Anam Aqil - Searched Literature

7/31/2019 Anam Aqil - Searched Literature

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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


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


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


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.


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.


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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.


7/17

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).


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.


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.


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.


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.


12/17


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.


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15/17


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


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

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