All managers in the organizations take the responsible to monitor the way employees work and assess how this matches organizational needs. This process is so called performance management. They form impressions about the relative value of employees to the organization and seek to maximize the contribution of every individual, and this becomes more arduous in today's diversity working force. Most organization implements a formal performance appraisal which is a process of review and evaluation of individual or team task performance in order to evaluate the strength and weakness of the employees and develop appropriate training and coaching to maximize productivity and gain competitiveness in the marketplace. Yet, the problems in making appraisal schemes work effectively are great enough especially in the 360 degree feedback, which is a popular performance appraisal method using by most organization.
One of the problem arise in performance appraisal is the characteristic of manager that is too leniency or strictness. Leniency is the behavior of manager giving underserved high performance appraisal rating to employees. This behavior often creates a harmony appraisal process where manager is too kindly and close to performers may reduce the conflict over the appraisal. However, sometimes it is less reliable when the appraisal purpose to achieve employee development, whereby managers evaluate the strength and weakness of performers as well as improving performance regardless the employees' level of performance. Managers' lenient make it unfair to the employees who provide superior performance getting the same comment with other in the appraisal. Further, the poor-performance employees who continuously receive positive evaluations in an organization may increase the cost per unit and lead to cost inefficiency. Strictness is the behavior of being unduly critical to evaluate employees' performance. Contrary to leniency, managers apply an evaluation more rigorously than the company standard and likely lead controversy and misunderstanding among managers and performers. The situation become worse when both lenient and strictness managers occurred in an organization performance appraisal. The poor performers get relatively high pay increase and promotion from lenient manager is unfair to the stronger employees who get the same value or even lower from strict manager. This can negative impact on the motivation of top- performance people and the overall workforce in the organization.
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Recent behavior Bias
Transparently, organization declared a notice when performance review is scheduled. Every employee knows precisely and despite they are not intentional, the performance and productivity usually improved the period of performance appraisal. The performance appraisal of someone may be different with the attitudes and performance presented in previous or after the evaluation period.
Discrimination occurs when managers evaluate employees' performance within individual differences like age, gender, race and so on. This pitfall become critically in today's diverse workforce and not merely influence the exactitude of performance measurement, but it is blatantly illegal and can lead to costly lawsuit.
Halo and horn error
Performance appraisal may develop in halo or horn error when manager generalizes all aspects of employee performance with either positive or negative performance feature. Considered only particular positive performance feature of employee may result in a higher rating however employee fail to recognize their weakness and improvement should be pursue and result performance appraisal meaningless. Conversely, determine employee's performance in a negative performance feature lead the employee get a lower rating and likely arise employee's disappointment to the organization's performance management and thus lower their willingness to perform better.
To be a performance appraiser in an organization always the critical task to managers. Almost manager who engage in performance evaluation create controversy with the performers because of frustration with low rating of performance appraisal and discontent to the requirement and task during the appraisal period. In fact, most mangers have always loathed the time, paperwork, difficult choices, and discomfort through the appraisal process. Thus, organization struggles in design a performance appraisal system that effectively brings out the means to the manager and employees as well as job performance impact.
Commonly, employees who involved in performance appraisal may raise anxiety and high pressure from the form of discontent, apathy, and turnover. In worse case, they intend to revenge or indict the organization for unfairness, even real or perceived. This could cause not only compensation loss, but the reputation impact to the organization.
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To create a performance appraisal that is effectively mean to the objective of strategic human resource management, organization requires take consideration into alternative of performance system.
The problems in making appraisal schemes work effectively are great enough. They can be considerably greater in the case of 360-degree appraisal schemes, which is commonly method that using by organizations to evaluate performance. 360-degree feedback evaluation scheme involves an evaluation input from multiple levels within the firm as well as external sources, such as subordinates and customers. Having a multiple raters result in a broader view of the employee's performance and may minimize biases that result from limited views of behavior. Whilst the feedback that can be obtained with such comprehensive arrangements can be very valuable, the process of collecting it can be extremely complicated. For instance, the schemes seem like a game where the evaluator comment all the good thing to the employees or intentionally distort and sabotage the colleagues because of the form of competition. Others, the cost of comprehensive 360-degree appraisal in terms of organisational resources can be very high in consideration of numerous evaluators require long time process and the potential extra benefits.
As well as the cost and other complications of comprehensive arrangements for 360- degree appraisal, this process can create serious role conflicts. Managers may be inhibited in their control of staff if subordinates are also partly responsible for their own appraisal. The person being appraised may have elements of conflict built into their relationship with colleagues and customers. Examples include competing for organisational resources, the natural tensions between production and inspection functions, and the desire of customers to have a better deal than the appraisee thinks is in the organisation's interests. Elements of 360-degree feedback can, and often need to be, incorporated into the flow of organisational communication. Appraises will normally have an idea of how they are getting on with those they work with. The technique of role set analysis can be a way of structuring this (Rees and Porter, 2001, pp. 27-34).
Ironically, particularly in the case of managers, the better they are the more likely they are to do this anyway (Rees and Porter, 1998, pp. 165-70). Techniques that are regularly used include client, customer and employee surveys. Feedback questionnaires are commonly used to monitor student views on courses that they attend.
It has been necessary to identify the many
potential and serious pitfalls with formal
schemes of staff appraisal. Sadly, the available
evidence is that most schemes do not work
well. Knowledge of the dangers can help,
however, with the assessment of the need for
schemes, their design, effective monitoring,
amendment and sometimes the case for their
abolition. A common problem is that
Account also has to be taken as to whether or not an organisation has the managerial expertise. The scale of the potential pitfalls is such that not all management teams could cope with the conflicts that a scheme can precipitate. Consider, for example, the dangers of a person with an ill-defined managerial responsibility and poor inter-personal skills trying to justify a low level of merit payment to n articulate subordinate in a heavily unionized environment. The priority may need to be to develop the managerial structure and associated expertise rather than introduce an appraisal scheme.
If appraisal is to be used constructively, it is
necessary to be aware of the potential pitfalls.