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In Focus: Performance Appraisal

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    In Focus: Performance Appraisal

    The introduction of performance appraisal and the continuous application of such process whether to maximize time efficiency, asses an employee’s capacity, or define rewards and awards an employee must have, brings debate over different company circles within different companies across the globe. On one hand, a circle that believes that time management increases the potential of an employee to maximize his or her capacity; and on the other, one that believes that time management deprives or abuses an employee or a subordinate of his or her rights, which often occurs due to the misuse of such process.

    Performance appraisal, since the 20th century. The idea of performance appraisal initially started from the study of Frederick Taylor in 1911. Taylor, studied how energies of a steel industry could be efficiently maximized, he argued that “even the most basic, mindless tasks could be planned in a way that dramatically would increase productivity, and that scientific management of the work was more effective than the “initiative and incentive” method of motivating workers”. (www.netmba.com.:2007). Taylor popularized time studies also known as time and motion studies wherein he timed a worker’s sequence of activities through a stopwatch. As time went on, different perspectives which have affected the world, giving of considerations on corporate integrity and ethics, corporate social responsibility, and other corporate responsibility concepts changed the perspectives of corporations in terms of human development and corporate growth (from man = machine, and man = human being) are part of this. The formal procedures of performance appraisal however date back to the time after the Second World War, about 60 years ago. At present, performance appraisal is employed by different corporations to maximize efficiency, and identify the strengths and weaknesses of an employee.

    Objectives of Performance Appraisal. The objectives of a performance appraisal depends upon the goals of a corporation, however, its aim in general is to provide the following: “Give feedback on performance to employees; Identify employee training needs; Document criteria used to allocate organizational rewards; Form a basis for personnel decisions-salary (merit) increases, promotions, disciplinary actions, etc.; Provide the opportunity for organizational diagnosis and development; Facilitate communication between employee and administrator; (and) Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.” (en.wikipedia,org,, 2007). Different methods of conducting performance appraisal are present at today’s corporations, some methods are more intensive in quantitative analysis, while some are intensive in qualitative analysis and their methods. There are two methods popularly used as performance appraisal process, these are Management by Objectives and the 360 Degree Appraisal.

    Management by Objectives.  Management by objectives is a performance appraisal technique used by most corporations and other organizations and institutions such as the United States Air Force. It was described by Peter Drucker, in John Tarrant’s Book (1976:78) as “the system of management by objectives can be described as a process whereby the superior and subordinate managers of an organization jointly identify its common goals, define each individual’s major areas of responsibility in terms of the results expected of him, and use these measures as guides for operating the unit and assessing the contribution of each of its members.”  It has long been used for over 50 years as cited by USAF Captain James S. Seevers (2002) “Management by objective (however) is not a new concept. It was introduced as a supplementary management tool by Alfred Sloan in the early 1950s; however, Peter Drucker is credited with making it a central management concept in his classic management book, The Practice of Management, in 1954.” Management by objectives also referred to as MBO is a means of evaluating the subordinates and officers in a participatory process. However, the failure to emphasize that such process must encourage a participative approach may hinder the process’ success. As another USAF officer, Captain James M. Grant (1978 : 4) warns, “Introducing MBO without first educating people to the concept of participative management is to ensure the failure of the program.” Some critics such as Rodney Brim (2004) describes MBO as insufficient and that “…their assumptions did not take into effect certain aspects in the workplace reality.” This, in some cases is true since not all MBO programs are studied to fit a participative approach.

    360 Degree Appraisal. From its title itself, a 360 Degree Appraisal credits both the opinions of both the officer and subordinate or the employer and employee, and some of his co-workers and peers.  It also allows an employee to express his or her assessment of the organization, institution, or corporation he or she is within. A strong point of the 360 Degree Appraisal or the 360 Degree Feedback is providing a venue for a well-rounded assessment of a certain employee. Cited from an article entitled”360 Degree Appraisal”, on the disability rights commission Web site (2006). : “The power of 360 degree appraisal is that it offers the manager a reality check whereby they can receive honest feedback on their behaviour and performance. Ideally the process should be anonymous and thus enables the sharing of feedback (both positive and negative) that would be unlikely to be provided during the normal course of events”. The downside of this Method however, is that, like the MBO, not being sufficiently reared towards this implementation or the lack of study thereof, leads to the failure of assessment and may cause the breakdown or the fall of the organization. Discussed by Susan Heathfield (2007), “Started haphazardly, because it’s the current flavor in organizations, or because “everyone” else is doing it, 360 feedback will create a disaster from which you will require months and possibly years, to recover”. An unprepared corporation would of course lose in doing such move without the proper steps taken.

    Significance of Performance Appraisal.  Development geared towards a company’s maximum efficiency is imperative to maintain competitiveness and the quality of its service.  Since the change of perspective, corporations now consider that they would only attain maximum efficiency if their employee’s themselves are efficient, thus the professional development of their employees must be monitored and taken due consideration.  “A performance appraisal program (PA program) is important to employees’ professional development, to meeting the company’s or firm’s goals or objectives and, ultimately, to contributing to the company’s or firm’s bottom line. No employer, whether a small CPA firm, a Big Four firm, a nonprofit organization, a government institution or a private or public company, should be exempt from having a formal PA program. Other benefits that could be derived from having a PA program include enhanced communications, an opportunity to effectively address performance problems, and improved employee morale.” (Lawrence 2004). Patricia Lawrence, a Human Resources Manager stresses the importance of Performance Assessment in the strengthening and the discipline of a corporation’s employees, regardless of position. A corporation, greatly enthusiastic to move towards maximum efficiency must undergo Performance Appraisal, to review whether it is still on the right track.

    Evaluation of Performance Appraisal Methods

    We now come to the question of assessing which appraisal method is best. Research has shown that more complicated techniques such as BARS, forced-choice scales, and mixed standard scales are only occasionally superior to inexpensive and uncomplicated graphic rating scales (Griffin, 1989). In fact, behavioural anchors sometimes bias supervisors’ ratings by forcing them to concentrate on specific behaviours (Murphy & Constans, 1987). Yet graphic rating scales are seldom superior to these more complicated rating methods.

    Although the more complicated techniques are only more psychometrically sound, they still have some advantages over graphic rating scales. Because employees are directly involved in creating techniques such as BARS, they tend to see performance evaluation results as being more fair. Furthermore, many supervisors who make such ratings prefer many of the more complicated behavioural approaches. Finally feedback from BARS may lead to greater increases in future performance than feedback from graphic rating scales (Hom, DeNisi, Kinicki, & Bannister, 1982).

    Though many of the behavioural methods yield similar results, the same is not true when comparing subjective and objective ratings. A meta-analysis by Bommer, Johnson, Rich, Podsakoff, and Mackenzie (1995) indicated that objective and subjective results are only slightly correlated (r=.39). Interestingly, there was a stronger relationship between objective and subjective ratings of quantity (r=.38) than between objective and subjective ratings of quality (r=.24).

    From a legal perspective, courts are more interested in the due process afforded by a performance appraisal system that in its technical aspects. After reviewing 295 circuit court decision regarding performance appraisal, Werner & Bolino (1997) concluded that performance appraisal systems are most likely to survive a legal challenge if they are based on job analysis, if raters receive training and written instructions, if employees are allowed to review results, and if ratings from multiple raters are consistent.

    Criticisms on Performance Appraisal. While many corporations view performance assessment as a process vital to the growth and development of their company, some individuals, corporate efficiency experts and organizations remain critical about the process, mainly on its side effects to the individual growth and the fallibility of such process due to political conflicts within a corporation.  Some corporations also have negative views when it comes to performance appraisals, an article by Alan Chapman (2007 : online) about performance appraisal in businessballs.com discusses this negative perspectives :”The senior manager/director typically will be heard to say that appraisals don’t work and are a waste of time, which for them becomes a self-fulfilling prophecy. This attitude and behaviour then cascades down to their appraisees (all the people in their team) who then not surprisingly also apply the same ‘no good – not doing it’ negative attitude to their own appraisals responsibilities (teams). And so it goes. A ‘no good – not doing it’ attitude in the middle ranks is almost invariably traceable back to a senior manager or director who holds the same view” Indeed some senior manager or director would typically work against performance appraisal, especially those who them selves have serious problems when it comes to criticism. Other criticisms against the Performance Appraisal process still remain as critics continuously garner arguments against it.  Leon Gettler (May 2007), discusses upon the criticisms against Performance Appraisal in one of his articles in Business Day, he says that “MANY performance appraisal systems are helping to produce dysfunctional organizations, according to a workplace ethics expert.” (Gettler 2007), yet although this statement might be the conception of some he also discussed why these criticisms arise. Gettler cited management professor Dr. Michele Kacmar’s statement that “You don’t quit your job, you quit your supervisor,”. Gettler explained that these organizations fail because of the misunderstanding between managers and the subordinates within corporations. Employees try to be objective in saying their reasons for quitting their jobs and so they avoid personal matters which have caused their resignation. While some criticisms hold true, most of them, remain within the bounds of the explainable, and solutions to these criticism are adequately supplied. Legal considerations although is very subjective, also hold a different weigh on the performance appraisals. A downside of conducting performance appraisals however, is the risk of being sued for firing an employee for having bad results from the appraisal. Many corporations get sued and made paid for torts because of the results of performance appraisals which have led to some misunderstandings between them and their employees. “Almost 500 published judicial and arbitration decisions from just the last several years that involve performance appraisals in one form or another!

    Many of these decisions turned out merely to contain evidence of favorable performance, offered to show that an individual was qualified for a particular job, and to raise an inference that the reason for refusing to hire, promote, or retain that person must have been discriminatory (see McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973)). However, the sheer number of cases underscores a critical reality for today’s industrial-organizational psychologist or human resource practitioner: it is almost inevitable that one or more elements of your organization’s performance appraisal system will attract legal scrutiny at some point in time.” (Malos 2007). Stanley B. Malos discussed that the number of legal cases which have been caused mainly by the use of Performance Appraisal, is hitting an all time high due to some misunderstandings and some misinterpretations about performance appraisal. Although most cases have inconsistent decisions from the courts due to varying policies between states, Malos suggested some important things which may be done in order to avoid being sued due to performance appraisals. He cited the following criteria for legally sound performance appraisals : Performance appraisals should be : (1) objective rather than subjective; (2) should be job-related or based on job analysis; (3) should be based on behaviours rather than traits; (4) should be within the control of the rate; (5) should relate to specific functions, not global assessments; (6) should be communicated to the employee. (Malos 2007) While these suggestions are given to avoid legal cases, it must be realized that sensitivity in all aspects must be a top concern.

    Conclusion. Reviewing past experiences is imperative to avoid further erring. A performance appraisal is a key factor in identifying the main elements which hinder the success of the corporation or the institution. It also attempts to create a friendlier atmosphere within the workspace of a corporation’s employees, while at the same time creates a more conducive environment for individual worker’s professional, as well as human development. While the number of critics never seems to fall, most, if not all of them criticize Performance Appraisal positively, as they determine the possible problems and loopholes of the process and even make suggestions on how to make Performance Appraisal a better process of improving or strengthening a corporation. Due to the benefits it gives a corporation that provides a win-win solution Performance Appraisal would definitely be continuously used globally.

    Bibliography

    360 Degree Appraisal.  [Online]. Available: http://www.drc-gb.org/about_us/leadership_strategy/development_theory_and_delive/360_degree_appraisal.aspx.   [ 30 July 2007 ]

     “Frederick Taylor and Scientific Management”. 2007. netmba.com. [Online]. Available: http://www.netmba.com/mgmt/scientific/. [30 July 2007].

    Bommer, W. H., Johnson, J. L., Rich, G. A., Podsakoff, P. M., & Mackenzie, S. B. (1995). On the interchangeability of objective and subjective measures of employee performance: A meta-analysis. Personnel Psychology, 48(3), 587-605.

    Brim, Rodney Ph. D. 2004. A Management by Objectives History and Evolution. [Online]. Available: http://www.performance-appraisals.org/cgi-bin/links/jump.cgi?ID=3978 [30 July 2007]

    Chapman, Alan. 2007. Performance Appraisals on businessballs.com. [Online] Available: http://www.businessballs.com/performanceappraisals.htm.  [30 July 2007]

    en.wikipedia.org. June 2007. “Performance Appraisal”. [Online]. Available:  http://en.wikipedia.org/wiki/Performance_appraisal.  [30 July 2007].

    Gettler, Leon. 2007. How performance Appraisals send you GAGA in theage.com.au. [Online]. Available: http://www.performance-appraisals.org/cgi-bin/links/jump.cgi?ID=10536 [ 30 July 2007]

    Giffin, M. E. (1989). Personnel research on testing, selection, and performance appraisal. Public Personnel Management, 18, 127-137.

    Grant, James. AFRP 11.1, TIG Brief, 19 November 1978, p. 4.

    Heathfield, Susan. 2007. 360 Degree Feedback: The Good, The Bad and The Ugly. [Online]. Available: http://humanresources.about.com/od/360feedback/a/360feedback.htm.  [30 July 2007]

    Hom, P. W., DeNisi, A. S., Kinicki, A.J., & Bannister, B. D. (1982). Effectiveness of performance feedback from behaviourally anchored rating scales. Journal of Applied Psychology, 67, 568-576.

    Lawrence, Patricia. November 2004. The Importance of Having a Performance Appraisal Program, Part I in the newspaper The Trusted Professional. Vol. 7 No. 14. [Online]. Available: http://www.nysscpa.org/trustedprof/1104/tp29.htm . [ 30 July 2007]

    Malos, Stanley B. 2007. Current Legal Issues in Performance Appraisal. [Online] Available: http://www.cob.sjsu.edu/facstaff/malos_s/bookchap.htm  [30 July 2007]

    Murphy, K. R., & Constans, J. (1987). Behavioural anchors as a source of bias in rating. Journal of Applied Psychology, 72, 573-577.

    Seevers, James S. September 2002. “Management by Objectives and Performance Appraisal”. [Online]. Available: http://www.airpower.au.af.mil/airchronicles/aureview/1979/sep-oct/seevers.html.  [ 30 July 2007].

    Tarrant, John J. Drucker: The Man Who Invented the Corporate Society. Boston: Cahners Books, Inc. 1976. 78

    Werner, J. M., & Bolino, M. C. (1997). Explaining U.S. Courts of Appeals decisions involving performance appraisal: Accuracy, fairness, and validation. Personnel Psychology, 50(1), 1-24.

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