Please read the following and respond to the question: Peak Power, a medium-size

Question

Please read the following and respond to the question: Peak Power, a medium-size hydroelectric power plant near Seattle, Washington, hires you as the HR consultant to design a new appraisal system. The plant's present 10- year old appraisal system considers the cumulative ratings over the years, for evaluating promotion or salary raise issues. Recent problems in other areas of HR management at the plant and the fear of potential lawsuits led Peak's president to the decision. What is your general evaluation of this appraisal system?

Explanation / Answer

The current appraisal system has the below issues which need to be addressed -

1. Evaluating an employee performance based on cumulative ratings over the years leads to predictability in what the employee is going to receive in the current year. This results in killing the motivation to work hard in either cases where the employee has received a good rating in past years or when he/she received a bad rating due to the below reasons -

i. Employee who received good rating for years will be confident that he will receive a decent rating in the current year due to the cumulative rating system. This results in complacence leading to lower productivity.

ii. Employee who received bad rating for years will anyways feel that he/she doesn't get a good rating in the current year leading to lowe rproductivity and in some cases, he/she also looks for another job.

2. The rating system doesn't take into consideration the improvement in employee's performance in the current year thus leaving nothing for the employees to look forward to.

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