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.
