Merrill Lynch Essay
Merrill Lynch & Co, Inc - Merrill Lynch Essay introduction. is basically an international financial firm established in 1914 by Charles Merrill. As the company succeeds several other firms merged with Merrill which forms what the company is today. Nonetheless during the Enron crisis, rumors that connect the phenomenon to Merrill Lynch spread which affects future investors and trust of shareholders. As the company struggle to gain back the confidence of the people, the September 11 incident, more than ever, shatters the capability of the management team. According to Moorhead and Griffin, there are three employees of the company that died. Thus a reevaluation of the company’s goals and priority changed. The company focused on organizational behavior through targeting the firms reward and performance management systems.
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Accordingly, Moorhead and Griffin described the old reward system as mainly distributed to those who have higher ranks. Weighing employees against one another had been Merrill Lynch strategy to justify employees’ performance. Nonetheless, as the company acknowledges that a changed on organizational ranking strategy is needed, there had been a realization to the importance of improving performance.
With regards to this, Linda Murphy, Merrill Lynch’s director for global performance management, shifted the concentration on coaching, evaluating feedbacks and performance and the conversation that transpire between the manager and their employees. The main goal is cooperation rather than the former competition. Both the employee and the manager work towards their set objectives. A standard is therefore set by both the employee and the manager, such that possible competitions between employees are reduced. This way the goal difficulty and specificity are given. This compromise or lessen goal acceptance and goal commitment since employees are able to set and/or modify their goal/s.
Another part of the new strategy is to use a 360-degree feedback system. Such system encompasses an evaluation made by clients, peers and superiors of employees. Moorhead and Griffin emphasized that peer reviews crucial in employees performance assessment for being a team member.
The 360-degree evaluation system gives way to a more multifaceted account of the employee’s performance. Each component of the feedback system are equally measured and/or evaluated. The superior assessment looks into how the employee performed with respect to the set goals. Client feedbacks, on the other hand, look into customer relations and strategies by individual employee. An employee is believed to reflect the whole company, thus, the client’s perception is crucial in identifying what image does the employee projects the whole company.
The feedback system is beneficial in evaluating the employee. It also provides client the chance to voice out what they think of the performance. Instead on competing with one another, employees are bound to check themselves individually and move towards their specific goals.
The basis or warrant that the employee demonstrates a specific trait depends largely on how other people see his/her performance and how they correlate. However, a problem might arise in the presence of bias and conflict in the workplace. Different clients’ possessed different interpretation and/or perception depending on culture and beliefs. Since Merrill Lynch is a global company, it seems to be a disadvantage for the employees if customers’ feedback has equal weight in evaluation as the two others. Basically, customer reviews are largely relative and subjective. Moreover, clients might be dissatisfied with the company’s performance which might affect the employee’s rating. Despite these odds, I still believe that customers are important source of data for Merrill Lynch; nevertheless, it must not possess the same amount of relevance to the rating system as the other two.
The reward system is bounded on the concept of attracting, retaining and motivating adept and qualified employees. Thus linking pay with performance offers this benefits and at the same tie riding the company off incompetent or unqualified people. Higher pays are generally given to those who have higher ranks, thus, employees often struggle to improve their ratings and to achieve compensations and eventually attain higher positions.
At the same time, Moorhead and Griffin described the way by which the CEO of Merrill Lynch, Stan O’Neal, laid off about one-third of the pay-roll as an effect of cost-cutting. This proved that the industry is somehow minimizing expenses by hiring people who would best fit in a specific job. In such rule, an employee is only given a limited time of six months or less to prove him/her self’s worth.
By pitting pay with performance, the employees would be pay-motivated and would only try to improve their performance if the pay will be higher. Nonetheless, it would be difficult for a company to balance its budget with maintaining compensation programs for the high rating employees. Thus, as explained above, lay-offs would be a number one choice. Since there are less people in the company, some work that is usually done by two or three person, at least will be the job of one person alone.
If the compensation is set lower or removed, employees would lose their interest in the job. Other than that, the employee upon losing motivation might also deliver lower quality of work which would induce the risk of being laid off. Linking pay with performance also established higher competition among employees and managers. A higher offer from another company would be tempting and for a ‘pay-motivated’ employee would be a very rational choice.
Moorhead, G. and Griffin, R. (2006). Organizational Behavior: Managing People and Organizations. 8th Edition. South-Western College Publications.