Article Critique on "Effectiveness of Performance Appraisal Systems for Both the Employer and Employee"

Article Critique 5 pages (1754 words) Sources: 7 Style: Harvard

[EXCERPT] . . . .

Performance Appraisal Systems for Both the Employer and the Employee

One of the most common tools that have been utilized by employers to evaluate their staff is: performance appraisal systems. On the surface, these are designed to provide a way of objectively observing an individual in regards to how well they are performing their duties. However, underneath it all this has been twisted around, as this has been used as way of strong arming employees into blindly following company policies and procedures. A good example of this can be seen by looking no further than Enron. What happened in this situation is: the firm used their performance appraisal system to critically evaluate those who questioned the practices of the executives. While those individuals; who followed the directives of management was given favorable reviews. Over the course of time, this was used as a way of being able to fill the company with people who would not question the kinds of actions that were being taken. (Collins 2006, pp. 55 -- 59) This is significant, because as the company was engaging in illegal activities no one directly reported that there were problems inside the organization itself. At which point, the scope of the fraud began to increase exponentially. As a result, this is illustrating how the purpose of these kinds of systems has been used for reasons other than what they were originally designed. Therefore, we will critically assess the various ways that this can benefit the employer and the employee. Once this takes place, we will be able to provide specific insights about how this can address the underlying challenges facing a variety of organizations.

To determine the benefits and drawbacks of appraisal systems we will examine a number of different sources on this subject. This will allow us to be able to offer specific insights about how these can be created to support the objectives of the organization. While at the same time, it will help an entity to create system that will support the goals of the employer and employees.

Negatives of Appraisal Systems

Like what was stated previously, one of the biggest drawbacks of an employer -- employee appraisal system is that some have been known to be very subjective. Where, managers and executives will often overlook a host of different facts or they will twist them around to create an atmosphere of compliance. In these kinds of situations, no one is interested in knowing what issues are impacting employees. Instead, they are only focused on how this can determine who is considered to be team players, not those people who have innovative ideas or can help the company to identify problems with potential managers.

This is when a firm can begin to lose its competitive edge and start making decisions that will lead to the loss of key talent. At which point, a company will slowly squander these advantages because no one is willing to critically look at the entire organization as a whole. Evidence of this, can be seen with observations from Rothwell (2008) who says, "Sometimes the appraisal systems lack top management support, it fails to provide a method for establishing performance standards at the beginning of an appraisal cycle, they discourage give and take discussions along with lacking clear objectives surrounding on the job execution." (Rothwell 2008, pg. 141) This is important because, it is highlighting how those entities that have subjective performance systems will often receive limited amounts of information within their company. This is the point that executives will ignore key facts that could be vital to an organization's survival and their ability to adapt to changes that are occurring in the marketplace. Once this occurs, they will be exposed to possible transformations and new competitors that can quickly take their customers without them realizing what is happening until it is too late.

At the same time, there are number of other issues that could have an impact on the effectiveness of the performance appraisal system. In this case, these elements could lead to a conflict within the workplace. A few of the most notable include: resistance to change, the halo effect and mistrust between management / staff members. Resistance to changes is when the employees may be reluctant to embrace the appraisal system. The reason why, is because they believe that it is changing the work environment for the benefit of executives. Where, they think that these transformations will result in them working longer hours and receiving less recognition. Once this takes place, it means that employees will not strive to use appraisal systems as way to improve the work environment. Instead, they will view it as tool that higher management is using to trying use to shove various policies down their throat. At which point, they will embrace these different changes with half measures. (Gupta 2007, pg. 381)

The halo effect is when executives will view a particular person or group of people in such a favorable light that they can do no wrong. During the course of a manager -- employee appraisal, this will make these kinds of systems ineffective. The reason why, is because they feel that a particular supervisor has all of the answers and that anything that is said against them is not true. This is problematic because, it leads to a shift in how an organization will evaluate their underlying strengths and weaknesses. Once this occurs, it means that there is the possibility that executives will overlook key issues that could be impacting the work environment or the business itself. Over the course of time, this can lead to possible employee -- manager related problems and it could have an impact on the ability of the company to quickly adapt to changes in the marketplace. (Gupta 2007, pg. 381)

Another issue with performance appraisal systems is that it can lead to mistrust between the supervisors -- staff. In this particular case, managers can use this as a tool to harshly criticize the most talented employees. As, they will belittle them at: every turn and offer limited amounts of praise or recognition for their accomplishments. This is problematic, because this kind of performance review can hurt employee motivation and productivity. The reason why, is because the staff will view this as tool to criticize them. At which point, many of the most talented individuals will leave a particular employer due to the fact that they feel they are not being treated fairly. Once this occurs, a company is left with less talented individuals, which could have a dramatic impact on their long-term success. (Gupta 2007, pg. 381) These different elements are important, because they are showing how when an appraisal system is not utilized correctly it can have devastating effects on an organization. As, it can create animosity and anger between: the staff members as well as management. This is the point that this will serve as a way of creating divisiveness inside a company (which will have a negative impact on their overall bottom line results).

Benefits of Appraisal Systems

However, an effective appraisal system can offer an organization a number of strategic advantages. A few of the most notable include: setting goals for managers / employees, identifying weaknesses, rewarding good employees and it allows a company to stay on top of the needs of staff members. The way that this helps to set goals for managers / employees is by creating objectives that everyone can reach for by working together. This is when a company can be able to increase the total amounts of innovation that are occurring and can build team work within the organization itself. As far as identifying weaknesses are concerned, the appraisal system can help to objectively determine what issues are affecting managers and their relationship with employees. This allows executives to quickly identify any kind of issues and rectify them before they become a problem. The way that this system rewards employees, is through determining what staff members are engaging in actions that will help to support the long-term objectives of the firm. At which point, they can recognize them for these achievements, which will help to fuel increased levels of motivation. At the same time, an effective performance appraisal system will help the corporation to be able to identify potential problems early. This enables top managers to address these issues before they lead to conflicts within the work environment. Once this occurs, it means that an entity can avoid major conflicts by preventing a variety of negative issues when they are small. These different elements are important, because they are showing how an appraisal system can be effective at helping an organization to be able to grow over the long-term. The real key moving forward is that, executives must realize that they need to keep an open mind during this process and utilize flexibility to deal with any kind of issues. If this kind of approach can be taken, it will help a company to… READ MORE

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