Performance Appraisal Systems - Essay Example

Performance Appraisal Systems Performance Appraisal Before going into the discussion regarding appraisal systems and measurement of their effectiveness, let us get a better understanding of what performance appraisal system actually is. Performance appraisal system is a continuous process of identifying, measuring, and developing the performance of employees and aligning their performance with the strategic goals of the organization (Aguinis, 2009). Without an effective appraisal system in implementation, it becomes very difficult for the organizations to achieve the desired goals and objectives. Mehmood (2009) asserts, “Performance appraisal is the step where the management finds out how effective it has been in hiring and placing employees”. Managers apply the most suitable appraisal methods in order to assess and evaluate the performance of employees. Performance management is all about sharing expectations (Mike, 2010). Appraisal systems not only monitor the performance of employees but also play a crucial role in selection of suitable employees for any specific task. Performance management is a whole working system that begins when a job is defined as needed and ends when an employee leaves the organization (Shahzad, 2010). 2. Common Objectives of Appraisals Two of the most common objectives of appraisal systems include developing and improving the skills of the employees and increasing the productivity of the organization through selecting best employees for high-value tasks. Plessis (2010) asserts, “The performance appraisal process is something that every business needs to do if they want to improve efficiency”. Performance appraisal plays a vital role in the success of any company or organization because it supports the management in taking various critical decisions. Bacal (1999, p.34) asserts, “The performance appraisal process involves manager and employee working together to assess the progress that the employee has made towards the goals set in performance planning”. Employee performance appraisal is done once or twice a year (Chandler, 2005). Effective performance appraisal systems improve employee loyalty, morale, and general productivity (Ndunuju, 2009). An appropriate performance appraisal not only makes the employees aware of their deficiencies but also helps them improve the required skills and knowledge. The four major components included in the performance appraisal system are senior management’s support, design of the system’s procedures, system implementation, and management training (Grote, 1996, p.189). 3. Performance Appraisal Methods There exist many performance appraisal methods, which prove to be very helpful not only for the employees but also for the organizations. Employees improve their job efficiency by analyzing their own performance reviews, which results in increasing the organizational efficiency and productivity (Grintt, 1993, pp.3-17). Let us discuss some of the widely used appraisal methods in detail: 3.1 Critical Incident Method In the critical incident method, managers of the organizations analyze the behavior of the employees and record all negative and positive aspects of their behaviors. Then based on the analysis of their behaviors, the managers and the supervisors identify the strong and weak points of the employees. Ngo (2010) asserts, “The manager maintains logs on each employee, whereby he periodically records critical incidents of the workers behavior”. These recorded incidents are used to evaluate the performance of the employees. 3.1.1 Strengths of Critical Incident Method An advantage of using critical incident method is that the managers can have a constant look at the behavior of the employees and they can record all of their activities in a file, and based on the detailed information, the managers can purposefully evaluate the performance of the employees in an effective way. Employees can also improve their performances by watching their own logs. 3.1.2 Weaknesses of Critical Incident Method One of the main weaknesses is that critical incident method is applied to evaluate the performance of superiors rather than evaluating the performance of peers of the subordinates. Another weak point is that negative aspects of employees’ behaviors are more noticed by the managers as compared to positive aspects of employees’ behavior. 3.2 Weighted Checklist Method In this performance appraisal method, manager makes a checklist that includes the descriptive statements regarding the positive and negative behaviors of employees. The checklist is created for every job title. The manager marks those statements which he believes to be present in any specific employee. 3.2.1 Strengths of Weighted Checklist Method This method is useful as the managers not only evaluate the performance of the employees but also make use of the checklist for the selection of the most suitable employee for any specific position. 3.2.2 Weaknesses of Weighted Checklist Method Two of the major weaknesses regarding weighted checklist method include probability of assigning biased weights to the questions included in the checklist and difficulty in analyzing the marked statements about an employee’s behavior and activities. 3.3 Paired Comparison Analysis In the paired comparison analysis, some reasonable options are written down on a form, and all options that are included in the form are compared with all other options present in the form. The managers evaluate the options and convert the evaluated score into percentile score. After evaluation of the scores, the option with the highest score is selected. 3.3.1 Strengths of Paired Comparison Analysis One of the advantages of paired comparison analysis include better comparison of employees. Another advantage is that it is useful even if the objective data is not available. Ngo (2009) asserts, “It is particularly useful where you do not have objective data to base this on”. 3.3.2 Weaknesses of Paired Comparison Analysis The major weakness in paired comparison analysis is that the ratings are often based on opinions instead of the facts. The personal opinion regarding an option may not be correct which may result in assigning inaccurate score to an option. 3.4 Confidential Report This form of appraisal is mostly used in the government sector. The employees’ supervisor prepares a descriptive report at the end of a year that shows the strong and weak points of the employees. The report is generally not shown to the employees. In addition, no feedback regarding the report is offered to the employees. 3.4.1 Strengths of Confidential Report One of the advantages of confidential report is that employees tend to work hard in order to come in the good books of the supervisor. As there is no set criterion for the performance assessment, employees try to impress their supervisor by effectively fulfilling the job responsibilities. 3.4.2 Weaknesses of Confidential Report The weak points associated with the confidential reports are that no feedback is offered to the employees, employees do not know the reason for decreased ratings, and employees are not aware of the criteria for assessment. 3.5 Behaviorally Anchored Rating Scale This method also includes some techniques of rating system and critical incident method. Critical incidents define the anchor statements whereas ratings show some specific performance dimensions. The steps involved in this method include collection of critical incidents, identification of performance dimensions, incidents’ reclassification, assigning values to the critical incidents, and production of result. 3.5.1 Strengths of Behaviorally Anchored Rating Scale One of the main advantages of behaviorally anchored rating scale is that it is widely accepted not only by the employers but also by the employees. It also supports the employees in improving their skills because it clearly reports the characteristics and performance of each employee. 3.5.2 Weakness of Behaviorally Anchored Rating Scale Disadvantages of behaviorally anchored rating scale include no clear superiority in achieving psychometric soundness, behaviors used are not result-oriented, and no clear advantage over traditional methods for performance appraisal. 3.6 360-Degree Performance Appraisal 360-degree performance appraisal is one of the widely used appraisal methods in which there are many sources of feedback. These sources include all those persons who have some form of contact with the employee on job. Other sources of feedback include managers, colleagues, and subordinates of the employee. Burlacu (2010) asserts, “This method is considered a human resources device to analyze a companys human potential”. The main components of this method include employee, team members, manager, and the subordinates. 360-degree appraisal measures the behaviors, characteristics, skills and abilities, and working attitude of the employees. 3.6.1 Effectiveness of 360-Degree Performance Appraisal 360-Degree Performance Appraisal is effective for the managers because it allows them to evaluate their management styles. “It gives managers and individuals better information about skills and performance, and working relationships” (Jane, 2009). It is also beneficial for the employees as it gives them a chance to show their strengths and weaknesses regarding accomplishment of the job responsibilities. This method not only provides complete assessment of individual performances but also provides a multifaceted view from various sources. Kumar (2006) asserts, “360-degree feedback increases the teams ability to contribute to the organizations goals develop better bottom line through boosting the capability of the organization to meet its objectives”. 4. Conclusion Summing it up, performance appraisal is one of the most important success factors for any organization. The appraisal systems play a significant role in improving the performance of the employees. It not only results in increasing the efficiency and performance of employees but also helps the management in achieving organizational goals and objectives. It is the responsibility of the managers to design an appropriate appraisal system for their organizations because correctly designed and implemented performance appraisal systems not only force the employees to think about their actual job responsibilities but also enable them to make required improvements in their performances. References Aguinis, H., 2009. Performance Management. 2nd ed. Upper Saddle River, NJ: Pearson Prentice Hall. Bacal, R., 1999. Performance Management. New York: The McGraw-Hill Companies, Inc. Burlacu, A 2010, 360 Degree Performance Appraisal - Major Controversies, viewed 30 July 2010, . Chandler, R 2005, What Makes a Good Performance Appraisal?, viewed 30 July 2010, . Grint, K., 1993. What’s wrong with performance appraisals? A critique and a suggestion. Human Resource Management Journal, 3(3) pp.3-17 Grote, R., 1996. The Complete Guide to Performance Appraisal. New York: AMACOM. Jane, C 2009, 360 feedback, viewed 30 July 2010, Kumar, D 2006, 360 Degree-performance Appraisals: Prospects and Pitfalls, viewed 30 July 2010, . Mehmood, M 2009, Employee’s Performance Appraisal, viewed 30 July 2010, . Mike, C 2010, Performance Management: An Overview, viewed 30 July 2010, . Ndunuju, A 2009, What is Performance Appraisal?, viewed 30 July 2010, . Ngo, D 2010, Critical Incident Method of Performance Appraisal, viewed 30 July 2010, . Ngo, D 2009, Paired Comparison Analysis, viewed 30 July 2010, . Plessis, D 2010, 3 Important Aspects of Performance Appraisals, viewed 30 July 2010, . Shahzad, F 2010, How to Develop a Simple and Concise Performance Appraisal Form!, viewed 30 July 2010, . Read More