In identifying motivational issues that Morgan Stanley has to confront with, its job design and goal setting show a clear-cut format unlike in the previous years of its operations. For instance Fisher and Mack, two leading executives at the Morgan Stanley state that the company will be investing in top employees, high level technology, and expansion in new geographical locations. The company’s goals are set to position it firmly in the long run. The company also seeks to change its values in order to attract the best quality employees. Mack and Fisher’s idea of transforming the company into a one-firm firm is set to achieve the company’s goals. The company’s performance appraisal system shows a high level of objectivity because employees are evaluated, promoted, and compensated by a criterion that is based on the company’s productivity. By tying compensation to performance the company would provide motivation to its employees to be more productive. The only problem with this kind of appraisal system would be that it can not be accurately measurable since performance is only judged through a cumulative process based on productivity. It is more of a generalized approach that does not take into consideration individual input in the company operations but instead relies on the big picture.
According to the company’s new style of performance appraisal, compensation is based on performance. In this kind of arrangement the workload is not equally distributed because it operates on the premise that departments that generate the most revenues stand to make the most money. However there are problems associated with this kind of arrangement because some departments are more visible for example technology and some like government agencies can not be expected to compete with the more visible ones. It must be noted that every sector is equally important as the others because the company can not operate without it. In such a scenario employees would tend to ignore or lack the drive in performing tasks that do not commercially contribute to the company since they have nothing to gain from such tasks (Pinto, 2005).
In Mack’s opinion the professionals they hired thrived best in an environment that provided stimulating challenges to their creativity and intellect. The firm was also committed to a meritocratic approach in which the strong contributors were well rewarded. This is probably why the company hired the best in the market. From the above observations it can be surmised that training was not a major consideration at Morgan Stanley since they already had the best employees in the market. Promotions were based on how each sector performed therefore the ability of each sector’s leader to motivate other employees was considered as a ground for promotion. A leader’s ability to increase production in his or her sector was the criteria for promotion (Hall & Liebman, 1998).
The Morgan Stanley case has set a capitalistic approach to the field of human resources in that individual ability and area of specialization will no longer be as important as the financial and other compensatory benefits that can be accrued in the workplace. Individual ability will suffer because even the best performing employee will not appear to be productive when teamed with a less cooperative group or in an underperforming sector. In a setting where compensation is determined by departmental performance teamwork might be enhanced but individual commitment to the company suffers (Jensen & Murphy, 1990). There are some career choices which are necessary in the running of a firm but which are not as conspicuous or visible as others like technology. Such careers will suffer because many will believe that they will not have the potential to draw in reliable compensation.
Hall, B. & Liebman, J. (1998). Are CEOs really paid like bureaucrats? The Quarterly Journal ofEconomics, 103, 653-691.
Jensen, M. & Murphy, K. (1990). Performance pay and top-management incentives. The Journalof Political Economy, 98, 225-264.
Pinto, J. (2005). Performance based compensation. Retrieved April 11, 2011, from HYPERLINK “http://www.jimpinto.com/writings/compensation.html” http://www.jimpinto.com/writings/compensation.html.