The ideal performance appraisal is a format, not a form.

Author:Kondrasuk, Jack N.
 
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INTRODUCTION

The latest edition of one of the most prominent human resource management textbooks (Dessler, 2011) points out that "every manager needs some way to appraise employees' performance" (p. 306), that performance appraisal (PA) will be done in each case--whether by the supervising manager or others (e.g. peers), and "few things managers do are fraught with more peril than appraising subordinates; performance" (p. 321). The appraisal of employee job performance is one of the most important, most common, and probably the most disliked human resource management activity. Others have echoed these points.

Thomas and Bretz (1994) state that PA, as typically conducted, "has remained a largely unsatisfactory endeavor" for years even though it is a very important HRM area; "both managers and employees tend to approach appraisal feedback sessions with fear and loathing" (p. 28). Thomas and Bretz state that managers and employees dislike the PA process because neither was involved in developing the forms nor processes, neither's suggestions for changes are solicited nor acted upon, managers don't like to give nor do subordinates like to receive negative messages, negative PA ratings have negative effects on employee careers and perceptions of their managers, and there are no rewards for taking the manager's valuable time to appropriately conduct the PA. Performance appraisal has been said to be "one of six deadly diseases" that keep organizations from performing at their peak (Staff of Employee Recruitment & Retention, 2010). However, Grote (2010) points out that PA has more influence on individual careers and work lives than any other management process. Performance appraisal can both make a business more efficient and help keep employees motivated. Evaluating people at regular intervals, appraisals help firms show where their employees excel, where they can improve, and how well they have followed the goals set by the firm.

PURPOSE OF THE PAPER

What would be an ideal performance appraisal (PA)? From the supervisor's perspective, it would probably be an appraisal that would be accurate and helpful in improving the employee's job performance and making administrative decisions (e. g. pay raises) about the employee. From the employee's perspective it would probably be an appraisal that would fully capture all that the employee has contributed in the job to the employer and enable continued career growth for the employee. From society's view it would probably be an appraisal that fairly assesses the employee's performance and is used justly in the employment situation to make the organization more useful to society. The purpose of this paper is to develop an ideal PA--or come as close as possible to a panacea in this area. To accomplish this we need to define PA and its goals, understand how PA is usually conducted, list the problem areas encountered in typical performance appraisals, and then propose an ideal PA to meet the concerns. The ideal PA system proposed here will seek to rectify the problem areas and achieve the goals of PA. The ideal PA system is meant to be theoretical but with enough details to make it pragmatically useful now. We start with the general background and the specific definition of PA.

BACKGROUND OF PA

Finding that the typical PA is disliked by both the appraiser and the appraise is not unexpected as it started as a negative procedure. The use of performance appraisals became institutionalized as a way of monitoring organizational output during the Industrial Revolution when bureaucratic organizations proliferated (Fandray, 2001). Use of performance appraisals during this epoch was usually linked to reactivity and punishment for poor performance (Kennedy & Dresser, 2001). In other words, the PA mechanism focused on the threat of punishing employees for poor performance as a means for motivating them to achieve higher performance standards. As industrialization continued and bureaucratic organizations proliferated, however, the PA system similarly began to evolve. Kennedy and Dresser (2001) told how "organizations gradually adopted more refined methods for seeking improvement in workplace performance ... eventually championing rewards over punishment, forsaking the stick for the carrot, arguing that performance should not only be appraised but also managed, and devising new and sometimes complex methods to improve performance" (p. 8). Within the last thirty years scholars and professionals alike have vigorously analyzed and critically examined the use and effectiveness of performance appraisals within the organizational context. Unfortunately, however, no consensus exists as to what type of PA system best meets the desired objectives.

Definition of PA

The term "Performance Appraisal" (PA) has been synonymous with performance evaluation, performance review, and other similar terms. PA has, at various times, referred to 1) an instrument or form to assess an employee's job performance, 2) an interview where an employee's job performance is assessed and feedback is given to the employee, 3) a system of setting employee job expectations/employee actual job performance/assessing that performance/feedback to the employee on the performance assessment and how to improve it in the future/setting new goals and expectations for another period, or 4) performance management with job performance appraisal a part of it (Dessler, 2011). More recently a fifth entry has been Integrated Organizational Performance Management with vertical and horizontal loadings and strategic/operating plans and individual goals and metrics as described by McGrath (2010). At the present time, PA typically refers to more of a systems approach as stated in #3 in the preceding. That is the definition of PA that we will use in this study.

PROBLEMS ASSOCIATED WITH CONDUCTING PA

It is much easier to find problems in doing PA than to find solutions or suggestions for improvement. PA systems have been criticized in many areas. It would seem that the present problems could be ascertained by surveying the research and practitioner literature about PA. Such a survey was completed which led to 76 different problems with PA as it is typically conducted. The list of problems seeks to be a representative, comprehensive list of PA problems, not an exhaustive list of all references to those problems (Kondrasuk, 2010).

It still constitutes an overwhelming, confusing list of problems regarding the typical PA system. The 76 problems found in present PA systems can probably be reduced to four categories (Kondrasuk et al, 2008). Those categories would be problems with: 1) the purpose of PA, 2) those involved with PA, 3) what is measured and how, and 4) the system and process of PA. The major complaints within each of these areas should provide a clearer understanding of the hurdles to overcome to develop an ideal PA system.

Problems with the Purpose and Goals of PA

Most authors in the field have indicated that there are two main purposes of a PA system: 1) Administrative and 2) Developmental (Kondrasuk, Crowell, Dillon, Kilzer, & Teeley, 2008). One stated goal of PA is to learn what the employee is/is not doing as well as possible and help the employee to improve her job performance. This is basically a counseling or guidance role that the evaluator plays in this role. The second goal or purpose is to use the PA results to help make administrative decisions such as if and how much to award in pay increases, what training is necessary or helpful to improve employee performance, and other uses such as test validation criteria. This second goal places the evaluator in the role of judge. Roberts (1998) states that the supervisor needs to achieve both goals. However, trying to achieve both goals simultaneously can create conflicts in the evaluator and appraisee. It is very difficult for the supervisor to concurrently be a counselor/guide while trying to be a judge at the same time. An evaluatee is likely to be very open and admit shortcomings to a counselor who could help him but NOT be candid to a judge who may cut his pay raise or reduce his promotional opportunities ... or fire him! Evaluators may feel they are placed in conflicting roles by having to be both a coach and a judge of subordinate performance (Eichel, & Bender, 1984; Grote, 1996).

Inconsistent evaluator perceptions are another issue with the purpose of performance appraisals. Inconsistent perceptions as to the purpose of the performance appraisal can throw the entire performance appraisal system off. If evaluators have different views on the purposes of their specific performance appraisal, the process will be conflicting, as well as what to do with the results. A supervisor who believes that the purpose of the appraisal is to determine which team members need to develop additional skills to better achieve organization goals may conduct the appraisals in a completely different way than a supervisor who believes the purpose of the appraisal is to determine which employees deserve a raise. It gets even more problematic when we add in more participants. For instance, additional problems in this area occur when appraisers and evaluatees both have different, conflicting views of the purpose of the PA.

Problems Involving the Participants in PA

Three categories of participants are usually involved in PA: 1) appraisers, 2) evaluatess, and 3) other users. The evaluator can be a variety of individuals or groups of individuals. Traditionally, the evaluatee's direct supervisor evaluates the individual because s/he is in the best position to observe the behavior and...

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