The Concept Of Performance Appraisal Commerce Essay Example
The Concept Of Performance Appraisal Commerce Essay Example

The Concept Of Performance Appraisal Commerce Essay Example

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  • Published: August 15, 2017
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The concept of performance appraisal, defined as the process used to measure and evaluate an employee's skills and behaviors over a specific period of time, is popular in both transnational and local companies (Devries et al., 1981). When performance appraisal is implemented within an organization, it elicits strong reactions, emotions, and opinions due to its formal assessment process. Most organizations, regardless of size, sector, or industry, utilize performance appraisal to achieve various human resource management objectives (Longenecker, 1997). However, the use of different tools and conflicting goals can create confusion regarding the exact purpose of performance appraisal systems. Nevertheless, performance appraisal allows for the measurement of an individual employee's behavior and accomplishments over a specific time frame, going beyond a mere set of instructions for supervisors to complete a form (Wiese and Buckley, 1998).Yong ( 199

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6 ) defines public presentation assessment as an evaluation and evaluation exercise conducted by an organization on all its employees either periodically or annually, based on the outcomes of performance related to the job content, job demand, and personal behavior in the workplace. Heyel ( 1958 ) defines performance assessment as a process of evaluating the performance and qualifications of employees in terms of job requirements, for administrative purposes such as placement, selection, and promotion, to provide financial rewards and other actions that require differential treatment among the members of a group as distinguished from actions affecting all members equally. Performance assessment objectives can be classified in several ways. One of the most well-known categorizations was developed by McGregor ( 1987 ), who classified the objectives as follows: -
- Administration: Providing an organized way of determining promotions, transfers, and

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salary increases.
- Informative: Providing data to management on the performance of subordinates and to individuals on their performance.
- Motivational: Creating a learning experience that motivates staff to develop themselves and improve their performance.
Since the First World War, the concept of performance assessment has been present, and it was referred to as "Merit Rating Program".The concept of public presentation assessment has undergone numerous changes over time. The areas being evaluated have also evolved (Sourabh, 2009). The public presentation assessment process can be traced back to many thousands of years. However, the first recorded assessment system in the industry was implemented in the New Lanark cotton Mills in Scotland around 1800 by Robert Owen, who used character books and blocks (Newstrom and Davis, 1993). In the past, the department head would assess the employee and share their feedback exclusively with the employee's immediate superior. As a result, the feedback remained confidential. As time passed, the performance of subordinates began to be evaluated by their immediate superior and sent to the head department while still keeping it confidential. At that time, employees were not involved in their own assessment process. The immediate superior made decisions regarding pay raises and promotions, among other things. Consequently, the system lacked transparency (Longenecker and Gioia, 1992). Today's performance assessment process is much more open and there is room for self-assessment by employees as well. Discussions regarding assessment take place between employees and their superiors; however, final decisions regarding salary increases or promotions are made by the department head.The feedback regarding the employee's public presentation is directly given to them. This change in procedure signifies a shift from non-transparency to transparency (Chawla,

n.d.). In the transparency stage, a public presentation assessment can be described as a formal and structured interaction between a subordinate and supervisor, typically taking the form of periodic interviews. During these interviews, the subordinate's work performance is evaluated and discussed in order to identify strengths, weaknesses, improvement opportunities, and skills development (Edwin B, 1984). The top management constantly evaluates the performance of its subordinate managers through daily interactions, regardless of whether the organization embraces performance assessment or utilizes a formal assessment system or not. Additionally, the same practice is carried out by the subordinates with their lower-level employees. Whether it is formal or informal, performance assessment is essential in managing as it is the core of the art of management. While management is an active process focused on the present and future, performance assessment is a passive evaluation of an employee's past performance (Wiese and Buckley, 1998).Over the years, some of the leaders recognized that self-evaluation had limited usefulness, but they were pleased that management had evolved into an art form. Previously, management believed that relying on intuition was no longer acceptable, and measurements were important for future development. This led to the creation of management systems that aimed to measure various aspects of a manager's job. These systems often relied on improving performance assessment methods. The meaning of performance assessment expanded to encompass all elements of management. In modern philosophy, employees are encouraged to collaborate with their supervisors in setting goals. Contemporary performance assessment systems serve several purposes, including improving communication between supervisors and subordinates through feedback systems (Edmonstone, 1996; Longenecker, 1997).The modern systems of public presentation assessment not only identify the range

of public presentation betterment but also the means by which they will achieve it. They also help identify the individual training and development needs. Additionally, these systems can determine the individuals responsible for promotion and arrangement. The methods used for public presentation assessment serve as a basis for determining salary and wages. Through setting objectives and reviewing the success or failure in achieving them, this assessment becomes a powerful tool for managerial control. In order to successfully achieve these broad aims, performance assessment must have two essential components. Firstly, the organization must have a technically sound evaluation process in place. This process should include clearly developed evaluation procedures, an appropriate and user-friendly form, and a system to monitor compliance and store assessment data. The second key component is having competent managers who can effectively evaluate employee performance and conduct performance assessments. Unfortunately, many managers lack these critical skills (Fink and Longenecker, 1998).According to Steers and Black (1994), performance assessment is an important aspect of management that is often mishandled. Coutts and Schneider (2004) argue that it is a challenging concept in human resource management and is seen as either ineffective or even detrimental to the employee-supervisor relationship. Many managers find the formal assessment process frustrating, political, and lacking in meaning, which hinders the development of the administration. Performance appraisal measures how well individuals are performing in their jobs and provides guidance for improvement (Heathfield, n.d.). The foundations of performance appraisal include the job profile, which focuses on the tasks and responsibilities of the job and how they contribute to achieving team and organizational goals (Wijesiriwardena, 2003).Aims describe what needs to be achieved and outline the

expectations for organizations, departments, teams, and individuals. Henman (2000) identifies two types of aims: work or operational aims, which focus on achieving desired outcomes or contributing to the success of teams, departments, and overall objectives; and developmental aims, which guide individuals in improving their performance, knowledge, skills, and competencies through training and personal development plans. Competences refer to the behavioral aspects of a role and are the behaviors required for satisfactory job performance (Grote, 1998). Administrations also establish core value statements to govern employee behavior, emphasizing areas such as customer care, concern for people, competitiveness, excellence, growth, and innovation (Grote, 1998).Three essential steps for effective performance appraisal are training, evaluation, and review. Training is important because it helps employees improve and encourages self-assessment under the guidance of the evaluator. This interactive approach not only empowers employees but also enhances workplace relationships and productivity. Evaluation should be based on results and behavior rather than subjective traits, which can be unsatisfactory.A results-based approach to evaluating public presentations is the most objective method to assess the complex task. It utilizes an evaluation system to measure productivity within a given timeframe. If an employee achieves a certain number of sales in a particular week, their worth can be assessed and compared with other employees. The assessment also takes into account the behavior displayed by the employee, such as the pace of work, willingness to work overtime, and ability to collaborate with others, all of which contribute to overall productivity (Dransfield, Robert, 2000).

For the review process, it is important to incorporate interactive techniques. Before the actual discussion takes place, the evaluator should give the employee an opportunity to reflect on

their performance. This not only empowers the employee but also saves time and prevents potential conflicts during the review session. Initially, the evaluator should guide the employee through the process. A successful supervisor begins with an overview of why the review session is necessary. Then they go through each aspect of the job in detail, allowing the employee to describe their achievements and weaknesses. The supervisor should always provide additional insight to supplement this feedback.The supervisor retains authority throughout the reappraisal process and the entire assessment procedure (Bacal, Robert, 2003). The Critical Incidents File is a method of performance assessment where the manager records positive and negative performance behaviors of employees during the performance period. This file serves as necessary documentation in our litigious environment (Lussier, Robert N., 2000). The Rating Scale is a performance assessment form where the manager simply checks off the employee's level of performance. Areas evaluated may include work quantity, work quality, dependability, judgment, attitude, cooperation, and initiative (Giri, y.L., 2008). Behaviorally Anchored Rating Scales (BARS) combine evaluation and critical incidents as a performance assessment method. It is more objective and accurate compared to using each method individually. Instead of categories like excellent, good, average, etc., this form consists of statements describing the employee's performance, from which the manager selects the one that best describes their performance for that task.Standards are clear when good Parallel bars are developed ( Lussier, Robert N. , 2005 ) . Ranking is a public presentation assessment method that is used to measure employee public presentation from best to worst.Under the superior method, the director compares an employee to another employee, instead of comparing each one

to a standard measuring.An outgrowth of ranking is the forced distribution method, which is similar to rating on a curve.A preset percentage of employees are placed in performance categories: for example, excellent-5%, above average-15%, average-60%, below average-15%, and poor-5% ( Kimball and Lussier, 2009 ) The Narrative Method The narrative method requires the director to write a statement about the employee's performance.The system can vary.Directors may be allowed to write whatever they want, or they may be required to answer questions about employees' performance.The narrative is often combined with another method ( Lene and Boissoneau, 1998 ) Management by Objectives ( MBO ) MBO is a process in which directors and their employees jointly set objectives for the employee, periodically measure the performance, and reward according to the results ( Imran, arshia, 2008 ) .The concept of 'Management by Objectives' ( MBO ) was first given by Peter Drucker in 1954.The text describes Management By Objectives (MBO) as a process where employees and higher-ups collaborate to establish common goals, define criteria for performance measurement, and decide on the course of action. MBO emphasizes participative goal setting, decision making, and measuring employee performance against set standards. When employees are involved in goal setting and decision making, they are more likely to fulfill their responsibilities. MBO aims to empower employees by providing clarity of roles and responsibilities, aligning organizational and personal goals, and setting SMART goals (Specific, Measurable, Achievable, Realistic, Time-bound).The focus is on the future rather than the past. Goals and criteria are set for future performance with periodic reviews and feedback. Involving employees in the entire process of goal setting and increasing employee empowerment increases

job satisfaction and commitment. Improved communication and coordination are achieved through frequent reviews and interactions between superiors and subordinates, which also help solve problems encountered during the period. 360 degree feedback, also known as 'multi-rater feedback', is the most comprehensive assessment where feedback about an employee's performance comes from all sources that interact with the employee on the job. These sources can include peers, supervisors, subordinates, team members, customers, suppliers/vendors - anyone who interacts with the employee and can provide valuable insights and information or feedback regarding their on-the-job performance (Ward, Peter, 1997). Many researchers agree that 360 degree assessment consists of four core components: 1. Self-assessment 2. Supervisor's assessment 3. Subordinate's assessment 4. Peer assessment.Self-assessment allows employees to evaluate their strengths, weaknesses, accomplishments, and overall performance. In the traditional 360 degree performance assessment, the employee's superior rates their responsibilities and actual performance. Subordinates' evaluations assess communication skills, motivation, the superior's ability to delegate work, leadership qualities, and more. These evaluations from peers, also known as internal clients, can identify the employee's ability to work in a team, cooperation, and sensitivity towards others. 360 degree performance appraisal is essential in these assessments and has a significant impact on behavior and performance. It provides a comprehensive review of the employees' performance and is considered one of the most reliable methods. Conducting regular 360 degree assessments helps track changes in others' perceptions of the employees, making it a powerful developmental tool.A 360-degree assessment is commonly seen as more suitable for managers as it helps measure their leadership and management styles. This method is used successfully worldwide for performance evaluations (Armstrong, Michael, 2006).

Determining the best assessment method depends

on the objectives of the system. It is generally better to use a combination of methods rather than just one. Critical incidents and MBO work well for developmental purposes, while evaluation scales or BARS work well for administrative decisions. The success of performance assessments does not rely on the method or form used; it depends on the manager's interpersonal skills (Sims, Ronald R., 2002).

When it comes to performance evaluations, both directors and employees agree that they dislike going through them. Fear, guilt, responsibility, and resentment are the real reasons why most employees dread the evaluation process, according to employees, managers, and HR experts. Some also view it as a mandatory ritual (Kulik, Carol T., 2004).

An effective review process helps organizations in three areas: evaluating and improving personnel selection and training systems, preventing unlawful termination.The text below, with the  and their contents, can beand unified as follows:

To increase employee diversity, it is important to have a comprehensive assessment process that gathers information from multiple sources and evaluates employees at all levels. Both the appraisee and valuator should work together to assess the employee's ability to fulfill responsibilities and achieve goals set in previous assessments (Ford, Deborah Kilgore, 2004).

HR professionals should follow these steps to simplify and enhance the assessment process: The performance appraisal form should align with the company's strategic objectives. Many organizations use a form with several sections. The results and impact section should focus on accomplishments related to job duties, goals, and tasks - essentially reviewing past performance (Simmons, J.E.L.et.al., 2003). The skills and abilities section should discuss how those results were achieved. By identifying the core competencies for each job category and the

organization as a whole, this section can address the critical behaviors for success (Stevenson and Starkweather, 2009).

The assessment results directly or indirectly determine rewards. High-performing employees may receive the majority of merit pay increases, bonuses, and promotions, while underperforming employees may require counseling or in extreme cases, receive no pay increases at all.The assignment and justification of wages and punishments through performance assessment is a controversial affair that elicits both satisfaction and dissatisfaction with an employee's job performance. Regardless of the situation, organizations should foster the belief that performance assessments are positive opportunities for overall employee development in order to maximize potential and the process should never be used as a means of controlling disciplinary matters (Floyd, Robert, n.d).

Performance assessments typically result in either monetary rewards such as salary increases, bonuses, incentives, and/or promotions; or in no increase in salary, denial of promotion, and so on. This leads to the concept of Performance Related Pay (PRP) (Kane, Jeffrey S., 2002). However, implementing PRP is not a simple choice. Before embarking on its introduction, certain factors must be taken into consideration. One such factor is ensuring that PRP strategies align with the organization's culture and core values. Understanding and working with the culture is essential for the development of effective strategies (Martin, Graeme, 1994).When linking PRP to the Performance Management process, it is important to consider factors such as profitability, productivity, cost control, research initiatives, product and market development, and overall stakeholder value (West, Michael A et.al., 2003).

To ensure a balanced evaluation, performance measures used should include a combination of input factors (skills and competencies) and output factors (performance and contribution). The assessment for determining wages

should be based not only on achieving objectives, organizational success, and levels of achievement and competency, but also on the extent to which individuals' behavior supports corporate values in areas such as teamwork, total quality management, customer services, innovation, etc. (Amaratunga, Dilanthi, 2000).

PRP agreements should allow for flexibility in the criteria for rewards and the method of payment (Egan, Janet, 2010). Additionally, when structuring the strategy and defining critical success factors and performance indicators, it is crucial to recognize the importance of teamwork in order to avoid creating isolated individuals through inadequate PRP strategies.Persons should be aware that achieving their goals at the expense of others is not considered competent performance (Armstrong, Michael, 2000). To avoid the danger of PRP focusing attention on short-term results at the expense of more important longer-term objectives, long-term as well as short-term goals should be set wherever appropriate and short-term objectives should be discussed in their overall context (Shen, Jie, 2004). The design of PRP strategies is usually an iterative process - seeking and testing ideas on measures and structure with those who will ultimately be involved in the strategy. It is also a valuable learning process, which can raise key strategic and business issues. Those expected to participate in the strategy should have an input into agreeing on critical success factors and performance indicators both for themselves and the organization (Fisher, Colin M., 1995). PRP provides a very powerful form of communication. To get the right messages across, the following questions will have to be addressed: Assess evidence for PRP. Why do we want to introduce PRP? What, realistically, do we expect to get out of it? Assess

readiness for PRP. Is PRP right for our culture?Are all necessary procedures in place for successful implementation of PRP? Is the management and employees supportive of PRP? (An attitude survey can be conducted to establish opinions). Do the individuals managing PRP have the skills and resources required? Will PRP have a significant impact on performance to justify the costs of implementing and operating the strategy? (Armstrong, Michael, 2003) Evaluate whether or not to introduce PRP. Does the assessment indicate that PRP is suitable for the organization? If not, what are the alternatives? There are several options: consider performance-related team pay, organization-wide profit sharing or profit-related pay schemes, gain sharing, incentive or bonus strategies, focus more on motivational aspects of Performance Management, job redesign to increase motivation, more intensive training in performance-related skills for managers, process re-engineering to improve organizational performance and productivity (Appelbaum, Steven H., 1996). How should employees be informed about the organization's objectives and goals regarding the introduction of PRP? How can concerns about PRP be minimized through this briefing process? To what extent and how should employees be consulted and involved?( Harris, Lynette, 2001 )  In determining the standard for PRP awards, a combination of input standards, procedure standards, output performance indicators, and outcome contribution indicators should be considered. These standards should relate to the accomplishments and knowledge applied in fulfilling job duties, the behavioral competencies used to achieve results, the attainment of objectives and fulfillment of performance requirements as stated in job responsibilities or tasks, and how individual behavior aligns with corporate values.

( McConville, Teri, 2006 )  It is important to establish clear criteria for the key positions eligible for PRP.

Are there performance measures available for these criteria in order to ensure fair and consistent assessment? What type of evaluation system should be implemented? How can we guarantee fairness and consistency in evaluations? What are our policies regarding payment size based on performance, contribution, achievement, and competency? What policies should we have regarding the rate of advancement and any limitations on progression within salary ranges?are PRP appraisals different from performance appraisals? What guidelines will be given to managers using PRP in their departments? Should performance matrices be used and how should they be created?

Baron and Armstrong (2004) discuss various considerations for implementing performance-related ball amount fillips, known as PRP. They explore whether the organization wants to provide these bonuses for exceptional accomplishments or sustained high-ranking performances at the top level. The authors also question if PRP appraisals should be conducted separately from performance appraisals as part of the Performance Management process. They suggest issuing evaluation, pay increase, and budget guidelines to managers who will implement PRP in their departments. Additionally, they explore the use of performance matrices and how they should be constructed.

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