Upload
rehanahmed88
View
227
Download
0
Embed Size (px)
Citation preview
7/31/2019 Anam Aqil - Searched Literature
1/17
P0 P1
Performance appraisal
facilitates management in
carrying out administrative
decisions relating to
promotions, firings, lay offs and
pay increases.
In most of the organizations/ departments rating
scales are predominantly used for conducting
performance appraisal of their employees. It is
essential that human observer is free from the
element of subjectivity & he should be reasonably
objective and accurate in his assessment.
Traditional performance
appraisal relies on economic
reward and the threat of
punishment to motivate
employees to reach desired
performance. But this concept
does not hold true anymore.
Today, performance appraisal is
used for developmental and
motivational purposes in the
organizations.
RP2
RP1
7/31/2019 Anam Aqil - Searched Literature
2/17
For many organizations, the
primary goal of an appraisal
system is to improve individual
and
organizational performance.
There may be other goals,however.To encourage good
performance, a firm should
design and implement a reliable
performance
appraisal system and then
reward the most productive
workers and teams accordingly.
Most compensation arrangements involve
superiors subjective and hence non-contractible.
judgements about employee performance.
The necessity of SubJective performance evaluation
raises issues of systematic
bias in organizations.
RP3
7/31/2019 Anam Aqil - Searched Literature
3/17
RP5
Performance appraisal is a
process designed to evaluate,
manage and eventually improve
employees performance. It
should allow the employer and
its employee to openly discuss
expectations of the
organization and the
employees achievements
especially for future
development of the employe
RP4
7/31/2019 Anam Aqil - Searched Literature
4/17
P2 P3
Research shows that raters memories are quite fallible and in most of
the cases they resort to their own sets of liking and disliking, and
expectations about people, expectations that may or may not be
reasonable and tenable. These biases breed rating errors, ordeviation
between the true rating an employee deserves & theactual rating
assigned.The most common and influential errors in most of the private
organiations include: Central Tendency,Hallo Effect,Rsuty Halo
Effect,Personal Biases ,Unclear Standards and the lack of feedback.
Almost in 39% of the
organisation,employees expressed
that they undergo fair amount of
stress due to biased attitude
displayed by their Reporting
Officers while evaluating their
subordinate employees
performance.
In practice, there are many possible errors or biases in the performance
appraisal process. . The most common errors that affect the objectinity
of the appraisal in organisations include:The Halo Effect and
HornEffect,Leniency & Strictness Error; The Central Tendency Error;
The Recency Effect;The Contrast Error;The Similarity Error.
7/31/2019 Anam Aqil - Searched Literature
5/17
The labor union is another external factor that might affect a firms
appraisal process.
Unions have traditionally stressed seniority as the basis for promotions
and pay increases. They
may vigorously oppose the use of a management-designed
performance appraisal system used
for these purposes.
Supervisors preferences and their relationship with subordinates can
affect appraisals and rewards even in the absence of personal bias.
There is substantial evidence that supervisors have preferences about
the distribution of rewards among subordinates. In many cases
supervisors are reluctant to give poor ratings to subordinates. either
because doing so is unpleasant or because supervisors prefer equity in
outcomes. For example. when supervisors at Merck and Co. had
discretion over the full distribution of appraisals there was a marked
tendency toward uniformity in reported performance and,
consequently, wages [Murphy (1991)]. This compression of rewards
reduced incentives and aggregate productivity.
Bias can cause inefficiencies on a
number of dimensions. Employees
who feel discriminated against
may quit, with resulting turnover
costs and lost human capital for
the organization.
7/31/2019 Anam Aqil - Searched Literature
6/17
If employee beliefs
that the supervisor is dishonest
may result in lower future effort or
a high propensity to quit. There
are also cases when the
supervisor observes theperformance of the worker being
less than he had anticipated. It
could be that the supervisors
signal of performance
underestimates the workers true
performance. If the supervisor
reports his observation honestly,
then the worker may believe that
the supervisor is biased and supply
less effort in the future.
Findings from the Pearson
correlation show that performance
appraisal politic elements which
are motivational motive and
punishment motive have a
positive relationship with
employee turnover intention. The
results obtained is in line with
June (2004), which stated that
when ratings are influenced by
motivation motive such as
rewarding or other recognition, it
will lead to higher job satisfaction
and decrease turnover
intention. The employees have the
tendency and intention to quit
from their job if their
performance were rated based on
some ulterior motives.
7/31/2019 Anam Aqil - Searched Literature
7/17
P4 P5
Approximately in 31% of the private
sector organisations,Performance
Appraisers (Reporting
Officers)appraise employees
performance in quantitative terms
only,turning blind eye to the quality
aspect altogether.
Mary Kay Ash, presented an interesting and
enlightened people approach of management. Treat
people fairly but according to merit. Make the other
person feel important, and let people know you
appreciate them & recognize their professional
worth.Encourage feedback and dont undervalue the
ability to listen.Sandwich every bit of constructive
criticism b/w two layers of heavy praise.
As reported in a study (Pulakos, 2004),
only ten percent of the employees
believe that their firms performance
appraisal help them to improve
performance. Appraisal errors, lack of
objectivity and nonperformance
variables such as age, sex and race
cause difficulties in the appraisal
process.
It has been known that appraisal
errors can harm perceptions of pay
system fair-ness by confusing the
relationship between true
performance differences (Miceli and et
al.,1991). Huber, (1983), Kane and et
al. (1995) also found that appraisal
errors can undermine the potential
beneficial of merit appraisals on
employee motivation.
Ndambakuwa and Mufunda (2006)
revealed the impact of performance
appraisal system on the productivity
and job satisfaction.
an important informational tool for the
firm.It allows employers to determine
compensation and provide feedback
when objective
measures are costly, inaccurate or
unavailable (Baker et al 1994,Prendergast
1999, Murphy 1999).
7/31/2019 Anam Aqil - Searched Literature
8/17
Managers do not like giving
performance appraisals and employees
do not like receiving them.Infact, in
one survey, almost 80 percent of
workers stated dissatisfaction with
their PA process.
A potential weakness of traditional
performance appraisal methods is that
they lack objectivity.
In the rating scales method, forexample, commonly used factors such
as attitude,
appearance, and personality are
difficult to measure. In addition, these
factors may have little
to do with an employees job
performance.
7/31/2019 Anam Aqil - Searched Literature
9/17
Subjectivity is central to performance
appraisal in most organizations.We
believe that subjective performance
evaluation is a central, but
understudied, factor in incentive and
organizational design.
Study shows that there is a relationship between
performance appraisal politics and employee turnover
intention. The findings also show that performance
appraisal politics elements do affect employee
turnover intention where punishment motive was the
best predictor which could have effects on employee
turnover intention. This study helps the human
resource managers to decide the
most appropriate way to conduct a good appraisal
practices that administered based on justice
principles. Managers can also identify potential factors
which may affect the level of job
satisfaction among employees and subsequently
influence their intention to quit.
7/31/2019 Anam Aqil - Searched Literature
10/17
P6 P7 P8
Laurie J. Mullins substantiate the
necessity of an effective appraisal
scheme by saying that it can identify
an individuals strengths and
weaknesses and indicate how such
strengths may best be utilized
and weaknesses overcome.
Almost in 43% of the organiastions
Reporting Officers adopt
authoritarian or dictatorial approach
while evaluating employees
performance and resort to
reprimands and punishments in case
of failure of the employees to
accomplish the targets.
There are two key reasons why
every or-ganization should give
performance reviews: (Performance
Appraisal, 2006).
Performance appraisals help
employees become better
employees by providing feed back
about their weaknesses and
strengths and can protect
organizations against legal caseswhen countering to claims of illegal
The most important reason for wide
variety of errors or biases in the system
might be due to the method of
appraisal; like superior rate only
system.
7/31/2019 Anam Aqil - Searched Literature
11/17
An employees immediate supervisor
has traditionally been the most logical
choice for evaluating
performance and this continues to be
the case. The supervisor is usually in an
excellent.On the negative side, the
immediate supervisor may emphasize
certain aspects of employeeperformance and neglect others.
position to observe the employees job
performance and the supervisor has
the responsibility for
managing a particular unit.
7/31/2019 Anam Aqil - Searched Literature
12/17
7/31/2019 Anam Aqil - Searched Literature
13/17
P9
The manager should place
emphasis on end results and level of actual
performance and achievement, rather than on
compliance with detailed instructions, rules and
regulations.Managerial / Leadership styles have a
profound impact on performance appraisal ratings
given by the evaluators to the subordinate
employees.
7/31/2019 Anam Aqil - Searched Literature
14/17
7/31/2019 Anam Aqil - Searched Literature
15/17
7/31/2019 Anam Aqil - Searched Literature
16/17
Research shows that raters memories are quite fallible and in most of the cases they resort to their
own sets of liking and disliking, and expectations about people, expectations that may or may not
be reasonable and tenable. These biases breed rating errors, ordeviation between the true rating
an employee deserves & theactual rating assigned.The most common and influential errors in
most of the private organiations include: Central Tendency,Hallo Effect,Rsuty Halo Effect,Personal
Biases ,Unclear Standards and the lack of feedback.
PA has
Memory is quite fallable
prone to likes and dislikes
unjustifiable and untenable expectations
results in
errors
overdeviation b/w true and actual rating
central tendency
halo effect
rusty halo effect
personal biases
unclear standards
lack of feedback
7/31/2019 Anam Aqil - Searched Literature
17/17
In practice, there are many possible errors or biases in the performance appraisal
process. . The most common errors that affect the objectinity of the appraisal in
organisations include:The Halo Effect and HornEffect,Leniency & Strictness Error; The
Central Tendency Error; The Recency Effect;The Contrast Error;The Similarity Error.
central tendency
halo effect
horn effect
leniency and strictness error
recency effect
contrast error
similarity eroor