Appraisals at Red Square Industries - Case Study Example

Analytical report of case study: appraisals at Red Square Industries Name Course Instructor’s Name Executive summary Worker’s standard of performance is usually evaluated in a systematic way using performance appraisal. Performance appraisals are used to make decisions such as promotion and pay determinations. It is also used to determine professional development need. Performance appraisals also help the management to identify factors at the workplace which hinder the effectiveness of employee performance. A performance appraisal system which takes into consideration all these criteria can have a great impact on the satisfaction of the workers with the motivation of workers and the appraisal process to improve performance. The performance process at Red Square Industries is ineffective. This is mainly because the process is secretive and only involves managers as the appraisers of the performance of other employees. . In this report, we have identified the first step of appraisal (identification of key performance criteria) as being the best solution to ineffectiveness of the performance appraisal process at the Red Square Industries. Table of Contents Table of Contents 3 Introduction 4 Problems in the case study 4 Alternative solutions to the problems 5 Best solution and Reasons 10 Conclusion 10 References 12 Introduction Worker’s standard of performance is usually evaluated in a systematic way using performance appraisal. Performance appraisals are used to make decisions such as promotion and pay determinations. It is also used to determine professional development need. Performance appraisals also help the management to identify factors at the workplace which hinder the effectiveness of employee performance (Coens, Jenkins, and Block, 2002). A performance appraisal system which takes into consideration all these criteria can have a great impact on the satisfaction of the workers with the motivation of workers and the appraisal process to improve performance. Regular performance appraisals are essential toward the development of effective workforce for the firm (Coens, Jenkins, Block, 2002). Performance appraisal system should be linked to the objectives of the organization, daily performance, professional development, rewards and incentives. Rewards and incentives need not be necessarily in monetary terms but can be in form of public recognition, opportunities to work on preferred tasks, time off or flex1-time or support for professional development. This report takes a critical look at the performance appraisal at Red Square Industries. It identifies the problems with the system, possible solutions and the most appropriate solution to the problems. Problems in the case study A successful performance appraisal process should be relevant and applicable to daily work practice. In addition it needs to be acceptable to appraisers and workers (DelPo, 2007). The performance appraisal at Red Square Industries is expected to be confidential. However, the ratings are quickly unveiled by employees at the firm. The perception of those rated as superior performers (referred to as Stars at the firm) by other employees as belonging to different ranking group destroys team work at the firm. Many employees become uncooperative to these employees rated in this category (DelPo, 2007). In addition, those rated as acceptable performers are usually not motivated by their ranking because they consider themselves as being only average performers. As a consequence, the firm is usually unable to retain this category of employees who quit because of the feeling of being unmotivated. Unionized employees belonging to unsatisfactory performers group are seen to be favored more than those who are not unionized. Favoritism is seen at the firm even though the managers deny this since most of them are reluctant to fire the non-performing workers who are unionized (Coens, Jenkins, Block, 2002). Some managers do not strictly follow the appraisal process and therefore do not grade their employees as being marginal or unsatisfactory performers. Those who follow it strictly feel that the system is unfair as it is to the disadvantage of their employees. Thus the major problems at the Red Square industries are tension, dissatisfaction, destruction of team work, inability to retain some employees and lack of motivation (Armstrong & Appelbaum, 2003). Alternative solutions to the problems The recommended performance appraisal process involves five steps. First is the identification of key performance criteria. Next is the development of appraisal measures. The third step is the collection of information from various sources (Swan & Wilson, 2006). The forth step is conducting appraisal interview. Final step is the evaluation of the appraisal process. Identification of the performance criteria is the most difficult step and it involves four key dimensions. The dimensions of performance include competencies, behaviors, results or outcomes and organizational citizenship behaviors. Competence dimension involves measurement of knowledge, skills and relevant abilities required for performance. Behavior dimension measures specific actions conducted or tasks performed (Grote, 1996). Results or outcomes dimension measures the outputs, achievements and attained objectives. Organization citizenship behaviors measures actions which are over and above the normal responsibilities of the job. For the performance criteria to be relevant to work practice and acceptable to both workers and appraisers it should be based on up to date job description and the development of the criteria should be done in consultation with the workers and appraisers. Workers can participate in development of appraisal criteria and measurement by being engaged in formal meetings, being represented in committees involved in the design and implementation of the performance appraisal, including self appraisal in the process of appraisal and provision of opportunities for workers to be involved in the appraisal of other workers and managers. The performance appraisal at Red Square Industries seems to be unacceptable to both appraisers and the workers. This is because of the dissatisfaction of both workers and managers. From the case study, the appraisal process seems to de-motivate the workers and some managers do not follow it strictly which is seen to be unfair by both employees and managers who follow it strictly. In addition, the fact that the appraisal process is expected to be confidential implies that the development criteria of performance appraisal was not done in consultation with the workers and appraisers. Thus to ensure that the performance appraisal process at the Red Square Industries is effective, there is need to revise the performance criteria. The revision should involve both the workers and the managers in its development to ensure it is acceptable to both workers and managers who are involved in the appraisal process (Coens, Jenkins, Block, 2002). The development should also be based on current employee job description to ensure relevance of the appraisal process which seems to be lacking at Red Square Industries. The appraisal system should be perceived by workers to be both equitable and fair. Fair and equitable appraisal increases acceptance of performance appraisal, motivation of the workers, performance, satisfaction with the appraisal process, trust in managers, commitment to the firm and continued stay at the firm. However, at Red Square Industries this is not the case since some managers do not rate their employees in all the categories. In addition, those rated in the 5th category are not treated equally. As seen in the case study it seems workers who are unionized are favored more than those who are not by managers. The process is seen by managers and workers as being unfair and dissatisfying. Furthermore the motivation of most workers is lowered by the process and the company is not able to retain some of its employees who consider themselves average performers. Thus, for better appraisal at the Red Square Industries, there is need for the process to be fair and equitable. This can only be achieved through consultation between workers and managers on the development and measurement of the process. In addition, consistent standards of performance should be established for all workers (Coens, Jenkins, and Block, 2002). Furthermore, there is need to explain to workers the relationship between outcomes and performance appraisal ratings. Moreover, there is need to ensure that the appraisal is accurate and reliable by keeping note of exceptional and performances that need improvement, having multiple appraisers, training appraisers, ensuring that appraisers are familiar with the work of each individual and ensuring that the rating of appraisals are in line with the job description. Finally, the company need to provide feedback in a manner that is constructive to promote fairness in its appraisal system (Fisher, 1997). This can be achieved by communicating standards of performance prior to carrying out appraisal process in addition to avoiding surprises at the review. Development of appraisal measures involves making decisions on how the performance of workers is assessed. Structured and systematic approach is recommended for the assessment process (Sandler & Keefe, 2005). This increases accuracy, ensures that knowledge, abilities and skills which are essential for job performance are not overlooked by the appraisers, increases consistency among appraisers and reduces perception of subjectivity which could lower satisfaction and acceptance of the appraisal process. The designing process of measurement of appraisal should consider the following: first, is the consideration of generic versus individually tailored measures. Second is the consideration of subjective versus objective assessment and finally, the assessment of the impact of the work environment on performance (DelPo, 2007). At Red Square Industries, it seem generic approach where one size fits all is used to asses performance. This seems to overlook important performance criteria which are vital for specific jobs and this also include criteria which are irrelevant some workers. The result has been dissatisfaction of both workers and managers with the assessment process. It is not clear whether subjective or objective measurement is used at the firm. However, the fact that the workers are unaware of the measures used at the firm to evaluate their performance implies that the criteria are not subjective and thus it might be objective (Coens et al 2002). The use of objective criteria masks factors which may impact on the performance of the workers that are beyond their control. Thus for the Red Square Industries to have a better assessment criteria that is fair and acceptable to all workers, it need to adopt a subjective criteria of assessing worker’s performance. Collection of performance information should be from different sources to ensure that the appraisal process is effective. At Red Square Industries the appraisal process is usually left to managers. Managers usually assess performance and provide constructive feedback and identification of areas to be improved (Sandler & Keefe, 2005). However, it is important that other sources such as co-workers, self appraisals, subordinate appraisals and client appraisals are involved in the performance appraisal process. Self appraisal increases the commitment of workers to the process, perception of appraisal fairness and being satisfied with the process. Co-workers appraisal ensures provision of valuable feedback on performance. Subordinates are essential in providing information related to communication, team work and delegation of duties. Customers can provide vital information on employees’ performance especially those who are in direct contact with customers (Sandler & Keefe, 2005). This collective source of appraisal enhances accuracy and reduces bias in the process. In addition, this could increase the perception of the system by workers as being accurate and fair. Conducting an appraisal interview helps in reflecting on past performance which is instrumental in identifying major achievements, areas which need improvement and barriers for effective performance. It also helps in identifying strategies and goals for future work practice. At Red Square Industries, there is no appraisal interviews which are conducted. Thus there is need to conduct appraisal interview which can enhance the appraisal process (Falcone & Sachs, 2007). Evaluation of the appraisal process needs to be reviewed regularly and improvements made. This evaluation gauges the satisfaction of the workers with the process. There seems to be no evaluation process at Red Square Industries. Thus, to ensure the process is successful there is need to have regular evaluation of appraisal process at Red Square Industries (Falcone & Sachs, 2007). Best solution and Reasons The identification of key performance criteria which is effective can help Red Square Industries develop a better performance appraisal process. This will increase acceptance of performance appraisal process which is lacking currently at Red Square Industries. In addition, it will be able to motivate the workers and improve their performance (Falcone & Sachs, 2007). The worker’s satisfaction with the appraisal process and trust in managers will also increase since the process will be done in consultation (Lloyd, 2009). The workers will also be committed to the firm and continued stay at the firm and hence the cases of employees quitting the firm will significantly reduce at the firm. Conclusion Worker’s standard of performance is usually evaluated in a systematic way using performance appraisal. Performance appraisals are used to make decisions such as promotion and pay determinations. It is also used to determine professional development need. Performance appraisals also help the management to identify factors at the workplace which hinder the effectiveness of employee performance. A performance appraisal system which takes into consideration all these criteria can have a great impact on the satisfaction of the workers with the motivation of workers and the appraisal process to improve performance. Regular performance appraisals are essential toward the development of effective workforce for the firm. The performance process at Red Square Industries is ineffective. This is mainly because the process is secretive and only involves managers as the appraisers of the performance of other employees. To ensure that the process is effective the recommended performance appraisal process which involves five steps should be followed at the firm. This should include identification of key performance criteria, development of appraisal measures, the collection of information from various sources, conducting appraisal interview and the evaluation of the appraisal process. In this report, we have identified the first step of appraisal (identification of key performance criteria) as being the best solution to ineffectiveness of the performance appraisal process at the Red Square Industries. This is because this will increase acceptance of performance appraisal process which is lacking currently at Red Square Industries. In addition, it will be able to motivate the workers and improve their performance. The worker’s satisfaction with the appraisal process and trust in managers will also increase since the process will be done in consultation. The workers will also be committed to the firm and continued stay at the firm and hence the cases of employees quitting the firm will significantly reduce at the firm. References Armstrong, S. & Appelbaum, M. 2003. Stress-Free Performance Appraisals: Turn Your Most Painful Management Duty Into a Powerful Motivational Tool. Sydney: Career Press. Coens, T., Jenkins, M., Block, P. 2002. Abolishing Performance Appraisals: Why They Backfire and What to Do Instead. London: Berrett-Koehler Publishers. DelPo, A. 2007. The performance appraisal handbook: legal & practical rules for managers. 2nd Ed. London: Nolo. Falcone, P. & Sachs, R. 2007. Productive performance appraisals, 2nd Ed. New York: AMACOM Div American Mgmt Assn. Fisher, M. 1997. Performance Appraisals. London: Kogan Page. Grote, R. 1996. The complete guide to performance appraisal. New York: AMACOM Div American Mgmt Assn. Lloyd, K. 2009. Performance Appraisals & Phrases for Dummies. London: For Dummies. Sandler, C. & Keefe, J. 2005. Performance Appraisals That Work: Features 150 Samples for Every Situation. Sydney: Adams Media. Swan, W. & Wilson, L. 2006. 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