Case Study:

It is time for Mahfooda’s annual performance appraisal and Mustafa, her manager, has sought your advice on two problems which he has identified as “motivation” and “organization’s systems”.

The appraisal system has a six point rating scale:

1. Excellent 2. Outstanding 3. Competent

4. Acceptable 5. Room for improvement 6. Unacceptable

The annual pay increase is determined by the overall rating of the employee.

Individual Portfolio – Fall 2017

Module: Compensation and Performance Management (BUSS 1703)

Level: 6

Max. Marks: 100

Duration: 5 weeks

Compensation and Performance Management (BUSS 1703)-CW1-Spring-18-QP

BUSS 1703 (QP) Page 2 of 8

Mahfooda was recruited into Mustafa’s team 18 months ago. She took about 5 months to learn the job

and achieve competence. Accordingly, at last year’s appraisal she and Mustafa agreed that an overall

rating of “4” was appropriate. Mahfooda worked hard and developed her competence so that she was

able to expand the range of her activities and perform better.

How-ever, in the last 6 months, the company has been facing tough times and has been forced to

rationalize the manpower to control costs. Workload on each employee has increased as a result of

reduction in the manpower. Mahfooda has been working hard to learn new skills and has accepted more

responsibilities as a result and therefore has a much more enriched job. How-ever, as she still has to

develop new skills further, her performance is still “4”. There are aspects of her performance which she

could improve.

When Mustafa met Mahfooda to agree the time for the appraisal interview, she jokingly said- “I warn

you, I am looking forward to a respectable pay rise this year.”

Answer the following questions:

1. Why does Mahfooda feel that she deserves a pay rise- for her efforts or performance? (3 marks)

2. According to Mustafa, is Mahfooda right in her expectations of a pay rise? (3 marks)

3. Can Mustafa meet her expectations? Why? (3 marks)

4. Is Mahfooda’s job different from what it was when she first started? What do you recommend to

Mustafa regarding job-evaluation of Mahfooda’s job? (3 marks)

5. What shall be the consequences if Mustafa over-rates her present performance to give her a payrise?

(3 marks)

6. What shall be the consequences if Mustafa recommends re-evaluation of her job in view of

higher responsibilities and then rate the performance in light of new re-evaluated job? (3 marks)

7. What would you recommend to Mustafa regarding above-mentioned choices? Why? (3 marks)

8. What Mustafa can do to keep Mahfooda motivated even without an expected pay-rise? (3 marks)

9. Should appraisal system also recognize efforts rather than performance alone? Justify. (3 marks)

10. What are Mustafa’s constraints as a manager with respect to company’s appraisal system and the

remuneration system? (3 marks)