PERFORMANCE APPRAISAL AND MANAGEMENT NOTES
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.
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:
Purposes of Appraisal
- compensation one of the most common uses of performance management
concerns compensation determining pay increases, bonuses and other pay
related issues - 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. - 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. - 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 - 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. - 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.
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
- 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 - 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. - 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 - 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 - 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
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.
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.
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
