arrow electronics
Arrow Electronics must tackle several issues in regards to its performance appraisal system for its non-sales employees. The performance appraisal problems that Arrow faces are similar to many companies in today’s business environment. Steve Kaufman, CEO, understands and stresses the importance of human resource management at Arrow; usually the first hurdle an organization must clear before delving into the specific problems associated with performance management. Kaufman has concluded that the performance appraisal system needs further adjustment in order to meet his needs. To do so, Kaufman must first identify the problems associated with the current performance appraisal system to develop solutions.
The objective of any performance appraisal (PA) system is to identify core competencies, set goals and standards to measure, maintain and improve job performance for short-term and long-term results for both the employee and the organization. Arrow will utilize the information obtained from the PA process for administrative reasons such as identifying those who deserve promotions and/or salary increases, those who should be trained as future stars of the organization, and those who should be let go. The information will be used for developmental reasons to identify career goals, problem areas, and the actions to improve skills. The PA information is also used for strategic reasons to communicate organizational goals, to align employee behaviors to those goals. Finally, this information will be used for research/evaluation purposes to analyze other human capital management practices in the organization such as recruitment practices and training.
Most of the time, the individual/employee goals differ greatly from those of the organization/manager when participating in an evaluation process. The conflicts that arise between managers and their employees contribute to the ambivalence that managers and employees have when involved in the performance appraisal system. Kaufman believes that those efforts have been unsuccessful due to his managers’ inabilities to accurately differentiate between employees when determining high versus low performers. This is demonstrated by the managers’ failure to utilize more of the rating range when evaluating subordinates. The managers tend to evaluate all employees as average performers and are reluctant to provide constructive criticism to employees. When a majority of the employees are evaluated as average, senior management is unable to determine how employees are ranked within the organization. The problem can be associated not only with the inherent conflicts between managers and subordinates, but also the fact that many of Kaufman’s managers are promoted without proper managerial training. Therefore, the less seasoned managers may not have learned the skills necessary to manage others, to objectively evaluate the employees they supervise, or to coach/mentor their subordinates.
Kaufman has also come across several biases in the PA system that stem from manager favoritism and lack of uniformity in the evaluation process. Annually disparate individual performance ratings are also witnessed. For example some employee ratings change from year to year dependent upon a number of factors including if a new manager evaluating the employee, or that employee being courted by a [next page]