The paper 'The Design and Implementation of Performance Management Systems and Job Satisfaction' is a great example of a management assignment. Hospitality and related industries in the U. K. employ about 2.2 million employees comprising 7 percent of the total workforce in the country thus emerging as the single largest sector. The hospitality segment of this workforce is employed in hotels, restaurants, pubs, bars, nightclubs, and contract food service. As the success of this industry depends on its human face, employees’ force that is human capital is the most important source of competitive advantage for the industry but characterized by high employee turnover.
(Kim et al, 2005) To consolidate its competitive strength, the industry needs to minimize the labor turnover for which organizations should have sound systems designed for the achievement of a high rate of employee retention. The purpose of this paper is to examine the relationship between performance management systems and job satisfaction and employee retention. It should be the goal of human resource management to recruit and retain employees for which evaluation of their performance is highly essential. Performance evaluation is a powerful tool which if implemented, can assist the hospitality organization and help its employees excel in their jobs.
It serves as a feedback system for the management of the successful implementation of the organization’ s manpower plan. It gives the management an idea as to how effectively each of its employees is improving individually and how the development of the individual is contributing to the realization of the goals of the business plan of the hospitality organization. Some of the benefits of the performance evaluation or appraisal are, it becomes a two-way communication between the management and every employee individually, laying down job criteria so as to measure job performance, improvement in job performance, correcting faulty work habits, suggestions from employees for enhancing job performance, methods and morale, becoming aware of problems earlier, feeling of commitment to the organization, improved job satisfaction, an effective tool for motivation, a means of communication to the employees, documentary proof in case of a future dispute, basis for giving promotions and giving an increase in salaries, a method of seeking alternatives to job termination, future guidance for improvement and development by the employee, continuous improvement, creation of high-performance workforce and enhanced productivity.
(Tanke, 2000 p 222) Both negative and positive biases must be avoided since they can lead to a nonobjective or unfair performance evaluation. They are apt to mislead even the employer with good intentions to make a wrong appraisal. Some of the possible situations are ‘ halo effect’ , ‘ horn effect or horn error’ , recent behavior bias’ , ‘ primary bias’ , and equating of self by the appraiser or employer with the employee. The ‘ halo effect’ results by interpreting subsequent events guided by the limited information of an earlier event.
Positive halo effect results when an employee who had scored high on the pre-employment skills test is weighed by a manager with high expectations from him. If such an employee happens to perform poorly, the manager thinks that the employee is not performing well due to some bad luck on him that day without actually ascertaining his reasons for poor performance. On the other hand, the employee tends to assume that his performance has been approved or appreciated.
This positive halo effect leads to the expectation of the employer for still higher performance by the employee in the future. The opposite of this positive halo effect takes place when the employee earns a negative impression from the employer. This effect is known as ‘ horn effect’ or ‘ horn error’ . Hence, however high a performance level the employee achieves, it will be viewed by the appraiser in a bad light. ‘ Recent behavior bias’ occurs depending on the time gap that precedes the appraisal. Since it is the tendency of humans to think of only the recent behavior, employees would take advantage of this tendency and would take care to show a high level of performance just before the appraisal if the periodicity of appraisal is known in advance.
This is also known as ‘ primary bias’ or ‘ recency bias’ . Yet another bias is ‘ expectancy’ by the employer to think of his employee in his own place and expecting a higher performance what he would otherwise have himself performed in the job. Some more problems in the appraisal are, not having sufficient time to review the data available and the tendency of the appraiser to rate employees as average due to his inability to rate as outstanding or poor.
This is called the non-differentiation. Besides, performance goals are found to be vague or contradicting one another. Some organizations would use performance appraisal just for exercising control and not as an additional developmental tool. There are also organizations that do not recognize and reward managers for developing employees through appraisals.
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