Features of the Evaluation System
1. There were several problems with the current performance system which affected the employees which consisted mostly of engineers and scientists and the managers. Firstly, there were different rating levels in the company and this variety if rating levels were a path to the abusing of the managerial position. It was found that there were the managers of the company tried to avoid any action that might offend the staff and for this, they mostly gave a B or a C rating and rarely gave an A or D rating and gave an E the least (Nuti, Seghieri & Vainieri, 2013). This kind of a rating affected the knowledge about the reality if the performers and the non-performers of the company. Since the rating was not clear therefore the company fails to determine who the individuals who work are and who are the ones that do not. This kind of rating was given by the managers as they did not wish to make the non-performers feel undervalued or undermine them in any way. However, the rating system was used to determine the wages of the staff based on their merit and their performance and receiving less salary made the top performers feel like their contribution are not being valued by the organisation since they are receiving the same wage as certain low performers (Zhu, 2014). To eradicate this issue the company tried to establish a single formula for payment where there will be a gradual increase in the salary of the people based on their evaluation points. The base salary for every month will be decided according to the position of the staff, and the raise will be done on the basis of the performance. This proved to be a problem for the high performers as well as the raises that they got were less than the low performers.
2. A new performance management system was introduced by the human resource head of Vitality Health Enterprises Inc. This newly introduced system for the incentive of the employees would be used for the reviews of preferences of the staff every year. This system would ensure that the inputs and the contribution of the staff towards the company were evaluated in a proper way (Busse, Aboneh & Tefera, 2014). There were certain features of the evaluation system that was spread across the company and had to be followed. The system stated that a performance model would be forcefully designed which will rank the performance of the staff. The performance would not be measured by any standards that have been set from before but would be measured on the basis of the performance of the staff over one another. This was done because of the fact that there was a huge set of employees who received very high ranks in spite of the fact that the department they belonged to did not perform well and was failing to meet the goals of the production and no development was seen in them (Ahmed et al., 2013). This system would eradicate any such actions and would rank all the employees by proper evaluation of their employees.
Employee Ranking Categories
There were targets which were set, and the achievement of these targets would determine the rank of the employees. The employee with the achievement of 10-14% would be ranked the top achiever. The employee with the achievement of 70-75% would be ranked as an achiever (Kehoe & Wright, 2013). The employee with an achievement of 7-12% would be ranked as a low achiever. Finally, the employee with achievement of 0-3% would be ranked as unacceptable by the company. A fifth ranking category was also present in the new system which was for the new employees who did not have the position to receive any rating yet. The system also mentioned that if there were any transfers in the company, then the previous manager would start an evaluation process on the performance of the employees with the association of the new manager (Sykes, Venkatesh & Johnson, 2014). This was the protocol of the new system which had to be followed. The main idea of the system was that the company would be able to evaluate their employees better if a simple ranking system was introduced which could determine the performance of every employee.
To ensure that the ranking and the evaluation was done correctly, the team that was designated for the evaluation process did thorough research on the primary duties and the core competencies of the several job roles and the employees of the organisation. The responsibilities and the goals that had to be met for each job role was evaluated against the performance of the employees in the job role. After the initial evaluation, a second component was used for determining the performance in the evaluation process which was set by the managers (Karim & Arif-Uz-Zaman, 2013). For this component, certain goals were fixed by the managers who had to be achieved by the employees for their perfect ranking. The system was created not just for the evaluation of the employees but also for the managers. The managers were ranked based on their performance regarding the proper training and development of the employees, the relations that they were able to form with the employees, the way they communicated with the employees, meeting the needs for staffing and recruitment of the proper employees and the success rate of the implementation steps that they took regarding the fulfilment of the initiatives of the company (Aguinis, 2013).
All of the evaluation of the performances would be done at the starting of the calendar year and would be delivered to all the employees along with the annual; process of goal setting in the month of January. This was done to eliminate any external factors from influencing the ranking process and also to ensure that the whole company was on a single cycle for the review and worked together to get the desired results (Aggarwal & Thakur, 2013). There was also a compensation structure which was adjusted according to the new system of evaluation. The system was set up in such a way that the employee does not have to rely completely on the increase in salary to understand their performance progress. Certain short-term and long-term bonuses and cash incentives were designed depending on the performance of the employees (Mone & London, 2018). The new system made sure that the management and the employees got their desired incentives and rankings based completely on their performance without any manipulation from any source.
Evaluation Process for Managers
3. The new system of performance evaluation was established for two years in the organisation. Beth Williams, the CEO of Vitality Health Enterprise Inc. decided at the end of the fourth quarter that the success of the evaluation process needs to be evaluated. It is was important to understand if the evaluation system was able to correctly access the performance of the employees and prepare a reward structure for the top performers of the company (Amin et al., 2014). A group of leaders was gathered together under the group name PMET2 to evaluate the system in the proper way. The previous ranking data in the year 2009 and the year 2011 was compared against the current data, and it was found that there were changes in the rankings if the employees. However, it was important to understand if the distribution of the employee rankings were correct or not and whether it was accepted by the employees (Lin et al., 2013). To understand this PMET2 sent several survey questionnaires to the employees in the company to gather feedback about the new system of evaluation. The results showed that around 54% of the employees were in favour of the new system of evaluation whereas almost 31% of the employees were not in favour of the new system and were inclined towards the old system. In addition to that almost 15% of the employees in the company were indifferent about any of the evaluation system (Muogbo, 2013). Nonetheless, there were several serious issues that were revealed based on the survey of the employees.
The company managers saw that it has become complex to discuss the performance with the employees as the evaluation review was very closely associated with the increase in the merit review. The compensation was a burden which made the employees closed towards any training or coaching from the managers (Carmeli, Gelbard & Reiter?Palmon, 2013). Many of the employees were also not inclined towards learning anything new which was not described in their job roles and responsibilities as they were not being accessed on those sections and hence would not be rewarded and therefore did not want to waste any time on them. In the same way, the managers were also opposed to spending any extra time and effort on tasks which were not reviewed and deemed them as unnecessary as they would not be rewarded on those and these tasks would divert them from more important tasks. Moreover, many of the managers felt that the new system of performance was very inflexible (Atmojo, 2015). It was noticed that even if a team performed hard together, they were left with the same amount of high achievers which they could allocate go their employees just like when a department did not perform well. There was also certain issues concerning the managers who ranked the employees. It was derived that it was a normal practice for the managers to give a ranking of not rated to those employees who had been in the organisation for less than a year, irrespective of the performance of that employee. This way the managers ensured that the high ranks were saved for the old employees. The managers also distributed the high ranks among the employees in their department every year so that everyone was in an equal position. Due to this none of the employees got rewarded, however, none of the employees was also left behind even if there was a lack in their performance (Awadh & Alyahya, 2013). This was done to maintain a balance in the team and not to anger the employees.
Compensation Structure
4. The new performance system had their pros and cons. There were both negative and positive feedbacks that were received from the managers and the employees if the organisation. The evaluation process was able to set the correct ranks in many situations; however, it was not completely successful (Cardy & Leonard, 2014). The managers were not always true to the ranking process and often decided the ranks based on their relationship with their teams and wanted to maintain equality in their team. The submitted a similar form of ranking due to the fact that nine of the employees in their team would be left behind even if they were not a good performer. This was unfair to the good performers as even they did not get high ranks and had to satisfy for similar ranking and were not rewarded. They did not want to differentiate between the employees in their team, which is why they established an equal system of ranking. Moreover, the new employees were not rewarded as they were not rated because of the ranks being saved for the older employees (Aguinis, Joo & Gottfredson, 2013).
This would have implications on the performance of the new employees as they may be demotivated to perform better and improve themselves since they know that they would be rewarded even if they performed better than the old employees. This way they would face problems in the future times as they might not learn anything new and be able to develop themselves (Grabner, 2014). Therefore, the company would not get any contributions from the new employees if this continued for a long time. Sometimes it also happened that the managers lied to their employees regarding the ranks that they give their team because they did not want to become the bad guy if they had ranked them lower than they said. This could create a rift between the managers and the employees if the employees came to know the truth at any time. The new performance system would not be successful if the employees and the managers did not truly act according to the need desired ranking system (Chen & Fong, 2015). The report of the evaluation would still be false and incomplete, and many of the deserving employees might not be rewarded.
5. The performance management system could become a success if some changes were made to it. There are certain recommendations which would help in the proper use of the system and to generate proper results. Firstly, the CEO should properly communicate her desired goal to all the employees collectively. She should share her views with the whole company personally so that they are able to understand the reason behind the whole new system of performance evaluation. Personal communication from the CEO could be beneficial in driving the employees and the managers into performing according to the new system and evaluating it properly so that the correct results are derived. Moreover, there should be proper training of the employees so that they may be able to develop themselves, Proper training to all of the employees would give them equal opportunity to perform better, and none of them would lag behind. Secondly, a proper strategy should be adopted so that none of the managers is able to falsify the rankings and evaluate the employees purely based on their performance. The importance of this has to be explained to the managers so that they understand that this evaluation system has been done for the betterment of the employees. The people who do not get the ranks would be able to develop themselves by acquiring more skills and performing better the next year. Thirdly, a new system of payout for the performance can be established which would ensure that there are also incentives for the good collective performance of the whole team so that every employee of a team would be pushed to perform to the best of their abilities knowing that everyone would eventually be awarded something if their team gets a good ranking. The following recommendations could help in the proper operation of the performance management system.
6. The recommendations have to implement in the right for it to work successfully. Firstly, the CEO needs to have open communication with the employees and determine the issues that are being faced by them before any training procedure starts. The issues need to be understood and resolved so that the employees can work with an open mind and grasp the training properly. If this happens, then they can contribute to the development of the organisation and also get rewarded if they perform well and achieve the desired ranks. Secondly, the manager also needs to resume their role of being leaders and make sure that they properly rank the employees so that even the employees understand their own position in the market. For this to happen, it is important that the managers continuously track the performance of the employees and help them to achieve the desired goals. The upper management also needs to keep a track on the evaluation that is being done by the managers so that no wrong ranks are given to any employee. The proper tracking of the management would ensure good performance from the side of the employees and the managers and also help in making the performance evaluation system a success.
References:
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