HR People Resourcing - Assignment Example

HR People Resourcing Question 3: Critically analyse why performance appraisal has been critiqued “Great works are done when one is not calculating and thinking” Daisetz T. Suzuki Appraisal of employee performance in organizations is a relatively primitive art, which has been practiced across all sectors, as an essential and inevitable tool of enhancing and sustaining organizational development. It is one of the most sought after techniques used by managers, to get optimum benefits from their human resources. Its success so far, can largely be attributed to the various advantages it offers to companies employing this technique to evaluate and assess the skills of their employees. According to reports approximately 80 – 90 per cent of organizations in the UK as well as U.S. use some form of performance appraisal and the number of organizations using it, has increased drastically from 69 per cent in 1998 to 87 per cent in 2005 (Armstrong and Baron, 2005). However despite its widespread use and popularity among organizations, the effectiveness and success of this technique of employee assessment is rarely documented. Hence it has been widely critiqued on various grounds, in the recent years. Various psychologists, researchers and human resource theorists have challenged the very premise of this technique and argued on its ability to effectively assess the employees’ performance. Some such reasons behind the criticisms of performance appraisal as an effective employee assessment technique are discussed in the ensuing sections. Figure 1: Performance Appraisal Systems Source: Craig et al., 1986 Flawed methods of evaluation: There has been a rise in criticism against the performance appraisal system in the recent years which is largely attributed to the apprehensions raised against the various methods employed by managers to evaluate their employees. One of the most dominant critiques of this technique is the manner in which the management framework applies this method, in its most primitive form, in order to enhance employee performance (Bach, 2005). This process involves ‘criticism’ or assessment of the employees’ performance, in the form of motivation linked with pay and other non-monetary rewards; but rarely focuses on the skills and capabilities of the managers assessing the employees (Grote, 2002). It is argued that the evaluation procedures are often poor designed due to lack of training making it difficult for mangers to use it appropriately. However, the entire burden of this flawed appraisal system is ultimately borne by the individuals. Also the credibility of those responsible for evaluating and judging the effectiveness of employee performance is rarely taken to task, and ignored, although their individual perception might prove to be a deterrent in drawing accurate results. More focus on the individuals as opposed to the entire system: The opponents of this method of employee assessment argue that this system mostly holds individuals accountable for any flaws in their performance, instead of considering the flaws in the system. This according to them, is a highly biased form of criticism, and is unfair on the part of the employees, who are held responsible for something beyond their control. According to Dr. Deeming, one of the major flaws of performance appraisal systems is the fact that it focuses only on individual performances and conveniently ignores the contribution of the system itself which might have affected the employees performance. He further states that some of the common causes responsible for poor employee performance include problems related to the system itself, and the rest of them are on account of an inaccurate assessment system. Thus according to him the reason behind the poor performance of workers is not solely because of their individual performance but because of the flaws in the organization as a whole (McGregor, Gershenfeld, 2006). Focusing on individuals rather than on the organization as a whole tends to create a distorted picture of employee performance and estimating the reasons of their failure becomes highly complicated. It is not fair to hold the individual responsible for failure since it could also be on account of flawed management systems, and no amount of performance appraisal can help the organizations in enhancing worker productivity, unless the systems responsible for restricting their performance are checked and reformed. Performance appraisal systems are discouraging rather than encouraging It is widely argued by critics, that this system hardly helps in motivating the employees but on the contrary proves to be discouraging, and prevents employees from enhancing their performance. In a study conducted by GE (General Electric) in the early 1960s, it was observed that: criticism has a negative effect on achievement of goals and praise has little effect one way or the other Critical appraisal of employees often results in defensive behaviour by the employees, leading to inferior performance Performance is enhanced through proper goal setting at the organizational level, rather than periodic appraisals (Grote, 2002) In the experiments conducted by Herzberg, it was observed that good feelings among employees on account of positive encouragement are quickly forgotten and the potential recognition of the motivation received through such systems is short lived (Hofstede, 2003). The observations made in this study are applicable even today. Poorly designed evaluation processes: In view of the rapidly changing external environment driven by technological innovations, there has been a tremendous and simultaneous change in the employee performance, making it increasingly difficult for companies to design an appropriate performance management system. For instance, in the case of Ford Motor Company, the management faced several challenges while developing a proper evaluation system, since factors such as clearly distinguishing high-performing and low-performing employees; qualitative as well as quantitative analysis etc were required to be taken into consideration. In a firm which involves service oriented as well as manufacturing jobs, incorporating various essential criteria for assessment is a highly difficult task. The matter is further complicated with the increasing use of highly advanced technology which has eliminated the differences in individual performances, since most of the work is done by machines rather than men; and hence the scope of variability in performing given tasks is narrowed significantly (Stroh et al., 2002). In such a situation, designing a proper evaluation system becomes highly complicated often leading to inaccurate appraisal systems, and ultimately flawed results. Conflicting interests and goals The performance appraisal systems essentially entail comparison between the employees’ past performance with their current performance. Since appraisal is essential for the overall organizational development, employees are required to share their concerns and details regarding their performance. However, they are often reluctant to confide their limitations and drawbacks to their supervisors / managers responsible for evaluating their performance as it could affect their reward or opportunities to climb up the corporate ladder (Newton, Findley, 1996). This clashes with the very premise of performance appraisal systems, and the managers in charge of evaluating the performance of employees, are caught in a complicated position - where they are made to act as mentors; helping the employees perform better and at the same time act as judge and evaluate their performance. Such a position demands critical analysis abilities which can only be acquired through training, which is hardly available to the appraisers (Randell, 1994). Apart from the above mentioned points there are various other issues which are contradictory to the performance appraisal system, and which tend to defeat the very purpose for which the system is designed and implemented in organizations worldwide. It is described as a frustrating ritual for some managers and most of the managers are reluctant to evaluate employee performance, mostly on account of poor training and lack of adequate knowledge regarding accurately assessing the employees. It is also observed in various studies that managers often tend to display very low trust in the performance rating scales and resist any form of procedural change. Flawed or inaccurately designed system conducted by a poorly trained manager, would invariably lead to inaccurate results which may mislead the management regarding their employee performance. In the absence of a proper / effective appraisal system, the manager might be tempted to add his / her own personal remarks or comments on the employees; which may or may not be true, thus defeating the purpose of the system. Performance appraisals entail rating the employees’ performance which may also involve negative feedback or low ratings. Such negative criticism might prove to be fatal on the part of the employees, who may not take it in the right spirit and may hamper his / her personal development, lead to low morale and hence negatively affect their productivity. One of the key reasons behind the designing of a flawed appraisal system includes the reluctance of the mangers in offering feedback to the employees. The managers may be reluctant to evaluate the employees and hesitate to criticize their subordinates; they might lack proper training to effectively evaluate their employees; they may share a strong dislike of the procedure employed by the management and hence may not co-operate properly; and may tend to mistrust the results or validity of the entire system. This may further hamper the organizational goals of enhancing their employee productivity, and ultimately restrict their development. Conclusion Performance appraisal is a system of evaluating employee performance in organizations, which has been widely implemented and practiced since decades. Why, then despite such widespread popularity and support from organizations, does this system face strong opposition in the recent years? The answer lies in the fact that various key issues related to the system are flawed and contradictory to the purpose for which it was created. These key issues needs to be resolved or replaced with alternative measures of evaluating the employees’ performance; in order to achieve the stated objective – that of human resource development. There are strong apprehensions regarding the credibility of the managers evaluating the performance, the negative impact on the employees, the complexity involved in designing a proper and effective appraisal system as well as the apparent lack of training available to the managers conducting such an evaluation. The system is highly partial in nature, and tends to support and encourage bureaucratic control on the part of the managers, who may use their position and personal grudges against certain employees while evaluating their performance. The fact that employees have very little or no say in the matter makes it even worse. Also, the companies may face legal action, on account of a faulty performance appraisal of employees, who may drag the company to court on various charges – such as age, race or sexual discrimination. As a result several companies have recently abolished the entire system, while several others continue to implement it with little modifications to suit their organizational objectives (Kessler, 2000). References: Armstrong, M. and Baron, A. (2005), Managing Performance: Performance Management in Action, Chartered Institute of Personnel and Development, London Bach, S. (2005), New directions in performance management, in Bach, S. (Ed.), Managing Human Resources: Personnel Management in Transition, Blackwell, Oxford. Craig, E. S., Beatty, R. E., Baird, L. S., (1986). How to contrast a successful performance appraisal system. Training and development journal, Pp. 38 - 42 Grote, R. C., (2002). The performance appraisal question and answer book: A survival guide for managers, AMACOM publishers, Pp. 3 - 10 Hofstede, G. H., (2003). The game of budget control, Routledge Publication, Pp. 60 - 65 Kessler, I. (2000), ‘‘Remuneration systems’’, in Bach, S. and Sisson, K. (Eds), Managing Human Resources: A Comprehensive Guide to Theory and Practice, Blackwell, Oxford. McGregor, D., Gershenfeld, J. C., (2006). The human side of enterprise, McGraw Hill Publication, Pp. 100 - 110 Newton, T. and Findley, P. (1996), ‘‘Playing God? The performance of appraisal’’, Human Resource Management Journal, Vol. 6 No. 3, pp. 34-58 Randell, G. (1994), ‘‘Performance appraisal’’, in Sisson, K. (Ed.), Personnel Management: A Comprehensive Guide to Theory & Practice in Britain, Blackwell, Oxford Read More