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Employee Performance Appraisal in the Public Sector: Uses and Limitations
I. Executive Summary
One of the responsibilities of management is to ensure that an organization functions effectively and efficiently. In order to achieve these goals, managers must be able to determine and assess performance levels of both an organization and its individual employees. To this end, an appropriate system of measurement must be developed and applied. In his article “Employee Performance Appraisal in the Public Sector: Uses and Limitations,” Dr. J. Edward Kellough discusses the need to measure performance and also the difficulty in selecting the most suitable approach for an organization. Effective appraisals must focus on proper performance criteria and standards. Also, managers need to select a fair and accurate method of conducting appraisals, and also should determine how to utilize the results to boost employee motivation and productivity. Dr. Kellough explores the studies and theories informing these issues involved with performance appraisals. Overall, managers should take the time to educate themselves about these issues in order to effectively measure performance levels through a system that meets the unique needs of their specific organization.
II. Statement of the Problem
In assessing organizational productivity or performance, managers must make determinations regarding the development, execution, and utilization of performance appraisals. Potential measures may include work product or outcomes and certain employee behaviors or characteristics. An appraisal can be conducted through the use of a rating scale such as behaviorally-anchored rating scales (BARS) or brief narrative definitions on a determined basis (qtd. by Riccucci, 2006, p. 180). Managers can use the results of the appraisals for a number of administrative decisions such as providing training opportunities or approving pay increases and other rewards. If the appraisals are not planned or conducted correctly, however, the results may include inaccurate appraisals that do not adequately reflect employee performance. Because of the various methods of appraisal that exist, managers must ensure that they understand the potential effects and limitations for their particular organization in order to encourage greater long-term effectiveness and productivity.
III. Causes of the Problem
The different aspects of the appraisal process have different implications for various organizations, and managers should be aware of them so as to ensure the most efficient use of organizational resources. For instance, managers need to carefully select the appropriate criteria for assessment according to organizational needs. Work products and outcomes are not easy to measure, especially when an employee’s tasks vary from day to day (qtd. by Riccucci, 2006, p. 178). Outcomes may not be the direct result of an employee’s work, and furthermore, an employee’s performance may depend on the work of co-workers (p. 178). In those cases, the results of an appraisal may be affected by the nature of the work and the structure of the organization. On the other hand, employee behaviors and traits may serve as performance measures, but even if an employee is assessed positively on this basis, behavior may not be enough to achieve organizational goals, and possession of these traits may not impact performance; therefore, appraising behavior alone is often not sufficient (p. 179).
Managers can use a rating system to evaluate employee performance, but because the appraisal process can be subjective, ratings should be supplemented with narrative definitions (qtd. by Riccucci, 2006, p. 180). However, these require interviews or briefing sessions, which call for great organizational resources as well as commitment by both management and staff to execute. Bias on the part of raters is also an impediment to accurately assessing performance (p. 181). These biases may result in certain errors like the halo effect, first-impression error, the similar-to-me effect, comparison or contract effects, or the central tendency error (p. 182).
Inaccurate or poorly conducted performance appraisals may lead to both short-term and long-term problems. For instance, employees who feel that they or their co-workers are not evaluated correctly may feel alienated or unmotivated to work at their full potential (qtd. by Riccucci, 2006, p. 186). According to the equity theory, employees believe that the outputs should be proportional to the work they put in, and that workers with equal inputs should receive similar outcomes (Klingner et. al, 2010, p. 214). If this condition is satisfied, equity is achieved and employees tend to be more loyal and involved in the organization (p. 213). Therefore, managers must make sure that employees are rewarded equally if they perform at the same level.
According to the expectancy theory, employees may also only perform at the level at which they expect to receive desired or valued rewards, such as enhanced pay and benefits (p. 185). Decisions around pay and benefits may be based on performance appraisals, but a link between productivity and pay does not necessarily exist (p. 187).
IV. Decision Criteria and Alternative Solutions
Certain criteria should be set against which possible solutions can be weighed, including: acceptability to management and employees; costs and time for implementation; and expected short- and long-term impacts on the workplace.
One option includes an agreement between supervisors and employees based on the concept of the psychological contract. This concept describes the situation where supervisors have expectations of employees, and employees in turn have expectations of their supervisors (Klingner et. Al, 2010, p. 212). Communication of these expectations is key to developing and maintaining a positive and productive relationship. Therefore, instead of managers only appraising their employees, employees should also be given the opportunity to appraise their managers so that they feel that they have the chance to share their thoughts and feedback in order to help improve the organization. Employees would likely accept this option, though managers may feel hesitant to be appraised by employees. The costs and time for appraisal would also increase, as employees would not be the only ones evaluated. However, the results could include improved employee morale and increased productivity on the part of both employees and managers who receive feedback on how to improve their performance.
Another possible solution could involve developing a defined and explicit system for appraising employees. The system would delineate the performance criteria that an employee must achieve in order to receive a certain rating; for instance, the employee must have a 90% punctuality rate and submit all reports by the deadline set by the manager in order to receive a raise in salary. All of the criteria would be written so that employees would know what exactly they must do to receive a raise or be promoted. This would be acceptable to employees, but managers may balk at the time required to develop and possibly update this system. However, the short- and long-term impacts on the workplace would be positive; current employees would benefit by being able set appropriate goals, and having such a system in existence would be helpful for future managers and workers.
A third option would involve the manager exploring the best practices of similar organizations. Since one method of appraisal is not always suitable for all organizations, a manager should investigate the systems of developing, conducting, and applying a performance appraisal used by other organizations that have the same number of employees, comparable functions, and other similarities. This would be beneficial to employees, who may benefit from the use of performance appraisal methods suitable to the organization, as well as managers, who can save time and other resources that would have been necessary to develop a new system themselves.
V. Recommended Solution, Implementation and Justification
Overall, an effective and feasible appraisal system should measure relevant elements of employee performance in a manner that does not require an unreasonable use of resources. In accordance with both theories of equity and expectancy, employees should feel that they are being evaluated fairly in order to have access to opportunities for advancement. Therefore, a combination of the alternatives listed in the previous section should be implemented by managers. Employees should have the opportunity to evaluate their managers to help increase their sense of equity and engagement in the organization. A system should be in place that involves defined and explicit criteria for employee improvement and advancement. Managers should investigate systems used by other similar organizations that incorporate both of those elements.
Should such a system fail to exist in other organizations, managers should work to develop such a system suitable to the needs and characteristics of their organization. They should engage employees in the process to ensure that they feel they have a stake in the organization and its success (Klingner et. al, 2010, p. 219). Ensuring democratization in the decision-making process by involving the different stakeholders helps to improve governance capacity (p. 16) and also allows employees to see the results of their work to understand its purpose so as to boost motivation and productivity. In the contemporary model of human resources management, managers must balance the values and perspectives of those involved to best carry out the organization’s mission of equity and effectiveness; furthermore, managers should continue to reevaluate their appraisal systems to ensure their efficacy (p. 72). Involving employees in the development of an appraisal system would help set more realistic expectations and criteria for evaluation so that an accurate appraisal system can be implemented.
- Performance Appraisal Handbook - U.S. Department of the Interior
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Kellough, J. Edward. “Employee Performance Appraisal in the Public Sector: Uses and Limitations.” Public Personnel Management: Current Concerns - Future Challenges. Ed. Norma M. Riccucci. 4th ed. New York: Pearson/Longman, 2006. 177-188. Print.
Klingner, Donald, John Nalbandian, and Jared Lorens (2010). Public Personnel Management: Contexts and Strategies. 6th ed. New York: Pearson/Longman, 2010. Print.