Question

case study:

B.R Investments is a reputed finance company having 15 branches in different part of the country. In the home office there are more than 200 employees. This company has a performance rating under which the employees are rated at six months intervals by a committee of two executives. Graphic scales have been used as means of appraisal. The qualities considered are responsibility, initiative, and interest in work, leadership potential, co-operative attitude and community activity. After the performance is evaluated, the ratings are discussed with the concerned employees by their immediate boss who counsels them. The ratings aroused to influence promotions and salary adjustments the employees and also as a criterion for assigning further rating for them.

Recently three employees of the company called on the company’s president to express their dissatisfaction with the ratings they had received. Their scores and composite ratings had been discussed with them. Because their ratings were comparatively low, they had been denied annual increments in salary. Approximately, two thirds of all the employees received such increments. The aggrieved employees argued that their ratings did not accurately represent their qualifications or performance. They insisted that “community activity” was not actually a part of their job and that what they do off the job is none of the company’s business. They expressed their opinion that employees should organize union and insist that salary increase be automatic.

The threat of a union caused concern to the officers of the company. This particular experience convinced the top officers that ratings may represent a serious hazard to satisfactory relationship with employees. Even the chief executive finds that performance appraisal is a dangerous source of friction and its hazards outweigh its values; so it should be discontinued altogether.

Questions:

1. How far do you agree with the management that performance appraisal should be discontinued?

2. If you were the HR manager, how would you tackle the situation?

3. What modifications would you suggest in the performance appraisal system of the company?

Answer 1

1. How far do you agree with the management that performance appraisal should be discontinued?

Personally speaking, I completely disagree with the management that performance appraisal should be discontinued. It is highly pertinent for every organization to have a performance appraisal. A performance appraisal motivates the employees to contribute more. It also empowers the employees to feel more confident in what they do which helps them to achieve further. The motivated employees need to be constantly driven to pursue their goals. An effective employee is also used to eliminate the negative behavior in employees. Work-quality problems are resolved with the help of a performance appraisal. Considering all these important factors of the performance appraisal, the management should not discontinue the performance appraisal.

2. If you were the HR manager, how would you tackle the situation?

If I was the HR manager, I would give importance to the feedback of the employees. As a HR there should be an open-door policy to listen to the complaints of the employees. In the case study, the employees refused to accept that the fact they had been denied annual salary increase due to their low rating. The first step that I would take is to ask them to write a rebuttal why they refuse the rating with supporting sources. The second step is to verify if the rebuttal is valid or not. The rebuttal is verified to know if they are true. If a HR manager does not listen to any of the employee complaints or concerns, then it would lead to disaster to the organization as a whole. Thirdly, I would assure the employees that steps would be taken to resolve the problem. My priority is to resolve these employee concerns first among all other tasks.

3. What modifications would you suggest in the performance appraisal system of the company?

I would suggest ways to management to reframe the performance appraisal methods. The basis of a performance appraisal is to improve the performance and motivate the employees. Hence, denying an annual increment for the performance of the whole past year would definitely de-motivate the employees a great deal. Unions might arise as a consequence. The modifications are:

Step 1- The 200 employees should be assigned roles and a hierarchical structure needs to be maintained by the organization.

Step 2- Each hierarchy should have a set of competency to perform their role and these competency should be synergized with the organizational goals. For example, a Team Manager’s competency is to have an effective people management skills; an executive’s competency is to have accountability and responsibility to what they do.

Step 3- Once the competency framework for each role has been designed, the performance appraisal criteria should be shared with all the employees.

Step 4- Each employee should be motivate right from the beginning of the year how their work related tasks are interrelated to the competency framework which in turn links to the performance appraisal. This helps the employees to enhance the skill set to achieve the targets they set to achieve good rating in the performance appraisal.

Step 5- The poor or under performers should be provided additional training and should be under constant monitoring of the manager to help them achieve better results and get better rating in the performance appraisals. The people manager’s role is crucial in this aspect.

All the above mentioned modifications would definitely motivate employees to work harder to achieve the organizational goals.