1. What is your opinion regarding forced ranking performance appraisals? Do they motivate employees? Explain. I think that forced ranking performance appraisals dose not motivate employees. It would create a scenario that people only focus on competing, backstabbing each other and protecting their own prospects instead of encouraging employees to focus on innovation and collaboration. This would cause the lack of cooperation between group members.
Companies may inevitably using forced ranking, firing someone who might go on to be a super star elsewhere or discouraging excellent performers by ranking them as mediocre simply to fill a quota. Replacing lower-rank employees each year can also be costly and can lower productivity in the early months of adoption. The effectiveness of Forced ranking performance appraisal is dependent on the type of industry an individual is employed in. If an employee is in the sales or manufacturing industry, then Forced ranking may be effective because there is a clear output in terms of sales or quantity of outputs produced, thus employee needs to meet the target.
For example, in marketing department, the force ranking might be a very effective way to rank an employee because they base on their sales. The higher sales would get the higher rank and also higher bonus. However, in R& D industry, forced ranking would not work well because these industries thrive on innovation, which requires collaboration among different groups and potential unsuccessful attempts in coming up with new innovation. Therefore, by having force-ranking system, it will discourage collaboration and unnecessarily punish employees that are not fulfilling the goal, or may not have to motivation to try out different things for fear of failure and low ranking in performance appraisal.
The use of force ranking in R&D industry may lead to demotivation and reduce in cooperation. 2. How would equity theory explain some employees’ negative reactions to forced ranking? Explain. Equity theory is a theory of motivation that examines how a person might respond to the discrepancies between the input and outcomes ration. The equity theory motivates the employees’ throught the outcomes that the employees will received from their contribution. But this does not included in the Forced ranking evaluation. Employees think that the ranking method violates employees’ right.
The equity theory explains some employees negative reactions from forced rankings by changing an employee’s inputs, how much effort to invest into their current job. The attitudes or mindsets of employees may change, that job security is more important than a raise. Or, the employee may just decide to resign from their current job position due to annoyance or perceived inequalities. The equity theory centers on overall pay as the outcome Equity Theory proposes that a person’s motivation is based on what he or she considers being fair when compared to others.
When compared to other people, individuals want to be compensated fairly for their contributions (the outcomes they experience match their inputs). A person’s beliefs in regards to what is fair and what is not fair can affect their motivation, attitudes, and behaviors. For example, when a worker who works longer time get lower salary, he would feel unfair if compare with a worker who work lazy and going back early getting higher salary.
In addition, Employee who are ranked lower with limited opportunity to unleash their potential due to their nature of job will feel unfair when they contribute great output ( more time, more work) yet they are not be rewarded accordingly to their input.(budget cutback, refrain to claim overtime, remain salary scale In forced ranking systems, employees are forced to be ranked according to a certain percentage to fit in the system. Some employees are getting big promotion/bonus/rewards, some are getting an acceptable amount of increment while a small numbers of employees are penalized with no rewards at all, and in fact they are being fired out of the job.
Those impacted by this system will feel that their inputs are not fairly rewarded, become demotivated and they will seek alternative ways to restore sense of equity. However, it is unfair for those who hardworking and get the same promotion as a lazy worker. Therefore, for both ways, the hardworking and lazy worker will feel the sense of unfair in certain way. 3. Based on chapter 5, if you decided not to use forced rankings at your company, how would you motivate employees? I will use goal setting theory which is based on the premise that people use goals to satisfy their needs and desires.
It is a conscious goal that influences motivation to be geared towards a desired outcome. Goal setting to set objectives for each employee that consists of complex goals to easy goals. If they meet the objectives with certain percentage given, they will be categorized as successful, and get normal pay rise. If the employee meets 80% of the objectives, then the employee will get promotion and steeper pay rise. Those that do not meet the target will be need to be identified whether it is related to motivation or lack of training and subsequently will be provided appropriate correction course.
By being specific with the goal and having a plan of action of how to attain that goal, they may sit down and set goals with employees and build trust with them. This allow the employees and managers can gauge and monitor progress towards that goal. The employees who trust and feel respected by their supervisors will feel confident to speak freely without fear of repercussions. Foster open and honest communication between your employees to achieve better understanding of both expectations and job performance.
Besides, we may also use the Herzberg’s Two-Factor Theory. By referring to the Herzberg’s Two-Factor Theory, Herzberg”s research suggests that there are two important sets of factors. Motivators are intrinsic conditions and include achievement, recognition, and responsibility. Hygiene factors are extrinsic conditions and include salary, working conditions and job security.
An employee who is paid well, has job security, has good relationship with co-workers and the supervisor (hygiene factors are present = no job dissatisfaction), and is given challenging duties for which he is accountable will be motivated. For example, relationship with supervisor, working conditions, salary, company benefits, policy, status , security and relationship with co workers. Existence of the hygiene factors in the work environment will not motivate a person to work harder, however without the hygience factors in the work environment will demotivate an employee.