Performance Appraisal and Training and Development - Example

Performance Appraisal and Training and Development Population growth in the world in the recent time has resulted to an expansion of business organizations. As they expand, the appetite for more human resource is increasing. To develop and maintain performance best human resource management skills are required. Currently, performance appraisal is being favored by many a managers as a way of ensuring that that performance is never compromised among the workers. To achieve the best out of the performance appraisals, training and development of both the appraiser and the appraised is crucial. Ingram points out that performance appraisal enhance the development of the employees (2012). It is through the performance appraisals that the seniors can gauge the competence of the employees. Where an individual is weak the necessary actions can be taken so as to enhance improvement of the said employee. Further training could be suggested as one way of the possible method of achieving developmental skills. It is therefore in order to suggest that performance appraisal is closely related to training and development. Employees reviews also commonly known as performance evaluation or performance appraisals are periodic and systematic processes used to assess productivity and job performance of an employee against a pre-established organization objectives and criteria (Muchinsky 2012; Manasa & Reddy 2009). Such individual employee’s aspects like weaknesses, strengths, accomplishments, future improvement potential among others are also considered during the process of performance appraisal (Manasa & Reddy 2009). Performance appraisals are usually conducted at the end of the year though an organization may opt to conduct them after a shorter period than this say quarterly (Lingham, 2007). Judgmental evaluation, personnel and objective production are the three main methods used while collecting performance appraisal data (Muchinsky 2012). Muchinsky (2012) observes that the performance appraisals being part of the performance management systems are used to align and manage the resources of an organization in an attempt of achieving the best of the performance. Management of performance is a very crucial process which when done in the right manner can go a long way in enabling an organization to achieve its objectives. This is the reason as to why majority of modern organizations are prioritizing improvement of performance appraisals for junior and senior employees. Ideally, as observed by DeNisi and Pritchard, performance appraisals are utilized so as to achieve performance improvement (2006). The improvement of an individual employee is the main target but ultimately it mostly than not results to the enhancement of the performance of the overall organization (DeNisi & Pritchard 2006). Additionally, performance appraisals are also used as employment decision’s base. The management may base their decisions pertaining to transfers, promotions or termination on the results of the performance appraisals. More over, performance appraisals serve a profound importance in the process of communication in organizations. This is brought about by the fact that the employees may need to know from the management how they have been performing. In the same vein, the management may also want to communicate organizational expectations to the new employees or even the older ones. Performance appraisals are also important for they can be used in establishing personal goals for training plans. The managements, through the reference of the performance appraisals, are also in a position of not only formulating job criteria but selecting individuals best suited to undertake the required tasks (Manasa & Reddy 2009). Employees on the other hand are able to monitor their career development as they use performance appraisals as their guide (Spinks & Meche, 1999). Those organizations that have developed reward systems as a way of motivating the workers can be aided by the performance appraisal in this undertaking (Manasa & Reddy 2009). The management simply looks at how an individual worker has been evaluated performance-wise thereby being awarded accordingly. Performance appraisals have been proved to be one of the most problematic aspects of HRM (human resource management). The lot involved, from the supervisor to the junior employees, typically airs their dissatisfaction with performance appraisal systems used in their organization. In fact, many are of the idea that the appraisal processes are a pointless bureaucratic exercise in addition to the main contributing factor to the destructive relationship between the employees and their supervisors. In spite of these indictments, many of the supervisors are not keen in abandoning performance appraisals which they continue to view as an important tool of HRM. To appreciate the relationship between performance appraisal and training and development the study at hand will be informed by a close look at Virgin Australia. To help John Borghetti, the Virgin Australia CEO, a dedicated team of executives oversee the daily running of the airline (Virgin Australia, 2012). Apart from Sir Richard Brandson, the airline chairman, the rest of the executive are housed in Bowen Hills (Virgin Australia, 2012). Sankar Narayan is the person in charge of the fleet, finance, group strategy, procument, investor relations and information system. The Chief Operating Officer is Sean Donohue who oversees the daily operation of the airline such as engineering operations, flight operations, ground operation, operations planning, catering, cabin crew, safety systems, and group and property sustainability among other key roles (Virgin Australia, 2012). The person marked with the customer care is Mark Hanssell (Virgin Australia, 2012). He ensures that a consistent customer care both on the ground and in air is maintained. He is also responsible with the brand management, marketing, lounges, customer relations and service, and service and product development (Virgin Australia, 2012). Danielle Keighery is charged with the responsibility of the airline corporate communications, media and public relations as well as community sponsorships and in-flight media (Virgin Australia, 2012). Merren McArthur is airline’s executive network, alliance and yield (Virgin Australia, 2012). The person responsible for Virgin Australia government relations is Jane McKeon (Virgin Australia, 2012). Richard Tanner and Adam Thatcher complete the list of the executive. Tanner is in charge of succession planning, talent management, remuneration, workplace relations, staff travel and recruitment (Virgin Australia, 2012). Thatcher being the company’s secretary ensures that legal aspects and corporate governance are taken care of. It is obvious that each team member is charge with more than responsibility and it therefore prudent to observe that there are other people who are expert of each of the role under these executives. To give the company an edge in the travel business segment the workforce performance is of importance to ensure that all the employees perform according to the airline objectives a performance appraisal program is embedded within Virgin Australia planning and performance cycle. Performance Review, Training and development Practices in Virgin Australia An organization should ensure it gets it right, right from the starting point of the process. Mostly, when the performance appraisal start from the leadership, the performance management policy is well crafted something that ensures that all the employees’ performance is aligned with the expected organization’s performance. When a junior employee discerns that the appraisal is not only for the lowest cradle workers, this alleviates suspicion and fear of workplace molestation. Allan is of the idea that performance appraisal should be definitively communicated and written (1994). The Virgin Australia performance appraisal was carefully invented to be in accordance with development of both annual and corporate plans. Boice and Kleiner intimate that it is not a simple job to develop a performance review system that correctly reflects the performance of the employees (1997). An appraisal system that is successful is cultivated from careful planning, thinking, hard work, and intermarried with the needs and strategy of an organization (Caruth & Humphreys, 2008). From simple ranking schemes to complex behavioral or competency anchored ratings, an organization can conduct its performance review using any of the methods. The method picked by an organization is informed by its expertise and resources available (Redman & Wilkinson 2001). Considering the maturity and development of HR, expertise and resources at the disposal of Virgin Australia the appraisal system employed may be considered complex. This system at times can get too bureaucratic with the employees getting driven mainly by ticking boxes or completing the paperwork (Rogers 1999). It is important for the employees to be involved in designing the appraisal system, for psychological, practical and operational reasons (Harrison & Goulding 1997). Virgin Australia to some extent involves its employees in development and updating the appraisal system. Every employee in Virgin Australia is appraised. This does not exclude John Borghetti, the company’s CEO, thereby making the appraisal all-inclusive. The Virgin Australia plan of action does not explain who appraiser is but it is generally taken that the line managers perform the work. The CEO is appraised by the airline’s Chairman. The reason as to why the line managers are the best suited candidate to undertake the appraisals is because they use a great deal of time with the employees something that make them to have first hand experience in regard to contact with other workers (Fletcher 2006). Judgmental evaluation being one of the methods of collecting appraisal data is on itself a congregation of methods though this does not disqualify it from being a method (Muchinsky 2012). Appraisers are commonly used to obtain performance appraisals making it very possible to encounter some errors. Halo effect errors, central-tendency errors and leniency errors are the characteristic ones (Muchinsky 2012). The errors arise from how we get hold of information, process and group it then use it to evaluate and judge others in a number of contexts. So as to minimize the occurrence of halo effect, central tendency and leniency errors, training of appraisers is important. Training entails educating appraisers to come up with more precise appraisal of performance. With training, the appraiser is in a position of coming up with a compact point of reference to be using while evaluating present and future appraissees. To assess the behavior of its employees the Virgin Australia opted for the 360 degree system. Through this system the airways used a combination of methods to evaluate the employees; using peers, superiors and one’s self. The Virgin Blue used to have 360 degree system of appraisal but Virgin Australia does not use the system any more. One of the reason as to why the airline dropped the 360 degree system is because the impact was small. The management had to deal with the resource, political, ethical and logical problems arising from the appraisal system and the resultant potential of doing more damages than good. From one of the interview conducted John Borghetti and his team recognized the challenges posed by bad appraisal system and this is when they decided to utilize performance feedback system that was to bring in more reliable results as well as good performance improvements something that made them to reconsider use of highly unreliable peer rating. The airline decided to settle on the self appraisal system for it had proved to be more beneficial elsewhere. For instance, the system is known to increase fairness perception on the employee. Self appraisal is also advantageous for it minimizes potential for an individual bias through provision of further rating. The employees are also able to communicate regularly through the feedback they provide as well as increasing their commitment to new goals and development plans. Personnel method is the second method of collecting data. This method involves recording such withdrawal behaviors as accidents and absenteeism (Muchinsky 2012). When an employee absents himself or herself without valid reason, the management may take this as an indicator of poor work performance. This is always the case regardless of how well an employee has been working. But it should be noted that quantity presence of an employee does not guarantee that he or she is dedicated to the job and therefore it is of importance to look at this aspect as a disadvantage of personnel method. Accidents can be analyzed as useful indicator of a poor work performance especially when it is the case of a blue collar job. Lack of training and employees’ development may render the rating useless, a fact that many HR managers appreciate. The Virgin Australia management is aware of the challenges encountered when untrained raters use this method and that is why the organization has embarked on a program of ensuring that its raters undertake a comprehensive training. The airline’s raters are in a position of validating whether excessive absenteeism or accidents reflect poor work performance of the employees. The third type of appraisal review is objective production. This method involves direct and limited measures like production number, sales figures or electronic performance in the case of data entry work (Muchinsky 2012). According to Muchinsky, mostly than not, the results of this method are incomplete due to criterion deficiency and contamination (2012). Criterion deficiency has to do with the quantity of the work done not indicative of the quality of the job. On the other hand, criterion contamination refers to variability in performance being contaminated by factors beyond the control of the worker. These criterion inadequacies lower the validity of the rating. This method being as inadequate as it may be, the managers still use its data to review the performance of the employees. Rao (2004) observes that performance management and appraisals are continuous and periodic respectively. Just like many organizations, Virgin Australia conducts a formal performance review annually. This is supplemented by less formal appraisal after every six months and informal sessions between line manager and employees which are held each month. Virgin Australia opinion survey of the employees of 2011 revealed high satisfaction level with feedback on the performance. In the survey 69% of the respondent gave a positive answer to the question of their manager giving them a regular feedback on their performance. 18% and 13% gave a neutral and negative answer respectively. Effective performance appraisal system is developed with an element of training the raters (Boice & Kleiner 1997). The process of training entails counseling and coaching, providing worker feedback, joining appraisal to pay, setting performance objectives and conflict resolution. For the system to be used effectively and consistently training is paramount (Williams 2002). The appraisal practice of Virgin Australia is successful for the managers undergo training which encompass such elements as report writing, interviewing, values, objectives setting, purpose and observation skills. Furthermore, the managers are trained on how to use the appraisal schemes while at the same time ensuring that they develop key skills needed in appraising. Williams (2002) continue to say that training is not only a preserve of the appraisers rather the employees whoa are to be apprised should also undergo it. This is important for it prepares the appraisees to be non-defensive while receiving feedback. To eliminate the discrepancies between actual and expected performance of reviews the employees at Virgin Australia undergo training. This has contributed to high levels of satisfaction on the part of the employees. Cook and Crossman intimate that training lead to higher organizational success for it increases effectiveness of the review system (2004). Links between performance review and training and development For when Allan (1994) say that the performance review should be definitively communicated and written, it is obvious that some form of knowledge is required here. For one to communicate an idea effectively the person should require some basic knowledge of what he or she is sharing out. The knowledge can be cultivated through some form of training. More so, it is not easy for everyone to communicate a written idea to others without having some form of experience of whatever is written. This experience can be gotten through observation or listening from others. It therefore explains the thin line between training and performance appraisal. Caruth and Humphrey observe that a successful appraisal system calls for intrinsic planning with the appraiser having a clear idea about the needs and the strategy of his or her organization (2008). Some form of inside knowledge of the company is important for one to come up with a workable review system. This know-how can easily be realized through training and development on the part of the managers and the employees. To add to this, an appraisal should be a two-way traffic. The appraiser should be in the same wave length with the appraissee and this is why organizations ensure that necessary exposure is accorded all the employees so as to make it easy for them to smoothly translate the purpose and objectives of the company as uniformly as possible. For instance, the Virgin Australia ensures that those who are recruited to work in it are taken for a training of what is expected of them. This is done through the watchful eye of Richard Tanner, the executive charge with the responsibility of talent management, recruitment among other duties. Richard Tanner ensures that the new employees are comfortable with the aspiration of the airways. The training is supposed to last for one and half month before one is officially employed. So as to make the trainees as comfortable as possible the office of Tanner through other relevant departments creates an enabling environment for them to spend as much time in their respective work station as possible. This makes them integrate and interact with other employees so as to get the practical aspect of their terms of reference. From the discussion above it is obvious that an untrained and underdeveloped rater may mess up a big time when he or she decides to employ the judgmental evaluation method. This is because the rater being highly prone to judgmental mistakes that may come as a result of poor analyzes of the information obtained about a particular employee. Without a compact point of reference while evaluating oneself or another, the rater will not be able to escape halo effect, central tendency and leniency errors. Like the case of the Virgin Australia, training and developing the capacity of the employees enabled the airline to appreciate firsthand the challenges posed by both 360 degree and peer rating system. When the airline reached a decision of settling for the self appraisal system, it is obvious that the raters had encountered a lot of problem on the course of doing their work. This realization did not come easy; the management had experimented with many methods and from the lessons that they learnt they ultimately picked what they thought would work and bring reliable results. It is very common for employees to absent themselves leave alone causing minor or major accidents in workplace. When untrained rater is asked to use the personnel method to rate himself or others, the rater may be quick to conclude that the absenteeism of a certain work is a sure way of telling that the work is not committed to his or her job. The same conclusion may be quickly forthcoming from the rater in the case of accidents in the work place. With this knowledge the airline ensured that the raters are fully exposed to the necessary training and exposure to avoid the pitfalls encountered while using the method. The role important role played by the training and development of employees cannot be over emphasized with regard to the method of objective production. In fact, a lot of training and development if required if the raters are to reach to conclusive review using the method. Failure of training and development of the rater will result to interference of the review results by the criterion deficiency and criterion contamination. A trained eye may not fail to measure the correlation between quantity and quality of the job done. Give an untrained rater the opportunity to appraise and one will realize that the results are skewed towards the quantity of the job done. In other words, the underdeveloped rate will favor the worker who has worked a lot while the one who has performed less but had done a quality work getting less favorable ratings. This is an indication that when an organization fail to prioritize training and development of its raters quality will always be measured through quantity of the work done a situation that can contribute to overworking the employees and in the process their motivation level gets compromised along the way. One cannot talk of performance appraisal without considering development and training of the employees for according to Harrison and Goulding (1997) the process is meant for both the appraisers and the appraissee. Though the management is responsible in ensuring that the reviews are conducted at the expected time, the employees have to chip in something during the development and updating of the system. For both the management and employees to work out well during the development stage of the system it is important to ensure that they have been exposed to the same knowledge, experiences and skills beforehand. If this is not done then the process might take like for ever to prepare leave alone implement. A lot of resource may be wasted and this can go on to have serious effect on the general operation of the organization. Before the Virgin Australia discovered the advantage of training it staff on the appraisal system, 78% of the junior staff interviewed in 2005 complained that the system was very bureaucratic. Merren McArthur documented that majority of the employees reported that they felt more motivated to work in the airline for they felt that their input was taken serious when they realized that the appraisal system reflected what they had shared during the development of the system. This was taken as one of the reason as to why the yield of the airway was pointing north in 2010 financial year with Sankar Narayan, the Virgin Australia executive financial officer, putting the profit to be A$34.3 m (Virgin Blue Holdings, 2011). In conclusion, though the performance appraisals are of importance to any business establishment the management should be careful on how it implements this system. If the right channel is not followed, employee appraisal system might become the source of borne of contention in an organization resulting to poor performance of the employees which can lower the productivity of the overall organization. For any appraisal system to be a success story training and development of the appraisers is of importance. The system is a very sensitive process and necessary skills are required so as to ensure that the company’s objectives are achieved. On the other hand, those who are being rated should also be trained for as established above, they are important part and parcel of the development stage of the review process. At no time will be the process deemed as above board if it is not all inclusive. Apart from making the management and the employees read from the same script during the time of appraisal, training and development goes a long way in establishing trust and satisfaction not to mention achieving the end result of the appraisal; boosting the performance of the employees. Time and a huge chunk of organization’s resources are committed to the performance appraisals. If the right things are not done then all the parties involved; raters, appraissees and the company might suffer untold losses. Before an organization embarks on subjecting its staff to performance review, manpower training and development should be done properly. It is also important to ensure that the process appraising start with the leadership so as to ensure that the organization creates a strong performance policy. Lack of proper training and development of the raters may see an organization failing to align the expected performance with those of the employees. It will be next to impossible for untrained rater to identify where the rain started to beat them for it will be very hard to know the pros and cons of objective production, personnel and judgmental evaluation methods. From the discussion above the three appraisal methods are only useful when the user know them inside out. Anything sort of this and the management find itself in a cyclic cycle of poor performance. References Allan, P. (1994) Designing and implementing effective performance appraisal systems. Review of Business. 19(2), pp 2-8. Boice, D.F. & Kleiner, B.H. (1997) Designing effective performance appraisal systems. Work Study. 46(6), 197-201. Caruth, D.L. & Humphreys, J. 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Williams, R.S (2002) Managing Employee Performance. London: Thomson Learning. Virgin Blue Holdings. (2011). Annual Report 2010, Retrieved from http://member.afraccess.com/media?id=CMN://4A224487&filename=20100930/VBA_01103543.pdf Virgin Auastalia. (2012). Virgin History, Retrieved from http://www.virgin.com/company/virgin-australia Virgin Australia. (2012). Virgin Management, Retrieved from http://www.virgin.com/company/virgin-australia Read More