Improving Business Psychology - Essay Example

Business Psychology Introduction While a lot of research has been carried out in terms of how performance evaluations should be conducted and how performance evaluation results should be acted upon, a person would seldom come across research done on the combined negative as well as positive effects of a performance evaluation for the individuals working for the company. Human resource management is a large part of business psychology and the effect of individual performance reviews can become a significant issue for an organisation which does not completely understand their effects. The case at hand involves a large company engaged in the sales business which is offering research opportunities that allow their sales staff to be more productive. One of the better ways to take this opportunity is to use an experimental approach which will allow the company to analyse the effects of performance reviews exactly as they are conducted within their setup. While the company could use research done on companies like GE or any other large organisation, it would not be exactly suitable for them and would offer little more than general guidelines. The actual conduct of the experiment is explained further onwards in the paper but the overview can be given as a set of surveys. The first survey which obtains the opinions and feelings of the employees would be conducted one week before the performance reviews and the second survey would be conducted one week after the employees have had their performance reviews. At the same time, continual monitoring of employee performance levels would let us understand how performance reviews in the company affect anxiety levels, stress levels and employee performance. Benefits to the Company There are two significant benefits to the company which are expected from this experiment. The first and primary benefit is expert support and knowledgeable consultancy regarding their performance evaluations and the secondary benefit is the accurate analysis concerning the negative or positive effects of performance reviews on salespersons. The time spent on performance reviews is a major investment which must be undertaken quite frequently as many companies have performance reviews every six months if not every quarter. Therefore, it would be wasteful to invest in the process time and again without understanding the effects of the process on the employees. Benefits of Performance Reviews Writing in the American Business Association Journal, Neil (2004) reports that the primary purpose of performance appraisals is not to seek out the people who are underperforming in the company, rather, the purpose of the appraisal is to seek out top performers. She discusses the case of Shaw Pittman, which is a law firm made up of more than four hundred lawyers working in Washington D.C. and the law firm uses performance evaluations to spot future partners. This idea would certainly be useful for our company since performance evaluations in sales related posts could lead to anxiety and stress. If the employees are also informed about how performance reviews can give them a roadmap to how they can move to higher posts, instead of looking at performance reviews with fear and dread, employees might start looking at them as chances to show what they can do for the company in higher positions (Kerr, 1996). This could be a great way to promote the survey as well as the performance evaluations. What the sales company can gain from this idea is the fact that a performance review is not a manager vs. employee meeting. Rather, it is a cooperative process in which both parties look at performance in the past and judge what path need to take in order to facilitate the growth of the company as well as the individual. Even if the company or the organisation is engaged in non-profit related sales, it does not mean that it can afford to ignore business practices or the growth of its employees since stagnation would lead to lowered employee morale and reduce the output of the individual. In fact, in some forward looking companies the evaluation process goes in both directions since managers get to evaluate their employees and employees get to evaluate their managers as well as the work environment. Some Companies even ask the employees to judge themselves, on the same form that their managers use, to make sure both can have their say on the review. Soliciting feedback from the people who make up the company let mangers know what they are doing wrong and what they are doing right. There is clearly no shame in being wrong but it would be a shame if employee feedback is not used to correct and enhance the processes followed at the company (Neil, 2004). There are three more psychological and business related benefits which come from using a performance review and they are: Improved communications between the management and the employees Justified individual salary and commissions based on merit as well as the performance of individual employees Creation of a standard process by which every person within the company can be fairly compared to others These benefits were highlighted by Neil (2004) who also suggested that the review process allows the company to improve itself as well since individual employees can bring forward any issues or complaints they have about their work environment or the tools they have been given to work with. A frank exchange of ideas between the managers and the employees would certainly help finding out what the company needs to provide to its employees and may even lead to improvements in the processes followed at the company. Understanding Employee Reactions Psychologically speaking, an employee can have many different reactions to upcoming performance reviews. Certainly some individuals would treat them with dread and fear thinking that their performance might not be as good as they would hope it to be. On the other hand, some might even look forward to a performance review in the hopes that they will get an increased salary and additional benefits for themselves. Finally a third group may be totally indifferent to such an exercise and consider it a waste of time. Grote, who discusses ranking employees into A, B and C categories depending on their individual performance, reports that “The A’s all think they’re B’s, the B’s are scared they’ll be ranked as C’s, and all the C’s are confident that they’re unquestionably A players." (Grote, 2002, Pg. 45) To avoid this situation and any ambiguity in the process, employees should be deeply involved in the entire performance evaluation method during and after the analysis. Company members will feel less nervous about the performance appraisal meeting if they know management would be ready to take their views into consideration. During the process, it can be useful to have employees complete a self appraisal document before the discussion with their seniors to see what they think about their own performance (Domeyer, 2005). It will also show the employees that management cares about their perspective on things and could also be reminded of some of the accomplishments of the employee which were missed by the superiors. The Approach The approach suggested by Domeyer (2005) is quite useful but in the case of our company we would need to modify it a little and announce employee performance evaluations a month in advance. If employees are made a part of the process then a lot of the risk associated with anxiety and stress over the evaluations can be mitigated but it can be expected that some stress levels would still be seen in the behaviour of the employees. To judge the level of stress and their individual reactions to the announcement, an employee survey would need to be conducted. The First Survey Attitude surveys for the employees are a relatively recent idea in terms of business management history but it is an important idea since more than two thirds of all companies survey their employees (Bracken & Paul, 1995). Significant research has been done on conducting employee surveys since much of the research in the field of organizational behaviour and business psychology depends on employee surveys. For our purposes, the survey will need to be geared to find out the attitude the employees have towards performance reviews and to know what they expect from the review itself. The survey will need to be well worded and produced by an expert in the field so that the questions do not suggest ‘correct’ answers or the right option. Once the survey has been conducted, an independent consultant should compile the results and let the managers of the company know how they can prioritize their action plans depending on the answers they get (Garron, 2001). Since the attitude survey is much more formalized than the grapevine or discussions around the water cooler, it gives the company all the employees’ opinions on the evaluations and performance reviews even from those who may not be as talkative or vocal as their counterparts. The Second Survey The second survey would be conducted soon after the performance evaluations results have been made known to the employees and it would be used to judge their reactions to the results (Bracken & Paul, 1995). By conducting the first survey the company has let the employees know that their input in valuable to the company and if the hopes of the employees were not met after the first survey, it can be expected that there would be a very negative response to the second survey. However, the consultants will need results from both surveys to compare how employees react to coming performance reviews and what effect it has on their stress levels and employee morale. It can also be reasonably expected that those who benefited personally from a performance review will have a higher morale level after the event than those who did not gain any direct benefits. On the other hand, those who came out on the bottom might even have lowered morale levels than others. Monitoring Throughout the process of surveying the employees and helping out with the performance evaluations, the consultants should continually monitor employee performance levels and output. There are hundreds of factors which can be evaluated and monitored ranging from an individual’s daily sales levels to the time they come in to the office but whatever data can be obtained without hindering the work process should be captured. If an external consultant is used to conduct the survey as suggested by Garron (2001) a company will gain the advantage of complete confidentiality and the ability to compare their results to the industry averages. Moreover, the consultant will be able to provide an outside view to the questions that should be in the survey. The mixing of outside and inside viewpoints would allow the survey to cover points such as satisfaction with the survey process, level of performance review depth, relevance of rewards based on high performance and how the employees understand the vision of the company and their part in the performance review (HR-Survey, 2005). Results compilation A performance review coupled with surveys about the review would lead to the reasonable expectations of the employees that they might see some changes or some of their ideas to be implemented across the company (Bracken & Paul, 1995). Therefore, as the results are being compiled for the management, the consultants should also create recommendations about what needs to be done regarding the review process to make it better. From the compilation of the results, the company can be given anonymous feedback regarding employees’ reaction to surveys and evaluations. For instance, the company can find out how their top performers reacted to the news of the evaluations and how their bottom performers reacted. The company can also understand how output and productivity levels were affected with performance evaluations and how they can maintain high productivity without letting evaluations become a hindrance to work. The Consultants With a background in business psychology, I would certainly be useful in managing the entire process and act as a communicator between the consulting team, the management of the company and the employees who wish to be assured of their anonymity or secrecy of their records. At the same time, I could manage the consultants and help them with the process of creating surveys or if they need any assistance in creating the correct system performance reviews. The team which I would need to conduct the research for the company is described below The first consultant would have to an expert on the process of conducting employee surveys and getting the real meaning of the results of the surveys. Experienced persons in this field are not hard to come by since many consultancy firms already offer their services for exactly this purpose. However, the consultant selected must also be a good analyst as well as a survey producer of exceptionally high quality. The second consultant required should be an expert on performance reviews and know exactly how the strategic objectives of the company can be fulfilled by having the right people at the right place (Neo et. al. 2000). A performance review can cover many things which let a company know how an employee is providing value to the company but the company need to invest in the right people who can only be gathered once this expert consultant has identified them with his/her performance reviews. Finally, the last consultant would need to establish the value for the survey as well as the performance evaluations since everything which a company invests in comes with a cost of time and money. Overall, in all the consultants selected for the research one would have to look for good communication skills, excellent writing skills and the ability to negotiate between research value and the benefits for the company. Word Count: 2,433 Works Cited Neil, M. 2004, ‘The Value of Evaluations’, American Business Association Journal, vol. 90, no. 12, pp. 56-57. Domeyer, D. 2005, ‘Planning for Performance Reviews’, Women in Business, vol. 57, no. 2, pp. 24-25. Grote, D. 2002. ‘Forced Ranking: Behind the Scenes’, Across the Board, vol. 39, no. 6, pp. 40-46. Bracken, D. & Paul, K. (1995). Everything You Always Wanted To Know About Employee Surveys. Training & Development. 49(1), 45-50. Garron, R. (2001). Seek employee feedback. Infoworld, 23(4), 63-66. HR-Survey. (2005). What is an Employee Attitude Survey? Retrieved February 15, 2006 from HR-Survey.com website: http://www.hr-survey.com/EmployeeAttitude.htm Kerr, S. 1996. ‘Risky business: The new pay game’, Fortune, vol. 134, no. 2, pp. 94-97. Neo, R.A., Hollenbeck J., Gerhat, B. and Wright, P. 2000, Human Resource Management: Gaining a Competitive Advantage, 3rd Ed, McGraw-Hill. Read More