Abstract When an employee is to be considered for promotion, job transfer, a pay raise or even layoff, they should be rated against a known standard as provided by the organization for which they are employed. A common tool for this is the Performance Feedback Tool or annual appraisal. Reviews of employee performance should be conducted routinely throughout the year, but should occur no less than annually. Additionally, when an employee demonstrates a specific period of unusual performance, either complimentary or critical, a review of this performance should be documented. This paper discusses various forms of performance appraisals and performance measurement errors.
Employee Performance Assessment and Common Errors in Making Assessments Employee performance is important to every organization. In order for an organization to operate at peak performance, management must know how well their work force is performing compared to task requirements. Companies conduct performance appraisals to provide feedback to both management and the worker.
Comparative appraisals are conducted typically in organizations with a small number of employees. This method is used to determine each employee’s relative positions against the others. The method of Rankings is considered one of the easiest and least time consuming to utilize. (Schermerhorn, Jr., J. R. Dr., Hunt, James, G., Dr., Osborn, R.N., Dr. & Ul-bien, M., Dr. (2011).
Former General Electric Company CEO Jack Welch believed in firing ten percent of his work force every year. He believed in “Ranking” the employees annually and letting the bottom ten percent go. The top twenty percent, he believed, should be given praise, money and other corporate amenities. “Sprinkling of rewards over a large group is a mistake” he argues. This practice may work for the top twenty percent and a few others, but the idea that your job is on line everyday may be too much pressure for some, not to mention the cost of replacing ten percent of a nearly 300,000 person work force. (The Wall Street Journal Essential Guide to Management; Lasting Lessons from the Best Leadership Minds of Our Time 2011). Ranking is the simplest approach to employee performance appraisal. This process ranks individuals from best to worst based on specific performance criteria as determined by management. Criteria used for grading is typically listed generically as Outstanding, Excellent, Above Average, Average, and Unsatisfactory. The highest rated personnel will receive compensation based on their rating, with the lowest ranking receiving no monetary award, and offered counseling and training to encourage an increase in their productivity and or behavior. Some could be let go if a trend in non-compliance is determined. (Schermerhorn et al. 2011). Paired comparison or comparing is an alternate method to ranking. This method compares the performance of every individual to each other. Each comparison results in a winner, the more “wins” a person receives, the higher they are ranked. Both the ranking and paired comparison method will become quite complicated if there are more than just a few people in the group being rated. (Schermerhorn et al. 2011). Some organizations use forced distribution in their assessment process. This method requires a percentage of personnel to be rated as the top ten percent and a group at the bottom, also typically ten percent. This eliminates the tendency for managers to rate everyone the same. (Schermerhorn et al. 2011). Forced Ranking is in decline, in fact, the company believed to have initiated the method, General Electric moved away from it when CEO Jack Welch retired. In The wall street journal essential guide to management; lasting lessons from the best leadership minds of our time. (2011), Jack Welch popularized the forced ranking process to prepare the company for work force reductions in an