CASE Appraising Performance at Precision An additional Supplemental Case can be

Question

CASE Appraising Performance at Precision An additional Supplemental Case can be found on MyManagementLab. Precision Manufacturing produces machine parts and has nearly 200 production employees and 50 employ- front office with responsibilities ranging from data entry to marketing. Jackson Smith is the nevw manager at Precision, and his first task is to implement a merit pay program that would tie to e company's performance appraisal process. For the last 10 years, all employees have received an annual e, with all employees receiving the same percent- th pay increase, but it has been an across-the-board incr age increase in base pay. Jackson and the company president have agreed that implementing a merit pay program to provide pay increases based on performance would support the company's competitive strategy by rewarding employee productivity. The first step in developing the merit pay program is to ensure that the performance appraisal pro- cess aligns with the proposed program. The purpose in implementing the merit pay program is to provide employees with pay increases as a reward for performance, and, therefore, effective measurement of

Explanation / Answer

What are some problems with Precisions performance appraisal process that might cause challenges for Jackson to implement a merit pay program?

One of the main problems is that employees are used to the current process and they are comfortable. It is hard to move people from their comfort zone especially when historically they know they will receive an increase on their payment but now it could be harder to achieve it.

Managers might complain with Jackson because this will make them work longer time on the appraisals.

Change the mindset of a company can be a difficult task

The review form needs to be different, you can’t review the same job of a factory worker than a general manager.

What changes do you recommend Precision make to the performance appraisal process to align it with a merit pay program

Clear description of the job functions.

Each employee should have his yearly goals established by January

Managers should meet more often with their employees, at least once per month to review their goals year to date

Change the review forms depending on the job type of the employee

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