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Different Types and Approaches to Performance Appraisals - Literature review Example

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It is essential to state that the paper 'Different Types and Approaches to Performance Appraisals " is a good example of a management literature review. The debate on the value and effectiveness of performance appraisals is never-ending with many management experts and authors having opposing opinions…
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Performance appraisals (Institution) (Name) (Course) (Module) (Instructor) 27th Dec 2009 Abstract The debate on the value and effectiveness of performance appraisals is never ending with many management experts and authors having opposing opinions. One side argues that performance appraisals in organizations enhance personal and organization al performance while the other side argues that performance appraisals have short term effects and in the long run undermine organizational performance and hinder teamwork initiatives. The lack of a clear definition of what really entails performance appraisal forms a rich foundation for the varying opinions. Performance appraisals entail basically reviewing, evaluating and appraising the performance of individual employees in order to achieve improved performance of the whole organization. However, due to organizational differences and structural differences, many organizations opt to carry out performance appraisals differently. This paper reviews the different types and approaches to performance appraisals from existing relevant literature and analyzes both sides of the debate. Grote (2005) defines performance appraisal as “a formal arrangement management system that provides for the evaluation of the quality of an individual’s performance in an organization. The appraisal is usually prepared by the employee’s immediate supervisor. The procedure typically requires the supervisor to fill out a standardized assessment form that evaluates the individual on several different dimensions and then discusses the results of the evaluation with the employee” (p. 1). Falcone and Sachs (2009) say that performance appraisals not only assess past performance by employees but also serve as work sessions between employees and the supervisors and also offer an opportunity to make and draft future objectives. However, the traditional manager does most of the talking without giving employee an opportunity to debate the review and the evaluation. They say that performance appraisal is not a senior management’s issue but rather the entire workforce in order for the process to receive acceptance and credibility that it deserves and makes them effective in achieving the laid targets. Snell and Bohlander (2009) warn that the defining of performance appraisal is more often than not different from what managers do in the workplace. They say that managers often employ means that limit the potential of appraisals. They define (Snell & Bohlander) (2009) define performance appraisal as A process ―typically delivered annually, biannually, or sometimes quarterly by a supervisor to a subordinate ― designed to help employees understand their roles, objectives, expectations, and performance success. In addition, new employees are often put of probationary status for a period of time and evaluated 30, 60, or 90 days after being hired, with their continued employment contingent upon their performing satisfactorily (p. 362). Berger (2008) also says that if managers could only impart performance appraisals on their employees in the right way then, the procedure would be sufficient enough to deliver feedback, manage organizational talent and play a significant role in making good compensation and rewards decisions. Falcone and Sachs (2007) say that performance appraisals have a common misconception in that their sole purpose in the workplace is to “inform employees how their performance has been rated.” Berger (2008) concurs with this misconception and says that a contemporary performance appraisal operates on the basis of absolute comparison by assessing how employees perform as compared to set goals and objectives. Arguments fronted to oppose performance appraisals is their extreme focus of personal performance rather than organizational or team performance (Snell & Bohlander, 2009). However, traditional managers are wary of performance appraisals in that they encourage consultations and interactions. In fact Keefe and Sandler (2003) say that performance appraisals work best in organizations which have a horizontal structure. In Vertical structure making of decisions and flow of authority is from top downwards hence the senior management in such structures is not ready to lose “respect” by interacting with their subordinates. Therefore a firm’s organizational structure determines to a great extent the perception of performance appraisal and thus the impact it has on the organization. Deming’s claim on performance appraisals may be inspired from a vertical organizational structure that is not willing to accept consultation but encourages personal performance at whatever costs. Grote (2005) says that organizations with an organic structure have higher success rates in implementing performance appraisals. In addition, outstanding communication between the senior management and other employees of the organization that involves the right choice of words in detailing job description is the backbone of performance appraisals. Edward Deming, a renowned management expert says that performance appraisals encourage politicking in the workplace, kill the teamwork spirit by insisting on individual performance of employees and also are a rich source of unhealthy competition. Rasch (2004) argues performance appraisals are more popular with supervisors and not employees implying that they are disliked by employees are there are high chances that employees will sabotage them derailing the whole process. Organizations should consider developing dynamic growth models that focus on employee career growth and leadership development as alternatives to performance appraisals as the term itself is associated with bad things by employees (Rasch, 2004) Perceived benefits of performance appraisals vary from one organization to the other and from one industry to the other. Different experts (Falcone & Sachs, 2007; Murphy & Murguiles 2004) have highlighted a number of benefits gained by an organization after implementing successful performance appraisals on other employees as follows: quality issues discussed without incurring expenses; managers gain confidence in reviewing employee performance; organizational issues such as work flow impediments are discussed in such meetings thereby saving valuable time; it cultivates a sense of belonging for employees by appreciating the fact that they get listened to instead of following orders all the time; employees learn about their own strengths and their weaknesses, new goals and objectives are agreed upon by the management and the employees; participation of employees in goal and targets evaluation; strengthening of the manager-employee relationship; restructuring of work teams if necessary depending on past performance; renewed interest in the organization in the present and in the future; training needs are identified. These benefits can only be realized if and only if a number of conditions are met such the right the right use of the evaluation results. Grote (2005) warns that it is common for managers to develop a personal perception on employee going by their performance record which may impact negatively on the involved subordinates especially for poor performers where numerical ranking is used. Other general conditions according to Murphy and Murguiles (2004) are: ensure that employees being rated have access to review and can comment on the same and also allow them to appeal against a review if they can clearly show it is unfair; clear instructions and training for performance raters; sensitizing employees on the importance of job duties and the relevance of performance appraisal, valuation of different appraisal systems and sticking with the most applicable and the easiest to understand and implement; take necessary precautions to avoid improper bias by performance raters; ensure uniform approach or application of the standards in the performance system. The relationship between managers, supervisory employees and the rest of the employees is to a large extent based on monitoring. Simple management tasks such as assigning duties, setting pay and making hiring and firing decisions are carried out based ion the performance of workers. The nature of work determines how productivity and performance can be assessed allowing it to be informal or formal (Brown & Heywood, 2007). Brown and Heywood (2007) quote Jackson and Schuler (2003) who say that the most common method of monitoring is a formalized performance appraisal system. They (Jackson & Schuler 2003) define performance appraisal as “evaluating performance based on the judgments and opinions of subordinates, peers, supervisors, other managers and even workers themselves.” This approach had psychometric properties and prone to error (Brown & Heywood, 2007). Heslin, Latham and VandeWalle (2005) asses the effectiveness of performance appraisals through the Implicit Person Theory based on a psychological standpoint. The Implicit Person Theory is founded on the assumption that personal attributes can be altered through a number of measures in order to induce a change in behavior of a person, in this context employee. This implicit theory is further divided into two, incremental and prototypical. The archetypal IMT assumes that personal traits are unchanging entity while the incremental IMT assumes that personal traits are comparatively impressionable. Studies have bent on showing the impact of the incremental theory on an organizational context on aspects as self control, resilience o their self efficacy following setbacks and multitasking abilities. However, Heslin et al (2005) note that the results might be biased due to the fact that the same tests have not been carried out to assess the impact of the same theories on managers' judgment and perception of their employees. Heslin, et al (2005) cite Manzoni and Barsoux (1998) who argue that managers who have experienced poor performance in their employees might be hyper vigilant expecting subsequent cases of poor performance and therefore very high chances of bias. Abdullah, Rose, Salleh and Kumar (2007) recognize employee training and development as another form of employee performance appraisal which takes a different definition from the contemporary one as of reviewing and evaluating employee performance. In their paper, they take the study of Malaysia as a country and discuss the government’s involvement in employee training and development in the country’s manufacturing industry. Increased demand for both skilled and unskilled labor fueled by the country’s rapid economic growth spurred the government into preparing the country’s labor force for the industry through the Human Resources Development Act of 1992 (Abdullah et al 2007). The Malaysian government collaborates with organizations through sponsorship to run performance appraisal systems such as the Retrenched Workers Training Scheme. In fact in 2004, the Ministry of Human Resources allocated RM1.72 billion for of retraining and upgrading workers’ skills. This the government considers performance appraisal as an investment the same way that companies invest in their human resources through reward and compensation programs. Much attention has been given to equipping employees with ICT skills. The approach used in carrying out performance appraisals determines the level significance of such an initiative in an organization. Forced ranking kills the teamwork spirit in certain types of organizations or positions while in others such as sale encourages competition between employees that lead to increased organizational performance. Ranking also helps create a clear promotion schedule. Career and education support as a form of performance appraisals create a healthy workforce nationally and lead to improved economic growth. Therefore, it is obvious that the approach used in carrying out performance appraisal more that the modern approaches that focus on empowering employees and future planning rather than judging from past performances have unlimited benefits to an organization and individual employees. References Abdullah, H., Rose, R., Salleh, A., and Kumar, N. (2007) Measuring and Managing Performance Improvement in the Manufacturing Sector European Journal of Social Sciences, Vol. 5, No. 1, pp 157-166 Berger, D. (2008) The Compensation Handbook, edition 5, (New York: McGraw Hill) Brown, M. and Heywood, J. (2007) “Performance Appraisal Systems: Determinants and Change,” British Journal of Industrial Relations, Vol 43, No 4 pp. 659–679 Falcone, P and Sachs, R. (2007) Productive performance appraisals edition 2, (New York: AMACOM) Grote, H. (2005) Forced ranking: making performance management work, New York: Harvard Business Press Heslin, P., Latham, G. and VandeWalle, D. “The Effect of Implicit Person Theory on Performance Appraisals,” Journal of applied psychology 2005, Vol. 90, No. 5, 842– 856 Kefee, C. & Sandler, J. (2003). Performance Appraisal Phrase Book: The Best Words, Phrases, and Techniques for Performance Reviews, New Jersey: Adams Media, Rasch, L. (2004). Employee Performance Appraisal and the 95/5 Rule, Community College Journal of Research and Practice, 28 (5) 407-414, Chestnut: Publisher name and contact information, as provided by the publisher; updated only if notified by the publisher.Customer Services for Taylor & Francis Group Journals Scholtes, P. (2004). The leader's handbook: making things happen, getting things done (New York: McGraw-Hill) Skinner et al (n.d.). Performance Appraisal, (Retrieved online on 4th Dec 2009 from) http://www.nceta.flinders.edu.au/pdf/TIPS/08-Perf_Appraisal.pdf Snell, G. & Bohlander, S. (2009). Managing Human Resources, New York: Cengage Learning Read More
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