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Performance Appraisal case study

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Executive Summary The Sales Manager at AX Systems, a small Spanish company which manufactures computer equipment, had announced his intention to leave the firm. To succeed him, there were two internal candidates being considered. The first, Juan Diez Martin, was a 20 year veteran who believed that the job was his given his seniority with the company and the fact that he was named Salesperson for the Year for the past 5 years. The second, Jose Luis Rodriguez Gonzalez, was with the company a respectful 5 years and had received much customer praise and recognition in that time. A decision to promote Jose Luis was made at the hands of the HR Manager who based his decision on the position job description and the employees' performance appraisals which were evaluated on a trait scale by their department manager. The appraisals were vague and were not communicated to the employees. There was no "action plan" put into place to ensure employees' performance could be improved. The decision to promote Jose Luis was told to the employees jointly in the HR Manager's office. After this time Juan claimed that the decision was unfair and came as a result of the Sales Manager being friends with Jose Luis. At that time the HR Manager provided both Juan and Jose Luis' appraisals for Juan to review. The failures here were that the individual selected for the position was selected in an unfair way. He may not be the best person for the job. Also, the way in which the entire process was handled was inappropriate. The HR Manager should not have informed the employees together nor should she have provided any of Jose Luis' confidential information to Juan. To respond to the immediate problem, the job offer should be rescinded while the management team has an opportunity to review which candidate is the best fit for the position. ...read more.


Cost of Option 4 Item Explanation Total Cost Legal 4 hours @150 Euro/hr 400 Euro Interview Preparation 1 hour @ 48 Euro/hr 48 Euro TOTAL 928 Euro Complimentary Alternatives Regardless of which option is taken with respect to the promotion decision, there are several organizational alternatives that need to be considered: 1. Discipline or Terminate HR Manager As laid out in the Problem Statement, the HR Manager's failures are what ultimately led to this situation. He should be disciplined and retrained. Given how pivotal knowledge of hiring and performance management is for an HR professional, the company should evaluate whether or not the incumbent is the right person for the job. Terminating employment may need to be considered. The Director should assess the other responsibilities of the HR Manager. 2. Create a Clear Hiring and Promotion Policy Although companies are able to hire and promote employees as they see fit, it is in the best interest of everyone if clear guidelines are followed in order to find the right person for the job. In this case, simply clarifying the core competencies (at least 6 of them) then matching these to the candidates' abilities would have aided the situation. 3.. Implement a Standard Performance Review System The system could be paper-based or an easy-to-use software system. It should be behavioral based and include dimensions as well as examples of the dimension. It should list goals that are: Specific, Measurable, Attainable, Reliable, and Timely. The company should consider which of the following they would like to include: peer reviews, subordinate reviews, 360s, Customer Appraisals and Self-Reviews. Using at least some of these methods would garner more reliability with the result. The review also needs to be communicated to the employee along with an action plan of how the supervisor can help the employee succeed in his/her job. 4. Train all Supervisory and Management Staff in Performance Management This point should be conducted in conjunction with point 3. ...read more.


Consequently, the company will be in a better position to meet their strategic goals. From a legal standpoint, this system protects both the company and the employee. Employees will know what the expectation (and failure) is. In any instance where the company is confronted with legal action for situations such as unlawful dismissal, it should be easy to foster proof of: job description, written instructions, employee review of appraisal results, an action plan to improve behavior, agreement among multiple raters, and there was rater training. Cost of Solution Item Explanation Total Cost Legal 4 hours @150 Euro/hr 400 Euro Interview Preparation 1 hour @ 48 Euro/hr 48 Euro Sourcing and Purchase of 10 hours @ 19 Euro (HR 3,192 Euro Appraisal Software Administrator) + Software @ 3000 Euro Training on Software 8 managers for 8 hrs @ 48 Euro 3,077 Euro Training Development Costs for 10 hours @ 48 Euro/hr 480 Euro Performance Management Total Training Costs (In-house 8 managers @ 8 hours @ 48 4162 Euros with set-up) Euro Administrative cost/Participant Materials = 1000 Euro Food = 90 Euro TOTAL 11,359 Euro APPENDIX: The Performance Management Training should contain the following: 1. Objectives: a. How to motivate employees to improve their performance b. Benefits to providing regular feedback c. Inventory of skills and capabilities d. Support the termination and layoff process 2. Guiding Principles 3. Communication Principles & Active Listening 4. Principles of Feedback: a. Describe the behavior in non-threatening terms b. Express consequences of this behavior c. Help employee make a plan to discontinue behavior d. Use positive feedback to show recognition of effective behavior e. Always use motivating, not deflating terms. 5. Positive Reinforcement of Behavior 6. Performance Diagnosis - My employee is not doing what I want him/her to do; what should I do? 7. How to handle a performance coaching meeting. Learn the art of script writing. 8. Corrective Action - When and how do we discipline an employee for poor performance? 9. How to write a corrective action letter. ...read more.

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