What are some problems with Precision’s performance appraisal process, and how might these problems cause challenges for Jackson’s implementation of a merit pay program?
The U.S. Department of Labor defines merit pay, also known as pay-for-performance, as “a raise in pay based on a set of criteria set by the employer” (N.d). When appraising performance at Precision, Jackson may face numerous challenges when implementing a merit pay program. One problem with Precision’s performance appraisal process is that the stated duties and performance standards of the employees are not clearly outlined. The prospects of the employees are also not clearly outlined by upper management. This might cause a challenge for Jackson when implementing a merit pay program because job descriptions are a product of job analyses. Job analysis is used as the basis for developing performance appraisal instruments (Martocchio, 2014). This is because it can be used to identify the best source of information that is essential for the appraisal of the different components of job performance.
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Secondly, the employees and supervisors communicate less about performance, and this can be a challenge for Jackson when implementing a merit pay program. It is essential for employees to understand what is expected from them in order to receive merit increase as well as the rewards they will receive for meeting the performance standards (Kokemuller, n.d). The last issue with Precision’s performance appraisal process is that the pay increase for all the employees is the same, regardless of their performance. Both poor and high performers have historically received the same compensation and increases. There might be animosity among the employees, and Jackson ought to consider this when implementing a merit program.
What changes do you recommend Precision to make to the performance appraisal process in order to align with a merit pay program?
Precision ought to make the following recommendation in order to make the performance appraisal process align with a merit pay program. First, Precision need to conduct a job analysis so they can state the duties and performance standards required from their employees. By outlining their expectations, the upper management of Precision would have a solid foundation to base their performance appraisal on. I would also recommend the company to establish effective communication between the management and the employees. This would help the supervisors speak with their employees openly regarding their performance. Lastly, I recommend Precision to give their employees a merit increase based on their performance.
References
Kokemuller, N. (N.d). What impact can a poorly written or non-existent job description have? [Online]. Available at: https://work.chron.com/impact-can-poorly-written-nonexistent-job-description-have-13646.html . Accessed 6 th June 2019.
Martocchio, J. (2014). Strategic compensation: A human resource management approach, 8 th ed. Upper Saddle River, NJ: Pearson/Prentice Hall.
U.S. Department of Labor. (N.d). Merit Pay. [Online]. Retrieved from: https://www.dol.gov/general/topic/wages/meritpay . Accessed 6 th June 2019.
