GUIDE TO THE CASE "POSTPONING PAY INCREASES"
1 Performance Evaluation System of This Organization
The details of the performance evaluation system in this case are not fully entered into, but it would appear to have the following three problems.
・There is no formula as to how the grades from individual elements are synthesized into a final rating.
There is no clear rule about the relationship between element ratings and the final grade. The final rating, however, has a direct connection to pay increase. Under this system, managers are likely to base their decision on whether the employee is worthy of a special pay increase or not. They mark the final evaluation accordingly and ensure that each element rating is compatible with the final grade. Assessed in this manner, individual element evaluations are reduced to nonsense.
・There is no particular rule as to how the final performance rating should be used except for that of pay increase.
This situation results in all attention being focused on pay increase, and the special pay increase in particular. The performance evaluations' main objective of facilitating the career development of employees is completely lost. It is essential that every supervisor realize the true purpose of performance evaluation.
・No training on performance evaluation for supervisors.
There is a great necessity to train supervisors about the purpose of performance evaluation. They should be taught how to make fair evaluations, how to handle performance evaluation meetings, and how to utilize these grades at a post evaluation stage. Supervisors may develop their own approach after studying how other managers operate or by seeking their advice. Performance evaluation is a confidential process, however, so it is difficult for supervisors to learn how to evaluate their staff without training. Untrained, they might possibly evaluate their staff in a manner which is far from appropriate. Training for supervisors who are to assess staff for the first time is essential.