Issues and Challenges in the Practice of Performance Appraisal Activities in the 21 st Century

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Issues and Challenges in the Practice of Performance Appraisal Activities in the 21 st Century
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   International Journal of Education and Research Vol. 1 No. 4 April 2013 1 Issues and Challenges in the Practice of Performance Appraisal Activities in the 21 st  Century. Rusli Ahmad Universiti Malaysia Sarawak arusli@fcs.unimas.my Sopian Bujang Universiti Malaysia Sarawak  bsopian@fcs.unimas.my Abstract In every organisation, employees play a vital role in determining its survival. Employees become the ultimate asset to ensure that the organisation operates as planned. The relation between the appraisal system and the organisation’s strategy is used as a strategic tool to achieve the organisation’s vision. This will evidently be a key factor in communicating values, promoting flexibility and maximizing individual potentials and contributions. Very often, employees who are not happy with the practice of the appraisal activities will send a huge impact on the organisation’s image. In the 21 st  century, performance appraisal activities continue to become one of the most important functions in human resource management. The work environment and the employees have become more in tune because of the massive usage of information and communication technology (ICT) in every organisation. This paper explains the relationship of the 21 st  century with performance appraisal activities and explores issues as well as challenges that arise in the appraisal activities. Key words: human resource management’s performance appraisal, strategic appraisal Introduction Employee’s performance appraisal is a subject of great interest in any organisation. In every organisation, employees  play a vital role in determining its survival (Rusli Ahmad, 2007a). In line with that, an employee is perceived as an important or valuable asset to an organisation and is the key or prerequisite factor to make sure the operation of the organisation or factory runs as planned. Employees become the heart and pulse of the organisation and really important to determine the needs and expectancies of the client or customers (Muhd Rais Abdul Karim, 1999). This is aligned with the purpose of performance appraisal in the contemporary approach which emphasizes on employee who has full  potentials that can be explored and expanded. Employees can be used positively to sustain the quality of service or  product of the organisation. This is associated with the roles and responsibilities of the employees to perform at the highest level of their work competencies. Performance appraisal become more constructive and therefore the progress of the employees are improved (Rusli Ahmad, 2007b). With the achievement of the organisation’s vision and mission, employees can work together collaboratively with the organisation itself based on the win-win basis. In this context,  performance appraisal can turn out to be a good device to plan a better career path for the employees. The term performance appraisal are sometimes called as performance review, employee appraisal, performance evaluation, employee evaluation, employee rating, merit evaluation, or personnel rating. Performance appraisal is a system that involves a process of measuring, evaluating, and influencing employees’ attributes, behaviour and  performance in relation to a pre-set standard or objective. Performance appraisal can be seen as the systematic description of individual job-relevant strengths and weaknesses for the purposes of making a decision about the individual. In another term, performance appraisal is a process of evaluating the behaviour of the employees in the workplace, or can also be referred as a process of giving feedback on employees’ performance. It involves a very complicated process and various factors can influence the process. Therefore, the process of evaluating employee’s  behaviour should be looked at as a reciprocal process or using a matrix perspective and not as a straightforward process (Rusli Ahmad, 2007a). There are a number of different appraisal approaches/ methods commonly used in organisations with methods used has their advantages as well as disadvantages and there is no right and wrong methods or approaches. Consistency and focus on the usage of the approaches or methodology are crucial to ensure they are successful.   ISSN: 2201-6333 (Print) ISSN: 2201-6740 (Online) www.ijern.com 2 The 21 st Century and Its Relationship with Performance Appraisal Activities Since the year 2001, organisations are already in the 21 st  Century. Several significant characteristics represent this century and are discussed from various area and field of disciplines. This section is aimed to highlight certain characteristics and important key words or terms involved from the perspective of management and human resource studies. It is hoped that by highlighting the characteristics, it will give a holistic perspective and understanding on important aspects involved in the discussion of the topic, and to expose oneself on the latest development of  performance appraisal issues in the 21 st  Century. Table 1 below shares some key words, terms and characteristics discussed by the researchers and scholars regarding this new century. Table 1: Key Words and Characteristics Explaining 21 st  Century The borderless world (Harris, 2002) Stiff competencies (Shurchuluu, 2002) The digital era/ information age (Kandampully, 2002; Mukherji, 2002) Global market (Friedman, 2005) K-economy (Mukherji, 2002) World is flat (Friedman, 2005) E-government (Majed Al-Mashari, 2007) Globalisation (Friedman, 2005) In short, nobody can deny the fact that the world have turned into a small village and can be linked and connected through all sorts of information and communication technologies. In the digital era, information and knowledge can be searched effectively and in an efficient manner. Most of us have come to a realisation that worldwide, be it in the developed or developing countries, knowledge economy and electronic government become a day to day practice in  private or the government sector. Today, sophisticated and up to date technologies are part and parcel of an organisation in order to run their businesses or services as well as to achieve its vision statement. This change, without doubt, will affect other parties in the organisation especially the workers. Direct, or indirectly, this impact can be in a short or long run and will cover all areas of the workers’ daily activities. Table 2 shows several aspect of the characteristics or key words for the employees when dealing and handling their tasks in the workplace. Table 2: Key Words and Characteristics Explaining Person Competencies in 21 st  Century Emotional spiritual quotient (Ary Ginanjar Agustian, 2006) Synergy or strife (Gatchalian & Gatchalian, 2003) Labor-management cooperation (Gatchalian & Gatchalian, 2003) Human capital (Perez & de Pablos, 2003)  Nano workers (De Feo, 2007) Intellectual capital (Nerdrum & Erikson, 2001)   Workers as the ultimate sources in the organisation need to fulfill their job well to meet the expectancy set by their organisation. In relation with that, performance appraisal activities is the most important activities in the human resource management practices. With the development and change happened in organisations, several themes or focus of the study can be identified in performance appraisal research in the 21 st  Century. Table 3 identify several research focuses in the performance appraisal context.   International Journal of Education and Research Vol. 1 No. 4 April 2013 3 Table 3: Key Words and Characteristics Explaining Research in Performance Appraisal in the 21 st  Century Link with strategic agenda (Rusli Ahmad, 2007a) Developmental approach (more open and transparent) (Rusli Ahmad, 2006) Expert witness (Simmons, 2004) User friendly of the instrument (Scout, 2001; Edell, 2003) Well-established key-components (Coutts & Schneider, 2004) Process (Khoury & Analoui, 2004) Cognitive process (Rusli Ahmad & Nur Azman Ali, 2004) Purpose of PA (Youngcourt, Leiva & Jones, 2007) Total Quality Management (Soltani, 2005) Accuracy and halo (Van Scooter, Moustafa, Burnett & Michael, 2007) Satisfaction (Cook & Crossman, 2004) Coaching (Brackett, Reid & Green, 2007) External control management technique (Law, 2007) Behaviour based competencies (Catano, Darr & Campbell, 2007) The 21 st Century Work Characteristics and Related Issues with Performance Appraisal Activities Performance appraisal system continues to be one of the most important function of human resource management in the 21 st  Century. This is because performance of the workers or employees is very significant for organisation to be more effective and competitive in comparison with other organisations. The world tend to be small and countries are linked to each other because of the increasing development of the information communication technology. Employees and  performance appraisal activities are frequently discussed in a transparent manner. In an organisation, the workers’ trade unions and associations is no longer a taboo. In this discussion, related issues on performance appraisal activities in the 21st century is based on author’s observation, ongoing research and studies undertaken by worldwide researcher. Several important and related issues on performance appraisal activity can be listed and explained as below: The appraisal philosophy The contemporary approach of performance appraisal is associated with employees as individuals. In this approach,  performance appraisal is used as a contributor to employee motivation, development and human resources planning. In the contemporary approach, the purpose of performance appraisal emphasizes that employees have full potentials that can be explored and expanded. Employees with promising abilities and expertise can be employed positively to sustain the quality of service and product of the organisation. Consequently, with the employees’ roles and responsibility to  perform at the highest level of their work competencies, performance appraisal tend to be more constructive, parallel with the employees’ work development. With this, employees can collaborate with the employer based on the win-win situation concept.  Roles and responsibilities of raters and ratees Performance appraisal involves two key players namely the raters and the ratees. In order to conduct a performance appraisal, both players need to refer to the organisation’s vision and mission. Management or the board of directors are responsible to supervise the whole process in general and is guided by other factors such as stakeholders and corporate governance of the organisation. Subordinates play a role as raters, assessor or the evaluation officer. Their core business is to make an evaluation of the ratees’ job performance. Subordinates are referred to the ratees whom their work  performance will be evaluated. Occasionally, subordinates can play two roles at a time; they can be raters and in other context they can also be ratees. This shows that those who are in the higher post will evaluate ratees’ work performance.  Measurement or methods in appraisal Performance appraisal measurement can be classified into three categories; as measuring traits, behaviours, or results. Of all three, trait approach is more popular despite its inherent subjectivity. Behavioural approaches provide more action-oriented information to employees, and therefore may be best for development. On the other hand, the result-   ISSN: 2201-6333 (Print) ISSN: 2201-6740 (Online) www.ijern.com 4oriented approach is gaining its popularity because it focuses on the measurable contributions that the employees make to the organisation. Combinations of approaches were used along the process and it contributed to a better implementation of the appraisal process. There are a number of different appraisal approaches/ methods commonly used. The approaches or methodologies used must be very familiar to the raters as well as the ratees. Training can also  be conducted from time to time to sharpen the raters’ skills, knowledge, attitude, aptitudes, abilities and competencies.  Performance appraisal process Performance appraisal is a continuous process whereby a rater will judge and evaluate their ratees. Although raters review performance after three, six, nine months or at the end of the year, ratees are still being observed consistently.  Nevertheless, appraisals should be viewed as a participative process which involves raters and ratees. This can be seen as a reciprocal process whereby the successfulness of the activity lies on the mutual and honest understanding between  both raters and ratees. The process must be viewed as a procedure that can benefit all parties in the organisation especially the ratees and to achieve the organisation’s goal. The appraisal activity can also be seen as a stimulus-response-feedback process. The organisation needs to conduct this activity to evaluate the stimulus (job description) given, the response of the ratees (cognitive, behavioural, affective and psychomotor) and feedbacks which involves trust and responsibilities of the ratees. Objective and fair standard of evaluation Performance standard is the measuring rod for determining the outcomes of employee’s performance whether it is successful or unsuccessful. Sometimes raters themselves are confused on the meaning of performance appraisal and the standard measurement to measure work performance. All necessary standard need to be followed and well articulated to the people. Standard is important because of several reasons; to help the organisation achieve and reach its goals; to motivate individual or a group to a higher level of personal work behaviour; standards can reinforce behaviour; standard  promotes the consistency of employee’s performance of the organisation; and standard can be used to weight and measure the impact of employee’s performance on their core business.  Performance appraisal mentoring Employees’ performance in the workplace is a continuous process and need to be monitored on a timely basis. This is to ensure that improvements in performance are continuous and within time, the organisation becomes a learning organisation. Several important purposes of mentoring are to identify the gap that exists between existing employees (with abundance of experience) with new employees (with minimal experiences); to identify opportunities that can assist existing employees with unfamiliar task or challenges; to identify any problems in advance to achieve the existing standards; and to collect documentation data on the employee’s performance for the final appraisal.  Individual performance or group/ teamwork performance Individuals and group members play an important role to achieve the vision of the organisation. Both parties play a vital function to complement each other. In the performance appraisal context, the power of individual performance is important in comparison with team performance. This is because the appraisal process is more towards the individual reward system rather than the group reward system.  Performance appraisal interview Performance appraisal interview is an important part in the appraisal process. It is a frequent on-the-job communication as well as feedback process and can be seen as a periodic activity. Normally, it is conducted one-to-one between the employee and his personal supervisor or rater. The employer (rater) will monitor and gather information on the employee’s performance to determine whether the employee has accomplished the organisation’s goal or not. Discussion between the employer and the employee can be focused on the employee or subordinates’ core business and other activities related with their job description.   International Journal of Education and Research Vol. 1 No. 4 April 2013 5 The forecasting issues on performance appraisal From a strategic point of view, performance appraisal activity is important to serve several main functions in the organisation. Some of main functions are to create conducive working environment and to recognise the existence of human capital as the most important asset. In the organisation context, a proper plan or a master plan of the appraisal activities and its progress need to be ready and can be comprehended by all parties involved.  Leadership style affects performance appraisal Leadership style will influence the decision making process in the appraisal activity. The appraisal turns out to be more  judgmental in nature when an autocratic leader uses his position to control the overall process. On the other hand, democratic leaders will initiate a developmental approach in the appraisal activity. They always encourage involvement and good relationship practices in all the appraisal process. Laissez-faire leaders however will create a havoc environment due to the fact that they are lack of commitment and skills. Eminently, the system practice used is ineffective and unsuccessful. The political mask in performance appraisal Extensive literature has evolved to help managers design systems that are accurate. Yet, while appraisal is supposed to  be objective and accurate, the reality is different. Many managers deliberately distort and manipulate appraisals for  political purposes. This shows that the literature on designing appraisals and training aimed at helping managers giving accurate appraisals miss a crucial point; appraisals take place in an environment that is anything but completely rational. In reality, managers may need other than being completely accurate and rational. Managers giving appraisals may have other motives and purposes that may supersede a concern for accuracy. User-friendliness of Performance Appraisal Form Studies by several researcher (see Scoot 2001; Edell, 2003) indicated that performance appraisal needs to be user-friendly to both the supervisors and supervisees. There are several factors to be considered to ensure that the  performance appraisal instrument is user-friendly; content - rated on the level of documentation provided for the information presented; ease of use - rated on the usability of the system, easy to answer questions, consistent page layout and free from unnecessary questions; time - rated on the amount of time needed to answer all the questions, less questions means less time is needed to complete it; clear - content should be clear and not ambiguous; direct questions - all questions should be straightforward and attractive and the layout or format of the form should be economical. The usage of ICT tools and devices may help to replace the traditional format of the forms. For an example, expert systems can be used to assist supervisors and managers with situation assessment and long-range planning. Win-win Situation in Performance Appraisal A win-win situation is the ultimate goal of negotiations. In the performance appraisal, it happens when a solution is found to be beneficial for both parties. Both parties would mutually agree on their needs and expectations, and ideally everyone will be satisfied with the solution produced. In addition, the process of reaching a win-win situation may foster learning and growth. This can lead to a greater understanding and a more positive relationship between those involved.  Performance Appraisal Training Training plays an important role in an organisation’s life. For the performance appraisal purposes, several objectives of training can be identified such as to develop the raters’ skill, knowledge and abilities in performing their job; to uplift the credibility on appraisal process; to seal problems faced; to cope with new issues; to fulfill the demand for skilled workers; and to grasp on most successful asset of organisation. In general, training can be beneficial to an organisation through better understanding of the appraisal system; strengthening the misperception of the system; create sense of awareness and also by encouraging the organisation to be a learning organisation. For employees, training on appraisal can enhance their understanding on the system. Apart from upgrading their competency and efficiency, employees are able to discuss with the management group in improving performance appraisal’s decision.
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