Fred Maiorino had been a successful sales manager for Schering-Plough Corporation for thirty-one years before Jim Reed was named general sales manager over the South Jersey sales district that included Fred’s sales territory. Afterwards, Reed implemented several changes to try to boost sales including a new performance appraisal system and a hands-on coaching style to motivate his sales staff. The problem arose with Reed’s inability to motivate Fred (Buller & Schuler, 2003). Major Issues
The major issue is this case is Reed’s inability to motivate Fred, which inevitably led to the dismal of a long-time loyal employee. The major issues associated with this motivation problem include Reed’s unsuccessful leadership attempt, the de-motivating factors of the appraisal system, and the violation of the psychological contract. Reed’s Unsuccessful Leadership Attempt
One major issue is Reed’s unsuccessful attempt at leading Fred. One could describes Reed’s leadership style as a directive leadership behavior of the path-goal theory that one typically uses with a new employee or a transactional leadership style that is used by many sales persons according to Dubinsky, Yammarino, Jolson, and Spanger (2001). “Sales managers generally employ transactional leadership behavior which can “induce adequate attitudinal and behavioral responses in employees, transformational leadership has found to engender even higher results” (Dubinsky et al., 2001, p. 17). Reed’s leadership style could have been described as transactional as he identified and clarified Fred’s job task and then communicated to Fred how to go about being successful at executing his job task (Buller & Schuler, 2003; Dubinsky et al., 2001). This was apparent when he went through Fred’s computer files to determine the large volume drug prescribers, and then through a memo told Fred how to go about accomplishing the task. Reed was setting Fred’s goals for him without his input and totally negating the fact that Fred had been working in sales with success for over 30 years before Reed became his supervisor. From the Ohio Studies of 1945, devoted to determining that motivation is influenced by the leader member relationship, 80 percent of the respondents who had a positive attitude towards their manager dropped to 53 percent when they felt they were being monitored to close by their supervisor. “Tight supervision correlated with a reluctance to contribute” (Bassett-Jones & Lloyd, 2005, p. 938). De-motivating Factors of the Appraisal System
Another major issue is the performance appraisal system. Fred had always received a “V” on each of his objectives in the past, but with Reed’s new performance appraisal system, he received a few “G”’s that Fred perceived to be very de-motivating. This is an “unintended consequence” (Lee, 2005, p. 54) that is derived from unacceptable performance ratings. “Poor ratings can stigmatize performance and cause unnecessary resistance to the acceptance of feedback” (Lee, 2005, p. 54). Gray (2002) describes how most workers would not describe their own performance as average; however, budget restraints dictate that most ratings should fall in the average or good category. With our current performance appraisal system at work, if you receive exceeds expectations on all your objectives then you are subject to a 5 percent raise rather than a 3 percent merit raise; however, I have been informed that some individuals due not receive their earned rating of exceeds expectations because of budget restraints. Another issue with the performance appraisal system is it based on past information. According to Lee (2005) the objective of performance appraisals should be future-oriented; however, most emphasize the past. There is no direct link between grading past performance and motivating performance according to Lee (2005). The most effective way to improve performance is through immediate...