Performance management is the process a business uses to assess its employees and to determine the efficiency of its activities in achieving its objectives. Performance management tasks include planning new business actions, monitoring the progress of those actions and examining which of those actions are bringing the business closer to its goals. Numerous issues between company leaders and employees can interfere with how quickly a firm reaches those goals.
The following are the problems that are being experience with performance management systems:
• “Performance reviews tends to focus on the past. They look through in the review mirror instead of through the wind shield and planning for a brighter future”. Example if a manager is focusing on what mistakes the employee did in the past instead of advising on how best they can achieve the company`s goals and objectives.
• “Employee`s negative outcomes can damage their self –esteem.
• Employees lament that these reviews focus primarily on recent events rather than performance over time”. Example a person is employed to collect data in a company using a certain system and it happens that during that month in one of the days there was a breakdown in the system, thus resulted in no data collected that means that there was less data collected in that month than the other months where there was no system breakdown.
• “They note that managers will often carry bias, as well”. Example in a company where an employee is given an award in a certain section not because he has excelled in areas but because the manager feels he/ she is good in her manner of approach toward her as compared to the other staff.
• “Other researchers has shown that often immediate colleagues have a more accurate view of a person `s performance than does the manager”. These means that in most cases managers are not close with their people and it`s important that managers understands each person they work with.
• “The process is a huge investment on manager’s time”. These means that it is time consuming for the managers.
• “It is also emotionally draining for many”.
1.2 The effect of bias on performance management system are as follows:
Hallo or horn effect – The hallo effect is the tendency to rate someone high or low in all categories because he or she is high or low in one or two areas. Result in appraisals that do not help develop employees, because they are two general or inaccurate as to specifics. Evaluating someone lower is sometimes also called the “devil effect”.
Standard of Evaluation- If you are using categories such as fair, good, excellent, etc, be aware that the meaning of these words will differ from person to person. In any event, the use of these categories is not recommended because they do not provide sufficient information to help employees develop.
Central Tendency – The habit of assessing almost everyone as average. A person applying this bias will tend not to rate everyone very high or very low.
Recency Bias- Tendency to assess people based on most recent behaviour and ignoring behaviour that is “older”.
Leniency Bias – Tendency to rate higher than warranted, usually accompanied by some rationalization as to why this is appropriate.
Opportunity Bias – Ignoring the notion that opportunity (factors beyond the control of the employee) may either restrict or facilitate performance, and assigning credit or blame to the employee when the true cause of the performance was opportunity.
False Attribution Errors – We have a tendency to attribute success or failure to individual effort and ability. So when someone does well, we give them credit, and when someone does less well, we suggest it`s somehow their fault. While there is some truth in this, the reality is that performance is a function of both the individual and the system he/she works in. Often we misattribute success and failure and assume they are both under the complete control of the employee. If we do, we will never improve performance.
1.3. 360 degree was initiated by the US armed forces way back in the 1940`s. However, it caught the attention of the administrators and HRN managers, who were concerned with the authenticity of the feedback coming from a single source. Known as the multi-rater appraisal, it is provided, it is provided by the immediate supervisor, the employee himself/herself, the peer group and the people reporting to the individual whose appraisal is being conducted. 360 refers to the 360 degrees in a circle. The basic idea is to seek feedback from a variety of sources so that the individual biases in the appraisal are controlled. Sometimes the appraisal is also sought from the customers so that the individual biases in the appraisal are employees who directly deal with the end users of the products and services of the organisation. The value of 360 degree appraisal lies in generating data that could be relied on for developmental efforts of the employees. It offers the following benefits: