Performance Evaluation
CEO
From: Non-CEO
Re: Internal Performance Evaluation System
Purpose of the Evaluation System
For the company Whole Foods, an internal performance evaluation system should be in place to ensure that the company maximizes its success and profitability. A performance evaluation system is necessary in order to implement internal control on the managers who work within the company. There are several reasons for this. It is important to remember that with a formal performance evaluation system the company insulates itself against the risks posed by wrongful termination or discrimination lawsuits, since the company can support all personnel decisions with empirical data. Landy (1978) notes that performance evaluation can also help the company to identify goals, eliminate weaknesses and provide supervisors with accurate measures of subordinate performance, not to mention improving the perception of procedural fairness in personnel decisions.
The industry is the grocery retail industry, and there are a number of measures already in place. With electronic scanning, Whole Foods already has access to a substantial amount of data that can be used to evaluate performance of managers and front-line employees alike. For established stores, there is also longitudinal data that can be used to track performance over time, during periods where the store has different managers, or just in relation to the performance of nearby stores.
Gjerde (2007) notes that the value of a performance evaluation system lies in its ability to generate information that managers can use. Thus, it is critical that this system is designed with specific objectives in mind. The improvements that the company derives as the result of this system should relate entirely to ability of the system to deliver results that help managers to save the company money on operations, or earn it more money. Managers in particular need to be motivated by these two outcomes, so the performance evaluation system will provide Whole Foods with the opportunity to measure such outputs, and make these measures a part of the way that managers are motivated and incentivized within the company.
The objectives of the system therefore are going to be to find ways to...
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