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Public Personnel Management

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Employee's performance appraisal is aimed at evaluating the effectiveness, productivity and professionalism of employees and identifying the areas for further training and promotion. Performance evaluation is intended to study the level of appropriated knowledge and personal attitude to the performed working tasks and the ability to perform the kind of activity in which the employee is engaged. Moreover, it is aimed at identifying the level of his potential to assess the prospects for growth.

Performance appraisal is usually compared with the performance management. Performance management is a “continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization” (Aguinis, 2009, p. 3). The performance appraisal and its interpretation in contrast to performance management analyses past achievements using system of rankings and ratings, and it is tightly connected with reward and punishments and with payment system in particular (Hennessey & Bernardin 2003).

According to Griffin (2012) the purposes of appraisal performance are the following:

- appraisal is conducted with the aim to “validate selection devices or assess the impact of training programs” (p.235);

- administrative purpose of performance evaluation is the assistance in managerial understanding of potential raise in payments level or further promotion in case the employee show extraordinary results in his current position;

- providing feedback to the employee for his thorough vision of the task performed and the attitude shown.

Griffin (2012) points that there are objective and judgment methods. Objective measures are combined with physical evidence, for instance, the volume of sales made by the employee or scrap rate. In this type of appraisal methods, opportunity bias is often present. Adjusting of the obtained output results is often needed for the fair and indiscriminate evaluation. Special performance test is also used as the efficient objective method of appraisal performance. Also it eliminates the possibility of opportunity bias existence, but testing may represent partial picture of the employee performance because during the testing he/she could demonstrate the most of his/her potential, while the employee’s attitude to work, accuracy, speed of task fulfillment can be low and inefficient in a daily performance. Ranking and rating techniques are included to the judgment methods that provide more detailed and essential data on the working performance. Ranking is very difficult for the correct interpretation as each employee is compared to their counterparts and it is rather difficult to evaluate the ranking of employees from different in size groups, company or the level of responsibility taken by each group fairly. Moreover, it does not provide any feedback to the employee with the aim of his/her further development and carrier growth. In contrast to the ranking method, rating uses comparison of employee’s performance data with the fixed set of standards and indicators. Behaviorally Anchored Rating Scale (BARS) is one example of implementation of rating appraisal method. Graphic rating scale is widely used in management practice.

One of the ways to improve the performance appraisal techniques is diminishing the level of errors and biases present in the rating scales. It implies analysing and adjusting of the “recency error” occurring due to the tendency “to base judgments on the subordinate’s most recent performance because it is more easily recalled” (Griffin, 2012, p.236). Another crucial issue is to avoid implementation of too severe scales or the scales which give three extreme points of “very good”, “very low” and “average” where naturally the manager often chooses “average” indicator.

The last stage but not the least important is the performance appraisal interview providing the employee with feedback on the results of his/her performance evaluation. The managers perceive this stage as the most difficult and specific. They point out that the appropriate training session as the obligatory factor for successful conducting of an interview in such a way that will not scare or totally disappoint the employee but will give him/her the feeling of further development and self-enhancement necessity; thus, motivating him for growth and constant improvement (Milne 2007).

Davis (2011) points out seven biggest issues that influence the quality of performance appraisal. They are direct bias, indirect bias, competency, devolution, authoritarianism, informal, incidental and ongoing appraising, and information collection. The author underlines that managers even the most objective ones give advantage and better ratings to the employees who share similar qualities with the managers. This bias is based on personal attitude to the employee and on religious, political, cultural, social or family reasons. Indirect bias of performance appraisal is connected with the company’s environment, corporate values, rules, dress code, ceremonies and other cultural, political and social peculiarities. As to the competency problems the author argues about lack of specialized in-depth preparation for the competent performance appraisal conduct and taking of balanced decision. The most important issue is to focus more on the training and development of application of the essential performance appraisal techniques and correctly implement them into practice. Davis put an emphasize on the fact that “training and coaching for both participants in the appraisal procedur,e manager and employee, the main focus should be on such topics as open communication, listening skills, collaboration, reaching agreement, negotiation skills, establishing of mutual trust and devising of a joint action plan” (p.13).

Pettijohn et al. (2001) argue that managers perceive performance appraisal trivially as a popular in business society annual obligation. Therefore, managers understate its importance while not understanding the potential and advantages of performance evaluation procedure. Such aspects as lack of awareness on how often this procedure should take place and what criteria should be used are the main reasons why managers don’t want to use it in their working practice as an efficient tool for motivation and facilitation of the employees to further development. The authors describe the biggest advantage of the performance appraisal as a “reduce in role ambiguity” (p.755) that facilitates the efforts made for the better working results, decrease in turnover and increase in an employee’s commitment. The purpose of the performance appraisal implementation is provision of the information and identification of further direction for the employee in the area of performance improvement and additional training.

360-degree appraisal is an evaluation method in the form of detailed structured feedback on the employee’s competencies and performance records given by people who interact with him at different levels (self-appraisal, manager, selected peers, team members or colleagues, subordinates). 360-degree feedback allows a more objective view on the weaknesses and strengths that the employee shows, the level of his/her competency. In some cases, for obtaining the full information on the behaviour and the demonstrated competency in achieving the established goal such feedback is collected from the external customers, suppliers, friends and family members. This technique can be applied in different areas such as employee’s self-development, team-building, supplement traditional 180-degree top-bottom appraisal, strategic development, training initiatives, remuneration. Moreover, this technique facilitates open communication in the organisations, it assists in collecting a large amount of data for better qualitative evaluation, enhances motivation. The results get after the interview with all participants are divided into four categories: developmental areas, strengths, discrepancies, and hidden strengths. Firth two categories reflect the convergence of views provided by the employee himself and the other group member. The discrepancy can be the unexpected feedback for the employee. It reveals the potential of the employee that was marked as the hidden strength by the respondents. However, 360-degree feedback is time consuming as the feedback process includes eight stages such as observation, briefing, questionnaire completion, report processing, feedback, reflection, action plan, changed behaviour. As the author argues, first five stages can be implemented in two months or even more (Ward 2003). 

Brown, Hyatt and Benson (2010) state that performance appraisals is an efficient tool for the employees’ motivation and growth facilitation, change in attitude to working responsibilities and type of behavior, improvement in manager-subordinate relationship in the form of meaningful communication of company’s goal and tasks. Performance appraisal is a formal, timely based review of the employees’ performance with its results to be used in development program for the employee.

Prowse and Prowse (2009) in their study point out that the “key objective of appraisal is to provide the employees with the line manager’s feedback on their performance” (p.70). The quality and effectiveness of such a feedback are based on the observations on performance, style of communication of the feedback, the reasons why such a style was chosen, and the determinants of the level of performance measurement. The authors emphasize that this method of evaluation of the employees’ performance is rather biased and propose to expand its techniques from “top-down” appraisal to multi-rater more objective upward 360-degree appraisal.

The main task for improving of the efficiency and objectivity of the performance appraisal is to conduct training on main principles, techniques and criteria so that the managers will understand the practical value and importance of the improving employee’s performance using the appropriate feedback and motivation of  the staff. Not least important is not only to fill the developed specificity for the company form with rating scales, but be able to provide an employee with the future plan of action, to help to reach the aim of changing the weaknesses in some professional areas such as communication skills or on time performance. In other case, performance appraisal turns to one more procedure proposed by Human Resource department that does not solve any problem in the way in which the performance of the employees is improving. Feedback that is provided upon completion of performance appraisal procedures should point out not just the areas where the improvements are proposed but also stress the strengths that the employee possesses (Kuvaas 2011). 

Performance appraisal methods are divided into two broad groups: individual evaluation methods and multiple-person evaluation methods. Individual evaluation methods include graphic rating scale, essay evaluation, critical incident technique, checklists and weighted checklists, behaviorally anchored rating scales, behavioral observation scales. Graphic rating scale provides a list of traits and a performance score given for each a range. Behaviorally anchored rating scales implement quantified scale with the developed specific behavior criteria for each individual position. The biggest advantages of this method are behaviorally based, ease at use, equitable, putting an emphasis on the individuality rather than common behavior, action-oriented giving the employee the opportunity to understand the specific expectations and responsibilities that the company expects to observe and fulfill by the employee.  The biggest disadvantage of this method is that implementation of behaviorally anchored rating scales is expensive, requires much time to prepare and maintain, difficult in creating while the jobs tasks are constantly changing and the scale do not always include the full list of tasks that the employee should perform. Essay writing is a useful tool in providing feedback on the employee, but there is a little possibility to make a comparison with the performance level of the other employees. Critical incidents technique implies identifying specific situation (events) where the employee show their strong skills or perform inefficiently. Applying this method demands to describe and fix the performance of the employee in the event, describe the problems needed to be solved and areas where the improvement should be made instead of marking several criteria proposing in rating forms. This technique is not recommended to be conducted on time base but to be recorded after the critical event happened (Caruth & Humphreys 2008).

Regarding the most commonly used rating scales techniques, it should be mentioned that they are highly structured and give standardized formulation of performance indicators. Obtained ratings are comparable, it is easy to understand and explain. Each employee is evaluated during a common for all workforce procedure. At the same time great popularity of this method among human resource departments has several influential interpretation disadvantages. These are recency errors, Halo effect, Horns effect, stereotypes, perceived meaning, sequencing effect, and central tendency. Great attention is paid to the rating scale marks. It is pointed out that such ratings as poor, acceptable/average, good do not provide sufficient information for the appraiser and appraisees. At the same time extended scale such as extremely unlikely, very unlikely, somewhat unlikely, somewhat likely, very likely, extremely likely and the similar variants produces ambiguous interpretation and, therefore, increase the subjectivity of research. Such 5-grade scale as exceptional, exceeds expectations, meets expectations, improvement needed, unsatisfactory is recommended and proved at practice to be efficient.  “Exceptional” rating implies that the employee shows superior performance using his/her outstanding skills and knowledge in all areas of responsibility. Moreover, it means that his/her performance far exceeded expectations due to superior working tasks fulfillment and exceptionally high quality provided. The main goal was achieved; the employee made an extraordinary contribution to the company’s development. This rating is rarely given whereas there are always areas needing further growth and improvement. The rating “exceeds expectations” implies that the employee demonstrate performance that required exceptional skills in crucial areas of responsibility; the objectives were met, quality of work was excellent. Under “meet expectation”, the manager understands that the employee showed very good quality of work and the most essential for the company goal were met.  The rating “improvement needed” is the indicator that some areas of the employee’s responsibility were weak to show the exceptional quality. Moreover, the most essential goals were not met. In such a case it is highly important to develop in-detailed development plan for the employee with the timelines and continuous progress measurement.

The worst rating “unsatisfactory” reveals that the employee did not cope with the tasks in the areas of his/her responsibility, even the visible progress towards the goals achieving was not made. It is needed to conduct specialized interview with such an employee to find out the reasons for such poor performance and develop an individual plan for the further professional growth and development (Analoui & Fell 2002).

Multi-person evaluation methods include ranking, paired comparison, forced distribution, and management by objectives. First method implies ranking employees from the best performer to the poorest performer, while paired comparison proposes creating a chart including crucial for the position traits and all possible pairs of employees ranked as the best or the worst in each pair. These methods are randomly used nowadays whereas it is difficult to provide efficient feedback to the employees. Forced Choice Technique is similar to Curve Grading where each group of employees depending on the performance results has its percentage. The interpretation is made using such criterion factors as problem solving and critical thinking skills, attitude, dependability, cooperation and team work and others specific for each industry indicators. Management by objectives process includes such stages as establishing of the company’s goals, defining what role the employee performs and what objectives he/she should achieve; continuous performance evaluation and support, performance appraisal, feedback providing, reward or punishment. It provides a clear understanding of the set goals for the employees, enhancing motivation, coordination and communication (Kreitner & Kinicki 2010).

According to Caruth and Humphreys (2008) effective performance appraisal includes the following characteristics: “formalization, job relatedness, standards and measurements, validity, reliability, open communication, trained appraisers, ease of use, employee accessibility to results, review procedures, and appeal procedures” (p.25). It is highly important whether the appraisal procedure is formalized and whether the written policies and instructions exist. Moreover it should the management should clearly understand what purpose the manager implemented such performance appraisal with. Authors argue that in some cases managers could not clearly formulate the purpose of performance appraisal conduction. It was only an administrative obligation for them. In such a case, performance appraisal does not fulfill motivating and developmental function. The authors also put an emphasis on the review procedures that is the confirmation or disagreement of given results and feedback created with the aim to avoid any bias, favoritism or discrimination and provide high level of accuracy, fairness and consistency.

Hiam (2003) points out that the most important objective of the performance appraisal is to provide such feedback to employee that will give the positive changes in the form of motivating and efficient communication inside the working team. The official feedback is given by the manager to the employee during the interview. The important task for the manager is to prepare him/herself and let the employee understand that this procedure is conducted in his/her favor to help him/her see the weak areas of his/her performance and offer possible solutions.

In order to minimize subjectivity and common errors when implementing performance appraisal techniques the emphasis should be placed on:

- addressing specific job activity rather than providing one standardized criteria;

- conducting performance evaluation on a regular basis rather than annually;

- using unclear terms in the performance expectation which could be differently interpretated;

- proposing clear and meaningful dimensions;

- conducting of an assessment for the small number of employees to provide development plan individually (Appelbaum, Roy & Gilliland 2011).

Mani (2002) offers to improve traditional rating scale so that the rating scale was based on the competency measurements. In other words, it is based on researching how often needed for the specific job position competency is shown by the employee and offers immediate solution search if  the competency is hardly observed. Another improvement of performance appraisal can be addressing clear objectives achievements and transforming the appraisal procedure from the automatic form filling to the specific for each activity evaluation, development and plan change.

Performance appraisal is an efficient tool in providing feedback on the employees’ performance successes, thus, showing them the areas where the improvement and development is needed and motivating for further professional growth. Using different methods of the appraisal performance system such as individual evaluation methods and multiple-person evaluation methods in the form of rating scales, checklists, rankings, etc., has pros and con. These include the existence of biased view of the manager in the form of Halo and Horns effect, recency errors, potential of different interpretation of the criteria and performance expectation.  At the same time it is rather inexpensive, standardized and formalized, and easy to use d. The biggest task that is set for the company applying this system is to assure that appropriate training and coaching of the managers  is provided in order to reach fair, objective and practical interpretation of the assessment results. Performance appraisal should be conducted continuously and be applicable to the specific position rather than to the company’s personnel as a whole.

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