Purposes of Performance Appraisals and Ways to Improve the Performance Appraisal Techniques - Essay Example

The purposes of performance appraisal in an organization By Insert Name Subject, Semester Institution Instructor Date Executive summary Just like the strategic managers are concerned about the overall performance and direction of the organization as a whole, the human resource function is concerned about the performance of employees. In trying to establish the average performance of the entire work force, the personnel managers evaluate the employees at an individual level. Such evaluation is what is referred to as performance appraisal. Also referred to as performance evaluation, performance appraisal is the assessment of the employees’ performance and conduct against predetermined organizational objectives and goals. The assessment is carried out periodically at regular intervals that vary from organization to organization. The evaluation is carried out for various reasons including, promotion decisions and dismissal options. Appraisal takes many forms and uses several methods. Managers are always looking for ways to improve the performance appraisal techniques. An efficient technique usually gives a valid feedback to the employee as well as the personnel department. Performance appraisal is an integral part of motivation within an organization since it is linked to recognition of effort as well as remuneration and compensation. The methods used to conduct this process vary from one organization to the other. Appreciating the importance of all aspects of performance appraisal is a requirement for all managers and supervisors. Introduction Performance appraisal and motivation are human resource management concepts that can be said to be complementary. Motivation, especially one that involves the use of rewards and monetary items, is based almost purely on performance appraisal. Performance appraisal in one way or another is an effective way of recognizing the best performers as well as identifying the worst performers within an organization (De Meuse & Kenneth 2010, pp.210). Evaluating an employee is an efficient way of identifying an employee’s areas of weakness as well as the worker’s points of strength. As such, the employer can be in a better position to allocate duties to all the employees depending on their strengths and weaknesses. The methods of evaluating the employees always need to be reviewed regularly because the organization is a dynamic institution and this means that at some point, some evaluation methods will be inefficient. This essay seeks to address the concept of performance appraisal, the major techniques used to assess employees, the ways of improving the effectiveness of performance appraisal and the link between performance evaluation and motivation. Performance appraisal has been defined variously by different people and management experts. There is no one clear definition of this process but the components of the concepts are the same universally. For instance, it is worth noting that in its usage, it encompasses the skill of the employee, the inter-personal expertise of a worker, the accomplishments of an employee as well as the organized and periodic assessment of such employee. This concept can therefore be defined as: a process through which an organization through the personnel department assesses its workforce periodically and at regular intervals, at individual level (Kennett et al 1994, pp.271). The purpose of performance appraisal Performance appraisal is carried out for many reasons. These reasons vary from one organization to another depending on the objectives and goals of the particular firm. Even so, the rationale for performance evaluation is governed by the same framework globally. The human resource management evaluates the performance of the employees with an aim of recognizing effort (Fletcher et al 2010, pp.77). Most of the performance appraisal techniques are capable of ranking the employees in order of performance. Most of the employees may rank averagely but in essence the ranking scales will be capable of identifying the best and the worst. The parameters used in the evaluation of performance apply equally to all employees. This means that the ranking is unbiased and lacks prejudice. The best employees according to the results of the process are recognized for their effort. This is to say that the employees whose efforts are closer to achieving the organizational objectives are rewarded by the organization. The ones that are performing poorly are treated accordingly. For instance they may be subjected to further training or taken through a process known as industrial counseling. This process enables the employees realize their individual goals as well as the organizational goals and how the two can be connected to yield maximum efficiency. Performance evaluation is also used as a basis for training decisions. The performance appraisal report indicates areas of weaknesses within the work force (Jefferson & Anne 2010, pp.112). These areas indicate the need for further training and retraining. The weak performers are subjected to further training as a way of increasing the average efficiency within the firm. Similarly the appraising of the employees acts as an effective feedback system. It is characteristic of all employees in various organizations to like knowing their ratings. The performance evaluation process enables the individual members of staff to know where and how they are ranked. This may yield tremendous motivation especially for those individuals that perform well. The performance appraisal process also acts as a basis for validating selection. The selection process is made up of both internal selection and external recruitment. Through the assessment of employees, the management is capable of identifying the need for more employees. This may prompt the management to source more staff to a particular department either from within or outside (Tziner et al 1993, pp.281). The performance measurement also gives the management the threshold qualifications to be employed in selecting new employees. Appraising the workforce thus enables the company to decide whether or not expanding the workforce is necessary. Additionally, performance assessment is used as a basis for promotions. Employees are promoted within the organization on basis of merit. Merit here means performance. It is rather definite that the best performers are the prioritized candidates when it comes to promotions. Apparently, in the traditional management environment, the personnel department promoted people on the basis of work experience. On the contrary, in the contemporary business environment where competition is extremely stiff and quality is emphasized, merit has become the criterion for promotions. Performance assessments are also the factors considered in effecting transfers and lay-offs. A company may need to transfer its staff for various reasons, key among them: job rotation, on-the-job training, cost saving, achievement of efficiency and effectiveness (Shore et al 2002, pp. 271). Transfers are based on the conduct and accomplishments as indicated by the performance appraisal report. Extreme poor performers may need to be laid off for efficiency to be achieved within the organization. The poor performers usually slow down the average performance and speed of the organization. In making decisions regarding to lay-offs, the performance appraisal report is a reliable criterion on the assumption of perfect objectivity. Transfers are usually the change of duties for an employee. It may also mean the physical movement of an employee from one branch to another. The best performers are taken to the poor performing branches in an effort to introduce and boost efficiency in such branches. Compensation decisions are as well based on the report generated after periodic assessments. This means that the efforts of an individual member of staff are compensated according to intensity and extent of accomplishment. This is a motivational role of performance appraisal since the best performers according of the assessment are rewarded accordingly and this helps boost motivation. Those that have the potential to perform well but haven’t performed well yet, get motivated to make use of their potential so as to be rewarded just like the rest of the good performers. It therefore follows that performance evaluation is an integral part of motivation. Performance evaluation is a basis for human resource planning (Babalos et al 2012, pp.5701). The human resource function of an organization needs to plan and pre-determine standards to be used in the process of recruitment or staffing the organization. Plans have been defined as prior arrangements that should be employed in governing future events. Plans provide a framework within which the events of an organization should be managed. The human resource function in the contemporary work environment, where Kaizen is a prominent concept, uses the standards of the best performer to design the staffing criterion. Through performance appraisal the human resource function of an organization is able assist the employees achieve career development. Career development is an idea that entails the improvement in the career of a person. Career development may take the form of further professional studies, or training and retraining. The performance report that is presented to the stakeholders on an interim basis can be a useful tool in identifying the part of the workforce that requires better sharpening of skills as well as acquisition of innovative ideas and concepts. The performance appraisal process is also used for the purpose of the human resource managers influencing the conduct of the employees (Denisi & Angelo 2011, 270). When an employee comes into an organization, they act according to the conducts that their instincts dictate. This may be detrimental especially if the employee’s conduct is one of pessimism and laxity. The employers, through the human resource management, can use the results of the employee assessment to influence the conducts of the members of staff. They can achieve such influence through such processes as training and education. The major techniques used in performance appraisal The techniques applied by organizations in appraising their staff vary depending on the style of management, the effectiveness of the organization’s internal communication system and the size of an organizations workforce (Vasset et al 2010, pp.32). Whichever technique is used, the desired results are the same in all organizations. The first method is the ranking technique. This technique ranks the employees in accordance to overall performance. This refers to the average accomplishments of the individual member of staff. This method is popular since it makes it easy for the management to identify the best as well as the worst performers. It is however said to be very difficult to administer in an organization with a large workforce. It has been discredited for its inability to aid the employees to improve their career. It has a demoralizing effect for those ranked last. The second method of performance evaluation is the forced distribution method. This technique makes use of percentiles in rating the employees. For instance the employees that fall within the first ten percentile are named according to overall performance. This formula has been credited for being devoid of bias and prejudice (Gilbar et al 2010, pp.550). Experts have however discouraged the use of this technique arguing that it lowers the morale of the staff and leads to cases of absenteeism. It may cause frustration to those that are ranked in the lower percentiles. The third method, the critical incident method is one that focuses on the particular activities of the individual employee. The method is used by the manager or the supervisor to weigh the issues that the employee has done right as well as those deeds that the same employee has engaged in and are seen as wrongful in the light of the organizational philosophy. It therefore terms the employee’s conduct as effective or ineffective. This method is one of the most effective methods. It has almost zero bias. It has however been criticized for the possibility of the wrong deeds being more noticeable than the effective conducts (Koppes et al 2010, pp.550). It has also been discredited for its need for close supervision which may make the employee being supervised feel intimidated. This hinders creativity. There is also a big possibility that the core managers do not have enough time to supervise. Fourth, among the techniques used in performance evaluation is the use of checklists and the weighted checklists. These are documented tables describing the behavior of an employee and a scale beside it. It is the most popular method of evaluation in the contemporary work environment. It is however said to be costly to the human resource management. It has also been criticized as being capable of bias. The fifth method that is actually related to this method is the paired comparative analysis. This functions exactly the same way as the checklist method but incorporates the element of comparison. The sixth method of evaluation is the graphical rating. The graphical rating technique is the oldest method of assessment. It is also common in the contemporary business practice but is currently used together with other methods as it is not as efficient on its own. This method ties the performance of the organization to the performance of the employees (Nicholls et al 2012, pp.265). When the company performs well, the graphical presentation of the employees’ performance is also good. This method is however full of inefficiencies. Its inefficiencies are rooted in the fact that this method only focuses on accomplishments and ignores the need to analyze the behavioral traits of the individual. The seventh method of employee assessment is the essay evaluation. This method focuses on the strengths and weaknesses of an employee in going about their duties. It is used together with the graphical method as well as the critical incident method. The eighth method is the behaviorally anchored assessment scale. Fundamentally, this is a combination of the rating scale and the critical incidents method. This method employs predetermined indicators to determine efficiency and effectiveness. It borrows from both the critical incidents records and the rating scales. Another method that is popularly used in the contemporary business environment is referred to as Management by Objectives (MBO). This method assesses the employee’s performance in line with the objectives of the organization and other pre-determined goals (Gravina et al 2011, pp.265). The tenth method is the behavioral observation method. This method is employed by managers who have employees under their direct supervision. They keenly observe the conducts and ways of such junior and prepare a report accordingly. The eleventh and last among the prominent methods is the 360 degree performance application. This involves the secretive and anonymous assessments by fellow employees. Ways of improving the effectiveness of performance appraisal There are some important ways through which the personnel management can improve the efficiency of performance assessment in an organization. These ways of boosting efficient assessments apply universally in spite of the method of evaluation used (Ahmed et al 2011, pp.18). One of these ways is making the assessments as regular as the firm can possibly manage. The management gurus recommend that these tests be carried out four times in one working year. Such assessments are referred to as quarterly assessments and are said to keep the employees on the alert since the interval is quite reasonable. The second way of improving the efficiency of the assessments is through providing the workers with the feedback of the processes. Making an employee know how they are rated boosts their self esteem and this result in an organization having a motivated workforce. This is the beginning of efficient operations. All employees by instinct like to know where they are placed on the ranking charts. The third way of improving efficiency of performance evaluation is through making the evaluation process a two way discussion. In interviewing the members of staff, the managers should allow the worker to explain why some things happened or are the way they are (Karyeija et al 2012, pp.165). This makes the employees open up and give ideas to the managers. It also helps the managers establish the number of employees that have the potential to perform but did not perform due to various reasons. The fourth way that has been identified as one of the most effective is allowing the employees carry out what is referred to as self assessment. Through this concept, the employees are capable of revealing their areas of weaknesses and strengths since they know their capabilities more than anyone does. This also gives them a sense of responsibility and boosts their morale. The self assessments are then evaluated against those carried out by the administration. The fifth way of making the process of evaluation seem worthwhile is proper communication. Instituting a strong system of communication within an organization facilitates feedback. Feedback is one of the most important sources of motivation within an organization. The sixth way of achieving efficiency is incorporating objectivity in the evaluation process. Bias and prejudice can compromise the function of personnel department (Kennett et al 1994, pp.271). Bias can cause unfair dismissals and transfers. Lastly it is recommended that the managers make the review a form of dialogue and not a confrontation with the employees. This will enable the management obtain valid decision making information. Conclusion In conclusion, it is worth noting that performance evaluation is an important part of personnel management as it forms a basis for promotions, dismissal, feedback, lay-offs and transfers. The concept also helps a great deal in providing information for personnel planning and career development. The concept is important as far as motivation and compensation are concerned. From the foregoing, it is noteworthy that there are more than ten methods of performance evaluation and these include: management by objectives, rating scales, behavioral observations and so on. The various ways of improving the efficiency of performance evaluation have been identified and they revolve around making the employee feel affiliated to the organization. XYZ COMPANY LTD YEARLY ADMINISTRATION PERFOMANCE ASSESSMENT Directives PART ONE: Use the ratings and details outlined here to grade the employee’s capacity to display the performance that maintains each aptitude. Give remarks to back the grading. Establish an overall grade for each aptitude according to the grades assigned for each individual conduct. GRADING DETAILS Exceptional (E) Is a representation of brilliance in the aptitude Above average Demonstrates noteworthy potency in the aptitude Average (A) Demonstrates skill in all phases of the aptitude Needs improvement (NI) Shows partial skill in the aptitude Substandard (S) Shows modest or no skill in the aptitude Not Applicable (NA) The aptitude is irrelevant is not applicable PART TWO: Give remarks on the employee’s capacity to accomplish duties and formal assignments as well as strong points and weak points. For persons with organization administration duty, complete the assessment of administration proficiency section. PART THREE: This part is designed to assess those persons holding managerial positions and have administrative duties. It should be completed and a copy signed by both the manager and the employee submitted to the Personnel Department. Giving examples, explain the managers capacity to go about the responsibilities of his position. With valid illustrations, give remarks on the points of strength that the manager has shown Give remarks and examples on the manager’s chief developments Signatures Employee’s signature Date Manager’s signature Date References Karyeija, Gerald Kagambirwe. 2012. The Impact of Culture on Performance Appraisal Reforms in Africa: The Case of Uganda's Civil Service. Asian Social ScienceVol. 8 Issue 4, p.159-174. Ahmed, Ishfaq; Ramzan, Muhammad; Mohammad, Saher Khushi; Islam, Talat. 2011. Relationship between perceived fairness in performance appraisal and OCB; mediating role of organizational commitment. International Journal of Academic Research. 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