Utley Food Markets

A pay-for-performance system will have several implications for Utley management. The first is that management will need to define "performance." At present, there are no performance measures for the company. Employees do not know what constitutes good performance and that will have to change. A scale will need to be devised wherein rates of pay are pegged to specific performance levels. In addition, it is advised that the pay-for-performance scheme be equitable across all job grades in the organization. In addition, management will need to negotiate the pay-for-performance plan with the union, since it will be unable to address the issue of pay without union agreement.

Management will also need to make many adjustments to the ways in which it evaluates employees. The current system will need to be discarded. Management will need to become familiar with setting and measuring quantitative measures. While the current system may be subject to bias, any pay-for-performance system that is expected to successfully motivate workers will need to be free from such bias. Thus, management is going to need to be prepared to be objective in evaluations for the first time ever.

2. There will be no changes made to the current system. It will be completely eliminated. Not a trace of it will remain. The new system will be built based on quantitative measures that are objective and relevant to the job. The current system contains none of the attributes of a professional performance appraisal system. The employees do not understand what is being measured or how it is being measured. Management does not know either -- evaluations are subjective and arbitrary. The system is wide open for abuse and there is no mechanism by which employees can understand their own appraisals or to contest them. A new system must be completely rebuilt with job descriptions, quantitative measures, appropriate training for management and for the employees, a system for appeals and full transparency.

3. The first step will be for management to design the new system. This will require designing job descriptions that are relevant to the work that the employees do. Once the job descriptions are in place, these will need to be communicated to the employees. The employees must know the ways in which their performance will be measured (Allan, 1994). Then, management will need to design rewards for meeting these measures. The rewards must be relevant to the job description, they must be achievable and they should ideally orient employee behavior towards Utley's strategic objectives. In addition, the system design needs to include a review and appeals process so that employees can contest the reviews should they feel that the review is inappropriate.

Managers will need to be trained on this new system -- they cannot be expected to shift instantly from the previous…