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Wits Business School Short Case 2002-1
The Marginal Performer
Staff appraisal is the number one management problem. It takes an average employee –
manager or subordinate – six months to recover from it.
W. Edwards Denning1
It was September 2001, and that time of year again: performance appraisal and salary review time.
Nadia Strom, the new branch manager at the Pentlands branch of Barrows Bank, had one of her
most difficult appraisals coming up the next day. Michael Nyageri, the branch accountant, was a
marginal performer. He was a valued member of staff, but among other things, he had been six
months late in submitting the annual budget, he was not appraising the staff under him on a
quarterly basis, and he was not controlling the amount of overtime his staff worked. All of these
were important components of his job.
Strom’s manager at head office was pressuring her to do something about it. If she wasn’t
successful she’d have some explaining to do at her own performance review. How was she to
handle her meeting with Nyageri the next day? In the last week she had read that marginal
performers’ weaknesses were a manager’s greatest opportunities. How could she turn Nyageri’s
weaknesses into opportunities for improvement?
Nyageri’s Responsibilities
As branch accountant, Nyageri was responsible and accountable for operations and staff
administration at the branch. He had two assistant accountants and three other subordinate staff.
His duties included compiling and submitting various financial and non-financial returns to head
office, including the annual budget for the branch.
The Problems
Nyageri’s performance was marred by the following problems:
Poor audit rating. The branch was audited every second year and the previous audit had
rated budgeting and administration at the Pentlands branch as having “room for
improvement”. This meant that the branch’s performance in these areas was only one up
from the lowest ranking of “unsatisfactory”;
1
In Peters, T, Thriving on Chaos, MacMillan London Ltd, London, 1989, p495.
This case was prepared by Research Associate, Claire Gordon-Brown, with Senior Lecturer Margie
Sutherland. Although it is inspired by actual events some components have been changed to make and
facilitate certain teaching points. The names of the company and protagonist have also been changed. The
case is not intended to demonstrate ineffective or effective handling of an administrative situation; it is
intended for classroom discussion only.
Copyright ©2002 Graduate School of Business Administration, University of the Witwatersrand. No part of
this publication may be reproduced in any format - electronic, photocopied, or otherwise - without consent
from Wits Business School. To request permission, apply to: The Case Centre, Wits Business School, PO Box
98, Wits 2050, South Africa, or e-mail chetty.l@[Link].
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Failure to meet deadlines. Nyageri was supposed to have submitted an annual budget for
2001 to head office by November 2000. He had only finalised the budget in May 2001. He
was also consistently late in meeting deadlines for returns and other information required by
the regional office;
Poor overtime control. Branch staff were working excessive amounts of overtime and
Nyageri could not satisfactorily explain why they could not cope with their workload during
work hours. He appeared to lack control over this area. The current cost of overtime in the
branch was averaging R350 000 a year, against a budget of R65 000;
Failure to conduct performance appraisals. All staff had to be appraised on a quarterly
basis and each branch accountant had to appraise the performance of their subordinates at
these intervals. Nyageri had not submitted performance reports on his staff for the last six
months. He blamed his subordinates for not doing their part;
Poor staff administration. There had been little control of the leave records of the staff
under his control and none of them had been sent to the company’s in-house training
college in the last year. Barrows had a benchmark of five days’ training per employee per
year; and
Full use of sick leave. Nyageri had used up all of his sick leave, citing reasons such as flu
and shingles.
These were some of the issues that Strom had to confront, while keeping in mind that he was a
popular member of staff who kept the rest of the operations ticking over nicely. Strom was
concerned that the fact that he was well-liked could impact on her having to “take control” in the
branch. Moreover, in light of the difficulty in getting good staff that knew Barrows’ systems, she
did not want to lose him.
Reasons Underlying the Poor Performance
As Strom reviewed his extensive personnel file and the performance appraisals that her predecessor
had conducted with Nyageri, she saw that his two previous appraisals had resulted in an “average”
rating (against possible ratings of “very poor”, “poor”, “average”, “good” and “excellent”). No
formal disciplinary procedures had been entered into yet, although in a previous appraisal with
Nyageri her predecessor had raised similar problems to those that Strom had identified. As far as
she could ascertain, from her own experience and the information in Nyageri’s file, there were both
personal and organisational reasons for his underperformance.
Personal Reasons
Nyageri was 40 years old. He had been with Barrows for 19 years and in his current position for
two years. He had the minimum entry qualifications for the position and had not undertaken any
further education to develop himself further. To date he had only completed the first part of a three-
part banking diploma, although completing this diploma was mandatory for all managers in the
bank. The bank believed that each employee had to take responsibility for his or her own
development.
In addition, Nyageri had admitted to having serious domestic problems, which could be dividing his
attention from work. He had married twice, but both wives had died. He had six children to look
after and all of them were of school-going age. The emotional and financial responsibility of
looking after his children weighed heavily on him.
Nyageri also appeared to lack motivation to improve. He did not show much drive to better his
position and had said he was content with his current status in life and with his work performance.
Over the years he had come to the conclusion that the banking environment was one that did not
pay well and he had therefore decided to exert less effort in his duties. He saw his successes as
receiving little or non-existent reward, either intrinsically or extrinsically. He derived no
satisfaction from what he did, saying that it was “just a job – but then aren’t all jobs that way?”
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Organisational Reasons
Nyageri had a long track record at Barrows: one that until he had been appointed to this post two
years ago, had shown promise. He had started out as a teller in another branch and worked his way
up to his current position. It was company policy to promote from within.
In selecting him for this post, Strom’s predecessor appeared to have been convinced by the strong
recommendation of Nyageri’s previous boss and had not evaluated sufficiently whether Nyageri
actually had the required skills. He had not gone through all of the assessment procedures available
within Barrows.
Added to this was the fact that in his last appraisal Nyageri had noted that he was not fully aware of
what was expected of him as branch accountant, as he hadn’t been given a job description. He said
that he spent much of his time reacting to problems as they arose and was not able to plan his work.
He felt the demands of his job to be excessive and had said that the previous branch manager was
“unreasonable” to expect so much of him. He was resentful of the branch manager and said that he
seemed to spend many hours “socialising with customers instead of doing bank work”.
The bank had also not spelt out the rewards that went with good performance until a year ago, when
it introduced merit-related increases. Nyageri had not yet adjusted to the new results-oriented
approach and appeared to resent the new system of performance appraisals. “These performance
appraisals are a complete waste of time,” he had been heard to say. “It’s just the human resources
department trying to make work for us. I prefer to motivate my staff using my own methods.”
Nyageri believed that Barrows Bank was not being fair to him. He said that he was expected to cope
with staff, administration, technology changes and accounting problems, but received very little
recognition for the work he had done on implementing processes around the new technology that
has saved the bank a lot of money.
He also believed the previous branch manager had been insensitive to his needs and unsympathetic
to the fact that he had six children to look after. The predecessor had become angry when Nyageri
didn’t come to work, and, said Nyageri, hadn’t taken into account the fact that he often had sick
children to look after at home.
The Good Points
Nyageri’s poor performance was offset by a number of redeeming factors, however. His computer
skills were excellent and his knowledge of how to work the system that Barrows had recently
implemented was very useful. He had helped the branch out of a number of predicaments when the
system failed and he appeared eager to learn more about the system. He was good at training other
members of staff in using the new system.
Also, despite the fact that Nyageri said he was not comfortable managing people, he was well liked
by the staff in the branch and had mediated effectively in one or two conflicts. He appeared to have
the staff on his side and mixed with them socially.
He had identified the following recent developments as making his work easier:
improved information technology, which had simplified the onerous routine jobs and
compilation of returns and reports. Information was available at the press of a button;
decentralisation and empowerment, which had done away with the need to write to head
office for staff loans, overdrafts, travel allowances and disciplinary issues. He was now
empowered to deal with matters to their logical conclusion and enjoyed not having to tell
head office what he was doing in these areas. He felt that a more personal style of
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management was far more appropriate than the “American model” that management
favoured.
He had said in his previous appraisal that he looked forward to future advancement within Barrows. In
consequence, he had decided to resume his personal development and to complete the Institute of
Bankers course in his free time. Strom had nevertheless not seen this happening.
The Dilemma
As Strom thought about what to do and how to approach the appraisal, she realised that Nyageri’s
performance was not weak enough to consider dismissing him, but that it was the weak link in the
overall success of the branch. She was determined that the Pentlands branch would win the “most
improved branch” award at the company’s “Hall of Fame” banquet the following year, but for the
branch to achieve this, Nyageri’s performance would have to improve.
What options did she have? Should she be blunt in her approach, or, bearing in mind his tough
domestic circumstances and his already significant distrust of management, should she take a softer
line? Should she warn him that disciplinary procedures might be necessary if his performance did
not improve? Was there even a possibility that his performance would improve, or was it more
likely that Nyageri would continue in a mediocre fashion? She looked through Barrows’ guidelines
on dealing with poor performers (see Exhibits 1 and 2) as she thought things through.
Head office had said that the branches were to give average increases of 8%, but that they should
vary the increases given according to performance. What increase should she give Nyageri? Should
she avoid conflict and give 8% across the board, or should she award him a lower increase in the
hope that this might motivate him to do all aspects of his job properly?
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Exhibit 1 Barrows Bank Guidelines on How to Deal with Poor Performance
What is Poor Performance?
Poor performance can be described as an employee’s inability to comply with the bank’s required
standards of performance.
Should the employee fail to meet the standards required by the bank, it may result in the termination
of the employee’s services. (See paragraph 4.2.31 of the disciplinary procedure.)
The bank’s emphasis is on assisting the employee to achieve the standards required and only as a last resort to
implement disciplinary action. Management must, however, accept responsibility for dealing with poor
performers.
The Importance of Setting Appropriate Standards
The performance of an employee cannot be measured effectively unless a standard has been set
against which to measure the employee’s daily performance.
Here follows some questions to ask that may assist you in the setting of standards.
1. Has the job been broken down into main tasks?
2. Have standards been set for each task that clearly describes how well it must be done?
3. are these standards realistic i.e. can the employee achieve them under normal conditions
working with normal resources?
4. Are the standards measurable i.e. how will you be able to determine if they are being met or
not?
5. Are your measures specific enough to allow you and the employee to identify precisely
where poor performance may occur and the degree of such performance?
6. Are the standards expressed in a way which can be understood by the employee and enable
him to get on with the job without constant guidance or direction from his supervisor?
7. Have the standards been communicated to the employee and has he had the opportunity to
clarify and question them?
8. Have you built in regular reviews of progress against the standards set?
The Need to Counsel Poor Performers
The Industrial Court has emphasised the importance of counselling poor performers with a view to
assisting them to achieve the required standards:
The following steps are usually followed when a counselling session on poor performance is being
conducted.
Remind the employee of the expected standards of performance;
Point out the specific areas of performance that you are not satisfied with and tell the
employee why this is so (i.e. explain the consequences of poor performance);
Give the employee ample opportunity to state his reasons as to why he is not meeting
required standards and listen to any reasonable suggestions that he may offer to assist him
in reaching the standard;
Attempt to agree on a specific action plan to be followed by the employee that should
enable him to achieve the required standard;
Tell the employee how much time you will grant him in which to improve his performance
– it is essential that the employee be given a reasonable period of time to improve. The
length of this period would be dependent on the nature of the performance problem and the
degree of difficulty involved in the job; and
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Ensure that the documentation regarding the discussion is placed on the employee’s file –
often it is useful to follow up the discussion with a memo or letter summarising the main
points covered and the action plan decided upon. This would serve as the necessary proof
should a dispute arise in the future. It is also preferable that the employee signs the
documentation.
Should the counselling process not result in the employee achieving the required standards, then
consideration may be given to disciplinary action.
Exhibit 2 The Paragraph in Barrows’ Disciplinary Procedure on Dealing with Poor
Performance
4.2.31 Disciplinary action to be taken for poor quality of work or failing to maintain output levels,
unless more serious action is required:
1st offence – first written warning
2nd offence – final written warning
3rd offence – dismissal