Performance Appraisal

Performance appraisal is a process in which an employ contribution and worth to an organization is valued using accepted performance appraisal methods. There are a number of performance appraisal methods notably essay, forced distribution, graphic ranking scale, and behavioral anchored rating scale appraisal methods.Advertising We will write a custom report sample on Performance Appraisal specifically for you for only $16.05 $11/page Learn More However, this report is going to give much credence to the management by objective method, 360-degree performance appraisal, and forced ranking/distribution performance appraisal. A detailed explanation of the three methods will be done bringing into perspective features that these three performance appraisal methods share in common and how they contrast to each other (Stone 1). Forced ranking/distribution performance appraisal method This performance appraisal method tries to order employees by comparing them to their colleagues. This helps in assessment of employees divorced from the usual specific judgments done on basis of job components. When straight ranking is to be done it is expected of the evaluator in terms of those who have the best attributes to those who have the worst attributes and those who are effective in their daily undertakings to those who are least effective in the way they do their job. It is imperative in this respect that a criterion is used. Alternative ranking slightly differs from straight ranking in the sense that it has to be done in a specific manner. Ranking like any other comparative evaluation system is fast becoming unpopular because it is discriminatory. This is so because even if employees perform well, a group will always find itself at the bottom and another group highly ranked. Ranking can also not be used to fairly compare employees across different groups, it is absolutely difficult to conclusively say that an employee ranked second in unit X is as good as or better than that employee who has been ranked second in unit Y. Nevertheless, if an organization has limited resources with which they can conduct other performance appraisal methods, the best performance appraisal they can make use of is the ranking method because it can successfully help in differentiating among employees (Stone 1).Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More In forced distribution, evaluators tend to rate subordinates in a given distribution. Forced distribution can be used in evaluation of myriad components of job performance as opposed to the ranking method that uses only one component. Forced distribution method is strictly used by managers who undertake to rate his or her subordinates in a given distribution. Some subordinates will fall into 10 percent low category, others in 20 percent below average, others 40 percent average, others 20 percent above average, and finally 10 percent high category. If there were 20 subordinates, 2 of them will be in the low category, 4 below average, 8 of them in the average, 4 in the above average category, and finally, 2 in the highest category. Forced distribution helps to eliminate errors that arise due to rating. These errors are normally attributed to leniency and central tendency. However, forced distribution can cause some grave rating inconsistencies because it tends to discriminate employees in cases where job performance is quite similar. This has caused a problem of acceptability of the results by the raters and ratees hence its unpopularity with this category of people. Problems of acceptability have been grave in circumstances where group members all have high ability (Stone 1). Management by objectives (MBO) performance appraisal method This performance appraisal method has much to do with the evaluator setting up specific measurable goals with employees. The evaluator has to perio dically discuss with the employee if he or she is meeting these goals that he or she set to achieve. This performance appraisal program has six main steps that have to be adhered to. Featuring prominently among these steps is the need for setting up the organizations goals. The organization should come up with a clear cut plan for what they intend to do in the next year and stipulate goals that have to met. Secondly, various organizational departments must come up with their departmental goals. This is the duty of the heads of the departments and their superiors.Advertising We will write a custom report sample on Performance Appraisal specifically for you for only $16.05 $11/page Learn More Thirdly, the conceived department goals have to be discussed and allocated. It is at this stage that the subordinates in the department have to be brought on board. It is important that these subordinates come up with their own individual goals to make sure that ever y member of the department has an input into attainment of departmental goals. As a matter of fact, expected results have to be defined by setting individual goals. Heads of departments and their subordinates have to come up with performance targets that are short term. A review of the performance has to be done and results subsequently measured. It is the role of departmental heads to measure up actual performance of every member of staff with the projected results in their minds. Finally, there has to be a feedback mechanism where heads of departments conduct performance review periodically with their subordinates with a view to discussing and evaluating progress made towards achieving the set out goals and objectives (Stone, 11). This method of performance appraisal enhances better communication and coordination in an organization because of frequency within which reviews are conducted hence harmonious relationships. 360-Degree performance Appraisal In this method, the performanc e of an employee is evaluated by consulting different types of people (Farhaan, para. 1). These may be an organization’s customers, its suppliers, and an employee’s peers. Direct reports can also be used. If the performance of a manager is to be appraised using this method, it is the work of the employees to give an upward feedback on how this manager manages them. This performance appraisal method requires the human resource managers to coordinate the whole process to dispel fears associated with the leakages of ones performance among his or her peers. This can be very disappointing within an organization. This method of performance appraisal is mainly conducted to find the gap between ones own appraisal and how others may feel about it. This is critical in analyzing ones strengths and weaknesses and how this can help in improving his or her own performance. The system helps in elimination of biases among employees that is inherent with the forced distribution method. Advertising Looking for report on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More It is imperative to note that the system has got its own shortcomings in the sense that if many employees are unhappy it is likely that they can become potential targets. It is therefore important that a right culture is inculcated into an organization before this method of performance appraisal is made use of. This performance appraisal consumes a lot of time and its complexity may eat into an organization time and resources. Its results are always very difficult to interpret. The feedback that is continually received after the evaluation can intimidate the employees and in the process interfere with their output. Conclusion Despite the fact that Forced ranking/distribution performance appraisal method tends to discriminate against employees, 360 degree performance appraisal and MBO also have their weaknesses. The feedback that is continually received in 360 degree performance appraisal interferes with an employee’s morale and can interfere with their performance. MBO enhanc es cohesiveness in an organization because of the frequent reviews. Works Cited Farhaan, Panagar. 360 Degree Performance Appraisal. 2009. Web. Stone, Thomas. Understanding Personnel Management. New York: Dryden Press, 2002. Print. This report on Performance Appraisal was written and submitted by user Susan Cortez to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Performance Appraisal Introduction Performance appraisal is a systematic and continuous process that involves the rater and the ratee, where the former evaluates the performance of the later with respect to laid down standards (Bauer Erdogan, 2009). During the performance review cycle, the evaluator constantly interacts and observes with the employee in order to establish his or her level of performance based on the company criteria.Advertising We will write a custom essay sample on Performance Appraisal – Case study of Coca and General Electric specifically for you for only $16.05 $11/page Learn More Feedback is essential during this process to give the employee a vivid report with regard to achievement of objectives as initially set. This paper seeks to compare Coca-Cola and General electric’s performance appraisal policies and examine their effectiveness. In 2011, GE emerged number six on fortune 500 companies according to fortune magazine. On the other hand , Coca-Cola attained the rank of 70 on this list of top 500 fortune companies based on revenues and profits (CNNMoney, 2011). Analysis of Co-Cola’s Employee Performance Appraisal In Coca-Cola, performance management entails all programs designed for annual employee appraisal. This concerns procedures used in communicating work expectations and relaying of feedback on a continuous basis through yearly performance rating. Performance appraisal in Coca serves to promote and compensate employees among other management decisions (Bauer Erdogan, 2009). Management/Performance by Objectives (PBO) The company has implemented a single performance appraisal system for all employees geared toward achieving fairness based on job-related metrics. The process implemented offers an opportunity for improvement in internal oversight as a means to achieve equal employment opportunity (EEO). Management by Objectives’ (MBO) is a process by which employees and their seniors meet to identif y the underlying goals and objectives. In this process, employees set their own goals, but the set company standards are used as standard measures against which their performance will be rated. Peter Drucker introduced this concept of management by objectives in the early 1950s (Taylor, 1994). The figure below shows an overview of MBO process. Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More At the beginning of the review period, each employee meets with his or her superior to establish measurable objectives together with required set of competencies for the year necessary for execution of the said objectives. Therefore, this mutual relationship offers an opportunity for a continuous feedback process. The feedback process also provides a framework for identification of other employee developments measured against the set plan. The company ensures a self-drive assessment where employees comm unicate their progress to their superiors from which managers make exclusive evaluation based on the initial standards. As a feedback oriented appraisal system, the management disseminated rating reports to the employees in which employees may appeal if need be (Taylor, 1994). To comply with the laid down best practices, Coca’s appraisal system involves a half-yearly employee review and mandatory training for two days where both managers and employees go through training on the functioning of the system. Employees work in conjunction with performance appraisal teams to plan, track and review their individual performance. At the end of the review period, the top managers undergo training to provide fair and accurate rating. In addition, an independent rater works to offer separate ratings for employees based on the ongoing performance e valuation. This process ensures consistency and fairness in the process. Purpose of the Performance system in Coca-Cola The major essence of t he appraisal system applied by Coca is to develop a set of employees who are aware of their duties, roles and responsibilities as expected of them by the company. The system thrives on the belief that clarity of objectives and continuous feedback lends an opportunity for achieving organizational and individual employee goals (Taylor, 1994). Effectiveness of the system MBO is a participatory process involving goal setting and selection of actions based on standard metrics in order to offer a basis for decision-making. Since the process involved in MBO is comparison of individual employee performance with the laid down organizational objectives, it follows that the process provides an objective evaluation for employee performance. An open-end feedback eminent in the process is likely to influence employees to fulfill their mandates. Management by objectives thrives on features such as clarity of goals, effective communication, and motivation. According to research, where employees eng age in the process of goal setting through an effective feedback oriented communication, they are more likely to offer best services aimed at meeting organizational as well as individual goals (Bauer Erdogan, 2009). It is worth noting that since the process entails a vigorous and inclusive evaluation, it is highly likely to achieve fairness and accuracy of the overall outcome.Advertising We will write a custom essay sample on Performance Appraisal – Case study of Coca and General Electric specifically for you for only $16.05 $11/page Learn More General Electric General electric is one of the fortune 500 companies. It falls in a group of companies generally sought for employment by job seekers according to fortune magazine. General electric (GE) company employs forced ranking system of performance appraisal where the evaluator rates employees relative to other employees. This process provides an overall evaluation of the employees, but not becaus e of specific job descriptions and objectives (Bauer Erdogan, 2009). During this process, the rater groups the employees into categories from excellent to worst, effective to ineffective based on laid down criteria. GE applies relative ranking and believes that it has the capacity to offer best criterion for achieving employee performance. During the review cycle, the evaluator applies a method in which the upper cluster would have 20% of employees, 70% of employees would be in the middle, and the remaining 10% would be ranked at the bottom (Bauer Erdogan, 2009). The former Chief Executive Officer of General Electric conceived this system. According to GE, the technique helps to overcome leniency and errors of central tendency. Relative ranking do not use objective scale while assessing the effectiveness of the employees, but rather the performance evaluation of an employee depends on the entire group. As a performance management system, relative ranking purports to generate a per formance culture where the management declares intolerance to non-performance. Purpose of the system The major purpose of this performance system is to create a culture of performance while eliminating those employees with repeat performance problems. Through the ranking system, employees develop a tendency of performing better with an aim to achieve the set objectives. Forced ranking aims at eliminating errors associated with leniency and central tendency through grouping (Bauer Erdogan, 2009). Objectivity and effectiveness of Forced Ranking Although the method is effective in communicating the need for good performance, it has several downsides. The process does not directly engage employee competencies through vivid feedback and as such, employees are not generally aware of their responsibilities. The raters solely discharge the evaluation process in usually one-sided performance appraisal procedure (Bauer Erdogan, 2009).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Objectivity in this technique is impaired since individual performance does not find space as a basis for assessment. Despite the fact that the company communicates goals to its employees, there is no clear criterion to achieve objectivity of the entire process (Taylor, 1994). For a system to be objective, it must be able to offer a precise, clear and measurable metric upon which to measure employees. However well employees perform, the system will always result in high and low ranks. This performance system fails to offer comparison for a diverse group. For instance, it is challenging to tell whether the third-ranked individual in department X is better than an individual ranked as third in department Y (Taylor, 1994). The system has inherent disadvantage of inability to create a spirit of teamwork and may lead to negative competition among employees. References Bauer, T., Erdogan, B. (2009). Organizational Behavior. New York, NY: Flat World Knowledge. CNNMoney. (2011). Fortune 50 0. Retrieved from https://money.cnn.com/magazines/fortune/fortune500/2011/full_list/ Taylor, C. (1994). Cultural diversity in organizations: theory, research, practice. New York, NY: Berrett-Koehler Publishers. This essay on Performance Appraisal – Case study of Coca and General Electric was written and submitted by user Boston Clements to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here. Performance Appraisal