Company ZYX is a small consulting organization with 40 employees. The manager who is responsible for employee performance appraisal has a particular way of conducting it. He has a firm belief that formal performance evaluations (with developed criteria, ratings, formal discussions etc.) are an absolute waste of time and should never be done. Instead, he thinks that he is well familiar with each employee’s work and achievements, and he can easily tell “what they are worth” by interacting with them and observing their performance on a daily basis. As a result, the manager periodically stops at employees’ desks, talks to them, asks about their progress on projects and discusses other work-related issues. Employees have a lot of daily feedback and seem to like it. However, no written performance appraisal forms are ever filled in. When it comes to pay raises and promotion, the manager makes his decisions and announces them to employees during meetings.

1. Do you think this manager’s performance appraisal is sustainable in the long run? Explain your answer?

2. Would you suggest any changes in the manager’s approach to performance appraisal? Explain.