The primary objectives of this chapter are:
From time immemorial, in any company or organization, the whole idea of performance appraisal was seen as a form of interaction between individual performance and motivation to continue with that. The position of an employee in a particular organization is specifically associated with how a performance is assessed and motivation to complete the work.
For an organization to perform well, it is of utmost importance that the company has a detailed planning schedule and this further is associated with how correct resources and clarity of the determinants depict a chance to reach that goal and allow a company to reach the topmost rungs.
Central managerial position in the company is placed by the set of goals and standards, correct set of resources, and finally guidance to reach the top.
Thus, correct performance is judged by, not just how an individual performs when placed with a certain amount of motivation but also how that individual works for betterment of the company or concerned institution.
Performance management and performance appraisal
In any organization, after a certain point of time, performance of employees is reviewed. It is based on this reviewing that employees are given a rise in their position or salary structure. It is to be noted that this system is a centrally held system with the HR manager conducting the concerned procedure. The most important role is a line manager who appraises his or her staff on an annual basis for getting the correct updates of his or her performance standards.
But the biggest glitch that occurs is – most of this elaborate procedure is kept stored in the form, and until the next review process, this performance appraisal almost holds no value.
The whole idea of how this performance appraisal will be done will completely depend on the company and at times can cover aspects as performance in a particular job, behavior of that person and personality. So, options are given to measure the performance in a quantitative or a qualitative manner.
In case of qualitative appraisal,a set of unstructured narrative is found which includes general performance that the concerned employee has shown over the years. What’s important to note is that, in case of such general appraisals, most of the important pointers are missed out. Therefore, you will not be able to get a detailed analysis of the concerned employee’s performance. So for comparison purposes, they do not hold much water.
According to Coates (1994), the performance analysis of a particular employee depends upon his or her conformation to the company codes. Just because a particular employee does not conform to the rules of that company, he or she cannot be said to be a bad performer. These are certain pointers that are not taken into consideration when it comes to qualitative and quantitative performance appraisal.
Certain traditional appraisal modes are purely based on personality standards of an individual. It depends on enthusiasm, resourcefulness and drives that a particular employee has for betterment of the company. However, these features are measured by different people in a different manner. Also, there are chances of some biased behavior when it comes to rating that is given on the basis of these personality traits. Also, given that in most cases, similar scales are used for different job profiles, therefore it cannot be said to be an ideal scale to measure a particular employee’s standards.
There are other approaches that are associated with linking of rating along with behavior and performance of that job and to ensure that this works in the best manner, behavioral observation scales (BOS)is used.
Another very important mode to make such appraisals worthy is setting a particular set of targets for a specific year and making sure that the concerned employees achieve that. But the involvement of appraise in this setting up of targets is minimal. In case of a competency profile, firstly it has to be identified, and only then can appraisal of a performer be used in the correct manner. An ideal case is combining job appraisals with an assessment of competency with a set of job account abilities that are present in that system.
It is also important to note that there is a final mode of appraisal that can be followed. There is multiple electronic surveillance systems that records the situation and activities of the concerned employees via computer operated tools. Their activity is further analyzed and only then can the whole issue be sorted. According to Newton and Findlay (1996), at times the organization itself tests the performance of sales staff by acting as consumers. This method is known as “mystery shoppers.”
According to IRS (2003) survey, a wide number of employees provided good appraisals for their peers. Though it can be termed as a success, however, on a wider basis, this cannot be said to be an authentic mode of appraisal. Rather, it can be said that this system is treated as an administrative procedure, and is to a great extent ineffective.
According to The Employment Studies Institute (IRS 2001), this system is to a great extent a fallacy in itself, since it is asked to deliver in multiple areas. Hence, it is not possible for a particular person to provide an ideal situation. The primary areas of focus include performance, motivation, reward, development and correct assessment of potential.
Now, these systems at various steps focus on various aspects, which is why – managers can give constructive feedback, workers can work on particular areas and improve their performance and set up correct goals in future for maximum benefit of the organization.
According to Research by Longenecker (1997)USA, there are 3 specific reasons for failure of the appraisal: 1. Improper rating instrument/measurement techniques 2. Not clear criteria of performance 3. Poor working relation with the concerned employees and boss.
However, apart from these, there are other problems that include – improper structure of the review infrastructure, lack of appraisal skills and the concerned process that it follows while carrying out this appraisal.
The most important point that has to be understood is what system it follows. If this appraisal system is something that has the HR function as its head, then the role of line managers in this appraisal system absolutely holds no value.
Not just that, if paperwork is associated with HR department, then the whole purpose of performance appraisal is defeated. According to Egan (1995), the concept of not correct appraisal stems from wrong designing and implementation of this process, and hence most of the organization is not very cooperative in this case.
Thus, on the whole from this one can get the role of performance appraisal in an organization.
Performance Management System
With performance appraisal being one of the most opted techniques for judging the performance of an employee, with this performance management system, the correct management of employees is judged in this manner.
According to Bevan and Thompson (1992) close to 20% organizations that they have reviewed have performance management system for judging their employees’ position and based on that reviewing their performance levels. Since they are well tied to objectives of that concerned organization, therefore performance is way better than organizational needs.
Hence with performance planning, the efforts of the employees are directed towards the priorities of a particular organization – that includes delivering reports against performance of employees, allowing efforts of employees to be successful and rewarding that performance in the best possible manner.
The basic idea of performance management comes from the fact that it is based primarily on ability rather than merely on motivation. The most important process that has to be understood is what the company demands of its employees and what are its priorities. So, apart from the goals, it is also the motivation that is required for any organization to function in the correct manner. Also, it is important that the concerned party should be constant updates about his or her progress so that there is consistent progress in her work.
While setting up the goals, it is important to note that these goals should be participative in nature and achievable to a certain extent. Apart from that, a person requires feedback at every instant to ensure that there is no chance of lagging behind.
Another very important section of this appraisal is theory of expectation. This is associated with what is expected of a particular employee, whether the goals that are set are achievable by the concerned party, also it should be remembered that matching of one goal leads to matching of another and finally to the rewards associated with it.
However, according to Bevan and Thompson, there is no specific connection between the performance management system and performance that is taken on an organizational basis, when concerned with private sector.
It must be seen that appraisals systems are both rewards driven as well as development driven. Now it depends completely on the concerned organization or at times the employee as to what situation, they would want to be in and what they want their employees to work for.
There are certain aspects that this appraisal system is associated with – ‘shared understanding of ideas,’ ‘agreement between parties,’ ‘dialogue between parties’ and ‘mutual commitment.’Thus, whatever be the reason for development, it is important to note that management of performance is either motivational, or it can be seen from a judgmental point of view as well.
When the developmental aspects are taken into consideration, it is the motivation that is taken into account. Where measurement is the focus, it can be found that performance management is taken as the judgmental point of view.
The primary way of determining ‘performance management’ in the best manner is ‘management of objectives.’ However, performance management in comparison to others is taken as a customized mode of product that is invested on current set of review and performance basis. So there can be no precise definition that is suitable for defining this term in the best manner.
In present times, it can be stated that performance management is a tool that can be used for cultural change, only if the concerned organization is held by a strong leader. It is only a strong leadership that can ideally provide a proper path to correct execution of performance management.