This case illustrates the effect of the use of rigorous performance measurement systems to create pressure to perform, motivate employee performance and sharpen the competitiveness of a company. It opens by describing the dark side of ruthless competitive culture at Zynga, a young, successful online gaming company. A similar data-driven performance measurement system in Dovernet, a Vancouver-based provider of enterprise communications and social networking technologies employed. Dovernet the … Read more »

This case illustrates the effect of the use of rigorous performance measurement systems to create pressure to perform, motivate employee performance and sharpen the competitiveness of a company. It opens by describing the dark side of ruthless competitive culture at Zynga, a young, successful online gaming company. A similar data-driven performance measurement system in Dovernet, a Vancouver-based provider of enterprise communications and social networking technologies employed. Dovernet founder and CEO provides performance measurement systems as critical to the cultivation of competitive, innovative workforce necessary Dovernet in a highly competitive industry to win. Dovernet used quarterly top-down reviews and stack ranking (with important implications for bonuses) and bottom-up review to reward high performers and low performers put on notice. The practical challenges of applying this system are shown in three short vignettes. In the first two, students can put in the role of a manager with the interpretation and action on the negative reviews, two workers with unique (but they soften?) Personal circumstances charged. The third vignette puts students in the role of an employee performing a bottom-up review as to the possible effects of giving honesty fights his manager less-than-perfect feedback equilibrium. The case allows students to consider the benefits and risks of the different performance assessment strategies and their impact on the performance of a company, the culture and morale of employees. Are there certain types of businesses or industries for which such systems are better suited? Have the integrity and effectiveness of a performance measurement system to managers from applying cold objectivity, or there is room for flexibility? In competitive industries, companies can lack a strong emphasis on performance and Dovernet beat competitors like Zynga?
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from
Robert L. Simons,
Natalie Kindred
Source: Harvard Business School
11 pages.
Release Date: 27 April 2012. Prod #: 112061-PDF-ENG
Dovernet HBR case solution