Integrative Approach to Managing People Issues Arising from Implementing a New Performance - Literature review Example

Performance Appraisal: People Issues Name Institution Course Date Performance Appraisal: People Issues Introduction Performance management and performance improvements have become popular topics in the 21st century businesses. The increased focus on performance management has particularly been triggered by the increasing pressure on organizations to the extent that businesses are now expected to become more effective and efficient to remain competitive. According to Pettijohn et al. (2001), top performing companies have highly performing employees and are using their employees are valuable resources to achieve a competitive advantage. Performance appraisal is one of the tools that most organizations across industries use as a yardstick for measuring the performance of their employees (Mikkelsen et al., 1997). Although most employees conduct performance appraisals on regular basis, such as half yearly or yearly, evidences indicate that implementing a performance appraisal is a challenge to most organizations. The challenge emanates from the fact that most employees fear to hear the world “performance appraisal’ and would always try to resist any attempt to implement a performance appraisal (Gerrish, 2016). Besides resistance, there are many other organizational behavior or people issues that are associated with implementing a performance appraisal system. This paper discusses people issues associated with performance appraisal and suggest how best to manage the issues. The major areas of focus include perception and attribution, motivation and learning, leadership and change management. Purposes and Benefits of Performance Appraisal Performance appraisal is an important performance management tool used across industries. Performance appraisal is also regarded as one of the most important function of human resource management. Mikkelsen et al. (1997) define performance appraisal as the formal review systems that an organization used to evaluate the performance or an employee and teams over a specific time period. A good performance appraisal is based on measurable and quantifiable information, such as productivity as this ensures fairness in the entire organization. Performance appraisals serve many purposes in an organization. First, performance management is an important exercise for any organization that hopes to succeed because the information gathered through performance reviews can be used by a firm as the basis for recruitment, selection, training and development of staff (Aguinis, 2009). At the same time, information gathered through performance appraisals can be used as foundations for motivating and ensuring the maintenance of quality workforce. Pettijohn et al. (2001) argue that if a company lacks a reliable performance review system, this is likely to cause the HRM system to fall apart, which consequently result in waste of important human assets that a company has at its disposal. Performance review, as an evaluative tool, performance appraisal serves as a critical tool by telling employees how they are performing and point areas that they might need to develop to produce the desired result (Gerrish, 2016). On the same note, performance appraisal is used to identify high performing employees and reward them, as well as those who are under performing for punishment, which may include actions such as layoffs. Besides the evaluative function, performance appraisal is also used for employee development purposes, which is often the main aim of conducting a performance review (Aguinis, 2009). In this regard, performance review is conducted to identify the problems that an employee might be experiencing in performing his/her tasks so that based on the information gathered, the right skill training and professional development program can be organized that suits a particular employee. People Issues in Performance Appraisal and How to Manage Them Perception and Attribution Attribution error is another major people issue associated with performance appraisal that normally affects the effectiveness of the implementation of a good performance management system. Attribution error arises in cases where the manager appraising employees use their subjective views and opinions to decide on what might have caused an employees to either fail or succeed in their tasks. Attribution error has been defined in literatures to manager’s tendency to attribute other people’s actions in terms of disposition instead of situational causes (Jones, 1972). Due to this, people tend to perceive others as acting in a particular manner because they are they see them as a particular kind of a person without necessarily taking into account other situational factors that might have prompted them to behave in that manner (Swift et al., 2013). For this reason, managers tend to associate poor performance to personal failing con the part of a worker without necessarily taking into account other problems or situations that might have brought about the failure, such as lack of adequate resources or failure by the management to provide the employee with the necessary support. Accordingly, fundamental attribution bias (FAB) mirrors on an individual’s perception as the reason for their behavior (Redmon & Dickinson, 1990). Attribution error affects the performance appraisal as it results in biased appraisal that affects the confidence of the employees on the performance appraisal. Jones (1972) linked employee resistance to performance appraisal to attribution error. For instance, when an employee feels that the parameters used to evaluate his/her performance is based on attribution, they are more likely to resist any attempt to evaluate their performance for fear of bias. Therefore, to effectively introduce and benefit from performance appraisal, managers must ensure that performance appraisal is free of perception or attribution errors. In this regard, managers must ensure that external or situational factors, such as resources and support (Swift et al., 2013). This implies that, when evaluating employees, besides the skills and competence of an employee, managers need to ensure that external influences are taken into account. This includes looking at whether the employee being evaluated had the necessary resource. Additionally, it is also possible that an employee might have performed poorly in a given task because they were not provided with the necessary support from the leadership. This would ensure that there is no perception or attribution error in the performance evaluation. This is also important as it instills confidence in the employees in the evaluation process, thus helping address resistance from employees (Martinko, 1995). In summary, managers need to stick to appraisal objective criteria that are set out and how a worker performs compared to the laid down performance parameters. Motivation and Learning Having highly motivated staff is critical to the success of an organization. According to Jabeen (2011), motivation is positively related to performance such that when employees are highly motivated; this results in increased satisfaction, which in turn results in better performance. Contrastingly, if employees have low level of motivation, this translates to low level of commitment which results in low productivity. Performance appraisal is one of the processes that have motivational issue (Latham, 2012). It has been demonstrated that performance appraisal if properly done can create motivation effect on employees. On the other hand, if not properly done, performance appraisal can have demotivational effect on employees (Steers et al., 1996). This implies that managers need to strive to ensure that performance appraisal is conducted in a manner that motivates employees to increase their effort. To motivate employees to increase their efforts, Jabeen (2011) suggests that managers tie performance appraisal to reward. Studies have shown that performance appraisal tend to be more effective when tied to reward decisions and punish lower performance through termination. This is supported by motivational theories, such as reinforcement theory. According to reinforcement theory, any behavior that is rewarded is repeated (Adams, 2000). In other words, the theory suggests that, when performance appraisal is tied to rewards, this often create the perception that performance is rewarded. Therefore, in line with reinforcement theory, managers should ensure that employees who are appraised positively are rewarded for good performance to motivate them to repeat good performance. It is important for managers to understand that if performance appraisal rating is not properly done and happens to be inaccurate, this might result in reward unfairness and this underscores the need for managers to ensure that performance appraisal is accurately done to ensure that the right reward is given to a deserving employee how demonstrate good performance. Leadership Leadership is another organizational behavior issue that has an impact on the implementation of a performance appraisal system. Yukl (2010) study found that the implementation of a performance appraisal system fail because of lack of leadership commitment. Leadership is necessary for the successful introduction and implementation of a performance appraisal system on many grounds. First, leadership is necessary to ensure that the performance appraisal system has the right design that suits the needs of the business (Boswell, & Boudreau, 2000). At the same time, the design of the system needs to be acceptable to the employees to prevent resistance. Additionally, leadership is important the initiation of a performance appraisal system as ensure that the performance appraisal system that is being introduced in an organization integrates well with strategic planning and human resource management system, and the organizational structure and culture. Moreover, leadership is required for setting the strategic direction and performance measures, as well as monitoring and reviewing the performance of employees in the entire organization (DuBrin, 2007). Therefore, leadership must be provided to ensure successful introduction of a new performance appraisal system. To successfully implement a new performance management system, the right leadership must be provided to ensure positive influence on the employees, such as explain to the employees why a company needs to implement a new performance appraisal system and why they need to accept it (Redmon & Dickinson, 1990). In this reason, a leader must be able to work closely with the employees by providing guidance and addressing issues that might impede the successful implementation of the new performance management system. Moreover, the right leadership is needed to set the standards for staff performance standards and firm quality culture. Change Management Performance appraisal is an important undertaking in an organization and organizations are encouraged to ensure that performance reviews are made a routine process so as to get the optimum result from employs. Although businesses recognize the importance of performance appraisal to organizational performance, implementing a performance appraisal is always a challenging endeavor. The main challenge emanates from resistance. Burns (2009) study found that employees are never at ease with performance reviews and would normally attempt to resist it at all cost. There are a number of reasons that explains why employees normally try to resist performance appraisals. According to Levy and Williams (2004), rating bias rank among the reasons employees resist performance review. It has been established that most employees fear that employers would not rate them based on objective criteria, in what expert term rater bias. For instance, when HR managers include nonperformance parameters, such as gender, race , religion and skin color among others into performance reviews, this the perception of unfairness in the rating process among employees. Consequently, employees react to such performance review with reduced satisfaction. Other reasons commonly cited by employees for resisting performance appraisal include fear of losing their jobs, hypocrisy, poor informal feedback and rater errors and poor communication (Senior & Swailes, 2010). Therefore, to benefit from performance appraisal, managers must ensure that resistance to change is effectively managed. Effective management of change ensures that employees accept evaluation for their benefit and the benefit of the organization. There are a number of change models that have been developed that managers can use to implement change successfully and overcome resistance from the members of the staff. One such change model is Kotter’s 8 Step Change Model (figure 1). Figure 1: Kotter 8-step Change Model Source: Kotter (1996). Kotter’s 8 Step Change Model highlights 8 critical stages that result in successful implementation of change. According to Kotter, successful implementation of change begins with the creation of a sense of urgency followed by creating a guiding coalition, and then creates a vision for change, communicate the vision, develop short-term wins, consolidate improvements, and finally anchor the changes (Kotter, 1996). Therefore, in line with Kotter’s model, to successfully overcome resistance to change associated with the introduction of a new performance appraisal system; the company has to ensure that it begins by creating a sense of urgency for change (Spector,. 2010). This involves creating awareness among employees of the need and urgency for change, which must be communicated openly and in honest and convincing manner. Creating awareness of the need for change is important as it makes the employees understand the importance of the change and why they need to embrace and support the change efforts. For this reason, the manager can effectively overcome resistance to change by explaining to the employees why the company needs to introduce a new performance appraisal system (Burns, 2009). This would dispel any suspicion and make the employees see the need for the new performance evaluation system. After creating sense of urgency, the managers must create a guiding team consisting of employees to help in the implementation of the change desired. For instance, managers need to involve some of the employees in to help guide the implementation of the new appraisal system as this would make employees feel part of the new system help minimize resistance. Once these are done, managers create a vision for the change (Kotter, 1996). This requires explaining to the employees what the company intends to achieve by introducing the new performance appraisal system and incorporating their views as this would help ensure that they accept the vision faster, suggests Senior and Swailes (2010). Additionally, in line with Kotter’s theory, managers can overcome resistance to change associated with introduction of a new performance appraisal system by ensuring that the new change is effectively communicated. Jick and Peiperl (2010) observed that poor communication is one of the reasons most employees resist change. Therefore, to overcome resistance, managers must ensure that the new appraisal system is communicated by seeking the views of the employees about the system, understanding their anxieties and concerns and explaining to them how the appraisal is going to affect them as this would help ease tension, thus ensuring acceptance of the system by employees. Conclusion Performance appraisals are increasingly becoming a common practice that businesses across industries use as a performance management tool. Performance appraisal serves two main purposes, namely evaluation and development purposes. However, as demonstrated in the paper, there are many people issues associated with performance appraisals that managers need to handle properly to ensure successful instruction and implementation of performance appraisal. Some of the issues include resistance to change, attribution errors, lack of leadership, and motivation and learning. Therefore, to successfully implement a performance appraisal system, these people issues must be effectively addressed as suggested in the discussion. References Adams, M. A. (2000). Reinforcement theory and behavior analysis. Behavioral Development Bulletin, 9(1), 3-6. http://dx.doi.org/10.1037/h0100529 Aguinis, H. (2009). Performance management. London: Pearson Prentice Hall. Boswell, W. R., & Boudreau, J. W. (2000). Employee satisfaction with performance appraisals and appraisers: The role of perceived appraisal use. Human Resource Development Quarterly, 11(3), 283–283. Burns, B. (2009). Managing change (5th ed.). Essex, England: Prentice-Hall. DuBrin, A.J. 2007. Leadership: Research findings, practice, and skills (5th. ed.). Boston: Houghton Mifflin. Gerrish, E. D. (2016). The impact of performance management on performance in public organizations: A Meta-Analysis. Public Administration Review, 76(1), 48-66. Jabeen, M. (2011). Impact of performance appraisal on employees motivation. European Journal of Business and Management, 3(4), 197-204. Jick, T. D., & Peiperl, M. (2010). Managing change: Cases and concepts (3rd. ed.). Chicago: McGraw-Hill/Irwin. Jones, E. F., & Nisbett, R. E. (1972). The actor and the observer: Divergent perceptions of the causes of behavior. In H. H. Kelley, Nisbett, R. E., Valins, S., & Weiner, B. (Eds.), Attribution: Perceiving the causes of behavior. Morristown, NJ: General Learning Press. Kotter J. P. (1996).Leading change First edition. Boston: Harvard Business School Press. Latham, G.P. (2012). Work motivation history, theory, research, and practice. Thousand Oaks, C.A.: Sage. Levy, P. E., & Williams, J. R. (2004). The social context of performance appraisal: A review and framework for the future. Journal or Management, 30(6). Martinko, M. 1995. Attribution theory: an Organizational perspective. Delray Beach Florida: St Lucie Press. Mikkelsen, A., Ogaard, T., & Lovrich, N. P. (1997). Impact of an integrative performance appraisal experience on perceptions of management quality and working environment. Review of Public Personnel Administration, 17(3), 82-98. Pettijohn, C. E., Pettijohn, L. S., & d’Amico, M. (2001). Characteristic of performance appraisals and their impacts on sales force satisfaction. Human Resource Development Quarterly, 12(2), 127-146. Redmon, M. K., & Dickinson, A. M. (1990). Promoting excellence through performance management. New York: Psychology Press. Senior, B. & Swailes, S. 2010. Organizational change (4th ed.). Essex, England: PrenticeHall. Spector, B. 2010. Implementing organizational change theory into practice (2nd ed.) Upper Saddle River, NJ: Prentice Hall. Steers, R., Porter, L. & Bigley, G. 1996. Motivation and leadership at work (6th ed.). New York: McGraw-Hill. Swift, S. A., Moore, D. A., Sharek, Z. S., & Gino, F. (2013). Inflated applicants: Attribution errors in performance evaluation by professionals. PLoS ONE 8(7): e69258. doi:10.1371/journal.pone.0069258 Yukl, G.A. (2010). Leadership in organizations (7th. ed.). Upper Saddle River, NJ: Prentice Hall. Read More