Explain the various methods used to evaluate the performance of employees?
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Explain the various methods used to evaluate the performance of employees?
Transcribed Image Text:You are the manager of Canadian markets for Excite Travel, a firm that provides incentive
travel, meeting management and event planning to a range of companies from the tech start-
up to the Fortune 500. In your department, you have reporting to you two customer service
agents who work with clients from the design phase to implementation. Anna, the longer
serving agent, is great at providing ongoing service to Excite Travel's established market; her
revenues are about 20% higher than those of the other agent, Maria. Maria, less experienced
than Anna, has been very effective in bringing onside new clients for the firm and has shown
a skill for innovation; her revenues have been growing at a faster rate than Anna's. In a recent
career discussion, Maria has indicated some impatience with her lack of opportunity at Excite
Travel.
Each year, Excite Travel provides an annual bonus to each of its employees. The bonus
assigned to each person takes into account not only the revenue produced but also the full
1
contribution of the individual to the firm. In the past, Anna has received more bonus than Maria.
Last year, for example, Anna received $2,500, while Maria received $1,500.
This year you have $6,000 to distribute as performance bonuses; $2,000 more than in
previous year. You need to decide how to divide the bonus allotment between Anna and Maria;
and, whatever your decision, you need to plan how to communicate to Anna and Maria your
decision. While your discussion with each of the women will focus only on them, you are well
aware that they might share information about their bonuses with each other.
Anna and Maria tell each other what bonus they received. Maria, however, who feels Anna
tries to lord it over her too often, lies and tells Anna that she has received a bonus that is
substantially more than the one Anna received. Anna feels she is being treated unfairly and
comes to you to complain. She is very angry and threatens to quit unless the company is
prepared to address the unfair bonus situation by giving her more money to stay on.
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