Examining Employee Appraisal, Reward And Demotivation Essay Example
Examining Employee Appraisal, Reward And Demotivation Essay Example

Examining Employee Appraisal, Reward And Demotivation Essay Example

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  • Pages: 16 (4332 words)
  • Published: August 18, 2017
  • Type: Research Paper
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The origins of public presentation assessment can be traced back to Taylor's influential Time and Motion studies in the early 20th century. However, this is a common characteristic found in many aspects of modern human resources management.

The act of appraising work performance has been employed since World War II, making it a relatively modern practice. Nevertheless, assessment can be viewed as an ancient art in a broader sense; some might argue that it is the second oldest profession. Dulewicz (1989) suggests that humans naturally form opinions about their colleagues and themselves, thus appraisal is an inherent and inevitable aspect of human interaction.

In the absence of a structured assessment system, individuals tend to informally and randomly evaluate others' work presentations. This tendency can result in significant workplace issues, including problems related to motivation, ethics, and legality. The lack of a structured assess

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ment system creates challenges in ensuring that judgments made are lawful, fair, defensible, and accurate. Initially, performance assessment systems were developed to justify income by determining if an employee's wage or pay was warranted. This assessment process was closely linked to tangible outcomes.

If an employee's performance fell short, their wage would be reduced. Conversely, if their performance exceeded expectations, a wage increase was deemed appropriate. Little attention was given to the potential for growth through evaluation. The primary motivation behind wage cuts or raises was to provide employees with the necessary incentive to either improve or continue performing well.

Sometimes, the basic system had success in achieving desired outcomes, but more often it was unsuccessful. Researchers in motivation found that individuals with similar abilities could be paid equally but still have different levels of motivation and

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performance. Empirical studies supported these findings. Pay rates were important but not the sole factor impacting employee performance. Other factors like morale and self-esteem also played a significant role. As a result, the traditional emphasis on wage outcomes gradually diminished.

In the 1950s in the United States, assessment as a tool for motivation and development started to gain recognition. This led to the development of the modern model of performance assessment.

Modern Appraisal

Performance assessment is a structured formal interaction between a subordinate and supervisor, typically in the form of a periodic interview (annually or semi-annually). During this interview, the work performance of the subordinate is examined and discussed. The purpose is to identify strengths, weaknesses, improvement opportunities, and skills development. The assessment results are used to determine which high-performing employees should receive merit pay increases, bonuses, and promotions. Conversely, it also identifies underperforming employees who may need guidance or, in severe cases, demotion, dismissal or reduction in pay. Organizations must comply with applicable laws in their country concerning termination or pay reduction of employees.

The use of public presentation assessment for assigning rewards and punishments is a highly debated and controversial topic. Performance assessment is one of the most contentious management issues, with doubts about its validity and reliability expressed by reputable sources such as researchers, management experts, and psychometricians. Some argue that the process is fundamentally flawed and cannot be perfected (see Derven, 1990). However, there are also many enthusiastic supporters of performance assessment.

Some position it as potentially the most important facet of organizational life (Lawrie, 1990). Between these two extremes lie assorted schools of belief. While all endorse the usage of performance assessment, there are many

different sentiments on how and when to use it. There are those, for case, who believe that performance assessment has many important employee development uses, but scorn any effort to associate the procedure to honor outcomes - such as wage rises and promotions. This group believes that the linkage to honor results reduces or eliminates the developmental value of assessments.

Instead of being seen as an opportunity for positive evaluation and encouragement, the reward-based process is viewed as judgmental, punishing, and distressing. For example, if people knew that their next pay raise or desired promotion hinged on an assessment result, they would likely avoid admitting or downplaying their weaknesses. The desire to manipulate or deny the truth is not limited to the person being evaluated. Many evaluators also feel uneasy about assuming the role of both judge and executioner. It is understandable why there is reluctance in such situations.

Appraisers often have a good understanding of their appraisees and typically have a direct subordinate-supervisor relationship. They work closely together on a daily basis and may even socialize outside of work. Suggesting that an employee needs to improve certain job skills is one thing; however, providing an evaluation that directly contradicts a promotion can have negative consequences. This can lead to resentment and a decrease in morale, resulting in workplace conflicts, strained relationships, and decreased productivity. On the other hand, there is a strong argument stating that performance assessments should be clearly tied to rewarding outcomes.

The proponents of this attack argue that organizations must have a procedure in place where rewards, which are not unlimited, can be openly and reasonably distributed to those who are most deserving based

on their virtue, effort, and results. There is a crucial need for fair justice in organizations. Despite its practical flaws, performance appraisal is the only available process to help achieve fair, equitable, and consistent rewards outcomes. It has also been claimed that the individuals being appraised tend to believe that the appraisal results should be directly linked to rewards outcomes – and they become suspicious and disappointed when they are told otherwise. Instead of feeling relieved, the appraised individuals may suspect that they are not being told the complete truth or that the assessment process is a sham and a waste of time.

The Link to Wages

According to recent research by Bannister & Balkin (1990), it has been found that employees tend to place more importance on the assessment procedure and are more satisfied with it when it is directly connected to wages. This challenges the belief that assessment outcomes and reward results should be kept separate. Some argue that evaluating employees for wage purposes and openly communicating with them about their performance are essential management responsibilities. Critics argue that the practice of not discussing reward issues during performance evaluations is based on conflicting and confusing ideas of motivation. In many organizations, this inconsistency is made worse by the practice of conducting separate pay and salary reviews, where merit increases and bonuses are determined arbitrarily and often in secrecy by supervisors and managers.

Basic Purposes

Effective public presentation assessment systems include two parallel components: an evaluation system and a feedback system. The evaluation system identifies performance gaps when an employee's performance falls below the organization's acceptable standard. Conversely, the feedback system informs

employees about the quality of their performance.

However, the flow of information in performance assessment is not one-way. The employee also provides feedback to the valuators about job problems and other issues. It is important to understand the intentions of performance assessment by considering the perspectives of both the employee and the organization.
From an employee's point of view, performance assessment serves four purposes:
1) To communicate what tasks are expected from them.
2) To inform them about how well they have performed those tasks.
3) To help them improve their performance.
4) To reward them for doing well (Cash, 1993).
On the other hand, from an organizational perspective, performance assessment is seen as crucial for establishing and maintaining accountability. It is recognized that a lack of alignment between responsibility and accountability can lead to organizational failure. This occurs when employees are given responsibilities without being held accountable for their execution or when multiple individuals or work units have overlapping roles. In addition to receiving feedback from employees about job problems, valuators also provide information during performance assessments. To truly comprehend the purpose of performance assessment, it is essential to consider both viewpoints - that of the employee and that of the organization.From the perspective of an employee, performance assessment serves four key purposes: understanding expectations, evaluating personal success in meeting those expectations, facilitating performance improvement, and acknowledging strong performance (Cash, 1993). Conversely, organizations view performance assessment as vital for establishing and upholding accountability within their structure. It is acknowledged that aligning responsibility with accountability is critical to prevent organizational failure resulting from overlapping roles and a lack of clear execution ownership.

The convergence actively encourages each person or unit to "go

through the vaulting horse" to the others, allowing for accountability. In a non-aligned system, no one is accountable, resulting in a breakdown of responsibility. This ultimately leads to organizational failure.

When the non-alignment is not too severe, the administration may still continue to operate, although inefficiently. Similar to a poorly made or poorly tuned engine, the non-aligned administration may function, but it will be sluggish, expensive, and unreliable. One of the main objectives of performance assessment is to hold people accountable. The goal is to align responsibility and accountability at every organizational level.

Appraisal Methods

Performance Appraisal Techniques

In a landmark study, Locher and Teel (1977) discovered that the three most common assessment methods in general use are evaluation scales (56%), essay methods (25%), and results-oriented or MBO methods (13%).

Extensive research has been conducted on different techniques for evaluating public presentations, showing that certain methods produce better results than others.

Promote Dialogue

Research shows that allowing employees to openly express themselves and actively engage in discussions about their performance leads to greater satisfaction with the assessment outcome. It also improves their likelihood of meeting future performance goals (e.g., Nemeroff; Wexley, 1979).

According to Greenberg (1986), employees are more likely to perceive the assessment procedure as fair if they are given the opportunity to discuss their performance and have the ability to challenge and appeal their rating.

The constructive purpose of providing negative assessment feedback is extremely important for employees to understand.

, to help employees overcome current issues and improve their future performance. Employees are less anxious about criticism and will find it more useful when they believe that the evaluator's intentions are helpful and constructive (Fedor et al., 1989). In contrast, other studies

(e.g.

, According to researchers (Baron, 1988), negative criticism that is unclear, uninformed, unfair, or harshly presented can lead to issues such as anger, bitterness, tension, and workplace conflict. It can also result in increased resistance to improvement, denial of problems, and poorer performance.

Set Performance Goals

It has been shown in many studies that goal-setting is crucial for employee motivation. Goals can inspire employees to put in more effort, focus their attention, maintain persistence, and encourage them to find innovative and better ways to work (e.g., Locke et al., 1981). The effectiveness of goals as a motivator in management is one of the most well-supported theories.

According to Harris & DiSimone (1994), specific, challenging goals that are accepted by employees lead to higher levels of performance compared to easy and vague goals or no goals at all.

Appraiser Credibility

In addition, it is essential for the appraiser (typically the employee's supervisor) to possess intelligence and credibility. It is crucial for appraisers to be comfortable with assessment techniques and knowledgeable about the employee's job and performance. When these conditions are met, employees are more likely to perceive the assessment process as accurate and fair. They also demonstrate greater acceptance of the appraiser's feedback and a greater willingness to make changes.

(Bannister, 1986)

Perceptual Mistakes

Perceptual mistakes, including the horns and halos effect and issues of perceived significance, are well-known phenomena in selective perception. Selective perception involves subjectively evaluating someone's true nature and then searching for evidence that supports our perception while disregarding contradictory evidence. This psychological phenomenon is prevalent among individuals as we tend to perceive in others what we desire.

The halo effect occurs when a supervisor perceives an employee as inherently good, dismissing

any evidence indicating otherwise. The supervisor shields the employee from criticism and may even make excuses for their declining performance. Conversely, the horns effect arises when a supervisor forms the impression that an employee is bad. Consequently, the supervisor consistently evaluates them harshly and is always ready to criticize and undermine their efforts.

The horns and halo effect can be a significant threat to the effectiveness and credibility of performance assessment. While it is rarely observed in its extreme and obvious forms, it can manifest in subtle ways.

Perceived Meaning

Problems arise when evaluators do not share the same understanding of the meaning of selected traits and the language used on evaluation scales. For example, one evaluator may interpret an employee's act of reporting work problems to a supervisor as a sign of initiative. However, another evaluator may see it as excessive dependence on supervision, indicating a lack of initiative. Similarly, the language and terms used to define performance levels on a scale, such as "Performance exceeds expectations" or "Below average performance," may carry different interpretations for different evaluators.

Rating Mistakes

The job here is not so much mistakes in perception as mistakes in evaluator opinion and motivation. Unlike perceptual mistakes, these mistakes may be (at times) deliberate. The most common evaluation mistake is cardinal inclination. Busy valuators, or those wary of confrontations and reverberations, may be tempted to dole out excessively many inactive, centrist evaluations (e.g.

The evaluations of subsidiaries tend to cluster around the middle of the scale, regardless of their actual performance. This problem is magnified in organizations where the assessment process lacks strong management support or where evaluators lack confidence in their ability to assess.

Rating Scales

The rating scale method provides a structured approach to assessments. Each employee trait or characteristic is rated on a bipolar scale with several points ranging from "poor" to "excellent" or a similar arrangement. The traits assessed on these scales include cooperation, communication ability, initiative, punctuality, and technical competency.

The selection of traits for inclusion in evaluation scales is only limited by the creativity of the designer or the organization's need to know. However, it is important that the chosen traits are somehow relevant to the appraisee's job. Unfortunately, some organizations have made unwise choices in selecting traits, leading to legal action due to accusations of discrimination.

Advantages

The main advantage of evaluation scales is that they provide structure and standardization.

The use of a standardized assessment procedure and evaluation standards creates a system that allows for easy comparison and contrast of evaluations, even when applied to large workforces. Every employee undergoes the same assessment procedure and is held to the same evaluation standards, with the same range of possible responses. This promotes equal treatment and intervention for all employees being appraised and enforces consistent performance measures throughout the entire organization. The rating scale methods employed are straightforward and comprehensible.

The construct of the evaluation graduated table is logically simple and efficient, making it easy for both evaluators and appraisees to understand. This has led to widespread acceptance and popularity of this approach.

Disadvantages

Trait Relevance: The selected rating-scale traits may not be equally relevant to all appraisees' occupations. In a standardized assessment system, some traits may hold greater importance in certain occupations than in others. For example, the trait "initiative" may not be crucial in a tightly defined

and structured job. In such cases, a low assessment score for initiative doesn't necessarily mean an employee lacks this trait. It may simply indicate that the employee has fewer opportunities to use and demonstrate it.

The relevance of evaluation scales is thus considered to be context-sensitive. Factors related to the job and workplace conditions must be taken into account.

Systemic Disadvantage:

Evaluation scales, and the characteristics they aim to measure, generally attempt to encompass all the relevant indicators of employee performance. It is assumed that all the true and most appropriate indicators of performance are included, while false and irrelevant indicators are excluded. This assumption is difficult to prove in practice. It is possible that an employee's performance may depend on factors that have not been included in the chosen characteristics.

Employees in this category are systematically disadvantaged by the evaluation scale method, which may result in evaluations that do not accurately reflect their effort or value to the organization.

Essay Method

In the essay method approach, the evaluator creates a written statement about the employee's appraisal. The statement typically focuses on describing specific strengths and weaknesses in job performance and recommends actions to address identified areas of improvement. The statement can be solely written and edited by the evaluator or can be composed collaboratively with the employee being appraised.

Advantages

The essay method provides more freedom and flexibility compared to the evaluation scale method. Evaluators can assess any relevant issue or performance attribute they deem important, as opposed to methods with rigidly defined assessment criteria. They have the ability to emphasize certain issues or attributes as they see fit. As a result, the process is open-ended and highly adaptable. This approach avoids

being constrained by an assessment system that relies on a specific format or assumes that employee traits can be easily quantified.

Disadvantages

The essay method is time-consuming and difficult to administer. Appraisers often find it more demanding than other methods like evaluation scales. The main advantage of this technique, freedom of expression, is also its greatest weakness. The varying writing skills of the appraisers can disrupt and distort the entire process. It is subjective, making it difficult to compare and contrast individual results or draw any general conclusions about organizational needs.

Consequences Method (MBO Method)

The Consequences Method, also known as the MBO (Management by Objectives) Method, was initially advocated in the 1950s by renowned management theorist Peter Drucker. This method of performance assessment focuses on achieving specific work objectives to measure employee performance. The goals are typically established collaboratively between the supervisor and subordinate. For example, a sales manager may have the objective of increasing monthly sales volume to $250,000 by June 30th.

Once a goal is agreed upon, the employee is usually expected to self-assess and identify the accomplishments needed to achieve the goal. Typically, they do not rely on others to recognize and specify their strengths and weaknesses. They are expected to monitor their own development and progress.

Advantages

The MBO approach resolves some of the issues that arise from assuming that the employee traits required for job success can be accurately identified and measured.

Instead of making assumptions about traits, the MBO method focuses on actual results. If the employee meets or exceeds the set goals, then they have shown acceptable job performance. Employees are evaluated based on actual results, not their potential for success or someone else's

subjective opinion of their abilities.

Disadvantages

MBO performance assessment methods can give employees a sense of freedom and accomplishment. However, they can also create unrealistic expectations about what can reasonably be achieved. Supervisors and subordinates must have strong "reality checking" skills to use MBO assessment methods effectively.

During the initial phase of nonsubjective scene, individuals will need to possess these accomplishments in order to self-audit and self-monitor. Unfortunately, research studies have consistently shown that people often lack the skills necessary for "world checking", and these skills are not easily taught. Reality is a deeply personal experience and is susceptible to various forms of perceptual bias. One advantage of the MBO method is the clarity of purpose that stems from well-defined objectives. However, this can also be a weakness.

It is clear that modern administration must be flexible in order to endure. Goals, by their nature, often impose rigidity. While the obvious solution is to make goals more adaptable and accommodating, the consequence of flexibility is loss of clarity. Variable goals can lead to employee confusion.

It is also possible that unstable objectives may be altered to disguise or justify failures in performance.

Advantages of Evaluation

Arguably the most significant advantage of evaluation is that, amidst the hurry and bustle of everyday work life, it presents a rare opportunity for a manager and employee to have a "time out" for a one-on-one discussion of important work issues that might not otherwise be addressed. Almost universally, when performance evaluation is conducted properly, both managers and employees have reported the experience as beneficial and positive. Evaluation provides a valuable chance to focus on work activities and goals, to identify

and rectify existing problems, and to promote better future performance. Thus, the overall performance of the entire organization is improved. For many employees, an "official" evaluation interview may be the only time they get to have exclusive, uninterrupted access to their manager.

One employee of a large administration commented on his first formal public presentation assessment, stating, "In twenty years of work, that's the first time anyone has ever bothered to sit down and tell me how I'm doing." The significance of this intense and purposeful interaction between supervisors and subordinates should not be underestimated.

Motivation and Satisfaction

Performance assessment can have a profound impact on levels of employee motivation and satisfaction - both for the better and for the worse. Performance assessment provides employees with recognition for their work efforts.

The significance of societal recognition as a motivator has been revered for a long time. There is evidence that people will choose negative recognition over no recognition at all. The existence of an evaluation system shows employees that the organization genuinely cares about their individual performance and growth. This alone can have a positive impact on the individual's self-esteem, dedication, and sense of belonging.

The importance of acknowledging individual achievements should not be underestimated, as it can significantly decrease absenteeism and turnover rates in organizations. Implementing regular performance assessments is a good initial step in this process.

Training and Development:

Performance assessment presents an excellent opportunity for supervisors and employees to identify and address individual training and development needs.

During the assessment of an employee's work performance, the presence or absence of work achievements can become quite evident - even to those who typically reject the notion of preparing for them! Performance

evaluation can make the need for development more pressing and relevant by clearly linking it to performance results and future career aspirations. From the perspective of the organization as a whole, aggregated evaluation data can create an overview of the overall need for training. This data can be analyzed based on variables such as gender, department, etc. In this regard, performance evaluation can provide a regular and effective training needs audit for the entire organization.

Recruitment and Onboarding

Evaluation data can be used to monitor the success of the organization's recruitment and onboarding practices. For example, how well are the employees performing who were hired in the past two years? Evaluation data can also be used to assess the effectiveness of changes in recruitment strategies.

By regularly analyzing annual data on new hires, it is possible to assess if the overall quality of the workforce is improving, remaining stable, or declining.

Employee Evaluation

Although often underestimated or denied, evaluating performance is an important objective of performance assessment. However, the need to evaluate (i.e., judge) also creates ongoing tension, as assessing and fostering development priorities frequently collide. Nevertheless, at its most fundamental level, performance assessment is the process of examining and assessing an individual's performance. While organizations have a clear right - some argue a duty - to conduct such performance evaluations, many still hesitate to do so.

According to some, the process of expressing opinions can dehumanize and corrupt and cause anxiety and harm to employees. It has been suggested that assessment cannot serve both the purpose of evaluating and developing employees simultaneously; it must be one or the other. However, there may be a reasonable compromise where the need to

objectively evaluate employees and the need to encourage and develop them can be balanced.

Reward Issues

Insights into potential problems in a system of performance assessment linked to rewards can be found in the research by Deets & Tyler (1986).

The Xerox Experience

The Reprographic Business Group of the Xerox Corporation had a traditional performance assessment system based on rating scale methods.

The evaluation results were directly linked to pay outcomes, specifically merit wage increases. This relationship was well-known and expected by everyone at Xerox. The evaluation system at Xerox incorporated typical features of graduated scale assessment systems. The annual appraisal interviews were carried out by the immediate supervisor of the employee. The accomplishments from the previous year were documented, and performance levels were evaluated based on various pre-established criteria.

The Xerox system incorporated components of essay assessment whereby evaluators had to write short supporting statements for each rated standard. Additionally, the system required a summary evaluation, ranging from 1 (unsatisfactory) to 5 (exceeding). This summary evaluation aimed to summarize the entire year's performance in a single number. The significance of this final number was significant as it directly influenced the magnitude of the employee's annual salary increase.

The rise in evaluation increases as well. For Xerox employees, the focal point was to obtain the highest possible final score. Through analysis of evaluations over time, it was observed that over 95% of employees received scores of either 3, 4, or 5. In other words, the distribution of evaluations heavily favored higher scores. According to the assessment system, almost every employee performed at or above average. Ratings such as "below average" and "unsatisfactory" were rarely assigned to employees at the lower end of

the scale.

The outcome of this distortion was that any employee who scored below a 4 ("exceeds expected performance level") started feeling like a failure! The evaluation process turned into a kind of lottery, where the goal was to get the highest score and win the prize. The process became obsessed with that crucial final number. This situation created significant pressure for both the appraised individuals and the evaluators. The evaluators had the challenging task of determining the winners.

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