Managerial decision making process - Essay Example

?Running Heading: Managerial Decision Making Process Managerial Decision Making Process CRITERIA for performance appraisal of an individual Performance evaluation is an important task in any organization because by evaluating the performance the productivity level of an individual is measured. Promotion, salary packages, increment in compensation and growth of the individual are also based on the performance evaluation therefore organization must ensure that they have proper performance evaluation method that considers important characteristics and traits of the individual so that right candidate is promoted and get his reward of hard work. Also by promoting the right individual, his motivation level would also increase thus it would further increase the productivity. There are different factors that an organization use to evaluate the performance of an individual however the following criterion are the most common considered by organization to evaluate the performance of an individual Knowledge of the individual Expertise in the field Productivity level Performance Tasks completed by the individual Completion of work within the deadline Skills to work as a team player These are the most common factors that are considered in evaluating the performance of an individual, but the criteria may vary from one organization to another. Main concerns with the given company’s current evaluation form The main problems with the existing company’s evaluation form and method are as follows: In evaluating performance, the behavior of an individual with his co-workers and supervisors is highly considered. The extent to which an individual keeps his desk or office clean is considered an important aspect. Task completed on time is not considered as an important characteristic to evaluate the performance of the individual. The knowledge and abilities of an individual are ignored. Most Commonly-Used Sets Of Criteria Which Should Be Evaluated In A Performance Evaluation There are several commonly used sets of criteria used in order to evaluate the performance of an individual and these criteria are as follows: Performance of the individual Goals and targets achieved by the individual Efforts put in by the individual Productivity of the individual Ambitions Leadership qualities Motivation level Technical skills and knowledge Team work and team player Advantage of using same performance evaluation method One of the main advantages of using one performance evaluation method for every employee is that it evaluates the performance of different employees in the organization using same criteria therefore it is easy to identify the performance level of different individuals and thus it becomes easier for the management to analyze and reward them and promote them. RELATIVE VALUE OF THE COMMONLY-USED SETS OF EVALUATION CRITERIA already IDENTIFIED There are drastic differences in the criteria used by the company and the criteria that are most commonly used in organizations around the world. The existing system of the organization focuses more on the behavior of the performance, rather than the contribution of the individual towards organization goals and objectives. Organizations around the world focus on the productivity and performance of the individual, whereas this company focuses on relationship with co-workers and managers. Result indexes, such as turnover, quantity and quality of work produced by the employee, are also used for appraisal purposes around the world, which are ignored by the company. Advantages Of Including Supervisors, Peers, And Subordinates In The Evaluation Process Most of the people in the organization review the employee’s performance than just their immediate supervisor. The 360-degree feedback evaluation allows the employer to understand what the performance of the employees is and how the supervisors, peers, subordinates and the external customers viewed the employee’s performance. This evaluation technique provides feedback from all levels of the organization. An organization believes that evaluation from all levels of the organization would be helpful in providing a better and more accurate evaluation of the individual’s performance. 360-degree feedback helps not only in personal development but also it is useful in developing career development goals. It helps in understanding of organizational and personal development needs. From the organizational perspective, customer satisfaction level can be improved when feedback from customers are taken and then considered as important. When employees know that feedback from customers is used to evaluate their performance, they tend to ensure that customers are satisfied. 360-degree feedback also provides detailed information about organizational training needs in the area of employee’s development. It helps in developing the goals and plans of the organization for future growth. It increases the creditability of the performance appraisal system as employees get feedback from all the directions, not only from supervisor but also from the personnel working with them (Mohrman, Allan, Susan, & Lawler, 1989). Disadvantages of including supervisors, peers, and subordinates in the evaluation process Although there are many advantages of 360-degree feedback with the inclusion of supervisor, peers and subordinates in evaluation process, but it has also some disadvantages. 360-degree feedback is regarded as more time consuming process. The giving and receiving feedbacks requires special training of everyone who is involved in the feedback process. Therefore, the organization must invest time in training in order to get this system successful. Since this evaluation system takes time, it will depend upon the organization to show commitment till the end and revise the evaluation until it becomes a quality product for all personnel. The other disadvantage of this technique is that there is no such way to ask for clarification about the particular rating or something that is unclear. If the evaluation system is not designed according to the organizational strategic goals, it will fail to improve the organization and to achieve its targets. The evaluation system can create confusion if it cannot be implemented or completed without care. Common performance evaluation methods used to analyze performance data after it has been gathered Different rating methods are used to judge the data collected from performance evaluation and these are: Graphic Rating Scale: Graphic rating scale method is used to evaluate an employee’s particular trait, behavior or performance. It is one of the most common methods of performance appraisal. 360-degree appraisal: in this performance evaluation technique feedback about the employee is taken from everyone including internal sources like subordinates, managers, supervisors, and external sources like customers, suppliers, stakeholders etc. Global Rating Essay Method BARS (Behavioral Anchored Rating Scales) Management by Objectives: Management by objectives is a managerial practice where managers and subordinates jointly plan, organize, control, communicate and debate the subordinate’s job and performance. Comparing different methods 360 degree feedback is a time consuming method in comparison to MBO. In order to gain an assessment of an individual, 360 degree requires feedback from different people. Graphical rating scale methods can be completed much quickly in comparison to the various interviews required for the 360 degree feedback. This method is quite scientific. However, this method evaluates an individual performance on different job behaviors. The disadvantage of using 360 degree is that not everyone involved in the performance evaluation are aware of how to evaluate the performance and thus it can distort the overall performance evaluation of the individual. Biases and/or errors that frequently impact the accuracy of performance evaluations Many people in the organization commit mistakes while evaluating the performance of an individual. Biases and judgment errors may ruin the performance appraisal process. The most common errors that occur are as follows: Halo Effect The individual’s performance is completely appraised on the basis of perceived positive quality or feature of the individual. In simple words, individual’s performance is evaluated uniformly high or low in any of the traits in which the individual is extra-ordinary. Horn Effect Individual’s performance is evaluated totally on the basis of a negative quality. This will result in overall lower rating of that employee. Central Tendency Most appraisals rate performance of the individual as average that is neither high nor low, following the middle path. Personal Biases Performance raters rate employees according to their personal relationship with them. It has a tremendous effect on the rating of their performance (Carroll, & Schneier, 1982). appropriate tools and techniques that can be used to improve performance evaluations in the given situation It is essential to start evaluating the performance of the individual from the time when he starts his job in order to be an effective manager and evaluate the differences in his productivity level. Employees must be given a regular feedback on their performance for encouragement and motivation. It will also help them in knowing what they are doing right and what they need to improve (Wiese, & Buckley, 1998). MBOs should be reviewed to track the progress of the employees. RECOMMENdation It is important for the firm to have a consistent method for evaluating the performance of employees and therefore it is important that the company evaluates the performance of employees by one consistent method. MBO could be the one method which can be adapted as it considers the achievements of the individual rather than his traits. References Carroll, J., & Schneier, C. (1982). Performance Appraisal and Review Systems. IL: Scott, Foresman and Company. Mohrman, J., Allan, M., Susan, M., & Lawler, E. (1989). Designing Performance Appraisal Systems. San Francisco: Jossey-Bass Publishers. Wiese, S., & Buckley, M. (1998). The evolution of the performance appraisal process. Journal of Management History, 4(3), 233 – 249. Read More