Haier Performance Management in America's Case Part B Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Haier Performance Management in America's Case Part B Case Solution

Introduction

The Qingdao Refrigerator General Factory's production facilities witnessed a bizarre event in the spring of 1985. The 35-year-old CEO of Qingdao, a northeastern Chinese city home appliance manufacturer, Zhang Ruimin, gathered the entire staff outside the gates. They saw their young CEO order the destruction of 76 brand-new refrigerators that had just left the assembly line, which seemed like a strange order to them.

These freezers were later determined to be flawed in some way, even though they had the potential to sell for four times the workers' yearly wages who assembled them. It's possible that some of the flaws, including a few tiny painting faults, seemed insignificant. But with sledgehammers in hand, Zhang and the workmen started tearing down these otherwise flawless products in a loud manner.

A seemingly inexplicable event occurred in the spring of 1985 at the Qingdao Refrigerator General Factory's production facilities. The 35-year-old CEO of this manufacturer of home appliances in Qingdao, northeastern China, gathered the entire workforce outside the gates. There, they saw their youthful CEO issue a rather baffling order: to destroy 76 brand-new refrigerators that had just left the assembly line.

It was discovered that these freezers, which might have brought in four times the annual wage of the people who manufactured them, had some sort of flaw. Some of the flaws, such as tiniest painting faults, might have seemed unimportant. However, the workmen and Zhang himself started the boisterous demolition of these otherwise perfect items with sledgehammers in hand.

Since that pivotal day in 1985, Haier's performance management system has not only proven successful in China but has also positioned the company as a formidable competitor on the global stage. This case study delves into the principles behind Haier's remarkable success in managing performance, explores why its performance management system is effective, considers potential pitfalls, evaluates its sustainability, and ponders its potential applicability beyond the borders of China.

Question No:1

The principles behind the success of Haier’s performance management system

The cornerstones of Haier's successful performance management system Some core concepts form the basis of Haier's performance management system, which has enabled the company not only to develop but also become an example of successful performance management in the business world (Zhao, 2023). These principles are as follows:

Quality Focus: Involving workers in quality assurance and improvement is a key component of Haier's performance management system. A change in employee involvement was made when factory workers were given the duty to find and fix refrigerator flaws. Employees have a sense of accountability and ownership as a result of this participatory strategy. They are inspired to have pride in their work and accountability for the caliber of the output as a result. This sense of involvement improves staff morale and yields better products (Dan, 2019).

Employee Involvement: Employee participation in quality assurance and improvement is highly valued in Haier's performance management system. Giving manufacturing workers the duty to find and fix refrigerator flaws signaled a change in the level of employee involvement. Employees develop a sense of ownership and accountability thanks to this participatory method (Mostert, 2021). They are inspired to take pleasure in their work and feel accountable for the caliber of the output they deliver. This sense of involvement improves both employee morale and product quality.

Continuous Improvement: Haier has ingrained a culture of continuous improvement within its organization. The company encourages all employees to identify issues, suggest improvements, and take proactive measures to prevent defects. This focus on continuous improvement means that the company is constantly evolving and refining its processes. It also promotes a culture of innovation, where employees are encouraged to think creatively to enhance product quality and overall efficiency.

Customer-Centric Approach:

Haier's performance management system places a strong emphasis on meeting customer needs and expectations. The company aims to understand its customers, their preferences, and their pain points. By keeping the customer at the center of its operations, Haier can design and produce products that truly cater to consumer demands. This results in high levels of customer satisfaction and loyalty (Phelps, 2021).

Accountability: Haier's performance management system places a high premium on meeting client objectives and expectations. The company tries to understand the wants, needs, and issues of its customers. By placing the customer at the center of its business operations, Haier can design and produce products that satisfy consumer needs. This leads to extremely high levels of client loyalty and satisfaction............

Haier Performance Management in America’s Case Part B Case Solution

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