Measuring Employee Performance - Case Study Example

Performance Management Essay Name Professor Institution Course Date Measuring employee performance Introduction Performance in organization and the follow-on effectiveness and efficiency can just be realized when employees are consistently evaluated and measured. The failure of the organizations to incorporate effective performance measuring approach has hampered them from attaining competitive edge that they need more than in the past (Forth & McNabb 2008, p.106). Employee performance measurement is developed to evaluate individual’s work to the company. Islam and Rasad (2006, p.106) argued that individuals’ performance against company goals reflects whether the company is fulfilling its objectives. Some companies have failed to reach their goals because they do not understand how much every employee can contribute towards the set goals. Organizations ought to be given much attention as it forms the basis for organizational training. Liu et al., (2007, p.507) claimed that it is from performance measurement that the management will dig what affects employees and recommend for training. Based on the information, this essay discusses the topic “measuring employee performance”. To put this discussion into perspective, the essay will define what measuring employee performance is and review similarities and differences, strengths and weaknesses, and identify the gaps within the literature about the topic. Overview of employee performance Aguinis (2009, p.3) defined employee’s performance as the degree of input a member of an organization contributes towards the realization of organizational goals. In a nutshell, it is the effort the employee puts towards realizing the goals of the company. The effort could be excess of or below the expectation of the manager. Aguinis (2009, p.7) employees’ performance needs effective management to realize the desired results. Such management is done of the basis of establishing measurement system which comprise of indicators, tools and processes which are selected and best suit concrete circumstances and certain attributes of the organization. In addition, performance management which is of emphasis of contemporary organization and management practice and theory, majorly is based on staff as the pillars in building new input in form of products or services within the organization (Cokins 2005). Islam and Rasad (2006, p.169) contended that performance of an employee is normally complemented by McKinsey’s seven 7S model elements such as structure, systems, strategy, style, skills, shared values and staff. However, the performance ought to be measured as stated to ensure the company has the right employees to steer the company to achieve the desired goals. Similarly, the performance is required to understand why the company is performing or why it is failing and what should be done to improve employee’s performance (Obisi 2011, p.12). Therefore, employee’s performance is defined as the as a practice which entails purposeful stock-taking of the company’s success, which a staff has attained in performing tasks assigned in bid of fulfilling the set goals within a time frame. Employee performance appraisal measurement has been in practice for many years by some companies. Although performance measurement approach has been deliberated by several people, it is still concerned by some experts as an inseparable element of management practice (Islam & Rasad 2006). Literature Review Types of employees’ performance measuring systems As a practice which was on conducted once a year, employee performance measurement in many companies turned out to be a continuous practice which ensures employees comprehends organizational objectives and their endeavor towards realizing them are appraised (Obisi 2011, p.29). Performance measurement for managers and subordinates must be an on-going process to enable continuous improve of organization performance. There are several types of the employee performance measurement system including Behavioral checklist, 360-degree appraisal, Management by objective, psychological appraisals, Grading and Checklist, Paired Comparison, Balanced Scorecard, Straight Ranking and Unstructured Method. Smither, London and Reilly (2005, p.36) argued that the behavioral checklist methods were developed with an imagination that behavior varies based on the job type being assessed. The approach is regarded effective since the measurement is carried based on the employee’s performance devoid of comparisons. In this approach, the manager is observes the behavior of the employee and record the performance-oriented judgment concerning such behavior. The result of this employee’s measurement is that a wide range of job-related behaviors is generated. The manager then observes if the if every behavior is carried by the employee or the level to which every behavior attributes match those of employee being measured (Islam & Rasad 2006, p.171). 360-degree is another effective tool that depends on the feedback of other people such as the team member, supervisor, direct reports or the manager (Luthans & Peterson S 2003, p.246). In this mode of measurement, employee’s full profile is gathered and evaluated. Furthermore, in measuring the employee’s performance at work and the technical skills, a manager gathers more employees’ feedback. Another modern form of employee’s measurement is the management by objective. In this type of measurement, Obisi (2011, p.35) both the manager and staffs comes into agreement about set goals and a particular time frame to achieve them. When this method is used, the manager is able to define both success and failure. On the other hand, psychological employees’ performance measurement assesses the analytical skills, emotional stability and intellect of a staff (Smither, London & Reilly 2005). These factors normally influence people’s attitude to perform well at the organization hence this method helps the manager to put the staffs in suitable teams. Upon conclusion of the evaluation process, the rater has to discuss the feedbacks with the employee and the progress. Cokins (2005) opined that when all employees are assessed, the best or one with potential is rewarded using various means such as promotion, financial incentive, just encourage or a combination of all. Factors which influence employees’ performance The performance concept is researched by means of measurement of general performance. The concept was encouraged by the statement “if the manager cannot measure it, then he cannot manage it” highlights the basis for the organization and the need for performance measurement system mentioned earlier (Aguinis 2009, p. 45). Performance measurement criteria require to be explained clearly, unambiguous and related to the job tasks carried out by employees. In addition, the criteria ought not to comprise of factors which are beyond the employee’s control. Supervisors need training so as offer constructive, meaningful and regular feedback. Similarly, the employees need to be trained on how to beat the weakness during the performance measurement process. According to Forth and McNabb (2008, p.117) the employee performance measurement also requires concentrating on assessing the work performance and the behavior of the employees, and not their personality. Cokins (2005, p.76) contended that employees in organizations contribute for the performance and human resource practices can influence individual’s performance via their impact over the motivation and skill of the employees and by means organizational structures which enable staff to enhance how their tasks are carried out. In addition, Smither, London and Reilly (2005, p.48) used productivity and labor turnover when testing the effect of human resource management practices on the staff performance. Islam and Rasad (2006, p.169) defined labor turnover as the level to which a company losses or gains employees. Wall et al (2004, p.97) argued that the job security, job perceptions, compensation rate, existence of a employee’s union, job satisfaction and have strong effect on job performance. Job dissatisfaction has been cited by numerous researches of employee performance measurement as one of the strong cause for low performance (Liu et al 2007, p.507). Job dissatisfaction is resulted by conflicting job roles. For instance, when someone who is hired based on ICT roles is deployed to finance roles, he could find it hard to settle. In the process, the employee will feel dissatisfied because the new roles do not help him or her to develop their preferred career. Liu (2007, p.509) went ahead to state that dissatisfied employees cannot improve an organization performance based on long term goals. In addition, several results of job performance measurement have claimed that remuneration also play part in employee performance. Saari and Judge (2004, p.397) claimed that adequate salary motivates an employee because they are likely to feel valued by the organization hence may work hard to justify why they are paid as such. However, in organization where employees are inadequately paid, low morale for the job is likely to be observed. In such situation, employees only work for survival and not for the improvement of performance. Tomaževič, Seljak & Aristovnik (2014, p.212) stated that high employees turnover are likely to be witnessed because most of staff will gain experience and leave for better paying jobs. Employer-employee relationship is also a determining factor in employee’s performance according to studies conducted on employee performance appraisal. Equity theory hold that when employer treats employees unequally some employees are likely to feel less valued hence may not produce desired results (Mount, Ilies & Johnson 2006, p.599). High performing and successful companies bear a culture which supports employee involvement. Hence, staffs are willing to take part in, goal setting, problem solving and other decision-making which afterward lead to high level of employee performance. Therefore, employees require sufficient remuneration, relaxed working conditions and job security to reduce job satisfaction (Thompson & Phua 2012, p.280). The strength of this research is that it points out what leads to either high or low performance. In a nutshell, the rater has already known what to expect or can just guess why employees are not performing well. However, a research conducted by the Tomaževič, Seljak & Aristovnik (2014) has its limitation in that it does not mention various methods which can be used to measure employees’ performance. Even though, the manager can guess what is hindering employees’ performance, he or she needs to measure various factors to be sure of the problem in order to find lasting solution. A research conducted by Forth and McNabb (2008, p.110) argued that the traditional performance measurement systems like observation are normally subjective, political and simplistic. The subjectivity of such measurement often arises owing to the manager’s attitude and emotions at the time of measurement. The manager could have a bad attitude towards certain employee hence giving bad ratings in terms of performance (Forth & McNabb 2008, p.113). Instead of just criticizing traditional employee performance measurement, researcher has provided an alternative and recommended for the use of 360-degree measurement system (Forth & McNabb 2008, p.118). This method is advantageous in that and takes in both information every source; internal and external information from who the staff has interacted. In this context, internal parties consist of top management, supervisors, subordinates and co-workers from different departments within organization who mingle with the staff. On the contrary, external parties comprise of suppliers, clients, consultants and the community. In brief, anybody who poses information about the effort and service of the employee is allowed to contribute during the 360-degree assessment (Maylett 2009, p. 55). In a research conducted by Aguinis (2009) at the Carolina University on employees of has shown that the perception employee about fairness performance measurement systems is linked to satisfaction and trust with the supervisors. A company like Coca Cola uses 360-degree feedback as their performance management systems to gauge and reward employees (Smither, London & Reilly 2005, p.42). However, the corporation stated that its 360-degree feedback process of evaluation goes through three main phases including stating job roles to employees, appraising employees on the basis and the results are communicated to the employee. Luthans & Peterson 2003, p.246) posited that the person evaluating an employee has to ensure that the staff is willing and has understood his or her responsibility upon which they will be appraised. Difference from the earlier reviewed literature is that Aguinis (2009) provided 360-degree assessment but did compare it with other modern systems of measurement such as management by objective, psychological appraisals, Grading and Checklist, Paired Comparison, Straight Ranking and Unstructured Method. However, the literature did not escape limitations. The research conducted by Aguinis (2009) was done through survey process and only concentrates on one institution as sample population hence may not represent performance of other employees from other universities. Conclusion and recommendation The essay has established that Performance measurement is one of the most indispensable and significant tool for any organization, for the as information presented by it is helpful in employees training and making decisions concerning different personnel factors like rewards. However, some companies have continued to use traditional even as the business environment change and new practices are being brought in place. Based on the failure and success of other companies with performance measurement systems, this essay provides various recommendations which the modern companies can adopt. Modern systems of employees’ performance measurements The essay has found out the traditional employees’ performance measurements system are often biased based on emotions, attitude and employees fake of behaviors. Therefore, the essay recommends for effective systems such as 360-degree assessment, psychological appraisals Paired Comparison, Straight Ranking and Unstructured Method. Multiple employees’ performance measurements The research has established that the performance measurements differ on their effectiveness and what they measure. For this reason, the manager or the rater is recommended to use different systems of measurement to understand the capabilities and weakness of the employee towards attaining company goals. Communication Employee performance measurement just any other policy needs to be communicated to the employees clearly. Communication ensure that employee understand the process. Similarly, stating that it is conducted on all employees remove the fear that some of the employees are victimized for the poor performance of the company. References Aguinis, H 2009, An expanded view of performance management, In J. W. Smither & M. London (Eds.), Performance management: Putting research into practice, San Francisco, Wiley. 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, pp2-97 Cokins, G 2005, Performance Management - Integrating Strategy Execution, Methodologies, Risk, and Analytics, John Wiley & Sons, Inc Forth, J & McNabb, R 2008, ‘Workplace performance: a comparison of subjective and objective measures in the 2004 Workplace Employment Relations Survey’, Industrial Relations Journal, 39, pp. 104-123. Islam, R & Rasad, S. M 2006, ‘Employee Performance Evaluation by the AHP’, Asia Pacific Management Review, pp.163-176 Liu, Y, Combs, J. G, Ketchen, D. J & Ireland, R. D 2007, ‘The value of human resource management for organizational performance’, Business Horizons, Vol. 50, No.6, p. 503—511. Luthans F & Peterson S 2003, ‘360- Degree feedback with systematic coaching: Empirical Analysis suggests a winning combination’, Human Resource Management, Vol. 42, No.3, pp. 243-256 Maylett, T 2009, 360-Degree Feedback Revisited: The transition from development to appraisal, Compensation and Benefits Review, Vol.41, No.5, pp.52–59 Mount, M, Ilies, R & Johnson, E 2006, Relationship of personality traits and counterproductive work behaviors: The mediating effects of job satisfaction, Personnel Psychology 59, 591–622. Saari, L. M & Judge, T. A 2004, Employee attitudes and job satisfaction, Human Resource Management , Vol.43, 395–407 Smither, J.W, London, M & Reilly, R.R 2005, Does performance improve following multisource feedback? 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