Different Methods Of Performance Appraisal Business Essay Example

workers meet requirements for their tasks and discussing these details with them (Jackson & Mathis, 2003). Performance appraisals are commonly used for rewards and benefits verification, conducting reviews, and determining individual strengths and weaknesses.Most U.S companies employ performance control systems for various categories of workers, including office, professional, specialized, supervisory, middle control, and nonunion production workers (Jackson & Mathis, 2003). According to Eberhardt and Pooyan (1988), performance evaluation is a crucial component of the hour control process. Different perspectives have been presented by various authors or experts (Berendin and Beaty 1984; Devires; Morisson; Mom and Schneier 1982; Shullman and Gerlatch 1981) when describing performance evaluation. Experts highlight the importance of improving director and subsidiary contracts, setting clear performance goals, obtaining enhanced top control support, and enhancing appraisal skills for evaluators. Educational scientists focus on different aspects such as ranking methods, consumer training programs, effective information implementation, and the need to improve experimental abilities. A case study conducted by Eberhardt and Pooyan (1988) revealed that knowledgeable workers who were familiar with assessment programs expressed higher satisfaction compared to those who were less informed. When workers are unfamiliar with the program and assessment process they lack understanding of how things are progressing which negatively impacts their work performance leading to an inability to perform at their best. It was also suggested that new workers should be properly introduced to the program in order to increase job satisfaction.According to Grints (1930), a 360-degree approach using multiple consumer appraisals should replace top-down assessment programs to reduce bias and exclusion. This involves gathering reviews from colleagues, clients, and service recipients to minimize subjectivity and unfairness in performance scores. The supervisors

conducting the 360-degree appraisal then evaluate these assessments.

A People IQ survey of 50,000 participants revealed that only 13% of workers and managers, as well as 6% of professionals, find their company's evaluation process useful. Similarly, a Mercer study found that while 50% of professionals consider their performance evaluation somewhat effective, 15% do not find it efficient at all. Additionally, a recent survey showed that majority (60%) of workers rate their companies poorly in managing performance management.

Despite Newman's (2004) research spanning over three decades, no evidence has been found supporting the belief that a specific technique like rating ranking provides stability. Borman (1991) also suggests that this technique has little impact on rating accuracy.

While performance appraisals are widely used globally, there is ongoing criticism regarding how they are conducted and their outcomes (Jackson & Mathis, 2010).

Criticism:

• The lack of usefulness and effectiveness in company evaluation processes
• Lower efficiency rates in performance evaluations among professionals
• Poor management of performance management by companies
• The lack of evidence supporting the stability of specific rating techniques
• The limited impact on rating accuracy for the technique of rating ranking

Appraisals in modern times primarily focus on group interaction and place a lot of importance on individual performance to encourage workers to improve their work. However, most workers who receive feedback and the managers who give it consider the process to have significant flaws. Appraisals are typically unreliable, short-term focused, highly subjective, and only useful for identifying workers who are doing exceptionally well or poorly (Jackson & Mathis, 2010).

Organizations use performance appraisals for two main tasks. One is to evaluate performance for purposes such as

determining pay, promotions, terminations, downsizing, or layoffs. This part is primarily used for management purposes and relates to the desired benefits employees want in relation to their efficiency (Jackson & Mathis, 2010). Performance-based compensation supports the idea that pay increases should be based on performance success rather than seniority. In this case, the administrator is the consumer of the staff's performance and also the person who suggests compensation for the employee (Jackson & Mathis, 2010).The text below discusses the use of appraisals for developmental purposes in performance evaluations. The focus is on identifying potential and planning staff's development opportunities and trajectory. This approach views the director's role as similar to that of a coach, where they benefit from good performance identification, describe necessary enhancements, and show employees how to improve their performance. It emphasizes that employees need clear guidance on where and how to improve in order for enhancement to occur. Performance reviews aim to change individual actions rather than simply evaluate individuals like management does with performance appraisals. These reviews can also identify areas where workers may want to develop. In a development-focused evaluation meeting, a worker may be lacking in one area that hinders their promotion, and the manager may suggest taking an evening course at a local higher education institution to enhance their skills. There are two approaches to performance assessment: traditional and modern.

Traditional Approach:
Performance appraisals originated as a means of determining whether a worker's pay or salary was justified.It was previously used to assess if a worker's pay aligned with their performance. Worker wages were dependent on how well they performed, resulting in a salary decrease for underperforming workers and an

increase for those who exceeded expectations (Target Woman, 2010). However, this approach disregarded the development opportunities for workers and often did not achieve desired outcomes. This traditional method focused solely on overall company strategy and final worker performance without much consideration given to improving individual performance. It wasn't until the 1950s that performance evaluation was recognized as a valuable tool for motivating and developing employees (Target Woman, 2010). In contrast, modern approaches now utilize performance evaluation directly or indirectly to determine compensation. The evaluation results aid in identifying which employees deserve higher pay, promotions, and bonuses (Target Woman, 2009). The process of evaluating performance has become more structured and formalized between employees and managers. Performance appraisals are generally conducted once or twice a year to assess employee strengths, weaknesses, improvement areas, and career development opportunities. During these evaluations, underperforming employees are encouraged to enhance their performance. In exceptional circumstances, demotion, termination or pay reduction may be considered.
The modern approach to performance evaluation focuses on individual workers and incorporates success stories (Target Woman, 2010). If employees perceive the evaluation process as unfair, political or irrelevant, it can lead to dissatisfaction and frustration (Skarlicki and Folger, 1997). Managers who are unaware of the flaws in the current evaluation process often assume the entire program is flawed. They may choose to discard the current system and replace it with a new one in the hopes of changing employee response to be more positive. However, implementing a new system without identifying the main causes of dissatisfaction and without considering different perspectives may not be effective. Workers do not enjoy negative performance appraisals but their attitude towards their manager and

company will be affected if they perceive the process and rules as fair (Leventhal, 1980).

The text provides techniques for selecting agents, establishing guidelines, making determinations, gathering information, making attractive choices, protecting workers' rights, and changing techniques. Workers' awareness of equity in any of these processes can lead to an understanding of bias. Performance appraisal is one technique that allows for optimizing labor.The text describes a set model that continuously measures and evaluates individual actions, impacting job-related characteristics like increased job satisfaction and recognition through promotions. This program serves the purpose of assessing recruitment performance, identifying areas for further growth, acknowledging additional potential, and aligning goals more accurately with employees. By doing so, businesses move closer to achieving their objectives. The program also includes another factor that can become a valuable resource on its own. To develop this program, it is crucial to establish genuine goals for employees and communicate them effectively. Once developed, appraisals can be conducted in three steps: stating and acknowledging worker's actions and their consequences; comparing outcomes to specific objectives; evaluating and determining actions needed to rectify deficiencies if any are identified. These actions may include increasing motivation, providing training or making necessary changes if an employee's performance is lacking.The text discusses the importance of rewarding workers who exceed expectations with benefits such as improved income or more challenging tasks. It also emphasizes the need for evaluating both initial and new objectives, considering authenticity and feasibility based on available resources and workplace factors. To effectively conduct performance appraisals, a performance evaluation program is necessary. This program includes methods for gathering and analyzing information, conducting occupation research, ensuring credibility and stability of data

collection techniques, selecting appropriate judges for evaluation, determining evaluation criteria, utilizing assessment results, and evaluating the assessment program itself. There are four types of evaluation systems: relative needs, overall needs, purpose-based techniques, and immediate indices. Performance evaluation has historical roots in examples like John Owens' work device at New Lanark during World War II and F.W. Taylor's deliberate performance methods. In the 1930s, visual scoring was used to assess performance and character traits; however, improvements were made over time by shifting away from using Likert scales to force a pick-entry method to avoid ranking individuals.The evaluation also included the writing of narratives and feedback to support the scores (Mair, 1958).

Various methods of performance assessment:

Retrieved from https://www.uplink.com.au/lawlibrary/, Bondy (1998) states that the comparative needs type of evaluation is considered one of the most convenient types due to its ease of application.
This program requires a lot of evaluation and distinguishes one employee from another in order to better identify their abilities and initiatives.
Within this program, several comparative techniques are available.
The first technique is "Simple" or "Straight" ranking, which involves ranking individuals based on their performance from best to worst.
This particular technique allows the decision-maker to make judgments or provide feedback on effectiveness without any requirements or standards to guide them.
This often leads to scores being more subjective rather than based on actual numbers of results, sales, or work output.
The second comparative technique is called the "Alternate," which shares the same disadvantages and design as the first one.
The appraisal process begins by recording the best entertainer first and the worst entertainer last.
After this is completed, the second-best and second-worst performers are selected and placed accordingly.
This process continues

until all employees have been rated.The text below analyzes employees individually and establishes multiple criteria for evaluation. There are a total of six appraisal methods within this framework. The first method is referred to as 'Essay Narrative', wherein each person's strengths, weaknesses, and areas for growth are discussed in writing. Composing these essays can be difficult as they often do not adhere to a standard structure and vary in language and vocabulary depending on the individual. This approach also depends on the judgment of supervisors, which may hinder its effectiveness.

Throughout all four techniques mentioned previously, one crucial aspect is frequently overlooked: the fact that employees possess different abilities and there will always be individuals who outperform others. This element contradicts the notion of comparative demands. According to Clarke (1995), overall demands constitute another type of assessment system that directly opposes comparative demands.

The third technique, known as 'Paired Comparison', involves two employees evaluating each other based on a particular criterion such as efficiency in comparison to all other team members. However, employing this method becomes more time-consuming as team size increases.

The fourth evaluation type is called 'Forced Distribution' where employees are categorized into groups for assessment purposes. Nonetheless, this approach has the potential to yield artificial results since employees might not always fit neatly into their assigned categoriesAssessing employees based on activities close to the evaluation period may not always be appropriate as it could lead to biased results. Employees tend to perform well during those days, potentially overlooking any previous issues. However, one advantage of this approach is that it allows judges to assess unique characteristics without being restricted by preset concerns.

Another technique, known as

'Critical Incident', focuses on exceptional performance rather than regular performance. In this method, judges record two extreme conditions - effective or worthless accomplishments - making it convenient for them to document positive or negative occurrences efficiently. However, this method does not differentiate between employees as it does not evaluate the value of tasks.

'Weighted Checklists' offer a different type of overall evaluation that combines information from significant events reviews and the frequency of activities. By reviewing this list, specific traits or outstanding performance can be identified in employees, ultimately determining their job satisfaction level effectively. The advantage of this method lies in its time-saving nature and objective approach.

Another similar approach called 'Forced Choice' addresses potential biases such as leniency, stringency, and primary leanings that may exist in certain assessments.The text explains that judges are required to select the option that better explains the subsidiary, with both options appearing equally viable or undesirable. This helps minimize bias but focuses more on actions rather than personal characteristics, potentially leading to a lack of employee connections and alienation. The evaluation method known as 'Graphic Ranking' is commonly used and assesses overall performance and personality traits like balance and cooperation. It's popular for its ease of use and adaptability to various tasks, being as effective as more complex methods like 'Forced Choice'. However, it shares the drawbacks of other overall assessments and lacks growth potential for employees to learn from their mistakes. Additionally, important information may sometimes be overlooked in this approach.Companies have incorporated elements from the essay/narrative approach in some cases to create a more accurate evaluation strategy. This incorporation allows for the inclusion of additional information that may

not be properly or adequately addressed. It should be noted, however, that including these elements also brings along the associated issues with that system.

The final scheme in overall demands is called 'Behaviorally Attached Ranking Scales'. It includes "five to ten consecutive machines - one for each important size of a job performance anchored by the events assessed to be significant. Critical events occur when employee actions result in exceptional weakness or success in some part of the job" (effective and ineffective behavior). Ratings are assigned by supervisors or job professionals based on their performance in these situations.

One drawback of this scheme is the time and professional skills required to establish appropriate anchors. Another problem arises from comparing findings to actual results. On the other hand, this scheme benefits supervisors as it allows them to receive assessments for improving their performance.

In 1989, Griffen created a goal-based type of appraisal program aimed at establishing control at all levels. The reputation of this program lies in its ability to recognize individuals who are entitled due to their skills.This program operates in four steps. The first step is to collaborate with employees to establish company objectives and ensure their commitment to achieving these goals. In the second step, subsidiary goals are identified and continuously adapted within a specific time frame to align with external changes. The third step occurs at the end of the designated time period, where an assessment is conducted on actual and projected performance. This evaluation involves researching the reasons behind specific outcomes. If performance falls below expectations, tasks may be reassigned or development plans designed for individuals responsible. On the other hand, if performance exceeds

expectations, an analysis of success stories helps determine if increased skills and abilities among employees played a significant role. In such cases, appropriate actions should be taken to optimize the utilization of those skills. The final stage involves summarizing outcomes, considering new factors, and establishing objectives for future and current business needs.

The fourth evaluation method known as immediate indices differs primarily in its approach to calculating performance from the previous three methods. Unlike the initial three methods (excluding potency-based attack), this method relies on an exceptional analysis of a subordinate's performance. Many other assessments in these cases are highly subjective.
However, when evaluating subordinate performance, immediate catalog techniques utilize objective criteria like performance, absenteeism, and turnover. Managers' performance is determined by the effectiveness of their workforce, measured through metrics such as employee turnover rates, customer complaints, productivity per hour, acquisition of new clients, purchases, sales, and other activities directly tied to organizational performance. This program minimizes subjectivity and rarely relies on it as the sole evaluation method. The appropriateness of a performance evaluation program is crucial to avoid ongoing issues and inefficiency in the company. To address limitations of individual methods and achieve desired objectives, a combination of multiple techniques such as the 'essay/narrative' approach and 'graphic' technique are currently being utilized. CCH (1988), one of Earth's largest legal sellers (CCH) of personnel management offers common recommendations for implementing these techniques. They emphasize the importance of analyzing various factors including available resources (especially financial ones), design, and goals of team evaluations in relation to overall company results.The assessment should prioritize job characteristics and allow the company to effectively utilize its resources, particularly in key business areas.

It is important to consider the size of the company, as smaller companies may not require a comprehensive evaluation plan. In such cases, the relative needs assessment technique is more appropriate. Considerations should also be given to training and development opportunities, as well as the capability of the existing team to conduct individual performance appraisals. For more complex evaluation processes, professional consultation may be necessary, although this can pose challenges for small businesses. Addressing these aspects properly can lead to significant cost savings for the company.

Despite ongoing discussions, even highly effective evaluation methods face questions regarding their validity and reliability. The position factor of employees in Appraisers is often regarded as having little value due to factors like strictness, leniency, personal biases, and influences from higher-ups. This can result in errors such as the halo effect and pigeonholing among others.

Some argue that employees may become resentful if they perceive their time being wasted during evaluations, leading to negative consequences for the business in the long term. There are also concerns about insufficient knowledge regarding certain evaluation information which can cause misunderstandings and result in unfair dismissals. Ultimately, this could lead to costly legal proceedings.The text emphasizes the importance of managers providing regular feedback to their employees and the positive outcomes that can result from performance appraisals. It highlights the benefits of maintaining strong relationships, synchronizing efforts, and providing guidance for employee performance. The text also mentions that performance appraisals can address issues such as new equipment provision and anticipate future business needs. However, it acknowledges that there are other areas to consider before implementing performance appraisals, such as meeting techniques and implementation plans. Additionally, the

text briefly mentions various techniques for performance assessment developed in the 1940s, including Behaviorally Anchored Rating Scales (BARS), Behavioral Observation Scales (BOS), Behavioral Evaluation Scales (BES), critical incidents, and job enrichment.

Various techniques for performance assessment:

The text describes different approaches used to evaluate performance criteria, including customer support. These approaches categorized skills and achievements in professions related to control, guidance, and future management potential by implementing mathematical rules into narrative statements. After 1945, a result-oriented approach called Management by Objectives (MBO) was developed to provide specific objectives and goals for design purposes.