Vitality Health Enterprises Case

Hikaru “Fred” Kikuchi founded Vitality Health Enterprises in 1964

False

Vitality acquired HerbaPure Nutraceuticals in 1994

False

The main problem with the performance management system prior to 2009 was that managers gave most employees very high ratings

False

VHE utilized a “lead the market” pay level policy

True

After changing the performance evaluation system, managers were expected to evaluate an employee’s performance each June.

False

The new performance evaluation system at VHE utilized a:

Forced distribution approach to rating employees

Prior to implementing the new performance evaluation system:

VHE had low levels of turnover for average employees, but high levels of turnover for top employees.

The __________ reflects the competitiveness of an employee’s pay level for a sepcific position

Compa-ratio

Employees with higher compa-ratios

Tended to receive lower annual pay increases

After implementing the new system:

Employee surveys indicated that 54% of employees preferred the new system