Compensation And Performance Evaluation At Arrow E

1300 Words6 Pages
Critically assess the issues identified in the Arrow case and then indicate whether Steve Kaufman should abandon the EPR system. If so, why? If not, why not? Steve Kaufman, CEO of Arrow Electronics, has been agitated with how managers of the company rate their employees come performance review time. The current Employee Review Process (EPR) that had been in place for the past three years was not providing Steve with the information he had been hoping for to determine who the outstanding as well as poor performers were in the corporation. The EPR was not well liked within the organization by employees or the managers. It quickly became apparent to Steve that something had to be done. The problem with the EPR system in place at the time was that managers were to rank their employees on a scale of 1 – 5 on seven different characteristics. This caused problems as most employees received either 4’s or 5’s (the highest ratings) for every characteristic. This form of ranking gave no indication of who was a top performer and who was not. The EPR system also determined merit increases and promotion decisions. I do not believe that Steve should totally abandon the EPR system that is in place as it is familiar to the employees and managers, but there should be significant changes to how the process is done. I believe this is necessary as managers have the tendency to rate everyone with high scores, and does not provide a real, accurate evaluation of performance. The EPR system also should be changed since currently all employees are compared to their peers, which can be the opposite of motivational and cause employees to have more questions than a solid understanding of their job performance. The current EPR process should also be changed as employees never get examples or reasons for why they are rated the way they are. There are no concrete metrics for

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