"POSTPONING PAY INCREASES"
Mr. Yoshida, Director of Planning Division was feeling rather distressed. The deadline for performance rating had finally arrived. He had been promoted to Director six months ago and this was the first time for him to have to evaluate the performance of his staff. He wondered to himself how any individual could properly evaluate another human being. He decided, at all cost, to avoid antagonism and maintain a harmonious atmosphere in the office throughout these performance evaluations.
Performance rating is conducted once a year. Three elements, job performance, ability and attitude towards work are evaluated and graded accordingly, from A to D. An overall rating is calculated from these, and similarly graded A-D. There is no particular formula involved in synthesizing individual elements into an overall rating. The assessor and member of staff involved are required to discuss this final evaluation. Staff must sign their evaluation sheets as proof this dialogue took place.
Evaluation encourages staff to make full use of their aptitude and abilities. It also plans a key role in the training and promotion of staff. There is no concrete rule, however, as to how this evaluation is utilized in the promotion, or other action concerning personnel. The only related rule that exists concerns pay increase. An employee with an overall rating in the top 15% is awarded a special pay increase, while anyone rated D receives no pay increase at all. Between these ratings, employees are given a regular pay increase. Figures for these ratings are fixed as follows. In each division, an overall rating of A is given to a maximum of 5% of staff, and B to a maximum of 20%. Employees who receive an A are automatically awarded a special pay increase. The personnel division awards a special pay increase, at its discretion, to half of those who received a B rating. This special pay increase may not be awarded to the same individual two years in a row.
Mr. Yoshida consulted Mr. Hara, his predecessor over how he had evaluated his staff. Mr. Hara informed him that he had been very careful to award special pay increases evenly among his staff.
Mr. Yoshida went to the Personnel Division and checked past ratings records of his staff and who in particular had received special increases over the last seven years. He decided to award a special pay increase to employees who have not received one in recent years. His division has twenty employees. Of these, one could be awarded an A, and four a B. Within these limitations, he gave an A or a B rating to three employees who have not received a special pay increase over the last seven years. He gave a B rating to two employees who received a special pay increase six years ago.