 for average scores across the 18 indicators.) The second source of performance declines were personal—divorces, deaths, illness, etc. They involved challenges that did not arise from work, but still affected performance. As a consequence, WeaveTech provided a generous Employee Assistance Program (EAP). Saturday Night Planning The Saturday night after he received the confidential summary, Jennings decided to use one of his favorite decision-making tools. It was a technique he called “Write It Down, Figure It Out,” which he had learned when he was in his MBA program. It involved a self-dialogue, in which he posed a question, answered that question, and then put all his responses together into a point of view. Jennings transcribed the following self-dialogue. Q: Why is WeaveTech shifting so abruptly to high-performance clothing in the private sector? My answer is not as definitive as I would like it to be, but I know that although WeaveTech is already in the high-performance clothing business, it has a narrow, declining customer base. Further, outdoor apparel is the fastest-growing segment of the sports-apparel market. Given WeaveTech’s capabilities, we can eventually supply products to established brands or launch a proprietary brand of our own. Further, CVX needs us to be more profitable in both the short and long term. We are not going to stay in its portfolio of firms if we don’t hit our numbers. Q: What is the long-term agenda of CVX Partners? Do companies like CVX Partners really have a long term? When my buddy Bill asked me that question two years ago, I joked, “Yes, their long-term goal is to make more money and then make some more money.” I was being facetious, but CVX’s only reason for existence is to make money for investors. I started working here because I wanted to work at a company that made things. My dad owned a small machine shop. Every year at tax time, he would smile and remind us that Henry Ford, his hero, once said: “A business that makes nothing but money is a poor business.” This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 6 BRIEFCASES | HARVARD BUSINESS SCHOOL Ron Gilford has been tasked with the job of making us more profitable. CVX believes that we can shift our customer base and maybe become a significant player in the consumer segment of the apparel industry. There is no way to know if it will keep us or sell us. Q: For the immediate problem, reducing managerial staffing by 20%, what are my options? When it comes to production, we are staffed lean. However, our staffing model has been shaped by the needs of our major customer. We are heavy on bureaucracy because that is what we have needed to do to succeed. The big challenge is figuring out whom WeaveTech should cut and how it should make those cuts. I also want to determine whether 20% should be cut. I would love to know who came up with that number. Behind those questions, I need to determine whether the performance data we have will help me develop a plan by Monday. Q: Are the PAS data of any use to me? Our PAS system is built around the assumption that we have hired the best. We’ve been successful for a long time, so it is safe to say that we do a first-rate job of hiring talented managers. The annual PAS is very useful for forcing an annual conversation between bosses and their direct reports. It helps keep people up to date, and it forces bosses and direct reports to keep their knowledge and skills fresh. We can always rank employees, even with weak data. How accurate those ratings are is another matter. Q: Can we save the WeaveTech culture? Cultural continuity becomes a topic of discussion anytime a company has a major change in leadership. WeaveTech’s culture, with its commitment to total quality and performance-based pay, will likely remain stable in the foreseeable future because these are proven business practices. The less stable components of our culture are derived from the influence of our major customer. We are good at being a government contractor. Can we respond effectively to different customer needs? Q: Are there ethical issues in play? Jack Davidson’s memo was more than a bit utopian, but people believed in what he said and acted based on those beliefs. Decisions of this magnitude always have an ethical component. I am also responsible for legal issues. We have counsel to help us get through the legal minefield, but just because something is legal doesn’t mean it is the right thing to do. My real ethical challenge won’t be associated with employment laws. As VP of human resources, I know things about our managers that others do not. Five years into our EAP program, 30 managers have sought assistance. Although I technically don’t know their names or problems because of privacy rules, I personally referred most of them to this program when it became obvious that help was needed. I could find out more information about them through casual conversations and some research into absenteeism. In addition, I know about their cancers, diabetes, arthritis, and the whole range of other health concerns. I know more than I would like about their pension assets and their personal debts. Because we are a small community of managers in a small town, I feel like I know too much. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. WeaveTech: High Performance Change | 914-553 HARVARD BUSINESS SCHOOL | BRIEFCASES 7 Exhibit 1 Company Mission Statement, 2012 WeaveTech’s mission is to continue to produce high-quality, high-performance apparel in order to meet the demands of our customers. WeaveTech is committed to the well-being of our employees. We provide opportunities for them to develop their skills, and we offer a competitive compensation package. WeaveTech is also committed to our shareholders. Their investment is vital to our long-term success, and we strive to maximize their return. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 8 BRIEFCASES | HARVARD BUSINESS SCHOOL Exhibit 2 Five-Year Plan Summary (Confidential) Five-Year Plan Summary, September 2013 (Confidential) To: WeaveTech Executive Committee From: Ron Gilford As you know, changing business conditions, accompanied by the departure of our friend and colleague Jack Davidson, require us to reconsider the future of WeaveTech. We are at a strategic inflection point, our traditional customer base is shrinking, and price sensitivity is rising. To address these challenges, we will soon announce our new strategic plan. The goals are aggressive, but our top management team, in conjunction with consultants from the Strategic Advisory Group, has concluded that these goals are necessary and feasible. By the end of this year, 5% of our sales will go to performance-wear customers in the private sector. By the end of the second year, these customers will purchase 10% of our products, and by the end of year five, they will purchase 25% of our products. To support this transition, and to use our present resources more effectively, we will be making major investments in new production technologies and sales and marketing. As you know, technology alone will not assure success. We need a new “private-sector” philosophy and an organizational culture to support that philosophy. Toward that end, we have engaged Powers Consulting Group (PCG), an organizational change consultancy. Over their three-month engagement, these consultants will interview all members of the executive committee. You should, ASAP, contact Administrative Coordinator Mary Young (x0399) to arrange your meeting time and receive preparation guidance. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. WeaveTech: High Performance Change | 914-553 HARVARD BUSINESS SCHOOL | BRIEFCASES 9 Exhibit 3 The No-Layoff Memo from Jack Davidson (This memo was removed from the Employee Handbook following the CVX purchase.) At Johnson-Ware, we care about long-term success. Because we are privately owned, we do not have to worry about meeting our quarterly numbers like our publicly-owned competitors do. We can invest in the future in order to serve our customers better, even if doing so means we lose money in the short term, and we cannot succeed if we do not meet our customers’ needs. Yet we have learned that meeting our customers’ needs means that our most important job is to take care of our employees. We cannot succeed without you. That is why we have the best employees in our industry. We selected you carefully, we respect your expertise and initiative, and we pay you well. We also do not believe in layoffs. It would be easy to make downsizing part of Johnson-Ware’s “strategy” when times are lean, but taking the long view of our business means that we resist doing what is easy when that is not the right thing to do. We have sometimes needed to be creative in order to avoid letting employees go during a downturn, but I am proud to say that we have succeeded in this effort. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 10 BRIEFCASES | HARVARD BUSINESS SCHOOL Exhibit 4 D-Corps and Other WeaveTech Managers DCorps Other WeaveTech Managers Total 97 218 Education 82 Master’s* 3 Ph.D.** 33 Master’s Median Age 53 44 Gender 3 Female 10 Female Veteran Status 97% 35% Average Tenure 12.4 years 18.1 years * Types of degrees vary. Most frequent are MBA, followed by engineering and IT ** PhDs are in history, sociology, and political economy. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. WeaveTech: High Performance Change | 914-553 HARVARD BUSINESS SCHOOL | BRIEFCASES 11 Exhibit 5 WeaveTech Managerial Performance Appraisal Instrument WeaveTech Performance Appraisal (Average Scores) Appraiser Report Employee ID #: _______________________ To be completed by the appraiser. Score the appraisees in the following areas in terms of her or his current role requirements (1 = poor; 2 = satisfactory; 3 = good; 4 = outstanding; 5 = exceptional). Report only whole numbers. If appropriate, provide commentary to support your assessment. Category D-Corps Managers Other WeaveTech Managers Product/technical knowledge 4.15 3.94 Time management 4.22 4.19 Planning, budgeting, and forecasting 3.98 3.78 Reporting and administration 4.35 4.17 Communication skills 4.l7 3.96 Delegation skills 4.00 3.68 IT/software utilization skills 4.31 4.07 Meeting deadlines/commitments 3.95 3.75 Creativity 3.83 3.97 Problem-solving and decision-making 4.33 4.01 Commercial judgment 4.17 4.01 Teamwork and developing others 4.15 3.94 Energy, determination, and work rate 4.22 4.19 Steadiness under pressure 3.98 3.78 Leadership and integrity 4.35 4.17 Adaptability, flexibility, and mobility 4.17 3.96 Personal appearance and image 4.00 3.68 Corporate responsibility and ethics 4.31 4.07 Total Score: __________ This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies. 914-553 | WeaveTech: High Performance Change 12 BRIEFCASES | HARVARD BUSINESS SCHOOL Endnotes 1 CVX Partners is a private equity firm. Private equity firms acquire a substantial position in a company or buy it outright and then look to maximize the value of that investment. They usually receive a return on their investments by: 1) reorganizing the acquired firm and then issuing shares via an initial public offering (IPO); 2) selling the acquired company to another firm; or 3) recapitalization—where the firm distributes cash to the shareholders from a debt issue or through the acquired company’s cash flow. 2 Performance clothing is manufactured from advanced fabrics engineered to meet the needs of athletes and adventurers around the world. Features used to describe these fabrics include: water resistant, lightweight, durable, breathable, moisture-wicking, temperature-regulating, etc. Performance clothing can be made from natural fibers, engineered natural fibers, or synthetic fibers like polypropylene, spandex, and polyester. 3 Timothy J. Minchin, Empty Mills: The Fight against Imports and the Decline of the U.S. Textile Industry (Lanham, MD: Rowman & Littlefield, 2012). 4 D-Corps members earn between $119,000 and $180,000. Their salaries are tied to the Federal Government Senior Executive Service (SES) and purchasing managers employed in the various defense department offices. 5http://blog.deming.org/2012/10/dr-deming-called-for-the-elimination-of-the-annual-performance-appraisal/, accessed April 16, 2014. This document is authorized for use only by ANBARROS@HOTMAIL.COM (ANBARROS@HOTMAIL.COM). Copying or posting is an infringement of copyright. Please contact customerservice@harvardbusiness.org or 800-988-0886 for additional copies.