Many people view human resource management as an elusive and vague concept. The aspect is attributed to the fact that it encompasses a wide range of meanings. Human resource management is involved with a variety of activities in day to day operations of any organization. It is a function that focuses on the human resources in the organization. Its primary concern is the management of individuals within an organization by focusing on the set policies and systems. Some of the activities conducted under human resource management involve recruitment, enhancement of safety, career management, reward management, training and development, performance appraisal among others (Jackson, Valentine & Mathis, 2013). HRM has gone through various transformations over the years. It first came into the limelight during the early 20th century. Its realization was triggered by organizations’ desire to document ways of creating business value using strategic management of employees at the workplace. This was a period regarded as Taylorisation named after the individual who first spearheaded the activity. The period between the 1950s and 1970s experienced emergence of some influential theories such as Maslow’s hierarchy of needs and Theory X and Theory Y by Mcgregor (Lussier, 2014). Human resource management gained roots in many organizations as from the 1980s. The major challenge that HRM faces is the fact that many organizations do not consider it in strategic planning. Some of the managers see it as a roadblock in attaining various organizational goals. HRM can apply to any organization regardless of the size. This is because any organization that is in operation thrives and survives due to the performance and capabilities of its people (Lussier, 2014). This paper is going to review performance appraisal as a human resource activity in XYZ Ltd. This is an organization that I have worked in the past.
XYZ Ltd Performance Appraisal
Performance appraisal entails a process where the human resource department evaluates the performance of employees with regards to the set standards in various areas. Different organizations perform this activity with different objectives in mind. Among the main objectives are determining the training needs that employees have, promotion issues, demotion, firing among others. It is an activity that the human resource department takes serious since it goes a long way in determining whether an organization fails or succeeds.
XYZ is a company based in Australia and is involved with manufacturing and distribution of toys. The company is involved with manufacturing a wide range of products that target children of all ages. XYZ has several departments that are usually independent of each other with matters regarding management. However, there exist employees in these departments that are tasked with the responsibility of developing linkages between relevant departments. The objective is to promote efficiency and reduce duplication of work. With regards to performance appraisal, the company uses rating scales to evaluate the employees. Not sure when this approach was adopted, but from the look of things it is like it has been employed since the inception of the organization. The method involves a numerical scale of 1-10; 1 being poor and 10 being excellent. Various job performance criterions are evaluated. Among the metrics that are used include output, initiative, attendance, dependability, attitude, punctuality, technical competence, cooperation communications ability among others. There is no clarification as to why the traits involved in the scale are the ones being used and not others. Actually XYZ does not embrace employee participation in its appraisal process. There is no consensus as to which traits should be assessed during the evaluation process. Many employees are left frustrated since they believe that the process gives some employees advantage over others. They also consider some traits being evaluated as redundant and not necessary for the process.
The appraisal process is usually conducted by a single individual. The individual is regarded to have sufficient knowledge regarding the organization since he has been there since the inception of the company. He is tasked with the responsibility of evaluating employees from all the departments. The process uses more of an objective approach. This is where the evaluations usually defy interpretation. It is either an employee did something or did not do it, was late five times or no late, met his/her per-hour target or did not. This form of approach does not fit well in a company with such a structure. There are numerous departments that are independent in management but work towards attaining common objectives. This means that failure in one department might result in failure in other departments (Jackson, Valentine & Mathis, 2013). The aspect showcases a weakness in the appraisal system prompting to use a purely objective approach.
There is also a feeling from employees that nothing much comes from appraisals conducted by the organization. It is usually a matter of criticisms and threats to employees that seem to be performing under the set thresholds. Employees that score high points only get the “well done” and “keep it up” chit-chats. Nothing much follows after that. XYZ’s performance appraisal is also not explicit on the standards that employees need to actualize. It is vague of some traits like employees are required to have effective communication skills, ought to be cooperative, ought to be dependable, have a positive attitude just to mention a few. Effective communication might have a different meaning and threshold to different people. What do you mean by positive attitude? What one thinks to be positive attitude might be negative to another person.
Despite the difference of opinion that has existed between employees and the company regarding the system that is being used, there are no changes being implemented. The company persists to the system due to the advantages that it brings. Among them is that it is easy to use, adaptability, a large number of employees covered, low cost, no formal training required and it is standardized (Nkomo & Fottler, 2011).
Weaknesses of the Performance Appraisal
XYZ’s performance appraisal has some weaknesses based on how it works. Among weaknesses is the usage of the rating scale to appraise employees. The approach seems to have various flows that make it not operate effectively. Among the flows is that it does not explain explicitly the level standards that employees ought to uphold. When people are told to be “good”, there ought to be a clear definition of being good. The reason behind this is because people have different ways of interrupting things. A workforce is usually diverse and is composed of people coming from different backgrounds. How one individual is brought up to understand a certain issue might be very different from what his/her colleagues view the same issue (Nkomo & Fottler, 2011). The system also seems to be forced upon the employees. It is a system that they detest but have to use since it is beyond their power to influence such issues. Based on their notion it would be difficult for the organization to get the actual picture of how things are. Some employees might be regarded as ineffective while in the real sense they are not. In short, XYZ is a company that is yet to value the input of its employees. It is an example of an organization that still operates with a traditional spectrum of not investing in employees’ wellness. What such organizations forget is that employees are the ultimate resource in any organization. There is no way an organization can function without employees regardless of the abundance of other resources (Sandler, 2009).
Another weakness with the company’s appraisal is the purpose for which it is conducted. XYZ’s appraisal is mainly conducted with the objective of “witch-hunting”. The management is more concerned with the employees that are not performing based on the expected standards. It lacks the dimension of acting as a roadmap to help employees improve in various areas. Employees get fired as a result of the appraisals without being given an opportunity of proving their worth after getting the information on areas that they need to improve. These types of appraisals usually create tension in the organization, and on many occasions may result to poor performance due to the pressure bestowed upon the employees. It can culminate to the culture of employees rejecting changes in the future due to the fear of the unknown. When anything new is being introduced, employees will always fear that it might have a negative effect on their performance (Sandler, 2009). Such perceptions usually result to stagnation due to the conflict between the top management and junior employees. The tendency of not rewarding employees that score high points during the appraisal process provides more evidence that the process is aimed at witch-hunting. Not rewarding employees that are performing well beats the logic of performance appraisal. There is the loss of motivation from the employees, and this affects their future efforts.
Using a single individual to conduct the appraisals also has some shortcomings. It might ensure that the activity proceeds faster, but might lose the ultimate objective in the process. The practice opens doors for the assessor to promulgate biases. This is more so enhanced by the fact that he gives employees a rating based on what he thinks. It is a time when the assessor takes the opportunity of rewarding the people that they relate well with high points that they do not deserve. It also creates an opportunity for the assessor to settle previous scores with some employees in the organization. Regardless of the professionalism levels that people want to hold at the workplace, it is in human nature for people to succumb to personal interests (Sandler, 2009).
Use of objective metrics during appraisals also acts a weakness. The company is composed of a diverse workforce working under different departments that are tasked with different duties. Using the same criterion to evaluate an employee from a marketing, sales and accounting departments would be misleading. This is because the use of objective measures encourages the appraiser to distil complex process into single scores, which may not have substantial meaning in the actual world.
Adopt Management by Objectives Performance Appraisal Technique
XYZ should abandon the rating scale, and adopt the management by objectives technique of performance appraisal. This is a technique that is gaining popularity in the modern day organizations due to the positive impacts that it brings along. It allows employees to be appraised based on the actual results that they contribute to the organization. The approach goes beyond performance appraisal since it can be used as a tool for managing the entire company. It encompasses a company’s values, vision, goals, performance measurement and strategies (Falcone & Tan, 2013). MBO appraisal technique is initiated by managers at the top level setting varied goals. Managers at lower levels together with junior employees also set their objectives. The goals of employees are designed in a manner that they support those of the top management. The entire company ends up being linked together in pursuit of common objectives. The main focus is usually on outcomes that are measurable, clear, specific and supported by action plans (Falcone & Tan, 2013).
This appraisal technique would work best for XYZ Company due to its structure. It is a large organization with several departments. The top overall management would be making goals for the organization. Departmental managers and others employees would also follow suit. This should be done at departmental levels since it entails employees working with similar objectives. Departmental managers should act as the link to other departments in the organization.
MBO will help build positive relationships between employees and the managers. This is because the employees have been involved in their own performance appraisal. They have set goals through which they shall be evaluated on whether they have attained. It minimizes aspects of resistance from employees since they feel like part of the team (Tapamoy, 2009). There is also development of a favorable climate at the workplace. Management by Objectives helps develop an atmosphere that enhances trust and respect within the departments and beyond. The quality of decision making also improves since the technique improves quality of problem solving and decision making (Falcone & Tan, 2013).
However, there is a limitation in the organization that would make implementation of this appraisal technique difficult. XYZ’s leadership is more of an autocratic one than democratic. All the decisions are made by the top level management, and the junior employees have no input in this. It would be difficult for the management to let employees make their own goals with which they will be appraised. There is a need for a change in mindset for this technique to work in the organization.
Incorporate Hybrid Metrics for Performance Evaluation
If the organization is going to persist with the scale rating for its performance appraisal, then some adjustments should be made. Currently, the company uses objective metrics in its evaluations. The approach has some shortcomings, particularly when complicated systems are involved (Tapamoy, 2009). A hybrid system would work best for XYZ. This is a hybrid of both the subjective and objective metrics. Some of the measures will be subjective while other measures will be objective. The approach will come in handy in situations when objective measurements cannot be obtained. Appraisers here have the opportunity of giving their perceptions regarding the employees in areas where the use of objective metrics does not make sense (Tapamoy, 2009). Incorporation of subjective metrics will make it possible to analyze jobs that are difficult to distil in few discrete metrics.
Making this implementation is quite easy for XYZ since it will only involve an assessment of areas where objective metrics are not viable and make relevant adjustments. However, there is a limitation within the organization that would hinder its efficient functioning. The organization currently uses only one appraiser. This would give him more power over the employees. He will have more ability to act in bias ways since his opinion is regarded highly. There ought to be changes, and a panel of several individuals should be used in the appraisal process. This way it will minimize the ability of appraisers taking advantage of the autonomy given to them to fulfill their own gratification.
Have Positive Reasons for Conducting Performance Appraisal
XYZ’s appraisals are only conducted with the objective of identifying employees that are not performing based on the standards set by the organization. This is because the only action that is taken after an appraisal is warning to employees while others get fired in the process. There are many reasons why performance appraisals should be conducted. Among them is to enhance training and development, promotions, competency building, confirmations, compensation reviews, feedback and grievances (Bandt, 2011). XYZ should view all the facets involved. The current reason of conducting appraisals puts more pressure on employees since they fear the misfortune of being fired. To some extent, this reduces an employee’s performance. It can be a major reason for employees rejecting changes in the organization due to the fear of the unknown. If the organization used performance appraisal with other objectives in mind, more favorable results would be derived. For instance when employees are aware that the next appraisal might present them with the opportunity of gaining promotion or having their compensation reviewed, a lot might change. There will be more effort towards actualizing the set standards. Who would hate to have a promotion or their salaries reviewed upwards?
Using performance appraisal for training and development would help the organization towards actualizing its objectives. Employees will be able to acquire the relevant skills that are required at the workplace. Firing employees now and then because they do not actualize some standards derails the organization from moving forward. This is because the company keeps going back to the basics whenever new employees are deployed. Identifying the weaknesses in the current workforce, and finding solutions to their problems is an appropriate way for the organization to move in the right direction (Bandt, 2011). There is not limitation into implementing this. It only requires a change of mind set from the top level management.
Restructure the Human Resource Management Department
XYZ seems to be experiencing a lot of shortcomings with regards to its performance appraisal. A greater insight to this issue indicates that there are problems with the human resource department. The department is supposed to take care of the employees’ wellbeing at all times. However, this does not seem to be the case. The human resource department seems to be taking care of the company’s affairs more than those of the employees. It is not conducting its primary duties. Why should there be single individual appraising employees from all the departments? Why persist with a performance appraisal technique that every employee in the organization is opposed to? This is the department that should be voicing the needs of the employees and not the one shutting them down. If other human resource activities were assessed, there is a high possibility that the functioning is also not effective. The company should restructure this department, and ensure that competent individuals have been appointed to foresee its operations. Employees are a valuable resource in any organization, and their issues should be addressed in the best way possible for there to be efficiency in the organization.
Human resource management can be viewed as an elusive and vague concept that has evolved over time. This is because it encompasses a wide range of activities that keep on expanding. In recent times, many organizations have identified the benefits that come with human resource management. As a result, efforts are usually made to ensure that it functions effectively. In this case, human resource management department associated with XYZ Company is not functioning optimally. There exist several gaps in the company’s performance appraisal system. Most of the employees are not satisfied with the current technique being used to appraise them, and how it is implemented. There are fears that the whole process has the ultimate objective of “witch-hunting”. Using a single appraiser to evaluate all the employees also shows some signs of deficiency. It would be appropriate if the organization tried another appraisal technique that would allow employee participation. Management by objectives would be a favorable option. It would make employees feel like part of the team; hence improve their efficiency. Restructuring the human resource management department would also come in handy because there seem to be more problems that what meets the eye.
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