Human Resource Management - Performance Appraisal

Topics: Performance appraisal, Human resource management, Performance management Pages: 21 (4345 words) Published: July 25, 2013

Word count: 2,956

Cover page i
Table of content ii
Executive summary iii
1. Introduction 1
2. The literature review of performance appraisal methods 1 2.1 Graphic rating scales 1
2.2 Management by objectives (MBO) 2
2.3 Critical incidents 4
2.4 Ranking 5
3. Applications to XXX Company and ABC clubhouse 6
4. Recommendation 8
5. Conclusion 9
References 10
Appendix 12
Appendix A: Graphical rating scale form 12
Appendix B: MBO appraisal form 17
Appendix C: Critical incident reporting form 19
Appendix D: Ranking appraisal form 21

In this report, it has a particular interest in performance appraisal methods regarding graphic rating scale, MBO, ranking and critical incidents. Using the evidences of XXX Construction Company and ABC clubhouse, it derives strong and weak points of these appraisal methods. Overview, both companies implement single-source of rater, viz., supervisors to evaluate their employees. Therefore, both deal with hinders of personal biases, previous performance appraisal’s results or prejudices. In XXX Company, graphic rating scale brings benefits of convenience, simplicity and fast completion. The company has adopted this method to evaluate many aspects of its operation and management. However, this method generates problems, especially the low level of reliability, ambiguous definition of evaluations and central tendency effect. Furthermore, XXX Company has strengths in the ability to achieve strategic objectives via MBO technique. It helps the company ensure operative goals to align with overall organizational missions. On the other hand, the company probably finds it difficult and time-consuming in setting objectives and it is hard to change established objectives. In contrast, ABC clubhouse uses critical incidents that allow the company to examine employee’s performance and behaviors for long time. Thus, the company does not face with recent performance effect. This appraisal tool also helps increase productivity via temporary instructions during supervisors usually spend time on the floors to observe their subordinates. Because of this, employees might feel uncomfortable at work as they are over-monitored. Sometimes supervisors might forget to record favorable or unfavorable employee’s behaviors. In addition, the appraisal method might also induce unethical competition or decreased morale at work due to ranking method. However, ranking technique forces managers to recognize best performers for rewarding or promotion, and poorest performers for punishing or demotion.

As discussed on areas of human resource management (HRM), often there is the concentration on recruiting, selecting, staffing and paying policies. However, there is still another aspect that is not less important in HRM study. Performance appraisal that belongs in performance management system is fairly considerable when it is viewed “as an overall measure of organizational effectiveness: organizational objectives are met through the effort of individual employees” (Stone, 2010). It is designed to evaluate employee’s performance, and to reward efficient employees, and to punish inefficient employees. As if employee’s performance is reviewed and improved, it will raise the overall organizational performance and efficiency. Because of the importance of performance appraisal, this report has a particular interest in studying 4 performance appraisal methods of 2 organizations. First, the XXX construction company has used graphic rating scales and MBO approaches. Second, the ABC clubhouse has adopted critical incidents and ranking techniques. Along with literature review of these methods, this report will compare and contrast strengths and weaknesses of these 2 performance appraisal systems. Finally, there is a brief recommendation to improve its effectiveness. 2. THE...

References: 2.3 Critical incidents
This is a performance appraisal method that requires managers or supervisors to keep written records of particularly favorable and unfavorable work actions during the appraisal period (Kleynhans, 2005)
2.4 Ranking
Under this appraisal method, managers will compare their subordinates’ performance, and then rank each in order from ‘best’ to ‘worst’ (Stone, 2010), Small Business, Managing Employees, “Advantages and Disadvantages Of Employee Ranking Tools”, Available from:, (Accessed on 17 Mar, 2013).
Dinesh, D. and Palmer, E. (1998), "Management By Objectives And The Balanced Scorecard: Will Rome Fall Again?", Management Decision, Vol. 36 Iss. 6; pp.363 – 369.
Drucker, P. (1979), Management: Tasks, Responsibilities, Practices. In Erik
Goel, D
Grobler, P.A. and Warnich, S. (2006), Human Resource Management in South Africa, 3rd edn, Thomson Learning, UK.
Grupta, M. (2009), Principles Of Management, PHI, New Delhi.
Kleynhans, R. (2005), Human Resource Management, 1st edn, Maskew Miller Longman Pty Ltd, South Africa.
Lloyd, K. (2009), Performance Appraisals And Phrases For Dummies, 1st edn, Wiley Publishing Inc., Canada.
Murphy, K.R. and Cleveland, J. (1995), Understanding Performance Appraisal: Social, Organizational, And Goal-Based Perspectives, 1st edn, Sage Publication Inc., USA.
Singla, R.K. (2010), Business Organization And Management, V.K. Enterprises, New Delhi.
Snell, S.A. and Bohlander, G.W. (2012), Managing Human Resources, 16th edn, Thomson South-Western, USA.
Stone, R.J. (2010), Managing Human Resources, 3rd edn, John Wiley & Sons, Milton.
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