ii) ultimately salary levels are determined by market forces of supply and demand for labour. Stuff shortages could cause the firm to pay high wages quite independent of the objective worth of particular workers.
Appraisal methods
There are many kinds of appraisal schemes, though usually they are elaborations or variations on one of the following.
Ranking, which requires the managers to rank sub ordinates in order of merit, usually on their total ability in the job but sometimes according to a few separate characteristics. It is quite easy for a manager to use this method for a small number of subordinates, and usually quite close agreement about the rank order is found among various judges who know the subordinates well. It can be used to decide pay, and to some extent to determine future use but not to identify training needs or provide motivation. However, although it puts subordinates in order of merit it does not show how much better the first is than the last.
Grading which allots employees into predetermined series of merit categories-usually five- on the basis of their total performance. It works reasonably well for a homogeneous group of subordinates, and a fair agreement among ratters is usually obtained. There is however, a strong tendency for extremes to be avoided, i.e. very few subordinates are rated poor or exceptional. To overcome this, a forced distribution is sometimes used; managers are instructed to ensure that subordinates are put into the five categories in the following proportions, ensuring that the assessment of merit is distributed normally:
Poor Below Average Average Above Average Exceptional
10% 20% 40% 20% 10%
The forced distribution is, however an unsound method to use if the number of subordinates is below about 40. Grading has the same uses and limitations as ranking.
The rating scale is by far the most common method of appraisal. It consists of a list of personal characteristics or factors against each of which is a scale usually of five points, for the manager to the mark his or her assessments of the subordinates. This method can be used for deciding pay, determining future use and indicating training needs. It is rather difficult to use for motivating an employee, who may well be inclined to argue about the details of the rating rather than discuss the job constructively.
The rating scale method is some ways rather dangerous because it gives a false impression of analysis and exactitude. If it is to be successful the managers who use it must be trained, and the factors included in it carefully considered. Some of the faults often found, and ways by which they can be reduced.
The open-ended method is a comparatively recent innovation, introduced because of dissatisfaction with rating scales. Instead of requiring a managers to assess a number or personal characteristics, not all equally relevant, the method emphasises the way the job is performed and expects the manager to write a few sentences about the subordinate rather than put tics in columns. The method has many varieties a common one being to ask the manager four questions about the subordinate.
- What are the employee’s strong points in relation to the job?
- What are the employee’s weak points in relation to the point?
- What are the employee’s promotion potential?
- What are the employee’s training needs?
Another approach is simply to ask manager to write a general account of the subordinate’s work over the past year and suggest any action that might be taken to improve his or her performance. In some companies subordinates simultaneously write their own versions of the year’s work and suggest transfers or training that might be help their career.
Behaviour expectation scales are an interesting development in appraisal method.
Behaviourally Anchored Rating Scale technique(BARS for short) requires the assessor to select some aspect of subordinates behaviour considered by the appraiser to be typical of the appraisee’s performances in a certain aspect of a job. For example , the superior of an employee being assessed under the heading ability to cope with stress would be asked to complet a form which begins with the word, I would expect this employee in the following way, followed by a list of statements from which the appraiser must choose. Among the statements might be:
Remain calm and collected 5
Become frustrated 4
Show irritability 3
Act erratically 2
Fly off the handle 1
-
Human Resource Development Management by Objectives and Training & Analyses
Management by objectives(MBO) is a system which attempts to improve the performance of the company and motivate, assess and train its employees by integrating their personal goals with the objectives of the company.
The MBO system generally includes the following steps:
- The superior and the subordinate mutually agree on the primary elements of the subordinate’s job.
- The supervisor and the subordinate mutually agree on the subordinate’s specific objectives for the specified period
- The subordinate establishes a plan of action necessary to meet each objective.
- During the specified period the subordinate periodically reviews progress toward objectives perhaps jointly with the supervisor. Progress checks may indicate the need to change action plans or modify objectives.
- At the end of the specified period the supervisor and subordinate meet to jointly evaluate the subordinate’s performance on objectives.
Most MBO programs are conducted on a one on one superior subordinate basis. However, one-on-one MBO does not account adequately for the interdependent nature of most jobs particularly at the managerial and supervisory level nor does it ensure optimal coordination of objectives between various organizational groups. Accordingly, it may be useful to take a team approach to reviewing targets and achievements, although this practice is wide spread.
Essentially, team MBO involves the application of the basic MBO process to work groups. First, overlapping units work with “higher” and “lower” units on overall organizational objectives. Then individuals work with their peers and superior to define roles and to develop individual objectives. This approach can lead to greater participation by subordinates in setting objectives and can improve relationships within teams and between superior and subordinates. However, the success of a team approach greatly depends on the overall leadership style, climate and culture of the organization. In particular there needs to be high trust level a participative supportive leadership style and strong norms of openness and cooperation.
The employee agrees with the manager what his or her performance objectives should be over a set period. The objectives are ideally expressed quantitatively and are taken from key areas of the job, i.e. tasks which if done well will cause the whole job to be done well. At the end of the period the employee and manager review jointly the achievement of the objectives.
Management by objective is included to encourage employee participation and increase job satisfaction by giving the employee a sense of achievement and involvement with his or her work. The manager can appraise the employee by referring to specific performances rather than by making subjective judgements. Training needs may also emerge during the discussion at the beginning and of the review period. Other advantages are that:
- Employees are forced to think hard about their roles and objectives about why are necessary and how best to get things done;
- Targets are clarified and the crucial elements in each job identified;
- Superiors and subordinates are obliged to communicate with each other and there is forced co-ordination of activities between various levels of management, departments and between short and long term goals.
Many managers and employees find the joint objective setting and performance review interviews difficult and sometimes inconsistent with the general management company. The system may then degenerate into a routine in which the manager simply instructs the employee which objectives to pursue. Quite often it is difficult to find new objectives which offer a challenge and the system may encourage individual selfish effort to the detriment of the working group. Further possible problems include the following.
- Attempts to quantify performance in activities that are not really quantifiable.
- Concentration on short term measurable goals while neglecting important but less precise long term objectives.
- Difficulties arising from subordinates being given objectives; but not the resources, information and authority needed to achieve them.
Few companies now practise MBO in its entirely but it has left a beneficial legacy to the appraisal schemes which succeeded it, achievement of objectives being emphasised much more than the rather indefinable qualities of energy, co-operation, initiative, etc. It has encouraged the use of open ended appraisal methods and the appraisal interview. Salaries or bonuses of senior managers are sometimes influenced by their performance against objectives set for them each year.
Performance means the integration of employee development with results based assessment. It encompasses performance appraisal, objective setting for individual and departments, appropriate training programmes and performance related pay. Appraisal of managers by their subordinates peers and people in other departments might also be included in the scheme.
There has been in recent years a reaction against formal appraisals largely because of their tendency to decay into routine form filling, managers sometimes copying what they wrote the previous year. It has been said that a manager should as a normal part of the managerial process continually assess the merits of his or her subordinates and consider what training they need to improve their performance or meet new demands. The manager should take action e.g. initiate a transfer, if his or her assessment indicates it is necessary and be ready to give a written appraisal whenever it is specifically required e.g. if a subordinates has applied for a promotion. There is general agreement, however, that an annual meeting between the manager and subordinate to review the latter’s work during the year is useful because it gives formal recognition of the subordinate’s efforts.
In many companies appraisal is one way secret; it can therefore only fulful the first three purposes of appraisal in 2 and ca not be used to motivate the employee by reviewing his or her job performance. A two way and open appraisal requires that an interview takes place between manager and subordinate based on the techniques. The self criticism that may occur in this process is much more likely to lead to action by the subordinate to remedy faults than criticism by the manager. On the other hand it is said that in many companies relations between manager and subordinate are not good enough to permit a problem solving interview to take place. The subordinate will try to hide shortcomings rather than discuss them. Managers who have the time patience and social skills to conduct problem-solving interviews are also rather rare. Moreover one of the functions of a manager is to assess subordinates and tell them if their work is unsatisfactory; subordinates expect the manager to do this and will not respect that person if he or she appears to avoid the task.
SUMMARY
Performance appraisal is the formal, systematic assessment of how well employees are performing their jobs in relation to established standards and the dialogue about that assessment with employees. How performance appraisal is conducted can have a decided impact on employees’ motivation moral and plans for improvement. Appraisals can be conducted by the immediate supervisor, the employee, the employee’s peers, customers or other outside appraisers, committees or the employee’s subordinates, or combinations of these. A committee of higher managers or a committee selected by the sometimes used to conduct appraisals in addition to the immediate supervisor. The most common approach is to have the immediate supervisor conduct the appraisal on a semi-annual or annual basis. The popularity of 360-degree feedback systems is growing rapidly. Laws and court cases affect the appraisal process. Performance appraisals are treated like employment tests under the EEOC guidelines and must therefore be reliable and valid. Reliability and validity can be reduced by appraisal errors such as the halo error, central tendency or leniency. The use of job analysis written standards for rating scales. Supervisory training in the use of appraisal instruments, appeal or review procedures and documentation and counselling relative to substandard performance will tend to strengthen management’s position in the event of legal challenges to management decisions for example in discharge cases. Courts have tended to allow fairly unsophisticated methods of appraisal, providing such conditions are present. Numerous approaches are used in appraising performance, including the graphic rating scale, the check list, the essay, the critical incident method, behaviourally anchored rating scales, rating methods, and behavioural observation scales.
REFERENCES
Barcley, J.(2001) Improving Selection interviews with structure: organizations’ use of behavioural interviews. Personal Review, 30(1): 81-101
Campbell, D.J. and Lee, C. (1988) Appraisal in Performance Evaluation. Academy of Management Review 13(2): 3-8
John Bratton and Jeff Gold, 2007. Human Resource Management. 4th Edition. New York: Palgrave Macmillan
Guest, D.E., Michie, J., Conway, N. and Meehan,M. 2003. Human Resource Management and corporate performance in the UK. British Journal of Industrial Relations, 41(2), 291-314
Pettijohn, L.S., Parker, S., Pettijon, C.E. and Kent, J.L. 2001. Performance appraisals: usage, criteria and observation. Journal of Management Development, 20(9): 754-71.