Performance Management and Appraisal - Essay Example

Running head: PERFORMANCE MANAGEMENT AND APPRAISAL Performance Management and Appraisal [Writer’s Name] [Institution’s Name] Performance Management and Appraisal Introduction Every organization has to manage and assess the performance of their employees. Howevre, there is a major confusion regarding the two processes i.e. performance management and appraisal. No organization can successfully manage their performance without first clarifying the difference between the processes. This paper will give a clear understanding of the above mentioned processes, while highlighting their characteristics. Analysis Performance appraisal is according to Fletcher (2001) “common phrase for a variety of activities which organizations use to evaluate employees and develop their ability, improve performance and select employees for rewards. Research regarding this issue has always been something important for industrial and organizational psychologist as well as for Human resource management experts. Performance appraisal usually has a problem in over estimating the performance. Majority of organizations utilize a formal evaluation systems instead of appraisal systems to measure employee performance, however as for those organizations which use such a system believe that “Performance appraisal is a annual practice of passage in organizations which causes anxiety and hesitation in the most qualified and experienced managers ” (Roberts & Pregitzer 2007 ). There are a lot of reasons for this anxiety, and those reasons make performance appraisal something of a tension for the management as well as the employees. Employees are rewarded for meeting or exceeding performance targets. The behavioural method is concerned with employee behaviour. The focus is on whether an employee is doing things in the right way, and not on the amount of output as such. The advantage this approach has is that it becomes relatively to analyze and identify where a person is going wrong and to suggest steps to correct the same. Finally, the person-centred approach is concerned with measures of personal characteristics such as knowledge, skills and ability. Where as, Performance management is an extremely old concept, it is utilized in every kind of organization. At times it may also be known as performance-based management. It seems a to be part of a fast moving trend by which competition is created amongst workers in the international job market. It is completely based on the performance question of how to improve the process, “can it be done faster, better, or cheaper (Hall 1984),” by utilizing important performance goal and measures. It has been said that "what gets measured gets done." Measures of performance at the individual level might affect performance at the organizational level in three ways, each with a corresponding public management strategy: 1) selection, 2) remediation, and 3) incentives (Tichy & DeVanna 1984). These three methods are not mutually exclusive. A very famous view is that an employee’s performance is vulnerable to change. This notion is based on the fact that sometimes some employee’s performance is naturally better than others. Is such a situation, performance measurement can be utilized to select top notch employees who are then kept or even promoted. Therefore, how to pick the best applicant would be an important issue. Another view assumes that employee want to do their work right and employer want the work to be done right. Thus human resource development will find new and innovative ways to improve performance . . Regarding this view, performance measurement serves two purposes: 1) it can help identify both best practices and effective executives who implement them; and 2) performance measurement may also be utilized to identify bad and unethical work practices as well as a poor performers, who can get "remediation," like better training and proper guidance from their managers (Harris & Schaubroeck 1988). Performance management is also based on the concept that employee’s performance can be changed within the incentive system. The incentive system is an important part of motivation and performance management. Employees will improve their perform if they are given something in return. Thus performance appraisal leads to good management which in turn gives the employees pay, recognition, promotion, and perks (Tichy & DeVanna 1984). Thus in this manner performance appraisal may become a smart way to improve the performance management. Thus, it may be said Performance appraisal is an significant part of the performance management. It may say that performance appraisal comes under performance management. In simpler words for managing performance appraisals is necessary. It is extremely important to understand is that performance appraisal, can not improve performance of the employees. In fact, it's perhaps the smallest part of the huge process of performance management. Performance Management System on the other hand is an important component of successful human resource management, it helps a company to thoroughly assess and assess performance of their employees (individual as well as organizational) and keep an eye on trends inside the organization. Efficient performance management system characteristics of initiative and practices as given under: - enhances organizational efficiency in the achieving their mission and objectives. - helps in performing successful performance appraisals - Continually assessing the performance of employees - Rating and Rewarding performance - Gives important performance tools for assessment to help managers – - A great tool to help managers to find out issues regarding poor performance -It also helps to manage employee performance issues. (Hauensteins 1992) Whereas, Performance Appraisals is an important part of the performance management system, the characteristics of a successful appraisal system is as given under: - Setting expectations - communicating job descriptions and organizational goals to employees. - Employees obtain feedback through this system. (Hauenstein 1992) The performance management system can be considered as a automobile" moving on optimal performance and the Performance Appraisal may be considered as the "tune up" of the automobile that is required from time to time in order to ensure and guarantee that the automobile is function at optimal performance. It may be said that ‘Performance appraisal’ is a separate, proper, organizationally formal event, generally occurring annually and not more then that, which has definite performance dimensions and/or criteria which may be utilized in the assessment process (McLagan, 1997). Moreover, it is an evaluation practice, in which quantitative scores are often given based by monitoring the employee’s job performance on the criteria, and the scores are also disclosed to the concerned workers. ‘Performance management’ is a broad set of activities aimed at improving employee performance (Armstrong 2009). Although performance appraisal information provides input for the performance management process, performance management focuses on ways to motivate employees to improve their performance. Again, the goal of the performance management process is performance improvement, initially at the level of the individual employee, and ultimately at the level of the organization. The ultimate goal of performance appraisal should be to provide information that will best enable managers to improve employee performance. Thus, ideally, the performance appraisal provides information to help managers manage in such a way that employee performance improves. The significance of these definitions lies in the fact that it helps in differentiating between the processes. Cleveland and her associates (Cleveland et al., 1989) gave many different reasons for carrying out appraisals in companies , this process also had practices like documentation, within-person decisions and between-person decisions , these process further show that performance appraisal is apart of the performance management. Meyer, Kay, and French (1965) had pinpointed the ‘split roles’ of performance appraisals and performance management, they had highlighted developmental feedback and decision as the important elements of both for processes. Those authors also noted that these purposes could often be in conflict and so it was important to keep them separate as much as possible. However, most of the above researchers, as well as other factors were highlighted in support of the fact that both purposes help – organizations conduct performance appraisals largely to help them to improve employee performance, as part of a larger performance management system. Nevertheless, it may be discussed that the similarities in both the processes may be identified by research in the area. T research has pinpointed similar issues associated with both processes, That is, the issues in the area are mostly considered as an important association between performance appraisal and performance management. Performance management refers to an umbrella of all organizational components and activities affecting individual, work group, and agency performance. A performance management system would include performance appraisal, as well as other components such as strategic plans, manager accountability, pay, promotion, training/development, and discipline. And, the system would coordinate these components effectively to improve organizational performance. Some of the problems and frustrations with performance appraisals involve mixed or conflicting purposes of appraisal systems - e.g., using appraisals both for feedback and development and for determining pay and promotion. [9] Particularly in shifting from appraising to managing performance, agencies need to evaluate their appraisal systems in relation to these other components and determine appropriate purposes of appraisals from this wider perspective. Both processes are based on employee’s competencies. Competency-based assessments are assessments that help measure an employees ability and performance regarding his job. A lot of other notions are also related with competency-based assessment these concepts are : motives, personality, self-concepts, thoughts, cognitive behavior skills, work behavior, etc. (Schippman et al, 2000). No process is prefect. Both processes have the same issues; one major issue is that a related point is raised by Levinson (1970) who notes that … “Most job descriptions … do not adequately take into account the increasing interdependence of managerial work in organizations. The more a man’s effectiveness depends on what other people do, the less he himself can be held responsible for the outcome of his efforts”. This problem is faced by managers who may be dependent on others for crucial information or other contributions. A simple example is that of the sales manager who is dependent on the production department for supplies of the finished goods of the correct type and quantity. The production department is in turn dependent on proper procurement and so on. And all these are affected by the decisions of top management. A decision to change something as seemingly innocuous as credit terms may result in the sales force suddenly missing their targets, with repercussions throughout the organization. Conclusion It may be said that performance appraisal and management are two important process of human resource management. However, both have their difference, infcat it may be said that performance appraisal is a part of performance management. Both in short are not two separate processes. Organizations and employees do not operate in a bubble they do not work in a closed system. The environment exerts tremendous influence on the organization as well as the individuals within. Economics, culture, regulatory issues, business competitors and alliance partners, technology, and demographics all have an impact on your organization as well as its people. This all has to be assessed; such an assessment can only take place if their performance is measured. This is possible by means of performance management. Thus, to conclude it may be said that performance appraisal is a part of performance management, due to this both have different characteristics yet they may face the same issues as mentioned in the above discussion. . References Armstrong Michael (2009), Armstrong's Handbook of Performance Management Kogan Page; Cleveland, J.N., Murphy, K.R. & Williams, R. E. (1989). Multiple uses of performance appraisal: Prevalence and correlates. Journal of Applied Psychology, 74: 130-I 35. Fletcher, C. (2001), Performance appraisal and management: The developing research agenda. Journal of Occupational and Organizational Hall, D.T. (1984). Human resource development and organizational effectiveness. Pp. 159-181 in C. Fombrun, Harris, M.M. & Schaubroeck, J. (1988). A meta-analysis of self-supervisor, self-peer, and peer-supervisor ratings. Personnel Psychology, 41: 43-62. Hauenstein, N.M.A. (1992). An information processing approach to leniency in performance judgments. Journal of Applied Psychology, 77: 485493 Roberts, G., & Pregitzer, M. (2007), Why employees dislike performance appraisal. Regent. Global Business Review, 1(1), 14-2 Levinson H. (1970), Management by whose objectives? Harvard Business Review, 48(4), 125-134. Reprinted, 2003, January. Harvard Business Review, 81(1), 107-116. McLagan, P. A. (1997), Competencies: The next generation. Training & Development, 51(5), 40-47. Meyer, H. H., Kay, E., and French, J. R. P., Jr (1965). Split roles in performance appraisal. Harvard Business Review, 43, 123-129. N.M. Tichy & M.A. DeVanna (1984), Strategic human resource management. New York: Wiley. Schippman, J. S., Ash, R. A., Carr, L., Hesketh, B., Pearlman, K., & Battista, M., et al. (2000). The practice of competency modeling. Personnel Psychology, 53(3), 703-740 Read More