These Things Are a Pain (Based on Chapter 10)“There, at last it’s finished,” thought Rajiv Chaudhry, as he laid aside the last of 12 performance appraisal forms. It had been a busy week for Rajiv, who supervises a road maintenance crew for the Georgia Department of Highways.In passing through Rajiv’s district a few days earlier, the governor had complained to the area superintendent that repairs were needed on several of the highways. Because of this, the superintendent assigned Rajiv’s crew an unusually heavy workload. In addition, Rajiv received a call from the human resource office that week telling him that the performance appraisals were late. Rajiv explained his predicament, but the HR specialist insisted that the forms be completed right away.Looking over the appraisals again, Rajiv thought about several of the workers. The performance appraisal form had places for marking quantity of work, quality of work, and cooperativeness. For each characteristic, the worker could be graded outstanding, good, average, below average, or unsatisfactory. As Rajiv’s crew had completed all of the extra work assigned for that week, he marked every worker outstanding in quantity of work. He marked Joe Blum average in cooperativeness because Joe had questioned one of his decisions that week. Rajiv had decided to patch a pothole in one of the roads, and Joe thought the small section of road surface ought to be broken out and replaced. Rajiv didn’t include this in the remarks section of the form, though. As a matter of fact, he wrote no remarks on any of the forms.Rajiv felt a twinge of guilt as he thought about Roger Short. He knew that Roger had been goofing off, and the other workers had been carrying him for quite some time. He also knew that Roger would be upset if he found that he had been marked lower than the other workers. Consequently, he marked Roger the same to avoid a confrontation. “Anyway,” Rajiv thought, “these things are a pain, and I really shouldn’t have to bother with them.”As Rajiv folded up the performance appraisals and put them in the envelope for mailing, he smiled. He was glad he would not have to think about performance appraisals for another six months.QUESTIONSWhat weaknesses do you see in Rajiv’s performance appraisals?Should HR have the ability to “insist that the forms be completed right away”? Discuss.Many managers would agree with Rajiv in saying that “these things are a pain, and I really shouldn’t have to bother with them.” What are the disadvantages in doing away with performance appraisal?Compensation Changes at JC Penney (Based on Chapter 11)Having been in business for over 100 years, JC Penney has experienced highs and lows in organizational performance. In the past decade the firm has faced a dramatically changing retail environment from competitors such as Target, Wal-Mart, the Gap, and others. As a result, JC Penney was increasingly viewed by customers and analysts of the retail industry as lagging in its merchandising strategies.Even the compensation system at JC Penney was viewed as traditional and paternalistic in nature because it emphasized rewarding employees primarily for their length of service. Also, most promotions were made internally, which created a more static organizational culture. The traditional pay structure at the firm contained many pay grades and was based on job evaluations to establish those grades. Its performance review system emphasized employee tenure and effort to a greater degree than performance results.To respond to the competitive environment, the firm’s executives decided that JC Penney had to become more dynamic and able to change more quickly. One of the changes identified was that a new compensation system was needed. The restructured compensation system that was developed and implemented focused heavily on market value, using pay survey data that specifically matched job responsibilities. The greatest change was the development of “career bands.” These career bands grouped jobs together based on survey data and job responsibilities and resulted in fewer grades with wider ranges. The career bands represented a broadbanding approach that was based on benchmark jobs for which market pricing data were available. Jobs for which market data could not be found were analyzed using a job evaluation system.Use of the career bands was designed to identify career paths for employees throughout the company and to better link compensation to all of the jobs. By having career bands, greater flexibility was provided for employees to be rewarded for both current performance and continuing career growth. To support this new compensation system, a revised performance management system was developed. This system used performance goals and measures more closely tied to business strategies and objectives. Important to implementing the new performance management system was managerial training. This training was needed so that the managers could use the new system effectively and to describe to employees the importance of performance and its link to compensation. Implementation of the new compensation system required extensive communication.Newsletters were prepared for all managers explaining the new compensation system. Then departmental and store meetings were held with managers and employees to describe the new system. A number of printed materials and videos discussing the importance of the new compensation plan were prepared and utilized. A final part of communications was to prepare letters for individual employees that informed them about their job band and market pay range.QuestionsHow do the JC Penney changes reflect a total rewards approach?2. Discuss why JC Penney’s shift to a more performance-oriented compensation system had to be linked to market pricing.
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