Employee Retention of Arrow Electronics : Arrow Electronics (NYSE: ARW) is a Fortune 500 company headquartered in Melville, New York. The company specializes in distribution and value added services relating to electronic components and computer products.
HBS: Compensation and Performance Evaluation at Arrow Electronics
When reading about the failure of Arrow Electronic’s Performance evaluations, I couldn’t help but think how this case proved Culbert’s point Kaufman CEO of Arrow Electronics had good intentions when creating the Employee Performance Review system. Indeed he planned on using the system to identify the company’s star players in order to accelerate their careers, in addition to identifying employees that might function better in other areas. The problem however, was that the subjective nature of performance reviews prevented the company from achieving consistent evaluations for all employees for all the different branches. While some training took place after the performance review system launch, there seemed to be little evidence that managers really knew what behaviors reflected each rating category. Like in Culbert’s article, employees’ review ratings changed drastically when management changed, reflecting how subjective these evaluations are. Kaufman’s idea that only so many people can be in each rating category also fails as there may be teams full of strong players and other teams full of weak players. Thus if results are allocated based on a quota system, teams can not be accurately compared. Management reluctance to give employees low scores not only reflected their management inexperience and lack of leadership training, but also their fear of potentially creating a hostile work environment if they told employees what they really thought. Like Kaufman I do not believe that the high score averages were an accurate representation of their employee’s skills and abilities. As the Harvard Business School: Speciality Medical Chemicals case demonstrated, telling your employees they are star players, creates problems in the long run.
In reading about Arrow Electronic’s employee retention problems, lack of loyalty appeared to be a big issue. While one can understand an employee choosing to leave for monetary reasons, employees are not always motivated by money; suggesting that retention may be a symptom of a problem in this case not a cause. Arrow Electronics need to do further research on what motivates their employees and what factors if improved would increase their loyalty. While some factors may be money related there may be other factors such as lack of career development, training and education which if improved would greater foster loyalty. It appeared from the case that there is a lack of leadership training and that employees often become General Managers before they are ready. More training may be needed prior to an employee becoming a General Manager to better prepare the employee for the role. Also by offering educational opportunities such as tuition reimbursement to do an MBA for example, after a designated number of years, in addition to the career advancement opportunities (which they currently offer) employees (especially college graduates) may be more motivated to stay with the company.
For any great company, the biggest asset is its people. Arrow Electronics is no exception. Our global workforce of over 12,700 employees in many locations around the globe, strive each day to deliver the products and services that create value for our customers and suppliers worldwide.
Arrow is an award-winning Fortune 200 company and a global provider of electronic components and enterprise computing solutions. Arrow offers many challenging and rewarding career opportunities for motivated individuals who are driven to succeed.
At Arrow, you'll be part of a team dedicated to global growth and innovation in an industry that is changing the world. Plus, we work with state-of-the-art technologies and some of the biggest players in the industry. You have the opportunity to acquire the skills necessary for personal advancement and gain visibility through shared leadership with peers and management. At Arrow, we'll encourage you to develop your talents and discover new challenges every day.
Arrow is an Equal Opportunity Employer.
Planning for Central Benefit
This premium white paper is available to Toolbox for Finance members.
If you are already a member of Toolbox for Finance, please Sign in to view this document.
Not a member yet? Join Toolbox for Finance to share knowledge with your peers and access premium resources to solve your workplace challenges. There is no cost to join, and the simple registration process will match you with relevant peers and content quickly
HBS: Compensation and Performance Evaluation at Arrow Electronics
When reading about the failure of Arrow Electronic’s Performance evaluations, I couldn’t help but think how this case proved Culbert’s point Kaufman CEO of Arrow Electronics had good intentions when creating the Employee Performance Review system. Indeed he planned on using the system to identify the company’s star players in order to accelerate their careers, in addition to identifying employees that might function better in other areas. The problem however, was that the subjective nature of performance reviews prevented the company from achieving consistent evaluations for all employees for all the different branches. While some training took place after the performance review system launch, there seemed to be little evidence that managers really knew what behaviors reflected each rating category. Like in Culbert’s article, employees’ review ratings changed drastically when management changed, reflecting how subjective these evaluations are. Kaufman’s idea that only so many people can be in each rating category also fails as there may be teams full of strong players and other teams full of weak players. Thus if results are allocated based on a quota system, teams can not be accurately compared. Management reluctance to give employees low scores not only reflected their management inexperience and lack of leadership training, but also their fear of potentially creating a hostile work environment if they told employees what they really thought. Like Kaufman I do not believe that the high score averages were an accurate representation of their employee’s skills and abilities. As the Harvard Business School: Speciality Medical Chemicals case demonstrated, telling your employees they are star players, creates problems in the long run.
In reading about Arrow Electronic’s employee retention problems, lack of loyalty appeared to be a big issue. While one can understand an employee choosing to leave for monetary reasons, employees are not always motivated by money; suggesting that retention may be a symptom of a problem in this case not a cause. Arrow Electronics need to do further research on what motivates their employees and what factors if improved would increase their loyalty. While some factors may be money related there may be other factors such as lack of career development, training and education which if improved would greater foster loyalty. It appeared from the case that there is a lack of leadership training and that employees often become General Managers before they are ready. More training may be needed prior to an employee becoming a General Manager to better prepare the employee for the role. Also by offering educational opportunities such as tuition reimbursement to do an MBA for example, after a designated number of years, in addition to the career advancement opportunities (which they currently offer) employees (especially college graduates) may be more motivated to stay with the company.
For any great company, the biggest asset is its people. Arrow Electronics is no exception. Our global workforce of over 12,700 employees in many locations around the globe, strive each day to deliver the products and services that create value for our customers and suppliers worldwide.
Arrow is an award-winning Fortune 200 company and a global provider of electronic components and enterprise computing solutions. Arrow offers many challenging and rewarding career opportunities for motivated individuals who are driven to succeed.
At Arrow, you'll be part of a team dedicated to global growth and innovation in an industry that is changing the world. Plus, we work with state-of-the-art technologies and some of the biggest players in the industry. You have the opportunity to acquire the skills necessary for personal advancement and gain visibility through shared leadership with peers and management. At Arrow, we'll encourage you to develop your talents and discover new challenges every day.
Arrow is an Equal Opportunity Employer.
Planning for Central Benefit
This premium white paper is available to Toolbox for Finance members.
If you are already a member of Toolbox for Finance, please Sign in to view this document.
Not a member yet? Join Toolbox for Finance to share knowledge with your peers and access premium resources to solve your workplace challenges. There is no cost to join, and the simple registration process will match you with relevant peers and content quickly
Last edited by a moderator: