The inner workings and philosophy of HP

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Hewlett-Packard is believed to be one of the most popular companies in the universe. It markets all over the world and distinct locations. Bill Hewlett and Dave Packard founded HP in the year 1939. The company has its own philosophy to attain success and stand different from its competitors in the market. Management by Objectives (MOB) is one of the successful trends carried out by HP Company to measure its performance management and appraisal system. Therefore many companies were following this method for evaluating their performance management. The objective of this report is to identify the performance management effectiveness and frequency of appraisal and also recognize the strength and limitations at HP Company and to make recommendations regarding their limitations and possible ways to overcome them (Armstrong 2005).


            Hewlett-Packard (HP) is a multinational company marketing allover the world. The company offers a wide range of consumer and IT products such as personal computers, Laptops, printing machines and services, Ink, Toner & paper, Monitors, Accessories and software's, Scanners, Smart Phones etc.

The HP Way

         The HP way is not entirely different from other company's management philosophy. But the company has got its own principles and management frame implemented by its founders in approaching the top to bottom level management in distinct way. It implies that the company should trust and respect every individual and they believe in their employee's intelligence leads to company success and they followed decentralized system (Peter Burrows business week 2004). This leads HP Company to retain the second top most places in the hardware industry globally (Hardware Top 100 2010).

System Aim

Performance management is a process carried out by organizations in order to attain the organization goals by identifying their employee's performance individually and in teams (Armstrong & Baron, 2005). The management levels may differ from organizations to organizations thus every management has its own performance appraisal system to identify, support, ascertain problems, develop and appreciation to the employee's regard their work performance (Sims 2002a, p. 81). Performance management evaluates the company's performance of the employee's, which helps to give effective feedback in order to improve their employee's working performance and to succeeded organization targets. The organizations targets are considered to be the long-term goals and to attain that performance appraisal system are to be carried as short-term goals. Controlling process, which is the most important role of any organization to monitor the individual employee's performance and this helps to compare the employee's performance and to analyses the overall management performance (Sims, 2002a). The basic need for controlling system is to initiate performance principles, observing performance of the employee's and comparing it with the primary principles framed by the organization and finally taking required action to manage the performance.

Performance management at HP

Hewlett-Packard applies the quality management therefore their organizations aim and objective is concerned about the ultimate customers. Therefore, HP employees practice the scheme called "Management by Objectives" (MOB). This scheme has structured the company objectives into two elements as long-term objectives and short-term objectives. These objectives were discussed between their distinct management levels that are communicating the performance criteria with the individual employee's and as department vise were negotiated. The Management by Objective (MOB) scheme finds how the employee's complete their task successfully, which indicates the process of mentoring and coaching. This process is made efficient by interconnecting the monitoring process at all levels throughout the HP Company. MOB also involves in the strategic planning of HP Company as a part that describes the aim or goal of the company. The company's top management involves in performance management system and introduces the performance appraisal process to the employee's and given chances to fix their goals. Even the workers at bottom management level are encouraged to participate in the process of decision making by suggesting their views for attaining targets successfully this process is carried out for every six months between all levels. The Mob's objectives are to serve as day-to-day to help in making decision for tremendous growth of the company. Dave Packard believe in " if HP made every individuals understanding their company objectives and goals and what the company planning for, then they could easily get every employee's narrow attention towards attaining the goal". This is known as the "HP Way."

Frequency of Appraisal:

 It is a process of identifying the employee's characteristics during the working period that basically indicates quantitative and also qualitative features of management performance. This can be identified by adopting certain appraisal methods in order to find how the employee's work efficiently and perfectly. Accordingly performance appraisal has goal setting and performance evaluation as arching targets. These targets are combined because of the performance management criteria used by the managers/supervisor in order to encourage the employee's by giving proper command about how to transfer results to compete distinct levels of performance.

1. Goal Setting

In HP Company they traditionally practice the HP Way, according to it they give respect and importance to each individual employee, therefore people in top-to-bottom level management have determined their goals. According to Bill Hewlett (co-founder of HP) a organizations performance should be measured by setting up of Goals also that should be measurable in both qualitative and quantitative terms for efficient management performance (mystrategicplan).

2. Performance Evaluation

In Hewlett-Packard, the performance evaluation method is implemented as a basic development device. The company conducts frequent meetings by mixed up with all level of management people at one roof to evaluate about the management performance quarterly. According to the HP Way the employees are given full freedom to place their requests and ideas in the meeting and their suggestions are strongly supported. They practice an informal way of approaching to the analysis the performance of its management by giving feedbacks to the employees on an ongoing basis. This reflects and made the company to introduce 360-degree and MOB appraisal method as measuring the company's performance.

Method of Appraisal

Management of Objectives

In HP Company their management's performance is analyzed by carrying out the management of objectives appraisal method. Through this method the company find their employee's rating during the work time and those who attain top rating are awarded with promotions and offers on the other hand the employee's who got poor performance rating will be taken necessary actions to make them correct accordingly. This appraisal scheme followed by the Hewlett-Packard Company measures both the qualitative and quantitative aspects of their employee's performance. The company follows a quality management hence their objectives