Performance appraisal process has to do with assessment and evaluation of employees, which is a very important process for any organization. (Clardy, 1996). The process affects an employee’s promotion, retention, termination, pay rise, transfer and entry into a training program. (Archer north 2006) These are various methods used in performance appraisal, most of which have evolved over the years with variations that have seen the appraisal process become more effective. Currently, my organization uses the rating scale method. The appraisal forms usually have a list of traits with the scale numbers 1 to 5.
These traits include loyalty, initiative, dependability, attitude among others. The appraiser usually circles the number that represents the employees level on that trait with 1 being the lowest and 5 the most acceptable. The appraisal forms are handed out annually f
...or the annual review and all departments of the organization (we make and sell furniture) are appraised in this way. The method is cheap and its concept is easy to understand hence it is very popular with the managers. The large work force can be assessed through a structured and standardized way so there is some element of equality in treatment.
Even with these advantages, the method of appraisal is ineffective and does not yield much benefit for the organization. It is subjective and many times employees have complained of such issues as leniency, halo effect and central tendency. Clardy argues that accuracy and consistency of the rating scale can easily compromised as it has fundamentals psychometric failures that make both ‘accuracy and consistency suspect’ (Clardy 1996) it is difficult to define clearly what 1,2 or 3 means without specific meaning being attache
to them.
Again, the rater may at one time attach one meaning to one value and at a different time attach a different meaning to the same value, bringing about inconsistency. Some attributes may mean one thing to one rater and to another rate something different. As a result the employees are evaluated using different scales of measurement sometimes even by the same rater These is also the feeling that the rating scales measure the wrong thing, that rather than attributes like loyalty or initiative, work output and job related performance behaviours should be assessed in the appraisal process.
This is more objective and can easily be related to the organizations goals. It has been argued that by assessing an individual’s loyalty and commitment to the organization, their performance can be gauged. Organizational commitment is the degree to which an employee believes in his/her organization’s goals and is willing to put is extra effort to ensure the goals are achieved. The rationale behind the rating scale is that when commitment decreases, behaviors such as lowered job involvement and turnover are likely. (Clardy 1996)
As a provider of furniture, customers contact skills and work output in terms of high volume of production and sales are more important measures of performance than attributes like attitude and loyalty. Using rating scales that assess the latter, the appraisal process becomes ineffective and provides a poor reflection of the employee’s performance. Rating a designer on ‘attention to detail’ does not provide information about his/her performance since there is no relation between the trait being assessed and the job of the designer.
The process of appraisal is supposed to increase employee efficiency through feedback. Results
of the appraisal process are sometimes not relayed to employees. When the appraisal process does not follow a regular pattern and what is being evaluated and how the grades add together to produce a final rating is not made clear to employees, most employees associate appraisals with negative implications as is the case in my organization. (Clardy 1996) Other methods of appraisal include the essay method where the appraiser prepares a written statement about the employee.
The statement describes weaknesses and strengths in performance and suggests course of action to correct the identified problem area. (Archer north 2006) The advantage of this method lies in the fact that it is not structured and so it does not confine the appraiser. Consequently, the relevant issues and attributes of performance can be thoroughly examined. Without the assumption that employees’ traits are scaled in a rigid way, flexibility is ensured. This method however is time consuming and difficult to administer especially in an organization that has a large work force.
Due to its freedom of expression, it can be overly subjective. An appraiser’s skill of writing may distort the process making it difficult to compare and contract individual’s results and draw conclusions about an organization’s needs (Archer north 2006) Management by objectives (MBO) was first widely campaigned for in the 1950s by the management theorist Peter Drucker. MBO is a result oriented method in that employee performance is measured by examining the extent to which preset objectives have been met. (Bohler and Snell 2002). Both the supervisor and subordinate usually predetermine the objectives.
A sales manager might have an objective such as increasing to gross monthly scales volumes to $350000 by
30 October. Upon agreeing on the objective, the employee is required to assess himself or herself and identify skills required to achieve the objective. There is no reliance on someone else to find strengths and weaknesses rather development and progress are self-motivated. By focusing on actual outcomes, MBO overcomes the problems that arise due to assuming that employee traits can be measured and used to predict success. When an employee meets or surpasses the set objectives then he/she has demonstrated an acceptable performance level.
Subjectivity and potential for success are removed from the appraisal process and with focus on the actual outcome; the guiding principle that direct results can be observed is maintained. This method illustrates that employee performance cannot be simply be broken down into various elements, rather performance is composed of many things and by considering them as a whole, performance can be observed and measured objectively. This method also gives employees satisfaction from their achievements (Acher north 2006) The major problem with the MBO technique is that most times people lack reality-checking skills.
This may lead to unrealistic expectations on the objectives that can be achieved. These skills are difficult too teach in training and may make starting to use the MBO technique difficult. In addition, well-expressed objectives can turn out to be rigid impositions, which are nowadays unwelcome since most organizations require flexibility. (Achernorth 2006) The critical incidents method uses example of good and bad job behaviour that have been put together over time. This method involves keeping a log of effective and ineffective job performance.
For instance, the performance appraisal log for Mr. Kimble may contain unsatisfactory incidents like 3/29/2001. ‘refused to try
a new work procedure’ and 4/26/200; ‘Argued with customers about origin of error in paper work’. The log will also have satisfactory incidents like s/3/2001 ‘Volunteered to install new operating system’, 3/15/1001: ‘Assisted Ann to complete her assignment’. (Becalm 2001) This technique has its basis on the description of the event; there is no assignment of rank or rating although sometimes it may be coupled with some form of rating.
Using critical incidents requires more of the manager’s attention and time. It is helpful to employees because by writing out details of incidents, areas that require improvement are highlighted. Sometimes managers encourage employees to record the incidents themselves. This makes the performance appraisal more inclusive and employees’ responsibility is increased by encouraging them to self-analyze since managers do not have to be present whenever an incident occurs. It is imperative that the incidents are written down as review as they occur and not at the annual performance review.
Such a delay would result in compromised accuracy and loss of detail (Bacal, 2004) Among the three mentioned above my organization would benefit the most from the MBO method. The sales department is the largest in the company and the MBO would effectively meet the needs of both the large workforce and the organization. Because the setting of objectives requires supervisions and subordinates to work together, employee participation would be encouraged, hence employees will be aware of what is being assessed and how this is happening.
This is important for the organization since keeping employees in the loop reduces liability risks reduced with decreased accusations of discrimination and a decrease in the negativity associated with appraisal process. The method will
also serve to motivate employees whose sense of achievement will be bolstered upon achieving objectives that have been set. A sense of responsibility and commitment to the work is also enhanced. This method, for my organization would be cost effective since most of the workforce is in sales, much altering of the objectives is not required.
Even in other departments where objectives may alter, the change is not radical. Even then, the changes in objectives can be made in such a way that they are in line with the overall vision of the organization, which is to maintain a competitive advantage of producing affordable furniture. By adopting MBO method it will become easier to identify performance problem since failure to reaction certain objective means that a problem has been encountered.
Articulating the problem will lead to the problem being solved. Different objectives can then be set in and this way some degree of flexibility is maintained since every organization needs to be flexible. In conclusion, performance appraisal is necessary as a component of career development and since the human resources is the greatest assets that an organization can have, it is necessary for a company to fashion an appraisal process that is transparent and caters for its needs as well as those of its workforce.
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