The Ways to Improve Performance Appraisal Techniques - Case Study Example

Performance appraisal Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Contents Contents 2 1.0 Introduction 3 1.1 Aim 3 1.2 Scope 3 1.3 Background 3 2.0 Body 5 2.1 Literature review 5 2.1.1 Purposes of performance appraisal 5 2.1.2 Ways to improve the performance appraisal techniques 10 2.1.3 General performance appraisal form 13 3.0 Conclusion 14 References 14 Performance appraisal 1.0 Introduction 1.1 Aim This paper aims at analyzing the purposes of performance appraisal at Westpac banking corporation. In addition, a general performance appraisal form that will incorporate the findings in this paper will be constructed in a latter section of this discourse. 1.2 Scope This paper will start with a literature review of the purposes of performance appraisal in a firm according to various scholars but with special reference to Westpac Banking Corporation. This will be succeeded by ways through which this institution can improve its performance appraisal techniques and then a conclusion will developed on the same. Lastly, general performance appraisal form that incorporates the findings in this paper will be constructed in the final section of this paper. 1.3 Background The definition of performance appraisal has often been cited as being elusive as different scholars have forwarded diverse definitions of this concept. Nonetheless, it is fundamental to comprehensively understand what performance appraisal entails in order to lay a robust foundation in capturing what this concept is all about as well as its purposes at the organizational level. Obisi (2011, p. 93) defined performance appraisal as a process which entails the deliberate/ purposeful stock taking which details the success at both the individual and the organizational level in the achievement of the set objectives or goals over a given period of time. It thus details the success in performing the assigned tasks over this particular period of time. This definition supports the presumption that the practices underpinning performance appraisal are deliberate as opposed to being accidental in the firm. Therefore, this calls for profound and serious approach in gaining knowledge into the performance of an individual in undertaking his/her task(s). On the other hand, performance appraisal has been perceived as a formal program through which the employer communicates his/her expectations to the employees in regard to their performance and rating done based on how well they have met these specific expectations. This process has been cited as being central in supporting human resource decisions which includes but not limited to pay increased based on merit, promotions, training as well as termination of contract. Westpac Banking Corporation which has for a long time made monumental contribution on the wider banking industry in Australia has been undertaking its performance appraisal practices two times in a year. The purposes of this process at the organizational level are explored in the subsequent section. This has been founded on the bank’s long-term commitment to continue with quality service delivery to its customers as well as responsiveness to their dynamic demands. 2.0 Body 2.1 Literature review This section will outline the purposes of performance appraisal at Westpac Banking Corporation as well as the ways in which this banking institution can improve its performance appraisal techniques. 2.1.1 Purposes of performance appraisal Various reasons have been forwarded as being behind this practice in different firms. Nonetheless, it is imperative to note that despite the nature, undertakings or locality of an organization, performance appraisal plays some generic roles which cut across or institutions at the global level. Firstly, Dargham (2008, p. 4) cited that the management structures of various institutions conduct appraisals aimed at influencing the behavior of the employees through a well-defined feedback process. In this regard, the practice of timely performance appraisal has been perceived as being integral in letting the employee understand where he/she stands in relation to the set targets or achievement of organizational goals. At Westpac Banking Corporation, performance appraisal and development planning is undertaken two times in a year and entails the review of the behavior of individuals as well as their achievements against the set targets (Westpac, 2002, p. 4). Thus, the feedback generated by the performance appraisal practices at Westpac Banking Corporation is central in positively impacting on the behavior of the employee based on where they stand in the efforts of attaining the set goals and objectives at the bank. This is mostly in a positive manner whereby the employees gain an understanding of their particular niche when they achievements are juxtaposed with the individual targets or at a wider scope, the overall objectives at the organizational level. It is also imperative to note that this process can be applicable in team work whereby the performance of the entire unit is assessed in meeting the set goals in a given timeframe. In this regard, the output of the group is evaluated with the sole aim of knowing where the group stands in attaining the set objectives, for instance, the quarterly assessment of the sales unit at Westpac Banking Corporation in attaining the sales targets. The feedback from this process will thus propel the members of this group towards better performance. Thus, in conducting feasible performance appraisal, the organizational management echelon at Westpac Banking Corporation is able to impact on the behavior of the employee through a well-defined feedback process. Secondly, performance appraisal has been cited as being fundamental in the identification of the strengths and weaknesses of the employees. In this regard, the managers and the employees in an organization are given an opportunity in engaging in collaborative efforts, working together towards enhancing the job-related behavior as addressing the identified loopholes (Field, 2000, p. 2). In this regard, the strengths as well as the weaknesses of different individuals are evaluated and the information generated therein triggers a synergy of approaches through a holistic approach by the management and employees towards maximizing on the strengths of different employees as well as minimizing the effects of their particular weaknesses. This is aimed at generating better performance at Westpac Banking Corporation. This is imperative when the organization is endowed with different future opportunities as well as being confronted by both internal and external threats. In this regard, the novel strengths of various individuals at Westpac Banking Corporation which are identified in the performance appraisal process can be central in job allocation when this future opportunity arises. Similarly, the identified individual weaknesses can be minimized in the efforts towards curtailing their detrimental impacts when an organization if confronted by diverse threats in its future operations, from instance, increased competition or market volatility. Thus, identification of strengths as well as weaknesses at Westpac Banking Corporation has been fundamental in the achievement of sustained competitive advantage of the firm through developing a formidable mechanism of embracing future opportunities as well as curtailing the effects of threats confronting the organization. According to Westpac (2002, p. 4), the performance appraisal process in the firm helps in the identification of the strengths and weaknesses at the individual level as well as building the preferred capabilities into the developmental plans in the firm. Thirdly, Obisi (2011, p. 94) perceived performance appraisal as being the most meaningful and requisite tool at the organizational level whereby the information it generates is immensely useful in the decision making process by the management in relation to different personnel aspects, for instance, promotions and remuneration increase. The above fact is supported by Field (2000, p. 1) who determined that performance appraisal produces information which forms the foundation of salary decisions in the firm based on the fact that remuneration ought to bear a considerable relationship with the performance of individuals in the organization. Burack, Elmer and Smith (1997, p. 19) also cited that through performance appraisal linking the decision making processes with information gathering, this provides an ideal platform for judging the overall performance of various personnel sub-divisions, for instance, training and compensation or recruiting selection. This, if there is availability of valid data on performance, there is a viable basis for accurate, timely, standardized as well as objective platform whereby the management can have a chance of maintaining consistency in compensation policies and the promotions of employees in the entire system. At Westpac Banking Corporation, this purpose of performance appraisal is evident whereby their remuneration philosophy is founded on providing pay increase, performance-linked rewards as well as other benefits which are integral in the efforts towards retaining core staff as well as aligning their financial interests with those of the stakeholders (Westpac, 2002, p. 4). Another purpose of performance appraisal is the identification of training needs in an organization (Obisi, 2011, p. 94). This purpose is particularly integral at Westpac banking corporations based on the diverse dynamics in the contemporary banking industry which has been prompted by increased market liberalization. Thus, this has not only resulted to increased competition but also changing of consumer demands in the banking sector (Bhatia, 2010, p. 21). Against this backdrop, a review of the employees performance culminated in a meeting of a group of staff from Westpac in 2002 aimed at exploring the dynamics in training needs of learning across the bank. Consequently, a new learning structure commonly referred to as the Westpac academy was instigated. This academy chiefly capitalizes on the specific learning preferences of the individual employees in the bank geared towards ensuring that all the employees in the firms enjoy active engagement in the overall efforts of developing their capacity and potential (Westpac, 2002, p. 3). In addition, the technological dynamics in the market have made Westpac make extensive efforts in embracing most recent technology. Thus, Westpac has been able to incorporate the latest technology in its operations which has been chief in offering dependable and accurate services. This effort has been spearheaded by a technology oriented group in Westpac whose sole responsibility is to develop and maintain reliable and flexible technology capabilities and strategies (Westpac Group, 2011, p. 6). Nonetheless, this has necessitated advanced training of the human resource on the adopted technology and this has been achieved through profound training needs identification after performance appraisal. Lastly, performance appraisal has been cited as having an indirect link to increased motivation of the employees in an organization. This is based on the fact that the overall improvement of the work being undertaken by an employee can only become manifest if he/she knows the current performance as well as what is expected of him/her. Moreover, the employee is bound to feel motivated towards better performance and commitment towards his/her job because of the feeling that the employer cares enough about the performance of this particular employee to openly talk about it with him/her and showing that there is high expectation for enhancement of the performance (Field, 2000, p. 1). At Westpac Banking Corporation, performance appraisal has been central in motivating the employees towards better performance, fostering their commitment as well as enhancing their productivity. This is whereby after the meeting in 2002 previously mentioned, there was an increase of the employees’ motivation and commitment by 5% to 65%, an overall 7% increase according to the measurements by International Survey Research (ISR) which is an independent worldwide firm which specializes in customized surveys on employee opinion and attitude (Westpac, 2002, p. 2). All the above are the purposes of performance appraisal at Westpac banking corporations although these functions of the process can be replicated in other firms outside the realms of banking in Australia. Nonetheless, there are some fundamental ways which can be used in improving the performance appraisal techniques in the case study firm. Some of these ways are analyzed in the subsequent section. 2.1.2 Ways to improve the performance appraisal techniques From the above discourse, it is apparent that performance appraisal plays a vital role in the operations of Westpac banking corporation, mostly in relation to human resource management practices in the firm. This fact is supported by Elverfeldt (2005, p. 5) who cited that formal performance appraisal has evolved into becoming a widespread tool of human resource management. However, there are some basic ways through which Westpac banking corporation can improve the performance appraisal techniques at the firm. Firstly, the participation of the employees in the planning of the performance appraisal process has been cited as being fundamental in the effectiveness of this process. This is based on the fact that this results in heightened ownership of the process by the employees which is key to its sustainability. This fact is supported by Levy and Williams (2004, p. 885) who determined that if the participants in the performance appraisal process fail to perceive the system as being fair and transparent, the sources as being plausible or the feedback as being accurate, then there is often a tendency to ignore and put the feedback that they receive into utility. Thus, Westpac Banking Corporation ought to make more efforts in cultivating the participation of the employees in the formulation and implementation of performance appraisal policies in the firm. This will be important in ensuring their willingness to participate in the process as well as using the feedback that they receive in enhancing their performance towards increased productivity, either as individuals or in group tasks. This will gradually improve the performance appraisal techniques in the firm. Secondly, the performance appraisal process ought to be perceived as a continuous activity rather than a practice that is twice-a year event. In this regard, there ought to be a greater tendency to discuss the actual performance of the employees against the performance expectations more often and regularly (Dargham, 2008, p. 17). Against this background, Westpac Banking Corporation ought to increase the frequency of undertaking performance appraisal in the firm. This will ensure that the employees are regularly made aware of their performance against the expected performance of the firm over a given period of time. In addition, the managers ought to discuss this performance with individual employees in order to search for the best approach in tackling any challenges that might be impeding the performance of the employees. In this way, there is a greater possibility of elevating the performance of the employees as opposed to when this is done just two times in every financial year. In a situation whereby it is only feasible to conduct formal performance appraisal only twice in a year, the employees in the bank ought to made aware about their performance periodically in the course of the year. This is integral in updating the employees on the dynamics in the market as well as keeping them focused to the larger objectives and goals at the organization through constant reminding. Thirdly, the managers ought to be regularly trained on the appraisal process which has been tailored to suit the novel requirements of the firm (Dargham, 2008, p. 17). This is mostly important when changes in techniques have been incorporated in the appraisal forms which require the managers to be well acquainted with these changes and communicate them to the employees in good time. This is important in familiarizing the employees on these changes as well as welcoming their input in fine-tuning the implementation of these changes. Lastly, the activities of setting the developmental targets and the performance expectation ought to be undertaken through a process of mutual agreement with the employees (Dargham, 2008, p. 17). Just like planning for the actual performance appraisal process, the performance expectations at Westpac Banking Corporation ought to be agreed upon by the management and the employees. This is important in setting of realistic and attainable performance targets in the firm. This is based on the fact that failure to develop attainable performance targets can be frustrating to the employees which can adversely affect their morale and eventual outcome in the job. Thus, Westpac Banking Corporation should make more efforts in incorporating the employees’ perspective while setting the performance expectations and developmental targets in the firm. 2.1.3 General performance appraisal form The following is an example of a general performance appraisal form which incorporates the findings in the preceding discourse which can be used in the performance appraisal process at Westpac Banking Corporation. Employee name…………………… Date………………………………… Major responsibilities of the employee (in approximate order of importance) 1. 2. 3. 4. 5. Performance factors Job understanding Reliability Organizational skills Communication skills Quality Constituent service skills Other professional skills Innovation Professionalism Teamwork and interpersonal skills Commitment and motivation Problem solving skills Computer skills Leadership and staff development Planning skills Rating Comments Overall rating Major training/developmental needs 1. 2. 3. Developmental resources Projections 3.0 Conclusion From the above discourse, it is apparent that performance appraisal is an integral process in performance management practices in a firm. At Westpac Banking Corporation, it has played a major role in influencing the behavior of the employees, increasing their motivation as well as aiding in the identification of training needs. Nonetheless, interventions like increased participation of the employees ought to be implemented to enhance the improvement of the performance appraisal techniques in the firm. References Bhatia, E., 2010, A Research Report on ‘Performance Appraisal’ in Banking Sector, Masters Thesis, Sikkim Manipal University. Burak, Elmer & Smith, 1997, Personnel Management: A Human Resource Systems Approach, Reinhold Publishing Corporations Ltd, New York. Dargham, N., 2008, Effective management of the performance appraisal process in Lebanon: An exploratory study, retrieved 18th September 2012 < http://www.fgm.usj.edu.lb/files/a12008.pdf>. Elverfeldt, AV., 2005, Performance appraisal – how to improve its effectiveness, University of Twente, Enschede. Field, L., 2000, Performance appraisal: It’s the intent that counts, retrieved 18th September 2012 < http://www.hr.com/en/communities/performance_management/performance-appraisal-its-the-intent-that-counts_eacu6hd2.html>. Levy, P. E. and Williams, J. R., 2004, ‘The social context of performance appraisal: A review and framework for the future’, Journal of Management. Vol. 30, no. 1, pp. 881–905. Obisi, C., 2011, ‘Employee performance appraisal and its implication for individual and organizational growth’, Australian Journal of Business and Management Research, Vol. 1, No. 9 , pp. 92-97. Westpac Group, 2011, Westpac Group Annual Report 2011, Westpac Group, Sydney. Westpac, 2002. ‘Employees’, retrieved 18th September 2012 < http://www.westpac.com.au/docs/pdf/aw/Employees03.pdf>. Read More