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Human Resource Development: Features, Scope, Objectives and Functions!

In 1970, Leonard Nadler published his book Developing Human Resources in which he coined the term

human resource development(HRD). Human resource refers to the talents and energies of people that

are available to an organization as potential contributors to the creation and realization of the orga-

nizations mission, vision, values, and goals.

Development refers to a process of active learning from experience-leading to systematic and

purposeful development of the whole person, body, mind, and spirit. Thus, HRD is the integrated use of

training, organizational and career development efforts to improve individual, group, and organizational

effectiveness.

Definitions of HRD:

1. According to South Pacific Commission human resource development is equipping people with

relevant skills to have a healthy and satisfying life.

2. According to Watkins, human resource development isfostering long-term work related learning

capacity at individual, group and organizational level.

3. The American Society for Training and Development defines HRD as follows: human resource

development is the process of increasing the capacity of the human resource through development. It is

thus the process of adding value to individuals, teams or an organization as a human system.

Features of HRD:

1. Systematic approach:

HRD is a systematic and planned approach through which the efficiency of employees is improved. The

future goals and objectives are set by the entire organization, which are well planned at individual and


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organizational levels.

2. Continuous process:

HRD is a continuous process for the development of all types of skills of employees such as technical,

managerial, behavioural, and conceptual. Till the retirement of an employee sharpening of all these

skills is required.

3. Multi-disciplinary subject:

HRD is a Multi-disciplinary subject which draws inputs from behavioural science, engineering,

commerce, management, economics, medicine, etc.

4. All-pervasive:

HRD is an essential subject everywhere, be it a manufacturing organization or service sector industry.

5. Techniques:

HRD embodies with techniques and processes such as performance appraisal, training, management

development, career planning, counselling, workers participation and quality circles.

Scope of HRD:

Human resource management (HRM) deals with procurement, development, compensation, mainte-

nance and utilization of human resources. HRD deals with efficient utilization of human resources and it

is a part of HRM.


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Human resource being a systematic process for bringing the desired changes in the behaviour of

employees involves the following areas:

1. Recruitment and selection of employees for meeting the present and future requirements of an

organization.

2. Performance appraisal of the employees in order to understand their capabilities and improving them

through additional training.

3. Offering the employees performance counselling and performance interviews from the superiors.

4. Career planning and development programmes for the employees.

5. Development of employees through succession planning.

6. Workers participation and formation of quality circles.

7. Employee learning through group dynamics and empowerment.

8. Learning through job rotation and job enrichment.

9. Learning through social and religious interactions and programmes.

10. Development of employees through managerial and behavioural skills.

Objectives of HRD:


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The prime objective of human resource development is to facilitate an organizational environment in

which the people come first. The other objectives of HRD are as follows:

1. Equity:

Recognizing every employee at par irrespective of caste, creed, religion and language, can create a very

good environment in an organization. HRD must ensure that the organization creates a culture and

provides equal opportunities to all employees in matters of career planning, promotion, quality of work

life, training and development.

2. Employability:

Employability means the ability, skills, and competencies of an individual to seek gainful employment

anywhere. So, HRD should aim at improving the skills of employees in order to motivate them to work

with effectiveness.

3. Adaptability:

Continuous training that develops the professional skills of employees plays an important role in HRD.

This can help the employees to adapt themselves to organizational change that takes place on a

continuous basis.

HRD Functions:

HRD functions include the following:

1. Employee training and development,

2. Career planning and development,


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3. Succession planning,

4. Performance appraisal,

5. Employees participation in management,

6. Quality circles,

7. Organization change and organization development

Human Resource Development is the part of human resource management that specifically deals with

training and development of the employees in the organization.

Human resource development includes training a person after he or she is first hired, providing

opportunities to learn new skills, distributing resources that are beneficial for the employee's tasks, and

any other developmental activities.

Introduction to HRM

Human Resource Management

Scope of Human Resource Management

Significance of Human Resource Management

Human Resource Management functions

Human Resource Management Model

HRM Vs Personnel Management

Human Resource Development

Human Capital Management

Talent Management

3 Benefits of Talent Management for a Company


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Knowledge Management

About Human Resource Manager

HRM environment in India

Changing role of HRM

e-HRM

INTRODUCTION

Development of human resources is essential for any organisation that would like to be dynamic and

growth-oriented. Unlike other resources, human resources have rather unlimited potential capabilities.

The potential can be used only by creating a climate that can continuously identify, bring to surface,

nurture and use the capabilities of people. Human Resrouce Development (HRD) system aims at creatingsuch a climate. A number of HRD techniques have been developed in recent years to perform the above

task based on certain principles. This unit provides an understanding of the concept of HRD system,

related mechanisms and the changing boundaries of HRD.

HRD concept was first introduced by Leonard Nadler in 1969 in a conference in US. He defined HRD as

those learning experience which are organized, for a specific time, and designed to bring about the

possibility of behavioral change.

Human Resource Development (HRD) is the framework for helping employees develop their personal

and organizational skills, knowledge, and abilities. Human Resource Development includes such

opportunities as employee training, employee career development, performance management and

development, coaching, mentoring, succession planning, key employee identification, tuition assistance,

and organization development.

The focus of all aspects of Human Resource Development is on developing the most superior workforce

so that the organization and individual employees can accomplish their work goals in service tocustomers.

Human Resource Development can be formal such as in classroom training, a college course, or an

organizational planned change effort. Or, Human Resource Development can be informal as in employee

coaching by a manager. Healthy organizations believe in Human Resource


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Development and cover all of these bases.

Definitions of HRD

HRD (Human Resources Development) has been defined by various scholars in various ways. Some of

the important definitions of HRD (Human Resources Development) are as follows:

According to Leonard Nadler, "Human resource development is a series of organised activities,

conducted within a specialised time and designed to produce behavioural changes."

In the words of Prof. T.V. Rao, "HRD is a process by which the employees of an organisation are helped

in a continuous and planned way to (i) acquire or sharpen capabilities required to perform various

functions associated with their present or expected future roles; (ii) develop their journal capabilities as

individual and discover and exploit their own inner potential for their own and /or organisational

development purposes; (iii) develop an organisational culture in which superior-subordinate

relationship, team work and collaboration among sub-units are strong and contribute to the

professional well being, motivation and pride of employees." .

According to M.M. Khan, "Human resource development is the across of increasing knowledge,

capabilities and positive work attitudes of all people working at all levels in a business undertaking."

THE CONCEPT OF HUMAN RESOURCE DEVELOPMENT

Human resource development in the organisation context is a process by which the employees of an

organisation are helped, in a continuous and planned way to:

Acquire or sharpen capabilities required to perform various functions associated with their present or

expected future roles;

Develop their general capabilities as individuals and discover and exploit their own inner potentials for

their own and/or organisational development purposes; and

Develop an organisational culture in which supervisor-subordinate relationships, teamwork and

collaboration among sub-units are strong and contribute to the professional well being, motivation and

pride of employees.


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This definition of HRD is limited to the organisational context. In the context of a state or nation it would

differ.

HRD is a process, not merely a set of mechanisms and techniques. The mechanisms and techniques such

as performance appraisal, counselling, training, and organization development interventions are used to

initiate, facilitate, and promote this process in a continuous way. Because the process has no limit, the

mechanisms may need to be examined periodically to see whether they are promoting or hindering the

process. Organisations can facilitate this process of development by planning for it, by allocating

organisational resources for the purpose, and by exemplifying an HRD philosophy that values human

beings and promotes their development.

Difference between HRD and HRM

Both are very important concepts of management specifically related with human resources of

organisation. Human resource management and human resource development can be differentiated on

the following grounds:

The human resource management is mainly maintenance oriented whereas human resource

development is development oriented.

rganisation structure in case of human resources management is independent whereas human resource

development creates a structure, which is inter-dependent and inter-related.

Human resource management mainly aims to improve the efficiency of the employees whereas aims at

the development of the employees as well as organisation as a whole.

Responsibility of human resource development is given to the personnel/human resource management

department and specifically to personnel manager whereas responsibility of HRD is given to all

managers at various levels of the organisation.

HRM motivates the employees by giving them monetary incentives or rewards whereas human resource

development stresses on motivating people by satisfying higher-order needs.

THE NEED FOR HRD


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HRD is needed by any organisation that wants to be dynamic and growth-oriented or to succeed in a

fast-changing environment. Organisations can become dynamic and grow only through the efforts and

competencies of their human resources. Personnel policies can keep the morale and motivation of

employees high, but these efforts are not enough to make the organisation dynamic and take it in new

directions. Employee capabilities must continuously be acquired, sharpened, and used. For this purpose,

an enabling organisational culture is essential. When employees use their initiative, take risks,

experiment, innovate, and make things happen, the organisation may be said to have an enabling

culture.

Even an organisation that has reached its limit of growth, needs to adapt to the changing environment.

No organisation is immune to the need for processes that help to acquire and increase its capabilities for

stability and renewal.

HRD FUNCTIONS

The core of the concept of HRS is that of development of human beings, or HRD. The concept of

development should cover not only the individual but also other units in the organisation. In addition to

developing the individual, attention needs to be given to the development of stronger dyads, i.e.,

two-person groups of the employee and his boss. Such dyads are the basic units of working in the

organisation. Besides several groups like committees, task groups, etc. also require attention.

Development of such groups should be from the point of view of increasing collaboration amongst

people working in the organisation, thus making for an effective decision-making. Finally, the entire

department and the entire organisation also should be covered by development. Their development

would involve developing a climate conducive for their effectiveness, developing self-renewing

mechanisms in the organisations so that they are able to adjust and pro-act, and developing relevant

processes which contribute to their effectiveness.

Hence, the goals of the HRD systems are to develop:

The capabilities of each employee as an individual.

The capabilities of each individual in relation to his or her present role.


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The capabilities of each employee in relation to his or her expected future role(s).

The dyadic relationship between each employee and his or her supervisor.

The team spirit and functioning in every organisational unit (department, group, etc.).

Collaboration among different units of the organisation.

The organisations overall health and self-renewing capabilities which, in turn, increase the enabling

capabilities of individuals, dyads, teams, and the entire organisation.

What is human resource development and what are the functions of HRD?

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What is human resource development?

A human resource development is set of planned and systematic activities designed by an organization

to provide opportunities to its members to learn skills necessary for the present and future job

requirements. The process of HRD involves the development of expertise in the employee through

organizational development and training and development. The aim of HRD is to improve the

performance of the employees. The three main areas of human resource development are human

resource management, quality improvement and career development.

The main functions of HRD are:-

1. Training and development

Training and development is aimed at improving or changing the knowledge skills and attitudes of the

employees. While training involves providing the knowledge and skills required for doing a particular job

to the employees, developmental activities focus on preparing the employees for future job

responsibilities by increasing the capabilities of an employee which also helps him perform his present

job in a better way. These activities start when an employee joins an organization in the form of

orientation and skills training. After the employee becomes proficient, the HR activities focus on the

development of the employee through methods like coaching and counseling.

2 Organization development

OD is the process of increasing the effectiveness of an organization along with the well being of its

members with the help of planned interventions that use the concepts of behavioral science. Both micro

and macro changes are implemented to achieve organization development. While the macro changes

are intended to improve the overall effectiveness of the organization the micro changes are aimed at

individuals of small groups. Employee involvement programmes requiring fundamental changes in work


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expectation, reporting, procedures and reward systems are aimed at improving the effectiveness of the

organization. The human resource development professional involved in the organization development

intervention acts as an agent of change. He often consults and advising the line manager in strategies

that can be adopted to implement the required changes and sometimes becomes directly involve in

implementing these strategies.

3. Career development

It is a continuous process in which an individual progresses through different stages of career each

having a relatively unique set of issues and tasks. Career development comprises of two distinct

processes. Career Planning and career management. Whereas career planning involves activities to be

performed by the employee, often with the help of counselor and others, to assess his capabilities and

skills in order to frame realistic career plan. Career management involves the necessary steps that need

to be taken to achieve that plan. Career management generally focus more on the steps that an

organization that can take to foster the career development of the employees.

organization with structure and the ability to meet business needs through managing your company's

most valuable resources -- its employees. There are several HR disciplines, or areas, but HR practitioners

in each discipline may perform more than one of the more than six essential functions. In small

businesses without a dedicated HR department, it's possible to achieve the same level of efficiency and

workforce management through outsourcing HR functions or joining a professional employer

organization.

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Recruitment

The success of recruiters and employment specialists generally is measured by the number of positions

they fill and the time it takes to fill those positions. Recruiters who work in-house -- as opposed to

companies that provide recruiting and staffing services -- play a key role in developing the employer's

workforce. They advertise job postings, source candidates, screen applicants, conduct preliminaryinterviews and coordinate hiring efforts with managers responsible for making the final selection of

candidates.

Safety


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Workplace safety is an important factor. Under the Occupational Safety and Health Act of 1970,

employers have an obligation to provide a safe working environment for employees. One of the main

functions of HR is to support workplace safety training and maintain federally mandated logs for

workplace injury and fatality reporting. In addition, HR safety and risk specialists often work closely with

HR benefits specialists to manage the company's workers compensation issues.

Employee Relations

In a unionized work environment, the employee and labor relations functions of HR may be combined

and handled by one specialist or be entirely separate functions managed by two HR specialists with

specific expertise in each area. Employee relations is the HR discipline concerned with strengthening the

employer-employee relationship through measuring job satisfaction, employee engagement and

resolving workplace conflict. Labor relations functions may include developing management response to

union organizing campaigns, negotiating collective bargaining agreements and rendering interpretations

of labor union contract issues.

Compensation and Benefits

Like employee and labor relations, the compensation and benefits functions of HR often can be handled

by one HR specialist with dual expertise. On the compensation side, the HR functions include setting

compensation structures and evaluating competitive pay practices. A comp and benefits specialist also

may negotiate group health coverage rates with insurers and coordinate activities with the retirement

savings fund administrator. Payroll can be a component of the compensation and benefits section of HR;

however, in many cases, employers outsource such administrative functions as payroll.

Compliance

Compliance with labor and employment laws is a critical HR function. Noncompliance can result in

workplace complaints based on unfair employment practices, unsafe working conditions and general

dissatisfaction with working conditions that can affect productivity and ultimately, profitability. HR staff

must be aware of federal and state employment laws such as Title VII of the Civil Rights Act, the Fair

Labor Standards Act, the National Labor Relations Act and many other rules and regulations.

Training and Development

Employers must provide employees with the tools necessary for their success which, in many cases,

means giving new employees extensive orientation training to help them transition into a new

organizational culture. Many HR departments also provide leadership training and professional


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development. Leadership training may be required of newly hired and promoted supervisors and

managers on topics such as performance management and how to handle employee relations matters

at the department level. Professional development opportunities are for employees looking for

promotional opportunities or employees who want to achieve personal goals such as finishing a college

degree. Programs such as tuition assistance and tuition reimbursement programs often are within the

purview of the HR training and development area

In a small organisation, the proprietor performs all the functions. But as the organisation grows,

delegation of duties is essential. He employs other people and delegates some of his duties and

responsibilities to them. In this way he creates another level in his organisation. With the further growth

of an organisation, there is a need for greater specialisation of functions.

Human resources

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To a small businessman, salary structure of his employees requires no specialised knowledge but a big

company employing several thousand employees needs the assistance of a specialist to manage wage

and salary administration. In this way managerial assistance of a specialised nature is required. This is

the origin of staff function separated from the line function.

The term line is used to indicate the line of authority as with different ranks in the armed forces where

the line of authority is clear. In organisation theory, the word line usually refers to those functions

which have direct responsibility for accomplishing the major objectives of the enterprise and the word

staff to these functions that help the line in accomplishing those objectives and are only indirectly

related to the major objectives.

In a manufacturing firm production, purchase and sales are line-functions and personnel, finance,

accounting and research are staff functions. The distinction between line and staff is a means of

determining who makes decisions directly related to the attainment of end results and who provides

advice and service in making those decisions. It is the function of the staff executives to serve the lineexecutives.

All managers are in sense human resources managers, since they all get involved in recruiting,

interviewing, selecting, training, etc. Yet most firms also have a Personnel or Human Resources

Department with its HRD managers. How the duties of this manager are related to the Personnel


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Management duties of other line managers in the firm?

Line managers are authorised to direct the work of subordinates-they are always someones boss. In

addition, line managers are in charge of accomplishing the basic goals in the organisation. On the other

hand, staff managers are authorised to assist and advise line managers in accomplishing these basic

goals in the organisation.

The direct handling of people is an integral part of every line managers responsibility. As already said,

line managers may carry out all the personnel management duties unassisted. But as the firm grows,

they need the assistance of a specialised personnel or HRD staff. The HRD Department provides this

specialised assistance. In doing so, the HRD Manager carries out three major functions as follows:

i) A line function The HRD personnel performs a line function by directing the activities of the people in

his own department and in service areas. He exerts line authority within his own HRD department.

ii) A co-ordinative function HRD executives also function as coordinators of the personnel activities, a

duty usually referred to as functional control. The HRD manager and his department act as the right

arm of the top executive to assure him that personnel objectives, policies and procedures which have

been adopted by the line organisation are being consistently carried out by line managers.

iii) Staff(Service) function Service to line management is the bread and butter of the HRD managers

job. HRD manager assists in hiring, firing, rewarding and evaluating employees at all levels and

administers various welfare programmes.

The term staff refers to the functionof a stick or staff carried by a person for support. Thus the staff

performs a supporting role. It supports the line in its performance. The objective of staff function is to

help line executives by relieving them of certain specialized activities.

While on the overall organisation chart of a company, the HRD manager is a staffman to the rest of the

organisation, his relationship with his own subordinates in his department is always line. He manages a

department which may run as high as hundred employees and his managerial duties are as heavy as

those of most line managers.


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Like them, he is concerned with production, quality of work, planning, organising and controlling the

efforts of his department as well as with the recruitment, selection and placement of people on his staff

and their training, leadership and motivation.

Formal organisation refers to the manner in which its personnel are grouped into different departments

and division. The different departments of an organisation can be formally structured in three major

waysby function, by division or by matrix structure.

In the functional form, all personnel who can contribute to the performance of a specific function are

clustered together. Under such a system all personnel concerned with personnel administration are

grouped together in the HRD department, all persons concerned with the marketing function are

grouped together in the marketing department and so on.

One important advantage of this functional form is that each function is performed by a specialist.

Owing to specialisation, skills of employees in a functional organisation can be more effectively utilized.

But the employees have several bosses, co-ordination is very difficult to achieve and the organisation

cannot operate as a total integrated system.

The other way of grouping organisational members is by divisionalisation. Here we aggregate all the

specialists required to produce a given product. If a company produces and sells four different products,

it may set up four divisional centres, one for each product. Within each division all the needed

production, marketing, finance and other manpower services are assembled.

Divisionalisation may be of different types. There may be divisionalisation by product or by territory.

Advantage of divisionalisation is that here it is easy to compare performances but it involves duplication

of staff and unnecessary wastage.

An organisations departments can be structured in the matrix form i.e. organisational members are

placed under two bosses, one boss will be the head of the department to which the employees belong

and the other boss will be the head of the project to which they are temporarily involved.


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Matrix form is also known as the multiple command system.In a big engineering firm, technical

personnel of various departments are assigned to a project.

When this particular project is complete, they go back to their respective departments until the next

assignment to another project is given. One great advantage of the matrix organisation or project

organisation is that specialized knowhow and skill is available to all projects on an equal basis but it

violates the traditional organisational principle of unity of command and fosters conflicts.

The organisational structure of the Human Resources Department has a pyramid-like shape with the

HRD Manager or HRD Director at the head. In many large organisations the HRD Manager is also a

Member of the

Board and would be designated as HRD Director or Vice-President, HRD. Where he is not a Member of

the Board, the appropriate designation would naturally be HRD Manager. Right below the HRD Manager

there is another level with personnel officers who will report directly to the HRD Manager

Performance Appraisal is the systematic evaluation of the performance of employees and to understand

the abilities of a person for further growth and development. Performance appraisal is generally done in

systematic ways which are as follows:

The supervisors measure the pay of employees and compare it with targets and plans.

The supervisor analyses the factors behind work performances of employees.

The employers are in position to guide the employees for a better performance.

Objectives of Performance Appraisal

Performance Appraisal can be done with following objectives in mind:

To maintain records in order to determine compensation packages, wage structure, salaries raises, etc.

To identify the strengths and weaknesses of employees to place right men on right job.

To maintain and assess the potential present in a person for further growth and development.

To provide a feedback to employees regarding their performance and related status.


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To provide a feedback to employees regarding their performance and related status.

It serves as a basis for influencing working habits of the employees.

To review and retain the promotional and other training programmes.

Advantages of Performance Appraisal

It is said that performance appraisal is an investment for the company which can be justified by

following advantages:

Promotion: Performance Appraisal helps the supervisors to chalk out the promotion programmes for

efficient employees. In this regards, inefficient workers can be dismissed or demoted in case.

Compensation: Performance Appraisal helps in chalking out compensation packages for employees.

Merit rating is possible through performance appraisal. Performance Appraisal tries to give worth to aperformance. Compensation packages which includes bonus, high salary rates, extra benefits,

allowances and pre-requisites are dependent on performance appraisal. The criteria should be merit

rather than seniority.

Employees Development: The systematic procedure of performance appraisal helps the supervisors to

frame training policies and programmes. It helps to analyse strengths and weaknesses of employees so

that new jobs can be designed for efficient employees. It also helps in framing future development

programmes.

Selection Validation: Performance Appraisal helps the supervisors to understand the validity and

importance of the selection procedure. The supervisors come to know the validity and thereby the

strengths and weaknesses of selection procedure. Future changes in selection methods can be made in

this regard.

Communication: For an organization, effective communication between employees and employers is

very important. Through performance appraisal, communication can be sought for in the following

ways:

Through performance appraisal, the employers can understand and accept skills of subordinates.

The subordinates can also understand and create a trust and confidence in superiors.

It also helps in maintaining cordial and congenial labour management relationship.

It develops the spirit of work and boosts the morale of employees.

All the above factors ensure effective communication.


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Motivation: Performance appraisal serves as a motivation tool. Through evaluating performance of

employees, a persons efficiency can be determined if the targets are achieved. This very well motivates

a person for better job and helps him to improve his performance in the future.

Following are the tools used by the organizations for Performance Appraisals of their employees.

Ranking

Paired Comparison

Forced Distribution

Confidential Report

Essay Evaluation

Critical Incident

Checklists

Graphic Rating Scale

BARS

Forced Choice Method

MBO

Field Review Technique

Performance Test

We will be discussing the important performance appraisal tools and techniques in detail.

Ranking Method

The ranking system requires the rater to rank his subordinates on overall performance. This consists in

simply putting a man in a rank order. Under this method, the ranking of an employee in a work group isdone against that of another employee. The relative position of each employee is tested in terms of his

numerical rank. It may also be done by ranking a person on his job performance against another

member of the competitive group.

Advantages of Ranking Method


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Employees are ranked according to their performance levels.

It is easier to rank the best and the worst employee.

Limitations of Ranking Method

The whole man is compared with another whole man in this method. In practice, it is very difficult to

compare individuals possessing various individual traits.

This method speaks only of the position where an employee stands in his group. It does not test

anything about how much better or how much worse an employee is when compared to another

employee.

When a large number of employees are working, ranking of individuals become a difficult issue.

There is no systematic procedure for ranking individuals in the organization. The ranking system does

not eliminate the possibility of snap judgements.

Forced Distribution method

This is a ranking technique where raters are required to allocate a certain percentage of rates to certain

categories (eg: superior, above average, average) or percentiles (eg: top 10 percent, bottom 20 percent

etc). Both the number of categories and percentage of employees to be allotted to each category are a

function of performance appraisal design and format. The workers of outstanding merit may be placed

at top 10 percent of the scale, the rest may be placed as 20 % good, 40 % outstanding, 20 % fair and 10

% fair.

Advantages of Forced Distribution

This method tends to eliminate raters bias

By forcing the distribution according to pre-determined percentages, the problem of making use of

different raters with different scales is avoided.

Limitations of Forced Distribution

The limitation of using this method in salary administration, however, is that it may lead low morale, low

productivity and high absenteeism.

Employees who feel that they are productive, but find themselves in lower grade(than expected) feel

frustrated and exhibit over a period of time reluctance to work.

Critical Incident techniques


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Under this method, the manager prepares lists of statements of very effective and ineffective behaviour

of an employee. These critical incidents or events represent the outstanding or poor behaviour of

employees or the job. The manager maintains logs of each employee, whereby he periodically records

critical incidents of the workers behaviour. At the end of the rating period, these recorded critical

incidents are used in the evaluation of the workers performance. Example of a good critical incident of

a Customer Relations Officer is : March 12 - The Officer patiently attended to a customers complaint. He

was very polite and prompt in attending the customers problem.

Advantages of Critical Incident techniques

This method provides an objective basis for conducting a thorough discussion of an employees

performance.

This method avoids recency bias (most recent incidents are too much emphasized)

Limitations of Critical Incident techniques

Negative incidents may be more noticeable than positive incidents.

The supervisors have a tendency to unload a series of complaints about the incidents during an annual

performance review sessions.

It results in very close supervision which may not be liked by an employee.

The recording of incidents may be a chore for the manager concerned, who may be too busy or may

forget to do it.

Checklists and Weighted Checklists

In this system, a large number of statements that describe a specific job are given. Each statement has a

weight or scale value attached to it. While rating an employee the supervisor checks all those

statements that most closely describe the behaviour of the individual under assessment. The rating

sheet is then scored by averaging the weights of all the statements checked by the rater. A checklist is

constructed for each job by having persons who are quite familiar with the jobs. These statements are

then categorized by the judges and weights are assigned to the statements in accordance with the value

attached by the judges.

Advantages of Checklists and Weighted Checklists

Most frequently used method in evaluation of the employees performance.

Limitations of Checklists and Weighted Checklists


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This method is very expensive and time consuming

Rater may be biased in distinguishing the positive an

Managers commit mistakes while evaluating employees and their performance. Biases and judgment

errors of various kinds may spoil the performance appraisal process. Bias here refers to inaccurate

distortion of a measurement. These are:

First Impression (primacy effect): Raters form an overall impression about the ratee on the basis of

some particluar characteristics of the ratee identified by them. The identified qualities and features may

not provide adequate base for appraisal.

Halo Effect: The individuals performance is completely appraised on the basis of a perceived positive

quality, feature or trait. In other words this is the tendency to rate a man uniformly high or low in other

traits if he is extra-ordinarily high or low in one particular trait. If a worker has few absences, his

supervisor might give him a high rating in all other areas of work.

Horn Effect: The individuals performance is completely appraised on the basis of a negative quality or

feature perceived. This results in an overall lower rating than may be warranted. He is not formally

dressed up in the office. He may be casual at work too!.

Excessive Stiffness or Lenience: Depending upon the raters own standards, values and physical and

mental makeup at the time of appraisal, ratees may be rated very strictly or leniently. Some of the

managers are likely to take the line of least resistance and rate people high, whereas others, by nature,

believe in the tyranny of exact assessment, considering more particularly the drawbacks of the

individual and thus making the assessment excessively severe. The leniency error can render a systemineffective. If everyone is to be rated high, the system has not done anything to differentiate among the

employees.

Central Tendency: Appraisers rate all employees as average performers. That is, it is an attitude to rate

people as neither high nor low and follow the middle path. For example, a professor, with a view to play

it safe, might give a class grade near the equal to B, regardless of the differences in individual

performances.

Personal Biases: The way a supervisor feels about each of the individuals working under him - whether

he likes or dislikes them - as a tremendous effect on the rating of their performances. Personal Bias can

stem from various sources as a result of information obtained from colleagues, considerations of faith

and thinking, social and family background and so on.

Spillover Effect: The present performance is evaluated much on the basis of past performance. The

person who was a good performer in distant past is assured to be okay at present also.

Recency Effect: Rating is influenced by the most recent behaviour ignoring the commonly demonstrated


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behaviours during the entire appraisal period.

Therefore while appraising performances, all the above biases should be avoidd.

A performance appraisal is a systematic and periodic process that assesses an individual employee's job

performance and productivity in relation to certain pre-established criteria and organizational

objectives.[4][5] Other aspects of individual employees are considered as well, such as organizational

citizenship behavior, accomplishments, potential for future improvement, strengths and weaknesses,

etc.[4][6][7]

To collect PA data, there are three main methods: objective production, personnel, and judgmental

evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation

methods.[1] Historically, PA has been conducted annually (long-cycle appraisals); however, many

companies are moving towards shorter cycles (every six months, every quarter), and some have been

moving into short-cycle (weekly, bi-weekly) PA.[8][9] The interview could function as "providing

feedback to employees, counseling and developing employees, and conveying and discussing

compensation, job status, or disciplinary decisions".[8] PA is often included in performance

management systems. PA helps the subordinate answer two key questions: first, "What are your

expectations of me?" second, "How am I doing to meet your expectations?"[10]

Performance management systems are employed "to manage and align" all of an organization's

resources in order to achieve highest possible performance.[1] "How performance is managed in an

organization determines to a large extent the success or failure of the organization. Therefore,

improving PA for everyone should be among the highest priorities of contemporary organizations".[11]

Some applications of PA are compensation, performance improvement, promotions, termination, test

validation, and more.[12] While there are many potential benefits of PA, there are also some potentialdrawbacks. For example, PA can help facilitate management-employee communication; however, PA

may result in legal issues if not executed appropriately, as many employees tend to be unsatisfied with

the PA process.[1][13][14] PAs created in and determined as useful in the United States are not

necessarily able to be transferable cross-culturally.[15]

Applications of results[edit]

A central reason for the utilization of performance appraisals (PAs) is performance improvement

("initially at the level of the individual employee, and ultimately at the level of the organization").[12]

Other fundamental reasons include "as a basis for employment decisions (e.g. promotions, terminations,

transfers), as criteria in research (e.g. test validation), to aid with communication (e.g. allowingemployees to know how they are doing and organizational expectations), to establish personal

objectives for training" programs, for transmission of objective feedback for personal development, "as

a means of documentation to aid in keeping track of decisions and legal requirements"[12] and in wage

and salary administration.[1] Additionally, PAs can aid in the formulation of job criteria and selection of

individuals "who are best suited to perform the required organizational tasks".[4] A PA can be part of

guiding and monitoring employee career development.[16] PAs can also be used to aid in work


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motivation through the use of reward systems.[4]

Potential benefits[edit]

There are a number of potential benefits of organizational performance management conducting formal

performance appraisals (PAs). There has been a general consensus in the belief that PAs lead to positive

implications of organizations.[17] Furthermore, PAs can benefit an organizations effectiveness.[16] One

way is PAs can often lead to giving individual workers feedback about their job performance.[13] From

this may spawn several potential benefits such as the individual workers becoming more productive.[18]

Other potential benefits include:

Facilitation of communication: communication in organizations is considered an essential function of

worker motivation.[13] It has been proposed that feedback from PAs aid in minimizing employees

perceptions of uncertainty.[16] Fundamentally, feedback and management-employee communication

can serve as a guide in job performance.[13]

Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues may

distract employees from their work, and trust issues may be among these distracting factors.[19] Such

factors that consume psychological energy can lower job performance and cause workers to lose sight of

organizational goals.[13] Properly constructed and utilized PAs have the ability to lower distracting

factors and encourage trust within the organization.[20]

Goal setting and desired performance reinforcement: organizations find it efficient to match individual

workers goals and performance with organizational goals.[13] PAs provide room for discussion in the

collaboration of these individual and organizational goals.[21] Collaboration can also be advantageous

by resulting in employee acceptance and satisfaction of appraisal results.[22]

Performance improvement: well constructed PAs can be valuable tools for communication with

employees as pertaining to how their job performance stands with organizational expectations.[16] "At

the organizational level, numerous studies have reported positive relationships between human

resource management (HRM) practices"[13] and performance improvement at both the individual and

organizational levels.

Determination of training needs: Employee training and development are crucial components in

helping an organization achieve strategic initiatives.[13][23] It has been argued that for PAs to truly be

effective, post-appraisal opportunities for training and development in problem areas, as determined by

the appraisal, must be offered.[24] PAs can especially be instrumental for identifying training needs ofnew employees.[7] Finally, PAs can help in the establishment and supervision of employees career

goals.[16]

Potential complications[edit]

Despite all the potential advantages of formal performance appraisals (PAs), there are also potential

drawbacks. It has been noted that determining the relationship between individual job performance and


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organizational performance can be a difficult task.[23] Generally, there are two overarching problems

from which several complications spawn. One of the problems with formal PAs is there can be

detrimental effects to the organization(s) involved if the appraisals are not used appropriately. The

second problem with formal PAs is they can be ineffective if the PA system does not correspond with

the organizational culture and system.[13]

Complications stemming from these are:

Detrimental to quality improvement: it has been proposed that the use of PA systems in organizations

adversely affect organizations pursuits of quality performance.[25] It is believed by some scholars and

practitioners that the use of PAs is more than unnecessary if there is total quality management.[21]

Subjective evaluations: Traditional performance appraisals are often based upon a manager's or

supervisor's perceptions of an employee's performance and employees are evaluated subjectively rather

than objectively. Therefore the review may be influenced by many non-performance factors such as

employee 'likeability', personal prejudices, ease of management, and/or previous mistakes or successes.

Reviews should instead be based on data-supported, measurable behaviors and results within the

performers control.[26]

Negative perceptions: "Quite often, individuals have negative perceptions of PAs".[17] Receiving and/or

the anticipation of receiving a PA can be uncomfortable and distressful[16] and potentially cause

"tension between supervisors and subordinates".[18] If the person being appraised does not trust their

employer, appraiser or believe that they will benefit from the process it may become a "tick box"

exercise.[27]

Errors: Performance appraisals should provide accurate and relevant ratings of an employees

performance as compared to pre-established criteria/goals (i.e. organizational expectations).[28]Nevertheless, supervisors will sometimes rate employees more favorably than that of their true

performance in order to please the employees and avoid conflict.[13] "Inflated ratings are a common

malady associated with formal" PA.[29]

Legal issues: when PAs are not carried out appropriately, legal issues could result that place the

organization at risk.[18] PAs are used in organizational disciplinary programs[16] as well as for

promotional decisions within the organization.[13] The improper application and utilization of PAs can

affect employees negatively and lead to legal action against the organization.

Performance goals: performance goals and PA systems are often used in association. Negative outcomes

concerning the organizations can result when goals are overly challenging or overemphasized to theextent of affecting ethics, legal requirements, or quality.[30] Moreover, challenging performance goals

can impede an employees abilities to acquire necessary knowledge and skills.[19] Especially in the early

stages of training, it would be more beneficial to instruct employees on outcome goals than on

performance goals.[13]

Derail merit pay or performance-based pay: some researchers contend that the deficit in merit pay and


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performance-based pay is linked to the fundamental issues stemming from PA systems.[24]

Improvements[edit]

Although performance appraisals can be so easily biased, there are certain steps that can be taken to

improve the evaluations and reduce the margin of errors through the following:

Training - Creating an awareness and acceptance in the people conducting the appraisals that within a

group of workers, they will find a wide range in difference of skills and abilities.

Providing Feedback to Raters - Trained raters provide managers who evaluated their subordinates with

feedback, including information on ratings from other managers. This reduces leniency errors.

Subordinate Participation - By allowing employee participation in the evaluation process, there is

employee-supervisor reciprocity in the discussion for any discrepancies between self ratings and

supervisor ratings, thus, increasing job satisfaction and motivation.[31]

Opposition[edit]

Not everyone is in favor of formal performance appraisal systems. Many employees, especially those

most affected by such ratings are not very enthusiastic about them. There are many critics of these

appraisals including labor unions and managers.

Labor Unions

Labor unions represent 11% (7% in the private sector) of the work force in the United States. In some

cases they may require that seniority be taken as one of the main criteria for promotion. However,

length of job experience may not always be a reliable indication of the ability to perform a higher level

job. That is why some employers give senior people the first opportunity for promotion, but the

employer may seek to further qualify the employee for that promotion because of their abilities (not

solely because of length of service). Performance appraisals may provide a basis for assessment of

employee merit as a component of these decisions.[32][33][34]

Managers

Managers who have had unsatisfactory experiences with inadequate or poorly designed appraisal

programs may be skeptical about their usefulness.

Some managers may not like to play the role of a judge and be responsible for the future of their

subordinates.

They may be uncomfortable about providing negative feedback to the employees.

This tendency can lead them to inflate their assessments of the workers job performance, giving higher

ratings than deserved.

Conduct[edit]


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Human resource management (HRM) conducts performance management. Performance management

systems consist of the activities and/or processes embraced by an organization in anticipation of

improving employee performance, and therefore, organizational performance.[35] Consequently,

performance management is conducted at the organizational level and the individual level. At the

organizational level, performance management oversees organizational performance and compares

present performance with organizational performance goals.[24] The achievement of these

organizational performance goals depends on the performance of the individual organizational

members.[24] Therefore, measuring individual employee performance can prove to be a valuable

performance management process for the purposes of HRM and for the organization.[24] Many

researchers would argue that "performance appraisal is one of the most important processes in Human

Resource Management".[14]

The performance management process begins with leadership within the organization creating a

performance management policy.[24] Primarily, management governs performance by influencing

employee performance input (e.g. training programs) and by providing feedback via output (i.e.

performance assessment and appraisal).[36] "The ultimate objective of a performance managementprocess is to align individual performance with organizational performance".[37] A very common and

central process of performance management systems is performance appraisal (PA).[24] The PA process

should be able to inform employees about the "organization's goals, priorities, and expectations and

how well they are contributing to them".[37]

When they are conducted[edit]

Performance appraisals (PAs) are conducted at least annually,[38] and annual employee performance

reviews appear to be the standard in most American organizations.[8] However, "it has been

acknowledged that appraisals conducted more frequently (more than once a year) may have positive

implications for both the organization and employee."[13] It is suggested that regular performance

feedback provided to employees may quell any unexpected and/or surprising feedback to year-end

discussions.[14] In a recent research study concerning the timeliness of PAs, "one of the respondents

even suggested that the performance review should be done formally and more frequently, perhaps

once a month, and recorded twice a year."[14]

Other researchers propose that the purpose of PAs and the frequency of their feedback are contingent

upon the nature of the job and characteristics of the employee.[39] For example, employees of routine

jobs where performance maintenance is the goal would benefit sufficiently from annual PA feedback.

On the other hand, employees of more discretionary and non-routine jobs, where goal-setting is

appropriate and there is room for development, would benefit from more frequent PA feedback. Nonformal performance appraisals may be done more often, to prevent the element of surprise from the

formal appraisal.[8][39][40]

Methods of collecting data[edit]

There are three main methods used to collect performance appraisal (PA) data: objective production,

personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a


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large variety of evaluation methods.[6]

Objective production[edit]

The objective production method consists of direct, but limited, measures such as sales figures,

production numbers, the electronic performance monitoring of data entry workers, etc.[6] The

measures used to appraise performance would depend on the job and its duties. Although these

measures deal with unambiguous criteria, they are usually incomplete because of criterion

contamination and criterion deficiency. Criterion contamination refers to the part of the actual criteria

that is unrelated to the conceptual criteria.[6] In other words, the variability in performance can be due

to factors outside of the employees control. Criterion deficiency refers to the part of the conceptual

criteria that is not measured by the actual criteria.[6] In other words, the quantity of production does

not necessarily indicate the quality of the products. Both types of criterion inadequacies result in

reduced validity of the measure.[6] Regardless of the fact that objective production data is not a

complete reflection upon job performance, such data is relevant to job performance.

Happy-productive worker hypothesis[edit]

The happy-productive worker hypothesis states that the happiest workers are the most productive

performers, and the most productive performers are the happiest workers.[41] Yet, after decades of

research, the relationship between job satisfaction and job performance produces only a weak positive

correlation. Published in 2001 by Psychological Bulletin, a meta-analysis of 312 research studies

produced an uncorrected correlation of 0.18.[42] This correlation is much weaker than what the

happy-productive worker hypothesis would predict.

Personnel[edit]

The personnel method is the recording of withdrawal behaviors (i.e. absenteeism, accidents). Most

organizations consider unexcused absences to be indicators of poor job performance, even with all

other factors being equal;[41] however, this is subject to criterion deficiency. The quantity of an

employees absences does not reflect how dedicated he/she may be to the job and its duties.Especially

for blue-collar jobs, accidents can often be a useful indicator of poor job performance,[6] but this is also

subject to criterion contamination because situational factors also contribute to accidents. Once again,

both types of criterion inadequacies result in reduced validity of the measure.[6] Although excessive

absenteeism and/or accidents often indicate poor job performance rather than good performance, such

personnel data is not a comprehensive reflection of an employees performance.[6]

Judgmental evaluation[edit]

Judgmental evaluation appears to be a collection of methods, and as such, could be considered a

methodology. A common approach to obtaining PAs is by means of raters.[1] Because the raters are

human, some error will always be present in the data. The most common types of error are leniency

errors, central tendency errors, and errors resulting from the halo effect.[1] Halo effect is characterized

by the tendency to rate a person who is exceptionally strong in one area higher than deserved in other


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areas. It is the opposite of the Horns effect, where a person is rated as lower than deserved in other

areas due to an extreme deficiency in a single discipline.[43] These errors arise predominantly from

social cognition and the theory in that how we judge and evaluate other individuals in various contexts

is associated with how we "acquire, process, and categorize information".[1]

An essential piece of this method is rater training. Rater training is the "process of educating raters tomake more accurate assessments of performance, typically achieved by reducing the frequency of halo,

leniency, and central-tendency errors".[1] Rater training also helps the raters "develop a common frame

of reference for evaluation" of individual performance.[44] Many researchers and survey respondents

support the ambition of effectual rater training.[14] However, it is noted that such training is expensive,

time consuming, and only truly functional for behavioral assessments.[14]

Another piece to keep in mind is the effects of rater motivation on judgmental evaluations. It is not

uncommon for rating inflation to occur due to rater motivation (i.e. "organizationally induced pressures

that compel raters to evaluate ratees positively").[1] Typically, raters are motivated to give higher

ratings because of the lack of organizational sanction concerning accurate/inaccurate appraisals, the

rater's desire to guarantee promotions, salary increases, etc., the rater's inclination to avoid negative

reactions from subordinates, and the observation that higher ratings of the ratees reflect favorably upon

the rater.[1]

The main methods used in judgmental performance appraisal are:[1]

Graphic Rating Scale: graphic rating scales (see scale (social sciences)) are the most commonly used

system in PA.[1] On several different factors, subordinates are judged on 'how much' of that factor or

trait they possess. Typically, the raters use a 5- or 7-point scale; however, there are as many as 20-point

scales.[1]

Employee-Comparison Methods: rather than subordinates being judged against pre-established criteria,

they are compared with one another. This method eliminates central tendency and leniency errors but

still allows for halo effect errors to occur.[1] The rank-order method has raters ranking subordinates

from "best" to "worst", but how truly good or bad one is on a performance dimension would be

unknown.[1] The paired-comparison method requires the rater to select the two "best" subordinates

out of a group on each dimension then rank individuals according to the number of times each

subordinate was selected as one of the "best".[1] The forced-distribution method is good for large

groups of ratees. The raters evaluate each subordinate on one or more dimensions and then place (or

"force-fit", if you will) each subordinate in a 5 to 7 category normal distribution.[1] The method of

top-grading can be applied to the forced distribution method.[45] This method identifies the 10% lowestperforming subordinates, as according to the forced distribution, and dismisses them leaving the 90%

higher performing subordinates.

Behavioral Checklists and Scales: behaviors are more definite than traits. The critical incidents method

(or critical incident technique) concerns "specific behaviors indicative of good or bad job

performance".[1] Supervisors record behaviors of what they judge to be job performance relevant, and

they keep a running tally of good and bad behaviors. A discussion on performance may then follow. The


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behaviorally anchored rating scales (BARS) combine the critical incidents method with rating scale

methods by rating performance on a scale but with the scale points being anchored by behavioral

incidents.[1] Note that BARS are job specific. In the behavioral observation scale (BOS) approach to

performance appraisal, employees are also evaluated in the terms of critical incidents. In that respect, it

is similar to BARS. However, the BOS appraisal rate subordinates on the frequency of the critical

incidents as they are observed to occur over a given period. The ratings are assigned on a five-point

scale. The behavioral incidents for the rating scale are developed in the same way as for BARS through

identification by supervisors or other subject matter experts. Similarly, BOS techniques meet equal

employment opportunity because they are related to actual behavior required for successful job

performance.[46]

Peer and self assessments[edit]

While assessment can be performed along reporting relationships (usually top-down), net assessment

can include peer and self-assessment. Peer assessment is when assessment is performed by colleagues

along both horizontal (similar function) and vertical (different function) relationship. Self-assessments

are when individuals evaluate themselves.[1] There are three common methods of peer assessments.

Peer nomination involves each group member nominating who he/she believes to be the "best" on a

certain dimension of performance. Peer ratings has each group member rate each other on a set of

performance dimensions. Peer ranking requires each group member rank all fellow members from

"best" to "worst" on one or more dimensions of performance.

Self-assessments: for self-assessments, individuals assess and evaluate their own behavior and job

performance.[1]

Peer assessments: members of a group evaluate and appraise the performance of their fellow group

members.[1] There it is common for a graphic rating scale to be used for self-assessments. Positiveleniency tends to be a problem with self-assessments.[6] Peer assessments from multiple members of a

group are often called crowd-based performance reviews, and solve many problems with peer

assessments from only one member.[47]

360-degree feedback: 360-degree feedback is multiple evaluations of employees which often include

assessments from superior(s), peers, and ones self.[1]

Negotiated performance appraisal: The negotiated performance appraisal (NPA) is an emerging

approach for improving communication between supervisors and subordinates and for increasing

employee productivity, and may also be adapted to an alternate mediation model for

supervisor-subordinate conflicts. A facilitator meets separately with the supervisor and with the

subordinate to prepare three lists. What employees do well, where the employee has improved in

recently, and areas where the employee still needs to improve. Because the subordinate will present his

or her lists first during the joint session, this reduces defensive behaviors. Furthermore, the subordinate

comes to the joint session not only prepared to share areas of needed improvement, but also brings

concrete ideas as to how these improvements can be made. The NPA also focuses very strongly on what

employees are doing well, and involves a minimum of twenty minutes of praise when discussing what


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the employee does well. The role of the facilitator is that of a coach in the pre-caucuses, and in the joint

sessions the supervisor and subordinate mostly speak to each other with little facilitator

interference.[48][49]

In general, optimal PA process involves a combination of multiple assessment modalities. One common

recommendation is that assessment flows from self-assessment, to peer-assessment, to managementassessment - in that order. Starting with self-assessment facilitates avoidance of conflict. Peer feedback

ensures peer accountability, which may yield better results than accountability to management.

Management assessment comes last for need of recognition by authority and avoidance of conflict in

case of disagreements. It is generally recommended that PA is done in shorter cycles to avoid

high-stakes discussions, as is usually the case in long-cycle appraisals.[citation needed]

Normalization of performance appraisal[edit]

Normalization is the process of review of the ratings each group as a whole to ensure the ratings are as

per the recommended norms and the percentages are generally decided by management.[citation

needed]

Organizational citizenship behavior[edit]

Main article: Organizational citizenship behavior

Also referred to as contextual behavior, prosocial behavior, and extra-role behavior, organizational

citizenship behavior (OCB) consists of employee behavior that contributes to the welfare of the

organization but is beyond the scope of the employees job duties.[6] These extra-role behaviors may

help or hinder the attainment of organizational goals. Research supports five dimensions of OCB:

altruism, conscientiousness, courtesy, sportsmanship, and civic virtue.[50] Researchers have found that

the OCB dimensions of altruism and civic virtue can have just as much of an impact on managers

subjective evaluations of employees performances as employees objective productivity levels.[51] The

degree to which OCB can influence judgments of job performance is relatively high. Controversy exists

as to whether OCB should be formally considered as a part of performance appraisal (PA).

Interviews[edit]

The performance appraisal (PA) interview is typically the final step of the appraisal process.[1] The

interview is held between the subordinate and supervisor. The PA interview can be considered of great

significance to an organizations PA system.[8] It is most advantageous when both the superior and

subordinate participate in the interview discussion and establish goals together.[1] Three factorsconsistently contribute to effective PA interviews: the supervisors knowledge of the subordinates job

and performance in it, the supervisors support of the subordinate, and a welcoming of the

subordinates participation.[8]

Employee reactions[edit]

Numerous researchers have reported that many employees are not satisfied with their performance


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appraisal (PA) systems.[14] Studies have shown that subjectivity as well as appraiser bias is often a

problem perceived by as many as half of employees.[14] Appraiser bias, however, appears to be

perceived as more of a problem in government and public sector organizations.[14] Also, according to

some studies, employees wished to see changes in the PA system by making "the system more

objective, improving the feedback process, and increasing the frequency of review."[14] In light of

traditional PA operation defects, "organizations are now increasingly incorporating practices that may

improve the system. These changes are particularly concerned with areas such as elimination of

subjectivity and bias, training of appraisers, improvement of the feedback process and the performance

review discussion."[14]

According to a meta-analysis of 27 field studies, general employee participation in his/her own appraisal

process was positively correlated with employee reactions to the PA system.[22] More specifically,

employee participation in the appraisal process was most strongly related to employee satisfaction with

the PA system.[22] Concerning the reliability of employee reaction measures, researchers have found

employee reaction scales to be sound with few concerns through using a confirmatory factor analysis

that is representative of employee reaction scales.[52]

Researchers suggest that the study of employees' reactions to PA is important because of two main

reasons: employee reactions symbolizes a criterion of interest to practitioners of PAs and employee

reactions have been associated through theory to determinants of appraisal acceptance and

success.[52] Researchers translate these reasons into the context of the scientist-practitioner gap or the

"lack of alignment between research and practice."[52]

Schultz & Schultz notes that opposition to performance appraisals generally don't receive positive

ratings from anyone involved. "So employees that will be directly affected by the Performance

Appraisals are less than enthusiastic about participating in them". When an employee knows that their

work performance has been less than perfect its nerve-racking to be evaluated. Most workers just don't

appreciate constructive criticism or any criticism. Employees tend to be hostile knowing they could be

given bad news on their performance.[53]

Legal implications[edit]

There are federal laws addressing fair employment practices, and this also concerns performance

appraisal (PA). Discrimination can occur within predictions of performance and evaluations of job

behaviors.[1] The revision of many court cases has revealed the involvement of alleged discrimination

which was often linked to the assessment of the employees job performance.[54] Some of the laws

which protect individuals against discrimination are "the Title VII of the Civil Rights Act of 1964, the CivilRights Act of 1991, the Age Discrimination in Employment Act (ADEA), and the Americans with

Disabilities Act (ADA)."[1] Lawsuits may also results from charges of an employers negligence,

defamation, and/or misrepresentation.[1] A few appraisal criteria to keep in mind for a legally sound PA

is to keep the content of the appraisal objective, job-related, behavior-based, within the control of the

ratee, and related to specific functions rather than a global assessment.[54] Some appraisal procedure

suggestions for a legally sound PA is to standardize operations, communicate formally with employees,


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provide information of performance deficits and give opportunities to employees to correct those

deficits, give employees access to appraisal results, provide written instructions for the training of

raters, and use multiple, diverse and unbiased raters.[54] These are valuable but not exhaustive lists of

recommendations for PAs. The Employment Opportunity Commission (EEOC) guidelines apply to any

selection procedure that is used for making employment decisions, not only for hiring, but also for

promotion, demotion, transfer, layoff, discharge, or early retirement. Therefore, employment appraisal

procedures must be validated like tests or any other selection device. Employers who base their

personnel decisions on the results of a well-designed performance review program that includes formal

appraisal interviews are much more likely to be successful in defending themselves against claims of

discrimination.[55]

Cross-cultural implications[edit]

Performance appraisal (PA) systems, and the premises of which they were based, that have been

formed and regarded as effective in the United States may not have the transferability for effectual

utilization in other countries or cultures, and vice versa.[15] Performance "appraisal is thought to be

deeply rooted in the norms, values, and beliefs of a society".[56] "Appraisal reflects attitudes towards

motivation and performance (self) and relationships (e.g. peers, subordinates, supervisors,

organization), all of which vary from one country to the next".[57] Therefore, appraisal should be in

conjunction with cultural norms, values, and beliefs in order to be operative.[58] The deep-seated

norms, values and beliefs in different cultures affect employee motivation and perception of

organizational equity and justice. In effect, a PA system created and considered effectual in one country

may not be an appropriate assessment in another cultural region.[57]

For example, some countries and cultures value the trait of assertiveness and personal accomplishment

while others instead place more merit on cooperation and interpersonal connection. Countries scoring

high on assertiveness consider PA to be a way of assuring equity among employees so that higher

performing employees receive greater rewards or higher salaries.[57] Countries scoring low on

assertiveness but higher in interpersonal relations may not like the social separation and pay inequity of

higher/lower performing employees; employees from this more cooperative rather than individualistic

culture place more concern on interpersonal relationships with other employees rather than on

individual interests.[57] High assertive countries value performance feedback for self-management and

effectiveness purposes while countries low in assertiveness view performance feedback as "threatening

and obtrusive".[57][59] In this case, the PA of the high assertive countries would likely not be beneficial

for countries scoring lower in assertiveness to employ. However, countries scoring lower in

assertiveness could employ PA for purposes of improving long-term communication development within

the organization such as clarifying job objectives, guide training and development plans, and lessen the

gap between job performance and organizational expectations.[60]

Developments in information technology[edit]

Computers have been playing an increasing role in PA for some time (Sulsky & Keown, 1998). There are

two main aspects to this. The first is in relation to the electronic monitoring of performance, which


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affords the ability to record a huge amount of data on multiple dimensions of work performance

(Stanton, 2000). Not only does it facilitate a more continuous and detailed collection of performance

data in some jobs, e.g. call centres, but it has the capacity to do so in a non-obvious, covert manner. The

second aspect is in mediating the feedback process, by recording and aggregating performance ratings

and written observations and making the information available on-line; many software packages are

available for this. The use of IT in these ways undoubtedly helps in making the appraisal process more

manageable, especially where multiple rating sources are involved, but it also raises many questions

about appraisees' reactions and possible effects on PA outcomes. Mostly, the evidence so far is

positive.[46]

Rater errors[edit]

Mistakes made by raters is a major source of problems in performance appraisal. There is no simple way

to completely eliminate these errors, but making raters aware of them through training is helpful. Rater

errors are based on the feelings and it has consequences at the time of appraisal.[61][62]

Varying standards

Problem: When a manager appraises (evaluates) his or her employees and the manager uses different

standards and expectations for employees who are performing similar jobs.[citation needed]

Example: A professor does not grade the exams of all students in the same standards, sometimes it

depends on the affection that the professor has towards others. This affection will make professor give

students higher or lower grades.

Solution: The rater must use the same standards and weights for every employee. The manager should

be able to show coherent arguments in order to explain the difference. Therefore, it would be easier to

know if it is done, because the employee has done a good performance, or if it because the manager

perception is distorted.

Recency effects

Problem: When the manager, according only to the last performance, that has been quite good, rates

higher.

Example: When a professor gives the course grade based just in the performance of the student, only in

the last week.

Solution: In order to avoid that, the manager should use some methods as documenting both in positiveand negative aspects.

Primacy effects

Problem: When the person who evaluates gives more weight according to information the manager has

received first.


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Example: It could be a silly example. When we are watching a TV quiz and conquest have to remember a

list of things, they only remember the first ones. This is apply also in remembering human performance.

Solution: performance. When manager has to take some decision, is better not to do it according to

what he or she remembers. It is better to based on real actions that has happened and are recorded.

Central Tendency

Problem: When the manager evaluate every employees within a narrow range, as the average because

he or she is dismissing the differences in the performance that employees have done.

Example: When a professor because the average of the class tends to grade harder. Therefore, if the

performance of the class average is quite high, the professor will evaluate them more high. In the

contrary, if the average of the class is lower, he or she would appraise lower.

Leniency

Problem: Rating of all employees are at the high end of the scale.

Example: When the professor tends to grade harder, because the average of the class.

Strictness

Problem: When a manager uses only the lower part of the scale to rate employees.

Example: When the professor tends to grade lower, because the average of the class.

Solution: try to focus more on the individual performance of every employee regardless the average

results.

Rater Bias[63]

Problem: Raters when the manager rates according to his or her values and prejudices which at the

same time distort (distorsionar) the rating. Those differentiations can be made due to the ethnic group,

gender, age, religion, sex, appearance...

Example: Sometimes happen that a manager treats someone different, because he or she thinks that

the employee is homosexual.

Solution: If then, the examination is done by higher-level managers, this kind of appraising can be

corrected, because they are supposed to be more partial.

Halo effect

Problem: When a manager rates an employee high on all items because of one characteristic that he or

she likes.

Example: If a worker has few absence but the supervisor has a good relationship with that employee,


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the supervisor might give to the employee a high rating in all other areas of work, in order to balance

the rating. Sometimes it happens due to the emotional dependability based on the good relationship

they have.

Solution: Training raters to recognize the problem and differentiating the person with the performance

they do.

Horns effect

Problem: This is the opposite to the Halo effect and Horns effect occurs when a manager rates an

employee low on all items because of one characteristic that he or she dislikes.

Example: If a worker does a good performance and in some resting times he or she loves telling jokes,

but his or her supervisor hates jokes, the supervisor might give to the employee a lower rating in all

other areas of work, because they do not have that conexion. Sometimes it happens when they do not

have a close relationship and manager do not like the person her/him-self.

Solution: Is the same as in the Halo Effect. Training raters to recognize the problem and differentiating

the person with the performance they do.

Contrast

Problem: The tendency to rate people relative to other people rather than to the individual performance

he or her is doing.

Example: At school, if you are sat down where all the chatty people are and you are silent but you do

not pay attention and you do not do your homework, because you are drawing; when teacher gets

angry with the group, you might be excluded of the bad behavior they have just because you are silent;

but not because you are doing a good performance. Therefore, according to the group, you are not that

chatty, but you are either doing the proper performance. However the rater will only get the idea that

your behavior is not as bad as other, thus, you will be rate higher.

Solution: The rating should reflect the task requirement performance, not according to other people

attitude.

Similar-to-Me / Different-from-Me

Problem: Sometimes, ratters are influenced by some of the characteristics that people show. Depending

if those characteristics are similar or different to ratters' one, they would be evaluated differently.

Example: A manager with higher education degree might give subordinates with higher education

degree a higher appraisal than those with only bachelors degrees.

Solution: Try to focus on the performance the employee is doing regardless the common characteristic

that you have

Sampling


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Problem: When the rater evaluates the

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