Recent Methods of Appraising Employees Used at Specific Companies and Organizations - Research Paper Example

Other 03 May April Discuss several (at least 3) recent methods of appraising employees used at specific companies and organizations. Comment on the pros and cons of each. Introduction: Performance Appraisal is an objective method to evaluate the capability of an individual employee to carry out his responsibilities. A good performance appraisal system should concentrate on the individual and his growth. Almost all organizations perform performance appraisal in one way or another to attain definite objectives. These objectives might differ from organization to organization or yet within the same organization from time to time. In order to attain these objectives, a mixture of performance appraisal methods has been developed. The selection of method depends on organizational culture, its purposes, size, manufactured goods and expertise. 1. Define performance appraisals referring to the definitions in either of the textbooks used in this course. The abilities, capabilities, talents and skills differ from one employee to the other. There is constantly some difference between the quality and quantity in the same work done by two different individuals. Performance appraisal has been defined as the process of recognizing, evaluating and increasing the work performance of employees in the organization, in order to efficiently achieve the goals and objectives of the organization. Performance appraisal is needed to appraise the performance of employees along with the organization to verify the development towards its preferred objectives and goals.  “It is a vital component in recruiting and hiring employees where it is used to validate selection procedures” (Grote pg 8). Performance appraisal is considered highly crucial both by educational as well as practicing managers, as it is one of the most important human resource tools. 2. Choose and define three (3) methods of performance appraisals used at specific companies and organizations. Discuss the pros and con of each of the three (3) methods of performance appraisals Performance appraisal is a helpful tool in determining the provision of rewards such as higher wage or promotion, to the employees on the basis of their performance. It is a type of feedback given to the employees by the employer. Following are some of the methods of performance appraisal adopted by different companies. Based on Ranking: In this method, performance of an employee is compared with that of others, who are doing the same type of job. Performances are evaluated graphically and the employees are ranked in the range of top to worst for every performance. “It may also be done by ranking a person on his job performance against another member of the competitive group” (Performance Appraisal Tools and Techniques para 1). This method is considered to be beneficial for selecting the best performer among the top performers. For example, companies such as Microsoft in US use a ranking method, so that some employees, no matter what the circumstances, must be rated in the bottom 10%. Ford and Sun Microsystems also follow this method for appraising employees. Under the ranking method, ranks are given to the employees on the basis of their performance. Under this method, the ranking of an employee in a work group is done against that of another employee (Performance Appraisal Tools and Techniques para 1). Pros of ranking method: 1) It is very easy to calculate: When comparing with all other appraisal method, ranking method is very easy to calculate. Because in ranking method, finding the best and the worst employee is a not a difficult task. By giving rank to each employee, the employer can easily find out the best employee among others. 2) It is easy in terms of giving rank to the best and worst employee: Under ranking method rank is giving to the employees on the basis their performance, ability or output. In an organization the employer can easy to find out the best and worst performer from the all employees. So giving rank to the employees is also very easy task. 3) Ranking method of appraisal is very effective if there are relatively few jobs to be evaluated. Cons of ranking method: 1) In this method, people are compared with each other. Under this method more importance is given to the performance of the employees. And not considering the behavioral qualities of individuals, because it becomes difficult to compare individuals possessing varied behavioral traits. 2) This method only speaks only about the position of employees in a particular group. It does not show anything about how much better or worst an employee is, when compared with another employee. 3) If there are a lot of workers in the organization, ranking of employees become much difficult. Because rank is giving only after comparing all individuals each other. If there are a lot of workers the comparison may not be efficient and effective. 4) There is no systematic ranking method for ranking the employees in the organization. In this system there is no possibility to eliminate the snap judgment. Based on Rating: Here, assessment of performances is done on the basis of specific qualities of the employees like attitude, cooperativeness, flexibility, employee motivation, quality of work, quantity of work, participation in team work and so on. Every employee is evaluated according to each of these qualities. Generally, it is done objectively by ticking the yes or no, or satisfactory or unsatisfactory check boxes. Assessment of a particular quality normally differs from one person to the other. This might create confusion and tension between the employees and the employer. For example, PwC Consulting Co., Ltd. is the Japanese subsidiary of the management consulting division of PricewaterhouseCoopers, which has branches worldwide uses this rating scale method. Skills evaluation is carry out annually at the end of the fiscal year, between April and June. The core capabilities, market capabilities, communication ability, leadership, creativity and innovativeness of employee are being evaluated. Five elements are included in the rating scale method of appraisal and they are: satisfactory, unsatisfactory, fair, good and outstanding. This methodology requires an employer to develop an in-depth grading system, similar to the way students in school are assessed. This scale is then used to evaluate an employee’s success within a variety of areas, such as technical skill set, teamwork a communication skills (Henderson para 4).  Pros of the rating scale: 1) Less time is required for developing graphic rating scale method. Rating scales methods are structured and standardized. So it will take less time and allows ratings to be easily compared and contrasted, even for entire workforces. 2) Quantitative comparison is possible in this method of performance appraisal and all the employees is have the same basic process of appraisal and rating criteria, with the same range of responses. Cons of the rating scales: 1) There is only limited reliability. The consistency of data collected in rating scale method is low when comparing with all other performance appraisal methods. If there is no steadiness in data collection, it will adversely affect the comparison. 2) There may be substantial variation among informants. The comparison is doing by collecting information from different people. So there is no possibility of getting the same information from different informer. 3) Rating scale method is not suitable in case of sophisticated treatment planning. 4) The sources of behavioral problems cannot be identified. Under rating scale method more importance is given to the performance of employees, and there is no source for the behavioral problem of employees. 5) Different supervisors use the same graphic scales in different ways. There may be different decisions will take in rating scale method, because different supervisors are using the same graphical scale and comparing different ways. Management by Objectives (MBO): In this method, certain goals and objectives are regulated by the employer after discussing them with the employees. The performance of the employees is assessed periodically after they submit their rank statement. When there is a detailed set of objectives, the employee feels motivated and puts his or her best potential hard work to accomplish the objectives. “The Management by Objective is a very popular performance appraisal method since it minimizes subjectivity and it relies on objective and quantifiable indicators of performance” (Dargham pg 14). This method regularly helps in attaining higher levels of performances from the employees. Frank Russell Japan Co., Ltd. has its MBO system, in accordance with the objectives of US parent company and the corporate objectives of Russell in Japan. Communication is one of the matters on which Russell places great importance for implementing the MBO system. Management by objective is an important tool used to appraise the performance of employees in an organization. Its advantages and disadvantages are as follows: Pros of MBO: 1) Better utilization of resources: In MBO, management can ensure the optimum utilization of physical, human as well as financial resources in order to achieve the organizational goals. 2) Makes planning effective: The objectives are stated clearly in management by objectives. It helps to make feasibility in plans to achieve various objectives. Therefore, it stimulates effective planning. 3) Objective evaluation: The objectives are measurable and tangible under this method. So it is possible to compare the actual performance of employees with the objectives. So objective evaluation is possible. 4) Development of personnel: MBO helps in the development of the workers’ skills in planning, decision-making, controlling, directing, leadership etc by giving proper training and development programs to the subordinates. 5) Better tem work: In order to fix the objectives and measure performances, the management and the subordinates start to work together. It helps them to bond with each other and works as a team Cons of MBO: 1) It will take up to a few years for this method to be completely effective. MBO is relatively static for one year period. In the fast changing world anything static for an year is likely to be risky. 2) Appraisals are sometimes made on personality traits rather than on the performance of workers. Although it focuses on the attention of workers towards the goal, it does not consider the behaviors required to reach them. It may be a problem for new employees, who may needed more guidance. 3) It is not easy to set measurable objectives for staff groups. Target setting for each worker is not an easy task. For instance, the target set for an average employee may be less challenging than those target set for a superior worker. How can it possible to compare? 4) There occurs difficulty in measuring key operations and too much of paperwork is also involved. Managers often dislike a lot of paper work required for this system and may also concentrated on the workers participation in goal setting robs them of their authority. 5) Achieving objectives may be at the expense of organizational goals. MBO focus on short term goals, so that can be measure at the end of the year. As a result the workers may tempt to achieve the goals at the expense of long term organizational goal. 6) Some companies have geared their salary administration to appraisal by results (easy targets may be set to allow a promotion). The performance standard varies from worker to worker. And there is no common basis for comparison in MBO. So there is a chance for getting promotion for easy targets, it is not effective. 7) Sometimes the review given and counseling done by the managers may prove to be ineffective. It may discourage the workers. It will adversely affect the performance of the employees. 8) Some employees do not want to be held responsible for something that goes wrong, and goals forced upon them may lead to an ill feeling. Conclusion: A performance appraisal system is a useful method used in almost all the organizations to judge their employees performance on the job. It is required to assess the performance of employees along with the organization to validate the growth towards its specified objectives and goals. There are various methods used to evaluate an employee. It includes ranking method, rating method and Management by Objective method. Under ranking method, performance of an employee is compared with that of others, who are doing the same type of job, and employees are given rank from highest to the lowest. Under rating method, employees are evaluated on the basis of their qualities to perform the work such attitude, cooperativeness, flexibility, employee motivation, quality of work, quantity of work, participation in team work and so on. Under Management by objective method, specific goals and objectives are regulated by the employer after discussing them with the employees and their performance is measured periodically after they submit their rank statement. Each method has their pros and cons and the selection of the method depends on the organizations culture and technology. In these methods, I think ranking methods is best appropriate as when employees are given best-to-worst rank it is helpful to recognize poor performers. The recognized poor performers are then set a time period in which they have to prove an enhancement in their performance. If the employee fails to improve his performance he is asked to leave the organization gracefully. It constantly motivates employees to improve their performance as no employee would like to be included in the poor performance list. Works Cited Dargham, Saleh, A, N. Effective Management of the Performance Appraisal Process in Lebanon: An Exploratory Study. n.d. Web. 25 May 2012. < http://www.fgm.usj.edu.lb/files/a12008.pdf> Grote, C, Richard. The Complete Guide to Performance Appraisal. AMACOM A Division of American Management Association. 1996. Web. 25 May 2012. Henderson, J, K. What are the different Types of Performance Appraisal? Chron. 2012. Web. 25 May 2012. Performance Appraisal Tools and Techniques. Management Study Guide. 2008. Web. 25 May 2012. < http://www.managementstudyguide.com/performance-appraisal-tools.htm> Read More