Problems of Performance Appraisals - Essay Example

Performance Appraisals Performance Appraisals Introduction Human resources management refers to the managerial utilization of the knowledge, efforts, capabilities and committed behaviors which people contribute to a co-ordinated human enterprise as part of the employment contract or carry out work tasks in a way which enables the enterprise to continue into the future (Watson, 2010). Charles Fombrun and Michael Beer are regarded as the founding father of the human resource management concept. The idea was initially developed in the United States; later on the idea was picked up in the United Kingdom. The ideas developed by Fombrun and Beer were then criticized, explained and developed (Armstrong, 2012: 4). Human resource management ideology revolves around the policies and practices of organization design and development. It concentrates on learning, employee development, performance and rewards and providing services that enhance the wellbeing of employees in an organization. Performance management is an integral tool in human resource management. Performance management helps managers to ensure that employees are giving their best efforts towards developing the organization. The idea of performance management was first introduced in the field of human resource management in the early 1990s. Despite the fact that employees’ assessment review and objective settings had been in use before the 90s, organizations started to concentrate on individual performance in the early 1990s. Research indicated that among 1800 employees in the United Kingdom, 46% of the employees said 86 per cent used a systematic approach to evaluate employee performance while 20 per cent used the more ambitious performance management systems on their employees (Anderson, 1996: 197). According to Anderson (1996), performance management practices have been used for a longer time in the United States. A study conducted by the Bureau of National affairs showed that in 244 organizations that were studied, 90 per cent of them conducted performance appraisal exercises every year. This is a clear indication that performance appraisals were widely used across the globe during that time. With the rapid development of global economy in the past 20 years, performance appraisal has become a tool for increasing productivity among employees in organizations (Gruman and Saks, 2011: 123). In the general performance management process, performance appraisal is a formal and a systematic process for measuring, recording and developing strengths and weaknesses of employees in an organization (Swanepoel, et al., 2000 cited in Espinilla at al., 2013: 459). The key reason for using performance appraisal in organizations is to evaluate the individual’s performance so as to arrive at objective personnel decisions (Robbins, et al., 2000 cited in Jafari, et al., 2009: 93). Another reason for conducting performance appraisals annually is that they have a big effect on the financial and program components in organizations. Performance appraisal has come to be regarded as one of the most important human resource management process in any organization (Jafari, et al., 2009: 92). Being a formal process, there is a commonly agreed process of conducting the performance evaluation of an individual or as a group in relation to explicit or implicit performance expectations (Armstrong and Baron, 2005: 2). When performing performance appraisal, the first step is to establish the performance standards and the criteria to be used in evaluating the employees. The second step is to establish the evaluation policies like when or who to evaluate. The third step is gathering data. The fourth step is gathering the employees for the actual performance evaluation and holding discussions with the employees who are being evaluated. The final step is making decisions based on the results of the evaluation and filling the report (ibid: 31). Performance appraisal plays an important role for both the organization and the employees. This is because it forms the basis for promotion, salary evaluations and training decisions. The feedback given to employees plays an important role in motivating the employees and improving communication between the managers and the employees. Studies have shown that employees favor performance appraisals where the feedback is given back to them without holding back some issues. A performance appraisal which includes multiple levels within an organization as well as external sources is highly favored by employees. Such a performance appraisal is usually an effective and a comprehensive source of personal performance feedback (McDonnell and Gunnigle, 2009: 201). This kind of performance appraisal is dependent on the input of managers, colleagues, subordinates, suppliers, spouses and customers (Yukl and Lepsinger, 1995 cited in Jafari, et al., 2009: 95). A 360 degree feedback is an approach whose main aim is to gather data through observation from several layers in an organization which includes self-evaluation. This kind of performance appraisal can help an individual to be rated form different sides thus bringing different perspectives in the performance appraisal process. Such a performance appraisal can be helpful to personnel in different managerial positions get feedback from many sides. The downside with this kind of performance appraisal is that they are costly and take a long time to finish the process because they involve getting feedback from a lot of people. As a process that is used for providing a systematic approach, performance appraisal has many strong points. A good and smartly executed performance appraisal can be used to make crucial judgments and decisions in an organization like making salaries reviews, transfers, promotions and feedback provision on the actual employee performance. It can also be used to lay a performance benchmark which can be used to measure performance in the future. Such a benchmark can be used to set standards for changing employees’ attitudes, skills and behavior. However, despite all the outlined advantages of performance appraisal exercise, there are also problems associated with performance appraisals. There are many problems of performance appraisal especially in terms of their practical application in relation to the expected returns which usually results in limiting their applicability (McKenna and Beech, 2008: 235). There is a tendency of ignoring the purpose for which performance appraisal is meant to play. The performance evaluation process should be tailor made according to the job description of the person to be evaluated. Many designers of performance appraisals tend to ignore the role of the appraisal. This eventually leads to a performance appraisal that gives incorrect evaluations and eventually leads to the organization performing worse than projected. According to the organization control theory, the design of performance appraisals is dependent on each and every job description (Welbourne, Johnson and Erez, 1998: 40-55). Organizational politics also play a major role in how performance evaluations are conducted. This may affect the objectivity expected from the results of a performance appraisal. It is possible for managers to design performance appraisals that will suit them (Longenecker, et al., 1987: 183-193). It is possible because in very organization there are political factors, executives and political actors who like to control their destinies as well as influencing decisions being made in the organization. Problems of Performance Appraisals Performance appraisals are disliked by both employees and employers. However, performance appraisals are the most favored by means of evaluating employees. Appraisals should be objective, not biased and should be tailored to ensure that they fit the needs of a given organization. An appraisal system should be easy to operate and its procedures and administration should be uniform (Kevin, et al., 2009). It is also highly recommended that an appraisal system should be acceptable to users and economical. Employee’s appraisal performance is one of the managers’ most important tasks. However, appraisals have also been a source of managers and employees dissatisfaction. There are many shortcomings associated with appraisals which have in the past led to many organizations having poor output as a result of employees’ dissatisfaction (Kleiman, 2013). Doing away with appraisal issues in human resources department can present more problems than good. In many organizations, performance appraisal is a yearly rite of passage. During the time of the years that they are bound to happen, they trigger a lot of tension and apprehension among the employees. Even the most hardened employees are usually apprehensive during this time of the year. Research has demonstrated that employees would rather take a trip to the dentist than go through the process of employee appraisal (Capko, 2006). Having an effective performance appraisal can help an organization in gaining competitive advantage. For instance, an effective performance appraisal can provide accurate assessments of the quality of employees work as well as their productivity (Parrill, 2009). It is also a tool of improving employees’ motivation which will lead to increased performance among the employees which will eventually improve the performance of the organization in the long term. In the recent years, organizations’ work force has increased and included women, disabled and ethnic minorities. The increase in workforce has made it even more crucial than ever for the performance appraisal systems in place to be non-discriminatory (Harrell, et al., 2010: 136). That implies that it is supposed to be focused on the essential areas of the job description. It is also supposed to be measured against performance criteria. The emphasis on team management in organizations requires organizations to rethink about the appraisal system they have put in place and how they reward employee performance (Dalton, 2006: 15). Background Information Ideally the best performance appraisals usually lets employees and managers communicate, share ideas, information and opinions. However, this is not usually the case since these appraisals usually make employers especially managers look like hostile judges. This makes employees feel uncomfortable in the working environment (Peter, et al., 2010: 384). This is especially true if the employee has been given a negative appraisal report. This paper will focus on issues concerning employee appraisal problems. The paper will focus on employees’ problems with employee appraisal and the culture problems presented by employees’ appraisal. Employees’ Problems Making judgments about oneself or others at the work place is inevitable and it is also a universal problem. That is an informal form of appraisal. However, there is also a structured system employee evaluation and appraisal with which people judge the performance of fellow employees, subordinates, peers and superiors (Banker, et al., 2011: 324). Most systems are usually formal, but they tend to lean on the informal side every now and then. The problem with formal judging of employees tends to create serious problems among the employees and their superiors. In cases where the employees are judged negatively there are usually serious ethical, motivational, and legal problems within the organization (Macintosh, 2006: 89). There is a common misconception that performance appraisals are enforced by governments considering their regularity. However, the only legal justification associated with performance appraisals is the ability to show a just cause for a disciplinary action or termination (Zingheim, et al., 2007: 54). There is a common belief among employees who have to go through that process every year that the performance appraisal process is poorly executed and the feedback that is given to the employees from the human resources department does not reflect the true performance of the employees. There are case studies that have been filed in the courts that portray the same thing (Vishtra, 2010: 327). For instance, in the United States, a labor law firm found that majority of performance appraisals from a random sample usually damaged an employer’s case against the employee. That implied that most of these appraisals are not professionally conducted nor do they have the capacity to rate the employees in a standardized method (Facteau, et al., 2011: 223). Most employees have a habit of ignoring performance appraisals and usually end up suffering through the process. However, the problem of employee performance appraisal does not only affect the employees, it also affects the employers and management in an organization. For instance, Nichols (2008) indicated that a performance appraisal usually costs a standard organization between USD 2000 to USD 2500 per employee in one year (Sullivan, 2011). The procedure has to involve human resources processing time, advances in technology and opportunity costs. Therefore, as an employer before going ahead with performance appraisal it is important to understand the problems associated with performance appraisals within organizations (Lee, 2013: 330). It is advisable to managers not to completely focus on employees’ actual performance. Judging an employee according to his behavior like being late to work, technical knowledge or commitment to the organization does not really gauge that person’s actual output at the workplace. Therefore, judging an employee in a performance appraisal exercise should be based on other factors like quality and response to the challenges that usually come up at the workplace. Although factors like commitment might be a contributor to a decrease in the output of an employee, it does not really reflect the value of an employee in an organization. Another problem that usually comes up during performance appraisals is lack of feedback or infrequent feedback (Marshall, 2011: 43). Research has established this as one of the major reasons that employees do not look forward to this exercise. The reason for conducting performance appraisals in the workplace is to assess the employees’ competence at their various jobs. Therefore, if it is conducted and the human resources department does not give feedback to the employees, majority of them usually start to become antsy and restless. Just being in the dark about how one’s employer is thinking about you is enough to make an employee’s performance plummet to the floor. Therefore, it is advisable for employers to ensure that once they carry out this exercise they should also ensure that they give their employees feedback (Cox, 2010: 364). Lack of effective metric system is another issue that employees have a problem with (George, et al., 2006). Employees usually do not understand or at least understand very little about how the whole process is judged. Therefore, it is possible for employees to harbor grudges and even consider that the human resources department is seeking to fire them. This will affect the employees’ output negatively which will in turn affect the overall performance of the company (Yukl, 2008: 570). Managers are usually not accountable for the feedback they give their employees. Therefore, even if the feedback that the human resources department feedback is not accurate; there is nothing that the employees can do. It is also not possible for the employees to complain since as mentioned earlier there is no standard metric system for assessing employees performance. Secondly, there is not penalty for late feedback or none at all for that matter (Burchett, et al., 2005: 36). There is also no penalty for mistakes that the personnel from the human resources department if they perform a mistake when conducting the performance appraisal. For instance, a firm had found an employee as the lowest performing yet the manager ended up identifying the same employee as the employee of the year and he ended up receiving the employee of the year award (Wayne, et al., 2008: 221). Case Study Mercy was an employee working for a software company as a trainer. She had an excellent performance record for at least five years. She had been rated as the best trainer for the last two consecutive years. Whenever there was a performance appraisal coming up, she always knew that she had nothing to worry about. She had the complete confidence of her superior. The appraisals in her company were always collegial and informal. Most of the employees and her as well used to consider those appraisals as just an annual housekeeping chore that lasted for half an hour without any real consequences. However, all this changed when her immediate manager retired. Mercy did not have a lot of face time with her new manager, but this did not worry her in any way. She still retained her confidence. She knew that as long as there were no negative feedbacks and complete absence of complains she was still in a good position with her employers. When the performance appraisals were around the corner, Mercy was still at ease and very confident that she would sail through it as always. Considering her last impeccable performance appraisal, she knew that her job and her reputation with the senior staff in the company were safe. At last when the performance appraisal day came around she was very confident when entering the manager’s office. After a exchanging a few pleasantries, she was handed her performance appraisal report. The manager then started to give his assessments without giving Mercy the time to provide input or comment on anything. The only area that the new manager covered was just her overall rating which was outlined in two documents. There was no mention of her accomplishments or her development goals that she had worked so hard for to have them included in the company’s training program. In those documents were complains from new recruits who were grumbling about the poor training they had received at her hands. They had mentioned issues to do with poor organization and poor delivery. Mercy could only sit on the chair stunned and feeling dejected. As the manager continued reading the report, there was no report of her past excellence or loyal service. In the end, she was assigned new performance standards and goals. In manager had increased her salary by 2%. This was her lowest increment in all the years she had worked at that company. Discussion Mercy’s story is an incidence that has occurred in many organizations all over the world. In her case, one can argue that there was poor communication between her and her students and between her and her boss. That miscommunication made her students to not inform her how they felt about her teaching methods. The same applies to the manager. She did not devote enough time to communicate with the manger and at least keep him abreast of the progress she was making in her training sessions. Providing accurate performance appraisal is regarded as the foundation of ethical managerial practice. Mercy’s problem could have been solved at two levels as mentioned above. Both at micro level with her students and employer and at the macro level with the organizational policies, values and culture. Her performance may have been affected by erroneous past performance appraisals. The goal of performance appraisals is to cultivate the system and facilitate growth and development among the employees (Dunnette, 2013: 253). Recommendations As much as people hate performance appraisals, they are also known to benefit organizations if they are conducted in the right manner. Providing accurate employees’ assessment reports encourages productivity, motivation and improved quality of work (Mia, et al., 2011: 9). Therefore, it is important for organizations to ensure that the management eliminates all weaknesses from their performance appraisal process. Some of the tips described in this paper are from experience, research and several rulings made in court based on mistakes committed on during performance appraisal exercises. The first recommendation is that appraisal process should be custom made to fit a specific organization’s needs. Each and every organization has different goals and specific job descriptions. Therefore, it is next to impossible to use one company’s performance appraisal process in another company. As much as that might be tempting especially if it succeeded in another company, it cannot work in another company. Organizations have different cultures, structures and usually operate in different environments and in most cases provide specific services. A company might adopt another company’s system; the management must be willing to modify it so that it can suit that company’s specific requirements (Richard, et al., 2009: 112). It is imperative that the organization ensures that the system that is to be implemented caters for its departments and individual employees. Implementing a strategy should start by identifying the results and the behaviors that are required to carry out the strategies. It is also important to understand that performance appraisals are part of any organization’s strategies and are considered when developing future plans for the company (Gabris, 2011: 160). Secondly, the factors that are used in rating should be concrete and objective as much as possible. It is true that performance appraisals are not 100% objective. However, they are usually true to some extent. Employers should do all they can to ensure that the degree of objectivity in performance appraisals is high (Roberts, et al., 2007: 16-17). Such a move is supposed to ensure that some subjective traits are no part of the process. Studies have shown that traits such as dependency, initiative and cooperativeness are given more weight than features like output and costs. Rulings made by courts on the issues of performance appraisals have shown that they do not usually regard subjective traits as basis for promotions, termination and pay decisions. Judges tend to favor concrete, objective and observable features (Tziner, et al., 2010: 481). Culture problem Performance appraisal is all about creating a culture which encourages continuous improvement of individual skills and contributions as well as business processes (Tubre, et al., 2006). Research has shown that employees are not the only people who dread performance appraisals. Managers are also known to hate this process. A lot of managers consider performance appraisals a waste of time while employees consider them as demeaning. Despite the common problems associated with performance appraisals in the workplace, there are also culture problems that come as a result of the performance appraisals. These problems are associated with employees’ behaviors and the overall culture of the organization (Reinke, 2008: 29). Teams are common in organizations and it is hard to determine team performance. This usually presents a lot of problems with the human resources department since singling out some employees within a team can be termed as favoring some employees over others. This can have a tremendous negative effect on the team chemistry as well as decreasing the team’s output. Therefore, it is important to understand culture problems associated with performance appraisals and how they affect the whole organization (Rotman, et al., 2012: 243). Armed with that information, it is possible to come up with solutions that can be applied to solve these problems. Across different cultures there are different perceptions to performance appraisals. For instance, according to a study done comparing perception of performance appraisals between Britain and Hong Kong showed that people in Hong Kong tend to be taken positively compared to Britain (Thompson, 2011: 841). One of the problems associated with performance appraisals when it comes to culture is lack of integration. A working relationship has to be establishes between the human resources department, teams, individuals and the organizational culture (Whiting, et al., 2008: 225). If there is no integration and harmony, the performance appraisal system cannot work. Secondly, if the employees are from different culture there is a possibility that employees who are from the smaller or minority culture might feel as if they are being segregated or targeted. This is bound to bring tensions in the organization which will inevitably reduce the output of the all the employees due to poor working relationship. It can also put the organization in a bad light should one or several employees get fired and decide to sue the organization. Resources would be wasted as the organization and the employees engage each other in legal battles (Kline, 2005). Lack of rewards is also another cultural problem that can come as a result of performance appraisal. As mentioned earlier, there are some cultures where employees look forward to rewards if there are rated higher than the previous year. Therefore, if an employer fails to provide those rewards, the employees might feel as if they were lied to or they did not actually perform well in the assessment. This might lead to poor communication between the employees and the employers (Hubert, et al., 2012: 401). The breakdown in communication might lead to poor flow of information which will lead to poor organization performance in the long run. Case Study Hiro was an employee at a technological company in Japan. In the company where he worked, he was regarded as one of the best employees. As expected, Hiro climbed the corporate ladder very fast. In a matter of three years, he was the head of his department. Being a senior engineer gave him freedom to make choices for his employees. Being a respectable man that he was it was easy to work with his employers and employees. In his fourth year at the same company, he was head-hunted by an American technological company to be a senior engineer at one of their departments. He started working in America with the same enthusiasm that he had shown in japan. When the performance appraisal came around, he was confident that he would fare well and might even get a pay raise. However, to his uttermost shock his superior complained about how he was slow to adapt to the company and proceeded to give Hiro a warning that he might be demoted if he did not improve. Hiro was too shocked to say anything. He considered his dressing down as humiliation. He knew that in Japan no one could say such things to an employee. Discussion In Hiro’s case, it was a conflict of culture that made him view his performance appraisal negatively. In the Far East, most people are humble and respectful to their colleagues even if they are junior staff (Kline, 2009: 161-162). The same cannot be said of the west where business comes first and pleasantries later. Therefore, it is important to come up solutions that can tackle such problems before they evolve and start affecting everybody’s work. Recommendations One of the key things that employers should consider when in the process of performing employees’ appraisals is adopting a friendly approach. This is meant to make the employees comfortable and even make it possible for them to actually contribute instead of sitting quietly and listening to the employer’s assessments (Smither, et al., 2005: 190). It is also advisable to the employers to congratulate the employees even if it is just for a small contribution. This will assure the employees that they are valued and will motivate them to work even harder and smarter (Gerald, 2007: 495). Treating the employees fairly is also a good recommendation for the employers. There are some mistakes that employees might make, but these employees are not directly responsible for those mistakes. Therefore, if the manager takes considerable time to investigate those mistakes he might discover ways of preventing such mistakes in the future. As for the employee, such a gesture will make him or her loyal to the organization and will strive to make sure that he does not repeat such a mistake. All of this will end up benefiting the organization. Conclusion Performance appraisal is the most hated exercise in any organization. Getting a bad report can mean that one is one step closer to the door. As mentioned above, this process is also hated by the managers who view it as a time wasting process (Simons, 2007). Despite the fact that it is hated by everybody, it is still done every year. That implies that it is also a useful tool in increasing the productivity of the employees. However, measures have to be taken to ensure that the process does not turn out to be a disaster for the employees, employers or the organization (Harris, 2008: 445). This paper have outlined several important measures that can be applied to avert such a disaster especially culture wise and problems associated with employees. Many performance appraisals are usually carefully designed to ensure that they give the most accurate report. However, in most cases performance appraisals are poorly executed leaving employees frustrated. There are instances where performance appraisals were so poorly executed that they led to court battles. Such problems can be avoided if the employers followed the simple recommendations outlined in this paper (Gosselin, 2011). There are several achievements outlined in this paper. The first achievement was to establish the reasons why employees hate performance appraisals. On closer look one can understand why employees are much against this exercise. Fear of victimization plays a great role in the opposition of performance appraisal. The second reason was how to deal with problems associated with performance appraisals at the employee level and at the culture. The third achievement was providing recommendations that might be useful when conducting employees’ performance appraisal. Finally, this paper has achieved the aim of creating awareness on the problems that lead to poor performance appraisal exercise. Performance appraisals are conducted in organizations all over the world. However, not many organizations usually share the problems that they face during performance appraisal sessions. Therefore, lack of sufficient data from organizations across the globe for comparison is a major limitation. Some employees who have been victims of performance appraisal exercises are reluctant to share their stories for case studies. Therefore, it is hard to get facts from the employers’ side and the employees’ side. Therefore, relying on such data can be misleading since it represents one side only. References Anderson, G., 1996. Performance Appraisal. The Handbook of Human Resource Management, Oxford: Blackwell, 196-222. Armstrong, M., 2012. Armstrongs Handbook of Human Resource Management Practice. Prentice Hall. UK Armstrong, M., and Baron, A., 2005. Managing Performance: Performance Management in Action, London: CIPD house. Banker, D., et al., 2011. An empirical analysis of continuing improvements following the implementation of a performance-based compensation plan. 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