Merck & Co. Performance Appraisal System
1) WHY?
Brief Background on Merck & Co. Performance Appraisal System
The past and existing performance appraisal of Merck & Co. was ineffective to identify and reward performance to a certain extent. Although the company was paying their employees around seven to eight percent more than the average compensation in other large companies, the performance appraisal system did not clearly identified outstanding performance, which caused inequity in rewarding performance and led to unhappiness among the employees, especially the high performers. Compared to the average performers, there was only marginal increase in salary for outstanding performers. Without proper recognition and rewards, the company was at risk of losing its high performers and keeping the worst performers.
Core Problems and Its Causal Identification: High Degree of Criterion Deficiency and Criterion Contamination
The core problems identified for inequity in performance appraisal was the high degree of Criterion Deficiency and Criterion Contamination in performance appraisal, forced distribution in performance rating and biasness in performance appraisal. There were 3 causal for the core problems. The 3 causal were namely: 1) the company's absolute performance rating scale, 2) company's salary determination under the old plan and 3) superiors' biasness in appraisal.
Recommendation Using Core Concepts to Solve the High Degree of Criterion Deficiency and Criterion Contamination
The 3 proposed recommendation to address the 3 causal are namely: 1) identifying conceptual criteria through employees' job analysis to eliminate criterion deficiency and contamination in performance appraisal, 2) employee comparison models (rank-order method) to identify outstanding performers under salary determination and 3) introducing an ongoing assessment to eliminate superior's biasness.
2) WHAT?
Causal 1: Performance Appraisal under the Old Plan (Criterion Deficiency & Criterion Contamination)
Brief Background on Merck & Co. Performance Appraisal System
The past and existing performance appraisal of Merck & Co. was ineffective to identify and reward performance to a certain extent. Although the company was paying their employees around seven to eight percent more than the average compensation in other large companies, the performance appraisal system did not clearly identified outstanding performance, which caused inequity in rewarding performance and led to unhappiness among the employees, especially the high performers. Compared to the average performers, there was only marginal increase in salary for outstanding performers. Without proper recognition and rewards, the company was at risk of losing its high performers and keeping the worst performers.
Core Problems and Its Causal Identification: High Degree of Criterion Deficiency and Criterion Contamination
The core problems identified for inequity in performance appraisal was the high degree of Criterion Deficiency and Criterion Contamination in performance appraisal, forced distribution in performance rating and biasness in performance appraisal. There were 3 causal for the core problems. The 3 causal were namely: 1) the company's absolute performance rating scale, 2) company's salary determination under the old plan and 3) superiors' biasness in appraisal.
Recommendation Using Core Concepts to Solve the High Degree of Criterion Deficiency and Criterion Contamination
The 3 proposed recommendation to address the 3 causal are namely: 1) identifying conceptual criteria through employees' job analysis to eliminate criterion deficiency and contamination in performance appraisal, 2) employee comparison models (rank-order method) to identify outstanding performers under salary determination and 3) introducing an ongoing assessment to eliminate superior's biasness.
2) WHAT?
Causal 1: Performance Appraisal under the Old Plan (Criterion Deficiency & Criterion Contamination)