The Performance Appraisal System for Your Position as President and CEO of a Nonprofit - Term Paper Example

The Performance Appraisal System For Your Position as President & CEO of A Nonprofit Introduction Managing human resources is a significant constituent of any organization which can determine the productivity and the profitability of the entity. One of the common ways of management of human resource is performance appraisal. Performance appraisal is a procedure by which an organization can observe and evaluate the tasks performed by individuals along with their overall role to the organization. With this concern, the report describes about performance appraisal system for President and Chief Executive Officer (CEO) in non-profit organization. The objective of the report is to recognize several facets and issues of performance appraisal system and accordingly mitigate them by recommending proper measures. Context The major responsibilities of CEO and President are abundant and challenging. They are liable for directing an organization through making appropriate decisions. They are in-charge of developing strategies and plans which can ascertain and promote the organization’s overall mission and purposes. They delegate responsibilities to the team members and ensure that the organizational objectives are met. CEO and President of a non-profit organization closely perform with other top executives to implement policies, systems and other internal control mechanisms in order to enhance the operational procedures. Their other responsibilities comprise the recognition of opportunities for national and global expansion of organizational activities. They ensure that the organization is performing according to the set organizational objectives. Furthermore, CEO and President help to establish certain standards as well as measures in order to effectively utilize the organizational resources (SNC-Lavalin, n.d.). Summary of Relevant Expert Knowledge Performance appraisal plays vital role for the overall management of performance of a non-profit organization. It serves two major objectives for a non-profit organization, firstly, it enhances the productivity by helping individuals to realize their complete potentials in order to undertake organizational mission and objectives and secondly, it provides information to the management for making work based decisions. Performance appraisal system is required in an organization as it not only assesses the performance, but also helps to motivate the individuals. When organized and managed in an efficient manner, performance appraisal system can help to align individual activities with the organizational objectives (Colquitt, Lepine, & Wesson, 2013). Performance appraisal is a regular procedure which offers feedbacks regarding a person’s execution of responsibilities. Every member of an organization undergoes continuing feedbacks and official appraisals which can be conducted on an annual or semi-annual basis. The performance appraisal procedure usually starts with the job description. Due to this reason, CEO and President must be clear regarding their roles and responsibilities, scope of their provided rights and boundaries as well as standards along with expectations from their job. The performance appraisal process should be transparent and must be executed in a timely manner (Cascio, 2013). Proposed Performance Appraisal System In the performance appraisal system of a CEO and President of a non-profit organization, self-appraisal plays a vital role. CEO and President need to go through self-assessment by incorporation of proper tools which reflect upon their job description. The appraisal process for President & CEO of a non-profit organization considers making a cautious evaluation of the achievement of the organizational objectives, performance on the major tasks according to the job description and performance on the extra managerial activities (Joyaux, 2009). The performance appraisal procedure for CEO and President starts with the creation of a committee. The concerns for committee comprise their experience with the CEO for managing non-profit activities. In order to assure continuity, as a minimum, two members of the taskforce or board always need to be involved with the performance appraisal procedure. On the other hand, in order to ensure a new perspective on the performance of the CEO or President, at a minimum, two members of the committee or board must be changed in every two to three years. During the performance evaluation, the committee must remember that it performs on behalf of the organization and thus cannot assume any authority in relation to the CEO and President (Joyaux, 2009). The responsibilities of the committee would be to secure the job description of CEO and President and accordingly develop the performance appraisal procedure by incorporating several tools. The management of the non-profit organization finally needs to approve the performance appraisal procedure. Usually, the performance appraisal procedure begins two to three months before the start of a new fiscal year. It allows the accomplishment of the performance appraisal procedure to be completed within the appropriate time before taking budgetary decisions. In the performance appraisal system, the annual objectives set out by the CEO and President are reviewed and informed to the board (Joyaux, 2009). The proposed steps of performance appraisal for the position of CEO and President in a non-profit organization are as follows: Committee should initiate the performance appraisal procedure and notify the board members for providing any remark on the appraisal CEO and President need to undertake the self-appraisal procedure and submit the outcomes to the committee Committee needs to compare the outcomes of self-appraisal procedure with its own appraisal procedure and prepare the final report for board evaluation and for taking measures in case of performance below expectations The committee then requires to send the final report to board members and board members should converse about the results of the performance appraisal for making any changes in the organizational objectives Subsequently, the committee should discuss the outcomes of the board’s decisions to the CEO and President The CEO and President can comment on the organizational objectives and can also propose changes for performance improvement and development plan Source: (Joyaux, 2009) Common Issues and Rating Errors in Performance Appraisal System In the performance appraisal system, the management of an organization faces several common issues which are described below: Bias Bias is considered as a vital issue for performance appraisal process. Bias is essentially a personality oriented propensity, either towards or against an individual’s performance. Every human being has certain biases, but the management of an organization cannot afford to allow the biases to interfere in the performance appraisal system. Bias can make the performance appraisal procedure subjective and positively generate the propensity for lack of reliability on an organization. Stereotyping Stereotyping is the other crucial performance appraisal issue for a non-profit organization. It denotes mental classification of an individual to a similarity group along with making assumption of similar characteristics as the classified group within the individual. Thus, stereotyping can generate the potential for significant errors in performance evaluation. Halo Issues Halo Issues arise when performance assessor develops an overall positive or negative impression regarding a person and then insincerely integrates that overall impression to the performance appraisal (Cascio, 2013). Distributional Errors Distributional errors happen in three forms which include harshness, central propensity and kindness. In case of harshness, performance assessor evaluates an individual as below average. In central propensity, assessors usually assess individuals to be average. Ultimately, in kindness, assessors evaluate individuals as above average. Thus, distribution errors are considered as rate inflation which impact on the performance appraisal system (Sagepub, 2010). Similarity Error Similarity error in performance appraisal happens when assessors evaluate the performance according to their individual similarities as better performers. It is a general tendency of every person to feel more contented with people having similar characteristics and this similarity error can reflect on the performance appraisal procedure (Sagepub, 2010). Contiguity Error Contiguity error happens when similar ratings are provided to certain criteria which are proximate to each other. As a result, it can result in an inadequate performance appraisal (Sagepub, 2010). Recency Error This type of error occurs when assessors use only a portion of assessment period as evidence of performance appraisal which can also result in inadequate performance appraisal for members in an organization (Cascio, 2013). Attribution Error In basic terms, attribution is considered as a procedure where an assessor assumes certain motives or incentives such as approaches, values or principles for a perceived behavior in an organization. In performance appraisal procedure, attribution error can occur when assessors observe certain action of a member in an organization and assume that the member has adverse attitude towards his/her job and thus they appraise the performance as poor performance. Thus, attribution error can create individual assumptions (Sagepub, 2010). Protection against Common Issues and Errors From the above description, it can be observed that there are various ways in which performance appraisal system is able to provide precise evaluation of abilities and conducts of individuals in an organization. However, there are certain activities which can help to overcome the common issues and errors which can impact on the performance appraisal system. Development of Accurate Performance Measures The performance appraisal must be able to provide accurate performance measurement of individuals. Thus, it is beneficial for the non-profit organization to hire a human resource specialist and consultant to develop an effective appraisal system. Implementation of Multiple Criteria One way to overcome certain common issues of performance evaluation is to make sure that in excess of one criterion is used to assess the performance. It would help to reduce the occurrences of halo, recency and attribution errors. Reduction of Trait Oriented Assessments The other way of mitigating the common issues of performance appraisal system is to reduce the trait oriented assessments, because these assessments tend to be more subjective and can produce inadequate outcomes of performance measurement. Thus, the reduction of trait oriented assessment can minimize the occurrences of bias, stereotyping and similarity errors. Training of Performance Assessors Training of performance assessors can also help to mitigate the common problems and faults of performance appraisal system. Through training, they can be aware of the existence of common error that might occur during the evaluation procedure. As a result, it will help to lessen them if not entirely disregard them. The assessors must also be provided training regarding different performance appraisal methods. It will help to minimize the occurrence of distributional error and congruity error since they will be able to understand the use of different methods along with their related advantages as well as disadvantages (Cascio, 2013). Conclusion From the overall discussion, it can be recognized that performance appraisal plays a crucial role in an organization which facilitates to ensure enhancement of productivity. It helps to develop an environment where employees strive to perform for the accomplishment of the organizational goals. However, performance appraisal system has a few limitations which need to be mitigated in order to derive actual measurement of performance of an individual and fulfill its purpose in an organization. Besides, proper performance appraisal method must be selected which can help to motivate and thus to assist in career growth and development of an employee. References Cascio, W. F. (2013). Managing human resources: productivity, quality of work life, profits. Boston: McGraw-Hill. Colquitt, J. A., Lepine, J. A., & Wesson, M. J. (2013). Organizational behavior: improving performance and commitment in the workplace. New York: Mc-Graw-Hill Irwin. Joyaux, S. P. (2009). Performance appraisal process for the CEO. Retrieved from http://www.simonejoyaux.com/downloads/CEOAppraisalTool.pdf Sagepub. (2010). Performance management and appraisal. Retrieved from http://www.sagepub.com/upm-data/45674_8.pdf SNC-Lavalin. (n.d.). The President and Chief Executive Officer: duties and performance review. 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