Taj Hotel Group Case Solution

1. Evaluate (i.e., compare and contrast) the performance management system at TAJ under Kerkar and Kumar.

Under Kerkira, Taj did not have a formal performance management system. Instead, the company was run, and performances' evaluated based on peoples' proximity with Kerkira, who in turn was a charismatic leader with a singular vision for the company. To achieve this vision, Kerkira opted for unorthodox ways of selecting and grooming professionals for different positions based on 'instinct' and his relationship with them. Moreover, this performance system did not give regular feedback to the employees regarding their performance as well – which created a loophole for employees for working towards constant improvement in their performance. Instead, Kerkira used to meet employees randomly once every six weeks to praise them for their job performance, and this served as enough motivation for keeping the performance up for another year. This highlights that under Kerkar's tenure, the performance evaluations and reviews were not objective at all, and instead, based hundred percent on judgmental review – which raised questions about fairness and justice in the performance system. The pay for employees was also below the market rate based on the absence of a formal and authentic performance appraisal tool. 

Under Krishna Kumar, the performance systems changed dramatically at Taj. Krishna introduced more formal tools for conducting performance appraisals regulatory and giving employees their due feedback for enhancing performance on the job. The performance systems that Krishna introduced were further seventy-five percent objective, and twenty-five percent based on judgmental review. This improved the transparency of performance evaluation and benefits that employees received against them through personalized incentives plans. Krishna's performance systems. Indeed, Krishna ensured that the company goals were well communicated and that the performance systems in place were linked to these goals through the balanced scorecard. The new performance system led to the adoption of a new philosophy at Taj – whereby people were now seen as assets, and resources allocated towards assessing their satisfaction levels as well as towards their development through training opportunities. 

2. What are the strengths and weaknesses of each system? Why would Kumar launch such an extensive reform?

The system of performance management under Kerkar was largely a one-man show – where the progress, promotion, and compensation for each employee was decided based on the relationship he had with the boss-man. Though Kerkar's vision had channeled success for the company through his charismatic leadership, and high followership within the company, it had failed to formally put in place objective systems. This highlights that Kerkar had not thought beyond himself for the company – how it would run after he left. Though his system led to high levels of loyalty and reduced turnover based on his larger0-than-life personality, it failed to incorporate transparency in the performance management system –which may have led to feelings of resentment as well as demotivation.