appraisal

Introduction

In this learning blog entry, I am going to present key concepts, theories and models from reading the chapter 7: Appraising and Managing Performance, from the eight edition (2016) of Managing Human Resources by Gómez-Mejía, Balkin and Cardy. I am going to summarize the key concepts from this chapter including definition of Performance Appraisal, Identifying Performance Dimensions, Measuring Performance and Managing the Performance. I will also present a case of “A Performance Appraisal Horror Story” and two other articles related to this topic.

What is Performance Appraisal?

Performance appraisal is the identification, measurement, and management of human performance in organizations. Identification means determining the specific areas of work the manager should be evaluating when measuring the overall performance. The evaluating should be done with analysis and focus on performance that affects organizational success rather than performance-irrelevant characteristics, race, age or sex for example. (Gómez-Mejía. Balkin & Cardy 2016, 233.)

Measurement is the foundation of the appraisal system including the managerial conclusion whether the employee’s performance was good or bad. This should be done consistently throughout the organization and the assessment standards should be comparable with each other. Management is the overruling goal for all the appraisal systems. Appraisal should always be future-oriented activity that provides employees with useful feedback and instructs them to better performances. (Gómez-Mejía. Balkin & Cardy 2016, 233.)

Appraisal can be used administratively or developmentally. Performance appraisals are used administratively when it is fundamental for the decision about the employee’s work conditions, including promotions, termination or rewards. Developmental appraisals are more goaled towards improving employee’s performance and strengthening their skill sets. This often includes providing feedback, counseling employees on effective work behaviors and offering them training and other learning opportunities to become more efficient in their jobs. (Gómez-Mejía. Balkin & Cardy 2016, 234.)

Identifying Performance Dimensions

Performance appraisal begins by identifying the dimensions, the aspects of performance that determine effective job performance. Dimensions should be identified with tools like job analysis to keep it legally and objectively legit. Performance appraisal process needs to add value for the business and the dimensions should be based on the organizations strategic objectives to make sure that everyone is working towards the same goal. Often popular approach to identifying performance dimensions focuses on competencies, the characteristics related with successful performance. The set of competencies is commonly described as competency model. (Gómez-Mejía. Balkin & Cardy 2016, 234-235.)

Measuring Performance

The methods that are used to measure employee performance are categorized in:

1. Whether the type of judgement called for is relative or absolute

On relative judgement an appraisal format asks supervisors to compare an employee’s performance to the performance of the other employees with the same job description.

On absolute judgement an appraisal format asks supervisors to make judgements about an employee’s performance based exclusively on performance criteria. (Gómez-Mejía. Balkin & Cardy 2016, 236.)

2. Whether the measure focuses on traits, behavior, or outcomes.

Together with relative and absolute judgements, performance measurement systems can be also divided by the type of performance data that they focus on: trait data, behavioral data or outcome data. Trait appraisal instrument is an appraisal tool that asks a supervisor to make judgements about employee’s characteristics that are often consistent and persisting. Behavioral appraisal instrument in the other hand is an appraisal tool that asks managers to assess employee’s behavioral habits. (Gómez-Mejía. Balkin & Cardy 2016, 238.)

All the measures have its advantages and disadvantages. However, the overall quality of assessments is more dependent of the judger’s motivation and proficiency than of the type of instrument chosen.

Managers face five challenges in measuring performance:

– Rate errors & bias

– The Influence of liking

– Organizational politics

– Whether to focus on the individual or the group

– Legal issues (discrimination & employment at will)

(Gómez-Mejía. Balkin & Cardy 2016, 243-244.)

Managing Performance & Challenges to Effective Performance Measurement

The main goal of any appraisal system is performance management. To manage and improve their employee’s performance, managers must investigate the reasons of performance and its problems and react to that. It is important to develop action plans, empower workers to find solutions and use performance-focused communication. (Gómez-Mejía. Balkin & Cardy 2016, 251-254.)

There are some situational factors, organizational characteristics that can positively or negatively influence performance. These situational factors to consider in determining the causes of performance problems.

Poor condition of work activities among workers
Inadequate information or instructions needed to perform a job
Low-quality materials
Lack of necessary equipment
Inability to obtain raw materials, parts or supplies
Inadequate financial resources
Poor supervision
Uncooperative coworkers
Inadequate training
Insufficient time to produce the quantity or quality of work required
A poor work environment
Equipment breakdown

(Gómez-Mejía. Balkin & Cardy 2016, 252.)

The communication between the supervisor and employee is critical to have an effective performance management. Based on what is communicated and how its done can determine whether performance will improve or weaken in the future. (Gómez-Mejía. Balkin & Cardy 2016, 243-253.)

Case PM: A Performance Appraisal Horror Story

This article was published by Jerry Bumgarner on April 12, 2011 in Cascade Employers Association. The article tells about Jerry’s first performance appraisal experience. It was a complete surprise for him to hear from his supervisor a bad feedback of his performance after doing a lot of work and even overtime. It turned out that they did not actually have a good communication between the employee and manager. The expectations and mutual goals did not meet. After having a bad experience of this performance appraisal the HR department soon realized to take action and make a structured plan for compensations and goals for Jerry. The understanding of common goals and targets became more clear and the communication between supervisor and the employee got better. While Jerry was given a clear targets to shoot together with the management it helped them to achieve and exceed the expectations and become more efficient on their jobs. (Bumgarner, 2011).

”Employees are more likely to hit performance targets and contribute to the organization’s success, if they know in advance what the target looks like. While it takes time to do it right, there are many pay-offs. In addition to supporting the supervisor/employee relationship, employees will be more focused and engaged, customers will be happier, and the organization can expect better results”(Bumgarner, 2011).

Article: The Performance Management Revolution

This article was published by Peter Cappelli & Anna Tavis on October 2016 in Harvard Business Review. In the article Brian Jensen explained that a company, Colorcon, had found a more effective way of reinforcing desired behaviors and managing performance than the traditional annual reviews of employees. Instead, supervisors were giving people instant feedback, tying it to individuals’ own goals, and handing out weekly bonuses to employees they saw doing good things.

Cappelli and Tavis also describes how performance management has developed in resent years and why current thinking has changed drastically. Firstly, today’s tight labor market creates a big pressure to keep employees happy and satisfied. Secondly, the quickly changing business environment requires evolving. They also argue that by Prioritizing improvement over pointing fingers, the teamwork gets more efficient. (Cappelli & Tavis, 2016).

”Some companies worry that going numberless may make it harder to align individual and organizational goals, award merit raises, identify poor performers, and counter claims of discrimination—though traditional appraisals haven’t solved those problems, either. Other firms are trying hybrid approaches—for example, giving employees performance ratings on multiple dimensions, coupled with regular development feedback”(Cappelli & Tavis, 2016).

Article: What Solid Research Actually Says About Performance Appraisals

This article was published by Jack Zenger on October 12, 2017 in Forbes. The article brings up the changes in performance appraisals on the resent years . Previously the traditional annual appraisal given in the organizations was more focused on reviewing the past whether now it is rather discussing about future. The typical ratings are being replaced with discussions about performance and the manager and employee are setting stretched goals for the future.

The GE team decided to conduct research within GE on this topic. Their findings were:

1. Criticism by a manager has a negative effect on the recipient.

2. Praise does little to change performance. (Later research suggests praise does improve the manager-subordinate relationship.)

3. Criticism generates defensiveness on the part of the subordinate, which in turn leads to poorer performance.

4. Coaching between a manager and a subordinate should occur day-to-day, and not be reserved for a once-a-year event.

5. Goal setting with clear targets and deadlines improves performance.

6. Participation by the subordinate in that goal setting process produces performance improvement.

7. The need to justify compensation decisions was allowed to eclipse the psychological pain inflicted by the appraisal process.

(Zenger 2017.)

References

Bumgarner, J. 2011. Cascade Employers Blog. A Performance Appraisal Horror Story (With A Happy Ending). URL: http://www.cascadeemployersblog.com/salarytrends/a-performance-appraisal-horror-story-with-a-happy-ending Accessed: 12 February 2020.

Cappelli, P. & Tavis, A. October 2016. Harvard Business Review. The Performance Management Revolution. URL: https://hbr.org/2016/10/the-performance-management-revolution Accessed: 12 February 2020.

Gomez-Mejia, L.R., Balkin, D.B. and Cardy, R.L. 2016. Managing Human Resources. Global Edition 8/E.

Zenger, J. 12 October 2017. Forbes. What Solid Research Actually Says About Performance Appraisals. URL: https://www.forbes.com/sites/jackzenger/2017/10/12/what-solid-research-actually-says-about-performance-appraisals/#569a0b232b59 Accessed: 12 February 2020.

Cover picture source URL: https://pixabay.com/illustrations/quality-hook-check-mark-excellent-787663/ Accessed: 12 February 2020.