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Review of performance is an inspirational to any company which aspires to boost itself towards the levels around the standards or even far beyond. Not a single company would tolerate performance which is below the averages. From deep analysis, authors mind was made to believe that in the absence of a system which rates the employees basing on their performance a company might face the following consequences including poor quality of products, inefficient & unsupportive workforce, and loss of scarce resources. Hence, the result will be poor recognition and a bad reputation in the society and the globe as a whole.
A tool to help a company in monitoring performance happens to be performance appraisal. Through it, a company can trace the path taken by its employees towards reaching the goals and objectives set well in advance. Critics have argued that, not always performance appraisal has got a positive role to play but also could result to biasness among the top managers and the subordinates as a result of favoritisms among the others.
Besides that, performance appraisal is very crucial for the better progress of any company. Henceforth, this essay will address the various parts which are of interest to both the essay writer and the topic itself. Two extremes will be discussed in the essays. On one extreme, it would give an analysis of performance management as a process while on the other extreme culture will pick.
The second essay will pick from this checkpoint by developing a further argument concerning the literature in the first essay. Its author's intention to display at least a few society's with differing cultural background and the degree to which they look performance appraisal. This is a tool which could be considered to either impede or hinder organizational development.
PERFORMANCE MANAGEMENT PROCESS
According to Baron & Armstrong, 1998: 38-39, performance management can be defined as 'a strategic and integrated approach to increasing the effectiveness of organizations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors', and also can be seen as a 'continuous process involving reviews that focus on the future rather than the past,â€¦' (Beardwell & Holden, 2001, pp.538)
This is a broad concept which not only concentrates management efforts on performance appraisals but towards identifying whether the overall performance matches with the business strategy and objectives. (Hendry et al, 1997)
It involves getting better results from the organisation teams and individuals by measuring and managing performance within agreed frameworks of objectives and competence requirements; assessing and improving performance; identifying and satisfying learning and development needs.
Characteristics of Performance Management
Controlled by the line managers so as to monitor the progress.
Ratings are not much used.
Tends to have a focus on objectives, values and behaviours.
Less likely to be linked directly with pay.
Paperwork isn't so much.
In most organisation scenarios, performance management throughout the employees is done through the following:
Planning - 'It is the process of setting goals and objectives for the company in its different departments.' (Robbins & Coulter, 2004)
Planning is continuous and very essential as organizational goals keeps on changing due to dynamic world we live in. Once this has been effectively done, it's obvious that the objectives will be met. The way things get done change overtime probably due to technological advancement which makes planning to be very essential.
Planning answers the following questions which might be asked in employees minds: what, why and how should things get done?
Developing - 'increasing the capacity to perform through training, giving assignments that introduce new skills or higher levels of responsibility, improving work processes, or other methods.' (U.S. Office of Personnel Management)
Training becomes crucial especially once an organization has identified the need for it which could be probably traced during appraisals conducted. Also, some employees get motivated if there are plenty of growth opportunities. It makes an individual climb a career ladder without much trouble but instead with high support and efforts by the management.
Rating - 'means evaluating employee or group performance against the elements and standards in an employee's performance plan and assigning a summary rating of record.' This is the time when the top management grades or ranks their employees according to the performance levels. Good about this is that scores are not made on group bases but on an individual bases. (U.S. Office of Personnel Management)
Rewarding - 'recognizing employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency's mission.' (U.S. Office of Personnel Management)
With rewards any employee within an organisation will be as part of it and have a sense of belongingness. Also, this is a kind of recognition to the efforts done by the employees. Employees also feel that they are valued.
Hegewisch, 1992a: 28 says,'â€¦the pay package is one of the most obvious and visible expressions of the employment relationship; it is the main issue in the exchange between employer and employee, expressing the connection between the labour market, the individual's work and the performance of the employing organization itself.' (Beardwell & Holden, 2001, pp.506)
Monitoring - is the process of scrutinizing the day to day activities so that things goes as planned.
This is normally done in organizations so as to measure the performance and later provide feedback to the employees so as to see whether they have deviated away from the goals set or not. This is the venue where employees who don't cope with the standards and regulations are identified during performance appraisals which aims at correcting wrong performance well in-advance.
Arriving here, this will be my reference point or area of interest in both my two essays. Let me step a foot further in towards this fascinating part. Performance appraisal is core in any organization due to the reason that, pay structure for employees will be based on performance. It is commonly being heard and believed that, 'no pain, no gain'.
'Performance appraisals is one among the many functions of the Human Resource Management which is, 'a strategic and coherent to the management of an organization's most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives.' (Armstrong.M, 2003)
'Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined and discussed, with a view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.' (Archer North & Associates, 2006)
In most organization's this is frequently done so as to see if the expected standards of the job are met. This dismantles the notion that, once 'an employee has been selected, hired, placed, inducted and trained for a particular job' everything is over. (NCC HRM Module DBA204)
Merits of Performance Appraisals
Hereunder, are the advantages of this system of rating employees of a particular organisation;
Settling grievances - accusations and complaints from one side to the other will be at minimal because performance appraisals decide whom to promote, demote or to get rid of.
Improve performance - when inefficiencies resulting to poor performance are realized, necessary actions are taken with the intention of lifting outcomes or production capacity.
Alerts training needs - play the role of an alarm which act as the reminder to the company in order to be ahead of the needs and requirements with time and progress.
Basis for promotion - acts like a sieve that separates the dusks and stones away from the rice. Enables a company to point the best employees who can be given responsibilities and established trust.
Way of maintaining contacts - this allows the management to be close to the employees so as to keep track of events and any problems faced by the later while at work.
Demerits of Performance Appraisals
Besides its benefits, this system has got issues too, to be given a careful attention. Hereunder, they are demonstrated:
Varying standards - 'Raters tend to apply varying standards, and it can be very difficult to combine or co-relate these.' Different individuals are rated depending on their jobs, nature of work and their respective performance. There is no a common standard to be considered as a benchmark while conducting performance appraisals. (NCC HRM Notes)
Systematic error or constant error - 'This is a consistent tendency to over-value or under-value ratees on a given characteristic.' (NCC HRM Notes)
Halo effects - 'Another common deficiency tends to allow one quality to colour the entire appraisal or to make all qualities fit a sort of general impression. This effect defeats a major purpose of ratings and reduces the total rating to a sort of overall, bird's eye impression. A ratee who makes a good appearance, for example, may be rated high on such presumably unrelated qualities as dependability and co-operation.' (NCC HRM Notes)
Central Tendency - 'Is the inclination to rate all or more qualities and the ratees close to the average or middle of the range. It may result from the fact that raters do not know ratees well enough to express a discriminating opinion.' (NCC HRM Notes)
Leniency - 'The desire to err on the generous side to avoid controversy by giving each ratee the benefit of the doubt.' (NCC HRM Notes)
Appraisals as opinions - 'A basic limitation of appraisals is that it is a method of obtaining opinions and is not a method of measuring performance; even at its best, the results should be considered as reflecting opinions and should be used as such.' (NCC HRM Notes)
Refer to the total way of life of a particular group of people who share common ideas, beliefs, practices and values concerning various issues. Analysts view culture as the way how different people perform their daily activities without confrontation from others.
Culture also can be defined as, 'the collection of traditions, values, policies, and attitudes that constitute a pervasive context for everything we do and think in an organization.' (Mullins, 2002, p. 802)
It is wise enough to begin this sub-theme by examining a combination of culture and human resource management.
Culture of individuals pertaining to different nations will greatly affect positively or negatively the human resource management practices like the performance appraisals in any country. So the national cultures are likely to influence the management practices.
It is obvious that, people from different places in the world won't have common or similar views concerning performance appraisals due to the fact that research findings have found 'emerging cultural profiles'. However, countries in these profiles differ one another depending on the degree of uncertainty avoidance and the degree of power distance. The profiles happen to be divided into four main parts which are:
Village Market - commonly known as Anglo/Nordic which is characterized by low uncertainty avoidance and low power distance.
Family or tribe - known as Asian has low uncertainty avoidance with a high power distance.
Well-oiled machine - also called Germanic is overruled by high uncertainty avoidance and low power distance.
Traditional bureaucracy 'pyramid of people' - known as Latin is characterized by both uncertainty avoidance and power distance by being high. This implies high hierarchy with too much bureaucracy.
Therefore, it can sometime happen for as many countries to have similar performance appraisals ways in relation to another. In such a scenario, it is possible to align the processes and procedures of rating employees so as to fit individuals from different cultures.
A clear examination on culture will yield as to how variety of human resource practices are perceived and interpreted by members of a company or country. This takes us to the cultural differences as the main reason for different perceptions on when it comes to performance appraisals.
By definition, organization is a group of people who share common values and a sense of purpose bound by the structures, systems and culture so as to implement strategic aspects of a company. (Daniels et al, 2009)
Considering the reality that an organization won't do without people who might be the stakeholders or even the shareholders originate from different cultures. An organization is required to identify its people and at the same time realize their likes and dislikes so as to be at a safer side.
Merits of Culture
As a source of Competitive Advantage
'Michael Porter has argued that nations derive competitive advantage from a set of country-level factors such as the availability of resources, the size and sophistication of the market, the nature of government intervention, and the type of strategic linkages or networks.' (Schneider & Barsoux, 2003, p.7)
For instance, performance appraisals won't do in the Chinese cultural set-up instead they prefer to be assessed by character appraisals for the sake of getting rid of bad feelings which may prevail. Giving poor ratings to subordinates is avoided by Chinese managers so that their personal relationships are not interfered or disturbed.
According to culture analysts, it's that this could stand as their (Chinese) competitive advantage due to the fact that there is no any sought of embarrassment. Instead to the Chinese it could result to building loyal and committed employees as no annoying is done to them.
'Because they are not used to direct criticism at all, you have to be very sensitive. You cannot tell them that they are doing a lousy job. You have to focus on the positive. If you're sensitive enough they accept it, and use it themselves later on when dealing with their own peopleâ€¦. One should be very sensitive, and you can do a lot of damage if notâ€¦. (p. 318).' (Schneider & Barsoux, 2003, p. 164)
Creates a uniqueness
Accounts for the degree of variations between managers and company's around the world. The truth is people are subjective, so even the way they perceive things may be very different. This will alert various stakeholders to have awareness when dealing with people from other cultures. (Mullins, 2002, p. 807)
One may experience different situations and scenarios when working with either the British firms or Chinese firms. It seems the British are much more concerned with the performance in terms of productivity and sales volume so as to generate more income and profits whereas the Chinese are both task-focused and more of a people-oriented looking at appraising on the employees degrees of integrity and loyalty.
A good benchmarking tool
To people and firms from various cultural background not performing well in different industries can view successful ones on how they use the appraisal systems so as to bring them to standards. As a matter of truth culture is not only acquired but it could also be learned and adapted too.
Demerits of Culture
Culture is deeply enrooted
Culture in reality is deeply embedded in people and organizations. This may make the idea of gathering people from various cultural backgrounds difficult and more intense. At times, it is too hard to change how an individual is shaped with his or her beliefs, values and attitudes which he or she had been used long back. Due to this, pushing on practices like performance appraisals could result towards resistance from those who don't prefer it.
The origin of power
Analysts have seen this as an obstacle probably due to the truth that the top most management who share a common set of goals and objectives are not from different cultural backgrounds. This has an impact to the subordinates having various cultures who will be exerted a lot of pressures.
Despise of a certain culture
It may happen when people from different cultures meet some of them will pretend or consider themselves to be so superior and capable than the rest who are termed as inferior. This situation might lead the powerful ones to impose practices like performance appraisals without considering opinions from the inferior.
Problems due to the presence of multi-cultures in an organization are inevitable because the truth is that people will have at-least some differences which may shape their attitudes, values, beliefs and underlying assumptions. In most scenarios, a person may perceive the things he or she does as better off than those of others.
If I happen to define cultural impact, I would have said that; it refers to the negative consequences undergone by members of a particular group probably due to lack of cross cultural awareness. These impacts will prevail at places where the management and its people fail to study and accept the values and beliefs of other people within and outside the organization.
So far, culture hasn't been acknowledged or rather perceived as a unifying force due to the reason that everyone thinks his or her culture happens to be the best. The tendency to ignore other people's cultures may have led to the following issues which need extra attention to come with appropriate solutions.
These cultural impacts could be:
'There is no shortage of evidence of cross-cultural friction between businesses. In every cross-border alliance there are seeds of potential cultural conflict and misunderstanding.' (Schneider & Barsoux, 2003, pg.9)
This is a situation whereby individuals become puzzled with how activities are carried on. For example, if performance appraisals involve too much of a paperwork it might be a tensing situation for those not used such processes.
These may prevail because in a multi-cultural scenario some people won't appreciate practices such as performance appraisals. Disputes or misunderstandings between those who accept performance appraisals and those in the other extreme could be more serious.
Cultural segregation: Countering the impacts
In turn the solution on how the management of a company could deal with cultural issues is to consider cultural segregation so as to minimize any of the cultural impacts mentioned above pertaining to differing cultures. Cultural segregation is all about separating but making all the parties equal.
Performance appraisals system need to be cross-checked with the purpose of minimizing if not getting rid of disputes and further work place complications which could probably take the organization and its people to chaos and a feeling of insecure. This should not be implemented as a platform to penalize others who don't perform in the right way. It should rather be one that intends to up-grade and motivate employees. The appraisers should study their own perceptions and motives first.
However, incentives following good performance shown should not only be in monetary terms but it should take non-financial incentives too. Some cultures do not put much more consideration on money as a motivator but people feel the importance of status, vacation time, further training and development to help in their career progression.
For example, 'Indonesians manage their culture by a group process, and everybody is linked together as a team. Distributing money differently amongst the team did not go over all that well; so, we've come to the conclusions that pay for performance is not suitable for Indonesia.' (Schneider & Barsoux, 2003, p.167)
On the part of the management, it is essential to review on the targets made due to the fact that they could possibly be a nightmare during the day. For instance, trying to impose performance appraisals in a company with multi-cultured staff including the Chinese is a dream.
To each and every society not all the aspects of human resource management will be weighed as equally as done by the rest of the society. Although, performance appraisals are mostly used to measure the way the jobs are performed with the aim of observing whether goals had been met doesn't mean it will be liked by members coming from different cultural backgrounds.
Also, for a long time performance appraisals was believed to be a system that is linked to pay (salary & increments) and incentives. However, it is high time for firms to think on other ways too which will minimize the cultural impacts upon people from different cultures. On the other hand to some individuals salary increment is not a big deal compared to training and others mentioned earlier above in the recommendation.
'The reason behind the preceding disasters is not only that behavior, values, and beliefs are different across cultures, but also that their importance to those cultures should not be underestimated.' (Schneider & Barsoux, 2003, p.10)
Culture can be a binding or a destroying force towards performance appraisals. 'Whether engaging in strategic alliances, setting up operations abroad, or attracting the local market, companies need to discover how culture can be harnessed to drive business forward.' (Schneider & Barsoux, 2003, p.10)
Considering the country cultural profiles it is clear that all the countries and its people have got varying power distance and uncertainty avoidance. Therefore, for this reason it is obviously that a lot of cultural differences in relation to performance appraisals should be recognized first before moving forward. The benefit of recognizing the differences are capability of solving future threats and exposed to opportunities that could lead to growth and development for the firms.
Furthermore, arriving at an end of this piece of literature it marks an end of the first essay but a continuation for the second essay which builds an argument on the first essay. The author has looked upon performance appraisals as not the only method of rating employees but also there are alternatives to consider so as minimizing disputes and misunderstandings among multi-cultures in a firm. The methods to be argued against in second essay mostly happen to be character appraisals or combination of both, performance and character appraisals.