5.0 Introduction
One of the most important activities of an HR is maintaining and enhancing the workforce. after all the effort and cost involved in the recruiting and selection process, it is important to develop employees so that they are using their fullest capabilities, thus improving the effectiveness of the organization. Performance management is the ongoing process of evaluating and improving employee performance. Therefore, it is important that the organization develop procedures and policies, which comply with process.
The development of standard performance appraisal process will help companies to improve their bottom-line performance, uplift motivational efforts, and resolve most moral problems. The purpose of this lesson is to provide an understanding of this stage of the success system model: a description of the performance management and appraisal process. This includes the major appraisal techniques, discussing various rating methods, and identifying several performance evaluation problems. Performance management is key factor in enhancing the development of the organization’s employees.
5.1 Performance management
The performance management system should provide benefits to both the employee and to the organization. For the individual, the appraisal should provide a management information system for making management decision as well as a toll for improving performance. Today’s organization can no longer afford to live with an ineffective appraisal system. Practically all managers and many employees dislike the experience of performance appraisals.
However, the pulses far outnumber the minuses with many good reasons for formally appraising performance. The appraisal is a more factual presentation to demonstrate an employee is failing within the functioning of a group or document. On the positive side, appraisals will also provide valuable insights as to the future direction the department or work group will take. Performance may be defined as the accomplishment of an employee or manager’s assigned duties and the outcomes produced on a specific job function or activity during a specified time period. Performance appraisal, review or evaluation refers to s systematic description and review of an individual’s job performance. Performance management refers to the total system of gathering information, the review and feedback to the individual, and storing information to improve organization effectiveness. The primary goal of performance management appraisals is to improve organization performance. The appraisal are used for a variety of purposes, including the following:
1. compensation one of the most common uses of performance management concerns compensation determining pay increases, bonuses and other pay related issues
2. performance improvement an example of this is where companies use appraisal systems which link performance improvement with pay. An effective appraisal system performance is nessesary for these incentive systems to work.
3. Inter appraisal Performance appraisal information is also used in performance decisions, to determine promotions, transfers, or in the case of downsizing, do identify possible layoffs. Most organizations rely on performance appraisal information in deciding
which employees to promote to fill openings and which employees to retain in a downsizing situation. One problem with relying too heavily on performance appraisal information in making decisions about promotions is the the employee’s performance concerns only his or her current job if the promotion involves different skills from the employee’s current job, it is often impossible to predict how the individual will perform at the new level.
4. Evaluation performance appraisal information may also be used to evaluate the effectiveness of the recruitment process, to validate selection criteria or other predictors of job performance. In these cases, the HR manger on-the- job performance appraisal so
that the test scores or selection ratings can be correlated to job performance
5. Internet feedback This is a feedback system where employees send feedback to assist managers in assessing their leadership skills. The system is user friendly and is seen by employees as worthwhile. The system feedback not only assesses manager’s team
leadership skills, but also helps them develop those skills. The advantages of the system include the reduction of paperwork, reducing employee’s times, and maintaining employees anonymity while providing prompt feedback. The result is informative
feedback that promotes leadership development.
6. Development tool Performance appraisal may also be used as a development tool for the individual employee, providing an opportunity for feedback, recognition, and reinforcement.
This performance review also provides employees with career goals and direction for future performance
The appraisal allows the organization to select those best qualified for promotion suggest areas where training may be effective, and help improve individual performance, resulting in improved bottom-line productivity. From the individual’s viewpoint, performance appraisals should provide recognition of one’s contributions; a feeling of support from one’s immediate supervisor and the feeling of security from knowing one is performing satisfactory.
When giving feedback to an employee in an appraisal, the interview should have the necessary information to make the evaluation of job performance and present a summation of that information. At this point the feedback session should trun to a discussion of developing strengths, thus shifting into a counselling session. It is suggested that supervisors keep a file on each worker, noting significance accomplishments or setbacks and appraisals as an ongoing process.
5.2 The performance appraisal review process
the performance appraisal review process provides a critical element in the development of organization’s most valuable resource: its employees
1. identifying performance standards The appraisal attempts to identify the key skills, behavious, results and output be reviewed, usually form job analysis data. Performance standards specify what is to be accomplished, and some measure of how well it is being
accomplished, and some measure of how well it is being accomplished. The more the performance standards are communicated to employees, the more accurate and fair the review process. In general, the greater the specificity of the standards, the more effective
the systems
2. the appraisers The appraisal is usually performed by one’s immediate supervisor. The rationale is that this individual has the most opportunity to observe the employee, should have a better understanding of the job being performed and is motivated to optimize the
employees performance appraisal because the supervisor’s future is directly linked to the organizational units profitability. The immediate supervisors should utilize to minimize any appearance of giving critiscm. This can be accomplished by focusing on results rather individual personality. One should be aware how voice tone can change a person’s interpretation of what is being said. The supervisor should regard the employee as a teammate and involve the person in the process. The future should be stressed that the past. The emphasis should be on the positive benefits to be attained by adapting the suggested adjustments. At the same time, it should be pointed out if the adjustments are not made, there will be consequences.
3. Self appraisal Other performance sources include surbodinate self-appraisals that are completed prior to there view session and then used as the agenda for the session. The effectiveness of self appraisals depends upon a trusting relationship between superior and
surbodinate. Also, not to be overlooked is the surbodinate’s expectation of one’s peer group as to their honesty and accuracy in their own self-appraisal
4. Peer appraisal/multiple appraisal Many organizations are finding that multiple raters add to the effectiveness of appraisal system. Ratings collected from several sources tend to be more accurate and have fewer biases. Still another form is peer appraisal, here one’s
follow workers rate each other. Again, trust must prevail, along with accurate and frequent observation of each other’s work behaviour. Often peers (or customers )have better knowledge have better knowledge of certain aspects of the employee’s work performance.
This method often places greater emphasis on team performance and team rewards
5. Surbodinate rating Yet another form is the reverse procedure of surbodinate evaluating superiors. This may be placing an unfair burden upon the surbodinates who, on top of being expected to perform their jobs satisfactorily, now are placed under the additional
stress of evaluating the person who will soon be evaluating them. Also, this assumes the surbodinates criteria is similar to the goals and objectives of the organization. Many organizations use self, surbodinate, peer and supervisor ratings as a comprehensive
appraisal. Although these sources of evaluation are innovative and thought provoking, they are not generally accepted in most organizations
5.3 Performance Appraisal methods
the appraisal methods that appear to be in more general use include rating scales, ranking, checklists, forced distribution, paired comparison, essay, critical incidents, and management by objectives. The number of perfomance appraisal methods listed is an indication of the importance placed on the process by the management. Another factor is test validity.
5.3.1 Types of validity
A test is said to be valid for selection purpose if there is a significant relationship between performance on the test and performance on the job. The better a test can distinguish between performance on the test and performance on the job, and the better a test can distinguish between satisfactory and unsatisfactory performance of the job, the greater its validity. Applicants’ scores on valid tests can be used to predict their probable job performance.
The for basic types of validity are
1) Predictive validity
2) Concurrent validty
3) Content validity
4) Construct validity
Each type is discussed as it relates to appraisal
1) Predictive validity: This method of validating employment practices is calculated by giving a test and comparing the the results with the job performance of those tested. There are several problems with using predictive validity, even though it is considered
sound in a statistical sense. For example, a relatively large number of number of people have to be hired at once, and the test score cannot be considered. Obviously, the firm may initially hire both good and bad employees. Because of these and other problems,
another type of validity is often used- concurrent validity.
2) Concurrent validity: Concurrent essentially means ”at the same time”. Using concurrent validity, current employees (instead of those newly hired) are used to validate the test. The test is given to current employees, and then the scores are correlated with their
performance ratings. A high corelation suggests that the test is able to differentiate between the better and the poorer employees.
3) Content validity: This type of validity uses a logical and less statistical approach. In content validity a person would perform a test which is an actual sample of the work done on the job. thus, an arithmetic test for a cashier would contain some of the
calculations that a cashier would have on job. content validity is especially useful if the workforce is not large enough to accommodate better statistical designs.
4) Construct validity: This type of validity is more difficult to deal with than than the others. In practice, construct validity describes some measure (such as a scale or index) of a variable that correlates with measures of other variables. These variables should agree
with a theory as to how they related.
5.3.2 Rating Scales
Rating scales usually include graphic, weighted, and behaviorally anchored criteria. The graphic rating scale is the simplest and most commonly used. A list of performance variables is determined for the particular job such as attendance, production, and cooperation. For each performance variable, there is a listing of levels of performance ranging from exceptional to below normal. The individual merely circles the performance level that is believed to have been achieved. Scoring is done by simply adding the number values assigned to each performance level, from exceptional to below normal.
The graphic rating
The graphic rating scale is the same as the graphic rating scale, with the exception that the performance variables receive different weights depending upon their importance in performing the job. The rating procedures is the same except that each variable has a box in which the rate indicates with a 1,2,3 and so on, the relevant importance of that variable. scoring is achieved by multiplying these numbers times the value of the performance levels ranging from exceptional to below normal. How ever , the weighted graphic rating scale, although emphasizing the more important performance variables, suffers the same problems as the graphic rating scale. Rater
subjectively is still present, as is the tendency to overrate present behaviour and group people within a narrow range.
Behavioral anchored rating scale BARS
A more sophisticated form of rating is the Behavioral Anchored Rating Scales, commonly referred to as BARS.BARS are graphic scales with the performance variables anchored in description of actual job bahaviour. For instance, BARS for a wage and salary administrator might range from“ maintains a current database „ to „fails to coordinate with appropriate committees. “BARS are constructed for each individual job category, and not for individual positions within these categories. The results are BARS that are broadly descriptive to cover the positions within job categories. The reasons for this are that constructing BARS is very time consuming ,very costly and very often needs to be updated .it is often not practical to do this first for each individual position .BARS appear to provide a workable system. It also has the advantage of using job categories which are closely reviewed from performance content. The anchors are job descriptive and should promote rate accuracy.
360 Degree or Multirater
This process allows employees to receive constructive and accurate rating feedback. The rating information is gathered from a questionnaire with approximately 100 items to obtain ratings. The questionnaire is usually completed by a work group of around ten people. This work group includes the person being rated, there boss, several peers, and subordinates.
Ranking
Another appraisal method is ranking. indivuals are evaluated from best to worst on some single performance criteria. This procedure may be changed by alternative ranking the best and worst, followed by the second best and second worst , until all individuals have been ranked. The result is rather simplistic evaluation that may be difficult to defend especially to defend as one reaches the middle of the group, when the best and worst designation differences may be extremely difficult to decide.
Paired Comparison
Paired comparisons require the rater to compare pairs of rates on performances which two individuals are compared at a time to determine which one is the better employee. Then, another two names are compared until every individual has been paired with every other individual. The final winning score would better individual having been chosen over the others. The paired comparison method is simple, but cumbersome to use. However when the number of employees to be ranked reaches 20,there would be 190 comparisons the result of which would dilute ones ability to make distinctions yet, This method does seem to reduce the central tendency, leniency strictness and halo errors.
Behavioral Checklist
Checklist appraisal are another appraisal method and are either basic, weighted or forced choice. The basic checklist development follows a procedure similar to BARS, in that a job analysis must be performed to come up with a job description. Then, several performances categories are indicated from which a wide range of favourable and unfavourable bahaviours are created. These are then randomly assigned to the checklist representing an accurate statement of favourable and favourable job performance. Randomness keeps the evaluator alert, because each behaviour must be carefully read and helps control tendency . Although checklists are easy to use and score, they are time consuming and costly to construct. Such checklists tend to be abroad and to make them more job specific
increases the cost. Also , basic checklists assign equal weight to each item ,ignoring any contribution differences of performance variables. However , the weighted checklist overcomes this problem. The procedure to determine weighting of the checklist is quite simple. A list of performance variables is drawn up, and knowledge persons assign varying weights depending upon their judgements as to the relative value of each variable for job performance. At times, organization policies, such as concern for safety , will be
reflected in higher weights.
Forced choice
The forced choice appraisal techniques are rating method that requires the rater to make choices among descriptive sentences. The forced choice checklists is a time consuming method because it requires the development of a set of sentences ranging from the high level of performance for variables such effort ,to the lowest level of acceptance performance. If an accurate set of sentences is developed, then the result may be a reduction of rater error, particularly central tendency .One technique often used to keep the raters alert is using a combination of positive and negative sentences for each job variable. Raters are not given the screening format , so they unable to intentionally give high or low ratings.
Forced Distribution
Another method of appraisal is forced distribution, which presents the rater with a limited number of categories and require and require a designate portion of ratees for each category. This technique is relatively simple and inexpensive. Employees are
divided into set categories, such, as the highest rated individuals for a particular variable quality, attendance, etc. This highest category must include 5 percent of all the employees being rated, the above average category must include the next 15 percent, the average category must include next 60 percent, and so on. One problem with forced distribution is that the group being evaluated may exceed or not meet the designated percentage category, thereby diluting the validity of the category. As with other forced techniques ,rater errors such as central tendency and to be reduced; however the forced distribution may cause ill feelings among raters and
ratees because the method is so objective.
Implementing performance management
A business may have the latest performance management systems, but it will fail unless it is implemented or put into action correctly. Front line supervisors may not understand the goal of the system and are confused by the objectives .Is the aim of the system to help employees meet the company’s expectations which will further their job security , Or is the system designed to have a record that will inhibit employees from suing the company Actually, performance management is a mixture of both. It is not one or the other. The following suggests some aspects of implementing a performance management system. Setting Expectations. Employers must provide employees with clear instructions of what the company expects of them. It would be unfair not to do this and then terminate employees. Not only is it unfair, in adversal proceedings (courts, arbitrators, or commissions one of the first questions asked is“….. did the employees fail to meet in terms of conduct, performance, or behaviour“ Employers who reply the employee should have known will usually receive the reply “,You should have told them.“ Big trouble!
Notification of Not Making the Grade. An employee discharged is unfair if the employee has not been told previously that ones job is on the line. This notifies employees they are not making the grades so they can make the suggested changes to preserve their job.
When employees know their records reflect their shortcomings, they are less likely to sue, which would place their personal records into the public record.
Nonpunitive discipline. Many supervisors are reluctant to punish their children, let alone adult employees. Most will not use discipline, even if the employer requires it. Nonpunitive discipline can be used and many believe it generates more effective results . Employers have the right to be treated like adults and should and should be counseled on their job shortcomings in a direct
and nonpunitive manner.
Deficiencies, Not causes. When employers try to address the real cause of a workplace problem such as emotional , medical ,or personal, there is a real risk of law suits. The reason is when you do so you are actually considering the employee as having a disabling condition which is against the law. Focus only on what takes place at the workplace. Do not inquire nor spectaculate as to
what may be the“ real“ Avoid Intent. When employees do not meet the company expectations, it does not mean they are bad and do not care. Stay out of the trap of analyzing the employees thoughts. you cannot prove an employee doesn’t care, but you can prove missed deadlines and defective work. If you focus on subjective intent, you allow the employee to divert attention away from the real issue of objectives deficient work behaviour.
Avoid Delay. If one must discipline employees ,do not delay. The longer time elapses, the more rigid our view of the employee becomes. Employees should have a chance to improve, not be judged prematurely. By acting quickly, you reduce the possibility the employee will raise protected complaint such as harassment or disability.
Other aspects of implementing performance management , which requires attention, is providing employees the opportunity to defend themselves. There are usually two side to every work incident. Employees should have a reasonable opportunity to improve. Any discipline should be progressive with reasonable time between each stop. The business should make good use of the introductory periods of 30 to 90 days at the beginning of employment to document employee work problems. If the new employees will not work out, now is the time for discharge. It is only fair to the particular employees so they can invest their time and effort in a more suitable job. All discharges should be the some for similar situations. Double standards and favoritism will cause legal problems later as comparisons are made. Always provide an appeals procedure such as per review because although companies try to be fair , errors will occur.
5.4 Performance Appraisal Problems
Performance appraisals and merit rating plans sometimes fail. When this does occur, there are several possible explanations or problem areas. Sometimes these plans not only attempt to motivate individuals to increase effectiveness, but also direct link pay raises and promotions. When this takes place during the evaluation feedback session, employees are more interested in the final result: that is, will they receive increased pay or a promotion , The result is the ratee often pays little attention to the feedback portion of the session. The feedback session should not include any pay rise or promotion decisions if future employee motivation is one of the expected outcomes. Pay raises and promotion should be discussed at later sessions.
In a feedback session using employee self ratings of their performance, there may be problems with the surpervisors rating differing. Such issues go beyond just the differences in overall ratings and require additional discussion. On cause of appraisal may be the lack of top management support. The result is that both the rater realize little will result from the evaluation process so they merely go through the motions, often wasting valuable time and energy. It is only when management supports appraisal and makes it known to the later that their future with the company depends upon their effectiveness in evaluating ratees, will there be appropriate results. This also applies to the ratees because they must be convinced their evaluations will eventually decide future career opportunities, pay raises, and possible promotions.
When the company is unionized, the major cause of evaluation problems is sing seniority as the basis for pay increases, promotions, and other work related issues such as vacations, shift preferences, and overtime. Although this is a contractual procedure, subject to negotiations, the company often does have other choices. For instance, the company would prefer to keep the seniority unit as small as possible, permitting the seniority restriction to apply to the smallest number of people and thus allowing greater company discretion in appraisal. Of course, the union desires larger seniority units, because it hopes to maximize the number of people to who the seniority rule applies. For example, in a layoff situation, the seniority person would bump the least senior person. When units are small the effects of seniority are often minimized. Other approaches to the seniority issues would split merit and seniority system, with extra, performance points given for years of service. Also, when merit measures favor a non seniority person over a seniority person, a joint management union committee could resolve the issue. The seniority issue aside performance management appraisal plans will continue to be major factor in determining pay increase, promotions, and retention in business organizations.
5.5 The appraisal interview
The appraisal interview gives a manager the opportunity to discuss a surbodinate’s performance record and to explore areas of possible improvement and growth. It also provides an opportunity to identify the surbodianate’s attitudes feelings more thoroughly and thus to improve communication. Usually the appraisals are conducted once or twice peer year. In smaller organizations, appraisals may be few and far between, but they are important.
The format for the appraisal interview will be determined in large part by the purpose of the interview, the type of appraisal system used, and the organization of the interview form. Most appraisal interviews attempt to give feed back to employees on how well they are performing their jobs, and to make plans for their future development. Interviews should be scheduled far enough in advance to allow the interviewee, as well as the interviewer, to prepare for the discussion.
Areas of emphasis
A major purpose of the appraisal interview is to make plans for improvement; however, it is important to focus the interview’s attention on the future rather than the past. The interviewer should observe the following points:
- Emphasize strengths on which the employee can build rather than weaknesses to overcome
- Avoid suggestions about the personal traits to change; instead suggest more acceptable ways of performing.
- Concentrate on opportunities for growth that exist within the framework of the employee’s present position.
- Limit plans for growth to a few important items that can be accomplished within a reasonable period of time.
Although fairness issue is a major concern in all the working areas of HRM, it is very important in the appraisal interview. The principles of justice for the basis for HRM practices in hiring, performance appraisal and rewards. There is ample evidence that fairness increases the company’s employee loyalty. The result is satisfied, committed employees who are willing to demonstrate
extra job effort. This leads to positive employee job behaviors even if they are relate only to job description, performance appraisals, or reward programs.
The appraisal interview is perhaps the most important part of the entire performance appraisal process. Unfortunately, the interviewer can become overburden by attempting to discuss too much as the employee’s past performance and future development goals. Dividing the appraisal interview into sessions, one of for the time pressures. Moreover, by separating the interview into two sessions, the interviewer can give each session also may improve communication between the parties, thereby reducing stress. A good , supporting feedback interview can result in greater employee satisfaction with the appraisal interview.
Another source of ineffective performance is the normally happy employer who suddenly demonstrates negative behavoir. Over a period of several weeks their behavior becomes aggressive and threatening. It could be cause be by medical condition, such as depression, or because the employee has stopped taking prescribed medication. Whatever is causing the behavior change must be unique to that person, although some people are naturally antagonistic or withdrawn. An important consideration is the disturbed employee may cause valuable employees to transfer or leave the company.
Ineffective behavior maybe caused by the work environment. The competitive of work with its budget cuts, restructuring and high tech advance are extending the reach of the workplace, overloading many employees. Employees begin to burn out when the negative pressure, conflicts and demands increasingly outweigh the positive of personal acknowledgement, and successes. Exhausted workers report lower job satisfaction, lower commitment and higher job turnover. Because highly motivated and committed employees are apt to burn out the company is losing its best people. Companies must increase their acknowledgement and show appreciation to
employees doing a good job. these rewards should be distributed fairly to employees because an unfair a location increases negativism.
5.6 Improving performance
In many instances, the appraisal interview will provide the basis for noting deficiencies in employee performance and for making plans for improvement. Unless these deficiencies are brought to the employees attention, they are likely to continue until they become quite serious. Sometimes, under performers may not understand exactly what is expected of them. However, once their responsibilities are clarified, they are in a position too make the corrective action needed to improve their performance.
Source of ineffective performance
There are many reasons why an employee’s performance might not meet standards. First each individual has a unique pattern of strengths and weakness that play a part in addition, other factors such as the work environment the external environment including home and commonly and personal problems have an impact on a job performance It is recommended that the appraisal of ineffective performance focus on three interactive elements; skill effort and external conditions for example if an employee performance is not up
to standards, the cause could be skill problem (knowledge, abilities technical competencies,) an effort problem(motivation to get the job), or some problems in the external conditions of work (poor working conditions, supply shortages, difficult sales territories). If any one of these there elements re unfavourable, performance will usually suffer
5.7 Improving ineffective performance
The first step in improving ineffective performances to determine its cause once the cause is known, a course of action can be planned. This action may include providing training or improving the skills needed for effective member of the organization. In other situations, greater attention may have to be focused on incentives to motivate the employees. If effective performance persists, it may be necessary to demote the employee take disciplinary action, or discharge the person from the organization. Whatever action is taken, it should be done within legal limits, with fairness and with recognition of the feelings of individual involved. This required a formal approach to a progressive discipline program. The most appropriate match of discipline to a specific offenses should be gorverned by the severity of offense, employee’s past performance record, length of time employed, and past penalties for similar offense. Appropriateness of discipline usually begins with the first step being a verbal warning, the second a written warning and third a final written indicating the disciplinary action
Optimal performance
The performance management process is designed t assists employees to develop their full potential ; that is to obtain their successful performance in the work environment. With the flattening of the company structure and the emphasis on quick response, more work is being done in task force and project teams. Employees are placed in teams with members of varying skills and must move quickly to complete their assignments before moving on to a new team and new project. The management consult believes this recruiting redeployment of employees is not being accomplished in an efficient manner. They may be mis assigned or mismatched. the situation
may also be inappropriate for the employee to achieve optimal performance
What is optimal performance? This occurs when employees produce outstanding or optimal results for this take place, the employee must be selected to perform in a particular work environment requiring that persons unique talents, which lead to their high performance pattern. Outstanding personal success is not random, accidental, or lucky. An employee does certain things when successful which are different when not successful; the person is in their high performance pattern. Each person has high performance pattern which is unique to the person. No two people have the same high performance pattern for successful performances to achieve
performance, there must be a careful people match between the job assignments and adjustments in how work is assigned to capitalize on the unique success patterns of the team members. Some companies have tried this approach and were highly successful. From the perspective of performance management, very performance review would become an original appraisal. This would appear to require a rethinking of performance management process
