Please refer to the attached case study and answer the following:
1. What are the costs associated with a bad PES system? Relate your answer to Jack Welch's quote from the book. "Winning".
2. How is the controllability principle being broken in the case? Is Tanaka a good/bad manager? Is Bogage a good manager?
3. What are the consequences and risks of using the PES just as they are presented in the case?
4. What do you propose to improve the PES at Falcon?
5. Please comment on the following quote: "We can have good a good subsidiary and a bad manager. Or we can have a bad subsidiary and a good manager. Each of these two combinations can occur at the same time and space".
Reference:© BrainMass Inc. brainmass.com October 25, 2018, 10:08 am ad1c9bdddf
1. According to Jack Welch, an effective performance evaluation system relies not only on honest feedback but also on meaningful differentiation among employees (Vollmer, 2005). He implemented a forced ranking system at GE where employees were divided into three distinct segments: the top 20 percent of performers, the middle 70 percent and bottom 10 percent. He said that an organization's job is winning.
A poorly designed performance evaluation system results in many indirect costs like loss of productivity that happens when performance problems are not addressed properly. The receiving side of performance evaluation can get upset, angry, demoralized and de-motivated. Hence, a bad PES is worse than having no PES at all.
2. In appraising the performance of divisional management, no account should be taken of matters outside the division's control. However in practice the controllability principle is often ignored. As a result managers are held accountable for areas over which they have little or no control (Merchant, n.d). In ...
The response discusses performance evaluation system as it relates to Falcon Inc.
Calculating Sharpe's Ratio and Jensen's Alpha
Understanding how to measure between risk and return by calculating Sharpe's Ratio and Jensen's Alpha.
See attached file for full problem description.
I want you to consider the optimal way to combine the ranking of funds by returns and risk. Using the 10 years of data provided, you will calculate the Sharpe ratio for each fund. Also, using the data you generated in your last homework assignment, you will calculate Jensen's alpha for each fund using regression. I have done the calculations for the Fast Track Growth Fund to help you get started.
In this homework assignment you will continue to explore the relationship between risk and return. You will be introduced to two additional metrics, Jensen's Alpha and Sharpe Ratio, which will help you determine the risk return tradeoff of each security.
When you complete the data compilation, write a memo explaining and defending your recommendations for a final ranking of the risk-adjusted performance of each fund and its manager.
Using the spreadsheet document labeled Soundsleep Funds Data, generate the Jensen's alpha and Sharpe ratio for each fund. Next, create two sets of rankings?one based on each of these measures. Note that an example, as seen in the Fast Track Growth Fund Update, has been included for your review. This should assist you with your calculations and presentation.
After you have completed your calculations, write a memo (300 words or less) summarizing your fund analysis. The memo should include the following:
? An interpretation of your findings and a comparison of the rankings in this step with the results from your rankings from Soundsleep's previous homework assignment
? Comments about the performance of any fund that surprised you
? A discussion of why the rankings you arrived at in your memo from last weeks Soundsleep homework assignment are different from the rankings you just created.
? An observation of how your ranking did or did not take into consideration the different objectives of each fund.