Business Ethics Essay Example | Topics and Well Written Essays - 1500 words - 2

Business Ethics - Essay Example Throat cutting competition and desire for growth is pushing companies to make every possible effort to improve their performance. It was during the 1950s when experts used the term â€Å"performance management† to refer to the systematic and controlled process with which organizations would monitor their performance in order to achieve their goals effectively and efficiently. Today, performance management is a crucial part of every big organization. Despite the fact that the Human Resource Departments are usually responsible for conducting the performance management functions and activities, entire organizations contribute to the process to make it successful (Dresner, pp. 214-219). There are five major pillars of performance management. First, planning the goals and objectives and deciding on the expectations. Second, performance management, as mentioned earlier is also about having a check and balance on the performance of the organization and its employees. Third, performan ce management also binds managers to ensure that there are enough resources available at the disposal of the company, departments, and employees to achieve those goals. Fourth, with the help of balance scorecards and performance appraisals forms, performance management also requires managers to rate and evaluate the performance of individuals and groups. Fifth, lastly, with different pay systems of contribution-based pay, performance based pay, skill based pay and others, and it rewards and appreciates employees for their performance (Cardy, Leonard & Newman, pp. 85-89). Managers all over the world are realizing that many decisions and processes required for performance management necessitate upholding of high ethical and moral standards. These ethical dilemmas are everywhere in the system of performance management. It becomes even more important to answer and address because many decisions concerning the future of the company and the future of its employees, remains depended on the se performance management decisions. Companies use this data for recruitment, selection, layoffs, terminations, promotions, bonuses, pay increases, rewards, demotions, and others (Cardy, Leonard, & Newman, pp. 85-89). One ethical question, which comes up during the performance management of companies, is the fact that whenever companies manage performance of their employees, they are well aware of the fact that the element of â€Å"bias† is embedded deeply in the system. Experts have pointed out many forms of bias, which are present in the system when employees are being rated. First, leniency error when the rater or the manager has the tendency to be lenient, nice, and kind to all the employees because he knows that these ratings would probably decide their future. Furthermore, in order to keep harmony within the group or the department, to gain support, to avoid any tensions or confrontations, managers also try to give above average ratings to all the employees. Second, cen tral tendency error occurs when managers do not want to give very high or very low ratings to anyone. Many managers know that their high and low ratings would force employees to ask them a series of questions, explanations and proofs and the best way to avoid that conversation is by giving them all average rating (Luecke, Hall & Harvard Business School, pp. 321-324). Third, halo effect occurs when manag