Performance Appraisals
The underlying reason for performance appraisals is to assist management in effectively staffing organizations for the purpose of improving productivity. When conducted properly, appraisals guide employees on improving their performance, allows managers to assess their employees' performance and take necessary actions in connection with hiring, promotions, demotions, training, compensation, and termination; and the ability to formulate goals set for employees.
Specific types of performance appraisal instruments will depend on the approaches used in measuring performance. Three approaches include behavioral, results-oriented, and traits (Aguinis, 2013). Accordingly, performance appraisal instruments will be geared towards the type of organization and the specific job responsibilities. A behavioral approach concentrates on what the duties of an employee, as opposed to a results approach that emphasizes outcomes, such as revenue generating results. A trait approach is focused on an individual employee virtually ignoring behaviors and results, and emphasizes cognitive and personality traits that remain relatively stable throughout an employee's lifetime (Aguinis, 2013).
The following three components of performance appraisal instruments are necessary for employee motivation. First, it cannot be overstated the importance of ongoing employee development and addressing employees' needs and goals. Second, on-going and frequent communications between supervisor and subordinate concerning expectations, results and suggestions for performance improvement are vital. Finally, having more than one rater to evaluate an employee is imperative in order to minimize bias.
Results of evaluations must be effectively communicated to employees on an ongoing basis, not just annually. It is this feedback about performance that will either improve or diminish an employees' behavior. For example, if a worker receives a favorable evaluation, it will likely serve to motivate the employee to perform at the same or higher level. Likewise, if an employee receives a negative appraisal, it could lead to either poorer performance, stagnation, or serve as an avenue for performance improvement, depending upon how the employee perceives the evaluation. For these reasons, employers can utilize a number of techniques to ensure that the end result of greater improvement in performance is met with written follow-ups, goal setting to overcome problems such as development, and allowing employees to have input into the appraisal process by allowing them to explain their reasons for their shortcoming (Aguinis, 2013).
In determining who should handle performance appraisals, an employee's immediate supervisor is in the best position to address a worker's performance, which should then be reviewed by a higher-level manager. To minimize bias associated with utilizing only one rater, it would be advantageous to have other evaluators, including co-workers, subordinates, and clients/customers to provide constructive criticism, as well as allowing for self-assessment (Aguinis, 2013).
Even when a performance evaluation program is properly designed, its effectiveness can be reduced by improperly using subjective measurements as opposed to objective or quantifiable measures. For example, a receptionist may be rated on the number of calls he/she picks up in an eight hour day or the number of complaints received in a given time period. In contrast, subjective measures cannot be quantified and can be easily distorted or manipulated by rater bias (Boll, 2011).
Deflation of performance ratings means purposefully lowering ratings associated with performance, and it can be in the form of centrality bias, in which a supervisor purposefully gives lower scores to all his/her subordinates (Bol, 2011). Both Boll (2011) and Spence (2011) agree that managers take into consideration their own incentives and personal agendas when subjectively evaluating performance. Spence (2011) further expounds upon this behavior by adding additional goals of managers, in connection with performance evaluations, to include the need to achieve and maintain a positive relationship with a subordinate, achieving and maintaining a positive image of themselves and their team, and achieving and maintaining behavior that is supportive of organizational norms and goals.
Organizations should not inflate or deflate performance ratings of employees under any circumstances. Although conscious rating distortion,termed by Spence (2011), or subjective bias is a universal phenomenon that occurs during performance evaluations, it should be minimized so that each employee has an opportunity to be evaluated fairly (Spence, 2011).
Appraisals serve an administrative function, informational role, and a motivational purpose. The administrative function is served by determining appropriate salary increases and other incentives. The informative role is completed when the system provides data to managers and the employees being evaluated. Finally, the motivational purpose is fulfilled when the process creates a learning environment that facilitates increased productivity and performance improvement (Aquinis, 2013).
Employees benefit from well-designed appraisal systems in a number of ways. First they obtain a better grasp of what is expected of them, as well as their positive attributes and deficiencies. Second, appraisals facilitate communications between worker and manager and vice versa. People want to know that by investing the best days and hours of their lives, they are making a substantial contribution for the benefit of the organization. People need to feel appreciated for their efforts, and not just in the form of a paycheck. Finally, employees need to be given assistance in creating improvement plans to enable them to understand better the organization's strategic goals (Aguinis, 2013).
Chief benefits that can accrue to the entire organization from the appraisal process include: better communication and decision making, improved motivation, increased productivity, which leads to increased organizational focus on strategic functions. Specifically, the performance appraisal process allows an organization to achieve a more productive labor force, develop training and educational programs aligned with employee development, minimize bias in subjective measures, and design effective compensation and reward programs. However, as Spence 2011) points out, in order to arrive at this final destination, managers must clarify to each employee the goals of the appraisal system, focus strictly on results and behavior appraisals, and allow employees to become more involved in designing and implementing the performance management process.
References
Aguinis, H. (2013). Performance management. 3rd Ed., Pearson Education, Inc.
Bol, J. (2011). The determinants and performance effects of managers' performance evaluation biases. Accounting Review, 86(5), 1549‚¬€1575.
Kondrasuk, J. (2011). So what would an ideal performance appraisal look like? The Journal of Applied Business and Economics, 12(1), 57‚¬€71.
Spence, J., & Keeping, L. (2011). Conscious rating distortion in performance appraisal: A review, commentary, and proposed framework for research. Human Resource Management Review, 21(2), 85‚¬€95.
Specific types of performance appraisal instruments will depend on the approaches used in measuring performance. Three approaches include behavioral, results-oriented, and traits (Aguinis, 2013). Accordingly, performance appraisal instruments will be geared towards the type of organization and the specific job responsibilities. A behavioral approach concentrates on what the duties of an employee, as opposed to a results approach that emphasizes outcomes, such as revenue generating results. A trait approach is focused on an individual employee virtually ignoring behaviors and results, and emphasizes cognitive and personality traits that remain relatively stable throughout an employee's lifetime (Aguinis, 2013).
The following three components of performance appraisal instruments are necessary for employee motivation. First, it cannot be overstated the importance of ongoing employee development and addressing employees' needs and goals. Second, on-going and frequent communications between supervisor and subordinate concerning expectations, results and suggestions for performance improvement are vital. Finally, having more than one rater to evaluate an employee is imperative in order to minimize bias.
Results of evaluations must be effectively communicated to employees on an ongoing basis, not just annually. It is this feedback about performance that will either improve or diminish an employees' behavior. For example, if a worker receives a favorable evaluation, it will likely serve to motivate the employee to perform at the same or higher level. Likewise, if an employee receives a negative appraisal, it could lead to either poorer performance, stagnation, or serve as an avenue for performance improvement, depending upon how the employee perceives the evaluation. For these reasons, employers can utilize a number of techniques to ensure that the end result of greater improvement in performance is met with written follow-ups, goal setting to overcome problems such as development, and allowing employees to have input into the appraisal process by allowing them to explain their reasons for their shortcoming (Aguinis, 2013).
In determining who should handle performance appraisals, an employee's immediate supervisor is in the best position to address a worker's performance, which should then be reviewed by a higher-level manager. To minimize bias associated with utilizing only one rater, it would be advantageous to have other evaluators, including co-workers, subordinates, and clients/customers to provide constructive criticism, as well as allowing for self-assessment (Aguinis, 2013).
Even when a performance evaluation program is properly designed, its effectiveness can be reduced by improperly using subjective measurements as opposed to objective or quantifiable measures. For example, a receptionist may be rated on the number of calls he/she picks up in an eight hour day or the number of complaints received in a given time period. In contrast, subjective measures cannot be quantified and can be easily distorted or manipulated by rater bias (Boll, 2011).
Deflation of performance ratings means purposefully lowering ratings associated with performance, and it can be in the form of centrality bias, in which a supervisor purposefully gives lower scores to all his/her subordinates (Bol, 2011). Both Boll (2011) and Spence (2011) agree that managers take into consideration their own incentives and personal agendas when subjectively evaluating performance. Spence (2011) further expounds upon this behavior by adding additional goals of managers, in connection with performance evaluations, to include the need to achieve and maintain a positive relationship with a subordinate, achieving and maintaining a positive image of themselves and their team, and achieving and maintaining behavior that is supportive of organizational norms and goals.
Organizations should not inflate or deflate performance ratings of employees under any circumstances. Although conscious rating distortion,termed by Spence (2011), or subjective bias is a universal phenomenon that occurs during performance evaluations, it should be minimized so that each employee has an opportunity to be evaluated fairly (Spence, 2011).
Appraisals serve an administrative function, informational role, and a motivational purpose. The administrative function is served by determining appropriate salary increases and other incentives. The informative role is completed when the system provides data to managers and the employees being evaluated. Finally, the motivational purpose is fulfilled when the process creates a learning environment that facilitates increased productivity and performance improvement (Aquinis, 2013).
Employees benefit from well-designed appraisal systems in a number of ways. First they obtain a better grasp of what is expected of them, as well as their positive attributes and deficiencies. Second, appraisals facilitate communications between worker and manager and vice versa. People want to know that by investing the best days and hours of their lives, they are making a substantial contribution for the benefit of the organization. People need to feel appreciated for their efforts, and not just in the form of a paycheck. Finally, employees need to be given assistance in creating improvement plans to enable them to understand better the organization's strategic goals (Aguinis, 2013).
Chief benefits that can accrue to the entire organization from the appraisal process include: better communication and decision making, improved motivation, increased productivity, which leads to increased organizational focus on strategic functions. Specifically, the performance appraisal process allows an organization to achieve a more productive labor force, develop training and educational programs aligned with employee development, minimize bias in subjective measures, and design effective compensation and reward programs. However, as Spence 2011) points out, in order to arrive at this final destination, managers must clarify to each employee the goals of the appraisal system, focus strictly on results and behavior appraisals, and allow employees to become more involved in designing and implementing the performance management process.
References
Aguinis, H. (2013). Performance management. 3rd Ed., Pearson Education, Inc.
Bol, J. (2011). The determinants and performance effects of managers' performance evaluation biases. Accounting Review, 86(5), 1549‚¬€1575.
Kondrasuk, J. (2011). So what would an ideal performance appraisal look like? The Journal of Applied Business and Economics, 12(1), 57‚¬€71.
Spence, J., & Keeping, L. (2011). Conscious rating distortion in performance appraisal: A review, commentary, and proposed framework for research. Human Resource Management Review, 21(2), 85‚¬€95.
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