Introduction to management
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- (iii) Leniency or Strictness
- (iv) Cross cultural biases
- 10.6 Suggestions for Improvement
- (i) Behaviourally based measures
- (ii) Trained Appraisers
- (iii) Multiple Raters
- (iv) Peer Evaluations
- (v) Evaluation Interviews
- 10.8 Self Assessment Questions
- 10.9 Suggested Readings
- Objective
- 18.2 Uses of Performance Appraisals (i) Performance improvement
- (ii) Compensation adjustments
- (iii) Placement decisions
- (iv) Training and development needs
- (vi) Staffing process deficiencies
- (viii) Job-design errors
- (x) External challenges
- (xi) Feedback to human resources
- 18.4 Methods of Performance Appraisal
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(ii) Central Tendency 290
Many supervisors have a central tendency when filling in rating scales. For example, if the rating scale ranges from 1 to 7, they tend to avoid the highs (6 and 7) and lows (1 and 2) and rate most of their people between 3 and 5. If you use a graphic scale, this central tendency could mean that all employees are simply rated “average”. Such a restriction can distort the evaluations, making than less useful for promotion, salary or counseling purposes. Ranking employees instead of using a graphic rating scale can avoid this central tendency problem because all employees must be ranked and this cannot all be rated averages. (iii) Leniency or Strictness The leniency bias results when raters tend to be easy in evaluating the performance of employees. Such raters see all employee performance as good and rate it favourably. The strictness bias is the opposite; it results from raters being too harsh in their evaluation. Sometimes, the strictness bias results because the rater wants others to think he or she is a ‘tough judge’ of people’s performance. Both leniency and strictness errors more commonly occur when performance standards are vague.
Every rater holds expectations about human behaviour that are based on his or her culture. When people are expected to evaluate others from different cultures, they may apply their cultural expectations to someone who has a different set of beliefs or behaviors. In many Asian cultures the elderly are treated with greater respect and are held in higher esteem than they are in many western cultures. If a young worker is asked to rate an older subordinate, this culture value 291
of “respect and esteem” may bias the rating. Similarly, in some Arabic cultures, women are expected to play a very subservient role, especially in public. Assertive women may receive biased rating because of these cross-cultural differences. With greater cultural diversity and the movement of employees across international borders, this potential source of bias becomes more likely. 10.6 Suggestions for Improvement The fact that managers frequently encounter problems with performance appraisal should not lead you to throw up your hands and give up on the concept. There are things that can be done to make performance appraisal more effective. The following are the suggestions in this regard:
Many traits often considered to be related to good performance may in fact, have little or no performance relatively. Traits like loyalty, initiative, courage, reliability and self-expression are intuitively appealing as desirable characteristics in employees. But the relevant question is, are individual who are evaluated as high on those traits higher performances than those who rate low? We cannot answer this question. We know that there are employees who rate high on these characteristics and are poor performers. We can find others who are excellent performers but do not score well on traits such as these. Our conclusion is that traits like loyalty and managers may prize initiative, but there is no evidence to support that certain traits will be adequate synonyms for performance in a large cross-section of jobs. 292
A second weakness in traits is the judgment self. What is loyalty? “When is an employee reliable? What you consider ‘loyalty’, I may not. So traits suffer from weak interrater agreement. Behaviorally derived measures can deal with both of these objectives. Because they deal with specific examples of performance - both good and bad - we avoid the problem of using inappropriate substitute.
If you cannot find good raters, the alternative is to make good raters. The training of appraisers can make these more accurate raters. Errors can be minimized through training workers. Training workshops are usually intended to explain to raters the purpose of the procedure, the mechanics of ‘how to do it’, pitfalls or biases they may encounter and answer to their questions. The training may include trail runs evaluating other classmates to gain some supervised experience. Companies even use videotapes and role playing evaluation sessions to give raters both experience with and insight into the evaluation process. During the training, the timing and scheduling of evaluations are discussed. (iii) Multiple Raters As the number of raters increases, the probability of attaining more accurate information increases. If person has had ten supervisors, nine having rated him or her excellent and one poor, we can discount the value of the one poor evaluation. Therefore, by moving employees about within the organizations so as to gain a number of 293
evaluations, we increase the probability of achieving move valid and reliable evaluations. (iv) Peer Evaluations Periodically, managers may find it difficult to evaluate their subordinates’ performance because they are not working with them every day. Unfortunately, unless they have this information, they may not be making an accurate assessment. And of their goal of the performance evaluation is to identify deficient areas and provide constructive feedback to their subordinates, they may be providing a disservice to these subordinates by not having all the information. Yet, how do they get this information? One of the easiest means is through peer evaluations. Employees’ co-worker, people explicitly familiar with the jobs involved mainly because they too are doing the same thing, conducts peer evaluations. They are the ones most aware of co-workers’ day - to - day work behaviour and should be given the opportunity to provide the management with some feedback. The main advantages to peer evaluation are that (i) there is a tendency for co-workers to offer more constructive insight to each other so that, as a unit, each will improve and (ii) their recommendations tend to be more specific regarding job behaviour- unless specificity exists, constructive measures are hard to gain. But necessary condition for this method is that the environment in the organization must be such that politics and competition for promotion are minimized. This environment can only be found in the most “mature” organizations. 294
(v) Evaluation Interviews Evaluation interviews are performance review sessions that give employees essential feedback about their past performance or future potential. Their importance demands preparation. Normally this includes a review of previous appraisals, identification of specific behaviours to be reinforced during the evaluation interview and a plan or approach to be used in providing the feedback. The evaluator may provide this feedback through several appraisals: tell and sell, tell and listen and problem solving. The tell and sell approach reviews the employee’s performance and tries to persuade the employee to perform better. It works best with new employees. The tell and listen allows the employee to explain reasons, give excuses and describe defensive feelings about performance. It attempts to overcome these reactions by counseling the employee on how to perform better. The problem solving approach identifies problem that are interfering with employee performance. Then, through training, coaching or counseling goals for future performance are set to remove these deficiencies.
Performance appraisal is a critical activity. It includes counseling and coaching as well. Its goal is to provide an accurate picture of past and/or future performance of an employee. To achieve this, performance standards are established. The standards are based on the job-related criteria that best determine successful job performance. Where possible, actual performance is measured directly and objectively. From a wide variety of appraisal
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techniques, specialists select the methods that most effectively measure employee performance against the previously set standards. Techniques can be selected both to review past performance and to anticipate performance in the future. The human resources department, often with little input from other parts of the organization usually designs the appraisal process. When it is time to implement a new appraisal approach, those who do the rating may have little idea about the appraisal process or its objectives. To overcome this shortcoming, the human resources department may design and conduct appraisal workshops to train managers. A necessary requirement of the appraisal process is employee feedback through an evaluation interview. The interviewer tries to balance positive areas of good performance with areas where performance is deficient so that the employee receives a realistic view. Perhaps the most significant challenge raised by performance appraisals is the feedback they provide about the human resources department’s performance. Human resources specialists need to be keenly aware that poor performance, especially when it is widespread, may reflect problems with previous human resources management activities.
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Define performance appraisal. How does it differ from counseling? Describe the process of appraisal. 2. What are the uses of performance appraisal? Discuss. 3. What are the limitations of performance appraisals? Give suggestions for improvement in performance appraisal. 4.
Explain in detail the following:
(a) Graphic Rating Scale 296
(b) Management by Objectives (c) Critical Incident Method
(d) Behaviorally Anchored Rating Scale 10.9 Suggested Readings 1. Sherlekar, S.A., Management- Value Oriented Approach. 2. French, Wendell L., Human Resource Management 3. Legge, Karen, Human Resource Management
4. Narayan, B., Human Resource Management 5. Saiyadain, Mirza S., Human Resource Management 297
Objective : The objective of this lesson is to make the students learn about the concept and methods of performance appraisal. Structure 18.1 Introduction 18.2 Uses of Performance Appraisal 18.3 The Appraisal Process 18.4 Methods of Performance Appraisal 18.5 Limitations of Performance Appraisal 18.6 Suggestions for Improvement 18.7 Summary 18.8 Self Assessment Exercise 18.9 Suggested Readings 18.1 Introduction Performance evaluation is one of the important functions of Human Resource Management (HRM). Human behaviour is a complex phenomenon because no one can anticipate accurately what the man is going to do exact. The individual joins an organization to satisfy his objectives. But the organization also has its own goals which need not to be in conformity with the individual goals. If the goals of the individual and organization are extremely contradictory, a conflict will arise which either result into suppression of human personality or a complete will set back to his work. It is not desirable that individual’s personality be suppressed but at the same time organization goals should also be achieved. For monitoring this process of achieving organizational goals, the performance of an individual needs to be assessed after a regular interval so that the desired behaviour could be maintained. Thus will also help the organization to satisfy the needs and
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the aspiration of the individual by providing him more facilities, improved working condition and carrier advancement. According to Heyel, the performance appraisal is the process of evaluating the performance and competencies of the employees in term of the requirements of the job for which he is employed, for the purpose of administration including placement, selection for promotions, providing financial rewards and other actions which require differential treatment among the members of a group as distinguished from action affecting all members equally. Performance appraisal may also be defined as any procedure that involves (i) setting work standard (ii) assessing the employees actual performance relative to these standards (iii) providing feedback to employee with the aim of motivating that person to eliminate performance deficiencies or to continue to perform above par. 18.2 Uses of Performance Appraisals (i) Performance improvement : Performance feedback allows the employee, the manager and personnel specialists to intervene with appropriate actions to improve performance. (ii) Compensation adjustments : Performance evaluations help decision makers determine who should receive pay raises. Many firms grant part or all of their pay increases and bonuses on the basis of merit, which is determined mostly through performance appraisals.
Promotions, transfers, and demotions are usually based on past or anticipated performance. Often promotions are a reward for past performance. 299
(iv) Training and development needs : Poor performance may indicate a need for retraining. Likewise, good performance may indicate untapped potential that should be developed.
guides career decisions about specific career paths one should investigate.
strengths or weaknesses in the personnel department’s staffing procedures.
errors in job analysis information, human resource plans, or other parts of the personnel management information system. Reliance on inaccurate information may lead to inappropriate hiring, training, or counseling decisions.
conceived job designs. Appraisals help diagnose these errors. (ix) Equal employment opportunity : Accurate performance appraisals that actually measure job-related performance ensures that internal placement decisions are not discriminatory.
Sometimes performance is influenced by factors outside the work environment, such as family, financial, health, or other personal matters. If these factors are uncovered through appraisals, the human resource department may be able to provide assistance. 300
(xi) Feedback to human resources : Good or bad performance throughout the organization indicates how well the human resource function is performing.
The evaluation process involves the following steps : Establish performance standards ↓ Communicate performance expectations to the employees ↓ Measure actual performance ↓ Compare actual performance with standards ↓ Discuss the appraisal with employee ↓ If necessary, initiate corrective action The appraisal process begins with the establishment of performance standards. At the time of designing a job and formulating a job description, performance standard are usually developed for the positions. These standards should be clear and not vague and objective enough to be understood and measured. Once performance standards are established, it is necessary to communicate these expectations. It should not be the part of the employees’ job to guess that what is expected of them. Unfortunately, too many jobs have vague standards. The problem is compounded when these standards are not communicated to the employees. It is important 301
to note that communication is a two-way street. Mere transference of information from manager to the subordinate regarding expectations is not communication. Communication only takes place when the transference of information has taken place and has been received and understood by the subordinate. Therefore, feedback is necessary from the subordinate to the manager. Satisfactory feedback ensures that the information communicated by manager has been received and understood in the way it was desired. The third step in the appraisal process is the measurement of performance. To determine what actual performance is, it is necessary to acquire information about it. We should be concerned with how we measure and what we measure. Four common source of information are frequently used by managers to measure actual performance : personal observations, statistical reports, oral reports and written reports. Each has its strength and weaknesses. However, a combination of them increases both the number of input sources and possibility of receiving reliable information. The fourth step in the appraisal process is the comparison of actual performance with standards. The attempt in this step is to note deviations between standard performance and actual performance so that we can proceed to the next phase of the appraisal process—the discussion of the appraisal with the employee. One of the most challenging tasks facing managers is to present an accurate appraisal to the subordinate and then have the subordinate accept the appraisal in the right spirit. Appraising performance touches on one of the most emotionally charged activities - the assessment of another individual’s contribution and ability. The impression that
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subordinates receive about their assessment has a strong impact on their self esteem and very important, on their subsequent performance. Of course conveying good news is considerably less difficult for both the manager and the subordinates then conveying the bad news that performance has been below expectations. In this context, the discussion of the appraisal can have negative as well as positive motivational consequences. This is reinforced, for example, when we recognize that statistically speaking, half of all employees are below average. The final step in the appraisal is the initiation of corrective action when necessary. Corrective action can be of two types. One is immediate and deals predominately with symptoms. The other is basic and delves into causes. Immediate correction action is often described as “putting out fires”, whereas basic corrective action gets to the source of deviation and seek to adjust the difference permanently. Coaching and counseling may be done or person may be deputed for formal training courses and decision making responsibilities and authority may be delegated to the subordinates. Attempt may also be needed to recommend for salary increased or promotions, if these decisions become plausible in light of the appraisal.
The previous section described the appraisal process in general terms. We now want to move from the general to the specific. In this section, we will look at how management can actually establish performance standard and devise instruments that can be used to measure and appraise an employee’s performance. There are a lot of methods to appraise the employees. No one approach is always best. Each has its
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strengths and weaknesses. Following are the some of the standard methods used by the organizations to measure the performance. 1. Graphic Rating Scale The graphic rating scale is the simplest and most popular technique for appraising the performance. It consists of typical rating scale. It lists traits (such as quality and reliability) and arrange of performance values (from unsatisfactory to outstanding) for each trait. The supervisor’s rates each subordinate by circling or checking the score that best describes his or her performance for each trait. The assigned value for the traits are then totaled. A performa of graphic rating scale items is shown on page 8. The rating method in easy to understand and easy to use. It permits the statistical tabulations of scores in terms of measures of central tendency, skewness and dispersion. It permits a ready comparison of scores among employees. The scores presumably reveal the merit or value of every individual. However, this method has certain drawbacks also. There is a disadvantage that a high score on one factor can compensate for a low score on another. If a man scores low for quantity of work, this may be counter-balanced by high scores for attendance, attitude, cooperativeness etc. In practice, rating tend to cluster on the high side with this system.
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