Description
Performance Management System
Dec 2026 Examination
Q1 Sigma Innovations, a software development company, has recently experienced challenges in retaining top young talent. Management recognises that, despite competitive pay, many new hires feel disconnected from the company’s values and are hesitant to seek guidance from more experienced colleagues. To transform this, Sigma’s HR team proposes a comprehensive mentoring culture, making mentoring a central component of employee development and accountability. The programme plans to use storytelling, skill-based matching, and regular feedback, and alignment organisational values and mentoring relationships at all levels. Based on the scenario, how should Sigma Innovations apply the foundational elements of a strong mentoring culture to create an environment where employees value and voluntarily participate in mentoring relationships? Your answer should suggest specific strategies that embed mentoring into daily organisational practice while ensuring alignment with company values and promoting accountability. (10 Marks)
Ans 1.
Introduction
Competitive pay alone could not stop Sigma Innovations from losing young talent, which tells management something important about why people actually stay at a company. New hires feel disconnected from the organization’s values and hesitant to approach experienced colleagues, a gap that no salary adjustment can close on its own. Building a genuine mentoring culture, resting on foundational elements like storytelling, skill-based matching, and regular feedback, gives Sigma a realistic and sustainable path toward employees who participate in mentoring because
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Q2 (A) In a large manufacturing company, the HR department adopted the forced distribution method to differentiate employee performance levels during yearly appraisals. However, the new system led to highly motivated employees being placed in the lowest tier, resulting in demotivation, increased grievances, and allegations of unfair treatment. Several department heads argue that the forced curve does not accurately capture unique team dynamics or actual employee contributions. Analyse the impact of the forced distribution method for performance appraisal on morale, fairness, and the ability to reward genuine high performers. (5 Marks)
Ans 2(A).
Introduction
Forcing every team into the same performance curve sounds like a fair, objective solution to inconsistent ratings, but this manufacturing company’s experience shows how badly that assumption can fail in practice. Highly motivated employees landing in the lowest tier, simply because their team happened to be unusually strong overall, has produced exactly the demotivation and grievances a well designed performance system is meant to prevent in the first
Q2 (B) A large Indian pharmaceutical company, Medico Ltd., is facing difficulties with outdated performance management practices that mainly focus on quantitative results (e.g., sales numbers and production targets), leading to employee disengagement and stifled innovation. Senior management now wants to shift to a competency-based performance management system (CB-PMS) by adopting clear role descriptions, competency mapping, and integrated assessment tools. However, some department heads express concerns that a focus on behaviours over outcomes may lead to inefficiencies and under-recognition of high performers. Critically evaluate the implications of balancing behavioural competencies and outcome-based results in Medico Ltd.’s transition to a CB-PMS. (5 Marks)
Ans 2(B).
Introduction
Measuring performance purely through sales numbers and production targets has clearly run its course at Medico Ltd., leaving employees disengaged and innovation stifled under a system that never looked beyond raw outcomes. Shifting to a competency-based performance management system promises a fuller picture, but the department heads raising concerns about under-
