March 6, 2011

Arrow Electronics and Sins of Commission

Posted in BADM 720 tagged , , , , , at 11:36 am by Sarah

This week’s first reading was about the employee review system at Arrow Electronics.  The CEO was trying to get an idea of which employees to retain in an impending restructuring of the company, but this was complicated by the managers basically giving the same scores to every employee.  It seems to me there are a couple of things that could have been done to help.

First of all, the managers giving the reviews were only told that their comments would influence salary and promotion decisions.  Wanting to appear fair, the managers gave everyone the same ratings, thinking this would ensure that the employees’ compensation would remain equal.  If the managers had been told that their reviews would also influence whether the employee was retained or let go, they might have been more inclined to evaluate the employees more objectively, knowing that if they gave an employee a bad rating, they wouldn’t have to face that person at work for much longer.

Second, if reviewing and providing feedback is such an important part of the managers’ jobs (as stated by the vice president of human resources in the very beginning), then the managers should have been evaluated themselves on how well they performed that job function.  Those managers who gave the same scores to every employee should have been told that by doing so they were impeding the work of the human resources department, and should have been given a low score in that area of their own reviews.

Our other reading for the week cautioned against the dangers of using a performance-based compensation system in the first place.  The author’s bottom line was that if you offer a high enough monetary reward to employees for a particular performance indicator, those employees will do whatever they can to improve in that one area, at the expense of other areas of their jobs.  We have read in other places that money is not as much of a motivator as one might think, but this author’s examples contradict that.  I do believe that motivation is different for each person, so I am skeptical of anyone who says that any one motivator is or isn’t a major factor in all workplaces.

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