Human Behavior Is Unpredictable Management Essay

This research sought to find out the gaps that exist in the Karatina University Colleges performance management system and to come up with recommendations for adjustments that will put the institution on a path towards continuous performance improvement. The objective of the study was to determine how the institution conducts performance appraisal, the main challenges faced in the appraisal process, and the best practices that it can adopt for the process. Literature review was conducted on the subject touching on the various aspect of performance management. The study was conducted using a survey research design. Primary data was collected using self-administered questionnaires with supplements of secondary data used to add efficacy to the results. The questionnaires were administered on randomly chosen members of faculty in the common School of Business Staff room. Descriptive statistics were used including percentages and frequencies. The results were presented in tables in the analysis for each objective.

Human behavior is unpredictable and differs among individuals or even on the same individual at different points in time (Hunt, 2007). Human beings also differ in their abilities, background, training and experience. At the same time, Dr. Nigel Hunt notes that many problems facing most organizations today are social rather than technical or economic. It therefore goes that human resource at work is the most important component of the undertaking. It is therefore very important for organizations to measure performance of this critical resource as doing so ensures organisational success. 10

Performance Management (PM) has recently dominated the Human Resource Management (HR) as a profession owing to the realization that HR is the one of the most potent source of competitiveness in today’s operating environment. Insights into performance management by leading thinkers in the recent past (Armstrong, 2009) point to the emergence of Performance Management as the most viable solution to address the productivity lag in most industries.

Performance Management is a branch of human resource management whose objective is to support employees in their struggle to attain their goals as well as those of the organisation (Bhattacharyya, 2006). Bhattacharyya explains that PM gained prominence in the 1960’s when competition in the operating environment led firms to reexamine their internal operating efficiencies to survive. A difficult operating environment coupled with a desire for productivity led firms to emphasize on productivity of not only their machines but also their human resource. Armstrong (2009) explains that Performance management as a term emerged in the 1970’s and was later gained prominence in the 1980’s as a distinct discipline within human resource management. Presently, most organizations have embraced performance management as a pillar of productivity in the organisation. As Abbey (2007) describes, performance management has taken prominence in organizations as a vehicle to deliver on organisational and individual performance objectives. Abbey emphasizes that the incorporation of individual objectives into the performance management paradigm made performance management distinct from mere performance appraisal. Performance appraisal emphasized the degree of accomplishment of a given individual by supervisors without seeking the active involvement of the employee in the process (Management Study Guide, 2012). Measuring employee performance therefore goes beyond staff appraisal to include other aspects of performance such as learning and development, talent management and culture change as key contributors to organisational productivity (Armstrong, 2009).

Performance management provides the only tool with which the management can evaluate departmental/sectional contributions to the overall organizational performance as well as determine the best options for intervention. For effective achievement of organizational objectives, employees must know what needs to be done and the overall objectives of the organisation (Dransfield, 2000). Besides the knowledge of the overall organizational objectives, individual employees must have knowledge of their particular role within the broader organisational setting. This way, and as Dransfield (2000) notes, all the players in the organizational production chain share a common objective and pull towards the same direction. This is particularly important in that it harnesses organisational synergies in pursuit of a common goal and aligns daily activities within an organization to the overall strategic objectives.

Performance management is done to compare relative variations in performance over time for organizations. Output from performance management process is also used for comparison with similar industries or benchmarks and establishing basis for corrective action (Management Study Guide, 2012). The nature of organizational power structure means that senior management cannot keep a direct watch over the performance of the subordinates and therefore a self-corrective process has to be initiates to assess their performance against objectives of the organizations. Performance management also inculcates the culture of sticking to organisational objectives and ignoring the activities that do not add value to the organisational value chain (Management Study Guide, 2012). Though it is impossible to forestall all management challenges, performance management helps the management take steps in advance to improve organizational capacity to deal with unexpected situations

The Management Study Guide website details the evolution of performance management as a discipline within the wider human resource management in four phases. The first phase involved filling of annual confidential reports to control employee behavior. Career development was pegged on positive evaluation in the annual confidential report. The second phase entailed communication of the contents of annual report to the employees to correct the identified failings. The last phase involved replacement of the annual confidential reports by performance appraisal process where employees could rate their accomplishment annually.

Today, performance appraisals have given way to performance management. The process entails performing continuous reviews based on mutually agreed objectives. The focus of performance appraisal is quantifiable objectives behaviors and values as opposed to employee traits (Management Study Guide, 2012). Appraisal processes are more of directive than participative thus stifling team effort (Leung and White, 2004). The output from performance appraisal is not directly linked to pay as was for the performance appraisals process. Guest, D E et al, (1996) aptly described performance management process as concerned with assumptions, expectations, mutual obligations and promises of employees and the organization.

With the continuous change in operating environment, businesses have leveraged on human resource as their basis of obtaining and maintaining competitive advantage (Bhattacharyya, 2006). However, appraisal processes misses the crucial aspects that sustain a firms competitiveness as earlier describes including the wider strategic framework within which the organization operates. A system that emphasizes on employee mentorship and development as opposed to remuneration and disciplinary action enhances organizational output (Tripathi & Reddy, 2008).

Performance Management requires continuous output by in time for action to be taken. Panagar (2009) explains that employees are disappointed when annual appraisals bring negative feedback and do not point to the areas of improvements that an employee needs to focus on. He offers that participative evaluation in performance management contextualize the management to the working environment and challenges them to facilitate positive change for achievement of objectives. Continuous and balanced feedback enhances coordination and cooperation in organizations (Heskett, 2006). Besides, Heskett cites that employees’ achievements should be emphasized as opposed to dwelling on areas of improvement to encourage them to do more.

Human behavior is unpredictable and differs among individuals or even on the same individual at different points in time (Hunt, 2007). Human beings also differ in their abilities, background, training and experience. At the same time, Dr. Nigel Hunt notes that many problems facing most organizations today are social rather than technical or economic. It therefore goes that human resource at work is the most important component of the undertaking. It is therefore very important for organizations to measure performance of this critical resource as doing so ensures organisational success.

1.2 Statement of the Problem

Upon appraising employees and provision of feedback, most organizations wait until the next planned appraisal exercise (Hunt, 2007). Hunt offers that performance management in most organisation stops at the employee evaluation process and mostly after there is sufficient evidence pointing to non-performance. However, this defeats the main objective of the performance management process as an undertaking in aligning employee’s goals to goals to those of the organisation. This keeps the whole organization focus on its strategic objectives by harnessing collective efforts of its workers. Hunt states four issues that need to be taken into consideration in the performance management process namely following up to ensure achievement of targets, evaluating the entire process to ensure that it is appropriate and fair and do not foster conflict in the organisation. Observance of these four standpoints guarantees employee job satisfaction and continuous improvement in the organization.

In most organizations, employees harbor qualms on the appraisal process (Shaddock, 2010). Shaddock attributes the negative perception to the use of appraisal results as evidence of poor performance instead of discussing performance with the employees to find common ground. The infrequent manner in which appraisal process is conducted adds to the subjectivity of the results as managers are more prone to conduct the exercise when performance is deteriorating (Tripathi & Reddy, 2008). Tripathi and Reddy explain that the effect of these appraisal processes leave employees disillusioned and afraid to take risks leave alone accepting the fact that continuous improvement can enhance their success and by extension that of the organizational. As a result, employees lose their sense of control over the situation and resign to the directives of the management without their own insights. This contrasts with the new human resource management paradigm that emphasizes on mentorship, coaching and empowerment (Dacri, 2006).

1.3 Purpose of the Study

This research sought to find out the gaps that exist in the KUC’s performance management system and to come up with recommendations for adjustments that will put the institution on a path towards continuous performance improvement.

1.4 Research Questions

1.4.1 How does KUC conduct performance appraisal?

1.4.2 What are the main challenges faced in the appraisal process?

1.4.3 What are the best practices that KUC can adopt for performance appraisals?

1.5 Significance of the Study

1.5.1 Human Resource Managers and Practitioners

The head of human resource at the institution as well as others will get insights into the performance of their organizations and the best practices they can employ to achieve the best output from the human resource. The research will reveal insights on the frequency of performance appraisal and how best to achieve the desired results.

Besides, the research will reveal the benefits of communication between the managers and employees. It will lead to clear understanding of job descriptions by the employees and better performance measurement. This will go a long way in boosting efficiency and effectiveness at the workplace.

1.5.2 Organizations

The research will emphasize the role of performance management process in the achievement of strategic objectives of the organization. It will also enlighten the employees on their role in the organisation as well as the opportunities they have to advance boost their performance and by extension their careers. The research will particularly emphasize on the role of the performance management process on continuous improvements within the organization. This will position organization on a path to responsive change needed for survival in today’s operating environment (Management Study Guide, 2012).

1.5.2 Employees

The research will provide employees with an opportunity to evaluate their performance appraisal system and to suggest adjustments to align it with the organisational objectives. The employees will have an opportunity to express their desired outcomes of the performance management process that best serves the interests of both them and the organizations. Besides, the research will expose new areas that employees need training. Lastly, the employees will feel that the organisation is concerned about their welfare just as much as it is concerned about the performance of the organisation.

1.6 Scope of the Study

The study was performed on a group of workers at Karatina University College. Data was collected on the month of February and March to reflect the current operational context of the organization. a review of literature was performed as well as secondary data on performance management concepts, the challenges faced and benefits that can accrues in evaluating an organization’s performance.

1.7 Definition of Terms

1.7.1 Performance Appraisal

Performance Management is an ongoing communication process, undertaken in partnership, between an employee and his or her immediate supervisor that involves establishing clear expectations and understanding of the functions expected of the employee and their contribution towards the achievement of the organizational goals (Robert Basal, 1999).

1.7.2 Performance Management

Performance management refers to the proactive system of evaluating and providing feedback on employee output in line with the desired results. It aims at harmonizing employee and organisational objectives to achieve operational excellence (Management Study Guide, 2012).

1.7.3 Benchmarking

Benchmarking is adopting best practices in the industry to guide organizational effort. It involves leaning from success of others (Peters, 2006).

1.7.4 Key performance Indicators

These are performance measurement for key values necessary to achieve success in an undertaking (Reh, 2010).

1.8 Chapter Summary

This chapter puts into perspective the concept of performance management and its application in modern day operating environment. The chapter defines the concept and differentiates it from performance appraisal as more elaborate and supportive of firm’s strategic objectives. The chapter also detailed the purpose of the study that was to find out the gaps that exist in the KUC’s performance management system and to come up with recommendations for adjustments that will put the institution on a path towards continuous performance improvement. In this pursuit, the three research questions to be answered were identified and the population from which the sample was drawn. Lastly, the research lists the beneficiaries of the research including employees, human resource managers and organizations keen to gain competitiveness from their human resource.

CHAPTER TWO

2.0 LITERATURE REVIEW

2.1 Introduction

Chapter 2 is a discussion on the various publications on the subject of performance management in line with the objectives of this research. The objectives of this research was to find out how performance appraisal is conducted, establish the main challenges faced in the appraisal process and identification of the best practices that KUC can adopt for performance appraisals.

2.2 The process of Performance Appraisal

2.2.1 Performance Appraisal explained

Performance appraisal is a periodic assessment of employee performance and productivity line with the objectives of the organization (Manasa & Reddy, 2009). Results of the process are used to gauge employees’ accomplishments as well as their potential for future improvements. Performance appraisal is done annually with the feedback used to counsel and develop employees, identify their training needs and align the compensation structures within the organisation (Manasa & Reddy, 2009).

Performance appraisal differs from performance management in that the earlier is carried out on a top-down basis with the supervisor acting as the judge with minimal employee involvement (Management Study Guide, 2012). Grote (2002) rightfully stated that the objective of the performance appraisal was to value each employee’s contribution against his rewards and take corrective action if the disparity is large. For this reason, performance appraisal was done on an annual or biannual basis depending on the particular entity. On the contrary, performance management focuses on the mutual objectives set by the employees and the management through a dialogue process (Management Study Guide, 2012). It is done continually and focuses on quantifiable objectives, behaviors and values (Management Study Guide, 2012). It thus leaves no room for subjectivity of the supervisor and aims at determining the points of improvements available to both the employer an employee.

Performance management dates back to the early 20th century when Fredrick Taylor equated employee’s compensation to their output at work (Vroom, 1990). In those times, appraisal was less formal than it is today and involved the aspect of units produced per given time (Lyster, Eteoklis & Arthur, 2007).

***** offers that performance appraisal is a mere step within the wider performance management paradigm. He notes that performance appraisal is an objective analysis of the facts and not the person. After getting the results of performance appraisal exercise, the wider process of performance management moves a step towards the final goal of aligning organisational and employee’s goals. According to ***, positive results are celebrated while negative results should prompt development of an improvement plan.

Performance appraisal uses a number of methods including graphic rating, ranking, behavioral anchored rating and management by objectives (Cokins, 2009). Cokins explains that the choice of the method used for appraisal depends on the goals of the organizations. Zaffron and Steve (2009) add that regardless of the method used, regular communication and feedback from the managers is essential for success of the appraisal process. That way, work teams in an organization feel that they are working towards a common goal (Grote, 2002).

2.2.2 Purpose of Performance Evaluation.

Heskett (2006) attributes the negative perception of performance appraisal among employees to the general lack of understanding about the purpose of appraisal. The Management Study Guide (2012) details out that performance management helps in defining responsibilities of both the individual and the team in the Key Result Areas. That way, coordination and control among the various departments in an organization becomes easy. The Management Study Guide notes that knowledge of responsibilities enables the employees to take initiative and work towards their set targets while improving their areas of weakness. This is as affirmed by Daniels (2006) that an objective and participative performance management process fosters learning and continuous improvement as opposed to breeding animosity.

Performance management cultivates a feeling of shared mutual accountabilities within an organization (Shepard, 2005). This way, Sheppard notes that employees are able to overcome resistance to change and are ready to improve on KRA’s. Leahy (2003) who offered that effective performance management anchors other operational metrics like the balanced scorecard has supported the views.

Effective performance management is crucial in motivating employees (Akrani, 2011). Akrani notes that performance management starts with employees setting goals that they intend to achieve over a given period. The employee assesses what he/she has done against the set targets. Given that the employer and the supervisor mutually set the targets for performance, the employee strives to reach the set targets (Akrani, 2011). Performance below the set standard is taken as an opportunity to improve as it is within the employees’ capacity to achieve. Beach (2007) explains that the employees give up trying if they feel that the set targets will not be achieved. Since the performance management entails mutual goal setting, such incidences are unlikely to occur. Instead, and as Akrani points out, performance management helps organizations determine the training and capacities for each of their employees.

Gamble, Strickland and Thompson (2007) explain that data obtained from performance appraisal is crucial in determining the right people to execute organizational strategy. Employees with the highest performance are easily identified and encouraged to undertake roles that are more challenging. In most cases, results from performance appraisals are used in the determination of employee compensation (Heathfield, n.d) a fact that Kirby (2005) detests. Appraisals are used to determine compensation and promotion levels that assist in linking rewards to performance among the staff (Heathfield, n.d). However, appraisals on their own should not be used as basis for promotions and rewards (Kirby, 2005). Given that the main goal of performance management process is to assist employees in setting goals and aligning them to those of the organization, it is crucial for performance and rewards framework be aligned to this process as opposed to mere performance appraisal (Lyster, Eteoklis & Arthur, 2007).

Lastly, performance appraisals play a huge part in shaping behaviors and attitudes of employees (Panager, 2009). Panager notes that employees relate well with the management and are responsive to the changing demands of their workplace. This is consistent with the Conaty and Ram (2011) assertion that human resource is the strongest catalyst or inhibitor of organisational change efforts. Performance management helps an organization to gauge its human resource’s effectiveness in coping with change (Conaty & Ram, 2011).

2.2.3 Common Performance Appraisal Practices.

The most common performance appraisal practice involves ranking employees from the best to the worst (Griffin, 2007). The method is mainly subjective with the supervisor’s judgment being crucial in the ranking of each employee. This subjective approach exposes the process to bias and manipulation by the management. Lunenburg & Ornstein (2011) offer that ranking involves the supervisor rating each employee based on employees’ traits and behaviors in comparison with the rest in the organisation. Despite its subjective nature, ranking gives a clear picture of employee performance relative to the rest of the employees within the organisation and offers them real models that they can follow within the organisation (Coens, Jenkins & Block, 2002). However, Griffin (2007) offers that ranking method is prone to bias and can result in poor relationships within work teams. Besides, ranking stifles the opportunity for feedback within an organization and sows a feeling of inferiority among underachievers (Coens, Jenkins & Block, 2002). In the same way, Coens, Jenkins and Block note that persons who are consistently ranked on top of the rest lack an opportunity to improve on their performance as they feel they have done enough. Lastly, Beach (2007) explains that ranking creates an adversarial relationship between work teams that stifles the spirit of cooperation between employees.

Paired comparison resembles ranking method only that the performance of each employee is compared to that of every other employee based on a single criterion (Mondy, 2008). If an employee receives the highest number of favorable comparisons, s/he is ranked the highest. The process is more objective compared to the ranking method but poses huge problems for organizations with large numbers of employees (Mondy, 2008).

Another performance appraisal system commonly used in organizations is the graphic rating scale. Under the system, evaluators judge performance of employees on a scale of about 5-7 categories (Mondy, 2008). These categories depict the rating of the employees by use of appropriate adjectives such as needs improvement, outstanding, average, meets expectations etc. The method is good in that it can be quantified by assigning numeric values to the descriptors. It is also easy to administer and can be tailored to meet specific needs of a given organization (Mondy, 2008).

Under the forced distribution method, the evaluator assigns individuals to a limited number of categories, similar to the normal frequency distribution curve. Few individuals get very high ratings while a few get very low ratings. Most of the employees rate at the center of the curve (Armstroong, 2009). Mathis and Jackson (2011) decry that this system explicitly calls for evaluators to distinguish between winners and losers even if their performance is not rightly so. For this reason, the method is unpopular among managers and employees as it stifles the concept of employee development and assumes that there must always be very good and very poor performers in the same organisation (Mathis & Jackson, 2011). It also creates cutthroat competition among employees that disarrays synergy (Beach, 2007).

Another employee appraisal technique is called critical incident method. Under the method, the evaluator maintains records of favorable and unfavorable performance during critical incidences (Mondy, 2008). These incident log records are maintained continually and are used as indicators of employee performance. Ostrom and Wilhelmsen (2012) explain that this method lacks intellectual merit as it is dependent on the frequency of occurrence of critical incidences.

Behaviorally anchored rating scale (BARS) is an appraisal technique that aspects of critical incident method and the rating scale method (Mondy, 2008). Under the method, the performance level of each employee is described on a scale. The evaluator then compares the different performance of each employee to decide the best performing and those in need of more training. Mondy offers that this system is more objective but is hard to quantify for further analysis.

One of the most common performance appraisal methods today is referred to as Management by Objective (MBO). Mathis and Jackson (2011) and Mondy (2008) define the method as a result based system under which the employees and managers set objectives together that form the basis of appraisal in the next appraisal period. The employee actual output is compared to the set performance targets and points of improvements identified (Griffin, 2007). Management by objectives arises allows management to see the wider picture of the organsaitional and the part that each employee plays in it and to remain on curse to achieving the overall strategic objectives of the firm (Drucker, 1954). Employees also conduct a self-audit of their performance potential and chart out the best course for attaining the mutually agreed goals (Pecora, Cherin & Bruce, 2009).

2.3.4 Frequency of Performance Appraisals.

In most organizations, employees and their supervisors deliberate on their performance over a given period typically annually, biannually or quarterly (Garber, 2004). Tripathi and Reddy (2008) list two major forms of performance appraisal namely summative and formative. They explain that a summative performance is done occasionally typically in three to six months relative to the organization in question. On the contrary, formative appraisal is done continually typically daily. Formative appraisals are important in that the employees can track their performance over time and determine their weak points for improvement. This is as opposed to summative appraisals under which employees have no trail of their past performance (Management Study Guide, 2012).

Many scholars emphasis on the need to perform appraisals based on a schedule (Miller & Braswell, 2010; London, 2003; Mathis & Jackson, 2011). Routine performance appraisal avoids the temptation of focusing on irrelevant activities (London, 2003). That said, the management is responsible for ensuring continuous performance appraisal taking care not to forget critical incidences (Miller & Braswell, 2010). Though appraisal is done continually according to the set schedule, it is important for the managers and subordinates to sustain informal communication throughout the performance period to take advantage of any opportunity to change negative trend (Edwards et.al, 2003). Edwards et al also cites the preemption of negative surprises at the end of an appraisal period as good reasons for maintenance of these informal contacts. Abbey (2007) notes that in most organizations, appraisal forms are used to capture employee’s accomplishment in the past year as well as some aspects such as their relationships with team members, their personality traits and flexibility, etc.

2.3 Challenges are faced in Performance Appraisal process

Most organizations experience challenges in their appraisal processes. Deming (2000) once cited that performance appraisal is one of the most powerful inhibitor to quality and productivity. More recently, Lee (2006) offered that performance appraisals inspire hate and distrust among employees. Challenges in performance appraisal occur from the fact that the processes are based on widely held and invalid assumptions that hold back progress (Scholtes, 2008). Lee aptly described the processes as designed to measure and rate performance as opposed to improve it.

Past research works (DeNisi & Williams, 1988; Longenecker et al., 1987) cite subjectivity among the evaluators as well as different standards used for different employees as major problems in appraisal process. More recently, Lee (2006) cited lack of congruence with organizational objectives as well as lack of use of the results to improve performance. Lee adds that the results of performance appraisal should be used to motivate employees as opposed to instill fear and loathing as to stifle the spirit of teamwork. Hazard, (2004) and Nickols (2010) explain that performance appraisal demotivates the employees, is too subjective and unfair in application, and takes too much time and is seen as a management attempt to coerce employees to submit to management authority.

2.3.1 Employees Motivation

Wilheir (2010) explains that motivation is the only effective tool for ensuring effective employee management. According to Wilheir employees, lose motivation when duties become repetitive, too difficult or too easy. The management should ensure that their employees remain motivated and productive throughout their engagement in the organization (Hazelden, 2010). Hazelden (2010) adds that the most common causes of employee demotivation include lack of information, unrealistic expectation by management, feeling of excessive control by authorities and lack of management appreciation of effort. Noone (2008) adds that to keep employees motivated, the management should develop clear goals and keep the roles interesting for the employees. That way, Noore asserts that employees are unlikely to deviate from the organisational mission. .

Employee motivation is crucial to achieving the g