Employee Performance appraisals

 

The Concept of Performance Appraisal

While a number of organizations continue to use informal and subjective performance evaluation practices to make reward decisions, there is evidence that objective performance evaluation practices an increasingly prevalent in the current times (Gardner, 2008; Sheilds, 2007).

Gardner (2008) describes performance appraisal as the evaluation of an individual‘s work with the main aim of arriving at objective personnel decisions. It is also considered as the process of obtaining, analyzing as well as recording information that revolves about the relative worth of the employee to the organization (Armstrong, 2009).

This takes place through the planned interaction between an organization’s supervisors and employees in which the former assess the performance of the latter. One of the main goals in this case is the identification of strengths and weaknesses that form the basis of recommending actions for improved employee performance (Gardner, 2008).

 

Types of Performance Appraisal

360 Degree/Multi-Rater Performance Appraisal

The 360 degree performance appraisal as evident from existing literature is one of the appraisal system that has in the recent years gained significant popularity in both small and large-sized firms (Deb, 2009; Lepsinger & Lucia, 2009).

By description the 360 degree appraisal system involves an appraisal system that encompasses the views of different groups of reviewers who socialise with the organisation‘s employees. Such reviewers include the employee‘s superiors (managers and supervisors), co-workers/peers and customers. The process also includes the employee‘s opinion about him/herself and hence its recognition as a multi-source, multi-rater and full-circle appraisal system (Grund & Przemeck, 2012).

While on this context, Horng Hsu, Liu, Lin, & Tsai, (2011) through a study on employee competencies identifies four key assessments that should constitute a 360 degree appraisal system. They include self-assessment; immediate supervisor assessment; subordinate assessment and peer assessment.

According to the Sahoo & Mishra, (2012). The underlying premise behind the use of 360 degree performance appraisal is that a significant amount of performance data about a given employee can be gathered when multi-sources are used. In other words, the 360 degree appraisal systems allows for gathering of information about an individual from different degree and angles. While supporting such views, Deb (2009) underscores that the use of multiple assessment sources helps ensure that an employee‘s performance is double checked. Moreover, the 360 degree performance appraisal system is considered as one that helps in overcoming disadvantages such as prejudice, subjectivity and halo errors, which characterize traditional evaluation systems (Hsu et al., 2005). Espinilla et al., (2013) for instance notes that the use of this evaluation method makes it unlikely that the employee is criticised solely by the manager.

Sahoo and Mishra (2012) add that systems of 360- degree appraisal are perceived by employees as more accurate and more reflective of their performance. They are thus considered as quite effective in providing comprehensive information that can be used to determine the employee‘s training needs.

Despite the effectiveness of 360 degree appraisal systems, several issues have been identified in literature that prevents the effectiveness of such systems. Espinilla et al., (2013) for instance notes that the use of a single type of expression domain such as numerical or linguistic in 360 degree systems limits the ability to gather the richness of information that reviewers provide. In addition, the correct interpretation of final results is hard as quantitative assessment do not always represent qualitative information accurately (Hsu et al., 2005).

Management by Objectives (MBO)

Management by objectives as one of the key appraisal methods is defined as a result-based evaluative program (Choon & Embi, 2012). In greater detail, the goals of the performance appraisal system from an MBO perspective are mutually defined by a number of key stakeholders who include the subordinates, supervisors and employees as well. A typical MBO appraisal system consists of several steps. The process begins by the establishment of clear objectives for the employee.

An action plan detailing the way in which the objectives are to be achieved is develop. The employee is then allowed to implement the developed action plan. This allows for appraisal of performance in an objective manner. Corrective actions are taken in situations deemed necessary as well as new objectives for the future established (Sillup & Klimberg, 2010).

A critical review of MBO literature however reveals that this type of performance appraisal is not without shortcomings. One of the main shortcomings of this approach pertains to the fact that it does not allow monitors to see how employee deal with every eventuality over the given work period. This is attributed to the focus on outcomes (Bipp & Kleingeld, 2011). In this case, the manner in which the employee under appraisal arrives at the outcomes may not necessary represent the most efficient use of resources. In addition, Bipp and Kleingeld (2011) argue that the MBO approach gives little consideration for comparative evaluation as no benchmark are provided based on the changing workplace environment during the work period.

Graphical Rating Scales

 Graphical rating scales constitute the most used method during performance appraisal in most organizations (Woods, 2012; Wirtz, 2004). A graphic rating scale in this context entails a performance appraisal rating checklist. Using the checklist the manager simply rates the employee on a continuum that may range from poor to excellent depending on the aspect being evaluated.

Woods (2012) attributes the popularity of graphical rating scales to the ability to use such scales for a variety of jobs. Such scales are also considered as requiring minimal cost, training effort and time. Panari, Guglielmi, Simbula, and Depolo., (2010) identifies a number of performance factors that can be effectively measured using the help of graphical rating scales. First, such scales can be used to evaluate the employee‘s quality of work. In this scale the employee‘s ability to consistently meet the work requirements, expectations and desired outcomes are assessed. Second, rating scales can be used in assessing productivity in terms of whether the employee makes good use of available plans, work time and completes assignments on schedule. In addition, the employee‘s knowledge of the job can be assessed. These include job relevant skills that are gained through education, experience and on-job training (Panari et al., 2010).

Despite their ease of use, various studies highlight a number of limitations attributable to the graphical rating scales. First, the standardized nature of the scales overlooks the aspects of trait relevance (Armstrong, 2009). Armstrong (2009) in this case notes that some traits are more relevant in some jobs compared to others and hence specific workplace context ought to be considered. In addition, rating scales may suffer from systemic advantage in which case relevant indicators of performance may be excluded and hence the inability to achieve results that are reflect the employees‘full value (Woods, 2012).

However, According to the Kissflow HR Cloud, Published On (February 1, 2022) the performance appraisal is rarely put to good use since existing performance appraisal methods fail to internalize employee performance results. To prevent performance appraisals from becoming nothing more than empty buzzwords, HR managers need to revamp their existing process and try implementing one of the six modern performance appraisal methods that are listed below.

• Management by Objectives (MBO) 
• 360-Degree Feedback
• Assessment Centre Method.
• Behaviorally Anchored Rating Scale (BARS)
• Psychological Appraisals
• Human-Resource (Cost) Accounting Method.

                            (Source , Kissflow HR Cloud, Published On February 1, 2022 )                       

References

Anthony, R. and Govindarajan, V. (2007) Management Control Systems, 12th ed., Irwin, Singapore.

Attorney, A. (2007) Performance Appraisal Handbook. New York: Nolo Publishers.

 Armstrong, M. (2009) Armstrong's Handbook of Performance Management: An EvidenceBased Guide to Delivering High Performance. London: Kogan Page Publishers.

 Drucker, P. (2013) People and Performance. London: Routledge.

 Kissflow HR Cloud, Published On February 1, 2022,Performance Management

Sunitha P C, June 19, 2019, Analytics, Blog, Cognos Report,HR Analytics

Wright, P. and Cheung, K. (2007) ‗Articulating appraisal system effectiveness based on managerial cognitions‘, Personnel Review, 36(2), pp.206 – 230.