Utley Food Markets
Performance appraisal is a critical issue in human resource management. It should be noted that an organization's human resources are its most important asset. In matters of administration in any organization, performance appraisal serves as the formal evaluation tool used by managers when making decisions about the distribution of pay increases. Apart from the critical issues of pay distribution, performance appraisal is useful when it comes to making key developmental decisions in the human resource; employee training needs, selection, and promotional opportunities all rely on performance appraisal. Research in HR, however, shows that employees and administration usually view an agency's performance appraisal system as a frustrating and unfair process. Performance appraisal instruments that are not job-related, have unclear or confusing performance rating levels are large to blame for this negative perception towards this crucial course). This essay explores different scholarly articles and hence gives a comprehensive account of what Utley Food Markets, a chain of 86 supermarkets in Missouri and Southern Illinois, should do in order to adopt a successful pay-for-performance appraisal system.
The new Utley management would like to establish a pay-for-performance system. What does this mean to the Utley management?
By establishing a pay-for- performance appraisal system, Utley management aims at making adjustments in each of the employees' base pay directly traceable to his/her job performance. This is a different system appraisal system from what has been the tradition at the supermarkets where employees' pay adjustment was subject to their individual agitation for it. The management will be able to communicate a strong message to all employees concerning their pay since this new appraisal system will have a tight link between the supermarket's pay expenditure and the individual productivity. Utley will be able to effectively address all issues concerning the norm of distributive justice and hence employees will be rewarded in proportion to their contribution. This will be instrumental in curbing suspicion among employees and management in matters pertaining that is to be rewarded and to what extent. It will, therefore, diffuse employees' concerns regarding fairness and equity while at the same time boosting their morale towards work and hence increasing their overall productivity.
Utley management will be able to distinguish outstanding performers from those lagging below average. This way, the management will be able to recognize and discriminate among employee contribution; this will greatly contribute to individual employee growth. For a supermarket, the realization of individual employee growth will go a long way in enhancing customer services and hence improve consumer rating of the supermarket; an essential tool in increasing the supermarket's sales volume.
What changes will have to be made in the way the system operates now?
For effective and efficient management of a pay-for-performance appraisal system, that is valid and legally defensible, the management will have to undertake three significant changes: (1) institute a clearly defined job specific performance criteria enabling creation of an appraisal instrument that distinguishes different performance levels, (2) a well-defined performance appraisal interview process and (3) equitable decisions regarding how much will be given for each level of rating (Milkovic & Newman, 2005). These changes will create a conducive environment that will go a long way in supporting the implementation of the new appraisal system. By defining the job performance criteria, it will become vivid for individual employees to make the critical decision on how much they want to want to earn since the system will clearly bring to an end the era of making general annual wage/ salary adjustments. Pertaining to the base pay, the management will have to, first of all, harmonize the pay for all employees to correspond to the requirement of the employment legislations and from that angle; the new adjustments will be made regarding the performance as the system advocates.
How might these changes be implemented?
The success of any given performance appraisal system greatly depends on its acceptance by the employees. An appraisal system is bound to fail no matter how successful it might have proved in other organizations if it is not accepted by the employees. It will, therefore, be critical that all employees take part in the formulation of the new system. It will be critical that employees agree on the performance appraisal questions that will feature during the performance appraisal interview. This will increase the acceptance level among the employees and the management will also not be terrified by the new system.
Which of the nonmonetary changes will help motivate better performance?
Other than money, employee training will be a very important motivating factor that will greatly lead to better performance. Workshops and seminars organized by the management for employees will boost the employees' confidence and morale to effectively undertake whatever they have to undertake. This will help in improving their discharge of duties and hence better performance.
Recognition of outstanding performers is also a motivating factor. The supermarket can come up with a system where outstanding performers are given a special treat by the management. This can be a treat to a dinner party or any other simple activity aimed at appreciating one's effort. Employees are usually encouraged when they do well and their services are in return recognized by the organization.
Performance appraisal is a field that should be taken seriously by the human resource manager in any given organization. The success of an organization heavily depends on how it effectively uses its human resources. This effectiveness and efficiency are only achieved when the employees are motivated to perform their duties. Motivation usually achieves better performance than supervision. Performance appraisal should, therefore, focus on how to motivate employees to give their best and to eliminate fear among the employees. Pay-for-performance enhances motivation as each employee is assured of reaping his/ her effort at the end of the day.