The Law and the Rights of the Employee

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Performance Appraisal
Week 8
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Overview of Lecture

• Introduction to Performance Appraisal
• Aims of Performance Appraisal
• Uses of Performance Appraisal
• Varieties of Performance Appraisal
• Common Problems with Performance Appraisal
• Summary

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Performance Appraisal

• According to ACAS (2003)
• Appraisals regularly record an assessment of an
  employees performance, potential and development
  needs. The appraisal is an opportunity to take an
  overall view of work content, loads and volume,
  to look back on what has been achieved during the
  reporting period and agree objectives for the
  next.
• (cited by Foot and Hook, 2005, p265)

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Performance Appraisal

• Fletcher and Williams (1985) believe that there
  are two conflicting roles involved in performance
  appraisal. They are
• Judge
• Helper
• Performance appraisal also involves giving
  feedback
• (cited by Foot and Hook, 2005)

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Performance Appraisal and Performance Management

• Performance Appraisal
• the formal assessment and rating of individuals
  by their managers at usually, an annual review
  meeting
• Performance Management
• a continuous, more comprehensive, natural process
  of management that clarifies mutual expectations
• emphasises the support role of managers who are
  expected to act as coaches rather than judges
• focuses on the future
• (Armstrong, 2006)

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Aims of Appraisal (Taylor, 2002)

• Two fundamental aims
• Assessing past performance (Evaluative)
• Improving future performance (Developmental)
• Research suggests problems may arise when trying
  to carry out both aims at the same time
• If purpose is EVALUATIVE appraisees will only
  focus on good aspects of performance /
  developmental needs may be overlooked
• If appraisal results are linked to PAY,
  PROMOTION, or REDUNDANCY, exchange of information
  diminishes!!
• Writers such as Beer and Ruh (1976) recommend 2
  meetings should take place to address both
  issues!!

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The Main Uses of Performance Appraisal Schemes (1)

• To improve current performance
• To provide feedback
• To increase motivation
• To identify potential
• To identify training needs
• To aid career development
• To award salary increases

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The Main Uses of Performance Appraisal Schemes (2)

• To solve joint problems
• To let individuals know what is expected of them
• To clarify job objectives
• To provide information about the effectiveness of
  the selection process
• To aid in career planning and development

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The Main Uses of Performance Appraisal Schemes (3)

• To provide information for human resource
  planning
• To provide for rewards
• To assess competencies
• (Foot and Hook, 2005, p268)

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Varieties of Performance Appraisal

• Typically involves the formal appraisal of an
  employees work performance over a set period of
  time (6/12 months) by his/her immediate line
  manager
• Two basic approaches include
• Behavioural Assessments
• Output-based assessments
• (Taylor, 2002)

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Behavioural Assessments (1)

• The supervisor reaches a judgment about overall
  performance on the basis of the employees
  general conduct during the assessment period
• Performance may relate to
• Customer care, Communication skills, organisation
  skills, relationships with others etc
• Evidence may be obtained from
• Observation of the employee at work
• Feedback from customers.
• B. approach is often associated with a
  requirement by managers to consider performance
  against certain criteria defined and determined
  by elsewhere (HR department) (Taylor, 2002)

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Behavioural Assessments (2)

• More sophisticated approach involves
• Identifying the particular behaviours or
  competencies required for employees in
  particular departments/jobs
• For example competencies in Front Office may
  include
• Conversational French
• Good interpersonal skills
• Ability to work under pressure
• Employees are then appraised according to how
  they are meeting or exceeding the requirements of
  the job in question
• (Taylor, 2002)

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Behavioural Assessments (3)

• General Criticisms
• Very subjective heavily influenced by a
  managers general view of someone
• Traditional approach to behavioural assessment
  does not focus on the specific requirements of an
  individuals job
• (Taylor, 2002)

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Output-Based Assessments (1)

• 1. May involve appraising employees on the basis
  of QUANTIFIABLE DATA
• Useful where employees repeat the same procedure
  or activity continually, allowing clear measures
  of their efficiency or effectiveness to be
  obtained (manufacturing, processing paper-work,
  salespersons)
• Employees are set/agree some form of target to
  work towards later formally appraised!

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Output-Based Assessments (2)

• 2. May involve appraising employees on the basis
  of OBJECTIVES/GOALS
• Specific performance objectives/goals are agreed
  by employee and Line Manager at the start of the
  appraisal cycle
• Performance is later appraised according to how
  many/fully the objectives have been met
• Employee Involvement in the setting of objectives
  is an important feature of successful
  output-based appraisal systems
• (Taylor, 2002)

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Output-Based Assessments (3)

• Advantages
• More objective than the behavioural approach -
  overall assessment is based on specific
  achievements
• Clarity employee knows exactly what is expected
  in future months to secure a favourable review
• Motivation Research shows where individuals are
  involved in goal-setting it has significant
  motivational qualities
• (Fletcher,1997) (cited by Taylor, 2002)

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Output-Based Assessments (4)

• Disadvantages
• Objective setting may be unsuitable for some jobs
  as there are so few clear goals to achieve
• Involves judging employees on the basis of
  different criteria - difficult to compare
  employees performance
• (Taylor, 2002)

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Use of Rating Scales (1)

• In the past PA schemes generally included an
  overall rating of an individuals performance
• A rating scale can either be
• 1.Behavioural with examples of good, average and
  inadequate performance or
• 2. Graphic which simply presents a number of
  scale points along a continuum
• Scale points may be defined
• AlphabeticallyA, B, C
• Numerically 1, 2 ,3
• By Initials Ex, VG etc to disguise the
  hierarchical nature of the scale
• Scale points may be further described adjectively
  e.g.
• Excellent (A) Unacceptable (E)

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Use of Rating Scales (2)

• Some organisations use verbal descriptions in
  order to minimise putting people into boxes
• Above average, average etc..
• An increasingly popular method is to have a
  rating scale that provides positive reinforcement
  at each level eg
• Highly effective frequently exceeds targets
  etc..
• Effective achieves targets
• Developing strong in some aspects/needs
  development
• Improvable generally meets standards/room for
  improvement
• The definitions ask raters to focus on the
  definitions above (Armstrong, 2003)

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Employee Involvement in Appraisal

• Self-appraisal involves getting people to analyse
  and assess their own performance as the basis for
  discussion and action
• Advantages
• Helps generate less inhibited and more positive
  discussion
• Involves appraisees in the process
• Likely to reduce defensive behaviour
• Provides scope to run the meeting as a
  constructive and open dialogue, reducing the
  top-down element
• (Armstrong, 2003)

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360-degree Appraisal (1)

• 360-degree appraisal/feedback has been defined by
  Ward (1995) as
• The systematic collection and feedback of
  performance data on an individual or group
  derived from a number of stakeholders on their
  performance
• (cited by Armstrong, 2003, p.514)
• The data is usually fed back in the form of
  ratings against various performance dimensions
• Feedback may be obtained from
• Line Manager
• Direct reports / Subordinates
• Peers (including team members and /or colleagues
  in other parts of the organisation)
• External and Internal customers

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360-degree Appraisal (2)

• Advantages
• Individuals get a broader perspective of how they
  are perceived by others
• More reliable feedback to senior managers
• Encouraging more open feedback new insights
• Gives people a more rounded view of performance
• Disadvantages
• People not giving frank or honest feedback
• People being put under stress in receiving or
  giving feedback
• Too much bureaucracy
• (Armstrong, 2003)

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Some Common Problems with Performance Appraisal

• Lack of clarity of objectives by the organisation
• Links with pay preventing open discussion
• Keeping information secret from the employee
• The appraiser attacking the appraisees character
• Being too subjective in judgements
• Using appraisal as part of the disciplinary
  process
• (Foot and Hook, 2005)

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Summary

• Performance appraisals can help motivate
  employees to enhance individual performance and
  ultimately improve organisational performance
• While many appraisal systems are still in
  existence and continue to be updated, PERFORMANCE
  MANAGEMENT systems are increasingly seen as the
  way to manage employee performance, and have
  incorporated the appraisal/review process into
  this
• (Torrington et al, 2005, p261)

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Case Study

• Claridges Savoy Group, London
• (Five star, 450 staff members)
• In 1998, faced with some concerning issues
• Occupancy was down
• Complaints high
• Staff turnover running at 73
• Employee satisfaction poor just under 1/3
  completed the annual satisfaction survey

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Case Study Good Practice

• Seven Corporate Values
• Communication
• Passion
• Team Spirit
• Interpersonal relations
• Service perfection
• Maximising resources
• Responsibility of action
• The key was to make employees have FUN!

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Case Study

• One-day Session management performed a 5 min
  sketch, song, dance to demonstrate a value
• Rainbow describing the values served as visual
  support
• A new reward recognition scheme prizes included
  limo home to a night in the penthouse worth 3,
  850
• Appraisal system entirely linked to the values
• New internal promotions sideways and upwards,
  within and across
• Staff are continuously given projects to prevent
  getting bored
• Appropriate training is provided
• This employee scheme was so successful that
  turnover had decreased from 73 to 27 and
  satisfaction/proud to work in the hotel increased
  from 67.2 to 99.2.
• The strategy centred on the employees - we
  believe that if you dont get right with
  employees, you wont get it right with guests HR
  director Sara Edwards

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References

• Armstrong, M. (2003) A Handbook of Human
  Resource Management Practice. 9th Edition.
  London, Kogan Page.
• Armstrong, M. (2006) A Handbook of Human
  Resource Management Practice. 10th Edition.
  London, Kogan Page.
• Foot, M and Hook, C (2005) Introducing Human
  Resource Management, 4th edition, Harlow, Pearson
  Education
• Taylor, S (2002) People Resourcing, 3rd Edition,
  London, CIPD
• Torrington, D., Hall, L. and Taylor, S (2005)
  Human Resource Management. 6th Edition, Hemel
  Hempstead, Prentice Hall.
•  

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Revision Questions

• What are the main uses of PA?
• Discuss the varieties of PA
• Evaluate the importance of Employee Involvement
  in the Appraisal system