5. Employees Performance Evaluation.

Performance Review

Robin Kessle in the competency-based Performance Reviews book said that the different organizations use different terms for the Performance review. According to Robin, some other terms used instead of performance reviews are performance evaluation and performance assessment.

Performance evaluation is a process of systematic assessment of individual performance. It applies as a development tool for the advancement of employee and organization (Reynolds and Scott, 2009). Performance evaluation methods are the systems and processes through which appraisal is carried out in an organization (Rosa Cintrón). Employee performance assessment can be divided into two main categories as systematic and non-systematic assessment. Within the non-systematic assessment, an employee will be asset continuously by a superior throughout the work process (Alain, 2013). In a performance culture, performance evaluations are specific to an individual’s role, responsibilities, and performance, as measured against clear expectations. Evaluations are data-based and objective and not subjective (Dr. Davinder sharma,2010). Performance is measured by using factors such as job knowledge, quality and quantity of output, initiative, leadership, administration, dependability. These factors must be pre-defined when setting objectives and evaluation should be limited to past and implied performance (Wermers and Fischer, 2012). At the core of any performance management system is the assessment of performance (Herman Aguinis, 2013). Performance appraisal (PA) was a term once associated with a rather basic process involving a line manager completing an annual report on a subordinate’s performance and (usually, but not always) discussing it with him or her in an appraisal interview (Clive Fletcher, 2001).

According to the above theories performance appraisal is the final phase of an effective performance management system.

Performance Appraisal Methods

There are many types of performance appraisal methods. In choosing an appraisal system, organization should consider their own organization's needs for performance appraisal. Key considerations are:

1. Whom the company should evaluate, and
2. What criteria should be used to evaluate.

According to Armstrong there are seven ways of assessing performance:

1. overall analysis of performance;
2. written assessment (narrative) of performance;
3. rating;
4. forced distribution;
5. forced ranking;
6. quota system;
7. visual assessment.

A balanced approach to employee performance appraisal is an effective way of getting a complete look at an employee's work performance (United States Office of Personnel Management).

SHRM HR Curriculum Guidebook exhibits the performance appraisal process considering the connection between the organization’s mission and objectives and the performance appraisal process.

Figurer 5.1 illustrates the performance appraisal (PA) process. Note the connection between the organization’s mission and objectives and the performance appraisal process.

Source: SHRM 2010 Curriculum Guidebook 

Job Analysis

Is prior for selecting a performance appraisal method and job analyses must be conducted. Job descriptions should be developed and refined to keep up with the company’s recent changes.( Matthias Zeuch)  Job analysis is the foundation of all HR management (William J. Rothwell ,2012). We should realize that the job must be based on the organizational mission and objectives, the department, and the job itself (SHRM HR,2010).

Figurer 5.2 illustrates Relationship of Performance Appraisal and Job Analysis.

Source: Business Jargons web site
 

 Sayles and Strauss (1977) , Tapmoy Deb (2008),  Muhammad Faseeh ullah khan (2013)  and many HR experts describes the   performance review methods are dividing into two  categories: Traditional methods and modern methods.

Traditional Methods - Rating Scales

• Checklists
• Forced Choice
• Forced Distribution
• Critical Incident
• Performance test and observation
• Field review
• Confidential Record
• Essay method
• Comparative Evaluation Approaches
• Cost Accounting Method
• Behaviorally Anchored Rating Scales

Modern Methods of Performance Appraisal

• Management by objectives
• Psychological Appraisal
• Assessment Centres
• 360-Degree Feedback
• 720-Degree Feedback

Benefits and Potential Problems of performance appraisals

Assessment is a necessary and inevitable performance management activity but it is one of the most difficult ones to get right (Armstrong 2006). People may define personality traits differently (Torrington et al., 2008).

Successful organizations have learned to implement the performance appraisal process very strategically as part of a larger performance management process. However, some organizations feel obligation to perform the dreaded task and do it as they need to have a piece of paper in the file.

        Advantages of doing performance appraisals:

• They provide a record of performance over a period of time.
• They provide an opportunity for a manager to meet and discuss performance with an employee.
• Provide the employee with feedback about their performance and how they completed their goals.
• Provide an opportunity for an employee to discuss issues and to clarify expectations with their manager.
• Offer an opportunity to think about the upcoming year and develop employee goals.
• Can be motivational with the support of a good reward and compensation system.

Disadvantages of performance appraisal

• If not done appropriately, can be a negative experience.
• Are very time consuming, especially for a manager with many employees.
• Are based on human assessment and are subject to rater errors and biases.
• If not done right can be a complete waste of time.
• Can be stressful for all involved.

While theoretical research on performance appraisal continues to evolve, practical literature has focused primarily on improving the performance appraisal process, making the review interview more positive, improving the contribution of the employee to the process, emphasizing goal-setting and applying procedural improvements (Karol, 1996 cited as Walsh 2003:20). Professional journals are filled with articles discussing performance appraisal practices in various organizations under varying conditions.

Finally, a performance appraisal is only as good as the performance management system and  is very much part of it. If organizations are strategically incorporating performance management into their strategic plan to implement the business goals, it will provide a process to accomplish the established goals. This can lead to satisfaction as well as dissatisfaction of employees.

List of References 

1. Alain, P., 2013. The Quick and Easy Performance Appraisal Phrase Book. 1st ed. USA: Career Press.
2. Clive Fletcher (2001), Performance appraisal and management: The developing research agenda, Journal of Occupational and Organizational Psychology (2001).
3. Dr. Davinder Sharma (2010), Performance Appraisal and Management, Himalaya Publishing House, India.
4. Herman Aguinis (2013), Performance Management, 3rd Edition, Pearson Education, Inc, USA.
5. Karol, S.H., (1996). The Influence of Planning Activity on Employee
6. Michael Armstrong (2006) Performance Management Key Strategies and Practical Guideline. 3rd edition,  London, Kogan Page Ltd.
7. Michael Armstrong (2009) Armstrong's Handbook of Performance Management. 4th edition, London, Kogan Page Ltd.
8. Muhammad Faseeh ullah khan (2013) , Role of Performance Appraisal System on Employees Motivation, IOSR Journal of Business and Management (IOSR-JBM)
9. Reynolds, D. and Scott, J., 2009. Handbook of Workplace Assessment: Evidence-Based Practices for Selecting and Developing Organizational Talent. 1st ed. USA: Pfeiffer.
10. Robin Kessle (2008) Competency-based performance reviews, Career Press.
11. Rosa Cintrón, Ph.D. (Corresponding author), Performance Appraisal: A Supervision or Leadership Tool? International Journal of Business and Social Science.
12. Sayles, L. and Strauss, G., 1977. Managing Human Resources. 1st ed. California: Prentice-Hall.
13. SHRM HR  (2010) Curriculum Guidebook.
14. Tapmoy Deb (2008),  Performance Appraisal and management, Excel Book.
15. United States Office of Personnel Management.
16. Wermers, R. and Fischer, B., 2012. Performance Evaluation and Attribution of Security Portfolios. 1st ed. USA: Academic Press.