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Essay: The Importance of Performance Appraisal in Human Resource Management

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Introduction

Human Resource Management (HRM) is the function within an organization that focuses mainly on the utilization of individuals by acquiring, training, appraising, compensating, and managing employees in order to achieve its organizational goals efficiently and effectively. HRM is the main structure of a company. It works strategically, relying on the company’s past experience, current condition, and future forecast to make decisions. Furthermore, HRM is also the key to managing an organization’s most valuable asset, its employees. HRM helps employees develop their personal and organizational goals. Hence, it is crucial for an organization to carry out a performance appraisal system. It is a formal procedure used to evaluate an employee’s current or past job performance in relation to his/her performance standards. (Dessler, 2005). Performance appraisal indicates the current and desired performance level of an employee. It is believed to be effective for deciding employee promotion, salary determination, and etc.

Background

Canyon Bluff Resort is a rather large company operating in the hospitality field and is currently facing a decline in its service quality. Canyon Bluff has a policy in which all personnel has to be given a formal performance evaluation each year. For the past 6 years, Executive Chef Mike Harris has been evaluating his co-workers alone and it was revealed that, there has been no changes / improvement seen in the evaluation results. Therefore, an investigation was conducted to find the causes of the poor performance appraisal of staff. It was discovered that Chef Harris has been doing the evaluation inappropriately.

CAUSES

The main problem is the poor performance appraisal of staff. This is due to Chef Harris’ negligence on his job as the appraiser by not doing the performance evaluation properly. Some of the mistakes he made are:

1. Unprofessional Appraising Method

Firstly, Chef Harris appeared to have completed the evaluation form provided by Human Resource Department for each employee before the meeting. Chef Harris has always done his job on time, however the results of the evaluations may not be accurate as he relies on his memory of the employee to fill the forms. Although Chef Harris occasionally refers to the employee’s personal files, most of the evaluation made is believed to be false because he might have remembered wrongly and the staff might have been improving their performance since the last time he/she was evaluated. Hence, Chef Harris’ evaluation could be inaccurate and therefore unfair and ineffective.

2. Misguided Mindset

Secondly, Chef Harrison strongly feels that if the employee has the ability to retain their position at Canyon Bluff, their work has to be satisfactory. Which is why most of the employees are still working there. This misguided idea that Chef Harris has, causes him to rate the staff as ‘satisfactory’ for each category every year. This raises dissatisfaction of employee as some of them may have performed their tasks very well, yet they are only graded as satisfactory. On the other hand, some other employees may have been doing their jobs poorly but their evaluations show that they receive the same ratings with those who have performed well, which is at satisfactory level. Furthermore, Chef Harris rarely makes comments about the employees’ performance and he also did not provide feedbacks. Therefore, the employees will not be able to learn and improve his/her performance, hence the company’s performance. Not only is this unfair for the staff, but it also gives them the wrong perception concerning their own skills and abilities.

3. Unsuitable Time Allocation

Last but not least, it is observed that the time he allocates for the appraisal interview is way too short. Chef Harris spends only 15 minutes to complete the evaluation form and interview. In this 15 minutes, all Chef Harris does is mostly to have a little conversations with the employees regarding how their families are doing and to give them a pat on the back. A proper interview is believed to last at least one and a half because it includes the entire year performance of the employee, target achieved, feedbacks and recommendations given by the employees, and both his/her goals personally and organizational wise. Chef Harris does neither of those things, thus it kind of defeats the purpose of having a performance appraisal in the first place as nothing much is achieved from it..

From what can be seen, Chef Harrison is believed to have gotten the wrong idea on how performance appraisal works. He personally does not expect any changes in the appraisal results and moreover, he also considers that the annual meetings with the employees serve no purpose but to comply with company policy.

CONSEQUENCES

Every action has a reaction or consequence. Therefore, what has been done by Chef Harris, of course, has its own consequences, whether it’s bad or good. Below are some potential consequences of the problems:

1. Inaccurate Evaluations

One of the consequences of relying too much on memory is that, there is a high possibility of him providing false, incomplete and hence, inaccurate evaluations of the employee. Therefore, it is unfair for the employee to be judged according to the performance evaluation that is blindly completed by Chef Harris. Although Chef Harris believes that he has excellent memory, it is still inadequate to only rely on what he remembers about the employees. Furthermore, these memories could be impractical as, as time goes on, the staff could have been working harder, putting more efforts, or perhaps they have been slacking because they received good ratings the previous year. Hence, the impressions that Chef Harris has in mind about the employees could be wrong because people change as time passes. Furthermore, he could have remembered the wrong thing about the wrong person. This matter may appear to be a small and simple problem, however, Chef Harris’ inaccuracy may cause the company to fire or to give promotions to the wrong individuals. Not only will this error cause inefficiency, but as time goes on, because the wrong person is doing more than he is capable of, the performance quality will sooner or later decrease and to fix these problems, will be very costly. Moreover, just by completing the forms before the actual interview, Chef Harris has already broken the rules and policies set by the company. Not only is this wrong morally, but it also defeats the purpose of having a performance appraisal in the first place.

2. Demotivation of Employees

As observed, there has been no improvement seen for the last six years. Chef Harris himself does not expect any changes to occur this year. The reason of the lack to zero improvement of performance is because it is believed that employees do not have motivation to work harder or to perform well due to the lack of motivation and dissatisfaction. These are caused by the unfair ratings they receive from Chef Harris, because for the past six years, Chef Harris has been rating all staff as ‘satisfactory’ no matter how good or bad the staff is. He personally believes that if the employees are still working at Canyon Bluff, that means their performance have to be satisfactory. Thus, he completes the forms before he even meets the staff for interview and rate each and every one of them satisfactory. This will lead the employees into thinking that they are not good enough or are really good, in which they will not have the motivation to work harder because they may think that their efforts are wasted or that they are in no need of improvement / hard work. If this problem is prolonged, not only their works will be inefficient, but the company will face a bigger problem in the future such as, which means the company in ineffective in managing its employees. Furthermore, Chef Harris barely makes any comment about the staff. As he does not really say anything (both good or bad) about the staff and their performances, they will presume that they do not need to work harder as they do not even get the motivations that they need and deserve. For employees who have been working really hard, it would be a disappointment that they do not even receive a small compliment from Chef Harris. This will lead them into being demotivated as their efforts are wasted without even being acknowledged by their superior, Executive Chef Mike Harris.

3. Information Deficiency

According to Deb (2009) performance appraisal interview is a systematic process of giving feedback to employees about their past job performance and future potential. However, as observed, Chef Harris barely gives feedbacks, let alone receiving it. He mostly asks about the employees’ families during the interview. Chef Harris has been conducting the interview for only 15 minutes every year for six years. The duration he allocates for the appraisal interview is believed to be too short, and it leads to information deficiency, in a way that, employees will not know much about their own performances, the company’s goals, or even about their own superior, Chef Harris. Furthermore, Chef Harris also will not be able to ask questions and feedbacks from the employees regarding the company, or the staff’s personal and organizational goals. All these are due to the short time allocated by Chef Harris, because nothing much can be asked and achieved in just fifteen minutes. While performance appraisal interview is also used to bond and get to know each other better, Chef Harris uses it pretty much just to give the staff ‘a pat on the back’. This is a serious problem, as if both parties, the staff and Chef Harris do not give each other feedbacks and share opinions, neither will know about their flaws and how to fix it, as they do not even acknowledge it that they are doing certain things wrongly. Doing their job incorrectly for a long time may cause the company’s quality to slowly decline, this is because the core person who is responsible to observe and manage the staff has failed to perform his job properly.

Recommendations

If the problems above are not solved quickly, the hotel will soon face a crisis. Hence, below are some recommendations on what should be done in order to fix this matter.

1. Multi Rater Feedback

Multi rater feedback, also known as 360-degree performance appraisal, is a relatively new evaluation method that provides each employee the opportunity to receive performance feedback from his/her supervisor, coworkers, and even customers (Sommerville, 2007).  The ‘360’ refers to the 360 degrees in a circle, which means that the feedbacks and evaluations come from all around the employee. The outcomes of the multi rater feedback are usually used by the employee to plan their training and development. In addition, supervisors may also use the results of this feedback for making promotional or pay decisions. This method is, to some extent, better in comparison to the traditional manager-employee appraisals because when used properly, the 360-degree feedback tends to reduce rater bias. In other words, as the number of evaluators / appraisers increases, so does the probability of obtaining broader and more accurate information about the employees. Hence, it would be a very good change to the traditional appraisal methods that is used by Canyon Bluff. Moreover, this method is somewhat more effective in improving staff performance because of the multiple inputs from different sources.

2. Conducting Appraiser Training

A common fault that causes all the problems explained above is that Chef Harris did not receive enough training. Training the appraiser is crucial for achieving better performance appraisal results. Hence, it would be better if Chef Harris to attend appraiser trainings because he is the only one who observes and works with the employees on daily basis, therefore he is the only one who can evaluate their job performances. Training for appraisers is very essential, especially in managerial areas where the responsibilities are heavier. The purpose of the training is not only to convince Chef Harris that performance appraisal is very important, but also to help Chef Harris to improve his capabilities to observe, conduct constructive feedback, listen, support, counsel, coach, set objectives, and ask appropriate questions. Moreover, by having this training, hopefully Chef Harris will eventually understand that evaluations have so much more purposes than just to comply with the company policy.

3. Revising Interview Forms

Another way to having and developing effective appraisal system is the selection of the appropriate format (Hickman 2001). If the current forms are inadequate to point out the employees’ progress on their personal and organizational goals, their strengths and weaknesses, or their opinions and feedbacks about the company, or what to be improved within the company, it would be very risky and difficult for the management to decide upon what actions are to be taken. Furthermore, if the forms are not detailed enough about the evaluations, it will be challenging for the appraiser to come up with relevant questions in order to understand the staff deeper. Hence, it is advised that the interview standards and forms are to be revised. Perhaps the forms format could be changed into a more detailed and updated forms. Since Chef Harris rarely makes comments about the employee, unless he remembers something exceptional about them, it would be suitable to use the critical incidents employee evaluation form (refer to appendix A for critical incident employee evaluation form example). Critical incidents employee evaluation form is extremely useful in giving employees specific job-related feedback. It also reduces recency bias when supervisors faithfully record incidents throughout the rating period. When properly utilized, this method also provides supervisors a more detailed lists of staff behaviors that can be discussed with employees during the interview. Furthermore, in addition to the critical incident employee evaluation form, a performance rating form would be very useful to evaluate the employees’ behavior and level of job performance. (refer to appendix B for employee performance rating review form). This method covers a broader criteria on what to be evaluated such as job knowledge, work consistency, skills, work quality, cooperation, and punctuality. Furthermore it would be better if the forms include a comment section in which Chef Harris could write down a few points on what the staff can or should improve on. (refer to appendix C for feedback form example)

Conclusion

 Canyon Bluff has a policy which states that each employee should undergo a performance appraisal every year. For the past six years, Executive Chef Mike Harris has been the appraiser and it was discovered that nothing much has changed every year. After some investigations, it is revealed that there are some mistakes that Chef Harris has made during the evaluation, such as unprofessional appraising method, having a misguided mindset, and unsuitable time allocation for the appraisal interview. As everything has its consequences, Chef Harris’ mistakes too have its effects on both the employees and the company. Hence, to solve and prevent the problems, there are a few potential solutions that might help. The recommendations are to assign someone to assist Chef Harris during the performance appraisal period, trying out / change to a new method, self-development training, and to revise the interview forms/standards. It is believed that if these recommendations are to be carried out, the problems will be solved and hopefully changes and improvements will be seen within the next year.

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