The Firmwide 360˚ Performance Evaluation Process at Morgan Stanley

The first case packet explains the details of Morgan Stanley’s new 360-degree performance evaluation process that the company has adopted as a part of their restructuring efforts. Feedback would be solicited from the employee’s peers, subordinates, superiors, and internal clients as well as from the employee themselves. Employees would be evaluated in the areas of Market and Professional skills, Management and Leadership skills, Commercial Orientation, and Teamwork / One Firm Contribution. All answer data from these responses would then be compiled into an Evaluation and Development Summary which would serve as the foundation for future promotion decisions for the particular employee.

The second case packet details the background, successes and struggles of a recently hired Market Coverage Professional for Morgan Stanley named Rob Parson. Paul Nasr, Parson’s supervisor, was struggling to interpret Parson’s appraisal results as he contemplated what role Parson should play in the organization’s future. Morgan Stanley’s restructuring had placed tremendous emphasis on instilling a team effort and a respect for the firm’s processes. Parson, while highly successful at generating new business and instrumenting deals that benefitted Morgan Stanley’s bottom line revenue, seemed to struggle with embracing the company culture. This was often noted by those who took part in his evaluation process, and as a result the responses regarding Parson’s performance for the organization were mostly negative. He had been deemed too aggressive and unwilling to “follow procedure” and “play by the rules.” Nasr needed to determine whether or not suggesting Parson for an upper management role would be beneficial to Morgan Stanley’s long term goals.

I personally like a lot of aspects that the new 360-degree evaluation system offers. I like the fact that all organizational members involved with the employee, whether it be bosses, peers, or lower level workers, have an opportunity to provide their input. I also like the fact that the template of the system clearly provides four structured areas on which the employee should be ranked. This should make it very clear to the employee receiving evaluation as to what areas they are highly competent in as well as what areas they could use improvement. I do believe there could be potential issues with the accuracy of the feedback, though. While the text in the case mentioned that positive comments are often clearly worded while negative comments are sometimes written in a “soft” way, I will reference what I mentioned in this week’s discussion post. If evaluators know the employee on a level outside of the organization (which is highly likely in most cases), there is a chance that feedback could be skewed to represent that evaluator’s positive or negative opinion of the employee on a non-organizational basis. This could make it challenging to determine which comments and feedback are genuinely accurate.

I believe that Rob Parson’s three strengths could be summarized as follows: 1) a strong ability to communicate with both prospective and existing clientele, 2) a high success rate of constructing business deals and generating incremental revenue for the firm, and 3) exhibition of a high commitment to the growth and development of the organization through individual accomplishment (pulling his own weight). I believe that Parson’s three development areas could be summarized as follows: 1) needs to show more interest and initiative in working with team members to accomplish goals rather than continuing such an individualistic approach, 2) needs to treat coworkers and colleagues with more respect; specifically, needs to seek their input and efforts when necessary as dictated by organizational policy, and 3) needs to learn to appreciate that the organizational mission of Morgan Stanley consists of more than solely building the business from a financial perspective. There is no doubt that Parson’s style and personality differ greatly from the typical investment banker, so it is no surprise that his actions have caused so much friction. I find it interesting that numerically, Parson’s scores are relatively strong from both managers and peers. However, negative comments in the open ended section seem to be plentiful. This could perhaps equate to the following statement: “He is doing what he is supposed to do, but we just do not like the way that he is going about it.” From managers and peers alike, it seems that both quantitative and qualitative reviews of his technical or “hard” skills are tremendous. However, it is apparent that his people or “soft” skills need further development in order for Parson to maximize his organizational effectiveness.

I believe that Parson should be promoted to a top managerial position within Morgan Stanley. He has proven that his ability to generate growth and revenue for the firm is unlike any of his peers, and his guidance could create the opportunity for Morgan Stanley to gain greater market share across all of the different industries in which they service clients. However, I do believe that Parson would need to (willingly and passionately) partake in a collection of leadership development and communication building activities in order to become a fully effective manager. In other words, I believe that Morgan Stanley should recognize the value that he brings to the organization (hard skills) by providing him with methods to gain the pieces of value that the firm believes he should utilize more regularly (soft skills). Training and development activities to enhance Parson’s soft skills are the only thing standing between the current situation and Parson’s full ability to dramatically impact Morgan Stanley.

If you were Paul Nasr, how would you plan to conduct the performance appraisal conversation? What would your goals be? What issues would you raise and why, and how would you raise them?

If I were Nasr, I would definitely realize that it is time to get a bit more stern with Parson regarding his areas of development and improvement. I would portray that the development of his leadership and communication skills were absolutely crucial to his advancement, and that all of the suggestions that he had been given should now be taken seriously in order to best position himself for promotion. I would almost have the goal of striking a bit of fear in him - “make the changes we’ve been asking you to, or your future with this organization will be bleak.” I would mention that he needs to treat coworkers with more respect and include them more on projects so that a feeling of teamwork can be instilled. I would mention that he needs to more fully embrace company mission statements and goals by softening his style and “playing by the rules” on all projects or assignments. I would also mention that his leadership skills would need to satisfy a much wider range of constituents in a management role, so it would be necessary to place organizational well-being ahead of individual deal-making on his list of priorities.

If I were Parson, I would realize that the promotion opportunity of a lifetime was currently on the line and likely contingent on my ability to make changes that others have been asking me to make for some time. My goals would be to finally “swallow my pride” and truly learn what changes were desired from me regarding my soft skill-set and work diligently to make those changes. I would know that as a manager, my reluctance to work with people and continue an aggressive individualistic approach would not suffice. As a result, I would work hard to be very receptive throughout the meeting with Nasr. Rather than object or argue to the personality or style changes that I needed to make in order to advance my career, I would instead let Nasr and my performance evaluations do the speaking. By simply listening and taking criticism regarding areas of necessary development, I would have a positive influence on both the meeting and my chances of major advancement within Morgan Stanley.

I definitely learned that 360-degree performance appraisal evaluations provide a comprehensive approach to determining employee strengths and weaknesses. When the same comments arise from multiple sections of evaluators, it is likely those areas need serious work for the employee in question. I also learned that a strong balance of both technical and leadership skills are greatly necessary in order to advance within an organizational setting. I would also like to note that a former boss that I worked for in an internship role was almost identical to Parson in his actions. Aggressive to gain sales and close deals, but marched to the beat of his own drum and was rather “rough around the edges.” I solidly believe that Parson should receive a promotion in the Morgan Stanley hierarchy primarily because of this experience - while my boss was not the typical person that you could imagine in that role (and he probably upset his fair share of people along the way!), his talent and ability to do what he was hired to do was absolutely incredible. Talent and ability can come in different forms, and it should always be rewarded if it leaves a positive impact on the organization.