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Murtada Almaqrodh
201001381
BUSI 3233- Human Resources Management
Test 3
1. Merrill Lynch used a system of employee ranking that rewarded higher ranked
employees. The problem with the system is that it emphasized competition between
employees, created tension among them, and created tension between them and their
managers. To solve that problem, the company had to change the appraisal system to a
system that de-emphasized competition and emphasized performance improvement. That
new system fixed the problems by implementing three ideas into the system.
The first idea was mentoring. Each employee had to meet with his/her manager to agree
on performance objectives that are related to company objectives. This did not only
improve employees in areas of company interest, but also created better relationships
between employees and their managers.
The second idea was measuring employee performance on a small three-point scale. This
scale groups many employees in one category, which helps reduce competition between
employees, and makes it easier for managers to talk to their employees about their
performance.
The final idea is the 360-degree feedback. Taking feedback from different sources helps
the company understand an employee’s performance better, and could also help the
employee understand to perform a better job.
4. The three job evaluation methods are classification, point, and factor comparison
systems. These systems are used to rank jobs in an organization to help determine how an
employee of a specific job is compensated.
The first evaluation method is the classification system. In this system, jobs of the same
importance to a company are grouped together. The importance of jobs is based on
several factors chosen by the company, such as difficulty and required skill. The
advantages of this system include ease of construction and use, ease of explanation to
employees, and availability of standards that make adaptation to changes easy. The
disadvantages of the system include grouping jobs that don’t fit together under one
category because of the inability to measure some factors correctly.
The second method is the point system. This system requires managers to allocate points
to different factors of a job, such as skill and responsibility. The advantages of this
system are that it is objectively based on clear factors, and that is the points
representation makes it easy to understand how the jobs are ranked.
The third method is the factor comparison system. This system like the point system, but
the difference is that is evaluates jobs based on standard factors. The advantages of this
system are that it provides good explanation of a job’s value, and that it helps managers
understand how to compensate different jobs. The disadvantages are that implementing
the system is time consuming, and that it could be subjective.
To improve the job evaluation system, a degree of flexibility is needed. Some jobs might
become more valuable at times than others, but the evaluation systems keep jobs at a
constant position. Also, jobs should be evaluated based on company needs in addition to
the needs of the job.
5. Both wage-pay and merit-pay have various advantages and disadvantages to them.
First, wage-pay compensates employees for what they should do, seems fair to
employees, and makes expectations clear. The problem with wage-pay is that it doesn’t
motivate employees to improve, and that it treats employees with varying performances
equally.
On the other hand, merit-pay compensates employees for how well they do their jobs,
motivates employees to gain more knowledge and skills, and improves organizational
performance as a whole. The problem with merit-pay is that employees seem to be
approaching a limit where they can’t improve beyond.
These two compensation methods could, somewhat, be used together. An employee’s
basic pay could be based on wage-pay, while bonuses could be based on merit-pay.
Compensating employees based on wage-pay only is not fair because some workers do
better than others in the same job, while compensating them based on merit-pay only is
also not fair because some workers are required to do more work than others in other
jobs.
6. The HRMs in the story boxes all made a mistake when it came to compensation. In the
first story box, Nucor compensated employees based on shift performance. This system
causes wages to change rapidly, which makes salaries in the company range from much
less than average to many times higher than average. Because of this system, even the
CEO of the company doesn’t each as much as an average CEO.
In the second story box, Korn/Ferry wanted to attract new employees by opening an
internet website that showed salary information. However, the employees of the used the
website themselves, and found out they were actually underpaid. This is a mistake of
HRMs because they are responsible for maintaining the current workforce of the
company.
In the third story box, there are companies that are afraid of setting a minimum wage
higher than the federal minimum. Those companies soon abandoned the idea in fear of
increasing wage levels. Even though minimum wages are increasing, people living on the
minimum wage are becoming poorer because inflation is increasing faster than their
wages.
HRMs should be careful when setting wages. Setting a low wage would upset employees,
while setting a high wage upsets the company.
7. First, the start should be from the workplace. An employee needs to be in a
comfortable environment in order to reduce work related stress. Technoholism could start
as a way to reduce stress, but then grows to become a cause of other problems. If
employees were in a comfortable environment, they would be in less need to overuse
technology.
Second, technology usage needs to be regulated at work. Work related Communications
through technology, such as e-mail, should be restricted to specific times through the day
to give the employee the ability to make a schedule with time away from communication
devices.
Finally, office employees need some physical activity to improve energy. A few minutes
for physical activity should be allocated through the work day to stimulate a workers
body and brain.
These steps could improve employee performance and satisfaction by allowing workers
to have time away from electronic devices, and stimulating their bodies with physical
activity to improve their energy, which would also make them feel better even after work
is over.