Performance Appraisal

Performance appraisal, also known as employee appraisal, is a method by which the performance of an employee is evaluated (generally in terms of quality , quantity , cost and time). The roots of performance appraisal can be found in Frederick Winslow Taylor 's time and motion study.

Outputs Measuring performance Against standards: 1. formal comprehensive review (e.g. annually) 2. Progress or periodic Review (e.g. for milestone, quarterly, monthly ) 3. Continuous monitoring (daily, with emphasis on self-control) Actual Performance Setting verifiable Objectives that become Standards Inputs Corrective actions for Undesirable deviation From standards

Generally, the aims of a scheme are: 1. Give feedback on performance to employees. 2. Identify employee training needs. 3. Document criteria used to allocate organizational rewards . 4. Form a basis for personnel decisions: salary increases, p romotions , disciplinary actions , etc. 5.Provide the opportunity for organizational diagnosis and development. 6.Facilitate communication between employee and administrator. 7.Validate selection techniques and human resource policies to meet federal Equal Employment Opportunity requirements.

Performance in accomplishing goals In assessing performance systems of appraising against verifiable prescribed goals have extraordinary value. Given consistent, integrated and understood planning. Designed to reach specific objectives, probably the best criteria of managerial performance relate to the ability to set goals intelligently , to plan programs that will accomplish those goals and to succeed in achieving them.

Performance as Managers The system of measuring performance against predetermined objectives should be supplemented by an appraisal of a manager as a manager. Managers at any level also undertake non managerial duties and these cannot be overlooked. The primary purpose for which managers are hired and against which they should be measured.

The appraisal process

The most popular methods that are being used as performance appraisal process are: Management by objectives (MBO) 360 degree appraisal (BOS) (BARS) Trait based systems, which rely on factors such as integrity and conscientiousness , are also commonly used by businesses. The scientific literature on the subject provides evidence that assessing employees on factors such as these should be avoided. The reasons for this are two-fold: 1) because trait based systems are by definition based on personality traits , they make it difficult for a manager to provide feedback that can cause positive change in employee performance. This is caused by the fact that personality dimensions are for the most part static , and while an employee can change a specific behavior they cannot change their personality . For example, a person who lacks integrity may stop lying to a manager because they have been caught, but they still have low integrity and are likely to lie again when the threat of being caught is gone. 2) Trait based systems, because they are vague, are more easily influenced by office politics , causing them to be less reliable as a source of information on an employee's true performance. The vagueness of these instruments allows managers to fill them out based on who they want to/feel should get a raise, rather than basing scores on specific behaviors employees should/should not be engaging in. These systems are also more likely to leave a company open to discrimination claims because a manager can make biased decisions without having to back them up with specific behavioral information.

In human resources , 360-degree feedback , also known as 'multi-rater feedback', 'multisource feedback', or 'multisource assessment', is employee development feedback that comes from all around the employee. "360" refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with upward feedback , where managers are given feedback by their direct reports, or a traditional performance appraisal , where the employees are most often reviewed only by their manager.

The results from 360-degree feedback are often used by the person receiving the feedback to plan their training and development. The results are also used by some organizations for making promotional or pay decisions, which is sometimes called "360-degree review."

Choosing The Appraisal Criteria The appraisal should measure performance in accomplishing goals and plans as well as performance as a manager. no one wants a person in a managerial role who appears to do everything right as a manager but who cannot turn in a good record of profit making, marking, controllership, or whatever the area of responsibility may be.

Performance Appraisal The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management. As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago. Yet in a broader sense, the practice of appraisal is a very ancient art. In the scale of things historical, it might well lay claim to being the world's second oldest profession! There is, says Dulewicz (1989) , "... a basic human tendency to make judgements about those one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily. The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgements made will be lawful, fair, defensible and accurate. Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified. The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order. Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well. Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed. For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance. These observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence. As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it is known today, began from that time.

Controversy, Controversy Few issues in management stir up more controversy than performance appraisal. There are many reputable sources - researchers, management commentators, psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it (see Derven , 1990 , for example). At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life" ( Lawrie , 1990 ). Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it. There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes - such as pay rises and promotions. This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is perceived as judgmental, punitive and harrowing. For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, in that situation, many people would deny or downplay their weaknesses. Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner. Such reluctance is not difficult to understand. Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another. The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines.On the other hand, there is a strong rival argument which claims that performance appraisal must unequivocally be linked to reward outcomes.The advocates of this approach say that organizations must have a process by which rewards - which are not an unlimited resource - may be openly and fairly distributed to those most deserving on the basis of merit, effort and results.There is a critical need for remunerative justice in organizations. Performance appraisal - whatever its practical flaws - is the only process available to help achieve fair, decent and consistent reward outcomes. It has also been claimed that appraisees themselves are inclined to believe that appraisal results should be linked directly to reward outcomes - and are suspicious and disappointed when told this is not the case. Rather than feeling relieved, appraisees may suspect that they are not being told the whole truth, or that the appraisal process is a sham and waste of time.

360-degree feedback In human resources , 360-degree feedback , also known as 'multi-rater feedback', 'multisource feedback', or 'multisource assessment', is employee development feedback that comes from all around the employee. "360" refers to the 360 degrees in a circle. The feedback would come from subordinates, peers, and managers in the organizational hierarchy, as well as self-assessment, and in some cases external sources such as customers and suppliers or other interested stakeholders. It may be contrasted with upward feedback , where managers are given feedback by their direct reports, or a traditional performance appraisal , where the employees are most often reviewed only by their manager.

Strategic Data
While the value of 360-degree feedback is often seen in terms of individual development, aggregate reporting of all recipients' results can provide valuable data for the organization as a whole. It enables leaders to:
1. Take advantage of under-utilized personnel strengths to increase productivity
2. Avoid the trap of counting on skills that may be weak in the organization
3. Apply human assets data to the valuation of the organization
4. Make succession planning more accurate
5. Design more efficient coaching and training initiatives
6. Support the organization in marketing the skills of its members

Benefits
1. Individuals get a broader perspective of how they are perceived by others than previously possible.
2. Increased awareness of and relevance of competencies.
3. Increased awareness by senior management that they too have development needs.
5. More reliable feedback to senior managers about their performance.
6. Gaining acceptance of the principle of multiple stakeholders as a measure of performance.
7. Encouraging more open feedback — new insights.
8. Reinforcing the desired competencies of the business.
9. Provided a clearer picture to senior management of individual’s real worth (although there tended to be some ‘halo’ effect syndromes).
10. Clarified to employees critical performance aspects.
11. Opens up feedback and gives people a more rounded view of performance than they had previously.
12. Identifying key development areas for the individual, a department and the organization as a whole.
13. Identifying strengths that can be used to the best advantage of the business.
14. A rounded view of the individual’s/ team’s/ organization’s performance and what the strengths and weaknesses are.
15. Raised the self-awareness of people managers of how they personally impact upon others — 16. positively and negatively.
17. Supporting a climate of continuous improvement.
18. Starting to improve the climate/ morale, as measured through the survey.
19. Focused agenda for development. Forced line managers to discuss development issues.
20. Perception of feedback as more valid and objective, leading to acceptance of results and actions required.

Introducing 360 feedback in an organization Before introducing 360 feedback in an organization the planning process must include the step addressing the benefits and perceived risks of all participants. Recipients of feedback and reviewers may have concerns about issues like confidentiality of reviews, how the completed reviews will be used in the organization and what sort of follow up they can expect. Communication and support provided throughout the project must take this into account if the programme is to provide maximum value for the individuals and the organization using 360 feedback.

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Performance Appraisal

by Rajesh Patel on Dec 20, 2008

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Performance Appraisal — Presentation Transcript