the Effectiveness of performance appraisal Essay Example
the Effectiveness of performance appraisal Essay Example

the Effectiveness of performance appraisal Essay Example

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  • Pages: 13 (3416 words)
  • Published: August 29, 2017
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2.0 Introduction

This chapter presents a more detailed analysis of all variables involved in the survey. Firstly, it outlines the performance assessment and effectiveness. Additionally, it explains justice and equity, job satisfaction, employee commitment and motivation, and turnover intention.

2.1 Performance Assessment

Latham and Wexley (1994) define performance assessment as any personnel decision that affects employees' status regarding their retention, termination, promotion, transfer, salary increase or decrease, or admission into training programs. According to this definition, performance assessment plays a key role in managing people within the organization. The definition by Latham and Wexley aligns with Fletcher and Williams (1986) as both claim that performance assessment is determined by management and is crucial to various aspects of human resource activity. Furthermore, Leap and Crino (1993) define performance assessment as a process of evaluating both the quantitative and qualitative as

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pects of an employee's job performance.According to Sisson (1991), performance assessment is the process of observing and discussing current performance in a job to enhance performance. However, Harvey and Bowin (1996) define performance assessment as the accomplishment of assigned responsibilities and outcomes produced during a specified time period while performing jobs. Milkovich & Boudreau (1997) refer to performance appraisal as the process of measuring employee performance, where performance is the degree to which employees meet work requirements. Armstrong (1993) defines performance assessment as a means of improving results by understanding and managing performance within a planned framework of goals and standards. On the other hand, according to Fletcher (2001), performance assessment is a general term for various activities that organizations use to evaluate employees, develop their competency, enhance performance, and distribute rewards.

2.2 Effectiveness of public presentation assessment

The effectiveness of

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public presentation assessment refers to the accuracy of performance observations and evaluations and the ability of the assessment process to improve the future performance of the individual or organization (Cynthia, 1985). Hammond (1980, 1981 as cited in Cynthia, 1985) suggests that different types of tasks require different cognitive processes for effective performance assessment. According to Feldman (as cited in Cynthia, 1985), the cognitive processes stimulated by different tasks affect how raters perceive and classify individuals during performance assessment, which in turn influences recall and judgment. Raters must be trained to observe, collect, process, and integrate behavior-relevant information in order to enhance the effectiveness of performance assessment (Cynthia, 1985). Lawler (1994) defines that reactions to appraisal and the assessment process significantly impact the effectiveness and overall viability of the assessment system. Scullen (as cited in Robert E., 2008) reports that among the various outcomes of the assessment process, the accuracy of evaluations and perceived effectiveness of interviews are crucial.According to Ilgen (1992), appraisal evaluations are used as inputs for various administrative decisions, including training, development, compensation, and promotion. The focus on appraisal accuracy has been seen as the main criterion for appraisal effectiveness. In line with this emphasis, performance assessment researchers Forgas and George (2001) have previously focused more on errors in information processing and judgments rather than understanding the strengths of evaluators. Lawler, Mohrman, and Resnick (1984) argued the need to better understand the differences in perceptions of the assessment process between managers and subsidiaries. They suggested that performance assessment systems will be effective if both parties share a perception of its purpose and function, and if the process meets their needs. The functions served

by the assessment process are an ongoing topic of debate as academics and organizations seek ways to improve its effectiveness. However, recent research suggests that having a technically sound assessment system and process does not guarantee its effectiveness for an organization.The manager and subsidiaries must share a common understanding of the goals and functions of the assessment process, as well as the belief that the assessment process is beneficial to them individually. Therefore, an effective assessment is one that meets the needs of all parties involved. In order to be effective, managers must not only possess the necessary skills to conduct assessments, but also be willing to do so (Clinton and Stephen, 1992).

In addition, perceptions of fairness and equity are crucial in all human resource processes, including selection, performance assessment, and compensation. According to Jawahar (2007), perceived fairness is particularly important in the performance assessment process. Cardy and Dobbins (1994, as cited in Jawahar, 2007) argue that any assessment system will fail if there is dissatisfaction and a sense of unfairness in the process and ratings. In practice, perceived fairness in rating, the procedures used for evaluating performance, and how performance-related information is communicated all play a key role in shaping employees' reactions to critical elements of the assessment process (Jawahar, 2007). Taylor (1995) also recognizes the significance of equity in determining the success or failure of an assessment system.According to James Brown (2007, as cited in Abuduaini, 2009), fairness is defined as equal treatment, receiving the same services and benefits as others. The concept of fairness can vary depending on individuals and is often based on specific circumstances (Klesh, J. 1979, as cited in

Abuduaini, 2009).

In relation to organizational values and employee perception of fairness, Konovsky (2000, as cited in Sharon and Mark, 2008) argues that equity plays a crucial role. Research has shown that perceptions of fairness have a positive impact on employee attitudes and behavior, such as engaging in organizational citizenship behaviors (Skarlicki and Latham, 1996, 1997, as cited in Sharon and Mark, 2008) and demonstrating organizational commitment (Folger and Konoveky, 1989, as cited in Sharon and Mark, 2008).

When it comes to performance assessment, fairness and equity can be best defined as ensuring equal treatment in a formal setting where no individual has an unfair advantage in identifying, measuring, and managing employee performance within an organization. This means that assessments must be conducted objectively, without any personal relationships or biases towards the individual being evaluated.If the public presentation assessment mechanism is used accurately, but subsidiaries perceive it as unfair, negative results will occur. However, if the public presentation assessment mechanism is used inaccurately but perceived as fair by subsidiaries, the possibility of negative results can be prevented (Ab. Aziz Yusof, 2009, p.170). To ensure justness during the execution of public presentation assessment, three constituents must be maintained: distributive justness, procedural justness, and interaction justness. Distributive justness deals with the perceived fairness of the outcomes or allocations that individuals receive in organizations (Folger and Cropanzano, 1998, as cited in Lawrence 2005). Distributive justness is based on Adam Smith's equity theory of motivation introduced in 1965. According to Smith, individuals in organizations compare their contributions and rewards with those of others. Employees expect to receive what they deserve, neither less nor more. When comparing themselves with others, individuals

are inclined to exert more effort and be more committed if they find that their rewards are fair compared to others' contributions and rewards. Conversely, if they perceive their rewards as unjust compared to others' inputs and results, there is a tendency for them to withdraw or exert less effort or change their perception of inputs and results.The employee is willing to change their behavior or attitudes based on their perception of fairness in the organization (Ab. Aziz Yusof, 2009, p171). Procedural fairness focuses on the fairness of the methods used in organizations to achieve distributive fairness. It addresses issues of fairness in the methods, mechanisms, and processes used to determine outcomes (Folger and Cropanzano, 1998 as cited in Lawrence 2005). The perception of procedural fairness reflects an assessment of the process by which an allocation decision is made (Folger and Cropanzano, 1998 as cited in Lawrence 2005). Procedural fairness in performance assessment emphasizes a process where decisions made do not conflict with various parties involved (Levental 1976 as cited in Ab. Aziz Yusof 2009). There are three principles that impact perceptions of procedural fairness: increasing employee input into the decision-making process, enhancing the accuracy of information used in the decision-making process, and discouraging the use of bias by managers (Levental 1976 as cited in Ab. Aziz Yusof 2009).Aziz Yusof, 2009) argue that interaction justness is a crucial aspect of organizational justice, as it involves assessing the fairness of interpersonal interventions received by individuals. Bies and Moag (1986, as quoted in Cropanzano and Randall 1993, as cited in Lawrence 2005) propose that organizational justice is influenced by the processes in place within the organization, the

interaction among its members, and the resulting outcomes. Thus, examining interaction justness requires considering interpersonal sensitivity and other aspects of social behavior that characterize exchanges between parties, including the explanation provided for certain decisions made about individuals (Folger and Cropanzano, 1998, as cited in Lawrence 2005).

Regarding procedural equity, Tyler and Bies (1989, as cited in Ab. Aziz Yusof, 2009) find that it is determined by the perceived sincerity and adequacy of the explanation. This finding is particularly relevant to termination decisions, as providing a sufficient explanation reduces the time taken for the terminated employee and their colleagues to come to terms with the situation. It also helps the terminated employee focus their thoughts and actions towards finding a new job. Greenberg & McCarty (1990, as cited in Ab. Aziz Yusof, 2009) support the importance of interaction justness in organizational justice.Aziz Yusof (2009) argued that the most important factor affecting perceptions of procedural justice is the satisfaction of subordinates with their interaction with management. This focus on interaction fairness may be particularly important in reducing unlawful dismissal lawsuits, as they often stem from a desire for retaliation against the person responsible for terminating the subordinate.

In regards to job satisfaction, Keeping and Levy (2000, as cited in I.M Jawahar 2007) defined satisfaction as a significant reaction to performance appraisal. Satisfaction with various aspects of the assessment process is considered one of the most significant reactions to performance assessment, according to Giles and Mossholder (1990, as cited in I.M Jawahar 2007). These researchers asserted that using satisfaction as a measure of employee reactions provides a broader understanding compared to more specific, cognitive criteria. In fact, cognitive measures such

as perceived utility and perceived accuracy are positively correlated with satisfaction measures (Keeping and Levy 2000, as cited in I.M Jawahar 2007).The satisfaction with key aspects of the assessment process indicates recognition, status, and future opportunities within the organization. Therefore, having positive attitudes towards different salary scenarios is more likely when satisfaction is high rather than low (I.M.Jawahar, 2007). Taylor (1984) stated that satisfaction has psychological implications that heavily influence behavior and attitudes towards work and the organization. Jawahar (2006), as cited in I.M Jawahar (2007), found that satisfaction with appraisal feedback is positively related to job satisfaction and organizational commitment, and negatively related to turnover intention. In essence, both theoretical arguments and empirical evidence suggest that satisfaction is one of the most important reactions to the assessment process. Dissatisfaction with performance management has been a persistent issue for many years, according to Brezt (1992), as cited in Sylvie and Denis (2009). Moreover, Skarlicki and Folger (1997), as cited in Paul & Laurel (2009), found that the appraisal process can also be a source of frustration and extreme dissatisfaction when employees perceive bias, politics, or irrelevance within the assessment system. Job satisfaction is the variable that has been most extensively studied in organizations.Locke (1976, as cited in Tobias and Neal, 2010) defined occupation satisfaction as an enjoyable emotional state resulting from the evaluation of one's job. This means that occupation satisfaction encompasses both the emotional reaction and attitudes towards one's job. Therefore, occupation satisfaction is influenced by emotions, knowledge, and ultimately leads to satisfaction through job-related behaviors. Some of the most commonly studied outcomes of occupation satisfaction include organizational citizenship behaviors, absenteeism, and turnover (Organ

& Ryan, 1995; Wegge, Schmidt, Parkes, & Van Dick, 2007; Saari & Judge, 2004, as cited in Tobias and Neal, 2010). According to Spector (1997, as cited in Abuduaini, 2009), occupation satisfaction refers to how individuals feel about their jobs and various aspects of their jobs. Ellickson and Logsdon (2002, as cited in Abuduaini, 2009) support this perspective by defining occupation satisfaction as the degree to which employees like their work. Schermerhorn (1993, as cited in Abuduaini, 2009) defines occupation satisfaction as an emotional response towards different aspects of an employee's work. Many researchers argue that occupation satisfaction can be formally defined "as the extent to which individuals feel positively and/or negatively about their jobs" (Steyn Wyk (1999) states that if employees' desired outlooks are met, they will feel a sense of achievement and satisfaction (Abuduaini, 2009). Job satisfaction is related to what makes people want to come to work and what makes them happy or decide to quit (Nor Azizah, 1998 as cited in Noor Asyikin, 2004). Employers should focus on job satisfaction to retain staff and improve worker productivity (Noor Asyikin, 2004). Blake and Mouton (1964 as cited in Noor Asyikin, 2004) suggest identifying employee needs and ensuring they are met to achieve high levels of job satisfaction and commitment. According to Rue and Byers (1994), job satisfaction consists of five components: attitude toward co-workers, general working conditions, financial benefits, attitude towards supervision. Job satisfaction occurs when a job meets an individual's expectations, values, and standards, influencing their commitment and performance (Gordon 1999 as cited in Abuduaini, 2009).The higher the level of expectations being met, the higher the level of job satisfaction

will be. According to Bateman and Snell (1999, as cited in Abuduaini 2009), employees will be satisfied if they are treated fairly in terms of the outcomes they receive or the processes that are implemented. However, they also caution that a satisfied worker may not necessarily be a productive worker. Job satisfaction can also be described as a sense of pleasure that comes from an individual's perception of their job.

Employee commitment to an organization is a reliable predictor of certain behaviors, particularly turnover. Theory suggests that individuals who are committed to an organization are more likely to stay with it and work towards its goals. Organizational commitment is seen as a crucial factor in understanding and explaining employee behavior in organizations. Two main themes in the literature on organizational commitment are attitudinal and behavioral perspectives. The attitudinal perspective defines organizational commitment in terms of cognitive and affective responses and attachment to the organization. In contrast, the behavioral perspective focuses on the behaviors that tie an individual to an organization.The concept of commitment towards an organization can be understood in different ways. One perspective suggests that commitment can exist at an individual level, such as being committed to an organization. Another perspective highlights that individuals may have multiple commitments, such as being committed to their job or career, as well as being committed to the organization (Bashaw & Grant, 1994 as cited in Noor Asyikin, 2004).

Mowday, Porter, Steers, and their colleagues (cf. Mowday, Steers, and Porter, 1979; et al., 1982 as cited in Lim Soo Giap, 1996) define organizational commitment as the "relative strength of an individual's identification with and involvement in a particular organization." They

argue that this commitment is characterized by at least three factors, including a strong desire to maintain membership in the organization (1979).

Most definitions of organizational commitment emphasize the extent to which an employee identifies with and is involved in an organization. For example, the OCQ developed by Porter and Smith (1970) defines organizational commitment as the relative strength of an individual's identification with and involvement in a particular organization (Porter, Steers, Mowday & Boulian, 1974 as cited in Noor Asyikin, 2004). This identification includes factors such as alignment with the organization's goals and values, willingness to exert effort for the organization, and a desire to maintain membership in the organization.The attitudes assessed in this conceptualisation include motive, purpose to stay with the organization, and alignment with the values of the organization. Organization committedness differs from occupation satisfaction as it focuses on attachment to the employing organization, including its goals and values, while occupation satisfaction emphasizes the specific task environment. Organizational committedness tends to develop gradually over time as employees consider their relationship with the organization and is less affected by daily events in the workplace. In contrast, satisfaction is a less stable measure that reflects immediate reaction to specific aspects of the work environment. There are situations in which organizational committedness can outweigh occupation satisfaction.The determination of performance assessment is crucial for employees as it impacts their monthly wage and is closely linked to their dedication at work (Abdul Hamid, as cited in Rusli and Nur Azman Ali 2004).

Motivation is defined by Merriam-Webster, 2007 (as cited in Georgina and Tugrul 2010) as "something (as a demand or desire) that causes an individual to act." Motivation

is a key factor in determining the work performance of employees. When a person, whether male or female, wants to accomplish something, they are motivated (Lefter, Manolescu, Marinas and puia, n.d). The motivation of an individual encompasses all the reasons why they choose to act in a certain manner (Adair, 2006 as cited in Lefter, Manolescu, Marinas and puia, n.d).

According to Mikkelsen (2005), employees have higher job motivation when they perceive their performance assessment as fair and trustworthy. An organization's performance assessment system can be a practical tool for employee motivation and development when employees perceive their performance assessment as accurate and fair (Ilgen 1979, as cited in Paul & Laurel 2009). Lawler (1994) has argued that assessment reactions likely play a central role in the development of favorable job and organizational attitudes and enhance motivation to increase performance.In 2004, Rusli and Nur Azman Ali defined public presentation assessment as having a direct influence on occupation satisfaction and motive of workers. In 1943, A.H. Maslow introduced his theory of Human Motivation, which highlights the existence of basic needs that must be fulfilled before higher-level needs emerge. Maslow's theory identifies five basic needs: physiological, belonging, self-actualization, safety, and esteem (Maslow, 1943; Hughes, 1999 as cited in Georgina and Tugrul 2010). Employee needs are constantly evolving, so what motivates them today may not be the same in the future (Georgina and Tugrul 2010). Douglas McGregor developed Theory X and Theory Y, two well-known motivational theories that categorize employees based on their behavior and attitude towards work. According to McGregor, Theory X employees tend to be uninterested in work, lack ambition, and avoid responsibilities. These employees show indifference

towards their company's needs and are resistant to change (Georgina and Tugrul 2010).In essence, the X employee at the workplace needs to be coerced and threatened with penalties in order to be motivated to fulfill company objectives. On the other hand, according to the Y theory, employees willingly take on tasks and responsibilities, motivated by the associated rewards. The Y employee is self-motivated and does not require external pressure to perform. However, McGregor's view is considered simplistic as both internal and external factors can greatly influence work performance. Herzberg's Motivation-Hygiene Theory highlights that management's inability to motivate workers extends beyond simply raising wages or providing benefits. It also involves addressing the worker's responsibilities. Turnover purpose, defined by Tett & Meyer (1993), refers to the conscious psychological willingness to leave an organization and explore new job opportunities.According to Price and Mueller (1981, as cited in Christina, Mei Huei, and Lilian, 2010), there are various factors that impact employee turnover, making it difficult to accurately predict turnover behavior. However, research has consistently shown that the intention to leave, or turnover purpose, is the best predictor of turnover (Bedeian, Kemery, & Pizzolatto, 1991; Mobley, Homer & Hollingsworth,1978; Newman, 1974 as cited in Christina, Mei Huei, and Lilian, 2010). Employee turnover has been used as a measure of organizational performance since the early work of March and Simon (1958, as cited in Ikhlas Altarawneh and Mohammad H. Al-Kilani, 2010). These researchers defined turnover purpose as reflecting an employee's decision to participate and work in the organization. Denvir and McMahon (1992, as cited in Ikhlas Altarawneh and Mohammad H. Al-Kilani, 2010) define labor turnover as the movement of people into

and out of employment within an organization. These definitions suggest that turnover purpose can be voluntary or involuntary. Involuntary turnover occurs when an individual is removed from their job by the employer (Eric & Nancy, 2008, p98), while voluntary turnover refers to an employee choosing to leave an organization.According to early studies such as March and Simon's 1958 (as cited in Tobias and Neal, 2010), job satisfaction plays a crucial role in determining the perceived desirability of a job transfer and ultimately whether an individual decides to quit their current job or not. March and Simon's model suggests that job satisfaction is influenced by the alignment between the job and one's self-image, the fit between the job and other roles, as well as the predictability of future relationships within the organization. Turnover intention is influenced by three categories of factors: 1) environmental or economic factors; 2) employee factors; and 3) organizational level factors (Moynihan & Pandey, 2007 as cited in Cheng, Xin & Hu, 2010). Another important aspect of business operation is job satisfaction. In recent decades, both researchers and managers have recognized that job satisfaction is positively associated with job performance (Bono & Judge, 2003; Saari & Judge, 2004 as cited in Cheng, Xin & Hu, 2010).

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