Based on her performance reviews at Merrill Lynch, Kathleen Bostjancic was amazing, at least for a few years. In one appraisal report, her boss said Bostjancic “continues to deliver top-caliber product,” and he wrote, “Her judgment is impeccable.” After three years, her pay more than doubled to reflect her apparent value to the company. Then something changed; Bostjancic noticed the difference around the time she took a maternity leave. Her economist boss phoned and asked her to take on a newly created position, Washington policy analyst. But when she returned to work with a plan for the position, her plan was rejected, and tension grew. A year later, Bostjancic’s boss issued a memo advising her that her work must “improve dramatically.” Seven months later, she was told that she was being laid off in a downsizing effort; the company hired a replacement two months afterward. A former Citigroup employee also recalls that good reviews before maternity leave didn’t do much to help her situation when she returned to work. Wan Li says one performance appraisal after another reported that she was exceeding expectations. Then as she neared maternity eave, she was transferred from a key job in the Structured Trade Finance Group to a support position that would (Li recalls being told) be “more manageable” for her. Upon her return from maternity leave, Li tried to transfer from her temporary support post to a revenue-generating job, but she was instead transferred to another support role. Three years later, following a second maternity leave, Li received a call announcing that her job had been eliminated in a “restructuring.” At Bank of Tokyo-Mitsubishi, Paula Best was progressing well in her career. She was responsible for securities lending and apparently handled the responsibility well enough that the bank added management of international lending to the scope of her job. Best thought she should be made a vice president, like the other employees who reported to the department manager of securities lending. What was holding back her promotion? It wasn’t her performance, according to the appraisals; she was rated at the level of “Achieves + ,” and Best recalls that her vice president promised her a promotion. After two more years and still no promotion, Best, who is African American, complained to the bank’s personnel department and then to the Equal Employment Opportunity Commission that she believed she was a victim of sex and race discrimination. Soon thereafter, Best and four other employees in her department were laid off. How could three employees with glowing performance appraisals be laid off by the institutions that once seemed to value them? Of course, one possibility is that the recent financial crisis required all of these institutions to make hard choices among many valued employees. It’s also possible that the three women’s performance deteriorated in the time after their last favorable review. Two of the three employers have publicly claimed that their decisions were justified. Merrill Lynch has said that Bostjancic’s manager treated her appropriately after her maternity leave; Bank of Tokyo says it fully investigated Best’s complaints and found that management had made appropriate decisions, given her level of responsibility. Whether or not these decisions were justified, they have proved costly in terms of negative publicity and legal actions. Bostjancic filed a discrimination lawsuit, which is ongoing as of this writing. Li filed a discrimination lawsuit against Citigroup, which was settled to avoid further expense. Best is part of a class-action lawsuit filed against Bank of Tokyo. Meanwhile, among the hundreds of thousands of financial-industry jobs lost in the financial crisis, almost three-quarters of the layoffs have involved women. Notable examples include Zoe Cruz, who had been co-president at Morgan Stanley, and Erin Callan, formerly chief financial officer at Lehman Brothers. The impact is especially dramatic in top-level jobs, where women were already scarce. In one recent survey of executives across industries, 19 percent of women said they’d been laid off in the past two years, compared with 6 percent of male executives. Questions 1. Which purposes of performance management did the appraisals described in this case fulfill? Which purposes did they not fulfill? 2. How can managers and HR departments minimize the likelihood of disputes arising over whether employees are continuing to perform at the same level? 3. If you had been in the HR departments of the companies described in this case, and the employees had come to you with their concerns, what would you have done in each situation?
Based on her performance reviews at Merrill Lynch, Kathleen Bostjancic was amazing, at least for a few years. In one appraisal report, her boss said Bostjancic “continues to deliver top-caliber product,” and he wrote, “Her judgment is impeccable.” After three years, her pay more than doubled to reflect her apparent value to the company. Then something changed; Bostjancic noticed the difference around the time she took a maternity leave. Her economist boss phoned and asked her to take on a newly created position, Washington policy analyst. But when she returned to work with a plan for the position, her plan was rejected, and tension grew. A year later, Bostjancic’s boss issued a memo advising her that her work must “improve dramatically.” Seven months later, she was told that she was being laid off in a downsizing effort; the company hired a replacement two months afterward. A former Citigroup employee also recalls that good reviews before maternity leave didn’t do much to help her situation when she returned to work. Wan Li says one performance appraisal after another reported that she was exceeding expectations. Then as she neared maternity
eave, she was transferred from a key job in the Structured Trade Finance Group to a support position that would (Li recalls being told) be “more manageable” for her. Upon her return from maternity leave, Li tried to transfer from her temporary support post to a revenue-generating job, but she was instead transferred to another support role. Three years later, following a second maternity leave, Li received a call announcing that her job had been eliminated in a “restructuring.” At Bank of Tokyo-Mitsubishi, Paula Best was progressing well in her career. She was responsible for securities lending and apparently handled the responsibility well enough that the bank added management of international lending to the scope of her job. Best thought she should be made a vice president, like the other employees who reported to the department manager of securities lending. What was holding back her promotion? It wasn’t her performance, according to the appraisals; she was rated at the level of “Achieves + ,” and Best recalls that her vice president promised her a promotion. After two more years and still no promotion, Best, who is African American, complained to the bank’s personnel department and then to the Equal Employment Opportunity Commission that she believed she was a victim of sex and race discrimination. Soon thereafter, Best and four other employees in her department were laid off. How could three employees with glowing performance appraisals be laid off by the institutions that once seemed to value them? Of course, one possibility is that the recent financial crisis required all of these institutions to make hard choices among many valued employees. It’s also possible that the three women’s performance deteriorated in the time after their last favorable review. Two of the three employers have publicly claimed that their decisions were justified. Merrill Lynch has said that Bostjancic’s manager treated her appropriately after her maternity leave; Bank of Tokyo says it fully investigated Best’s complaints and found that management had made appropriate decisions, given her level of responsibility. Whether or not these decisions were justified, they have proved costly in terms of negative publicity and legal actions. Bostjancic filed a discrimination lawsuit, which is ongoing as of this writing. Li filed a discrimination lawsuit against Citigroup, which was settled to avoid further expense. Best is part of a class-action lawsuit filed against Bank of Tokyo. Meanwhile, among the hundreds of thousands of financial-industry jobs lost in the financial crisis, almost three-quarters of the layoffs have involved women. Notable examples include Zoe Cruz, who had been co-president at Morgan Stanley, and Erin Callan, formerly chief financial officer at Lehman Brothers. The impact is especially dramatic in top-level jobs, where women were already scarce. In one recent survey of executives across industries, 19 percent of women said they’d been laid off in the past two years, compared with 6 percent of male executives.
Questions
1. Which purposes of performance management did the appraisals described in this case fulfill? Which purposes did they not fulfill?
2. How can managers and HR departments minimize the likelihood of disputes arising over whether employees are continuing to perform at the same level?
3. If you had been in the HR departments of the companies described in this case, and the employees had come to you with their concerns, what would you have done in each situation?
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