Are There Effective Performance Appraisals for Business? Research Paper by Nicky
An exploration of the research on whether performance appraisal systems are a fair and effective means of motivating employees.
# 151588
| 7,634 words
| 11 sources
| APA
| 2012
| 
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Description:
The paper explores the research on the performance management system (PMS), the fuzzy based approach, management by objectives (MBO) and the 360-degree feedback method. The paper examines the ways to improve the psychometric quality of performance appraisals and addresses the weak relationship between employee appraisal ratings and employee performance, employees' perception of fairness and the need for a transition from performance appraisals to guiding skilled performance. The paper draws the conclusion that although used for decades, employee performance appraisals simply are not effective means of controlling pay increases and promotions. Instead, performance appraisals should be used solely for training employees and developing their skills and talents. The paper includes an annotated bibliography.
Outline:
Abstract
The Changing Performance Appraisal Concept
The Performance Management System (PMS)
Fuzzy Based Appraisal System
Management by Objectives (MBO)
Data Envelopment Analysis (DEA)
360-degree Feedback Method
Measuring Work Performance
Weak Relationship Between Employee Appraisal Ratings and Employee Performance
Employee Perception of Fairness and Performance Appraisal Systems
Tenure and Performance Appraisal Systems' Effectiveness
A Transition from Performance Appraisals to Guiding Skilled Performance
Discussion
Recommendations
Outline:
Abstract
The Changing Performance Appraisal Concept
The Performance Management System (PMS)
Fuzzy Based Appraisal System
Management by Objectives (MBO)
Data Envelopment Analysis (DEA)
360-degree Feedback Method
Measuring Work Performance
Weak Relationship Between Employee Appraisal Ratings and Employee Performance
Employee Perception of Fairness and Performance Appraisal Systems
Tenure and Performance Appraisal Systems' Effectiveness
A Transition from Performance Appraisals to Guiding Skilled Performance
Discussion
Recommendations
From the Paper:
"Sudarsan's (2009) study found that nearly all of the organizations he surveyed were concerned about their employees meeting objectives or achievements. These objectives were described by a variety of terms including: objectives, goals, targets, Key Results Areas (KRAs), Key Performance Indicators (KPI), and work achievement. More than 60 percent of those surveyed indicated that objectives were a criterion for appraisals. Forty percent actually required their employees to specify their objectives for the following year, on a form. The difference in these two figures is of concern."If 60 percent of organizations use objectives to determine whether or not an employee has made a valuable contribution to the organization, yet only 40 percent require their employees to specify what their objectives are for the upcoming year, which will be used when their appraisal time rolls around again, this is a problem. Twenty percent of the organizations had individual employees who may not now what their objectives are, for the upcoming year. In addition, when it comes time for appraisals, how is the evaluator supposed to accurately rate the employee, when they themselves likely don't know what the objectives were to measure against?"
Sample of Sources Used:
- Addison, J. & Belfield, C. (Sept 2008). The determinants of performance appraisal systems. British Journal of Industrial Relations, 46(3). Retrieved November 15, 2009, from Business Source Complete. Addison and Belfield compare the findings of Brown and Heywood's analysis of the Australia Workplace Industrial Relations Survey with their findings in Britain, using the Workplace Employment Relations Survey. Of particular interest for this paper was the conclusion from both studies that tenured employees are not strongly motivated by performance appraisals. This shows the ineffectiveness of appraisals, no matter what system is used, for those employees with tenure.
- Banu, C. & Umamaheswari , P. (Jul 2009). A study on 360 degree performance appraisal systems in Reliance Life Insurance, Udumalpet. ICFAI Journal of Management Research, 8(7). Retrieved November 15, 2009, from Business Source Complete.Banu and Umamaheswari research the use of the 360-degree performance appraisal system on a life insurance company. It was found that this appraisal system was helpful in identifying training needs, in addition to evaluating the performance of employees. It was also found to be useful in determining rewards and incentives, as well as promotions. However, the authors failed to acknowledge the challenges inherent in this system, as found be other researchers.
- Kline, T. & Sulsky, L. (Aug 2009). Measurement and assessment issues in performance appraisal. Canadian Psychology, 50(3). Retrieved November 15, 2009, from Academic Search Complete.Kline and Sulsky explore the measurement and assessment issues present in performance appraisals. Of particular interest to this paper is the discussion of the challenges in the rating systems appraisals utilize. Trait-based systems are more difficult and less accurate because they require the evaluator to infer the rating from the behaviors they are observing. Comparative systems are less justifiable as well. This underscores a flaw in all appraisal systems.
- Manoharan, T., Muralidharan, C., & Deshmukh, S. (2009) Employee performance appraisal using data envelopment analysis. Research & Practice in Human Resource Management, 17(1). Retrieved November 15, 2009, from Business Source Complete.Manoharan, Muralidharan, and Deshmukh theorize that their data envelopment analysis process will counteract the challenges found in other performance appraisal systems. By measuring input and output of an employee and comparing it with that of peers in the same environment, the authors surmise that they eliminate the subjectivity found in other systems. However, they fail to acknowledge challenges such as the effects of the system, even in similar environments, the negative consequences of giving a poor performance appraisal, the non-measurable tasks that employees complete, and the qualitative and intangible aspects of an employee's performance. Although on the surface the DEA system eliminates subjectivity, subjectivity and others are still a problem.
- Murphy, K. (Jun 2008). Perspectives on the relationship between job performance and ratings of job performance. Industrial & Organizational Psychology, 1 (2). Retrieved November 15, 2009, from Business Source Complete.Murphy explains why job performance ratings are not necessarily indicative of actual performance. Although an employee's performance may actually be poor, a poor performance appraisal may have nothing to do with the employee's skill and be due to unmotivated employees, focus on other tasks, tasks that keep changing, or the evaluator may not have the information needed to make the best appraisal. In addition, evaluators are often motivated to not give accurate ratings for a variety of personal reasons. This clearly shows how evaluation systems are not effective measures of performance in general, no matter what system is utilized.
Cite this Research Paper:
APA Format
Are There Effective Performance Appraisals for Business? (2012, June 27)
Retrieved May 19, 2013, from http://www.academon.com/research-paper/are-there-effective-performance-appraisals-for-business-151588/
MLA Format
"Are There Effective Performance Appraisals for Business?" 27 June 2012.
Web. 19 May. 2013. <http://www.academon.com/research-paper/are-there-effective-performance-appraisals-for-business-151588/>