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MGT415 Performance Appraisal

Table

Question 2

Introduction 2

Definition 3

Objectives of Performance Appraisals 4-6

Methods of Performance Appraisals 7-11

Performance Appraisal for Project Manager in Construction Industry 12-13

Suitable Method of Performance Appraisal for Project Manager 14-15

How error could occur in two methods 15-16

General Error could occurred on assessing employees 16-17

Conclusion 18

Appendix 19

References 20

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Question: E xplain the objective and the judgmental methods of performance appraisal.

Explain how errors could occur in the two methods. Suggest which method is the most

suitable for appraising the performance of a Project Manager in a construction company

and explain why.

INTRODUCTION

The purpose of this assignment is to define the method of performance appraisals for

Project Manager in Construction Company and to determine error that could occurred on

the methods that currently being applied in the construction company in Malaysia. This

assignment also will propose the best method for the construction industry to enhance

and develop their staff to become more efficient at working places and how they can be

assessed accordingly.

In addition, I have completed a case study on one of the construction company in

Malaysia to make myself understand more on the application of the performance

appraisals and its implication to the company. Besides, this assignment required student

to understand and be able to give opinions towards the topic given and do their own

writing.

The other objective in this assignment, is also to complete part of syllabus of MGT415

which currently lectured by En. Rizal Rahman for both part A and B.

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Definition

Performance appraisal (PA) is generally defined as assessment procedure carried out by

the company towards employees in order to enable the company to review the

performance of the staffs and give them appropriate rewards. The focus of the

performance appraisal is measuring and improving the actual performance of the

employee and also future potential of the employee. The aim is to measure what an

employee does at past year and setting new goals for them.

The performance appraisals shall affect the employee salary's increment, bonus,

promotion, incentives and so on. The purpose of PA is especially to identify the strengths

and weakness of the employee's and subsequently to provide employees such courses and

trainings. However, there are various objectives of performance appraisals based on the

industry and level of the staffs. For instance, the marketing staff are always liaise with

customers and their services and their skill of public relation are the main aspect to be

assessed with, therefore the Project Manager for the construction company is mainly

liaise with consultants and subcontractors and their ability to talk to multi level of people

are required and also to resolve technical issues.

A performance appraisal is a part of guiding and organizing of employees’ career of

development. It is the process of obtaining analyzing and recording information about

relative worth of an employee to the organization. The outstanding performance staff

always been recognized and had been rewards, therefore for average or low performance

staffs will be sent to training and any related courses to improve on their weak area.

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Objectives of Performance Appraisals

Based on the research done through Internet and guidance by lecturer, generally, the

objectives of a performance appraisal are mainly referred to as followings:

1. Give an employees feedback on performance

The employee may or may not realize on their strengths and weakness. With the

assessment done by the company, it will required employee to give a feedback or

response to their job function where the employee target has been set earlier and as a

guide for them to carry out duties. The employee also will be noted on their weakness

which required them to pay more attention and they may needs such training to improve

their weak area. Therefore, the employee’s feedback is important to ensure the

performance appraisal become success and get them ready for the next position or

additional task assigned by the management.

2. Identify employee training needs

In relation with item (1), the training will be provided by the company to the staff on their

weak area, for instance, customer care services courses which myself had attended during

my previous company. The training purpose is to upgrade the skills that will help

employee to improve their skills to perform their job function effectively where at that

particular time, I have attended the joint inspection with the customers/ purchaser during

liability periods that indirectly help my work performance.

3. Document criteria used to allocate organizational rewards

The rewards such as bonus, incentive, and increment of salary and so on are applicable to

a lot of company in Malaysia and overseas. This document is used to enable the company

to yearly or stipulated of time to monitor and review the staff improvements and

subsequently to allocate organization rewards.

4. Form a basis for personnel decisions: salary increases, promotions, disciplinary

actions, bonuses, etc.

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As part of employment, the company shall use employees’ performance appraisal as basis

or evidence of rewards to be given or any disciplinary action will be taken against the

employee. This form of basis shall be used as employee record which to be kept by HR

department to refer to when any necessary action to be taken to the particular employee.

This basis of form will be used by top management to re-evaluate and assessment toward

staff basically if the removal or promotion of staff will be given a high impact to the

company. For instance, the retrenchment of staff may required concrete reason and with

proper documents evidence, otherwise, the particular staff may able to sue the company

and may caused a big losses to the company.

5. Provide the opportunity for organizational diagnosis and development

This is referring to promotion and forecast of employee career enhancement. Like my

present company, they have provided a policy where the position or designation is to be

adapted from junior to senior post based on experience and qualification. The policy shall

not be changed as it is as a benchmark for employer to foresee where they can see the

structure of organization fore coming. The development of organization will give chance

and career enhancement to the staff that make them become more motivated and

dedicated towards their job.

6. Facilitate communication between employee and administration

The performance appraisal is focuses on communication between employee and

administration where all employees has their opinions and suggestion to the management

or immediate superior. With this objective, the company may review the staff condition

under their immediate superior so that the management can hear both parties to avoid

misleading. For instance, the assessment reviewed by immediate superior may have an

objection by appraisee, therefore, by practicing open communication between the staff

and management, the company may observed more closely and fairly towards their staff

from low level to high level.

7. Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity requirements

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The output of performance appraisals is to identify efficiency of certain policy of the

human resource that may require changes. The techniques or methods apply by group of

Human Resource may be outdated and not suitable for employees. Therefore, upon

finalized first round of Performance Appraisal, the company may analyze have accurately

the efficiency and effectiveness of the existing policy and methods of performance

appraisal that has been implemented. The changes shall required if the company find the

new policy or method can improve their performance appraisal system.

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Methods of Performance Appraisals

A common approach to assessing performance is to use a numerical or scale rating

system which managers will be asked to score an individual against a number of

objectives. In some companies, employees receive assessments from their manager,

peers, subordinates, and customers, while also performing a self assessment. This is

known as a rounded system or 360-degree appraisal and forms good communication

patterns.

Based on the research and understanding of methods of performance appraisal, I

discovered that performance appraisal system practices by various industry methods used

in the performance appraisal process in Malaysia and developed country in the world as

following:

1. Management by objectives

Management by Objectives (MBO) is a process of agreeing upon objectives within an

organization so that management and employees agree to the objectives and understand

what they are and suppose to do in the organization. The crucial of MBO is participation

of goal setting, choosing course of actions and decision making that required mangers

level to adopt. An important part of the MBO is the measurement and the comparison of

the employee’s actual performance with the standards set. Ideally, when employees

themselves have been involved with the goal setting and the choosing of course of action

to be followed by them, they are more likely to fulfill their own-setting responsibilities. It

is can be called “set your own goals to the company benefits”

Features and advantage of the MBO process:

The principle behind Management by Objectives (MBO) is to create empowered

employees who have clarity of the roles and responsibilities expected from them,

understand their objectives to be achieved and thus help in the achievement of

organizational as well as personal goals.

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Some of the important features and advantages of MBO inclusive:

Motivation – Involving employees in the whole process of goal setting and increasing

employee empowerment increases employee job satisfaction and commitment. A better

communication and coordination within the staff and strengthen the communication and

relation within the staff. Frequent reviews and interactions between immediate superiors

and subordinates will helps to maintain good relationships within the departmental and

also solve many problems faced during particular of time. Clarity of goals well to be

supposed if yet this management by objectives has certain advantages as well as

disadvantages, it is a virtual technique for effective management and it takes around

certain years to obtain a result (Says 5 years).

2. 360-degree appraisal

In human resources or organizational psychology, 360-degree feedback, also known as

"multi-rater feedback," "multisource feedback," or "multisource assessment," is feedback

that comes from all around an employee. "360" refers to the 360 degrees in a circle, with

an individual figuratively in the center of the circle. Feedback is provided by

subordinates, peers, and supervisors. It also includes a self-assessment and, in some

cases, feedback from external sources such as customers and suppliers or other interested

stakeholders. It may be contrasted with "upward feedback," where managers are given

feedback by their direct reports, or a "traditional performance appraisal," where the

employees are most often reviewed only by their managers.

The results from 360-degree feedback are often used by the person receiving the

feedback to plan training and development. Results are also used by some organizations

in making administrative decisions, such as pay or promotion. When this is the case, the

360 assessment is for evaluation purposes, and is sometimes called a "360-degree

review." However, there is a great deal of controversy as to whether 360-degree feedback

should be used exclusively for development purposes, or should be used for appraisal

purposes. There is also controversy regarding whether 360-degree feedback improves

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employee performance, and it has even been suggested that it may decrease shareholder

value.

3. Behaviorally anchored rating scales (BARS)

Behaviorally Anchored Rating Scales (BARS) are scales used to report performance.

'BARS are normally presented vertically with scale points ranging from five to nine. It is

an appraisal method that aims to combine the benefits of narratives, critical incident

incidents, and quantified ratings by anchoring a quantified scale with specific narrative

examples of good or poor performance.

BARS scales are a method that combines elements of the traditional rating scales and

critical incidents methods. In order to construct BARS seven steps are followed as

mentioned below. Examples of effective and ineffective behavior related to job are

collected from people with knowledge of job. These behaviors are converted in to

performance dimensions. A group of participants will be asked to reclassify the incidents.

At this stage the incidents for which there is not 75% agreement are discarded as being

too subjective. Then the above mentioned incidents are rated from one to nine on a scale.

Finally about six to seven incidents for each performance dimensions- all meeting

retranslation and standard deviation criteria will be used as BARS. This is by far the best

method used for a performance appraisal method. This is the official Performance

Appraisal method of many companies and countries.

4. Trait-based systems.

Trait-based systems, which rely on factors such as integrity and conscientiousness, are

also commonly used by businesses. The scientific literature on the subject provides

evidence that assessing employees on factors such as these should be avoided. The

reasons for this are two-fold:

i) Because trait-based systems are by definition based on personality traits, they make it

difficult for a manager to provide feedback that can cause positive change in employee

performance. This is caused by the fact that personality dimensions are for the most part

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static, and while an employee can change a specific behavior they cannot change their

personality. For example, a person who lacks integrity may stop lying to a manager

because they have been caught, but they still have low integrity and are likely to lie again

when the threat of being caught is gone.

ii) Trait-based systems, because they are vague, are more easily influenced by office

politics, causing them to be less reliable as a source of information on an employee's true

performance. The vagueness of these instruments allows managers to fill them out based

on who they want to/feel should get a raise, rather than basing scores on specific

behaviors employees should/should not be engaging in. These systems are also more

likely to leave a company open to discrimination claims because a manager can make

biased decisions without having to back them up with specific behavioral information.

5. Essay Evaluation

This method required managers / supervisors to describe strengths and weaknesses of an

employee’s behavior. Essay evaluation is a non-quantitative technique that no specific

form or features to asses the appraisee. This method usually use with the graphic rating

scale method.

Input of information sources:

i. Job knowledge and potential of the employee;

ii. Employee’s understanding of the company’s programs, policies, objectives, etc.;

iii.The employee’s relations with co-workers and superiors;

iv. The employee’s general planning, organizing and controlling ability;

v. The attitudes and perceptions of the employee, in general.

6. Graphic rating scales

The Rating Scale is a form on which the manager simply checks off the employee’s level

of performance. This is the oldest and most widely method used for performance

appraisal in many firms. The scales may specify five points, so a factor such as job

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http://www.humanresources.hrvinet.com/graphic-rating-scales/

http://www.humanresources.hrvinet.com/essay-evaluation/


knowledge might be rated 1 (poorly informed about work duties) to 5 (has complete

mastery of all phases of the job).

Rating scales can include 5 elements such as unsatisfactory, fair, satisfactory and good.

The elements is explain itself where the highest rating will be outstanding performance or

otherwise.

The advantages of the rating scales that its provide graphic rating scales which will have

less time consuming to develop. They also allow for quantitative comparison.

Content of appraisal:

i. Quantity of work. Volume of work under normal working conditions

ii. Quality of work. Neatness, thoroughness and accuracy of work Knowledge of job.

iii. Dependability. Conscientious, thorough, reliable, accurate, with respect to attendance,

relief, lunch breaks, etc.

iv. Judgment

v. attitude. Exhibits enthusiasm and cooperativeness on the job

vi. Cooperation . Willingness and ability to work with others to produce desired goals.

vii. Initiative.

(Refer to Appendix for sample Appraisal Form)

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Performance Appraisal for Project Manager in Construction Industry

Project managers in Construction Company are ultimately responsible for making sure

projects are completed on time, on budget and with the features and functionality

specified by the project's stakeholders. So one would presume that project manager's

performance would be evaluated based on those same criteria.

In fact, it's not always the case that project managers are evaluated on the basis of

whether their projects are completed on time, on budget or with the required

functionality.

Six Attributes of Successful Project Managers

The best project managers are those who consistently deliver, on time and within budget,

projects that meet or exceed stakeholders' expectations. Those project managers

understand that leadership and people skills are even more important to good project

management than a sound methodology and project tracking tools says by experts from

Consultants Company.

The soft skills are necessary to become a top-notch project manager; however others may

be main requirements for successful Project Manager which has been reviews by certain

consultant company came up with the following six attributes:

1. Posses the gift of foresight. Good project managers are able to anticipate and

head off problems that can jeopardize deadlines, budgets and user acceptance.

2. Organized. Organization seems like an obvious characteristic of a star project

manager, but it manifests itself in a variety of ways, including in an ability to stay

focused on the big picture and to prioritize competing responsibilities. In most

projects, there are so many things that have to get done that it's hard to stay on top

of everything and in control of everything. The PM shall be able to prioritize

work for team is a critical aspect of what a project manager has to do.

3. Leadership. Project managers have to interact with and influence a variety of

stakeholders including their project teams and project sponsors. Since many

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http://www.cio.com/article/193050/The_Secret_to_Successful_Project_Teams


project team members don't report directly to the project manager, the project

manager has to find ways to motivate workers over whom they have no direct

influence and who can make or break a project. Project managers also need to be

able to inspire the confidence of stakeholders and sponsors in the event the budget

or timeline needs to be renegotiated or additional resources are needed to

complete the project.

4. Good in Communication. Successful project managers effectively use e-mail,

meetings and status reports to communicate their ideas, get decisions made and

resolve problems. They also understand that they need to discuss their project in

the context of whatever is most important to their audience.

5. Pragmatic. Sometimes project managers can be too analytical, says Kondo.

"They analyze things to do death before they move ahead," she notes, which

slows progress on a project. Good project managers focus on getting work done

with the resources available to them.

6. Empathetic. "Project managers rely on others to be successful," says Kondo. She

adds that project managers can't effectively influence others if they don't

understand what motivates their stakeholders. They need to learn stakeholders'

concerns about a project, take those concerns seriously and address them.

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Suitable Method of Performance Appraisal for Project Manager

In my opinion, the most suitable method to assess a Project Manager in Construction

Company is MBO (Management by Objectives). The conditions of MBO that following

SMART condition are specific, measurable, achievable, relevant and time-specific.

Specific in the sense of scope of work as a Project Manager shall be cleared and

understood. As project Manager the specific task for particular project will be assigned

and he/she will prepare the organization chart for their sub-ordinates on duties and

responsibilities of each respective subordinates. Specific means the work that will be

carried out by Project Manager shall be scheduled and well-plan. As Project Manager in

construction firm, he/she will be bear all the responsibilities of the site and monitor all the

works that carried out at the assigned project. He/she also required to solve technical

problems and coordinating with consultants, client, authorities and subcontractors.

Project Manager will place their capable subordinates to carry out each trade of work,

such as Architectural supervisor will be supervise all the architectural works at site and

carry out inspection with consultants.

Measurable is where the specific task assigned to Project Manager can be measured by

management trough the quantitative and qualitative. These two factors are often used by

many companies to measure the successful of the project. Besides of that, the ability of

controlling wastages and usage of manpower and machineries wisely is another factor.

The Project Manager shall set their objective relevantly and as well as “achievable”. As

this is the most factor that always happen in my view that high objective and unreal is set

and by Project Manager, but the end the objective not be achieve. For instance, normal

construction work for high-rise building shall be completed in 2 years time, however for

extreme Project Manager or so-called “too ambitious Project Manager” will commit to

management that he/she can manage to complete the project less than 2 years. As buffer

is needs and contingency is always required to the management, the good Project

Manager shall not commit to constraint time like that. He/she shall be practical and work

smart in the sense to be more productivity rather than “sell their trust-out”. So, in relation

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with relevant and achievable, a Project Manager also required to be “time-specific”. With

this fives condition that set by MBO, I believed as a Project Manager in construction

work, with the good studying in every inches of objective they are setting, he/she will be

a very successful Project Manager and can win the management believes.

How error could occur in two methods

1. Essay Evaluation Method

Essay evaluation method is dependable on appraisers’ ethic and their present feeling

without being uncontrolled and unrealized. Therefore, the Manager or supervisor may

write a biased essay towards their subordinates which may cause the error of

performance appraisal. This error may damage the performance of employee where the

particular employees may be a good and outstanding employees on perform their job.

The company also will lose their potential staff and they might fail to assess the staff

accordingly.

The lacking of writing skill by appraiser also may cause error on appraisal the

employees. Some evaluators may be poor in writing essays on employee performance

and others may be superficial in explanation and use flowery language which may not

reflect the actual performance of the employees. Besides, this method required focus on

writing and details during evaluating their subordinates. In that particular reason, the

evaluator may be busy and write the essay hurriedly without properly assessing the

actual performance of their subordinates. This essays evaluation may needs experts to

guide and proper analysis for evaluator to judge fairly and accurately.

Apart from that, evaluator will takes a long time to think and write and this is basically

becomes uneconomical from the view point of the firm, because the time of evaluator is

much costly and important.

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2. Graphic rating scales method

Graphic rating scales rely on exiting rating scale that made by the company and it might

unchangeable. The error could occur for this method where it is more validity comparing

workers rating from a single supervisor than comparing two workers who were rate by

different supervisors. A different supervisors will be used the same graphic scales in

slightly different way. One way to get around the ambiguity inherent in graphic rating

scales is to use behavior based scales, in which work related behaviors are assessesd.

General Error could occurred on assessing employees

Accuracy is critical to performance appraisal. In order to obtain accurate performance

information, raters must provide objective and unbiased ratings of employees. But,

because it is almost impossible to develop a perfectly accurate performance checklist,

managers' subjective opinions are frequently called for. Many companies use some

combination of subjective and objective assessment for actual performance appraisal.

Yet there are numerous problems in the actual assessment of employee performance,

mainly due to rater bias. Some raters tend to rate all employees at the positive end rather

than to spread them throughout the performance scale; this is called "leniency."

Alternatively, "central tendency", which places most employees in the middle of the

scale, also raises concern about possible appraisal error.

Another common error in performance appraisal is the halo effect. This occurs when a

manager's general impression of an employee, after observing one aspect of performance,

influences employee’s judgment on other aspects of the employee's performance.

Researchers have found that personal preferences, prejudices, appearances, first

impressions, race, and gender can influence many performance appraisals. Sometimes

raters' personal opinions or political motives creep into the performance appraisal

process. They intentionally inflate or deflate performance ratings of certain employees as

a way to punish them or promote them out of the department.

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http://www.humanresources.hrvinet.com/graphic-rating-scales/


Using unreliable and invalidated performance appraisals may cause a legal problem. A

number of court cases have ruled that the performance appraisal systems used by many

companies were discriminatory and in violation of relevant acts.

In order to avoid legal problems, companies must develop an appraisal system based on

careful job analysis and establish its reliability and validity. They must give clear written

instructions to raters for completing evaluations and provide them adequate training if

necessary. The company must allow employees to review the results of the appraisals.

Human resources departments must play a key role in the development and

implementation of an effective performance appraisal system.

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CONCLUSION

In the final analysis, managers and organizations must realize that there is no perfect

appraisal system. There will always be problems and conflict built in with the whole

process. Organizations need the system to ensure productive performances, and yet at the

same time, whatever system implemented is fraught with pitfalls as it deals with the

human factor. In a sense, performance appraisals are a necessary and organizations and

managers will have to learn to live with this.

I would think that most managers and organizations if given half a chance would want to

do away with performance appraisals. The problem however is that there seems to be no

viable alternative. There is no other management system that has answers to the question

of equitable distribution of organizational rewards, to the question of rewarding good

performance and to the question of recognizing development and training needs. So, as

much as most managers will agree that performance appraisals brings them ‘headaches’

and related problems, the annual ritual of appraisals will still have to be carried out.

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APPENDIX

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REFERENCES

Bernardin, H. J., Kane, J. S., Ross, S., Spina, J. D., and Johnson, D. L. (1996). "Performance Appraisal Design, Development, and Implementation." In Handbook of Human Resource Management, Gerald R. Ferris, Sherman D. Rosen, and Darold T. Barnum ed., Cambridge, Mass: Blackwell, 462-493.

Cascio, W. F. (1998). Applied Psychology in Human Resource Management, 5th ed. Upper Saddle River, NJ: Prentice-Hall.

Cawley, B. D., Keeping, L. M., and Levy, P. E. (1998). "Participation in the Performance Appraisal Process and Employee Reactions: A Meta-Analytic Review of Field Investigations," Journal of Applied Psychology, 83(4):615-633.

DeNisi, A. S., Robbins, T. L., and Summers, T. P. (1997). "Organization, Processing, and Use of Performance Information: a Cognitive Role for Appraisal Instruments," Journal of Applied Social Psychology, 27:1884-1905.

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Documents

It is often suggested that in order for performance …cm609.yolasite.com/resources/Assg Job Appraisal(2).doc · Web viewBehaviorally anchored rating scales (BARS) Behaviorally Anchored