Performance appraisals and merit rating plans sometimes fail. When this does occur, there are several possible explanations or problem areas. Sometimes these plans not only attempt to motivate individuals to increase effectiveness, but also direct link pay raises and promotions. When this takes place during the evaluation feedback session, employees are more interested in the final result: that is, will they receive increased pay or a promotion , The result is the ratee often pays little attention to the feedback portion of the session.
The feedback session should not include any pay rise or promotion decisions if future employee motivation is one of the expected outcomes. Pay raises and promotion should be discussed at later sessions. In a feedback session using employee self ratings of their performance, there may be problems with the surpervisors rating differing. Such issues go beyond just the differences in overall
ratings and require additional discussion. On cause of appraisal maz be the lack of top management support. The result is that both the rater realize little will result from the evaluation process so they merely go through the motions, often wasting valuable time and energy. It is only when management supports appraisal and makes it known to the later that their future with the company depends upon their effectiveness in evaluating ratees, will there be appropriate results.
This also applies to the ratees because they must be convinced their evaluations will eventually decide future career opportunities, pay raises, and possible promotions. When the company is unionized, the major cause of evaluation problems is sing seniority as the
basis for pay increases, promotions, and other work related issues such as vacations, shift preferences, and overtime. Although this is a contractual procedure, subject to negotiations, the company often does have other choices.
For instance, the company would prefer to keep the seniority unit as small as possible, permitting the seniority restriction to apply to the smallest number of people and thus allowing greater company discretion in appraisal. Of course, the union desires larger seniority units, because it hopes to maximize the number of people to who the seniority rule applies. For example, in a layoff situation, the seniority person would bump the least senior person. When units are small the effects of seniority are often minimized. Other approaches to the seniority issues would split merit and senoirity system, with extra, performance points given for years of service.
Also, when merit measures favor a nonseniority person over a seniority person, a joint management union committee could resolve the issue. The seniority issue aside performance management appraisal plans will continue to be major factor in determining pay increase, promotions, and rentention in business organizations.