Monday, May 16, 2011

Discuss various methods of performance appraisal and evaluate their advantage and disadvantages.

Discuss various methods of performance appraisal and evaluate their advantage and disadvantages. Discuss the performance appraisal in the context of your organization or an organization you are familiar with. Suggest few measures to improve it. Briefly describe the organization you are referring to.

Ans: Performance Appraisal
I. Purposes of PA systems A'. Basis for personnel decision-making (e.g., training needs, layoffs, promotions, raises)
B. Developmental: Feedback increases performance C. Needed to evaluate effectiveness of new structures, programs D. Needed to validate selection measures
II. General guidelines for PA systems (both objective and subjective)
A. Choosing dimensions to be appraised
1. Should be based on standards set for performance, given job analysis, job description
2. should focus on behaviors & performance, not personality
B. Completing the appraisals
1. do them frequently them in written form
C. Keep in mind laws and legal guidelines
1. performance appraisals should be relevant, valid
2. performance appraisals should be reliable
3. performance appraisals should be unbiased (see later notes)
II. Objective PA systems
Types: Production data (e.g., sales volume, units produced, number of errors, amount of waste Personnel data (e.g., accidents, turnover, absences, tardiness) Advantages/disadvantages: .
Advantages: Unbiased, Easy to measure
Disadvantages: criterion contamination—variation due to factors beyond the person's control criterion deficiency—misses part of performance (e.g., tells quantity but not quality) c. not available for most jobs
IV. Guidelines for PA ratings (subjective systems) A. Regarding Rater: should be trained to do PAs and in a position to observe performance Supervisor
B. advantage: usually in best position to observe performance
C. disadvantage: not in a good position to observe certain dimensions of
performance self-assessment
a. advantage: less halo (ratings of outstanding performance on one-
dimension doesn't generalize to other dimensions)
b. disadvantage: positive leniency (rater rates performance higher than it
actually is peer assessment
a. advantage: high interrater reliability and validity (even after short .period of time)
b. disadvantage: friendship bias, acceptance problems subordinate
assessment a. advantage: different perspective that can be useful, e.g., can rate leadership, communication
b. disadvantage: may fear retribution for poor ratings Or give good ratings
to get in good with supervisor client assessment
a. advantage: good for jobs dealing with public b. disadvantage: clients'objectives and organization's objectives differ
• Recommended method: multi-rater, multi-dimension
a. get different perspectives of performance
b. raters rate only the dimensions they observe D. Regarding methods: need to watch for biases inherent in methods; need to be aware of limited information
available from using certain methods

1. Graphic rating scales (most common)
a. Advantages: quick to develop & administer; gives quantitative results—can compare across workers
b. .Disadvantages: not as much depth as narrative essays; subject to many rater errors:
contrast effect: an average ratee following a person who was outstanding will be likely to be rated poorly; an average ratee following a person who was poor will be likely to be rated as excellent
friendship bias: a form of positive leniency; where the rater rates a friend's performance higher than it actually was
central tendency: the tendency of raters to choose' the middle of the rating scale
positive/negative halo: when the rater generalizes from an outstanding- (or very poor) performance on one dimension and rates performance on other dimensions similarly
positive/negative leniency: when the rater rates performance either better or worse than it actually was
2. Forced distribution—use predetermined percentages for ratings
a. Advantages: gets rid of central tendency, positive and negative . leniency
b. Disadvantage: what if normal distribution doesn't reflect true
. performance of group of ratees?

3. BARS system—rating scales anchored with behaviors generated
through critical incidents a. Advantages: focuses on behaviors, not traits; good acceptance because raters participate in creating system b. Disadvantage: focuses on expected behaviors, not actual; therefore also have BOS (Behavioral Observation Scale)
4. .Other systems: rank order, paired comparisons, weighted checklists
V. Guidelines for doing performance appraisal interviews (giving PA feedback)
A. Do them in private, do them one on one
B. Avoid surprises (worker should have gotten ongoing feedback—don't blow up because "saved up" frustration with worker)
C. Be specific and direct

1. DON'T:
a. tiptoe around issues
b. compare the person's performance to others
c. get personal
d. focus only on negative aspects of performance
2. DO:
compare performance to a standard in objective terms (e.g., "this should normally be done within 10 days"); highlight positive aspects also.
D. Make communication two-way
1. Give appraisee a chance to respond; listen to the response
2. Offer and elicit suggestions for improving performance (problem-. solving focus) VI. Providing due process in Performance. Appraisal Systems Research on due process in performance appraisal

1. .Satisfaction with performance feedback is higher when employees see
the process as fair
2. Greater perceptions of accuracy and fairness in a "due process" group even when received lower evaluations
3. Better employee attitudes as a result (greater commitment to the organization, higher satisfaction with management, higher satisfaction of managers)
B. Key elements of due process in performance appraisals 1. Adequate notice (no surprises): publish, explain performance standards, provide regular, timely feedback
2. Fair hearing: meeting explaining tentative appraisal and how derived in which the rate can challenge ratings, provide commentary and provide a self-appraisal
3. Judgment based on evidence: the best performance appraisal technology (content, format, training) is used, standards are consistent across employees, and rewards are based on appraisals
The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago.
Yet in a broader sense, the practice of appraisal is a very ancient art. –In the scale' of things historical, it might well lay claim to being the world's second oldest profession!
There is, says a basic human tendency to make judgments about those/ one is working with, as well as about oneself." Appraisal, it seems, is both inevitable and universal. In the absence of a carefully structured
system of appraisal, people will tend to judge the work performance of others, including subordinates, naturally, informally and arbitrarily.
The human inclination to judge can create serious motivational, ethical and legal problems in the workplace. Without a structured appraisal system, there is little chance of ensuring that the judgments made will be lawful, fair, defensible and accurate.
Performance appraisal systems began as simple methods of income justification. That is, appraisal was used to decide whether or not the salary or wage of an individual employee was justified.
The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order.
Little consideration, if any, was given to the developmental possibilities of appraisal. If was felt that a cut in pay, or a rise, should provide the only required impetus for an employee to either improve or continue to perform well.
Sometimes this basic system succeeded in getting the results that were intended; but more often than not, it failed.
For example, early motivational researchers were aware that different people with roughly equal work abilities could be paid the same amount of money and yet have quite different levels of motivation and performance.
These, observations were confirmed in empirical studies. Pay rates were important, yes; but they were not the only element that had an impact
on employee performance. It was found that other issues, such as morale and self-esteem, could also have a major influence.
As a result, the traditional emphasis on reward outcomes was progressively rejected. In the 1950s in the United States, the potential usefulness of appraisal as tool for motivation and development was gradually recognized. The general model of performance appraisal, as it
is known today, began from that time.
• Modern Appraisal
Performance appraisal may be defined as a structured formal interaction between a subordinate and supervisor, that usually takes the form of a periodic interview (annual or semi-annual), in which the work performance of the subordinate is examined arid discussed, with a' view to identifying weaknesses and strengths as well as opportunities for improvement and skills development.
In many organizations - but not all - appraisal results are used, cither directly or indirectly, to help determine reward outcomes. That is, the appraisal results are used to identify the better performing employees who should get the majority of available merit pay increases, bonuses, and promotions.
By the same token, appraisal results are used to identify the poorer performers who may require some form of counseling, or in extreme cases, demotion, dismissal or decreases in pay. (Organizations need to be aware of laws in their country that might restrict their capacity to dismiss employees or decrease )
Whether this is an appropriate use of performance appraisal – the assignment and justification of rewards and penalties - is a very uncertain- and contentious matter.
M Controversy, Controversy
Few issues in management stir up more controversy than performance appraisal.
There are many reputable sources - researchers, management commentators, psychometricians - who have expressed doubts about the validity and reliability of the performance appraisal process. Some have even suggested that the process is so inherently flawed that it may be impossible to perfect it
At the other extreme, there are many strong advocates of performance appraisal. Some view it as potentially "... the most crucial aspect of organizational life"
Between these two extremes lie various schools of belief. While all endorse the use of performance appraisal, there are many different opinions on how and when to apply it:
There are those, for instance, who believe that performance appraisal has many important employee development uses, but scorn any attempt to link the process to reward outcomes - such as pay rises and promotions.
This group believes that the linkage to reward outcomes reduces or eliminates the developmental value of appraisals. Rather than an opportunity for constructive review and encouragement, the reward-linked process is perceived as judgmental, punitive and harrowing. For example, how many people would gladly admit their work problems if, at the same time, they knew that their next pay rise or a much-wanted promotion was riding on an appraisal result? Very likely, .in that situation, many people would deny or downplay their weaknesses. Nor is the desire to distort or deny the truth confined to the person being appraised. Many appraisers feel uncomfortable with the combined role of judge and executioner.
Such reluctance is not difficult to understand. Appraisers often know their appraises well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain' work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another.
•The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument, which claims that performance appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process by which rewards - which are not an unlimited resource - may be openly and fairly distributed to those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations. Performance appraisal - whatever its practical flaws - is the only process available to help achieve fair, decent and consistent reward outcomes.
It has also been claimed that appraises themselves are inclined to believe that appraisal results should be linked directly to reward outcomes - and are suspicious and disappointed when told this is not the case. Rather than. feeling relieved, appraises may suspect that they are not being told the whole truth, or that the appraisal process is a sham and waste of time.

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