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 one of those methods, explain it, and discuss how it could be effectively used to impact employee compensation. Your response should consider the potential impact the performance evaluation method could have on at least 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 arise from linking the method of performance appraisal you chose to employee compensation. 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

A performance appraisal or evaluation as it is sometimes called is a review by a manager where the employees work performance is evaluated and strengths and weaknesses are identified

so that the employee understands where improvement is needed. Employee performance appraisals are given to employees during a time of year when it is appropriate for the manager or company to evaluate the performance of that individual. There are many types of performance appraisals that can be offered to an individual and over the years there have been some new types of reviews that are being met with success today. These evaluations are done not only for raises. promotions, and bonuses, but also for employee growth and development.

Common methods for performance evaluation include, the management by objectives review (MBO), rating scales, and the 360-degree feedback method. This paper will discuss how the performance appraisal process is conducted, in particular the latur method. Further discussion will offer insight as to how these appraisals can be used to positively impact employee compensation and the different stakeholders involved throughout the process. Legal and ethical Issues will also be addressed.

A management by objective review or MBO, mcasures an employee's accomplishments against a clearly established set of objectives. In this method, managers and employees will typically begin the year by discussing together a list of objectives. When the end of year appraisal arrives, they simply compare each goal with the employee's final outcome. MBO's are simple and clear and can also serve as an empowering process for employees that are goal oriented. However, in terms of aligning compensation for performance metrics, this may not be the best method because appraisals are sometimes developed on personality traits instead of performance of organizational results.

The rating scale methad is probably the most common review lype. In this method, a supervisor rates an employee using a numerical scale for a defined set of behaviors, traits, and competences. This method works well it both managers and employees share the same understanding of each point on the scale. While this method is easy to use and understand, a common criticism for using rating scales is that there is an assumption they are directly tied to employee raises or bonuses which can inevitably cause a scure to influte. In addition, managers may also have negative bias toward employees.