PERFORMANCE APPRAISAL
AN OVERVIEW OF PERFORMANCE APPRAISAL: USES, LIMITATIONS AND ISSUES AFFECTING IT
MARIA KONTOPOULOU
UNIVERSITY OF NEW HAVEN, 2005
Performance appraisal is rather important for the effective management and evaluation of staff. It helps develop individuals, improve organizational performance, and promote effective business planning. Performance appraisal is usually conducted annually for all organization’s staff. Each member is appraised by his/her line manager. Annual performance appraisal enables management, setting standards and objectives, and establishes individual training needs analysis and planning. Additionally, it reviews employee’s performance against the standards and objectives of the company that have been agreed through the previous year’s appraisal. Furthermore, it is essential for career and succession planning, staff motivation, promoting positive relations between management and staff. In other words, it is essential in order to manage the performance of both employee and organization (Noe, 2003).
What is rather important for an appraisal is to be a positive experience for the employees. Appraisals are a great chance for training, motivation, development and must be faced as an opportunity for all these, in order for the appraisal to be really valuable for both the employees and the organization. In many companies, especially in Greece, appraisals create fear emotions and are considered to be tools used to handle discipline issues. Before the application of an appraisal, employees should be informed for its use (Chapman,2001).
Many types of performance appraisal are available today. Which is going to be used in each case depends on several things: the purpose of the evaluation, the individual, the culture of the organization, and the evaluator. Some of the most commonly met forms of appraisal are the following:
- Formal annual performance appraisal
- Informal one-to-one review discussion
- Counseling meetings
- Observation on the job
- Survey of opinion of others who deal with the individual
- Psychometric tests and other behavioral assessments
Performance appraisal is used for many reasons. It can be used to successfully promote business strategy and culture change, by identifying employees’ behaviors that are required for this goal. This can be done by “re-focusing the workforce to attain changed organizational goals through changing their behavior” (Lepsinger, 1997, p. 19). It also helps to achieve team effectiveness. This is done by “identifying gaps in team skills sets in organizations seeking to implement a team structure” (Lepsinger, 1997, p.20). Additionally, it can be used as part of human resource management system. “Just as individuals use 360 degree feedback to determine their own development needs, organizations can use aggregate reports to create a profile of training and development needs across the company” (Lepsinger, 1997, p.20).
In spite of the fact that performance appraisal is widely used in companies today, many are the people that come to criticize it. The most common criticism is that it doesn’t give enough emphasis on teamwork. It rather encourages individuals using the organization’ system for personal gain, rather than trying to develop it so that everyone to improve. Another criticism is that the measurement system is not reliable and inconsistent. It actually gathers information based on personal characteristics, irrelevant to the task he/she proceeds. Also, it discourage and de-motivate or/and over-encourage and motivates certain individuals (Scholtes, 1993).
Performance appraisal should not for any reason be used for gathering information against a single employee from his/her colleagues, neither for facing an individual’s problem. If something like that happens may create problems between the employees (Bacal, 1999).
Despite the criticism, performance appraisal seems to be a rather good tool in evaluating employees and have a quite clear picture of their abilities, knowledge, weaknesses and strengths. Much research has been done on this issue, concluding in some interesting findings, in many aspects of appraisal. One representative example is a research conducted by R. Rubin in 1995 on “upward appraisal”. What Rubin and his partners did is designing an experiment on “upward appraisal”, meaning evaluation of the supervisor done from his/her subordinates and peers. Rubin was interested in finding what the evaluators consider important while evaluating. The whole research is based on the perspective assuming that gathering information from one source only is not as valuable as gathering it from more than one source. He decided to use supervisor’s subordinates and peers as source of information in upward appraisal because they are able to observe supervisor’s performance that he/she or her peers would not see. Also, subordinates’ attitudes toward supervisors can affect subordinates’ performance and attitude toward the organization. Furthermore, subordinates could reveal information valuable for training, polices and procedures, and their evaluation may increase the validity of supervisor evaluation. Rubin assumes that supervisors’ subordinates’ opinion can positively influence the organization train its supervisors and at the same time provides supervisors information regarding the way they are perceived by their subordinates. The basic conclusions of this research was that subordinates gave paid more attention on whether the supervisor had leadership abilities and was able to be a good role model, as well as being able to set a positive tone on the work environment and encourage teamwork. Paradoxically, little attention was given on issues such as knowledge and application of organization’s policies and procedures, schedule preparing, vacation time, handling emergencies and enforcing rules and regulations. Actually, those who perceived supervisors as a role model, seems to rate them highly (Rubin, 1995).
Another example of research that comes to add information on performance appraisal issue is the one conducted by Frank Moers in 2003. What makes this work important is that it is based on agency theory, which states that “any performance measure that is informative about the agent’s effort should be used for incentive purposes”. In this work, Moers wants to notice whether performance measure diversity and/ or subjectivity have an effect on appraisal rates. He actually found that indeed these two variables affect the rate (how strict the rate is) of appraisal. Specifically, measure diversity seems to motivate employees to improve their performance and to differentiate among employees based on their ability and skills. In that way it helps to make better promotion decisions. He also noticed that diversity in measures leads to more lenient ratings and less differentiation among employees. On the other hand, subjectivity leads to bias in evaluation. When more subjectivity is used evaluating and rewarding employee, superiors give higher rating. In that way it is difficult to separate skilled employees from the less skilled (Moers, 2003).
Some other things that must be taken into account before giving the appraisal tool to be completed are: the company’s organizational culture, job list inventory, job description, and task analysis.
Company’s culture plays an important role when you have to choose the appropriate appraisal method in a company. Company’s culture has to do with the ideology and rules a company follows to face its employees as well as how it faces problems and how its departments and tasks are arranged.
Job list is the gathering of all job titles in a company. Jobs are collections of tasks and responsibilities. A job is generally associated with the worker’s title. For example, “secretary” is a job. A job consists of responsibilities, duties, and tasks that are defined and can be measured and rated, and can be used as an employment tool for classifying work, measure their performance and place them in the appropriate position (Clark, 2000).
The processes of job description and task analysis can be considered as part of job analysis. Job analysis is acquiring information about a position, that helps to identify the major job requirements and links them to skills, education, training needed to successfully perform the functions of that job. The purpose of job analysis is to identify the experience, education, training, and other qualifying factors, joint with candidates who have the potential to be the best performers of the job to be filled. Job Analysis is a process to identify and determine in detail the particular job duties and requirements and the relative importance of these duties for a given job. It is a process where judgements are made about data collected on a job. It provides an objective basis for hiring, evaluating, training, accommodating and supervising persons with disabilities, as well as improving the efficiency of the company (Noe, 2003).
Once the job analysis has been completed the job analyst will be in a better position to develop objective job-related interview questions, write current and accurate position descriptions. Position descriptions should be updated on a regular basis and a job analysis done if any factors outlined above have to be altered, perform objective performance appraisals, determine if accommodations can assist a person with a disability to perform the job, conduct personnel functions in a non- discriminatory manner.
After job analysis is completed and the results of performance appraisal are gathered can gain a clear picture of whether an individual is appropriate for the position he has or it is needed to change position or get trained to develop better, etc. Many big companies nowadays choose not to fire employees that are inappropriate for a task. Instead, they either use rotating processes that is most employees, if not all, try themselves in as many positions in the company as possible. Training is very important in this case. And even in the case that an employee is decided to remain in the same position, training is again important.
Another thing that must be taken into account is that we must be precise in how we define and measure performance. We can achieve that if we define performance regarding the outcomes. It would be helpful to use outcomes that have to do with frequency of behavior. Also, use criteria that are related to the ways an employee may exhibit so that to improve his/her job and benefit the company (by saving money, for example). In addition, measure the work an employee does and he/she is not responsible for, such as helping others in their tasks. And not to mention that all employees’ (of a similar job) performance must be measured fairly and in a common baseline and feedback must be clearly explained.
The employee must continually be encouraged to clarify the results of appraisal, contribute information, and suggest solutions for performance. Also, the examiner needs to understand the results of the appraisal and the meeting following must hold value for everyone involved, and the results should include the following:
- a clear understanding of what is expected of the
employee.
- an understanding of the employee’s strengths, weaknesses, and areas of development.
- an expectation of employee’s success in meeting the goals of job description and company’s goals.
- Opportunity for the employee to add written comments to the appraisal and continue to have open channels of communication with his/ her supervisor.
(Feuer, 2003).
REFERENCES
Bacal, Robert. Performance Management Listserve, February 11, 1999.
Clark, Donald, 2000. Instructional System Design- Analysis Phase.
Feuer, Louis, 2003. The Management Challenge: Making the Most of your Next Performance Appraisal.
Lepsinger, Richard & Anntoinette D., Lucia. The Art and Science of 360 Degree Feedback. Pfeiffer/ Jossey-Bass Inc, San Francisco.
Moers, Frank, 2004. Discretion and bias in performance evaluation: the impact if diversity and subjectivity.Accounting, Organizations and Society.
Noe Hollenberg, Gerhart Barry & Wright Patric, 2003. Human Resources Management: Gaining a Competitive Advantage.
Rubin, Richard, 1995. Upward Appraisal: What DO Subordinates Consider Important in Evaluating their Supervisors? School of Library and Information Science, Kent State University.
Scholtes, R., Peter, 1993. Total Quality or Performance Appraisal: Choose One. National Productivity Review, Vol. 12.
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