Performance Measurement & Reward System-Case Study

Presented by :Aafreen Ahmed

MBA,2nd Sem

Introducton to the Caselet Neha Kapoor(Neha) & Tina Menon(Menon) were excited about their first job

offer from a leading multinational company, Meridian Business Solutions(MERIDIAN).It is a UK-based consultancy , offered business development and improvement solutions to organizations in wide range of industries . Both have passed their MBA from prestigious college, where Menon was topper. In their new job,the job-responsibility was to tap potential clients from corporate world. This was an ideal break for them as it provided exposure , adequate opportunities and compensation offered was even at par.

The first few months were a learning experience for both of them, when they were given adequate training and reasonable autonomy to perform their job. Nitish Bajaj(Bajaj) , Regional Sales Manager was more impressed with Menon as she was able to get into a deal with a very high profile client that could get huge profits for the firm. Hence in a party ,Bajaj even announced cash award for the commitment and dedication of Menon, that motivated her to strive harder to better her performance .

Contd… The company had a yearly Performance Appraisal System in which

employees were rated, on the basis of that they were paid hefty performance bonuses that served as effective motivators for its employees.

Menon had hoped to receive a handsome bonus for her performance as earlier stated by Bajaj . But Meridian did not have any transparent policy regarding appraisals and remunerations paid to employees. So outcome was not known to anyone but the employees that to by the information gathered informally. Similarly Menon and all her colleagues had an unpleasant surprise when they found that Kapoor had been rated high & even given higher bonus than her.

The performance bonus acted as a demotivating factor for Menon . She began to perceive an inequity in reward system & put in less effort to bring about a perceived equity of pay between Kapoor & herself. Consequently her productivity level declined. The negative attitude affected the performance of the organization. Her frustration made her look fro new jobs.

1.The annual performance review had a demotivating effect on Tina Menon. Briefly discuss the motivational theory that best describes Menon’s response to the appraisal.

The motivation theory that best describes Menon’s response to the appraisal is “Herzberg’s two factor theory”. According to Herzberg the factors contributing to Job satisfaction are different from those contributing to Job dissatisfaction. They are not the opposites of each other.

The hygiene factors i.e the extrinsic factors contributing to dissatisfaction , here relate to Menon’s demotivation as follows-

Organization policies and practices in Meridian are not transparent regarding appraisals and remuneration paid to the employees. So such information was not immediately known to anyone unless gathered informally as Menon came to know about Kapoor and was shocked.

The Superior-Subordinate Relationship was earlier sound as Bajaj being impressed announced for cash reward just within few months of joining. But on the yearly performance review Bajaj didn’t turn-up rather gave ratings & bonus to Kapoor higher than what Menon had been given. So it proved to be bad Superior-Subordinate Relationship.

There was initially a safe & healthy working environment as they were given adequate training & reasonable autonomy to carry out their job. Everyone knew that Menon was a better performer but when performance review was given it was a surprise for the rest employees where rather they could contribute to her performance appraisal & make her get a better rating. Hence the quality of supervision was not good making no further security for job.

Here the motivational factors /motivators i.e Recognition, responsibility, advancement, achievement, personal growth, work itself lead to her satisfaction but were not the demotivating & dissatisfaction factors .

2.Based on equity theory, explain in what other ways Menon could have reacted to the outcome of the performance appraisal?

Equity theory states that individuals compare their job inputs & outcomes with those of others & then respond to eliminate any inequities.

Menon could have used the different referent comparison that would add to the complexity of the equity theory. Her selection of referent depends on the information about the as well as the attractiveness of the referent. Here she has considered “Other-inside”->Another individual inside her organization.

She also took into consideration four variables – Gender, length of tenure, level in the organization & amount of education or

professionalism. Menon has decided to Change her input and is looking out for new jobs. The other

ways Menon could have reacted to the outcome of the performance appraisal are- Distort perceptions of oneself. Distort perceptions of others. Change her outcome. Choose a different referent.

THANK YOU!!!