MICHAEL ANGELO MANGLAL-LAN 1.

Central Tendency Error

SCRIPT FOR HBO
1. The problems of performance appraisal
2. The reward system
3. LESSON APPLICATION
The PROBLEMS of Performance Appraisal
A number of problems can be identified that pose
a threat to the value of appraisal techniques. Most
of these problems deal with the related issues of
the validity and reliability of the instruments or
techniques themselves.

Validity is the extent to which an instrument 2. Varying Standards

actually measures what it intends to measure,
whereas reliability is the extent to which the
instrument consistently yields the same results each
time it is used. Ideally, a good performance
appraisal system will exhibit high levels of both
validity and reliability. If not, serious questions must
be raised concerning the utility (and possibly the 3. Halo Effect
legality) of the system.

Performance Evaluation – the process by which,

through observation by the rater, the individual’s
efficiency in performing his duties and
responsibilities during a given period is evaluated
on the basis of predetermined standards set by the
employee and his superior. 4. Recency Error
- There are queries as to its reliability and accuracy
if evaluation on employee’s performance.
According to the report by the Institute of
Manpower and the Equal Opportunities
Commission of United States of America (1999),
appraisals were found to be riddled with biases.
Performance appraisals, although vary widely 5. Personal Biases
used, have well-recognized shortcomings and
deficiencies. Measuring performance is a
difficult-task. Giving someone else an honest
candid evaluation based on that measurement
is a stressful experience for most evaluators.

FIVE SEVERAL COMMON SOURCES OF ERROR IN

PERFORMANCE APPRAISAL SYSTEMS
The General sources of problems in employee
rating are the Evaluator and Evaluation instrument.
Wherein the evaluator may be guilty of providing
unduly high or low ratings while the evaluation
Note: The EXAMPLE and SOLUTION will be the
instrument is a tool that is not based on job analysis
explanation.
information is defective for it cannot measure what
it purports to measure.
Reducing Errors in Performance Appraisals
A number of suggestions have been advanced
recently to minimize the effects of various biases
and errors on the performance appraisal process.
When errors are reduced, more accurate
information is available for personnel decisions and
personal development. Dagitoy dagijay some
solution that will reduce errors based on the given
5 several common sources of error
• ensuring that each dimension or factor on a
performance appraisal form represents a single
job activity instead of a group of job activities.
• avoiding terms such as average, because
different evaluators define the term differently.
• ensuring that raters observe subordinates on a
regular basis throughout the evaluation period.
It is even helpful if the rater takes notes for future
reference.
• keeping the number of persons evaluated by
one rater to a reasonable number. When one
person must evaluate many subordinates, it
becomes difficult to discriminate. Rating fatigue
increases with the number of ratees.
• ensuring that the dimensions used are clearly
stated, meaningful, and relevant to good job
performance.
• training raters so they can recognize various
sources of error and understand the rationale
underlying the evaluation process.
Extrinsic Reward - external to the work itself.
They are administered externally—that is, by
someone else (usually management).
Intrinsic Reward - represent those rewards
that are related directly to performing the job. In
this sense, they are often described as “self-
administered” rewards, because engaging in the
task itself leads to their receipt.
Examples of the EXTRINSIC and INTRINSIC rewards
1. Extrinsic Rewards
1.1 Salaries and Wages – Money is a powerful
motivator
1.2 Fringe Benefits – These are usually financial
benefits
1.3 Interpersonal Rewards – These are based on
status and recognition
1.4 Promotions – Performance and seniority are
the criteria used in promotions
2. Intrinsic Rewards
2.1 Completion – The ability to start and finish a
job
2.2 Achievement – It is a self-administered reward
taken out of reaching a challenging objective
2.3 Autonomy – It is the right to make decisions
and provide results without close supervision
2.4 Personal Growth – It is enhancing one’s skills
and capabilities on the job

The REWARD SYSTEM

A reward system proves to be beneficial to
organizations. A comprehensive rewards program
attracts qualified individuals to the organization.
Reward system in organizations have far-
reaching consequences for both individual
satisfaction and organizational effectiveness.
Hence, this kind of system will serve as a form of
motivation for employees to perform well.
According to Lawler, rewards can satisfy
employees if they are satisfied with the rewards
provided by the organization.
It is important for managers to develop a
reward system that would satisfy employees’ basic
needs and which can be considered fair and just.
Intrinsic Rewards and Extrinsic Rewards
The variety of rewards that motivate employees
can receive in exchange for their contributions of
time and effort can be classified as
either extrinsic or intrinsic rewards.
THE REWARD SYSTEM (APPLICATION) There is a comprehensive employee training and

Starbucks Reward and Performance each participant must take at least 24 hours

Motivation is one of the main causes for an industry training. Furthermore, this workshop is a set of

in the process of making their production. five different classes which every new

Hence, I present the two types of rewards that employee must complete in the first 45 days

motivate the employees of Starbucks with the company.

Starbucks Corporation, one of the most famous

retail coffee shops chain in the world, specialize
in grinding, roasting, and selling special coffee
beans and a variety of coffee or tea drinks.
Starbucks always meet its customer’s requirements;
Internal Pay Equity
A situation in which employees who do similar jobs
within a company receive similar salaries, and
the amount they are paid is related in a fair way

they achieve a good motivation of their to the type of job that they do.

employees which will be beneficial on its
internal and external customers.
Someone think that to measure a company
success or not, is based on the profit that this
company earned. But in these days, the
attitude should be changed due to the global
market changing. For staff has become one of
the most important factors in company
Motivation strategy has been used in company,
which helps team work more efficiency, also the
strategy can attract higher degrees or perfect
skills workforce. Motivation strategy has
become a very important system for company
operation management.
Starbuck is a good model, they well-known for
satisfaction of employees.
Starbucks believes that motivation and personal
satisfaction should be put into first rank. A
respectable connection between managers
and employees could maintain a high quality of
performance.
Narrow the gap among managers and
employees, managers co-work with the basic
level staffs in the front line
The managers in Starbucks take care of each
employee equally and all the staffs are called
“partners”.
Listen to Employees and Empowerment
Starbucks has a well-organized communication
channel for employees. It places a huge
importance on labor.
Employees even have the right to figure out what
is the best policy for them, and directors show
respect for each suggestion
Starbucks promotes an empowered employee
culture through generous benefits programs.
Employees are empowered by management to
make decisions without management referral
and are encouraged to think of themselves as
a part of the business.

Intrinsic Rewards
1. Training Policy
2. Internal Pay Equity
3. Listen to Employees and Empowerment

Training Policy
Starbucks former CEO, Howard Schultz, considers
that the key of success in Starbucks is not coffee
but employees. He believes that happy
employees are the key to competitiveness and
growth. Starbucks gives opportunity to
employees and allow them to learn something
new;
Extrinsic Rewards
1. Fringe Benefits
2. Pay for Performance
Fringe Benefits
These benefits promote loyalty to a company so
employees can stay longer, which also helps
employees meet its social need. Also, all
employees are entitled for insurance coverage
after being with the company for at least two
weeks.
Starbucks comprehensive benefits package
includes: medical, vision and dental, short-term
disability insurance, as well as holiday and paid
vacation, mental health/chemical
dependency benefits. The CEO of Starbucks
believes that without these benefits, people do
not feel economically or spiritually tied to their
jobs.
Pay for Performance
Starbucks as a successful company is tying reward
directly to employee performance to drive
unbelievable business results. Pay-for-
performance is providing to be successful at all
levels and in all functions of the company
Starbucks, it is a considered a top tool by senior
executives for achieving better financial results.
And for good reason: a strong pay-for-
performance culture has the capability to
release their employee performance potential,
keep Starbucks’ employees happy, and
eventually drive a healthier bottom line.
Pay-for-performance culture helps Starbucks
improved motivation by combining clear
direction, quality feedback and tangible
rewards, and recognition-key components to
job satisfaction and employee commitment.
Cost savings is another advantage by using pay-
for-performance as company can only reward
individuals whose performance help attain key
corporate objectives
CONCLUSIONS
Starbucks changes the behaviors and point of view
of global consumers to coffee and this thriving
example has caught global attention.
Starbucks shows that motivation is the
fundamental factor of a company policy.
In addition, motivation and personal satisfaction
should be set into first rank. A good connection
between managers and employees could
sustain a high quality of performance.
References:
Hwang, V. (2004). Creating a unique blend: total
rewards at Starbucks. Strategic HR Review, 3(4),
12-13.
Starbucks Develops Survey to Better Understand
Employee Performance. (2012). HR Focus,
89(10), 15.
Starbucks - investing in people as a route to profit
and growth. (1997). Industrial & Commercial
Training, 29(4), 137-138.
Sun, P., Hsu, W., & Wang, K. (2012). Enhancing the
commitment to service quality through
developmental and rewarding systems: CSQ
consistency as a moderator. The International
Journal of Human Resource Management,
23(7), 1462. Retrieved from
Zarate, C. (2006). Organizational Behavior and
Management in Philippine Organizations.
Manila: Rex Bookstore
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