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Throwback Brewery: Personnel Performance Appraisal Decisions to Ring in the New Year
Thitiwut Kiatvisansri
ID 1397096
MGMT90015 Human Resource Fundamentals
Class time: Thursday 16.15 -19.15 (Dr. Senani Rajamanthri)
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Throwback Brewery: Personnel Performance Appraisal Decisions to Ring in the
New Year
Throwback Brewery was considering implementing a new performance appraisal system
to extract their employees' full potential. They were also considering the structure and formality
of the performance appraisal process and the potential use of a sample performance appraisal
form obtained from another craft brewery. Throwback’s main concerns are ineffective
communication with staff and the lack of a structured performance appraisal system. In this
paper, the analysis of the existing HR system, involving the areas of good practices and
improvement, will be discussed. Additionally, a new performance management and appraisal
system will be introduced and evaluated.
Analysis Throwback Brewery’s existing HR system
Positive Sides
Since Throwback was a small brewery company, the HR system was simple and not well
designed. Throwback did not have a structured performance management and appraisal system.
The present HR system, though, still has some constructive sides. First, the evident internal
strength is a low turnover rate of under five per cent in 2018 and 2019. This shows Throwback
created a positive work environment and had a high level of employee satisfaction showing their
willingness and commitment to stay rather than leave the company. Karsh et al. (2005)
uncovered that job commitment and job satisfaction were factors that can predict an employee's
intentions to leave their job. The low turnover rate indicates that employees are satisfied and
engaged with their roles at the brewery. Furthermore, they found that both intrinsic and extrinsic
satisfaction and organizational commitment are essential predictors of intentions to stay. Also,
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the low rate decisively confirmed that the company was successful in hiring the right people
because they were, as said, satisfied with their role. It also means the employees perceived their
job characteristics and work environment as supportive. Chiedu et al. (2017) posit that when
employees are satisfied with their jobs, they do not want to leave the organisation, as shown by
the low turnover rate. Hence, their commitment to the organisation is high. Another supportive
factor is that team leaders were given autonomy to manage day-to-day tasks, which increased job
satisfaction (Federici, 2013). Second, Throwback emphasized employee engagement and a
positive work environment, which had a significant impact on employees. Considering employee
engagement, Tanwar (2017) revealed that increased employee engagement led to better
employee-employer relations, less conflict, and absenteeism, and improved work effectiveness
and efficiency. This enhances employees' knowledge, leading to better performance and
reputation of the organization, and faster advancement. Also, Galletta, 2016 unequivocally
confirmed that, at the individual level, job satisfaction and team affective commitment are
essential factors for retaining staff, as evidenced by under five per cent turnover rate. Referring
to the positive work environment. According to a study by Darmastuti & Oi (2023) pointed that
the work environment had a positive and significant effect on employee performance and job
satisfaction. Finally, the commitment to core values, such as kindness, excellence, and
community support, indicates that the company prioritizes a supportive and inclusive workplace
culture, contributing to a positive and fulfilling work environment for employees. The core
values suggest that the company values respect, teamwork, and continuous improvement, which
can foster a sense of purpose and satisfaction among employees. Erro-Garcés & Ferreira, 2019
indicated that Workplace “climate” had a significant positive impact on job satisfaction. For
Throwback, having a positive workplace climate will lead to higher job satisfaction.
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Overall, Throwback's focus on employee engagement, satisfaction, and a positive work
environment results in higher employee retention, increased productivity, a low turnover rate and
a more fulfilling work experience for the staff.
Areas of Improvement
The existing HR system also presents some shortcomings. First, the most obvious
weakness is Communication issues, with employees expressing a desire for more recognition
and communication from the owners. Some employees questioned why they received pay raises
without any explanation. This indicates a potential disconnect between the employees and the
leadership. The employees sought a greater sense of involvement, appreciation, and
understanding of their contributions to the company. This could impact their job satisfaction,
engagement, and motivation. Pincus (1986) uncovered that Organizational communication
satisfaction of employees positively impacts job satisfaction and job performance. As the
employees at Throwback expressed concern over the communication issue (i.e. they were not
satisfied with how successfully the owners communicated with them), it can signal that in the
future, they will be even more discontented with job satisfaction problems. Although Annette and
Nicole recognized the need for improvement in communication and implemented measures such
as weekly meetings to address this issue, the employees' feedback indicated that more efforts
may be needed to bridge the communication gap and enhance recognition.
The second weakness is the disparity in wages between frontline workers and behindthe-scenes staff which can have significant effects on employee morale, motivation, and financial
well-being. The front-line workers, such as bartenders, earned approximately 30% more than
employees working behind the scenes, such as cooks and brewers. Tekleab et al. (2005) found
that pay raise satisfaction was significantly and negatively related to turnover. If Throwback
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cannot sort out the wage gap properly, the turnover rate will increase. This wage disparity can
also lead to employee disobedience actions, worsening employee morale, disincentivizing
productivity improvement and encouraging workplace controversies (Osiichuk,2022). As
Ukaegbu (2000) explained, for employees working in a depressed economy, as in the case of
New Hampshire’s high cost of living, the extrinsic working conditions (e.g. wage) and equity
factors (fairness in wage payment) of their work were stronger predictors of employee
commitment than intrinsic/responsibility components. This notion is further confirmed by the
study by Ahmad (2018) that the employees attach their job satisfaction feelings more toward the
extrinsic worth of the job than the intrinsic worth. Therefore, Throwback needs to bridge the
wage disparity between two types of staff as soon as possible to pull back their job commitment.
The study by Ahmad (2018) suggested that employee’s perceived costs and benefits are
associated with employee turnover intentions. If not appropriately addressed, the turnover rate
will increase.
The last weakness is that the lack of a formal performance appraisal system contributes to
uncertainty and a lack of clarity for employees regarding their performance, recognition, and
career development. The absence of a well-structured appraisal system can lead to ambiguity
about job expectations, performance standards, and opportunities for advancement. Subordinates
may feel uncertain about how their work is being evaluated and recognized, which can impact
their motivation and job satisfaction. Pettijohn et. al (2001) verified that when appraisals provide
clear criteria, the criteria meet with the salesperson’s approval, and the appraisals are perceived
as fair and used in determining rewards, salesperson job satisfaction increases. So, if Throwback
cannot establish a structured system, it will lead to lower job satisfaction. This notion conforms
to the study by Setiawati, T., & Ariani, I. D. (2020) that performance appraisal fairness and job
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satisfaction have a positive and significant influence on job performance. Moreover,
performance appraisal fairness and job satisfaction have a positive and significant influence on
employee commitment. They further suggested that companies should maintain fairness in
performance appraisal practices to enhance employee job engagement and ultimately increase
job satisfaction and intention to stay.
In summary, the communication issues, wage disparity, and absence of a formal
performance and appraisal system can impact employee morale, job satisfaction, and overall
clarity about their roles. These issues can have implications for employee retention,
organizational culture, and the overall effectiveness of the brewery's operations.
Question 2
In designing the new HR system, this paper will suggest some improvements and
consider recent trends in performance and appraisal management. Researchers commonly
acknowledge that the performance appraisal process often leaves managers and employees
dissatisfied (Taylor et al. (1995). Nonetheless, performance appraisals provide employees with
formal feedback to help them identify areas for improvement (Tziner et al., 2005). Notice that
small companies like Throwback, which had few departments (low complexity) and high
coordination (work closely together) tend to use performance appraisals for within-individuals
comparisons and system maintenance. They focus more on developmental use, such as
identifying strengths and weaknesses and monitoring goal achievement. Therefore, workforce
must develop a broad range of technical and interpersonal skills to function effectively and
successfully (Cleveland et al.,1989).
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Considering the problems the existing HR system had, to Overcome the communication
problem, Throwback should first implement More Frequent “Check-Ins” and have a
structured communication channel between management and employees to manage the
communication issues. Throwback had no official or agreed-upon communication channels with
no specific date and time provided to the employees. The meetings can be in the form of
informal one-on-one or team check-in meetings between workmates and their direct supervisors
to discuss progress, challenges, and goals. Likewise, Throwback should encourage open
communication and provide a platform for employees to express concerns and receive feedback.
Cappelli & Tavis (2016) suggested that many companies are now opting for more frequent and
development-focused conversations between supervisors and members of the workforce due to
the rapidly changing business environment requiring agility, which argues for regular check-ins
with employees. This is due to the Rigidity of annual appraisals. They are often mandated and
inflexible, which poses a problem for companies whose projects can vary in duration from weeks
to months. As a result, the review process should be flexible enough to accommodate the
changing work environment. Boice & Kleiner (1997) proposed that the company should perform
employee reviews frequently and on an ongoing basis; the time period may vary based on
organizational needs. Likewise, they also pointed toward creating an efficient performance
appraisal system that necessitates a firm dedication from the upper management. The company
should encourage a culture of continuous feedback and recognition, where managers and staff
can provide informal feedback on a regular basis. Frequent feedback allows for rapid monitoring
and correction of inefficiencies and flaws, increasing flexibility (Mertens et al., 2021).
Mertens et al. (2021) also suggested that Frequent feedback has the following benefits:
First, it is crucial to cultivate a feedback-friendly culture, enhance attitudes toward feedback in
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the workplace, and help employees become comfortable with receiving feedback rather than
seeing it as unpleasant. Hence, one would expect that more frequent feedback could improve
employee well-being and lead to better performance. In general, research has shown that
frequent feedback is positively associated with favourable employee attitudes (Tseng et al.,
2019). To support my idea that “more is better”, Kluger and DeNisi (1996) proposed the
Feedback Intervention Theory (FIT), which advocated that more frequent feedback normally
produces more effective feedback interactions. Coupled with frequent check-in meetings, I
suggest Throwback’s HR system to create feedback‐friendly cultures. This kind of culture is
delineated as a culture of open and informal feedback is encouraged, where feedback is viewed
as a two-way exchange of information (Mertens et al., 2021). The goal is to encourage
employees to initiate feedback conversations with the supervisor. Creating such environment has
been linked to better job satisfaction, less role ambiguity, and reduced burnout rates. (Mertens, et
al., 2021). However, organizations should help managers provide feedback by equipping them
with proper tools, such as training on how to conduct effective and supportive feedback.
In sum, more frequent meetings will result in improved Communication. They can
facilitate open communication, allowing employees to express their concerns and receive
feedback from the owners; enhance transparency and build trust within the organization.
The next benefit is Recognition and Engagement. Frequent meetings provide
opportunities for the owners to recognize employee contributions, provide feedback, and show
appreciation. This can boost employee morale, motivation, and engagement with the company's
goals. Tziner et. al (2005) found that Feedback frequency is positively related to employee
appraisal reactions, which are measured by perceptions of accuracy, performance appraisal
fairness and utility, satisfaction with the appraisal, motivation to improve performance, and
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perceptions of organizational justice. That means having more frequent meetings and supportive
feedback; Throwback Brewery can have more favourable reactions from employees to appraisal
feedback.
However, the cons of more frequent meetings are as follows. First, Frequent meetings
may consume valuable time for both the foremen and the workforce, potentially impacting
productivity and operational efficiency. Next, excessive meetings can lead to meeting weariness,
causing staff to feel overwhelmed and less productive. So, it is essential to balance the frequency
and duration of meetings to avoid burnout.
Second, Throwback should apply Multi-Source Feedback. It is commonly used widely
(London & Smither, 1995). Multi-Source Feedback imposes that jobholders receive input from
peers, subordinates, customers and supervisors to gain a comprehensive understanding of their
performance. They use multi-source feedback to identify strengths and areas for improvement,
promoting a holistic approach to performance evaluation. The pros of Multi-Source Feedback is
that it can help individuals gain a better understanding of how they are perceived by others,
leading to a more accurate self-assessment of their goals and abilities. It is also beneficial for
self-understanding, development, and performance improvement (London, M., & Smither
(1995).
Considering the case, some issues need to be addressed. First, as evident, most
Throwback employees were female, and the craft brewing industry was dominated by males. The
new HR System should consider diversity and inclusion. In other words, there is a need to
incorporate Gender Balance by actively promoting diversity and inclusion in recruitment and
hiring processes to ensure a balanced representation of genders across all levels of the
organization. Second, role confusion needs to be discussed. Throwback’s team servers took the
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role of a general manager (GM). For example, Annette needed to remind frontline staff not to
treat Lead Server as a manager. As a result, the role of the Lead server was blurry. This situation
may create confusion among staff about the Span of control or whom they should report. Annette
and Nicole must clarify Job Responsibilities. It starts by clearly defining the roles and
responsibilities of each position within the organization and providing detailed job descriptions.
This clarity helps employees understand what is expected of them and reduces role ambiguity.
Next, the new HR system should have a transparent and fair compensation structure
that addresses wage disparities and the blurry appraisal system. As illustrated, frontline labourers
received more than 30 per cent than behind-the-scenes workers. I agree with Annette, who saw
and was aware of this wage disparity. Uraon & Kumarasamy (2024) found that Perceiving
justice in performance appraisals positively impacts job satisfaction, employee engagement, and
retention. Accordingly, if they perceived the pay system to be fairer, they tended to have higher
job satisfaction and job engagement. Third, the HR system, particularly a formal performance
appraisal structure and system, should be formed since many employees said that little was
known about the performance appraisal system, leading to uncertainty about job performance
and recognition. A performance appraisal system is designed to either motivate future
performance through rewards or identify poor performers for corrective action or separation from
the organization. (Murphy, 2020).เปลี่ยนคำแล้ว)). Moreover, many corporations use performance
management systems to ensure that the performance goals and activities of employees, work
groups, departments, and divisions are aligned with the overall strategic goals of the
organization. These systems support employees in executing plans and strategies that help the
organization achieve its goals.(Murphy, 2020).เปลี่ยนคำแล้ว). I do believe that Throwback needs
to have a formal performance appraisal system because at least it is still a reliable and acceptable
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tool to measure performance based on various criteria and can answer the curiosity about the
employee’s performance. Emphasis on Meaningful Feedback is another point that needs to be
merged into the system. Encourage supervisors to provide timely, actionable feedback that
supports employee growth and contributes to improved performance (Murphy, K. R. (2020).
เปลี่ยนคำแล้ว
By adapting the sample of the formal performance appraisal form, this form could be
customized to meet Throwback's specific needs, providing a structured framework for evaluating
employee performance. However, it is essential to ensure that the form aligns with the company's
values and culture, and that it does not create unnecessary bureaucracy or hinder open
communication.
Lastly, Throwback should not have a traditional performance appraisal system such as a
checklist of an employee’s traits in the form of statements, Bell curve method, Straight Ranking
Method etc. Instead, the system needs to focus on the following factors. First, Throwback should
have a Continuous Improvement measure. It can promote a culture of continuous
improvement by iteratively refining performance management practices based on organizational
needs and employee feedback (Murphy, 2020).เปลี่ยนคำแล้ว For example, the system should not
assess only the performance evaluation; it should include brewery industry-specific needs such
as Innovative Recipe Development (e.g., the introduction of new flavours, use of innovative
ingredients, and successful launch of new beer styles or limited-edition brews), stringent safety
protocols and compliance standards, sensory analysis etc. IBISWorld’s Craft Beer Production in
Australia report (2023) reported that beer purchasers are focusing on quality over quantity in
their alcohol consumption.
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In sum, Throwback’s new HR system should have more frequent meetings, which will
solve communication problems and recognize employee contributions. It also needs to apply
Multi-Source Feedback, which will provide a comprehensive and holistic view of appraisal. The
new system should have a transparent and fair compensation structure to address the wage gap.
Role ambiguity needs to be solved by clarifying Job Responsibilities The system should have a
Continuous Improvement measure that will promote the continuous improvement culture. The
last point is to consider brewery industry-specific needs to remain competitive.