Page 159 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes 5. An ethical performance management seeks to build or change culture to a state in which
the vision of the organization includes its employees, its customers, and the society at large.
The organization’s values and norms support employee’s decision making, behaviour, and
actions consistent with an ‘ethical’ vision.
6. An ethical performance management system provide fair and free environment to its
employees so that employees can get the opportunity to scrutinize the basis upon which
the important decisions were made.

13.3 Ethical Issues and Dilemmas

“An ethical dilemma is not a choice between right and wrong, but a choice between two rights.”
– Rushworth Kidder (1995)
Many managers talk about ethics but do not recognize or act upon ethical issues in their day-to-
day managerial responsibilities. Most ethical questions arise from people relationships within the
organization. Recent survey results in one large organization indicate that only 26% of managers
believe they are recognized and reinforced for their ethical decisions and behaviors.
Performance management is essentially a commitment-based system of the organization which
seeks to align employee action and behaviour towards the desired organizational goals. Most
organizations understand that employees tend to engage in behaviour that is recognized and
rewarded, and avoid behaviour that is penalized. As employees are the key to the organization,
their beliefs, values, behaviours, and actions have a profound impact on the organization’s
outcomes.

Example: ABC Ltd. is having performance-based reward system. One of the employees
has done an outstanding job all year, so he deserves strong recognition. However, he is already
paid at the top of the salary range for his job grade and ABC Ltd. has too many people in the
grade above him, so the company cannot promote him.
Some of the ethical issues and dilemmas are listed below:
1. Performance Appraisal: Performance appraisal lends itself to ethical issues. Assessment
of individual’s performance is based on observations and judgement. HR managers are
expected to observe the performance in order to judge its effectiveness. Often managers
tend to rate those employees highly whom they consider to be their loyalists. They infl ate
their performance ratings and reward them for performance they have never exhibited,
or perhaps could never deliver. Such managerial unethical behaviours and actions have a
detrimental effect on the rest of the employees including performers.
2. Value Confl ict: Every organisation has its own set of core values and the organisation
expects that its employees should honour and practice these values. On the other hand the
employees also have their own set of values and goals. They want follow their own value
rather than the organisation’s values.
3. Politics on Workplace: Workplace politics is the major concern in these days. According
to a survey it is estimated that 18 per cent of an administrator’s time is spent resolving
conflicts among employees. It states that use of such intentional behaviour is designed to

acquire power or to protect their self interest.
4. Employee Engagement: Many talented employees’ shows dis-interest to their jobs. They
tried to maintain the minimum level of performance to hold on to their jobs. They spent
their times on other unnecessary activities.

Example: Employees using their organization’s Internet access for personal
purposes during work hours results in productivity losses.

154 LOVELY PROFESSIONAL UNIVERSITY