Question

Aligning Performance Appraisals and Compensation Plans

During the past few weeks, we have learned that there are various methods of conducting employee performance appraisals (e.g., trait, behavioral, ranking, MBO, etc.). Your task for this assignment is to pick two performance evaluation methods, explain each, and then compare and contrast the two in terms of how they could be effectively used to impact employee compensation and benefits.

Your response should consider the evaluation methods from the perspective of three different organizational stakeholder groups. Also, your assignment must include your thoughts on what organizations can do to prevent ethical and legal challenges that might from arise from linking the two methods of performance appraisal you chose to employee compensation and benefits.

Your assignment should be approximately 5-7 pages in length (not including cover page and reference list) and include ample scholarly and professional sources to support your key ideas.

Answer 1

Ans:The method that I have chose is Ranking method, wherein the performane of the employees are evaluated based on the rankings ranging from 1 to 5, 5 being the outstanding and 1 being the lowest ranking. This methid can be effectively used to decide the compesation package of the employees and the hike as well.

If any employee is getting 5 rank in the appraisal the employee can expect the best hike depending upon the company policy, It can range any thing between 15% to 20%. The employee who receives 1 will not be getting any hike the compensation wont change, even employee would ask to leave the organisation.

These rankings will have impact on employees, shareholders and government at large, like if employee is getting 5 ranking then he / she would be expecting a hike of 20% that will increase teh G&A cost, that will impact the EPS of the shareholders and it will also have an impact on the government since government would be receiving lessor tax from the company since exp is increased.

What company can do to prevent any ethical and legal complications attached to this is that company can adopt 4 eye or 360 degree policy, wherein an employee will not be evaluated only from their manager points of view rather everyones point of view that will erase out any biasness from the evaluation process, and there has to be defined rules and policies that should link with ranking method