Effects of Performance Evaluation Systems on Employee Morale - Research Paper Example

? Effects of Performance Evaluation Systems on Employee Morale (your school) 2011) Effects of Performance Evaluation Systems on Employee Morale This paper will look into theories and explanations as to why performance evaluation systems are important in boosting employee satisfaction or morale in most work settings. Discussion will center on are Abraham Maslow’s Hierarchy of Needs, Expectancy theory, Goal-Setting theory, Acquired Needs theory, Equity theory, Job Characteristics theory, on the relationship between personality type and job expectations, and on other implications important in the administration of performance evaluation systems. In human resources management, morale is defined as “the extent to which an employee’s needs are met ant the extent to which the person perceives that satisfaction as stemming from his or her total job situation; (it is) synonymous with satisfaction” (Rosenberg, 2004; p. 349). Job satisfaction and employee motivation are two of the more important concerns of the human resource function in any organization as most of these recognize, that its people are its most important resources. Therefore it is to their ultimate advantage to take care and provide for the needs of their employees (Ivancevich, 2010). People’s needs are of course determined by different sources and these needs variously control their motivations or the driving forces behind their behaviors (Jones, 2007). In the study of employee morale therefore, the theories on motivation could be useful to explain this psychological construct. One of the most influential theories upon which many managers base their performance management approach is Abraham Maslow’s Hierarchy of Needs Theory. As people engage in activities that increase their satisfaction, the study of Maslow’s theory becomes important as it explains what particular needs people are trying to gratify through their pursuits. The theory proposes that there are five levels of needs, namely, physiological or the need for food, shelter, water, clothing and other biological needs; security or the need to for protection and safety; belongingness or the need for affection and love; esteem or the need for recognition either from himself or from others; and the highest need of self-actualization which is the desire for self-fulfillment. Maslow emphasizes that the needs in the lower rungs of the hierarchy should be met first before an individual can satisfy the higher level needs. This theory has important implications to management as it points out clearly which needs are to be met and provided at which stage at work and which could be used to motivate them (Jones, 2007). The need for esteem in particular relates to the need of employees to be recognized for their accomplishments, expertise, or skills. If an employee is motivated by this particular need, then providing timely and constructive feedback on how he does at work may encourage him to give a better performance. Another prominent theory on employee motivation is Victor Vroom’s Expectancy Theory which argues that employees will be more motivated to work if they believe that their efforts will lead to higher performance and that this better performance will result to more rewards (Jones (2007). It means then that if an employee will be provided knowledge about his past performance, he can gauge the likeliness of his success or failure in a future or similar task. Performance evaluation systems should be sensitive then to detect low performance so that managers can provide encouragement and the necessary support like coaching or training to underperforming employees. In the same vein, if the evaluation results show that an employee is performing very well at work, then managers’ congratulatory notes can boost the employee’s morale and self-confidence in his abilities and success at work. Psychologists Henry Murray and David McClelland introduced the Acquired Needs Theory which posits that individuals obtain certain needs during their lifetime; specifically the needs for achievement, power and affiliation (Zimbardo, Johnson, & McCann, 2008). Individuals with a high need for achievement particularly seek jobs which have challenging goals and that which provide immediate feedback. If a manager finds himself working with such individuals, then the best way to boost their morale and consequently their work motivation is to conduct periodic evaluations to provide them information on how management views their performance. At the heart of the acceptance and perceived effectiveness of any performance evaluation system is the belief by managers and subordinates alike that is fair and equitable (Ivancevich, 2010; Randell, 1973). The Equity Theory supports this assumption with its argument that employees will be “motivated to achieve a goal only when they believe that will be rewarded equitably for doing so” (Jones, 2007, p. 219). In like manner, the Social Comparison theory in social psychology likewise proposes that satisfaction is “relative not only to our past experience but also to our comparison with others” (Lyubomirsky, 2001, as cited in Myers, 2005, p. 656). Thus, evaluating the work performance of employees within a particular job level must be perceived as fair by everyone in that job category as employees tend to compare their inputs and outputs with those like them. If employees view themselves as either being over- or under-evaluated relative to others within the same job category, they will tend to hold back certain effort. Naturally, employees who feel less valued in the company will have a lower morale and self-confidence. Randell (1973) concurs that it will unfair for any individual to be rewarded based on his performance if no information is given about how the individual is doing or what he should be doing differently to be more effective in his performance. What gets measured and rewarded certainly drive behavior (Dreher & Dougherty, 2002; Ivancevich, 2010) so much so that the Goal-setting Theory recommends that work goals for employees must be established and that these should be used to evaluate their performance. This is the gist of how the popular Management by Objectives (MBO) works: employees and managers agree on a set or work goals that become their performance criterion in the evaluation period (Ivancevich, 2010). This theory suggests that goals serve to increase motivation and essentially job satisfaction in several ways, namely, it directs behaviors towards the achievement of the standards set for performance, it goads the worker to be persistent despite challenging situations, and it helps goal-setting become a personal habit which provides one a feeling of achievement and control over work situations (Jones, 2007). Care must be taken though in setting goals for the employee. To be successful, goals must specific, measurable, attainable, results-oriented and time-bound – in other words, smart. An additional characteristic of a goal is that it must be challenging, otherwise, it will cease to be motivating (Jones, 2007). The importance of providing feedback is also emphasized by the Job Characteristics Model of Work Motivation by Hackman and Oldham (as cited in Ivancevich, 2010). According to this model, one of the core job dimensions that lead to critical psychological states and personal and work outcomes is feedback. Feedback is defined as the degree to which an individual is provided information about the results of his performance of a task or of a job as a whole (Anderson, Ones, Sinangil, & Viswesvaran, 2001). Feedback results to the critical psychological state of the knowledge of actual results of work activities which is necessary in increasing motivation and satisfaction, and to the personal outcome of increased internal motivation and to other positive work outcomes such as lower employee turnover and absenteeism (Anderson, et. al., 2001). It may also be useful to know that certain personality types benefit more from performance appraisal mechanisms more than others. In a study that sought to find the relationship between individual differences in terms of personality and work motivation found that there are indeed some personality traits that respond more positively to feedback (Bipp, 2010). This study likewise referred to earlier studies that support the current findings. For instance, the traits Extraversion and Conscientiousness in the Big-Five factor model of Costa & McCrae (as cited in Bipp, 2010) is seen to make workers “react more favorably to rewards, reinforcement, or feedback” (Bipp, 2010, p. 29). The knowledge therefore of which employees will be more receptive to feedback based on their personality traits will help managers manage work performance, motivation and satisfaction. Despite criticisms from managers, company owners and even business experts about the evils and non-necessity of employee appraisal systems (Graber, Breisch & Breisch, 1992, as cited in Ivancevich, 2010; Randell, 1973), many human resource and other professionals still believe it is an “outstanding motivational technique” (Ivancevich, 2010, p. 251), and is as useful in managing employee performance as psychological test results are important to the employee selection process (Randell, 1973). As discussed in the foregoing, the importance of employee performance evaluation systems in boosting morale are backed by scores of researches and several theories that give credence to its value in organizations. Additionally, the following implications on the assessment of employee performance may just as be important as the theories behind how serve a particular function. These are the performance review where employees are rated in terms of their work performance; rewards review where evaluations are used to tie performance with rewards schemes as in incentive plans; potential review where appraisal results are used as basis for promotion (or demotion); and organization review where information on evaluation also serves as information about how the organization is doing – after all, the performance of an employee on the job is a result of the interaction of his skills, the way he is managed, and the facilities provided him at work. Randell proposes that for evaluation systems to serve their true purpose, which is of providing accurate feedback to the employee and to the organization regarding performance, the four procedures must be separated and the implementation of recommendations resulting from each system should be administered by the right person (e.g. the job of implementing findings from a rewards review must be done by the rewards administrator). Another critical issue in the administration of performance systems and this was already mentioned earlier in this paper is that the company must acknowledge that any employee’s performance is affected by his motivation, ability, and work systems in place in the company. This means that in reviewing performance, managers must take into consideration other factors outside of the employee’s control that may hinder him from achieving optimum job outcomes (Ivancevich, 2010). For example, if a clerk is expected to process twenty online claim forms in an hour but the speed of his computer can only handle ten an hour at most, then the reason for his failure to meet the set criteria may not be due to his lack of skills but to the inferior equipment he has to work with. This implication relates to the Expectancy Theory of motivation which posits that in order to motivate employees to tie their efforts with their performance, they need to believe that “nothing in the work situation, outside their control, will prevent their hard work from resulting to superior performance” (Jones, 2007, p. 213). If employees start thinking that their best efforts at work will be put to waste because of the lack of management or organizational support, chances are they will only put in minimum efforts resulting to poor performance. Another important consideration is that when employees are constantly rated low or failing, they may experience a “reverse motivation” (Ivancevich, 2010, p. 271) – that is, they will slow down and not strive to do better. It is therefore imperative that negative consequences resulting from poor performance evaluation results be arrested at the earliest time possible. It is not enough for management to say “Do your best the next time around.” As discussed in this paper, particularly on the Goal-Setting theory, employees will be motivated to achieve if they have clear goals to accomplish. Apart from this, management may help low performing employees achieve the new goals through training activities like mentoring, coaching, or formal schooling or he may be assigned to work on similar tasks from which he may learn from but which are not necessarily part of his job. If, despite all these efforts from the management the performance is still not up to par, then the deficient results may be indicative that there exists a poor job-person fit in the situation. Lastly, performance evaluation can be done in several ways. Although a formal appraisal system is desired, supervisors and managers can still give informal assessments when a formal system is not yet in place or whenever they feel like it is appropriate. A manager does not have to wait for the annual evaluation period to take place before he corrects an undesired behavior. He can do it immediately to avert further damage. In the same manner, if a supervisor notices that an employee is lagging behind the performance quota, he may inject the necessary intervention to prevent unwanted results. To help supervisors in reviewing the performance of their subordinates especially if the intervals between the past appraisal and the next are far apart, he may keep logs or diaries of their most significant observations of the latter’s work behavior or performance. No time like the present, as they say. In conclusion, performance evaluation systems are important tools of a wider performance management system. Their importance becomes more noticeable these days where a downturn in the economy affects everyone’s – especially those in the employment sector – morale negatively. Given the uncertainty of the times, people may start to fear and mistrust each other and their employers, increasing unhealthy competition and other undesirable job outcomes. Though obviously not all companies can assure their employees that their jobs and incomes will remain intact while they weather the economic storm, they can however keep the morale up and going through effective performance evaluation systems that point to what is positive about them and which assures them that they will be rewarded for good performance accordingly. References Anderson, N., Ones D., Sinangil, H.K., & Viswesvaran, C. (Eds.) (2001). Handbook of Industrial, Work, and Organizational Psychology (Vol. 2). London: Sage Publications. Retrieved October 15, 2007 from http://books.google.com.ph/books. Bipp, T. (2010). What do people want from their jobs? The big five, core self-evaluations and work motivation. International Journal of Selection and Assessment, 18 (1), 28-38. Retrieved August 9, 2011 from EBSCO Database. Dreher, G. and Dougherty, T. (2002). Human Resource Strategy: A Behavioral Perspective for the General Manager. Boston, Massachusetts: McGraw-Hill Irwin. 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