Case Study B.R Investments is a reputed finance company having 15 branches in di
ID: 357464 • Letter: C
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?
(The word count for this assignment must be between 800 to 1000 words)
Explanation / Answer
1. A performance apprasial is something which derives how the employee is doing and the company further motivates them by gicing them additional perks and benefits. It is a motivational factor for the employees to give their best for the organisation and keep improving in their work. It also improves the loyalty factor between the employee and the organisation. Therefore, the decision of discontinuing the performance appraisal would not be a wise decision as the employees would not be agreeing to the fact that they will have to work on the same salary every year irrespective of if they get a bonus or not. This might hamper the relationship between the employer and the employee as the employees are used to this appraisal system and they would look forward for the same.
2. An HR's role in an organisation is to keep the employee satisfaction up. In this case, the employee satisfaction has decreased because employees are not happy with their appraisal system and the kind of increments that they have got. As a HR Manager, I would have first investigated as to what went wrong and why were the employees claiming their appraisal to be wrong. Also, I would like to look at the parameters on which the employees are being rated. If the parameters are defined in a way which is in line with the company's goals then that would be fine, but if it is not, it will have to be replaced with one. Finally, after reviewing all this, I would meet the officers and employees seperately to understand what went wrong and what can be done to control the situation. Based on their fedback, I would take a decision as to on which parameters the employee has to be rated and a fixed increase of salary would be allocated based on a particular rating.
3. The qualities that are considered for the performance appraisal of the employees are responsibility, initiative, interest in work, leadership potential, co-operative attitude and community activity. In all the mentioned parameters, more emphasis has been laid on employee traits rather than actual performance of the employee. The problem with these parameters are that these are not measurable and tehre would always be conflict due to this. The employees would argue their employee traits are above expectation and would demand higher appraisals. Instead, the organsiation can keep parameters which can be measured with an equal weightage with that of other traits. This gives a balanced approach towards the appraisal.