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Granting managers authority to hire, appraise, and compensate subordinates can lead to potential drawbacks such as favoritism and bias in hiring and performance evaluations, which can undermine team morale and fairness. Additionally, it may result in inconsistencies in compensation practices, creating disparities within the organization. Furthermore, if managers lack adequate training in these areas, it could lead to poor decision-making that impacts employee satisfaction and retention. Overall, without proper oversight and guidelines, this authority can jeopardize the integrity and effectiveness of the hiring and appraisal processes.

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