The Western Australia Main Roads Department: Performance Appraisal Audit

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Table of Contents

Executive Summary
Introduction
Approaches to Performance Appraisal
Performance Evaluation and Ranking
Case Study Analysis; Main Roads Department of Western Australia
Conclusion
References

Executive Summary

The Western Australia Main Roads Department is obviously facing problems regarding their system of evaluating the respective performance of their workers. The human resources manager, Leon Ottobrino, is suspecting that the evaluations reaching his desk from the various supervisors are not as accurate as they should ideally be; consequently, he has asked for an audit of the process.

The first part of this audit report discusses various approaches to employee evaluation; and the various aspects and issues which may stand in the way of an effective employee evaluation regime. The final part of the report identifies the issues within the department’s workers and offers recommendations on steps that should be taken to mitigate the issue.

Introduction

Performance appraisal is the process through which the performance of an employee is evaluated for various parameters; the major ones being the quality of work delivered, the quantity of work done during the evaluation period, the amount of money the employee is costing the employer; and the amount of time the employee dedicates to executing duties in his/her work station. At the end of an evaluation period, the employer should ideally have comprehensive information about the employee that would enable him/her to make appropriate decisions regarding the future of the employee in the particular firm.

Performance evaluation was necessitated by an increase in competitive pressures both in the job market and within respective industries; as such, employers needed a form of differentiating employee performance levels, identifying poor performance and addressing it so as to gain competitive edge. A common method used in evaluating employees is the use of scalar of numerical rating systems; this is whereby managers or supervisors are required to score with the individual being evaluated against a numerical measurement or a set objective.

In an ideal situation, evaluation is done on all levels and not from top-down only. This situation, commonly referred to as 360° appraisal involves the assessment of lower cadre employees as well as the management level staff by their peers, subordinates and clients; such would offer a three-dimensional picture of the situation in the firm/institution.

The purpose of a performance appraisal

As mentioned before, performance appraisal is an important tool to any management as it allows it to view their workforce in a more detailed manner. For starters, an appraisal is useful in identifying a specific behavior and/or conduct which should either be encouraged or discontinued. By identifying such issues, the management will be able to identify the training needs of their workforce; and develop training and coaching programs for their existing and future employees.

The outcomes of an employee appraisal are crucial in developing systems of rewarding good performance through promotions, salary increments and reward. One the other hand, such would also be useful in developing evidence-based disciplinary protocols which would be crucial in shielding the management from legal repercussion or accusations of discrimination (Jui-Kuei & Chen, 2009).

Performance appraisals offer a crucial route of communication between the various levels of the firm; and offer a basis for promotions and human resource strategies.

Approaches to Performance Appraisal

Performance appraisal has come a long way; with the methods being refined each day to fit the changing markets and to suit various emerging needs and industries.

Traditional performance appraisal methods

This type of appraisal is based on quantitative tools which form the backbone of the evaluation; which are then oriented to fit into numerical measurements. This type of approach to evaluation is based on the assumption that the appraiser will make sound and objective judgment of the performance of the employee in regards to the measurement parameters included in the evaluation (Feldman, 1981). This, however, cannot be guaranteed and can be jeopardized either by lack of experience, expertise or objectivity on the side of the evaluator (Rothaus et al., 1965).

Additionally, this form of evaluation would prove ineffective with the increase in the complexity of the jobs; and the subsequent amount of information about the employee that is supposed to have been captured at the end of the evaluation. Assigning all these parameters numerical values would eventually result in an overloading of the systems and protocols.

This system also gives the employer problems in regards to making decisions regarding important issues such as compensation; such would usurp the powers of the management in making such important decisions in favor of the grading system based entirely on numbers. Additionally, such a system would result in the whole process being geared toward attaining the favorable numbers rather than providing solutions to the managers and feedback to the workforce. The overdependence of the manager on this numbers would eventually result in rigidity and lack of a personal touch in handling of management issue, thus precipitating management failure (Dipboye & Pontbriand, 1981; Brutus, 2009).

Many businesses and firms continue to use traditional approaches to evaluate their respective employee; systems which are based on traits such as cooperation. Many studies have shown that basing an evaluation on traits which are perceived solely by the evaluator results in ineffective or inaccurate evaluation. This can be attributed to two reasons. First, evaluating an employee on traits is tantamount to defining his/her character; such would make it very difficult for a manager to make any positive changes to the workforce since s/he cannot change the employee’s character. As such, the manager can change a specific behavior in an employee, such as stealing; however, if that employee is inherently dishonest, then some other behavior will crop-up to give such a person release; thus crippling productivity and reversing any gains made (Heslin et al, 2005).

Secondly, the traits used to evaluate an employee are often vague and amorphous; and prone to variable interpretation by the appraiser. As such the appraiser cannot be trusted to be completely objective during the evaluation. For example, if the numbers derived from the evaluation would be subsequently used to determine the promotions in the firm, then a manager would be inclined to give favorable numbers to his/her friends; and to those employees whom s/he has good rapport with (Feldman, 1981). On the other hand, employees who may have had a fall-out or disagreement at any one time with the evaluator would find themselves with a poor rating regardless of their actual performance at work (Kay & Meyer, 1965). Such would leave the firm wide-open to accusations of discrimination since the manager cannot back their decision with concrete evidence of the factors that precipitated (for example) the dismissal or demotion of an individual (Brutus, 2009).

Modern approaches to employee evaluation

The traditional approach has been modified in several ways to make it more effective and objective. Such new approaches include management-by-objectives; work planning, peer reviewing and 360 degrees appraisal. These methods are significantly more collaborative; offer a more detailed picture of the workforce since all levels are evaluated; and offer a significantly higher level of objectivity.

In scenarios where employees have numerous or high needs for training, development and achievement, modern method would prove more effective than the traditional methods; since they result in pinpoint information; and identifies real problems rather than simply grading people into good or bad. The collaborative nature of modern approaches allows for effective communication between various levels and departments of management; such allows for the management and the workforce to grow and develop together as they identify and solve problems in unison.

Modern approaches to evaluation commonly have provisions whereby subordinate employees evaluate their superiors. Additionally, such employee evaluations are not based solely on the opinions of the immediate superior, but also that of peers and other factors that are more objective. As such, evaluation has developed to a more humane and fair process; where the true merit of a worker can be seen; and where one can work on their strongest attributes to counterbalance their weaknesses (Brutus, 2009).

Trends in performance appraisal

Many firms wanting to engage in employee performance appraisal usually have to customize the approach to best fit their environment and situation. As such, may adopt approaches that fall in between traditional and modern methods of evaluation. Such approaches have both aspects of numerical appraisal and collaborative evaluation method; and have customized these aspects to cater for their specific and unique needs.

Key to formulating an appraisal approach is to have clear goal for what the outcome of the evaluation hopes to achieve. Many of the firms which decide to undertake a process of evaluation fail to set such goals before the onset of the process; this commonly result in disappointments as the outcomes are not sufficient enough to solve the human resource issues in the institution.

A failure to have goals can also be attributed to scenarios where an institution is forced to undertake evaluation as part of a reform or reorganization process; without proper management of the process and outcome of the evaluation, little progress may be made in such a case as many of the parties would be seeking for the outcome to favor them in one way or another (Waite & Stites-Doe, 2000). Such situations are commonly seen among government institutions which are influenced by political powers in their respective countries. While the demands made to the institutions may not be reasonable, the outcome is commonly linked to some political gain; thus unreasonable or ill-planned actions may be taken.

Performance Evaluation and Ranking

As mentioned before, performance evaluation, particularly in the private sector, is commonly induced by competitive pressures. Many firms are forced to have a lean and efficient work force in-order to remain competitive in the market; this would require a system of ranking their employees on the basis of production so as to retain the most productive ones and eliminate human liabilities. Such a process involves the charting of a bell-curve and setting of margins of performance such that marginally ranked individuals are identified and eliminated from the system.

Many managers would naturally be inclined towards a system which identifies and eliminates bottlenecks in the production-lines. However, there lies several problems in employer-ranking. First, since the system involves elimination of lower ranking employees, it is only safe to assume that accusations of unfairness and discrimination will arise. While these allegations may not necessarily be true, they may adversely affect the public image of the firm therefore harming its business. A ranking system would therefore put a manager at pains to explain the criteria used; and which must be seen to be thorough, fair and objective (Holbroook Jr. 2002).

Ranking systems can also easily inadvertently target employees from a certain socioeconomic or cultural extract resulting in a disproportionate dismissal of certain groups (for example from a certain race or region). While aspects in the appraisal may be objective, they may put certain employees at more risk than others; thus putting the firm at risk of accusations of racial, ethnic, religious, age, gender or socioeconomic discrimination (Rosen et al, 1981; DeVoe & Inyegar, 2004).

Ranking involves the comparison of the performance of an individual against the other; as such, the actual job performance thus misses the whole point of the process. On the other hand, ranking would label a certain employee as poor based solely on comparison, thus punishing a workforce that has superior levels of productivity (Zedeck & Cascio, 1982).

Ranking would also be of no purpose in a situation whereby employees with skills, experience or qualification are difficult to find in the job market. Even in a scenario where such an employee is ranked as poor, the management would be forced to keep him/her so long as a quick replacement cannot be found. On the other hand, the process of ranking and elimination may be hampered or affected by other issues such as office politics, personal interests and prejudices; as such, some of the lower ranked employees may remain in the firm while others are fired. This would definitely lead to demoralization and disillusionment among the remaining workers (Kay & Meyer, 1965).

Case Study Analysis; Main Roads Department of Western Australia

The appraisal process which the Roger undertook of his crew was not as effective as ideally it should be. Indeed, little benefit can be gained both for the department, or his crew from the outcome of the appraisal. Several problems in the whole process can be identified.

The evaluation approach and process

From the description, the evaluation involves only one angle, the supervisor grading the workers. This is a traditional method of evaluation and is prone to issues of lack of objectivity. For example, Roger penalizes a worker who only differed with him in opinion; and yet gave a known unproductive worker a favorable response. Additionally, the appraisal is based on personal traits one of them being cooperation; as mentioned before, basing an evaluation on traits may not be accurate or be of benefit to the department. The department does not also seem to have any goals for the appraisal; this is evidenced by the pressure to complete the process anyway despite more urgent issues awaiting the evaluator.

Recommendations: the evaluation approach should be modernized to make it more comprehensive and less prone to evaluators biases. Additionally, clear goals of appraisal should be set so that all parties see it as crucial to the proper functioning of the department; and thus allocate proper time and resources to it (Waite & Stites-Doe, 2000).

Personal biases and attitude

The evaluator, Roger, sees the process as “being a pain” and that he “should have to bother with them”. The evaluator takes little time to fill the forms correctly and opts to give his workers a blanket score. Additionally, he does not even complete the forms in regard to the comment of why he gave the grades. It may be safe to assume that this has been so as previous members of his crew reported different things to the human resources manager contrary to what Roger had filled in his evaluation six months earlier. Roger is thus denying himself and the department the feedback mechanism that should ideally be triggered by the appraisal outcomes; thus beating the purpose of the process.

Recommendation: the importance of the process seems not to have registered well with the department staff; as such, they don’t ‘own’ it. Proper planning of the process should be done and should involve all cadres of workers. Additionally, modernization of the approach to make it more collaborative is crucial. Indeed, if Roger would have been evaluated by another person, maybe this problem would have been identified a long while back.

Conclusion

It may be convenient to put all the blame on a single person, in this case Roger Russell, the problem is however in the system as a whole. The evaluation approach is flawed, the timing of the process is wrong and the attitude of the evaluator does not favor feedback which is paramount for the process to be deemed successful. Consequently, the process has not been able to identify human resource problems in the system; which have persisted unchecked. Changing one component of the system will thus not be useful; an overhaul is necessary.

References

Brutus S. (2009). Words versus numbers: A theoretical exploration of giving and receiving narrative comments in performance appraisal. Human Resource Management Review, In Press. 2009

DeVoe S. E., Sheena S. Iyengar (2004) Managers’ theories of subordinates: A cross-cultural examination of manager perceptions of motivation and appraisal of performance. Organizational Behavior and Human Decision Processes, Volume 93, Issue 1, Pages 47-61

Dipboye R. L., Rene de Pontbriand (1981) Correlates of employee reactions to performance appraisals and appraisal systems. Journal of Applied Psychology, Volume 66, Issue 2, Pages 248-251

Heslin P.A., Gary P. Latham, Don VandeWalle (2005). The Effect of Implicit Person Theory on Performance Appraisals. Journal of Applied Psychology, Volume 90, Issue 5, Pages 842-856

Holbrook Jr. R.L. (2002). Contact points and flash points: Conceptualizing the use of justice mechanisms in the performance appraisal interview. Human Resource Management Review, Volume 12, Issue 1, Pages 101-123

Feldman J.M. (1981). Beyond attribution theory: Cognitive processes in performance appraisal. Journal of Applied Psychology, Volume 66, Issue 2,Pages 127-148

Jui-Kuei Chen, I.-Shuo Chen (2009): A Pro-performance appraisal system for the university. Expert Systems with Applications, In Press.

Kay E., Herbert H. Meyer (1965). Effects of threat in a performance appraisal interview. Journal of Applied Psychology, Volume 49, Issue 5, Pages 311-317

Rosen B., Thomas H. Jerdee, Robert O. Lunn (1981). Effects of performance appraisal format, age, and performance level on retirement decisions. Journal of Applied Psychology, Volume 66, Issue 4, Pages 515-519

Rothaus P., Robert B. Morton, Philip G. Hanson (1965). Performance appraisal and psychological distance. Journal of Applied Psychology, Volume 49, Issue 1, Pages 48-54

Waite M.L., Susan Stites-Doe (2000).Removing performance appraisal and merit pay in the name of quality: an empirical study of employees’ reactions. Journal of Quality Management, Volume 5, Issue 2, 3rd Quarter, Pages 187-206

Zedeck S., Wayne F. Cascio (1982). Performance appraisal decisions as a function of rater training and purpose of the appraisal. Journal of Applied Psychology, Volume 67, Issue 6,Pages 752-758

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