Arrow Electronics

For the last couple of weeks I have been reading articles about the pros and cons of performance evaluations and commission incentives.  With the huge success and longevity of the electronic’s company Arrow, i really wasnt anticipating reading this case study about the turmoil within.  Basically, the question is whether or not their current commission and review system should be maintained or a new system brought in. 

In my opinion, i have yet to see a commission system that has benefited both the company and the employees.  Commission does not motivate to make the company do better only themselves and arrow is no different.  Furthermore, their attempts at creating a new system of performance review has serious downfalls.  First of all, there is no clear expectations as to what each category means.  Also, the CEO Steve Kaufman puts this added pressure on the managers to maintain a certain quota of people who are below and above average.  The fact that each person is required to have a score of 2 in at least one category has a dramatic effect on how everyone is scored.

With no consistency in the system at Arrow, there are no clear expectations in a persons work or on how they are reviewed.  In my opinion I think that the best option would be to have some other sort of incentive plan that eliminates the commission system and the performance review.  Of course no one system for works for every body, it all depends on the system and the culture of the company.

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