Rob Parson at Morgan Stanley (A) Case Solution

1. Introduction & Problem Identification

Morgan Stanley, a global leader in financial services prides itself for its products and its efficient workforce. Morgan Stanley currently finds itself in a dilemma as one of its star performers, Rob Parson, has received one of the worst performance evaluations. This is a dilemma as Rob was on the verge of being promoted to the position of managing director in the company’s Capital Markets division. The reason that this issue has become a problem is that Rob Parson, currently the Principal at the Investment Banking Division does not seem to fit well into the Morgan Stanley culture and colleagues are not happy with the way he conducts himself. However, the decision of promotion is a tough one for Paul Nasr who is a senior managing director in Capital Market Services. Rob Parson has given the company’s sales and business a boost much bigger than many other peers.

2. Strategic Alternative 1

The first strategic alternative for Paul Nasr is to put up Rob Parson for promotion to the position of managing director immediately. Paul Nasr as a senior managing director in the Capital Markets division can only recommend Rob for the promotion as the final decision ultimately rests with a promotions committee that evaluates all candidates who could potentially be promoted. The advantages of such a move would primarily be for Rob Parson personally. He would thoroughly be motivated to be put in this new role which he had always aimed for since joining the company. Rob Parson was a different person and always wanted to outshine others. With his increased responsibilities, he is likely to take the financial services business of the company to newer heights.

Secondly, it must be remembered that Rob is a popular guy with the company’s clients. Hence, it is important at this stage that the company takes care of Rob as he is responsible for keeping many of the company’s clients satisfied. Moreover, it is likely that Rob would increasingly pursue the task of bringing more business to the company as his new job role would give him increasing authority, a challenge that he would cherish. The chance of promotion also gives an opportunity to Paul Nasr to get his point across and explain to Rob the improvement areas he needs to work upon, based on his evaluation.

However, the employees at Morgan Stanley would lose their motivations with such a decision. They would discover a loophole in the company’s performance evaluation system; you can get away with violating the company’s policies as long as you are bringing business.

3. Strategic Alternative 2

Another alternative for Paul Nasr, as a senior managing director in the division, is not to recommend Rob Parson for the promotion. The final word from Paul in this regard would be that he is putting the idea of promoting Rob on a hold and the company would later consider his promotion based on the performance evaluation. As per this alternative, no exact time period shall be described for the promotion and would solely be based on the performance evaluation.

There are some pros to this alternative. This would send a strong message to Rob, and all employees that adhering to the Morgan Stanley culture and the way of operation is extremely important to the management and bringing in more business is not the primarily and the sole goal of the company. Also, it would clarify to all employees that promotion to a senior level requires that your internal coordination, communication, and relationships are absolutely at the top level. Hence, the motivation levels are likely to go up in a large number of employees at all levels.

However, this alternative would discourage Rob Parson to perform, and he may decide to leave the company. The decision could end up being a blow for the company that has gained quite a lot due to the presence of Rob Parson. If Rob decides to leave Morgan Stanley, this could bring a lot of bad word of mouth for the company. This is because due to the cocky nature of Rob Parson; he could speak out against the company’ policies, which he may deem to be discriminatory.

4. Strategic Alternative 3

A last alternative for Paul Nasr is to hold Rob’s promotion recommendation for another year. However, this means that Paul would formally communicate to Rob that although he is not being put up for promotion this year, he would certainly be recommended the next year. Again, this would not be an easy decision for the senior managing director of the Capital Markets division. Firstly, how would he justify his stance to the employees of Morgan Stanley? That is, if Rob Parson is not being promoted this year due to the ratings on his performance evaluation, how come the company has given him a clean chit for the next year? Secondly, how is Rob Parson expected to react to this development?

Firstly, the advantage of choosing such an alternative would be that Rob Parson would realize the company takes its performance evaluations and adherence to the company’s policies and culture very seriously. He would realize that had his ratings on internal communications, attitudes, and behaviors been better, he would have been set up for promotion immediately.

On the other hand, Rob Parson’s colleagues and superiors are not likely to be happy with this decision. They could very well allege that this is a biased and single-handed decision of Paul Nasr who personally wants Rob to excel despite all his problems. Paul has already been a point of discussion as Rob was brought into the company on Paul Nasr’s personal connection; hence, Paul needs to be very careful with this alternative action.

5. Recommended Action Plan

The recommended plan of action is the alternative that Rob should not be recommended for promotion to the managing director’s position and role. Also, future consideration for promotion would also be made based on the performance evaluation and that the company was not specifying any time period when Rob Parson would next be having a chance for promotion. The chance of promotion for Rob, just like for any other employee, would purely be performance-based. Performance here does not mean only business development but all the four criteria that the company has already been using; market skills, commercial orientation, teamwork, and management and leadership effectiveness.

Secondly, the peers and subordinates of Rob Parson would be happy that the company made a correct decision and did not engage in anything outside the company’s practice and its established norms. Hence, the motivation levels on the whole are likely to go up. The workforce is likely to put in more efforts in their performance to be eligible for promotions in their respective positions.