Performance Appraisal Systems - Essay Example

?Literature Review: Performance appraisal systems are commonly employed in organizations to evaluate the capa of workers to perform. A performance appraisal system can be defined as “a means of determining the acceptability of an individual’s level of performance at work over a given period of time” (MacKenzie, 2000, p. 15). These systems have specific standards on the scale of which employees’ skills are assesses. Hence, every organization has its own performance appraisal system, and the systems vary from one organization to another. Despite the fact that a performance appraisal system is designed after considering a lot of important factors, they have conventionally not managed to retain a highly skilled workforce in the organizations. Every year, companies incur a lot of undue cost just because of the slackness of employees despite the thoughtfully constructed performance appraisal systems in place. This paper explores reasons why performance appraisal systems may not be the best way to judge an employee’s abilities by conducting a thorough analysis of the workers’ needs and the various factors that influence their competence in the workplace. A lot of studies have conventionally been done to identify the factors affecting workers’ performance. However, this review will be limited to the discussion about the validity of performance appraisal systems. A lot of factors influence a worker’s performance that include but are not limited to job satisfaction, job security, allowances offered at the job, time of work, duration of work, relationship with peers, organizational structure, organizational culture, social interaction, accommodation, association with family and distance from the family. These and many other factors like them have a great impact on the motivation of a worker. The performance of a worker is fundamentally governed by his/her competence. Therefore, in order to study the impact of appraisal on the performance of an individual, it is customary to study the factors that influence the individual’s competence. According to Stern and Kemp (2004), competency is the product of an individual’s skill, motivation and personality traits. Various theories have been proposed at different points in time to identify the factors that play a decisive role in motivating an individual in the workplace. One of such theories that is discussed most frequently is the Maslow’s Hierarchy of Needs theory. The Maslow’s Hierarchy of Needs theory, as the name implies, consists of a set of needs that are staged in order of priority. The following diagram depicts all stages that accommodate the hierarchical order of needs identified by Maslow: Maslow’s Hierarchy of Needs (Chapman, 2010). There are basically five stages of needs. The biological and physiological needs which include such things as air, water and food form the most basic needs. Life is not possible without the fulfillment of these needs. Next come the safety needs. All humans need safety and protection. Unless their safety is ensured, workers can not put in their best effort because of the resulting psychological upsets. In the present age, job security has become a big problem all over the world. Because of the economic recession, employees are being fired in large numbers and the companies are being down sized. This is a potential threat to the safety of workers, so performance appraisals can not be considered valid system for the assessment of the workers’ capabilities with such job insecurity. After getting secure, a worker wants his love and belongingness needs fulfilled. Quite often, people have to live away from their home because of work, and hence, do not get a chance to meet the family quite often. Many employees try to fulfill their love and belongingness needs by interacting with the colleagues. However, not many are successful because all employees share common interests in the context of an organization, and hence, many develop grudges particularly as one of the employees gains more status and reward as compared to others. It is only after the fulfillment of the achievement needs that an employee can concentrate upon personal growth. Needs mentioned on the lowest level are the most basic needs of a human without which, he/she can not survive, and accordingly it is not possible to work unless they are met. As we go up the triangle, the needs change from extremely essential to opportunistic. The Maslow’s Hierarchy of Needs theory emphasizes that a person can not concentrate upon improving his performance or upon the self actualization unless all lower level needs have been adequately met. An in-depth analysis of the Maslow’s Hierarchy of Needs theory suggests that appraisal is not the only factor that can convince a worker to improve his/her performance in the work. Instead, there is a while range of factors that mutually determine the extent to which an individual would concentrate upon polishing his/her skills and improve the performance in work. Therefore, in order to make the worker perform better, it is imperative that the managers take into consideration all of the needs mentioned in the Maslow’s Hierarchy of Needs theory along with their order of priority and address them accordingly. Most of the performance appraisal systems tend to relate performance to an employee’s pay (Boice and Kleiner, 1997, p. 200). However, there are several other types of needs that are more important than salary. According to David McClelland’s motivational needs model, there are three key drivers of the motivation in an employee which are as follows: 1. Achievement based motivation (n-ach) 2. Affiliation based motivation (n-affil), and 3. Power based motivation (n-pow) (Chapman, 2009). Here, the “n” signifies “needs”. David McClelland proposed that the three aforementioned needs are all found to various extents in all employees. Their combination various from individual and individual and it is the very combination that decides an individual’s behavior and makes it different from that of others. The performance of an individual in a certain type of work is fundamentally controlled by the extent to which he/she is skilled in it. In the contemporary age, when there is immense competition in the market scenario, companies tend to gain competitive advantage over others by focusing upon the improvement of the skills of workforce. The success of any organization depends upon the skill of the workforce. These days, many companies provide their personnel with on-job training in accordance with the requirement of the work. This is a very strong way of improving the skill of workforce. Workers tend to take interest in such activities because not only do they help them improve their performance in the work, but also educate them sufficiently so that they are able to get highly paid jobs in the future because of increased knowledge and skill. Personality traits vary from individual to individual and play a very important role in the quality of performance of any worker. Some people do not have a strong self control and may lose balance in shear complexity of circumstances. As an individual gets outraged, his/her ability to think rationally and make well informed decisions is sapped. He/she thinks on the extremes and does not manage to adopt a balanced approach. According to the Social Learning Theory, an employee who has worked in an organization in a specific organizational culture for some time undergoes a considerable change in his/her work behavior as compared to the behavior that he/she displayed at the time he/she joined the organization (Anderson, 2002, p. 8). The level to which an employee is motivated influences the way he/she acts. Both the individual’s motivation and the work environment shape an employee’s attitudes regarding the organizational performance appraisal system. The commitment of an employee with the organization and the employee’s perception of justice in the process of performance appraisal are two of the most important employee behaviors that govern the usability of his/her performance appraisal in determining his/her true capabilities (Anderson, 2002, p. 8). A supervisor’s belief in the accuracy and validity of the performance appraisal system in place in an organization has a deep impact on his/her tendency to put effort into completing it rightly. If the distributive justice or the procedural justice is violated, it will alter the supervisor’s understanding of the validity of the performance appraisal system. Similarly, if a supervisor feels that decisions are not made in accordance with the results derived from the performance appraisal system, he/she is least likely to take it seriously. Usability of a performance appraisal system can be explained with the help of the following diagram: The usability of performance appraisal process (Anderson, 2002, p. 13). Skilled workforce is extremely essential for the success of an organization since it is the workers that are fundamentally involved in the work (MacKenzie, 2000, p. 8). It is extremely difficult to design such a performance appraisal system that would accurately evaluate the performance of workers in an organization (Boice and Kleiner, 1997, p. 197). In order to make the performance appraisal systems effective, it is imperative that the top management shows extreme commitment to them. The management should thoroughly integrate the performance appraisal systems into the routinely budgeting, planning, and monitoring systems (Quality Health Partners, 2005, p. 7). However, it should be understood that all factors discussed in this paper need to be taken care of in order to make an employee perform as per his/her assessment made in the performance appraisal system. References: Anderson, JR 2002, Measuring Human Capital: Performance Appraisal Effectiveness, University of Kentucky, pp. 1-13, viewed, 13 April, 2011, . Boice, DF, and Kleiner, BH 1997, Designing effective performance appraisal system, Work Study, vol. 46, no. 6, pp. 197–20, viewed, 13 April, 2011, . Chapman, A 2009, David C McClelland's motivational needs theory, viewed, 13 April, 2011, . Chapman, A 2010, Abraham Maslow's Hierarchy of Needs motivational model, viewed, 13 April, 2011, . MacKenzie, IS 2000, Performance Appraisal Systems for Organizational Success, pp. 1-10, viewed, 13 April, 2011, . Quality Health Partners, 2005, Performance Appraisal Evaluation: Report of Findings and Recommendations, viewed, 13 April, 2011, . Stern, DJK and Kemp, LK 2004, Competency-based human resource management. USA: Davies-Black Publishing. Read More