MGT3045 WK 4 Project
Performance Tools Do and Don’t © 2017 South University
Drawbacks of Performance Tools Objective measures can result in creating rater errors, producing invalid or inconsistent results. Rater errors occur due to lack of training, the human tendency to make errors, or hastiness. There are several specific rater errors. In the halo error, the evaluator ranks the employee identically on all behavioral or skill items, although the employee may actually have only one demonstrable skill. For example, since Susan is always on time or early, the evaluator rates Susan high on punctuality, 6 out of 7 points. The second parameter is attendance. Susan is sometimes absent, but the evaluator awards 6 points. The third parameter is quality of work. Susan frequently allows errors in production to slide past her, but the evaluator awards her 5 points—after all she is always on time! In the Error of Central Tendency, the evaluator rates employees consistently in the middle range of the Likert scale. It is common in HRM for supervisors to provide room for improvement in the evaluation. The evaluator gives all employees a rating of 4, 5, or 6 on each parameter, regardless of their performance. In the Lenience/Severity Error the evaluator is either more stringent or lenient than other evaluators. Unfairness in evaluation becomes evident when employees move from one supervisor to another. An employee’s work and performance remain the same, but evaluation points differ because of errors of severity or lenience. It is human to be biased. Bias of liking occurs when we prefer a good-natured employee, a hard worker, or a single mother. In these cases, the judgment and evaluation may be influenced by feelings. HRM tries to minimize problems by providing specific training for evaluators. HRM should also provide the same training to all evaluators in the organization to ensure consistency across all departments. The appraisal interview presents both an opportunity and a challenge. It can be an emotional experience for the manager and the employee. The manager must communicate both praise and constructive criticism. A major concern for managers is emphasizing the positive aspects of the employee's performance while still discussing ways to improve. If the interview is handled poorly, the employee may feel resentment, which could lead to future performance problems. (Mathis et al., 2017). Read the following hints for a successful performance appraisal interview.
2 Appraisal Interview Hints
Drawbacks of Performance Appraisal Tools
Performance management is essential because it:
• Enables employment, promotion, compensation decisions • Motivates goal setting • Provides feedback for improvement • Enables career planning sessions • Facilitates retention and internal hiring • Provides legal protection for employers
Performance management systems have a few drawbacks such as:
• They requires extensive cost, time and effort. • Employees tend to compare evaluation results, finding fault with the process. • Can be demotivating to some employees. • There’s a tendency for rater errors. • Confidentiality breaches may occur when employees share results of evaluations with
colleagues. • Online storing systems are vulnerable to unauthorized access.
Compensation Strategies and Practices Some enjoy their work and rewards of a great job, but most people work to pay bills and save for retirement.
Page 2 of 2
Human Resource Management
©2017 South University
3 Appraisal Interview Hints
Drawbacks of Performance Appraisal Tools
Good performance typically leads to higher compensation. However, a pizza delivery person may work long hours, work hard and do a great job but still won’t make as much money as a bank loan officer. Society evaluates jobs, which is one way pay is determined. The market determines how much jobs are worth and compensation packages. (A teacher earns less than a rock star). The labor market also determines compensation packages; if only a few teachers are available, compensation increases. The dynamics within an organization is the internal labor market. For example, if you decide to start an e-commerce firm, Web designers are needed. As a startup you probably cannot afford to pay high salaries. You may entice candidates with stock ownership offsetting the low base salary. You can still recruit good Web designers despite the lack of funds. As the firm grows, the salaries of Web designers increase, but not salaries of administrative staff since their services are not crucial. The first employees to benefit from growth of a firm are those whose services are essential to the product/service the firm offers. As firms based in both the United States and other countries expand globally, executive compensation issues are raised. Numerous executives have responsibilities for operations throughout the world, and they are compensated for those expanded responsibilities. However, senior executives in the United States continue to earn higher salaries than similar executives in other countries. Read the following examination of measuring the effectiveness of executive compensation. Mathis, R.L., Jackson, J.H., Valentine, S.R. & Meglich, P. (2017). Human resource management. (15th ed.).
Boston, MA: Cengage Learning.
Page 3 of 2
Human Resource Management
©2017 South University