News

Citation

(2013), "News", International Journal of Productivity and Performance Management, Vol. 62 No. 1. https://doi.org/10.1108/ijppm.2013.07962aaa.002

News

News

Article Type: News From: International Journal of Productivity and Performance Management, Volume 62, Issue 1.

Stacked ranking systems being abandoned

Many American companies that adopted a much-vaunted employee evaluation system have lately been turning away from it.

Known as “stacked ranking” or “forced ranking,” the process made famous by GE is really just a version of what teachers call grading on the curve: a few people at the top, a few at the bottom and the rest clumped in the middle.

The practice leapt into the spotlight – at least for people who study how companies perform – when Vanity Fair published a profile of technology icon Microsoft. The company's malaise, the author argued, was partly pegged to its evaluation system.

Vanity Fair notes that Apple Inc now has more revenue from one product – the iPhone – than mighty Microsoft Corp. has in all its businesses combined. The paper, by Kurt Eichenwald, portrays the company's culture as “cannibalistic.” Microsoft's response to the Vanity Fair story: The company's performance review system is designed to “provide the highest rewards to employees who have the highest impact on our business success.”

Indian IT

IDC Manufacturing Insight predicts that India manufacturing IT spending will grow to $8.78 billion by 2016, which will be double what it was in 2011.

This represents a cumulative average growth rate of 14.5 percent between 2012 and 2016. The sector with the highest IT spend in the Indian manufacturing sector in 2012 is automotive, which is followed by chemicals and consumer products.

Small change, high unemployment

The US jobs picture brightened toward the end of 2012 but Northwestern University economics Professor Robert Gordon says the unemployment rate isn’t likely to drop back down to pre-recession levels around 5 percent anytime soon.

“I think more realistically that, gradually, [unemployment] equilibrium will move from 5% to 7%,” he said. He says that fits with anecdotes of businesses finding difficulty in hiring workers with the right skills, and with skills eroding from the long-term unemployed. There are more than 5 million people who have been out of work for more than six months according to Labor Department data.

Standards drive up efficiency

The ClimateWorks Foundation and International Council on clean transportation have released a new set of vehicle efficiency standards. The two organizations suggest that the USA could cut vehicle emissions by 48 percent by 2030, while creating 190,000 jobs to build more efficient cars by 2020.

Recent results have shown increasing fuel efficiency works. The CWF-ICCT report found the current 35.5 mpg by 2016 standard, set in April 2010, is expected to reduce vehicle emissions by 18 percent while saving every car owner $3,000 over the life of their vehicle.

Mortgaging the future

In all, 266 million people or 35 percent of workers in China are still employed in the primary sector – agriculture, forestry and fishery.

So it's no surprise that in the past few years Chinese farmers have revolted against Mao-era collective ownership of land. But farmland continues to be owned at the village level and cannot be mortgaged which is seriously impacting agricultural growth and productivity in China.

Deutsche Bank analyst Michael Spencer says the inability of farmers to mortgage property largely limits the scale of farming. And this also makes Chinese farms labor intensive and use less machinery.

Turkish success

Hyundai has fared well in the European market despite dampened demand for new cars there due to the Eurozone crisis. The Korean automaker saw its share grow over 10 percent with sales of some 400,000 vehicles last year, while car sales in Europe contracted by nearly 2 percent.

To meet growing demand for its products, Hyundai plans to double its manufacturing capacity at its plant in Izmir, Turkey, to 200,000 units by June next year. The plant produces the i20, a compact hatchback popular in Europe. About 70 percent of the cars manufactured in Turkey are shipped to the region.

Many Korean companies have found Turkey an attractive place to do business, and factories are being built at a rapid rate, including one for Korean steelmaker POSCO a five-minute drive from the Hyundai plant.

Coal fired

Russia should boost labor productivity in its coal industry fivefold by 2030, Prime Minister Dmitry Medvedev said recently in the country's coal heartland of Kemerovo.

“Labor productivity has also changed radically. In principle, we have the potential to boost labor productivity virtually by five times by 2030,” Medvedev said.

Today, the backbone of the Russian coal industry is comprised of successful private companies, which mostly invest using their own cash or loans. A total of 90 billion roubles ($3 billion) was invested in the coal industry in 2011, Medvedev said.

Coal output in Russia rose from 232 million tons in 1998 to 336 million tons in 2011. The main problems impeding development of the Russian coal industry are worn-out fixed assets, use of outdated technologies and poor rail infrastructure. Russia must modernize its coalmines and infrastructure, which requires government incentives for coal companies to use new technology, the premier said.