Erros Pharma Product Performance Appraisal Erros Pharma Products is engaged in the manufacture and distribution of generic and branded medicines for various ailment. It employs more than 450 production employees and 30 sales distribution people. Products are well accepted by the market and physicians patronize the product together with their patients. A performance appraisal has been regularly conducted at six month intervals using the Graphic Rating Scale. The company uses the five point rating scale and the factors evaluated are quality of work, quantity of work and observable factors as initiative, leadership, responsibility and dependability. Two supervisors rate the employees and the average of the two raters becomes the basis for salary evaluation. The department manager reviews the ratings and discusses with the employees the final results given by the supervisors. Three most vocal activists in the company complain directly to the president about the ratings that were quite low and they were not given salary adjustments during the mid-year performance review. Roger Acero, Edwin Santos and Maurine Calzado who were former members of an activists’ union in another company threatened to form union as result of the performance appraisal. They argued that adjustment in salary should be uniformly made regardless of performance. They further stated that their ratings did not accurately represent their qualifications and experiences. They also stated that other employees received salary adjustments because they are favorites and buddies of some supervisors and others are closely related because they come from the same region. The president was alarmed and did not want any union to prosper in his company. He was paternalistic but was firm in the belief that performance appraisal is important component in all management programs. He believed that employees should be evaluated periodically to find out their performance and this should serve as basis for all other personnel actions including termination if so warranted. He called all the managers and supervisors to a closed -door meeting in one of the resorts for an overnight discussion of the problem. The president was in deep thought on how they could resolve the problem and come up with a satisfactory solution. Instruction: Prepare a written case analysis using below format: 1. Statement of the Problem 2. Case Facts 3. SWOT Analysis 4. Alternative Courses of Action 5. Recommendation and Conclusion