The function of performance appraisal is to provide feedback on performance of employees during evaluation. Feedback is valuable to both the employees being appraised as well as the management of the company. Some of the most critical resolutions of an organization, including transfers, salary reviews, firing of employees and promotions, depend on the way the employees perform in their jobs. Organizational resources allocations are also based on performance appraisal.
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As such, an ideal assessment format enhances organizational development, analysis and flow of communication. This report discusses three performance appraisal formats, including, self-assessment, 360-degree feedback and management by objective. Also, discussed are the advantages and disadvantages of these performance appraisal formats.
The 360-degree feedback method
The 360-degree feedback provides a very ideal way of assessing the employee’s strengths and weaknesses. Its main aim is to help the employees improve on their performance. According to Edwards and Ewin, feedback from multiple and respected sources such as superiors, peers and subordinates tend to have more impact on people than a single source (215).
Many employees view performance information, from this approach, as fair, credible, accurate and motivating. Employees are likely to be motivated to change their habits to reach the standards of their co-workers than comply with what is imposed by their seniors (Edwards and Ewin 216).
In industrial psychology and Human Resources, 360-degree feedback is a feedback system that originates from the employee’s closest workmates. It is sometimes referred to as multisource assessment, multisource feedback or multi-rater feedback. This feedback relies on superiors, peers and subordinates, who help in issuing direct information regarding the employees’ performance.
In some situations, this can be concerned with feedback from vendors, customer and other parties that are involved in an organization. A 360-degree response is different from an upward response, which involves strict use of reports, or the conventional performance assessment where only the managers and supervisors are charged with assessment of employees’ performance.
The supervisor-only performance appraisal relies on the supervisor’s judgment and, therefore, it is subjective. They consume a lot of time, and they are disliked by those giving and receiving them. They are done once a year and they assess the employee’s performance and give the management the information it needs when promoting or increasing payment for the hardworking employees (Edwards and Ewen 253).
360-degree Feedback system also helps improve the quality of employees and performance measures by using multi-raters, hence providing a more comprehensive and balanced view. According to Edwards and Ewen, the information provided is more credible, valid and reliable since the sources interact frequently with the employee while at work (213).
Single source appraisals do not give accurate information; they tend to give inflated evaluations that give every employer a high performance rating. This results into an environment where employees feel that they are entitled for promotions or salary increase without giving them the much-needed information for growth and development. This creates a tense atmosphere, between managers and the employees, since the managers find it hard to provide critical and specific feedback.
The 360-degree appraisal (or multisource assessment or full circle feedback) collects information from close workmates of the employee under evaluation, regardless of the position. The intelligence that these people disclose helps in determining the strengths of the employee and areas that need improvement (Edwards and Ewen 250).
Different researches (Rao 125) reveal that the 360-degree feedback system helps in the development and improvement of employees since it helps them know the perspective of their performance.
According to a five-year study (Walker and Smith 26), it was found that there was no improvement in the ratings between the first and second years, but higher scores were realized between the second, third and fourth years. According to Edwards and Ewen, the employee performance increased between the first and the second year and administrators kept this improvement two years later (215).
Advantages of 360-degree appraisal
The main advantage of a 360-degree feedback is that it provides a comprehensive view of an employee’s performance. In addition to providing feedback from various viewpoints, it helps minimize the biases inherent in evaluations. Many appraisers are likely to cancel out the various biases of different raters, and their different perspectives combines to give a more accurate, complete and honest picture.
The feedback that cuts across multiple aspects individually assists the employees decide whether their performance appraisal is done consistently. Individuals are able to acquire information on how other workmates thinks of them.
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Research shows that some employees do not like managers who analyze them when they do not directly interact with them. The employees can also be helped to agree to information through acquisition of direct information from colleagues and customers – this should be done anonymously to make sure no one is victimized.
Disadvantage of 360-degree appraisal
One notable disadvantage of 360-degree feedback system is that employees find it difficult and uncomfortable to offer honest feedback to their managers. This can also happen between employee-employee evaluations. To avoid criticism and retaliations, the system should not reveal the names of the contributors – this will also encourage employees to provide information without fear of victimization.
However, a question comes to mind. Since different raters observe different behaviors, what is the basis upon which these ratings are observed? It has been found that subordinate can easily witness various characters of their seniors, as opposed to the colleagues at the same level with them. In addition, various clients are able to understand the employees that serve them. It is, however, difficult to give consistent, positive and negative information on an employee despite the gain of the insights of the perceptions of the employee.
Management by Objectives (MBO)
MBO is a modern method of performance appraisal. This method requires an agreement between the employees and managers on specific objectives within a deadline. For instance, a company may instruct a sales manager to increase his taxes by 25 percent within a period of 3 months. Once the goal is set, it is now up to the sales manager to plan how to achieve the objective. This technique helps identify success or failure much easier.
Management by objectives (MBO) system helps the management set achievable goals. It also helps the management achieve the best results from the available resources. MBO aligns objectives and subordinates objectives to the firm; therefore, it helps enhance the organizational performance.
According to Ducker, MOB operates if the objectives are known for 90% of the period not known. However, many critics argue that Peter Ducker’s MBO concepts are hard to implement. Nevertheless, when every employee understands and comprehends the aims of an organization, then their development and effectiveness will be helpful in attaining the goals that the management seeks.
Advantages of MBO
If the employees can be able to meet the set goals or even exceed them, then they are considered to have performed acceptably well (Rao 125). Management by objective format provides that the performance of an employee is noticeable; however, the behavior of those employees can only be deduced.
This observation result from the fact that this approach assumes that it is extremely difficult to break down the components that shape the employees’ performance. This method provides that the aspects of employees’ performance should not be differentiated. Alternatively, harmonization of the different aspects is recommended, so that the behaviors of the employees can be observed more effectively and directly.
MBO principle involves all the personnel at all levels in framing the objectives of the organization. They are delegated with certain powers and freedom, and then made to involve themselves toward achieving the objectives of the company. Ducker points out that involvement towards a common goal as an enterprise is build by true and committed team that wields individual’s efforts towards a common effort.
Their contributions may differ, but they should all be pointing to one direction; achieving the goal of the organization (Dannemiller 214). The efforts of the employees should all be directed towards one direction and their contribution must come together to produce a complete goal, without gaps, fiction or unnecessary duplication of efforts.
According to Peter Ducker, the possibility of managers to control their performance is one of the greatest advantages of an MBO approach (Dannemiller 214). Self-control helps motivate the employees, hence making them desire to do the best. This helps widen the vision and paves way for high performance objectives.
Self-control motivates the managers to act, not because somebody demands or talks into doing it, but because the objectives of the organization demands it. The manager acts, not because somebody demands or requires him to, but because he decides to act, as a free man.
Disadvantages of MBO
Since there is an assumption that the behaviors and performance of the employees can be successfully measured by management by objective format, there are some challenges that arise. Management by objective performance appraisal motivates the employees since they are accorded some autonomy, and they feel that they have contributed towards achievement of the organizational goals. Nonetheless, this scenario could cause unworkable prospects regarding what is achievable.
The employees together with the managers should be able to check practicability of different situations when applying management by objective. Nonetheless, this is a source of flaw because it is clear that, currently, firms should uphold high level of flexibility so they can endure their challenges. However, flexibility leads to loss of clarity. Failure of performance can also be experienced when flexible objectives are circumvented.
In employee self-assessment approach, employees are given the opportunity to evaluate themselves. In this system, both employees and the managers receive forms that contain the performance standards. The performance standards in question are the levels of training, job proficiency, written communication, development efforts and other interpersonal skills.
Since both the evaluation forms are similar, both the manager and the employee address them line by line. In case a substantial difference appears between the employee’s self-assessment and the manager’s assessment, they both discuss the reason for the difference. The employer and manager eventually agree on a common overall evaluation, which is used to determine salary or wage increase.
Self-assessment helps the employees think and give critical considerations about their performance in meeting their performance expectations. Supervisors and managers have recently shunned away from providing employees the opportunity to conduct their self-assessment for the PAMP (Performance Assessment and Management Process).
These individual assessment methods allow employees to give important feedback and involve them actively in the final performance review session. Whether the manager and the employee agree or not, regarding the performance, self-assessment opens channels of communication that lead to a successful PAMP outcome.
Advantages of self-assessment
Self-assessment ensures that the employees are actively involved in the assessment process – this also means that they have an active role to play in the course of assessing their performance. As such, employees are able to monitor their own performance as opposed to merely receiving feedbacks from their seniors.
This kind of empowerment gives them an opportunity to become more engaged in both the review process and their performance generally. This approach gives the mangers an opportunity to understand their employees in a wider view, hence having a better position to improve their perception and performance.
However, depending on how close managers are to the employees, it is always challenging to comprehend the factors that affect the employee’s performance. Self-assessment helps managers to view performance in their own perspectives and get the employees’ side of assessment. It also helps the manager realize the strengths and weaknesses of different employees and their respective training needs.
Since managers and employees cannot have the same impression on the employee’s performance, employee self-assessment helps to avoid differences in perceptions before the review meeting is convened. There is a lot of information that the managers do not know, and it will be damaging if the employees speak out the differences in a performance review meeting.
At times, managers have very different information that affects employee ratings and; therefore, it will be unfair to judge them using that information only. Furthermore, this method helps in pointing out the variations that are not easily observable, therefore, according the managers an opportunity to plan for their review congregations. It also ensures fair performance ratings and fruitful discussion.
Self-assessment appraisal also promotes more effective discussions about priorities, performance, challenges and other factors affecting the employees. Research shows that when a subject touches or affects people, they tend to provide their side of the bargain and then listen to opinions from others (Dannemiller 250). With this technique, the employees can assess their own back ground information and performance, and then sit back and wait to hear the opinion of their managers.
One tool, which determines the effectiveness of management, is the way the employees and the managers conduct their discussions. A two-way communication; that is, between the employees and their managers is an evidence that issues such as performance, challenges and priorities can be discussed and resolved amicably.
The two-way discussion can be enhanced by a performance management plan, which tries to evade domination by the mangers during the evaluations – this could put off the employees. It also inculcates a culture of a two-way communication in the entire organization, hence making it more successful.
Disadvantages of Self-assessment
Self-assessment appraisal is subjective and hence limited. Although the method helps the employees to assess their own performance, usually, the accuracy and effectiveness of this assessment is hampered by personal bias, communication breakdown, and self-perception. Employee self-assessment also tends to bring the aspect of non-accountability to employees. After the assessment is over, employees often find limited motivation for change.
Nevertheless, involvement of other parties in this process could inculcate accountability because the employees will be compelled to act in a certain manner. Although the extrinsic motivational methods influence the employees’ performance, they cannot be relied upon to produce long-term goals.
This is partly because they are bound to transform with the adjustments in the operating environment. Also, they do not provide an environment of sharing ideas through teamwork as each person competes to be the best individually rather than as an organization.
Some of the most important resolutions of an organization, such as transfers, salary reviews, firing of employees and promotions, depend on the way the employees perform in their jobs. MBO method requires an agreement between the employees and managers on specific objectives within a deadline.
The 360-degree feedback provides a very ideal way of assessing the employee’s strengths and weaknesses. In employee self-assessment approach, employees are given the opportunity to evaluate themselves. Organizational resources allocations are also based on performance appraisal.
As such, an ideal assessment format enhances organizational development, analysis and flow of communication. The three methods of performance appraisal discussed in this report have been found to be very essential, not only to help managers execute their duties, but also for employees’ assessment and motivation
Dannemiller, Kathleen. Management by objectives (MBO) in student services. Michigan: University of Michigan, 1960. Print.
Edwards, Borman and Jade Ewen. 360-Degree Feedback: The Powerful New model For Assessment And Performance Improvement. New York: AMACOM, 1996. Print.
Rao, Raju. 360 Degree Feedback and Performance Management System. New York: Excel Books, 2009. Print.
Walker, Dimmock and John Smither. “A five-year study of upward feedback”, what managers do with their results matters? Personnel Psychology 52.2 (1999): 393–423.Print.