Realigning HR Practices at Egan's Clothiers - Term Paper Example

? Realigning HR Practices at Egan's Clothiers Realigning HR Practices at Egan's Clothiers Can increased sales be linked directly and/or indirectly to the appraisal system? The increased sales can be linked directly to the Egan’s appraisal system; however the system has proved to be ineffective which will be discussed later in this paper. The human resource department in Egan’s clothiers came up with various methods that would reward the employees according to their performance. The employees would either be classified as very good, superior, fair or poor according to their performance and productivity. This made the employees want to sell as much items as possible in order to be ranked at a higher level of productivity. This appraisal system did not perform at it best though, the sales of the firm increased. At one time, the store manager acknowledges that the performance of the employees got worse because they did not respect customers. They would harass them in order to make more sales. Performance appraisal is one of the major tools that are used to improve the productivity of workers at their place of their work and to be effective. In order for an organization to attain its stipulated goals, appropriate performance appraisal tools should be put in place in order to increase workers performance. Most organizations perform below the required level, making very little sales per day since their workers are not encouraged to perform better and to work harder. If an organization does not invest in to the welfare of the workers, problems are bound to happen such as low morale and productivity and low level of commitment at work. Attractive systems of appraisal are set up in order to motivate workers to work harder and recognized through promotions and rewards (Selden & Sowa, 2011). For instance, Egan Clothier uses a promotion strategy that is based on the productivity of the workers. The workers are encouraged to sell as much as possible. The retailers made more sales as compared to its competitors because the Egan’s Clothiers hired employees based on their past experiences. The employees would then undergo through a retail selling skills training and customers services training. This put the Clothier ahead of its competitors who hired inexperienced students from high schools (Snell & Bohlander, 2011). Although, the training program cost the Egan’s approximately 750, 000 dollars, the management thinks it was worth the cost because the workers would perform at their best making more sales and hence more revenue in the long run. On the other hand, the Egan’s associates rewarding of the workers based on their performance. Their on-going sales would be recorded and used to categorize the workers. The firm would then use the categories to promote the workers within the firm. This activity ensured that the workers sold as many items as possible hence increasing the overall sales turn out of the form. This appraisal system was ineffective because the workers would do everything possible to hit the set individual targets. They would even beat up their customers in order to sell. Are there other performance effects directly and/or indirectly caused by the appraisal system? Appraisal system used by Egan Clothiers had several effects, both directly and indirectly. For instance, the system is not effective in reducing cost of labor instead the worker’s productivity is worsening. According to Paul Kelly, the store manager, the workers are beating up the customers in order to make a sale. Peter Drucker, on the other hand says that establishing effective decision making is important at every level of the employees. Egan failed to acknowledge the satisfaction of the workers based on the appraisal system used. Egan Clothiers only took the first of improving performance of the workers and neglecting other aspects that affected the performance of the organization. An organization should use successful criteria of evaluation. The criteria based on the performance of the employer that Egan Clothiers used was not very effective because it failed to look at the self esteem of the employees. Any improvement in the performance of the workers should be in a position to clarify the expectations of the employee. This was the indirect effect of the appraisal system. On the other hand, an appraisal system that is individual based is viewed as a way to measure the differences between the employees, hence showing their strengths and weaknesses. Egan clothiers used the appraisal system to evaluate the employees who achieve the objectives. This helped the HR management of Egan’s to improve the performance by aggregating the performance of the employees. This tool of appraisal system acted as an effective tool for evaluating and developing the employees’ abilities which hence resulted to better productivity within the firm. The managers implemented the employee’s personal skills and abilities in order to advance their careers. The management also motivated the workers by providing training (Snell & Bohlander, 2011). The other effect of the Egan’s appraisal system was that the organization was able to only meet the organization’s objectives as opposed to individuals’ goals. The organization was able to attain the TQM and various other changes in the business. This resulted to achieving an efficient and effective team-work with reduced costs. Moreover, team assessed appraisal systems are more effective than individual based appraisal system. Although, Egan does not use team based appraisal, this kind of appraisal would require the firm to observe more validity and reliability of the performance of the team. This system of performance appraisal would create a positive relationship between the employees and the evaluators, and hence creating a better working environment for the workers (Gatewood, Field & Barrick, 2010).. A major effect of the performance appraisal system used by Egan Clothiers is that the system is used to punish the poor performers by not promoting them and giving them a lower ranking. As much as the system is effective for improvement of productivity among the employees, the system fails to consider many other factors such as satisfaction to the workers, personal goals and self-esteem. The system may be less effective because of restrictions and conditions. For instance, an employee can only be classified as superior if he or she sells more products (units). The system fails to see other abilities and talents of the employees that could be utilized elsewhere in the organization’s operations. The appraisal system is blinded to one side of productivity hence neglecting other factors and abilities of an employee. The rating method used by Egan’s Clothiers has a halo effect in that the graded characteristics will influence one another. This is due to the fact that any performance which is considered to be acceptable by the management may result to the manager reiterating the standards that are required and reaching onto an agreement. The steps will be used to determine an employee and it would end up being hard to rate one’s output as poor. This kind of system is inappropriate not unless the characteristics are explained adequately. What overall changes should be made to the appraisal system? Since the performance appraisal method that is being used by Egan’s clothiers is not effective, there would be a need for an overall restructure on the existing system. The management would be required to change into incentives such as rewards in terms of money on the total sales for each department. This would be better than assigning the employees within the five categories; good, very good, superior, poor and fair. This way the self esteem of the workers would not be affected. Reward appraisal system gives a systematic way to achieve positive consequences. Cost is an important factor in reward and for organizations that are service oriented. This system contains various processes that are interrelated and activities are performed effectively in order to achieve the goals of an organizations and to maintain the value of an employee. This kind of system has monetary rewards which are variable or fixed and non-monetary which incorporates the benefits to the employee. When they are put together they form a total remuneration (Brown, Hyatt & Benson, 2010). In order to achieve an effective reward system, concise and clear objectives are stipulated. The first thing is to ensure that the employees are satisfied in the workplace. The reward system is effective because it aims at propping the achievements of organizations and the operational objectives. It also facilitates communication and it supports expected behavior and attitude, promoting development that is continuous among the employers and the employees. This will facilitate the firm attaining a competitive market of employment and enhancing team work, gaining fairness and equity, as well as promoting flexibility (Thurston Jr, & McNall, 2010). For example, Egan’s clothiers would be required to calculate the profits per every hour of labor for the team in each department in the store at an interval of four weeks. The teams that attain a certain threshold would be given a bonus in their next salary. This method, the pay for performance system, would be better than the rating system. This is because the appraisal is generally given for certain results of performance rather than the time used for a particular job. This way the job satisfaction of the workers in the Clothier would be raised. The other method that would be appropriate would be assigning the best person for a particular task. This would be assigning responsibilities according to an individual’s abilities and talents. This would result to employees be motivated and generating anxiety of reward. This method would indirectly motivate the workers in the Clothier. People differ in their aptitude and in their abilities and people do not perform in the same way. This is because every person is gifted differently and each holds different abilities. Therefore, it would be appropriate for the Egan’s clothier to allocate tasks and projects to employees according to their abilities and experience. Workers show difference in their quantity and quality of work that they are able to achieve within a given period of time. It is however, important to understand the differences between one employee and another and weigh their performance at work, accordingly. It is therefore appropriate to promote an employee based on their abilities, talents and commitment to work. This is because promoting an individual would mean assigning that employee additional roles and responsibilities. This method would also be effective because the operations of the organization would be allocated to the best employee with suited abilities to achieve its objectives. When an employee is allocated a task in the organization, he or she will dedicate specialized skills and time into working on the task. This is called specialization (Bacal, 2012). Job specialization results to better results and better services to the customers. For instance, Egan would allocate sales tasks to employees that specialize on different sectors of products such as ladies clothes. This would result to improved performance in that department attributed to dedicated time and specialization. This would have ripple effects in the long run because that particular employee would train others who later specialize in that department. Egan’s Clothiers cost of training would be cut and resulting to more benefits in the business. Conclusion The rating system of appraisal that is used by Egan’s Clothiers is effective but it does not take into consideration the satisfaction of the employee and customers. The case study reveals that the customers would harass the clients in order to increase their sales. This shows that the organizations neglected some objectives with the aim of increasing sales. The interests of the customers and the employees’ welfare were overlooked. By rating the workers based on their performance and categorizing them, their self esteem was lowered. However, with better human resource management the existing performance appraisal can be reconstructed to achieve better results and employee’s satisfaction. This would be achieved by allocating the employees tasks and responsibilities based on their abilities rather than their sales outcome. The reward system would also motivate the employees into achieving the goals of the organizations. This would be effective and efficient for both the organization and employees. References Bacal, R. (2012). Manager's Guide to Performance Management. McGraw-Hill. Brown, M., Hyatt, D., & Benson, J. (2010). Consequences of the performance appraisal experience. Personnel Review, 39(3), 375-396. Gatewood, R. D., Feild, H. S., & Barrick, M. R. (2010). Human resource selection. Cengage Learning. Selden, S., & Sowa, J. E. (2011). Performance management and appraisal in human service organizations: management and staff perspectives. Public Personnel Management, 40(3), 251- 264. Snell, A. S., & Bohlander, G. W. (2011). Realigning HR Practices at Egan's Clothiers. In A. S. Snell, & G. W. Bohlander, Managing Human Resources 16th ed (pp. 747-749). Cengage Learning. Thurston Jr, P. W., & McNall, L. (2010). Justice perceptions of performance appraisal practices. Journal of Managerial Psychology, 25(3), 201-228. Read More