Linking Evaluation and Compensation to Firm’s Objectives

Subject: Employee Management
Pages: 2
Words: 678
Reading time:
3 min
Study level: College

The contemporary world is marked by rapid technological changes throughout almost all industries, forcing more companies to adopt innovative development strategies to survive and thrive in new realities. Braintrust Toy Company has decided to embrace the current market’s demands by shifting its perspective from product development towards innovation. However, such a transition raises the necessity of major reorganizations within the firm’s corporate structure and operational processes.

Among other crucial changes, employee evaluations and compensation methods should be one of the primary questions under management revision. Although there are several methods that Braintrust Toy can adopt to appraise workers, management by objectives (MBO) and behaviorally anchored rating scales (BARS) approaches would serve the firm’s objectives the best. Moreover, considering those evaluation strategies, an incentive-based compensation method is suggested.

It is a well-known fact that the cornerstone of any innovation is peoples’ creativity. For that reason, Braintrust Toy Company would attempt to preserve and nourish that quality in their current workers and seek new employees with high ability to deliver original ideas. However, it is found that evaluation and compensation mode can affect employees’ creativity and, thus, should be chosen carefully (Bratton & Gold, 2017). As work that demands the elaboration of new ideas is different from routine-based tasks, the managers should acknowledge that generally, employees involved in innovative activity need more autonomy and time. Therefore, the combination of MBO and BARS methods would serve the best to address those specific aspects of creative work.

Management by objectives evaluation approach is based on the notion that managers and employees identify and arrange the objectives for certain assessment period which align with a company’s goals (Bratton & Gold, 2017). The practice of MBO processes allows managers to provide a certain percentage of autonomy in creative goal settings and time period decisions to employees while remaining in control over final results and expectations towards the latter counterparts.

Particularly important, that objectives are not set as strict as for non-creative workers in order to provide freedom for new ideas. However, in order to keep some quantity assessment measures, the leaders can discuss, for instance, the number of generated ideas, and presented product designs that employees would attempt to achieve. Such a combination of qualitative and quantitative appraisals is believed to assist the generation of fresh ideas. Moreover, freedom in decision-making is associated with increased motivation, which is one more advantage of the MBO (Bratton & Gold, 2017).

Behaviorally anchored rating scales are scales that are created to assess performance (Bratton & Gold, 2017). Due to such advantages of the method as behavior orientation and rate individuality, BARS could be a much better construct when evaluating non-conventional variables in comparison with standard appraisal scales. For instance, that parameters could be “an elaboration of new ideas”, “product development” etc. Therefore, the analysis of detailed employee behavior would allow managers of Braintrust Toy to organize the assessment standards for creative labor, which may seem chaotic and highly personal, thus, hardly measurable at first glance.

Likewise, the compensation method should be oriented at similar principles as evaluation modes, providing more autonomy and time freedom to creative workers. For that purpose, the best suitable approach to compensation is an incentive-based paradigm (Bratton & Gold, 2017). According to that method, the employees should be rewarded for their performance rather than paid for working hours. Such an approach would allow innovators to be concentrated on the final product or service as well as increase motivation for the successful completion of a task.

In conclusion, MBO and BARS are the best evaluation methods that would allow Braintrust Toy to achieve new goals and implement an innovative strategy successfully. They effectively favor the development of creative ideas among employees, but at the same time, ensure the ability to control their performance. The advantages of the MBO system are based on the ability of the worker to influence once own objectives, whereas BARS allows developing personalized and action-oriented scales to assess performance. Finally, incentive-based compensation is aligned with evaluation strategies as it is oriented toward the final result rather than the working process.


Bratton, J., & Gold, J. (2017). Human resource management: theory and practice. Palgrave.