To write reply (discussion) replying post for GIVEN answer. The answer should DESAGREE with GIVEN answer. Minimum 350 words.
Mary Elizabeth Mills is a textile manufacturing firm located in the southern United States. The company carefully prepares all financial statements in accordance with GAAP, and gives a copy of all financial statements to each department. In addition, the company keeps records on quality control, safety, and environmental pollution by the company. It then prepares “scorecards” for each department indicating their performance. Recently, the financial impact of the second set of information was added, and the information has been used in the evaluation of employees for merit pay and promotions.
At the most recent employee meeting, Carl Victor, marketing manager, expressed his discomfort with the system. He said there was no guarantee that the second set of information was fair, since there were no generally accepted principles for this kind of information. He also said that it was kind of like keeping two sets of books—one following all legal requirements, and the other one actually used by the company.
- Is it ethical to evaluate managers in the way described? DISCUSS and Explain (a limited yes or no is not sufficient).
- Discuss one or more safeguards the company could build into its system to ensure the ethical treatment of employees.
I personally do not believe it is ethical to evaluate managers in this manner. I believe that this manner leads to favoritism and also unfairness in the balance of egos. This can potentially lead to employee conflicts and also scorecard error. The scorecard may help some employees get their act together but to some it may be detrimental to them. For example, some employees cannot function under high pressure and with employees not doing so well, their promotions and pay may be lower, which is not ethical what so ever. To be fair, employee pay should be standardized and bonuses can be based on performance. Carl Victor makes a valid point that the company can potentially abuse the scorecard system if it wanted to by giving the employees a lower grade thus pocketing the money for themselves. There is no way of knowing if the company actually took the time to grade each employee and when there is money involved there is too much of a risk to be ethical. I believe that legal standard for financial reporting has to be able to represent the specific outputs of the company. If the company is doing well then all the employees deserve a larger bonus and if the company is doing bad then the employees will receive a lower bonus.
If the company truly wants to have their own grading system, I believe the company should hire an external company to evaluate its employee to prevent biasness. For example, the company can set up a contract with KPMG where their auditors would come in to evaluate the company’s / employees’ performance and areas where the company needs improvement in. By having external auditors reviewing Mary Elizabeth Mills, it allows fair grading of the different sectors in the company and prevents the company from tampering the financial reports. I also believe the company should not grade individual employees but rather the company should grade different sectors of the company. By doing so prevents favoritism in the workplace as mentioned earlier and reduces pressure on those who cannot handle it. But as I have discussed earlier, the company should not be grading their sectors but rather an external audit company should do it.