Rob Parson at Morgan Stanley
Paul Nasr, a senior MD in Capital Market Services at Morgan Stanley (hereafter referred to as MS) is facing the challenging question of how to effectively handle Parson’s annual performance review without creating a vacancy in an irreplaceable area that was difficult to perform and had seen a tremendous amount of turnover at MS. Nasr had the fear of losing Parson, his valuable employee and a star producer if he was not promoted to Managing Director as promised by Nasr during his hiring.
Rob Parson, Principal, Capital Market Services (CMS) had played a critical role in making significant gains in building MS’s revenue and reputation. Parson was an outstanding individual contributor, who in his sincere, relentless attempt to generate more business, had created a hostile environment around him by going against the norms and culture of the organization. MS’s environment and mission statement was of teamwork, innovation, building consensus and treating employees with dignity and respect.
However, there was no formal training for new employees regarding MS’s culture, expectations and performance evaluation (PE) process. Next, there were several biases and blind spots in the PE process. The 360° performance evaluation appeared to be a very shallow process, and there was no consensus on how to implement a decision based on PE and how to use the PE under various circumstances. Instructions and training on how to make effective performance assessment was not provided to the managers.
There was no definite internal validity/reliability measure of the PE, leading to personal biases. Questions were not specific and focused on the job function of the employee. Although, Parson’s colleagues and seniors had described him to be volatile, cocky, abrasive, overbearing, and insincere and “not a team player”, strong examples to site his strengths and weakness were missing. Also, the 360° evaluation process was not customized to special situations where one may have to contribute individually and use out of the box strategies to build business in areas like CMS.
Although, Parson had to break a few eggs in order to develop the firm’s presence in the CMS area, he had extraordinary client relationship skills and made significant gains in building MS’s reputation (ranked up from tenth to third) and revenues (market shares raised from 2% to 12. 2 %). Additionally, he was commended by several colleagues for his ability to cross-sell, his willingness to share information and make introductions and his energetic approach to his job.
Clearly, the PE failed to mathematically compute these different dimensions in determining an employee’s promotion. Lastly, Nasr was partially responsible for Parson’s failure to adapt to MS’s work culture. Although he had worked with Parson at a different firm earlier and was familiar with his work style and personality, he failed in his responsibility to train Parson to Morgan Stanley’s work culture. He underestimated the fact that Parson was not the typical MS type and the degree to which some of Parson’s actions had violated MS norms.
Also, in being sympathetic towards Parson and being perceived by others as his “Godfather” he failed to address the interpersonal problems Parson was facing in working with the people inside the firm and took a soft stance towards Parson. He could not be a good mentor and did not provide him timely and constructive feedback. Nasr could handle this problem by utilizing the following possible alternatives. First, he can recommend promotion for Parson after completing his performance evaluation and development summary.
Nasr could explain to the senior product managers about Parson’s strengths and contributions to the firm within a short time and that too in a challenging area and submit to them an effective action plan to improve his interpersonal skills. Nasr should discuss with Parson the action plan and ask him to work on his interpersonal and organizational skills and have Parson himself address the committee about his shortcomings and remedial actions that he has taken.
Secondly, Nasr can meet with Parson to discuss the PE data packet as well as his view on the same. He can come up with an action plan with Parson to work on his weaker areas and provide him with resources for the same, for e. g. assigning him a mentor to guide him to adapt to MS work style and sending him to workshops on team building and interpersonal skills. He can provide him with more frequent feedback and set target dates for reviewing him in 3 months to decide whether or not to put him up for promotion.
Alternatively, Nasr does not put him up for promotion after his performance evaluation and development summary and explains his rationale behind the same; discusses short term and long term goals with him and comes up with an action plan for the forthcoming year. Lastly, After reflecting over all the aspects of the PE, Nasr can discuss in the meeting with the higher management his concerns if the current PE is fair to be used as a reliable criteria for promotion of an employee, keeping in mind that not all jobs in the company can be perfectly filled by adhering to the job culture that MS has developed, and should be customized in special situations like these. On the other hand, I believe Parson should not be promoted at this point of time. MD needs to be a “role model”, who reflects company’s vision and mission statement to his department employees. He needs to command respect for knowledge and insight among people, both inside and outside the firm.
Parson, on the other hand was overbearing, judgmental, rushing to a decision or opinion before having the facts, with inconsistent moods and disrespectful at times and not perceived as a team player by most of his colleagues. Also, he failed to lead as a Principal in CMS, by not showing much of a presence in the morning meetings. Contrary to the average score of 4. 0 for professional skills, he only scored average of 2. 95 for management skills in colleague rating. Ability to articulate department visions and strategy is an important responsibility of a MD, which Parson seems to be currently lacking.