There are two main characteristics of the MFS system that can be perceived as issues or challenges. Firstly, the subjectivity that is applied widely to determine the compensation of fund managers may be unfair. The fact that a person is more or less sociable can affect their financial reward; also, subjectivity leaves greater room for inaccuracy. Some of the company’s employees believe that their payment does not fully match their contribution. Moreover, according to Kenneth and Laurence, there is also a high chance of bias involved in such subjective performance assessments.
Secondly, although MFS puts an enormous emphasis on its culture, its system still tolerates outliers – people who do not fit culturally but demonstrate great individual results. The presence of such people erodes the culture and makes others question the fairness of their compensations. It is expected that the system can filter such people; however, in some cases, the company’s employees hesitate to assess outliers adequately due to their excellent performance record.
Partially, the mentioned issues are the essential parts of the MFS system; therefore, it is impossible to find a solution that completely resolves these problems. However, some actions can be suggested to improve the situation. For instance, regarding subjectivity, more complex training of employees in the field of assessment may be helpful. The evaluation training may involve modeling various scenarios of peer assessment to lower the subjectivity-related issues’ impacts. The same methods can be used regarding the tolerance towards outliers, as the clear assessment instructions and beforehand mentioning of such situations may help employees develop a more confident approach towards peer evaluations.
