A Critical Analysis of Performance Appraisal Methods and Adoption

This essay provides a critical analysis of performance appraisal methods, contrasting classical approaches like ranking and rating scales with modern methods such as Management By Objectives (MBO) and 360-degree appraisals. It examines the strengths and weaknesses of each approach, considering American and British perspectives, and discusses the adoption of these methods in a global context, particularly within multinational corporations (MNCs). The analysis highlights the importance of considering various parameters beyond customer feedback, such as employee behavior, dedication, and sincerity, to ensure a fair and effective performance management system. The essay concludes with recommendations for companies to adopt a mix of approaches, involve experts in the appraisal process, and gather feedback from all stakeholders to minimize employee turnover and foster a supportive work environment.

Performance Appraisal

Critical Analysis of Performance Appraisal Module
Traditionally, in many companies, HR manager uses the classical approach for
measuring employee performance. Thus there are several methods to
perform this job, out of which two are discussed as follows:
•Ranking Method
•Rating Scale Method
Selden, S. and Sowa, J. E., 2011. Performance management and appraisal in human
service organizations: Management and staff perspectives. Public Personnel
Management. 40(3). pp.251-264.

Cont..
RANKING METHOD- HR manager compares the employee's performance with
that of other employees rather than measuring it with the set standard. Here 5
parameters are set on which ranks are allotted that is Excellent, above
average, average, below average and poor. Based on this, groups are made
where top rankers are rewarded and low rankers are given punishment.
RATING SCALES METHOD- In this, manager gives rate on the 5 point or 10
point scales depending upon the job of employees under various traits that is
attitude, performance, regularity, accountability and sincerity. On this scale, 1
depicts negative feedback and 10 depicts positive feedback.
Moynihan, D. P. and Pandey, S. K., 2010. The big question for performance management:
why do managers use performance information?. Journal of public administration
research and theory. 20(4). pp.849-866.
Rating Scales in Performance Appraisal. 2010. [Online]. Available through <
http://performance-appraisal.com/ratings.htm>. [Accessed on 4 Jan 2016].
Job Evaluation: Methods: Ranking. 2000. [Online]. Available through <http://www.hr-
guide.com/data/G411.htm>. [Accessed on 4 Jan 2016].
1 2 3 4 5 6 7 8 9 10

Cont...
Critically it can be explained that:
 Company will reain far more behind.
 They are not coping up with the modern approaches.
 However, classical approahes are highly adopted in every company.
 Better performance can be assessed.
 Modern approach has been adopted to meet out the present
requirement of the company.
 MNC's have adopted new measures but classical method are valued
more.
Halachmi, A., 2011. Imagined promises versus real challenges to public
performance management. International Journal of Productivity and
Performance Management. 60(1). pp.24-40.

Discussion of line manager and employees
•Line manager has direct contact with the employees. They give correct
review about the workforce.
•During planning for change, line manager discusses with the employees
about the implication on the future performance.
Line manager take out the issues faced by employees during under
performance.
•This help in getting clear view.
•Employee resistance can be avoided for the implementation of new
appraisal methods.
Gruman, J. A. and Saks, A. M., 2011. Performance management and employee
engagement. Human Resource Management Review. 21(2). pp.123-136.

Three styles of performance appraisal
•American Thinking
•American companies adopt the system of merit pay where they give
permanent pay raise to the employees on the basis of past performance.
•British Thinking
•Britishers have adopted two ways of new method to appraise their
employees that is-
•Management By Objectives (MBO) – The process of defining objectives by the
management and employee's agreement so that proper consensus can be
reached.
•360 Degree Appraisal – It is a process in which feedback is given by the
people who are working around them.
Farndale, E., Hope-Hailey, V. and Kelliher, C., 2011. High commitment performance
management: the roles of justice and trust. Personnel Review. 40(1). pp.5-23.

Strengths and Weaknesses
Strengths Weaknesses
Clasical Approach This helps in assessing
the performance of
employees on every
aspect.
The performance is
assessed by only
supervisor or HR
manager.
Modern Approach  In social performance,
customer are put at top
priority and it is true
that customers provide
more accurate
feedback.
 In British thinking,
company measures the
performance on the
basis of all the
parameters and from
every stakeholders
performance are
known.
 As per the American
thinking, customers are
not the only parameters
to judge an employee's
performance.
 As per the British
thinking, the judgement
about the employee
performance are
fluctuating by each
stakeholders.
Halachmi, A., 2011. Imagined promises versus real challenges to public
performance management. International Journal of Productivity and Performance
Management. 60(1). pp.24-40.

As the American are doing they are not useful (Social
Performance)
•Performance management set standard for measuring the individual productiveness
and their overall contributions.
•This allows organization proprietor to guide execution to suit their organization’s
action and demand.
•American organizations uses Social Performance management tool.
This tool focuses on the measurement of the organization's performance in satisfying
their customers.
•They concentrate on the customers while taking all the strategic and operational
decisions.
•This style is not useful in present scenario because different parameters are available
to measure the performance.
Taticchi, P., 2010. Business performance measurement and management: new contexts, themes
and challenges. Springer Science & Business Media
Social Performannce Management. 2015. [Online]. Available Through:
<http://www.microfinancegateway.org/topics/social-performance-management>. [Accessed on 14th
December 2015].

Adoption in a Global context or not
•The meaning for MNC's in HR is related to adoption of different other
practices in order to manage performance of employees.
•Performance is based on feedback of customer.
•Employees performance are affected by many other factors according to
global standard.
•For example, if an American company operates business in India then it has
to take into account several approaches like sales target, team performance
and achievement of organizational objectives.
•It is very important to consider overall aspect of performance management
by MNC in HR.
Mone, E. M. and London, M., 2014. Employee engagement through effective
performance management: A practical guide for managers. Routledge.

Cont...
 In adequate manner, employee performance should be managed.
 Comparing their performance with customer satisfaction aspect is not
feasible.
 MNC's should consider different parameters as well so that employee
potential can be identified on fair and appropriate manner.
 Companies should make sure that new changes are arising and that are
underpinning the efficacy of existing process of Performance
Management.
Adler, R. W., 2011. Performance management and organizational strategy: How to
design systems that meet the needs of confrontation strategy firms.The British
Accounting Review. 43(4). pp.251-263.

Cont...
 Organization might have to shift traditional lookout of evaluating things
and every parameters related to employee performance should be
considered.
 Moreover, this is also beneficial in terms of encouraging the employees
by depicting that their performance is evaluated through justified
method.
 Apparently, every new change comes with difficulties and this present
change will also transform the existing procedure.
 Hence, it will consume more time and financial resources because from
every aspect, employer has to consider employee performance.
Redmon, W. K., Mawhinney, T. C. and Johnson, C. M., 2013. Handbook of
organizational performance: Behavior analysis and management. Routledge.

Can Country Adopt
•If the social performance is accepted and than judgment of employee
performance is done in MNC than it will depict that:
Employees are satisfying the customers than they are performing their job in an
efficient manner.
It infers that if employees are influencing the customers for repeat business than
they are performing their duty in a better manner and thus, on that basis
performance appraisal is done.
It is not necessary that customers will provide exact feedback so due to this
employees will be judged in a negative manner.
Due to this, there will high number of termination and employee turnover.
Adler, R. W., 2011. Performance management and organizational strategy: How to design
systems that meet the needs of confrontation strategy firms.The British Accounting Review.
43(4). pp.251-263.