Case Study B.R Investments is a reputed finance company having 15 branches in di

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?

The word count for this assignment must be between 300 words

Explanation / Answer

Performance appraisal as a process plays a significant role of evaluating the potential and achievements of the employee and seeks to guide them in order for them to continually improve in their tasks and help them achieve their objectives. However, this should be a continual process and not limited to an interaction and feedback with a frequency of 6 (six) months.

Further the parameters of performance appraisal should be refined to ensure that metrics related to job performance are evaluated and other extrinsic factors are not taken into account. Also the performance appraisal process should be a constructive process and employees should not feel that process is a hindrance in their professional growth and increase in compensation. The proposal for automatic increment and doing away with the performance appraisal is a dangerous notion as that would imply automatic increase in compensation without any mechanism for reviewing the performance and thus would imply not benchmarking pay as per performance. This is quite a dangerous step and may deteriorate organizational performance and lead to complacence. Thus pacifying workers by guaranteeing increment without demanding performance is not a correct strategy. Also the decision by management to do away with the performance appraisal is not correct though the entire process should be optimized to make it more effective.

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