Critical Evaluation of Different Types of Performance Appraisals

Introduction

There is an extended number of factors that are believed to influence the overall performance and success of a company. For example, they are the power of its leaders, competent management, supply and demand levels and even the country’s economic situation. Certainly, employees are also a crucial part of an organisation’s success, and it depends on them and their desire to work hard whether the company achieves its goals. To check and boost employees’ performance, there are several systems, including management by objectives, 360-degree feedback and behaviourally anchored rating scales. They all have specific advantages and disadvantages that will be critically discussed and exemplified in this paper. Each system and its pros and cons will be analysed one by one in several paragraphs, and a specific conclusion will be made.

Management by Objectives

Despite numerous advantages of the management by objectives, there are various drawbacks associated with this model, which is why it is crucial to utilise MBO as a strategic tool instead of treating it like a cure-all.

Management by objectives can, indeed, be an integral part of the organisation’s success due to the various benefits this framework has. Firstly, setting common goals positively affects motivation among employees since their professional objectives become clearer and more realistic. According to a recent study by Kampkötter (2017), measurable and challenging goals as a form of performance appraisal and evaluation lead to greater work effort and higher employee satisfaction rates. Secondly, MBO results in open communication between employees and supervisors, which affects job satisfaction as well (Islami, Mulolli and Mustafa, 2018). Management by objectives serves as an exceptional instrument of ensuring employee loyalty because common goals bring a sense of purpose and importance to them (Shamsa et al., 2019). A great example of the MBO’s positive impact on the workers is the incorporation of performance appraisal at a number of government agencies described in the book by Milkovich and Wigdor (1991). The authors argue that the implementation of consistent objective performance appraisal frameworks improved the quality of work. Based on the mentioned advantages of MBO, it would be rational to consider its incorporation at the company.

Although there are a variety of benefits related to MBO, it is crucial to acknowledge the limitations of the framework and generate possible solutions to the challenges resulting from MBO incorporation. Management by objectives focuses on targets, while often neglecting other important parts of the organisation, including corporate culture and work ethos. As a result, employees ignore their professional duties by prioritising the established goals and choosing to meet them by any means necessary (Wekesa and Makhamara, 2020). The strain MBO puts on employees in terms of time frames leads to them abusing short-cuts, which affects performance and work quality (Amponsah-Tawiah, Opata and Tetteh, 2018). In addition, the lack of timely feedback and flexible timelines results in numerous organisational drawbacks (Rahman et al., 2020). As a performance appraisal tool, MBO can be ineffective due to the fact that employers tend to have an upward bias in their evaluation based on the research findings presented by Cappelli and Conyon (2018). The implementation of management by objectives has to be a step-by step process, which would allow employees to voice their concerns.

In conclusion, it is evident that although the implementation of the MBO model has a number of organisational and individual benefits for employees, the framework is not perfect and can lead to various drawbacks. On the one hand, management by objectives has a positive impact on employee satisfaction and commitment. On the other hand, workers often become pressured to achieve the goals of the company by sacrificing work quality and overall performance. In order to deal with the challenges regarding MBO, management has to generate strategic road maps in order to address emerging issues.

360-Degree Feedback

360-degree feedback is a special though not completely perfect process or system that provides a company’s employees with anonymous and confidential feedback from different people who work around and with them. Generally, such feedback comes from the worker’s leaders, managers, and co-workers (Michiel et al., 2015). Unfortunately, despite various advantages, this system has significant drawbacks that may limit its helpfulness and require leaders to use another one.

To begin with, positive features of 360-degree feedback process include providing a manager with a fuller picture of a worker’s performance, allowing employees to learn how they are seen in the company, and spotting development opportunities. For example, since employees’ daily lives are not filled with compliments and positive comments, this system is a way to give them a great boost to learn that co-workers appreciate their work. As for disadvantages, they typically include lack of informativeness and truthfulness and the fact that it may actually be not 360-degree (Michiel et al., 2015). For instance, if senior managers are not entirely involved in this process, it becomes unfair, and employees lose interest.

Behaviourally Anchored Rating Scales (BARS)

Behaviourally anchored rating scale (BARS) is a particular system that measures and rates trainees and workers according to their various behavioural patterns and overall performance. The unique mechanism of BARS is created to combine the benefits of quantified ratings, narratives, and critical incidents by emphasising skills, behaviours and traits needed to perform a job correctly (Devcich et al., 2015). Therefore, it is specifically designed to provide the employee appraisal process with the advantages of both qualitative and quantitative data.

It is hard to disagree that such a system has significant pros, and it is used all over the world in many brilliant organisations. To begin with, BARS focuses on observable and specific behaviours, provides standardised and common comments on one’s job performance and reduces the possibility of prejudiced or biased responses. In other words, since such a system relies on individual and hence unique behavioural patterns that are required for organisation’s particular positions, it is narrowly focused and excludes generalisations (Medvedev et al., 2018). This s a great example of the main advantage of BARS. As for disadvantages, they include complicated development, dependence on accuracy and the necessity to update the statements as job requirements change.

Conclusion

To draw a conclusion, one may agree that all three systems are quite appropriate for performing appraisals but cannot be considered wholly ideal and perfect because of various shortcomings. For management by objectives, the main disadvantage is that employees ignore their professional duties by prioritising the established goals. For 360-degree feedback, it is the lack of informativeness and truthfulness. Finally, the necessity to update the statements as job requirements change is the con of BARS.

Reference List

Amponsah-Tawiah, K., Opata, J. L. and Tetteh, S.D. (2018) ‘Time management: presenteeism versus management-by-objectives’, International Journal of Law and Management, 60(6), pp. 1470–1484.

Cappelli, P. and Conyon, M. J. (2018) ‘What do performance appraisals do?’, ILR Review, 71(1), pp. 88–116.

Devcich, D. A. et al. (2015) ‘A behaviourally anchored rating scale for evaluating the use of the WHO surgical safety checklist: development and initial evaluation of the WHOBARS’, BMJ Quality & Safety, 25, pp. 778–786.

Islami, X., Mulolli, E. and Mustafa, N. (2018) ‘Using management by objectives as a performance appraisal tool for employee satisfaction’, Future Business Journal, 4(1), pp. 94–108.

Kampkötter, P. (2017) ‘Performance appraisals and job satisfaction’, The International Journal of Human Resource Management, 28(5), 750-774.

Medvedev, O. N. et al. (2018) ‘Examining reliability of WHOBARS: a tool to measure the quality of administration of WHO surgical safety checklist using generalisability theory with surgical teams from three New Zealand hospitals’, BMJ Open, pp. 1–6.

Michiel, G. J. S. et al. (2015) ‘Do 360-degree feedback survey results relate to patient satisfaction measures?’, Clinical Orthopaedics and Related Research, 473(5), pp. 1590-1597.

Milkovich, G. T. and Wigdor, A. K. (1991) Pay for performance: evaluating performance appraisal and merit pay. Washington, D.C.: National Academies Press.

Rahman A. et al. (2020) ‘The effect of management by objectives on performance appraisal and employee satisfaction in commercial banks’, European Journal of Business and Management, 12(20).

Shamsa, E. et al. (2019) ‘Goal-driven autonomy for efficient on-chip resource management: transforming objectives to goals,’ Design, Automation & Test in Europe Conference & Exhibition, pp. 1397-1402.

Wekesa, P. and Makhamara, F. H. (2020) ‘Performance appraisal and employee performance at Kibabii University in Bungoma County, Kenya’, Journal of International Business, Innovation and Strategic Management, 4(2), pp. 16–37.

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