Question

                       Case Study

Imagine you’re the VP of Human resources for a Fortune 100 company. You’ve spent your entire career attempting to enhance the workplace for employees to support their productive work in the organization. While you understand that bottom-line decisions often dominate many of the matters you have to address. You have worked hard to ensure that the employees were treated with respect and dignity in all interactions that affected them. You aligned the hiring process to serve the strategic needs of the organization, as well as implemented an effective performance management system. You truly believe in the progress you’ve made in helping the organization achieve its goals. You simply couldn’t imagine doing things differently. However, concern that the performance management process is becoming less effective because managers are inflating employee ratings has led 15 percent of all large organizations to adjust their performance management to what is frequently called “rank and yank”. Under such a system, managers are evaluated as 1, 2, 3 or 4, with 1 being the highest rating and 4 the lowest. In many cases, managers are required to give a 4 rating to the lowest 10 percent of employees each year.  Those individuals receiving a rating of 4 for two consecutive years are often let go from the organization.

The intent behind this system is that the throughout the two year process, evaluators are to meet frequently with the four employees, counsel them and provide necessary development opportunities. Employees in organizations that employ such a performance management system often view this process unbearable. They view the performance management process as punitive, one in which the organization is attempting to rid itself of higher-paid older workers. In at least one case, Ford Motor Company employees have filed a lawsuit to stop this practice­­­­­­­—and prevailed .Ford removed the punitive nature of its evaluation system—and focused it more on counselling and performance improvement of the lowest-rated employees rather than elimination from the organization.

Source: Textbook- DeCenzo, D. A., & Robbins, S. P. (2013). Human resource management

ASSIGNMENT QUESTIONS:

1. What type of evaluation process would you say is being used in this case? Explain this evaluation process.[ Marks 2]
2. What effect, if any, do you believe rank and yank evaluations have on managers? Do you see these effects as positive or negative? Defend your position.[ 3]
3. What role does such a system have in distorting performance appraisals?[Marks 2.5]
4. Write your suggestions/opinions to create better performance appraisal system in the Organization. [Marks 2.5]

Answer 1

1.)The evaluation process used here is called vitality curve. It is affecting the employee morale and potential, where the management start to rank from best to worst ranks according to their merits. The quality of the work is not monitored properly. The achievement is measured in terms of quantity and not in quality. The relative position of each employee is expressed in terms of the numerical rank suh as 1, 2, 3 and 4, 1 being the best and 4 being the worst . The appraiser rates the employee from highest to the lowest, which is an easy method. However this method speaks only about the position and says nothing about how much better or how worse an employee is in comparision to other employees.

2.) There are many issues faced by the managers due to such evaluation some of them are as below:

Turning Promotion into Pay cuts: The employe may refuse promotions. If the employee get promoted, the organisation might expect much better performance, if not the rating will be reduced, thus there will be reduction in compensation.

Encouraging Sabotage:They start hiring excellent co-worker with the existing employee to create the competition. This make difficult to improve the rating for the exisitng employees, as they find difficult to rush through the newly hired co-worker, who are much skilled. Thus making difficult to arrive the rating, as everyone works equally.

Reduction in Productivity: The workforce is reduced, even if the workload is high and hiring managers are put in intense pressure of hiring new candidates. Due to which low calibre employees are hired. They lose skilled employees. This affect the productivity of the organisation.

This has a negative impact on the organisation's growth. As this doesn't give oppurtunity for the employee for improving their skills. The morale fo the employee is destroyed, which leads to discrimination. The rank-and-yank puts success or failure of the organization on the shoulders of the individual worker.

3.) The are many appraisal system, which are much better than this system, like Self Assessments, where the employee can assess and rate themselves and these ratings can be evaluated by management, Peer Assessments, 360-Degree Appraisal and negotiated performance appraisal, which will encourage the employees to perform better. Any one of these methods can be applied to eliminate the issues faced from earlier one. These methods may avoid the conflict between the employees and employer, as the individual performance is monitored, based on the achievements and completion of target set for the given period.