John Robertson clearly has his dad's DNA. He purposely chose general performance dimensions because he believes the oil business is fast-changing and demands people who are willing to work with a great deal of ambiguity. He doesn't want to be tied down to specific performance dimensions that employees can then use to "lawyer up" on him if they believe they didn't get a fair shake. He gave average or good ratings to most of his employees. Two employees, though, are causing him some problems. He likes to link ratings to performance. He's inclined to give Billy Ray Jenson a very good rating, and this would be associated with an 8 percent increase. John is reluctant to give Billy Ray this large an increase because he feels he overpaid the Petroleum Engineer to begin with. After all, there are hundreds of people who could fill his job in Texas, and all of them he believes would work for less. He can't rate Billy Ray Very Good and only give him a 3 percent increase. The merit pay guide is known to all employees. John has decided, therefore, to rate Billy Ray only Average. Billy Ray was great on the teamwork and hardworking dimensions. No question. So John has decided he'll downgrade Billy Ray on productivity and quality. Billy Ray has some promising wells that look like they might deliver, and he is right on target with the number of wells sunk in a one-year time frame. But none of the wells have produced yet. So John figures he can rate Billy Ray lower on that. John also has decided to rate Billy Ray lower on quality. There aren't any hard and fast measures of quality, so John can justify whatever he wants to get an overall rating of average.

John has a different issue with Elizabeth Andrews. She is hard-driving and aggressive. She shows great initiative, but he has had many complaints from other engineers that she isn't a team player. They ask her for help using her holographic technology, claiming it will help them decide whether a well is worth pursuing. For the most part she turns these requests down, claiming that she is too busy exploring her own wells. She suggests that the others take the same online class at UT Dallas to learn to use holographic technology. On other dimensions Elizabeth is quite good. She works as hard as Billy Ray, has two wells that are producing already, far better than the industry standard for one year, and there have been no quality problems that he knows of. John is inclined to give Elizabeth an average rating because of complaints from other workers. The guys just don't think she is a team player.

John's Action

John gives both workers an average rating. In the performance review Billy Ray takes the news and feedback stoically. However, six days later he tenders his letter of resignation, effective in one week. Two days after that, though, in a very bizarre move, he asks to have the resignation revoked and return to his job. John accepts his change of heart and continues Billy Ray as an employee.

Elizabeth is far more confrontational. She maintains that she was indeed a good team player, and that others were taking advantage of her so much that she didn't have time to do her own job. She asserts that she took an online course on her own time and at her own initiative, and that others could do that too. Plus, she says, in response to his rating of her on the quantity dimension, she has two producing wells in only one year's time. That is a phenomenal record, she maintains, and certainly better than any of the other petro engineers John hired for the new office. This statement is accurate. Elizabeth says nothing else during the meeting but leaves the office unhappy, perhaps unhappy enough to do something about it.

Question 21(10 points)

What problems do you see in the performance appraisal system and accompanying merit pay system?Did any of these problems contribute to the people problems John had with his two employees in the performance review process?

Should Billy Ray have quit?Why?Should John have accepted his return?What other action might Billy Ray have taken that could have been hurtful to the company?