HR Challenge: Choosing a Performance Appraisal System

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HR Challenge: Choosing a Performance Appraisal System


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Scenario You are a newly hired HR professional in a medium-size company, which is a video gaming company that is globally recognized as a leader and groundbreaking competitor. It is a young firm that has grown quickly, from one having no HR staff to having five HR professionals supporting over 700 employees and a performance appraisal system that has been in place for several years. The management team is not all that comfortable with any system of appraisal but has accepted that one is required. The organization currently has a healthy employee engagement program. Part of the program is a yearly organizational satisfaction survey that over time has provided employee input about what they perceive as a lack of performance appraisal effectiveness. Employees feel the current performance appraisal system is not capable of identifying struggling and failing employees. At the same time, it is also described as not having the capacity to recognize the best performers in the organization. That is, there is a stated desire from employees for a performance appraisal system that can better differentiate performance outcomes. The current performance appraisal system is similar to the traditional academic evaluation system with five levels of performance: superior, outstanding, contributing substantively, developing, and needing improvement. The leadership in the organization insists that a new three-level (superior, contributing substantively, and needing improvement) will favorably respond to the employees’ viewpoint. This new appraisal system that tracks the assignment of each level by employee would limit how many high threes would be given every year, thus most people in the organization would fall into the category of contributing substantively. Your Challenge As an HR professional in the organization, you desire the best outcome for your organization and its employees, and are not sure if this three-level system would be best. Your challenge is to select the best course of action among the following options and recommend that action to the leadership team. You can recommend 1) they retain the current five-level performance appraisal system, 2) they adopt the three-level system with forced-distribution preferred by the leadership team (superior, contributing substantively, and needing improvement), or 3) an alternative. Assignment Instructions Prepare a 2–3-page plan that states your recommended course of action. Along with your recommendation, include the following: An analysis of how your proposed solution contributes to organizational goals and strategies. A description of the legal factors you considered in making your decision. A brief explanation of the role you will take to influence the eventual outcome. Consider aspects of leadership, negotiation, and consultation. A discussion of the two SHRM behavioral competencies you think are most directly applicable to a successful resolution of this challenge, and why

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