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Performance Appraisal Management

OUTLINE

Thesis: Performance Appraisal is simply a management technique operating under a mask to control employees by reinforcing behavioral norms it consider desirable.

. The Purposes of Performance Appraisal

  • The assessment of past effectiveness and setting of new Performance targets
  • The assessment of present salary levels and setting of new levels or relation of performance to pay
  • The assessment of training and development needs, and identification of strategies for meeting them
  • The assessment of potential for promotion and development with succession planning
  • The assessment of individual progress and assistance with career planning decisions
  • The enhancement of motivation and communication

I

II. Popular Methods that being used as Performance Appraisal Process

  • Management by Objectives (MBO)
  • 360- Degree Feedback

III. Advantages and Disadvantages of Performance Appraisal

  • Advantages of Performance Appraisal
  • The Disadvantages of Performance Appraisal

IV. Performance Appraisal Method

  • Written Essays
  • Critical Incidents
  • Graphic Rating Scales
  • Behaviorally Anchored Rating Scales (BARS)
  • Multiperson Comparisons

V. Conclusion

Performance Appraisal is simply a management technique operating under a mask to control employees by reinforcing behavioral norms it consider desirable. Performance appraisal is the process of analyzing and recording performance which the purpose to make judgments about staff that lead to decisions. Performance appraisals are essential for the effective management and evaluation of staff. Performance appraisals help develop individuals, improve organizational performance, and build strategic business planning.

The system of highly interactive processes which involve personnel at all levels in differing degrees in determining job expectations, selecting relevant appraisal criteria, writing job descriptions, developing assessment tools and procedures, and reporting results, and collecting interpreting can also be viewed by performance appraisal. (http://filebox.vt.edu). The performance appraisal process is streamlined and impact. It becomes simple for managers to deliver constructive feedback on their progress and agree upon goals and skills with the employee. The process benefits both the individual and the organization by clearly outline goals.

Formal performance appraisals are generally conducted annually for all staff in the organization. Each staff member is appraised by their line manager. Directors are appraised by the CEO, who is appraised by the chairman or company owners, depending on the size and structure of the organization. Annual performance appraisals enable management and monitoring of standards, agreeing expectations and set the goals, and delegation of responsibilities and tasks. It also set the need of training for individual and helps organization to analyze and plan the organization training needs. Performance appraisal also can be used on measurement of salary and pay of employees to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes, a cut in salary or pay would follow if an employee's performance was found to be less than ideal, but if their performance was better, a pay rise was in order.

There are pros and cons of performance appraisal, pros such as let people know how they are doing, hold people accountable, help in salary adjustment, and provide information for promotion and other decisions. Hence it will assist all organization function and activity to improve productivity. The cons of performance appraisal are appraiser and appraise commonly dislike appraisals and try to avoid them. To this kind of people the appraisal is daunting and time-consuming. They assume the process as difficult task and emotionally challenging. The annual appraisal is maybe the only time since last year that the two people have sat down together for a meaningful one-to-one discussion. No wonder for them the appraisal is stressful - which then defeats the whole purpose. There lies the main problem and the remedy.

The human inclination to judge can create serious ethical, motivational, and legal problems in the workplace. On the other hand, without a structured appraisal system will cause a little chance of ensuring that the judgments made will be fair, lawful, defensible and accurate. For early motivational researchers were aware that different people will be paid the same amount of money with roughly equal work abilities and also have different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates is important but they were not the only element that had an impact on employee performance because other issues, such as morale and self-esteem, could also have a major influence (www.performance-appraisal.com).

Now a days most of organization use performance appraisal system because it very useful to organization. Staff appraisal schemes are all concerned with taking stock of the present situation and reviewing past performance, and planning for the future. According to this description, there are a number of purposes and outcomes of the appraisal process (ABE Study Manual, 1994, pg 161-164).

The assessment of performance is very important task in all organization, from the CEO to the newest office junior. Granted, the criteria for judging will be different at those extremes, but the principle is same (ABE Study Manual, 1994, pg 161-164).

Appraisal can only address the achievement of standards or objectives if they have been clearly defined and understood by all concerned. It must be clear what level of performance are acceptable, that the standards are valid and attainable, and that allowance will be made for factors outside the control of the individual (ABE Study Manual, 1994, pg 161-164).

In the context of appraisal it must be seen as a two-way exercise which locates the individual's own objectives in the context of those of the organization and the organization's support. This would include the establishment of individual's major priorities over the next period and the extent of managerial support needed for success. Next will be agreement about overall objectives of the department/section and of the individual within that context (ABE Study Manual, 1994, pg 161-164).

The way of the company to determine pay and bonuses of its staff is measure the staff performance. Many organization use staff appraisal for this purpose, but this is time consuming and difficult. The main problem lies in the impossible marriage of a process concerned with improving the quality of performance with one which aims to provide information for salary review. It is difficult to get the truth discussion about performance standard and achievement when there is a overriding implication that the discussion will be used to set salary levels. The employees seldom express their weaknesses to avoid any penalties (ABE Study Manual, 1994, pg 161-164).

All plans for training and development must include the needs of the section or department as well as individual, as seen both at present and well into the future. The appraiser should capitalize on strengths, seek to remedy weaknesses and consider the individual's career aspirations (ABE Study Manual, 1994, pg 161-164).

Appraisal can help to identify those employees who show great potential - talent spotting - and groom them for future higher roles in the organization. Good planning should be an on-going process which covers a sound knowledge of the employee group, their collective and individual abilities and the future needs of the unit. To be effective, a succession plan should address organizational needs over a two, five or ten year period. Many variables are in play, and the task is made more difficult by unexpected shift in the national economic scene, in political demands, the availability of materials and funds, and the changing nature of service provision. Therefore, the personalization of such activities, by effort to identify and develop individuals for specific posts in the future, is loaded with problems (ABE Study Manual, 1994, pg 161-164).

Staff appraisal schemes focus attention on the individual's performance in the job. As well as discussing improving performance in the job in the future, the process provide a natural forum for considering where he/she may be going in the future, both from the organization's perception and in view of the employee's own aim and objective. Such discussion can inform both planned adjustments in job role and hence performance targets, training and developments plans. This is an example of the creative use of appraisal to meet compatible purposes within a single framework (ABE Study Manual, 1994, pg 161-164).

This can generate a large amount of goodwill and respect for the organization, and provide significant gains in the development of internal communication and individual motivation. The appraisal process should include the good communication between colleagues, upwards, downwards and sideways. It also must give the organization a powerful forum for individual and team development, personal growth and greater job satisfaction (ABE Study Manual, 1994, pg 161-164).

From the individual employee's point of view four elements are worthy of note. The first element will be opportunities to discuss career development are rare, the chance offered in appraisal can stimulate personal growth and set new targets for the future. Than follow by the act of completing a careful and thorough appraisal is a source of motivation, with a consequent enhanced enthusiasm and commitment to the job and the organization. Next will be a creative appraisal will allow the appraiser to make constructive comments about the level and quality of supervision received. At last, most people are pleased to have their work performance evaluated in order to have strengths emphasized and developed, to have the opportunity to discuss improving areas in which they are less effective, and to recognize the relevance of the part they play in the overall patterns of the enterprise

Management by objectives (MBO) appeal undoubtedly lies in its emphasis on converting overall organizational objectives into specific objectives for organizational units and individual members. MBO operationalizes the concept of objectives by devising a process by which objectives cascade down through the organization (Robbins, S. P. 1988, pg. 550).MBO consists of four elements that are goal specificity, participative decision making, an explicit time period and performance feedback (Robbins, 2006, pg.246). MBO aims to increase organizational performance by aligning goals and subordinate objectives throughout the organization. MBO substitutes for good intentions a process that requires rather precise written description of objectives for the period ahead and timelines for their monitoring and achievement. The process requires that the manager and the employee agree to what the employee needs to be attempting to achieve in the period ahead, and the employee accepts and agree with the objectives, otherwise the commitment will be lacking (www.1000ventures.com).

For example, whatever else a manager and employee may discuss and agree in their regular discussions, if that they feel that it will be sensible to introduce a key performance indicator to show the development of sales revenue in a part of the firm. Then the manager and the employee need to discuss what is being planned, and what the indicator might or might not be what the time-schedule is. The manager and the employee should liaise to ensure that the objective is being attended to and will be delivered on time (www.1000ventures.com).

Organizations have scarce resources and so it is incumbent on the managers to consider the level of resource and to consider whether the objectives that are jointly agreed within the firm are the right ones and represent the best allocation of effort. Reliable Management information systems are also needed to establish relevant objectives and monitor their "reach ratio" in an objective way (www.1000ventures.com).

MBO is often achieved using set targets. MBO introduced the SMART criteria: Objectives for MBO must be SMART (Specific, Measurable, Achievable, Realistic, and Time-Specific). However, it has been reported in recent years that this style of management receives criticism in that it triggers employees' unethical behavior of distorting the system or financial figures to achieve the targets set by their short-term, narrow bottom-line and completely self-centered thinking (www.1000ventures.com).

In human resources, 360-degree feedback, also known as 'multi-rater feedback', 'multisource feedback', or 'multisource assessment', is employee development feedback that comes from all around the employee, supervisors, and co-workers. In other words, this appraisal utilizes information from the full circle of people with whom the manager interacts. Some of the companies are using or were planning to use 360-degree feedback such as Alcoa, DuPont, Levi Strauss, UPS, and W.L. Gore & Associates have used this approach. It can be effective for career coaching and helping a manager recognize his or her strengths and weaknesses (Robbins, S.P, 2007, page 368).

360 degree appraisals are a powerful developmental method and quite different to traditional manager-subordinate appraisals that which fulfill different purposes. 360 degree appraisals are considered helpful and relevant because it involves the appraisal receiving feedback from people named or anonymous. The appraisal should assess the employees by using the same feedback instrument or form. The feedback is typically provided on a form showing job skills, abilities, attitudinal, behavioral criteria and some sort of scoring or value judgment system (www.businessballs.com).

The advantages of performance appraisal will be in the rush and bustle of daily working life, it offers a rare chance for a supervisor and subordinate to have "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, where performance appraisal is conducted properly, both supervisors and subordinates have reported the experience as beneficial and positive. Appraisal offers a valuable opportunity to focus on work activities and goals, to encourage better future performance, and to identify and correct existing problems. Thus the performance of the whole organization is enhanced (www.performance-appraisal.com).

For many employees, an "official" appraisal interview may be the only time they get to have exclusive, uninterrupted access to their supervisor. If an employee of a large organization after his first formal performance appraisal, "In twenty years of work, that's the first time anyone has ever bothered to sit down and tell me how I'm doing." The value of this intense and purposeful interaction between a supervisors and subordinate should not be underestimated (www.performance-appraisal.com).

Performance appraisal can have a profound effect on levels of employee motivation and satisfaction such as for better as well as for worse. Performance appraisal provides employees with recognition for their work efforts. The power of social recognition as an incentive has been long noted. In fact, there is evidence that human beings will even prefer negative recognition in preference to no recognition at all (www.performance-appraisal.com).

Performance appraisal offers an excellent opportunity to perhaps the best that will ever occur such as for a supervisor and subordinate to recognize and agree upon individual training and development needs. During the discussion of an employee's work performance, the presence or absence of work skills can become very obvious, even though to those who habitually reject the idea of training for them! Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations (www.performance-appraisal.com).

Appraisal data can be used to monitor the success of the organization's recruitment and induction practices. Appraisal data can also be used to monitor the effectiveness of changes in recruitment strategies. By following the yearly data related to new hires (and given sufficient numbers on which to base the analysis) it is possible to assess whether the general quality of the workforce is improving, staying steady, or declining (www.performance-appraisal.com).

The disadvantages of performance appraisal will be employees tend to keep receiving the same appraisal results, year in and year out, their appraisal results will tend to become self-fulfilling: if they have done well, they will continue to do well; if they have done poorly, they will continue to do poorly. So no matter how hard an employee strives, their past appraisal records will prejudice their future attempts to improve. There is a research to support the theory that poor performers might not be given a fair chance to improve. Subordinates tend to be divided into two groups that are in-groupers and out-groupers were found out by a study of supervisors in nearly 40 different organizations. In groupers are subordinates who seem to be favored by their supervisors. In their relationship with the boss, they enjoy "a high degree of trust, interaction, support and rewards." On the other hand, out groupers don't do as well. They appear to be permanently out of favor and are likely to bear the brunt of supervisory distrust and criticism. The effect is therefore similar to the horns and halo effect; supervisors tend to judge employees as either good or bad, and then seek evidence that supports that opinion.

It was found that when an in grouper did poorly on a task, supervisors tended to overlook the failure or attribute to causes such as bad luck or bad timing; when they did well, their success was attributed to effort and ability. But when an out grouper performed well, it was rarely attributed to their effort or ability. And when an out grouper performed poorly, there was little hesitation it citing the cause as laziness or incompetence. It is not clear how supervisors make the distinction between in groupers and out groupers. Whatever the criteria, it is clearly not objective, equitable or reliable. This bias must inevitably lead to a distortion of the appraisal process. It must also be a source of frustration for those employees who are discriminated against (www.performance-appraisal.com).

The written essay requires no complex forms or extensive training to complete but the results often reflect the ability of the writer. A “good” or “bad” appraisal may be determined as much by the evaluator's writing skill as by the employee's actual level of performance (Robbins, S. P. 1988, pg. 550). Next will be the use of critical incidents focuses the evaluator's attention on those critical or key behaviors that separate effective from ineffective job performance. The appraiser writes down little anecdotes that describe what the employee did that was especially effective or ineffective. Only specific behaviors are cited, not vaguely defined personality traits (Robbins, S. P. 1988, pg. 551).

After that will be graphic rating scales lists a set of performance factors such as quantity and quality of work, job knowledge, cooperation, loyalty, attendance, honesty and initiative. The evaluator then goes down the list and rates on incremental scales (Robbins, S. P. 1988, pg. 551). Behaviorally Anchored Rating Scales (BARS) has received a great deal of attention in recent years. These scales combine major elements from the critical incident and graphic rating scale. The appraiser rates an employee according to items along a continuum, but the points are examples of actual behavior on a given job rather than general descriptions or traits (Robbins, S. P. 1988, pg. 551).

At last Multiperson comparisons compare one individual's performance to those of one or more others. It is a relative, not an absolute, measuring device. The three most popular uses of this method are group order thinking, individual ranking, and paired comparisons (Robbins, S. P. 1988, pg. 551).

Performance appraisal is common use by most of the organization because performance appraisal can viewed as the process of assessing and recording staff performance for the purpose of making judgments about staff that lead to decisions. So that the organization can know what is the performance of the staff. Performance appraisal also can motivate the employee of their work effort. Performance appraisal can make the need for training more pressing and relevant by linking it clearly to performance outcomes and future career aspirations. Performance appraisal is very useful and easier for most of the organization to view the staff performance and the process of assessing.

Reference

ABE 1994, Study Manual, Human Resource Management, p. 161-164.

Stephen P. Robbins, Mary coulter, 2007, management, 9th edition, Pearson Education Australia Pty Limited, Australia

Stephen P. Robbins, 1988, Management, 2nd edition, Prentice Hall, United State

Stephen P. Robbins, Mary coulter, 2006, Foundation of Management, 2nd edition, Pearson Education Australia Pty Limited, Australia

Chapman, A, BUSINESSBALLS.COM, Performance Appraisal 1995, Retrieved: 15 November 2007.

http://www.businessballs.com/performanceappraisals.htm

PERFORMANCE-APPRAISAL.COM, Introduction Performance Appraisal 2006, Retrieved: 16 November 2007.

http://www.performance-appraisal.com/intro.htm

PERFORMANCE-APPRAISAL.COM, Performance Appraisal Benefits of Appraisal 2006, Retrieved: 16 November 2007.

http://www.performance-appraisal.com/benefits.htm

PERFORMANCE-APPRAISAL.COM, Performance Appraisal Bias Effects 2006, Retrieved: 17 November 2007.

http://www.performance-appraisal.com/bias.htm

Vadim Kotelnikov, Management by Objectives (MBO), Retrieved: 17November 2007.

http://www.1000ventures.com/business_guide/mgmt_mbo_main.html

Winston & Creamer, Performance Appraisal 1997, Retrieved: 15 November 2007.

http://filebox.vt.edu/users/dgc2/staffinghandbook/perfappraisal.htm


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