Performance Appraisal: a Critical Review

PERFORMANCE APPRAISAL A CRITICAL REVIEW Abstract Performance approximation is utilise in many organizations in order to assess the surgical process of their employees. But there argon some issues and problems that are associated with implementation judgment commode bear negative impacts on the exertion of employees and can make it useless. These issues and problems are absence of objective criteria, gender issues, raters bias, social and ethnic issues. And there are a posteriori rehunt evidences that are genuinely much consistent with the problems and issues I identified before.But performance appraisal should non be abandoned due to the problems mentioned above. Its can prove very effective if used by trained authenticators in a constructive manner using objective criteria against which the performance of the appraisee to be checked. It not only reviews the performance of an employee but also helps to identify dressing and breeding needs of the appraise. Introduction In organizations, there are some formal and unceremonial methods of performance assessment, and performance appraisal is one of the most widely used formal methods of the assessment of performance.Performance appraisal is also a valuable calamus of performance focus in organizations as CIPD describes thatPerformance appraisal is an distinguished part of performance management. In itself it is not performance management, but it is one of the plod of tools that can be used to manage performance (CIPD, 2008). CIPD (2008) describes that performance appraisal essentially provides an opportunity to the appraisees and appraiser to review and discuss, in a constructive manner, the performance of the appraisee and possible reasons and determinants of his or her bad performance in a one on one meeting.It also provides an opportunity to them to identify and set objectives regarding training and development for the future and to reach an agreement about the possible actions required getting those objectives and the support the soul or appraisee expects from the manager. If performance appraisal is conducted in a beautiful and constructive manner, then it can establish a positive relationship surrounded by the individuals and the line managers. Aims and objectives of performance appraisal on that point are some blow over aims and objectives for conducting performance appraisal in organizations, and these objectives are listed and described below 1. atomic number 53 purpose of conducting a performance appraisal is to exercise organizational control 2. The chief(prenominal) purpose of a performance appraisal system is to review the performance of individuals over a period of time 3. Performance appraisal is also aimed at finding out that the appraisee is productive or not. 4. One purpose of performance appraisal is to review the actual performance of an employee against the set objectives or desired standards. 5. some other important objective of conducting a perfor mance appraisal is to find training and development needs of the appraisee. 6. One purpose is to identify the type of support the appraisee expects from the management in order to meet those training and development needs. Key elements of performance appraisal CIPD (2008) has described avocation five key elements of performance appraisal 1. beat individuals performance is assessed against agreed standards and objectives. 2. Feedback the individual or appraisee is provided information on his performance and progress after the performance has been assessed. . Positive reinforcement the appraiser recognises the good performance and make constructive criticism about the aspects of performance where there is a need of improvement. 4. Exchange of views there is a dialogue between the appraiser and the appraisee about the outcomes of the assessment, and how appraisees can improve their performance, the support they need from their managers to achieve this and their aspirations for th eir future career. 5. Agreement an agreement is reached by all parties about what needs to be done to improve performance and issues are overcome. Problems with performance appraisalHaving described the definition, objectives, and the key elements of performance appraisal, we move on to problems or dilemmas with performance appraisal. Performance appraisal is considered a way or tool of motivation and enhancing morale and it is also assumed that appraisal will lead to an improvement in performance or performance will decrease without appraisal. (Grint, 1995). But it can also lead to negative effects on performance and motivation and leaves the apprsisee with negative feelings much(prenominal) as inferiority, bitterness, depression and some other negative feelings (Ridly, 1995).On the part of the appraiser, there are some dilemmas and difficulties that the appraiser faces in the course of performance appraisal process. One of these is the subjectivity of the appraiser that cannot b e completely avoided in spite of efforts. Another important dilemma faced by the appraiser is to play both the roles of a judge and a facilitator at the same time as Fiona Wilson (2002) and many other including McGregor (1957), and Fletcher and Williams (1985) stool described this problem. One of the aims of performance appraisal is to identify training and development needs of the employees.In order to do so, the appraiser is assumed to judge the gaps between the desired performance and the actual performance by assessing the performance of the employee against a set of objective standards, this not always possible to have objective criteria available, as Fiona Wilson (2002) describes that If staff development is the aim then the temptation is to search for inadequacies in the appraisees performance. In order to act as judge the appraiser needs criteria with which to judge, yet the internal evaluation and trait oriented criteria for evaluating performance have been recognised as a central problem.Objective criteria against which to assess staff are difficult to achieve and are going to be faultfinding(prenominal) to some degree. Counseling does not usually involve making any judgments but allows the person to reflect on performance and make their own judgments. There is an increase in the use of 360-degree feedback in organizations as Bruce and Ira Kay have noted that The use of 360-degree feedback has grown dramatically in recent years. According to HR consulting firm William M. Mercer, 40 percent of companies used 360-degree feedback in 1995 b 2000, this figure jumped to 65 percent (Bruce & Ira, 2002).But there are also some sincere issues associated with 360 degree feedback and it is assumed that it can have some negative effects on performance and can hurt the appraise as Bruce and Ira Kay (2002) have quoted Watson Wyatts human capital index playing area which found that the use of 360-degree feedback is associated with a decrease in shareholder ba nkers bill out. Bruce and Ira also quoted the other findings of Watson Wyatts HCI study and described thatWatson Wyatts 2001 HCI report revealed that companies using 360-degree feedback have lower market value.According to the study, companies that use peer review have a market value that is 4. 9 percent lower than similarly situated companies that dont use peer review. Likewise, companies that allow employees to evaluate their managers are valued 5. 7 percent lower than similar firms that dont (Bruce & Ira, 2002). Ghorpade (Ghorpade quoted in Bruce & Ira, 2002), a professor of management at San Diego State University, reported that only triad studies out of 600 feedback studies found improvement in performance and one-third found a decrease in performance and rest of them found no effects.Bruce and Ira (2002) have also identified some other issues and problems with 360-feedback such as lack of training, and the costs of 360-degree feedback. Arvey and Murphy(1998) have described t he issues around the costs of measures of performance as well A discussion of the relative costs of utility(a) performance measures was provided by Stone et al (1996). As an alternative to a more expensive hands-on performance measure, a affordable, readily available measure of performance was developed for Air Force specialty jobs using an existing data base that rank-ordered individuals.More research is needed to explore the relative advantages of low-fidelity and low-cost performance measures. Conceivably the relative value of such instruments might be better than more highly specific, high-fidelity instruments if relatively molar decisions are universe made about individuals (e. g. promote versus not-promote, high versus low performance) Subjective and objective Evaluation The main problem and issue associated with performance appraisal may be the subjective evaluation and absence of objective criteria against which the performance of the individual is to be assessed.Subjecti ve evaluation may result in devastating effects on the performance of the individual or the appraisee. As Longenecker et al. (1987) have noted that the appraisers olds intentionally distort and manipulate appraisal for political purposes. Subjective measures of performance sometime lead to biasness on the part of the rater and result in negative effects on performance. But Arvey and Murphy (1998) have reviewed a research conducted by Bommer et al in 1995, and described that Bommer et al assessed the relationships between relatively objective and subjective measures of employee performance.He used meta-analytic techniques to summarize the relationships for over 50 independent samples, and found that the dickens measures were significantly related. Bias on the part of line manager or the appraiser or rater can result in negative effects on performance. Arvey & Murphy (1998) write that many studies have focused on the potential biases of supervisors that occour as a result of their l ikings and disliking about their subordinates. But recent studies show that emotional influences on ratings may not represent rating biases. Vera et al (quoted in Arvey & Murphy, 1998) presented evidence that supports this argument.Arvey and Murphy (1998) quoted a study in their paper conducted by Schrader and Steiner in 1996, and described that They hypothesized that ratings in which employees are evaluated against clear and specific objective standards will differ from those in which such objective criteria are not specified and the standards are ambiguous. Results supported this proposition. However, ratings made when using internal, relative, or multiple standards of comparison were not terribly different from those made under the more objective conditions both in terms of mean differences and supervisor-self agreement.Thus, a conclusion that employee standards that involve objective and specific standards against which to evaluate individuals are the one best method seems prem ature given the results of this study Ethnic, Social and Gender Issues There are some gender, and social issues in terms of bias and subjectivity related to performance appraisals. Societal stereotypes may pillowcase the appraisers to be biased against women and minorities.In 1996, Woehr & Roch (quoted in Arvey & Murphy, 1998) studied the effects of prior evaluations that were different in terms of performance and ratee gender on succeeding evaluations and on recall of a male or female of average performance. Results bespeaked that both the performance level and the gender of the target ratees prior evaluation affected the subsequent rating. Relatively low performance for the prior target influenced subsequent evaluations differentially for male and female target ratees and males were given higher evaluations than females.Another study conducted by Ford et al (quoted in Arvey and Murphy, 1998) conducted a meta-analysis across 53 studies, and found that that blacks receive slightl y lower performance scores than whites on both subjective and objective measures of performance. Arvey and Murphy reviewed a study conducted by Kraiger and Ford in 1985, and wrote that Kraiger & Ford (1985) conducted a meta-analysis of 74 studies across field and laboratory settings and concluded that an fundamental interaction effect existed White raters rate white ratees higher than black ratees, whereas black raters evaluated black ratees higher than white ratees.Moderator effects were found also for group part and research setting Effect sizes increased as the proportion of blacks in the group decreased, and field studies generated larger effect sizes than laboratory studies. (1998). These are the problems and issues that make a person think if the performance appraisal should be abandoned or not. In my opinion, performance appraisal should not be abandoned because of the problems and issues associated with it, if it is used carefully in an objective and constructive manner, i t can prove a useful tool in motivating, developing and enhancing the performance of an employee.Bruce and Ira have also move to answer this question Despite these drawbacks, there are good reasons not to give up on 360-degree feedback. The process still holds the potential to deepen employees pinch of their own performance. And, it may be able to help companies create value by better aligning job performance with business strategy. The question is this bathroom 360-degree feedback be implemented in such a way that it achieves these benefits without negatively affecting the bottom line?Based on our analysisand conversations with clients we believe the following steps may help companies transform 360-degree feedback into a value creator, not destroyer. Implement 360-degree feedback for the right reasons. The first thing you need to ask is why youre doing it, says capital of Minnesota Rumely, a New York-based executive coach, If you cant articulate a strong business case for a 360- degree feedback program, it should not be introduced (Bruce & Ira, 2002).Training can be very useful in enhancing the effectiveness of performance appraisal systems and can equip the raters with essential knowledge and skills to cope with the problems and issues associated with performance appraisals in work settings. Bruce and Ira suggest that Train people in giving and receiving feedback. Companies that implement 360-degree feedback without first checking and developing managers feedback skills risk serious damage to teamwork and morale. Providing constructive feedback takes instruction, training and practice. (Bruce & Ira, 2002).They also write that slice training individuals to give and receive feedback may temporarily increase the expense associated with 360-degree feedback programs, the gains will outweigh the higher costs as the feedback delivered to participants becomes more focused, targeting the behaviors most well-nigh associated with value creation and destruction. Ult imately, the goal should be to create a culture in which individuals feel comfortable giving and receiving feedbackboth positive and negativeon a realtime basis, rather than waiting for an annual review (Bruce & Ira, 2002).Assessment of performance of employees is essential to the process of performance management in organizations, and a performance appraisal not only assess or review the performance of an employee but also identify training and development needs of the employee, and is an important need of organizations. As Fiona Wilson has also stressed Given these difficulties identified in the literature, it may be tempting to abandon any hope of finding dependable assessment of performance.Yet, there is still a need for control, accountability, assessment and staff development in organizations. Bias is difficult to overcome but can an individual give feedback on performance without that feedback being construed as negative and can staff be developed? One way to achieve this is to design an appraisal scheme where the emphasis is on development, to use a safe approach, which recognises achievements and supports professional development and avoids the issue of accuracy and rating of performance (Fiona Wilson, 2002).