HRM methods Essay Example | Topics and Well Written Essays - 3750 words

HRM methods - Essay Example This is nothing but performance-based compensation, which is one of the widely acknowledged HRM practices that contribute to business success (Dyer & Reeves, 1995; NC-DHHS, 2005). The employees' knowledge that such a reward awaits them if they perform well should keep them on their toes. Granting pay incentives and job promotions according to seniority and length of stay, which is the usual practice, does not motivate employees across the organization because the newer employees know that they will receive the same benefits and career boosts if they just stayed longer in the company and all they need to do is wait for their turn. While they thus wait for their time, you cannot expect them to exert themselves harder at their jobs. Even with a so-so performance, they tend to feel secure in their positions because of employment laws or labor union agreements that forbid dismissal without cause. With the forced ranking and distribution system in place, employees will strive to avoid bein g included in the worst performing group. ... The downside of the system, however, is the perceived lack of a foolproof benchmarking method to measure performance. As noted in the case study, it is inherently difficult to differentiate between good, average and poor performance. Precisely because of this particular difficulty, Goodyear mistakenly fired one chemist who got a consecutive C ranking for poor performance but who, it turned out, had earlier patented a new type of aircraft tire without management knowing about it. In essence, the forced ranking and distribution system is an anachronism to the popular HRM model that sees companies setting up rigid screening processes to ensure that they hire only the best people (Storey, 1992; Guest, 1999). If these companies hire only the best, then how come there are poor performers to be found in their ranks Dow Chemical, for example, realized in time that the forced ranking system did not fit with its corporate philosophy of recruiting only the best employees. In addition, the forced ranking system is likely to provoke perceptions of status and discrimination, thus encouraging income comparisons and perhaps spreading envy as others see a fellow employee doing much better than them (Guest, 1999). Envy and jealousy could have prompted employees at Ford and Goodyear to complain that the system discriminated against certain type of employees. 2) Suppose any of Ford, Goodyear and Dow Chemical contacts you to modify its performance management system to avoid some of the problems that it has experienced. What would you suggest the company do If asked to suggest a performance management system that avoids the pitfalls of the forced ranking and distribution system, I would propose a system that emphasizes the