Performance Appraisal 11

performance appraisal System (PAS) is introduced in organizations for a variety of purposes, One of the major goals of PAS is to help developing people by way of creating greater awareness of what they perform and how they perform. In our research paper we have discussed the importance of performance appraisals as well as the pros and cons of this procedure. In this regard, there arise many questions like who to appraise? Why to appraise? The methods of appraisals; What should be the best method to appraise?

Benefits of performance appraisals, why managerial performance appraisals are ineffective? Gender biasness i. e Sex equality in the workplace has been an important issue in human resource management since the mid-1970s when legislation was introduced to tackle a history of discriminatory practices, especially regarding female employees (Mike Millmore and David Biggs and Laura Morse) . The legal framework has largely been directed at tackling disadvantageous discriminatory practices that separated women in workplace. After that, the key components and mployee involvement in performance appraisals because most of the employees want to take responsibility for their own lives and want to work freely without interference of others, when they find that others are making decisions for them like formal performance evaluation , they may feel deprived. In this report we have also discussed 360° feedback (Yukl and Lepsinger, 1995, p. 45) . In this technique, appraisal relies on the input of an employee’s superiors, colleagues, subordinates, sometimes customers as well as suppliers. Key words

The Term Paper on Performance Appraisals Appraisal System Employee

... systematic method of performance appraisal. Performance appraisal is a process of obtaining, analyzing and recording information about the relative worth of an employee. It is ... a manager's appraisal of a given employee's performance. The most obvious is the employee. But there are others.These include other employees who are being appraised by ...

Appraisal, Evolution, Effectiveness, Correlates, Voluminous, Formulations, Frustration Literature Review 1. Evolution of the performance appraisal process Worldwide, performance appraisals are used in nearly all organizations. Corporations use different tools and have a number of goals for performance appraisals, often resulting in some confusion as to the true purpose of performance appraisal systems. However, at its core, the performance appraisal process allows an organization to measure and evaluate an individual employee’s behavior and accomplishments over a specific period of time (DeVries et al. 1981).

There are many advantages to using a formal system if performance appraisals are designed and used properly (Murphy and Cleveland, 1995).

It facilitates organizational decisions such as reward allocation, promotions/ demotions, layoffs/recalls, and transfers. It may also assist managers in developing employees. It serves to assist individual employee’s decisions regarding career choices and the subsequent direction of individual time and effort.

Additionally, performance appraisals may increase employee commitment and satisfaction, due to improvements in organizational communication. (Murphy and Cleveland, 1995).

Feedback can be a useful tool for development, especially if it is specific and behaviorally oriented, as well as both problem-oriented and solution-oriented (Murphy and Cleveland, 1995).

Therefore, many believe that performance appraisal systems should provide meaningful feedback, rather than exclusively be used to make judgments about the employee.

Although, when the same performance appraisal system is used for administrative decision making (e. g. raises, promotions) and for feedback, both functions may suffer (Cleveland et al. , 1989; Meyer et al. , 1965).

(Murphy and Cleveland, 1995).

2. Performance appraisals today When discussing the uses of performance appraisal, it is important to distinguish between organizational goals, rater goals, and ratee goals. Cleveland et al. (1989) described four types of uses of performance appraisal: between person, within person, systems maintenance and documentation.

The Business plan on Introducing Performance Management System Yen Employees

Introduction This report is an attempt to analyse the existing Performance Management System for Large Financial Service Organisation (LFSO) and from this information, recommend, and implement an appropriate new performance management system. LFSO is an organisation, which traditionally has a paternalistic culture with low levels of unionization. LFSO current Performance Management system was ...

Between person uses are what have been referred to as administrative purposes, consisting of recognition of individual’s performance to make decisions regarding salary administration, promotions, retention, termination, layoffs, etc. Within person uses are those identified in MBO, such as feedback on performance strengths and weaknesses to identify training needs and determine assignments and transfers. Cleveland et al. (1989).

3. Performance Appraisal in Government Sector General Studies.

Lacho, Stearns, and Villere (1979) examined the appraisal practices of the sixty largest cities in the United States. Their findings showed that 72 percent of the cities had a performance appraisal system in place. The primary purposes of appraisal were rewards, raises, and promotions as opposed to development and training needs. The major method was the graphicrating scale combined with essay (68 percent).

Lacho, Stearns, and Villere (1979) 4. 1. 9Written Performance Appraisal All the cases involved some type of written appraisal.

In older cases, informal and non written performance appraisals were found to be illegal if they had an adverse impact on one of the protected employment classes (Rowe v. General Motors Corp. , 1972).

Informal and unwritten employee performance appraisals are not illegal per se, but the absence of a formal appraisal and written forms makes the plaintiffs case easier. It seems that employers have all adopted the more sophisticated written forms (Ashe and McRae, 1985).

(Rowe v. General Motors Corp. , 1972).

4. 2. Subjective Performance Appraisal System

A totally objective performance appraisal system is virtually impossible to achieve. Subjectivity is tolerated in the system if the system includes administrative safeguards. Typical safeguard include reviews of the completed document by upper management, training for the rater, and appeal procedures for the employee being rated (EEOC v. IBM Corp. , 1984).

The Review on Implementing A Performance Evaluation System

... the job, is later transformed into performance scores. (Tziner, Joanis & Murphy, 2000). Other Methods: Other performance review methods include trait-based systems, essay appraisal method, ... improve their weaknesses and by implementing a performance review process it will increase organizational performance. Employee performance review methods may vary depending on the ...

An individual is more likely to be subjective and discriminatory in the performance appraisal system. As more persons become involved through review or appeals, discrimination becomes less likely.

Courts seem to recognize the lower probability of discrimination and tolerate more subjectivity (Mistretta v. Sandia Corp. , 1981).

(EEOC v. IBM Corp. , 1984).

4. Performance appraisal interviews The performance appraisal interview is a potentially important part of any organization’s performance appraisal system. Clearly, the appraisal interview might function in several important ways; providing feedback to employees, counseling and developing employees, and conveying and discussing compensation, job status, or disciplinary decisions.

Although the potential benefits of the performance appraisal interview seem evident, its infrequent and ineffective use in organizations also is widely recognized (Landy & Trumbo, 1980; Mc- Gregor, 1957; Meyer, Kay, & French, 1965).

De-spite the apparent importance of appraisal inter-views, superiors often receive no training in conducting these sessions (Burke & Kimball, 1971).

(Landy & Trumbo, 1980; Mc- Gregor, 1957; Meyer, Kay, & French, 1965).

5. Performance appraisal techniques Keeley maintains that a suitable appraisal technique depends on the degree of structure it provides, the employee, and the employee’s job.

Kane and Lawler outline a comprehensive model, in which the effectiveness of an appraisal system is contingent on a large number of factors, including the appraisal technique and content, characteristics of the appraiser and appraisee, the purpose and timing of the appraisal, and the appraisee’s job. A different, comprehensive approach to dealing with the development and evaluation functions has been proposed by Cummings and Schwab (1978).

They suggest that appraisals have development potential if meaningful and challenging goals can be established.

Landy and Trumbo (1980) reported experience with numerous companies in which available performance ratings were not presented to employees, partly because of logistic difficulties for one supervisor interviewing all subordinates, and partly out of superiors’ feeling that the ratings served no real use. ( Keeley 1978), Cummings and Schwab (1978) , Landy and Trumbo (1980).

The Essay on Performance Appraisal Employee Expectations Job

... strive for mutual understanding of the performance appraisal process. The employee should be encouraged to complete the Employee Self-Appraisal form and submit it to the ... issues which perhaps incline some managers to avoid performance appraisals but the reality is companies which have adopted this system find the benefits to ...

In fact, employees report that, when conducting appraisals, their managers give too little attention to career and development issues (Lawler et al. , 1983) 6. 3.

Task types and performance appraisal formats Control systems such as performance appraisal or compensation systems can focus on regulating behavior and/or outcomes. Moreover, such focusing should be designed according to task goals or a known best way to achieve an outcome Cummings (1984) if reliable and valid performance measures are available and if there is complete knowledge of the transformation process. Organizations can use either behavior-based (qualitative) or output- based (quantitative) performance appraisal systems. Ouchi (1977, 1979).

More specifically, as a way to reduce cognitive errors and to increase rating accuracy, suggests that the choice of an output-based and/or behavior-based performance appraisal format should be dependent on task types. For example, if there is complete knowledge of the transformation process and a valid and reliable measure of performance is available, BARS (behavior-based format) can supply information to managers attempting to implement MBO, whereby action plans can be developed in specific terms (Schneier & Beatty, 1979).

6. . Objective Performance Contracts Subjective appraisal methods lend themselves to favoritism, inefficiency, and conflict in the management of personnel. They permit race, sex, age, friendship, and other non job-related factors to subvert the evaluation process. Modern techniques of evaluation attempt to minimize abuses of both the appraisal function and the employees being evaluated, secondly the aim itself conflicts with widely accepted notions of employee/employer relationships, thirdly just as employees expect a range of inducements from n employer in return for their services, employers seek a variety, fourth when realized, expectations of contributions from employees of employee loyalty energy, identity with organizational values, harmony in the work place, and “fitting in,” make organizations workable and productive social systems; they provide cohesion and vitality to the order articulated in formal statements enumerating job-related employee contributions. 6.

The Research paper on The General Manager Case Study

I. TIME CONTEXT Acme Kemico, a small chemical outfit, was established in the early part of 1986. It was started as a single proprietorship selling paints and house sprays. The office set-up was composed of nine persons namely: a General Manager who was also the owner of the company; an Office Manager who served as the recruiting officer, accountant and overall supervisor; a lawyer who acted as the ...

Employee Involvement in the Appraisal Process According to this principle, most employees have a deep psychological need to take responsibility for their own lives and be self-directing (Odiorne, 1984; McGregor, 1961).

When they find themselves in situations where they feel others are making decisions for them, including formal performance evaluation situations, they may experience resentment and resistance to that situation and to the closed, one-way control of the autocratic manager.

When these employees have greater involvement and personal responsibility in the appraisal process, their work performance may improve and be maintained to a greater degree (Locke, 1982; Beer, 1987; Lawler, Mohrman and Resnick, 1984; Latham, Mitchell and Dossett, 1978) (Odiorne, 1984; McGregor, 1961) Laurent (1986) found that nationality was the most powerful determinant of their assumptions. He concluded that deep-seated managerial assumptions are strongly shaped by national cultures rather than organizational cultures.

If we accept this view, human resource practices, including the performance appraisal process, will have to be designed specifically for each national culture since the same human resource. Laurent (1986) 7. 5. Performance appraisal and employee satisfaction In addition to the organizational perspective, the performance appraisal literature has examined purpose from both the employee’s and manager’s differing and often conflicting perspectives, as well as from conflicting pressures within the manager. First, conflicting employee and manager goals make effective appraisals a difficult challenge (Beer, 1981; Holbrook, 2002).

Some argue that effectiveness is not determined solely by the objective characteristics of the appraisal process but is ultimately a question of how satisfied the employee is with the outcome, including its associated rewards, and consequently, how motivated he or she feels to improve performance (Longenecker, 1997).

An employee’s satisfaction with the appraisal process is determined by a number of factors, including if the manager provides supervisory support, positively evaluating aspects of an employee’s performance, offers guidance and establishes a climate of trust (Dorfman et al. 1986; Ilgen, 1993; Latham and Saari, 1979; Metcalfe, 1984; Meyer et al. , 1965; Russell and Goode, 1988).

The Research paper on Performance Management And Development Processes Within Otis Plc

... pay has declined. A small group of employees, managers and sales staff, receive specific performance related incentives ranging from 10% of ... realities IPD: London Lawson, P 1995 The appraisal process in Walters M ed.The Performance Management Handbook IPD: London Lehman Bros. 1999 ... is the introduction of 360-degree appraisal where the large number of raters offers a greater chance of consistency. ...

The challenge is thatmanagers and employees may have different perceptions of satisfaction with the appraisal process. Indeed, one study found that approximately half of the employees felt satisfied with their appraisal and its related discussion. In comparison, over 80 percent of their managers felt satisfied with the same event. Moreover, 53 percent of the managers reported that their employee’s behavior improved after the appraisal, whereas only 41 percent of employees felt this was the case (Lawler et al. 1983).

One of the few studies to measure actual changes found that the appraisal discussion did not change job performance, measured one year later (Dorfman et al. , 1986).

Others did find changes in performance one to two months after a review but concluded that performance (and satisfaction) are more a factor of the overall manager-employee relationship, than of the once a year appraisal discussion (Nathan et al. , 1991).

The performance appraisal literature has examined the role of feedback in appraisal discussions.

Research demonstrates that feedback has strong positive effects on the performance of both individuals and groups, specifically through role clarification, improved self efficacy, the establishment of behavior reward contingencies and increased self-regulatory control processes (Ashford and Cummings, 1983; Chhokar and Wallin, 1984; Guzzo et al. , 1985; Waldersee and Luthans, 1994).

(Beer, 1981; Holbrook, 2002).

(Longenecker, 1997) (Dorfman et al. , 1986; Ilgen, 1993; Latham and Saari, 1979; Metcalfe, 1984; Meyer et al. , 1965; Russell and Goode, 1988) (Lawler et al. 1983).

(Dorfman et al. , 1986) (Nathan et al. , 1991).

Employees in turn, feel anxiety about being rated and as a result, some try to manipulate the outcome. When employees suspect they are performing poorly, they will use feedback-seeking strategies to minimize the amount of feedback they receive. In addition, when employees receive negative feedback they are likely to attribute performance problems to factors beyond their control (Ashford and Cummings, 1983; Larson, 1989).

One study yielded found that managers, after hearing the employee’sv explanation or poor performance, came to regard the employee as being less personally responsible (Gioia and Sims, 1986).

Appraisal discussions for employees who had strong, positive working relationships with their managers were more participative, as well as more focused on career development, than discussions for those with weaker relationships. In addition, because of managers’ limited perceptual abilities, performance appraisal discussions are areas where employees can politically maneuver the impressions they create (Buckley, 2001; Ferris et al. , 1994).

For example, employees who engage in impression management behaviors tend to have more supportive, positive communications with their managers and receive higher performance ratings (Wayne and Kacmar, 1991).

Finally, the manager’s leadership approach also matters. Any type of leadership attention helps employees feel more comfortable about performance appraisal processes and more satisfied with the experience. Both transactional and transformational forms of leadership are enacted through performance appraisals, yet aspects of leadership characterized as transformational are more likely to result in improved performance (Waldman et al. 1987).

Performance appraisal and reward systems are based on the assumption that employees’ performance and motivation can be improved by establishing a clear link between efforts and reward through formalised and specified individual targets (Kessler and Purcell, 1992; Campbell et al. , 1998; Fay and Thompson, 2001; Beer and Cannon, 2004; Latham et al. , 2005).

(Ashford and Cummings, 1983; Larson, 1989).

(Gioia and Sims, 1986).

(Buckley, 2001; Ferris et al. , 1994) (Wayne and Kacmar, 1991) (Waldman et al. 1987) 7. Performance appraisal and career development A study by Spriegel and Mumma (1961) reveals that besides salary and wage determination, performance appraisal is also used for training and development, career planning, man-job matching, promotion, helping supervisors know their subordinates, helping the employees know their achievements and failures, etc. McGregor (1966) advocates that a performance appraisal system must address itself not only to the organizational needs, but also to the needs of individuals.

Spriegel and Mumma (1961) McGregor (1966) Taft (1971) believes that accuracy of performance appraisal depends upon the rater’s motivation to rate accurately, the relevance of job items to be evaluated and the rater’s ability to accurately evaluate the ratee’s behavior. Davis (1974) highlights, how of the two purposes of performance appraisal interview, salary review and employee development, the latter gets diluted as a result of the faculty interview process.

Kay, Meyer and French (1965) point out the deleterious effects of combining the issues of salary and employee development in the appraisal interview. Taft (1971) Davis (1974) Kay, Meyer and French (1965) Vaghul (1975) concludes that in Indian banks, the performance appraisal system is not linked to performance of the man on the job. It leaves much scope for the rater’s personal biases and suffers from ignorance on the part of the ratee on how he is rated. Vaghul (1975) 8. Managerial Effectiveness and Its Correlates

Managerial effectiveness is difficult to define in precise terms. Different researches have, therefore, used different methods to evaluate the effectiveness of a manager. A number of studies have focused on completion of goals and results (Drucker 1961; Guion 1965; Reddin 1974).

Others have focused on the characteristics/qualities and skills of the individual managers (Ghiselli 1971; Bennis 1984).

Still others stress appropriate behaviors and actions (Mintzberg 1971; Koprowski 1981).

(Drucker 1961; Guion 1965; Reddin 1974) (Ghiselli 1971; Bennis 1984)..

In the Indian context Dayal (1984), based on his consultancy experience, identified four important factors of managerial effectiveness, namely a clear understanding of the mission, shared organizational values, concern for customers and concern for developing the capabilities of employees. Singh etal’s study (1984) indicated four factors that emerged as important indicators of effective management. These were job satisfaction, output, wages and indices of alienation. The study also indicated four important processes of effective management, viz. consideration, coping mechanism, leadership and control. Balaraman’s study (1989) attempted to determine whether certain personal characteristics. (Dayal (1984) Singh etal’s study (1984) Balaraman’s1989) Several studies on managerial effectiveness really talk of leadership effectiveness. Some look at characteristics of successful organizations and by inference get to the characteristics of effective managers (Peters and Waterman 1982).

Some researchers have equated seniority with effectiveness while for others success and effectiveness are used as synonyms. (Peters and Waterman 1982).

The seven personality factors discriminating the effective managers from the not-so-effective managers highlight the following profile of the effective mangers. Such a manager is more (i) experimenting, liberal, free thinking and radical (ii) venturesome, active, uninhibited and socially bold; (iii) humble, considerate, expressive and accommodating; (iv) practical and has “down to earth” concerns; (v) suspicious, hard to fool and shows a higher inner tension; (vi) reserved, critical, precise, objective and (vii) conscientious, persistent, moralistic and has higher super ego strength.

Baruch and Harel(1993) point to research findings illustrating that different rating sources often give similar ratings and suggest, “it is reasonable to assume that the achievement of moderate correlations enables us to improve the accuracy of the performance appraisal process by combining multiple rater’s appraisals into one performance appraisal. ” Baruch and Harel(1993) 9. The Performance Appraisal Process

Performance appraisals are frequently used in organizations as a basis for administrative decisions such as employee promotion, transfer, and allocation of financial rewards; employee development, including identification of training needs and performance feedback and personnel research (Barrett, 1966).

A problem that reduces the utility of appraisals for these purposes is apparently impossible task of obtaining accurate appraisals of employee job behavior, a difficulty most often attributed to faults in the rating format used (Smith, P. C. 963), deficiencies in appraisal content (Dunnette, M. D. 1966), rater resistance to judging others (Dayal, I. 1969, Dwyer, J. C. ,1976), and the implications of the specific purpose of appraisal for the rater and the ratee (Bartlett, C. J. , 1969).

(Barrett, 1966) (Smith, P. C. 1963), (Dunnette, M. D. 1966), (Dayal, I. 1969, Dwyer, J. C. ,1976).

10. 6. A Model of the Performance Appraisal Process Taft’s (Taft, R W. W. Ronan & E. P. Prien 1971) theory of interpersonal judgment is an excellent first approximation of the performance appraisal process.

His theory states that the accuracy of one individual’s judgment of another individual is determined by: (a) the judge’s motivation to evaluate accurately; (b) the availability of the appropriate judgmental norms or standards to the judge; and (c) the evaluative ability of the judge. Similarly, the accuracy of performance appraisals can be viewed as a function of: (a) rater’s motivation to appraise accurately; (b) job-relevance of the rating standards used by the rater; and (c) rater’s ability to evaluate ratee job behavior. Taft’s (Taft, R W. W. Ronan & E.

P. Prien 1971) FIGURE 1. Model of the Performance Appraisal Process. (Academy of Management Review – July 1978) Figure 1 indicates six determinants of rater motivation. Without regard to the order of their importance, they are: (a) perceived consequences of accurate appraisal for both rater and ratee; (b) rater perceptions of the adequacy of the performance appraisal instrument used; (c) relevant organizational policies and practices; (d) rating format itself; (e) availability of appropriate standards of performance; and (f) purpose of appraisal.

Each of the six determinants their linkages to other determinants and the attendant propositions are discussed below. Although several explanations could be offered for this reticence, the most plausible one centers on the inextricable linkage between the purpose of appraisal and the consequences of appraisal for the rater and ratee. For example, appraisals tend to be less accurate when they are obtained for administrative purposes than when they are obtained for purposes of either employee development or personnel research (Bartlett, C.

J. , 1969, DeCotiis, T. A 1976, Gellerman 1976).

These differences in accuracy have been explained in terms of the relationship between the purposes of appraisal and the likelihood or appropriateness of confidentiality (Bartlett, C. J. , 1969), rater role conflict (Dayal, I. 1969), and the possibly negative impact of appraisal results on future ratee outcomes (Dwyer, J. C. ,1976) (Bartlett, C. J. , 1969, DeCotiis, T. A 1976, Gellerman 1976) (Bartlett, C. J. , 1969), (Dayal, I. 1969).

Performance appraisals conducted for purposes of employee development are likely to be more accurate than administrative appraisals but less accurate than appraisals conducted for purposes of personnel research. Employee development may be a dimension of the rater’s organizational role and viewed by him or her as in the best long-run interest of the ratee. Consequently, under certain conditions such as performance goal setting (Meyer, H. H. , E. Kay, 1965) and mutual performance problem solving (Maier, N. R.

F,1963), a rater may be motivated to assign accurate performance appraisal scores. To the extent that the rater is required not only to identify ratee development needs but also to be the catalyst for corrective changes in rate behavior, inaccurate (e. g. , lenient) appraisals as a means of avoiding these responsibilities, may result. It is difficult for many raters to constructively criticize ratee job behavior or to provide unambiguous cues for ratee behavioral change (Dayal, I. 1969, Meyer, H. H. , E. Kay,1965) (Meyer, H. H. , E. Kay, 1965).

(Maier, N. R.

F,1963), The model of the performance appraisal process and discussion of its components suggest three conclusions with respect to performance appraisal research: (a) it is voluminous; (b) largely unsystematic; and (c) at least as subject to fads and fashion as any other aspect of personnel research and practice. Perhaps indicative of the feasibility of these conclusions is continued emphasis in performance appraisal research and publication on the development and support, respectively, of new appraisal formats as still the primary problems in performance appraisal could be solved simply by changes in the format of appraisal.

In short, performance appraisal research has focused on instrumentation at the expense of other, perhaps more important, variables. Current research on topics such as rater training, rating simulation, and use-based scale evaluation (DeCotiis, 1977, Latham, 1975), indicate that researchers are pursuing other promising avenues for future research. What is not evident is that this research is based on a systematic consideration of the performance appraisal process. (DeCotiis, 1977, Latham, 1975), 10. Why to appraise performance?

Employees want to know how well they perform on their jobs. A simple statement, almost axiomatic in any organization, yet it has probably caused more controversy, applied research and practical advice than any other assertion in the history of management writing and thinking. The riddle is that both applied scientists and managers have simply been unable to provide complete feedback about job performance that satisfies an employee’s need to know how well he/she has done and where to improve (Kavanagh,1997, p. 147).

DeNisi and Kluger (2000) herald that, for scholars and practitioners in the field of human resource management in general, it is widely accepted that feedback is an essential component of an effective performance improvement strategy. Furthermore, commentators argue that performance feedback increases job satisfaction and motivation(see Hackman and Oldham,1980) and many decision-making and career development models include a feedback loop emphasizing that individuals learn on the basis of receiving feedback on their performance (DeNisi and Kluger, 2000).

Thus, performance feedback plays an important role in numerous organizational activities such as career development, motivation, job satisfaction, and performance management. It seems important then that such a globally employed phenomenon is fully understood. 3608 or multi-rater feedback is one of the vehicles that is used to facilitate performance feedback and therefore deserves attention at an academic and practitioner level. DeNisi and Kluger (2000)( Hackman and Oldham,1980) (DeNisi and Kluger, 2000).

11. Defining 360° feedback There are numerous authors who propose definitions of the 360° feedback process. Feedback from multiple sources or 360° feedback” is a performance appraisal approach that relies on the input of an employee’s superiors, colleagues, subordinates, sometimes customers, suppliers and/or spouses” (Yukl and Lepsinger, 1995, p. 45).

Lepsinger and Lucia (1997) indicate that the 360° feedback process involves collecting perceptions about a person’s behavior and the impact of that behavior from a number of rating sources. Therefore, a 360° feedback program seeks to relay feedback to the recipient regarding his/her behavior in the workplace and how it affects other organizational members that work with that employee.

Lepsinger and Lucia (1997) There are varying forms of the 360° feedback process such as 270° feedback, where one source of feedback is omitted, such as customer ratings, or 180° feedback where it is only peers that provide feedback (Peters, 1996).

Handy et al. (1996) suggest that some organizations use an extended version of the 360° feedback process which is termed “540° feedback”, because suppliers and external customers are included with the other raters. However, it is acceptable to use the term 360° feedback or multi-source feedback, even if the process does include suppliers and customers as rates. Peters, 1996,. Handy et al. 1996) A 1988 study asking supervisors how valuable they would find subordinate feedback for their personal development determined that 75 percent would find such feedback definitely or extremely valuable (McEvoy, 1988).

Peer group appraisal may be applicable to product managers, particularly when they work in parallel with one another and all report to the same supervisor or if working in teams such that the success of any individual is largely dependent on the success of the group (McConnell 1992. ,McEvoy, 1988).

Self-appraisal.

This type of performance evaluation is praised for its potential to increase the effectiveness of the performance appraisal interview (Bernardin and Beatty, 1984; Latham and Wexley, 1981).

Fundamentally, self-evaluations are thought to be effective because they force employee participation into the evaluation process. Numerous studies have found that participation enhances the perceptions of performance appraisal fairness (Greenberg, 1986; 1987) as well as motivation to improve performance, acceptance of appraisal results, and satisfaction with the appraisal (Burke and Wilcox, 1969; Cederblom, 1982; Wexley et al. 1973).

Yet, research shows employees will be more satisfied with their appraisal discussions if their managers can create a two-way dialogue, where the employee’s input is a critical component. By its very nature, appraising is a judging process with a high degree of subjectivity (Nathan et al. , 1991).

Research suggests that self-appraisals increase participation in the appraisal process, which in turn, leads to increased satisfaction levels (Cederblom, 1982; Farh et al. , 1988).

Self-appraisal (SA) methods have been recommended for both developmental and administrative (i. e. aise, promotion) evaluations (Folger, Konovsky and Cropanzano, 1992).

Self-appraisal based performance valuations have been widely advocated by academics and practitioners because of their potential or increasing the effectiveness of the performance appraisal interview (Bernardin and Beatty, 1984; Carroll and Schneier, 1982; Latham and Wexley, 1981).

Several studies have shown that SA enhances the positive outcomes (e. g. satisfaction with appraisal, motivation) of appraisal discussions for both managers and their subordinates (Bassett and Meyer, 1968; Farh, Werbel and Bedeian, 1988).

Bernardin and Beatty, 1984; Latham and Wexley, 1981).

(Greenberg, 1986; 1987) (Burke and Wilcox, 1969; Cederblom, 1982; Wexley et al. , 1973).

(Nathan et al. , 1991).

(Cederblom, 1982; Farh et al. , 1988).

(Folger, Konovsky and Cropanzano, 1992) (Bernardin and Beatty, 1984; Carroll and Schneier, 1982; Latham and Wexley, 1981).

Potential raters in multi-source appraisal systems Figure 2: Potential raters in Multi-source appraisal system (Hegarty, 1974;Mount, 1984; Cederblom and Lounsbury, 1980; Downey et al. , 1976) Taylor et al. 1995) contend that performance appraisal is a practical challenge to all involved in the process and Lawler et al. (1984) argue that the performance appraisal interview is considered as an unpleasant activity for managers and supervisors which is either avoided or carried out in a hurried or perfunctory manner. Taylor et al. (1995) 12. 7. Benefits of 360° feedback Hazucha et al. (1993) highlight some of the advantages of feedback from an individual perspective. They suggest that recipients receive valuable information which they may use to identify and address their weaknesses.

Feedback helps the recipient to identify strengths which he/she can build upon. The use of 360° feedback instruments provides peers/co-workers with the opportunity to praise or criticise their colleagues anonymously. Hazucha et al. (1993) Bernardin et al. (1993) suggest that a multi-rater system that incorporates a number of raters such as one’s boss, subordinates and peers is more useful for the feedback recipients than only one source of feedback. ( Bernardin et al. 1993) 12.

Why managerial performance appraisals are Ineffective Top ten causes of ineffective managerial appraisals (i) Unclear performance criteria/ineffective rating instrument (ii) Poor working relationships with your boss (iii) Superior lacks information on actual performance (iv) Lack of ongoing performance feedback (v) Overly negative/second guessing review (vi) Perceived political reviews (vii) Lack of focus on management development Improvement (viii) An ineffective link to reward systems (ix) Superior lacks rating skills/motivation (x) Review process lacks tructure/consistency (Longenecker, C. O. and Gioia D. A. 1988,Gioia, D. A. and Longenecker, C. O. 1994, “Delving Longenecker, C. O. and Gioia, D. A. 1993,) 13. Negative impact of performance appraisal Smith (1993) speaks of “ossification here” those who want to innovate will explore the unknown and accept the risk that the result will be either different from or less than what they accepted. As a result innovation may harm for organization’s output. Performance measurement rewards the constant reproduction of the existing ( Behn and kant. 1999,p. 474).

Competing with each other in terms of performance are less willing to share their “best practices’ with each other. Performance measurement has an adverse effect on the relations between school ( Fiske and Ladd,2000).

An organization that invests in efficiency and is transparent, takes a risk: the manager can translate this into a lower budget for the following year for the same performance. The colleague organization that does not invest in efficiency and transparency is rewarded with the same budget for the same performance (Bordewijk and Klaasen,2000).

The organization have a separate department that measurement the bureaucratic competence to make all sort of activities “auditable” now there is no objection to this at all, albeit these organization are found- on paper, but not in reality- to perform better than organization that have fewer of such facilities. The organization scoring well in a system of performance measurement have invested heavily in procedural and organization provision, in orderto meet the requirements of the system of performance measurement (Leeuw, 1996).

Performance measurement focuses excessively on the clearly defined aspects. it may therefore be an incentive to ignore complexity and to make a trade off in favour of the clearly defined aspects. Performance measurement may also be an incentive to ignore local circumstance and may result in building up of less rich tacit knowledge ( Carnegy and Wolnizer, 1996).

Performance measuremet may then kill yhe professional attitude(Smith, 1993; Goddard et al. , 2000).

Performance appraisal is one of the most problematic components of human resource (HR) management (e. g. Allen and Mayfield, 1983; Heneman, 1975).

All involved parties, supervisors, employees, and HR administrators — typically are dissatisfied with their organization’s performance appraisal system (Smith et al. , 1996) and view the appraisal process as either a futile bureaucratic exercise or, worse, a destructive influence on the employee-supervisor relationship (e. g.

Momeyer, 1986).

This is certainly true of police organizations, at least in the USA, wherein surveys typically reveal widespread dissatisfaction with the appraisal process (Huber, 1983; Walsh,1986).

Despite these indictments, managers are reluctant to abandon performance appraisal which they still regard as an essential tool of HR management (Meyer, 1991).

(Allen and Mayfield, 1983; Heneman, 1975. , Smith et al. , 1996. , Momeyer, 1986. ,Huber, 1983; Walsh,1986).

14.

Five key components of effective performance appraisal are reviewed below One factor that contributes to an effective performance appraisal system entails ensuring that the system focuses on performance variables as opposed to personal traits (Smither, 1998).

Whereas experts disagree about whether performance should be measured in terms of the results produced by employees (e. g. Bernardin and Beatty, 1984; Kane et al. , 1995; Swank and Conser, 1983) or in terms of work-related behaviors (e. g.

Latham, 1986; Murphy and Cleveland, 1991), they agree that measuring personal traits has several drawbacks. (Smither, 1998) Bernardin and Beatty, 1984; Kane et al. , 1995; Swank and Conser, 1983) (Latham, 1986; Murphy and Cleveland, 1991) Secondly, Regardless of the nature of employee input, it is clear that giving employees a voice in their own appraisals enhances the perceived fairness of the appraisal process, which, in turn, increases the likelihood that employees will accept the appraisal system as a legitimate and constructive means of gauging their performance contributions.

As noted by Gilliland and Langdon (1998, p. 211), without the perception of fairness, “a system that is designed to appraise, reward, motivate, and develop can actually have the opposite effect and create frustration and resentment”. (Gilliland and Langdon ,1998, p. 211) Third, To be most effective, a continuous performance-based feedback process should exist between superiors and subordinates (Henderson, 1984; Meyer, 1991) and should include two way communication and negotiation between the supervisor and employee (Smith, 1987).

Similarly, Kane et al. 1995) suggest that, in providing feedback, supervisors should allow employees the opportunity to share their insights and evaluations concerning their own performance. Thus, effective performance feedback should involve, inform, and motivate employees and also create improved supervisor-employee communications (Villanova et al. 1993).

(Henderson, 1984; Meyer, 1991. , Smith, 1987. , Kane et al. 1995) Fourth, effective performance appraisal should provide the opportunity for the supervisor and employee to promote the achievement of individual and organizational goals.

That is, effective performance appraisal serves to clarify performance standards and expectations (Lowenberg and Conrad, 1998) and provides the medium for supervisors and employees to negotiate mutually agreed-upon goals (Katzell, 1994; Latham and Wexley, 1981) (Lowenberg and Conrad, 1998).

Finally, like any other system, performance appraisal will be only as effective as the task-relevant skills and knowledge of those responsible for using it, and the attainment of such skills and knowledge usually requires training.

The voluminous research literature on performance appraisal rater training has focused on several training issues, including improving raters’ observational skills, reducing judgmental biases, and providing objective, meaningful, and constructive feedback (e. g. Cascio, 1998; Hauenstein, 1998).

15. Traditional Formulations 16. 8. FUNCTIONAL THEORY The theory of functional role differentiation (Bales 1953, Bales & Slater 1955) has been used to explain role differentiation in families (Zelditch 1955) and organizations (Etzioni 1965), as well as in small task groups.

The theory implies a direct relationship between role differentiation and collective task performance: Functional role differentiation is assumed to emerge as a response to incompatible task contingencies, e. g. the need to solve collective problems and the need to maintain group cohesion. When such incompatibilities arise, groups are assumed to develop separation of functions in order to facilitate the resolution of each problem.

Hierarchical role differentiation is explained as a result of differences in the survival value of role behaviors and of the skills required to perform them (cf Davis & Moore 1945).

Functional theories generally assume that the process of differentiation is similar across groups (Davis & Moore 1945, Parsons 1964).

Competence is assumed to be the principal criterion for assignment of actors to particular roles. However, Parsons (1964) has argued that qualities (like race or gender) are often linked to competence by the expectations for performance held by group members.

As a result, gender can become an important criterion for role assignment through its association with perceptions of competence, even if there is no demonstrable association between gender and either past performances or the skills necessary for successful performance. Hence, although functional theories imply an absence of gender differences in the likelihood of role differentiation in all-male and all-female groups, they predict gender differences in role assignment in mixed-gender groups.

Expectation states theory (Berger et al 1974) offers a more formal-but entirely consistent- explanation for the emergence of functional and hierarchical differentiation in initially undifferentiated groups. (Bales 1953, Bales & Slater 1955) (Zelditch 1955) (Etzioni 1965), (cf Davis & Moore 1945).

(Davis & Moore 1945, Parsons 1964) Berger et al 1974) 5. 2. Sex-role theories Sex-role socialization theories are among the oldest explanations for gender differences in role assignment, and a number of explanations are subsumed under that rubric.

They include arguments with strong biological or physiological components (Freud 1933, Homey 1967), as well as more social and psychological formulations (Bandura & Walters 1963, Kohlberg 1966, Mischel 1966).

The principal argument of sex-role theories is that gender-appropriate behaviors are acquired through social learning. Individuals internalize the role-appropriate behaviors and enact them. Behavioral tendencies acquired in this manner are assumed to be highly resistant to change and not situationally specific, although there is disagreement on the latter issue (cf Duncan & Duncan 1978).

Sex-role theories imply that patterns of role differentiation in all-female groups will be different than those in all-male groups and that gender differences in role assignment will occur in mixed-gender groups. (Freud 1933, Homey 1967), (Bandura & Walters 1963, Kohlberg 1966, Mischel 1966) (cf Duncan & Duncan 1978).

15. 3. Unfair Discrimination of Employees Unfair discrimination in subjective appraisals is explained most frequently with the stereotype-fit model, according to which raters possess stereotypes of the ideal occupant of a job and their evaluations reflect their perceptions of the goodness of fit of the rate to the job.

The thesis here is that the stereotype-fit model and passive observer research procedures have led researchers and theorists to overemphasize cognitive determinants and neglect behavioral, affective, and social determinants of biases in subjective appraisals. (ROBERT L. DIPBOY, Rice University) 15. 4. The Stereotype-Fit Model Raters possess a variety of cognitive structures, including implicit theories, schemata, and prototypes. A stereotype is a particular type of implicit theory consisting of the characteristics that raters attribute to a category of persons.

According to the stereotype-fit model, which is depicted in Figure 1, raters tend to attribute to individual ratee characteristics consistent with their stereotype of persons similar to the ratee. In like manner, raters tend to attribute to a particular position requirements that are consistent with their stereotype of successful occupants of the position. For instance, some jobs are considered “man’s work” requiring masculine characteristics whereas other jobs are considered “woman’s” work requiring feminine characteristics (Krefting & Berger, 1979).

15.

Gender discrimination in managerial performance appraisals: 16. 1. STATUS-EFFECTS THEORIES (Berger et al 1977, Kanter 1977, Ridgeway 1978) have been applied to the problem of gender differences in role assignment with increasing frequency over the past decade. The most highly-developed and thoroughly tested of such arguments, that of Berger at all, suggest that group members use status information to create performance expectations for themselves and other group members. In turn, differences in expectations for performance determine the nature of actual performances.

Berger et al (1980) argue that gender is a status characteristic and demonstrate that gender organizes interaction in the manner suggested by the theory. (Berger et al 1977, Kanter 1977, Ridgeway 1978) Berger et al (1980) Similarly, Kanter (1976, 1977) argues that the structure of a group (e. g. the proportion of low and high status members) or of society has important implications for the behavior of females and males. Women (and other minorities) are perceived as tokens in settings in which they comprise less than 35% of the population (skewed groups).

Token status evokes three responses that can be detrimental o the performances of tokens-heightened visibility, increased isolation, and role entrapment (the attribution of stereotypical roles to tokens).

As skewness is reduced (minorities become more numerous), detrimental responses are assumed to decline. Kanter’s arguments are intuitively appealing, but attempts to validate them empirically have been either methodologically problematic [cf Spangler et al (1978) and comments by Kuzloski (1979) and by Walker (1980), as well as the reply by Pipkin et al (1980) or nonsupportive (Finigan 1982, Scott et al 1982, Izraeli 1983).

Kanter (1976, 1977) cf Spangler et al (1978) Kuzloski (1979) Walker (1980), Pipkin et al (1980) 16. 2. LEGITIMATION THEORIES Recently, several investigators have suggested that gender differences in role assignment are due to the effects of variations in legitimacy (Eskilson & Wiley 1976, Meeker & Weitzel-O’Neill 1977).

The relationship of legitimacy to role differentiation was initially specified by Verbal (1961) who argued that the likelihood of role differentiation increased as the legitimacy of task activity and of persons engaged in task leadership decreased.

Fennell et al (1978, and McMahon et al 1976) argue that the legitimacy of task activity is gender-specific: Instrumental and other “leadership” behaviors are legitimate for males (but not for females), while expressive actions are legitimate for females. The theory assumes that group members will behave legitimately. Hence, gender differences in role assignment are expected in heterogeneous groups, with females occupying the less-valued, less influential, expressive roles. The theory also leads to predictions of gender differences in role differentiation in homogeneous groups. Eskilson & Wiley 1976, Meeker & Weitzel-O’Neill 1977) Verbal (1961).

Fennell et al (1978, and McMahon et al 1976) More than 30 years on it is debatable as to how successful the gender equality “movement” has been. Substantial increases in female participation rates during this period have been largely in part-time jobs within the secondary labor market (Taylor, 2005) and horizontal and vertical occupational segregation as well as a gender pay gap are still evident (Willey, 2003) (Taylor, 2005).

With respect to gender discrimination, Aguinis and Adams (1998) argue that despite the steady increase of female managers, evident over the past three decades (Bartol, 1999), their positions in organizations involve lower-paid roles with less power and authority than their male counterparts. Nieva and Gutek (1980) and Haefner (1977) argue that female employees who perform well may not always receive due credit because their performance is attributed to characteristics other than ability.

For example, where males and females have been assessed as performing equally well in male-related tasks it is attributed to skill for males but luck for female employees (Deaux and Emswiller, 1974).

However, perversely, where a female fails on a male-related task it is attributed to an internal source such as lack of ability whereas a male’s failure on a female-related task is perceived as coming from a temporary external cause, such as task difficulty (Feather and Simon, 1975).

Jacobson and Effertz (1974) and Scherer et al. 1991) found that females received more favorable performance ratings than males. Such findings may simply reflect that females were actually outperforming their male counterparts. An alternative view, known as the “gender contrast” effect, occurs where raters, surprised that female performance ratings for traditional male roles exceed those predicated by typically held stereotypes, over-rate that performance (Heilman et al. , 1988).

Aguinis and Adams (1998) (Bartol, 1999), Nieva and Gutek (1980) Haefner (1977) (Deaux and Emswiller, 1974).

Feather and Simon, 1975).

Jacobson and Effertz (1974) Scherer et al. (1991) 16. Effects of Self-Appraisal Information, Appraisal Purpose, and Feedback Target on Performance Appraisal Ratings A large amount of research has been conducted on supervisory ratings of employee job performance, with much of this research focusing on factors that bias performance rating (Murphy & Cleveland, 1991).

There has been a trend in many organizations for employees to appraise their own performance (Ferris, Yates, Gilbron, & Rowland, 1985).

Self-appraisals have been recommended as a valuable employee development tool (Campbell & Lee, 1988), and some research has shown that self-appraisals result in improved job performance (Korsgaard, Roberson, & Klein, 1991).

(Murphy & Cleveland, 1991) (Ferris, Yates, Gilbron, & Rowland, 1985) (Campbell & Lee, 1988).

However, research on self-appraisals has typically shown them to be lenient relative to supervisory appraisals (Harris & Schaubroeck, 1988; Thornton, 1980).

Furthermore, in many performance management systems such as Management-by-objectives, the employees’ self-appraisals are submitted to supervisors or managers prior to the managers completing their appraisal of the employees. This procedure raises the possibility that the often-inflated self-appraisal may bias the supervisory appraisal. Thus, the present study investigated the potential biasing effects of self-appraisals on supervisory job performance evaluations. (Harris & Schaubroeck, 1988; Thornton, 1980).

Accountability theory suggests that having to provide face-to-face feedback to a poorly performing subordinate may distort performance ratings. Prior research has found that people try to avoid sending negative messages to others (e. g. , Blumberg, 1972; Tesser & Rosen, 1975), and accordingly may distort feedback (Larson, 1984).

Stone (1973) found that the majority of managers disliked giving negative evaluations to subordinates. Fisher (1979) found that supervisory performance evaluations were much higher when ratings were to be fedback than when no feedback was to occur.

Other studies also support the contention that feeding back performance evaluations enhances supervisor accountability to the subordinate, particularly when subordinate performance is low (Ilgen & Knowlton, 1980; Fusilier, 1980).

(Blumberg, 1972; Tesser & Rosen, 1975), (Larson, 1984) (Larson, 1984) Stone (1973) Fisher (1979) 17. Globalization of performance appraisals: theory and applications Training is a crucial factor to conducting effective performance appraisals.

Companies must train their managers on how to conduct performance appraisals and managers must know how to set proper goals and objectives at the beginning of the calendar or evaluation year. There is a general consensus among researchers on the topic that companies must give some sort of training to their managers on how to give proper appraisals to employees. Managers must receive training in supervision skills, coaching and counseling, conflict resolution, setting performance standards, linking the system to pay and providing employee feedback. (Steven H.

Appelbaum John Molson School of Business, Concordia University, Montreal, Canada) In addition, the appraiser must receive periodic re-training in order to maintain their performance assessment skills. The rater should also be evaluated each year on how they conduct performance appraisals with their employees (Boice and Kleiner, 1997).

Figure 3: Elements of appraisal effectiveness Referred to as “global localization” benefits from the best of both approaches. Described by Ohmae (1994) as the most advanced stage of corporate globalization; where management of the MNC is both global and local in orientation.

Rather than develop only local responsiveness, knowledge transfer or pursue global efficiency, Bartlett and Ghoshal, 1989, 1992) believe that all must be practiced simultaneously. This structure would require managers to act based on a shared perspective rather than on an organizational chart. This was referred to by Bartlett and Ghosal (1992) as “creating a matrix in the manager’s minds”. The global localization strategy and structure diffuses power across the MNC creating an interdependent network of firms (Kidger, 2001) Ohmae (1994) Bartlett and Ghoshal, 1989, 1992).

8. Performance improvement strategy Typically, performance appraisal systems are employed to achieve five primary goals that include,1 clarifying employee work expectations 2 documenting employee performance 3 fostering employee development 4 creating a linkage between merit and pay 5 Monitoring workforce improvement (Mathis and Jackson, 1998).

The organization must have clearly developed rating procedures; an appropriate, user-friendly instrument (form); and a system in place to monitor compliance and to store appraisal data.

Without a technically sound rating system, organizations can alienate (isolate) their workforce and frustrate managers, stifle employee development, damage merit pay for performance programs, and even find themselves breaking the law (Longenecker and Post, 1996).

Successful performance appraisal system is the manager who is actually called upon to evaluate employee performance. The manager, placed in the challenging role of performance “rater,” must have both the skills and motivation to conduct effective performance appraisals. Unfortunately, far too many managers do not possess these critical attributes (Longenecker, 1989).

Proper rater training can increase the overall quality of the rating experience for employees and managers alike while at the same time improve rating accuracy (Cardy and Dobbins, 1994).

Technically sound rating process is important, the primary cause of ineffective performance appraisals from both the perspective of employees (ratees) and managers (raters) is not poor rating procedures, forms, or systems but instead the poor rating skills of managers (Longenecker and Goff, 1992).

(Mathis and Jackson, 1998), (Longenecker and Post, 1996), (Longenecker, 1989), (Cardy and Dobbins, 1994), (Longenecker and Goff, 1992),

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