Brief Background on Merck Performance Appraisal System The past and existing performance appraisal of Merck was ineffective to identify and reward performance to a certain Although the company was paying their employees around seven to eight percent more than the average compensation in other large the performance appraisal system did not clearly identified outstanding which caused inequity in rewarding performance and led to unhappiness among the especially the high Compared to the average there was only marginal increase in salary for outstanding Without proper recognition and the company was at risk of losing its high performers and keeping the worst Core Problems and Its Causal High Degree of Criterion Deficiency and Criterion Contamination The core problems identified for inequity in performance appraisal was the high degree of Criterion Deficiency and Criterion Contamination in performance forced distribution in performance rating and biasness in performance There were 3 causal for the core The 3 causal were the absolute performance rating salary determination under the old plan and biasness in Recommendation Using Core Concepts to Solve the High Degree of Criterion Deficiency and Criterion Contamination The 3 proposed recommendation to address the 3 causal are identifying conceptual criteria through job analysis to eliminate
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