Performance Management
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Introduction
Over the years, organizations have depended on performance appraisal system to evaluate the employees’ achievement against the organizational goals. Performance appraisal motivates employees to work towards achieving organizational goals and objectives on time. It also enables managers to reward employees based on their achievement in attaining organizational goals. Information obtained from performance appraisal play a crucial role in the decision-making process in the organization (Reinhart, 2000). Managers formulate and implement new policies and strategies such as organizing vocational training and capacity building seminars with the aim of improving employees’ productivity.
With the current stiff competition in the business arena, organizations are compelled to redesign their performance management system so that to maintain their productivity and competence. With this respect, different organizations have applied the concept of performance management system as one of their competitive advantage strategies. There are many types of performance management, approaches adopted either singly, or in combination in organizations. These include; comparative approach, attributive approach, behavioural approach, result and quality approach.
The paper compares and contrasts the comparative approach and behavioural approach in performance management system.
Comparison
Both comparative approach and behavioural approach are designed to correlate employees’ performance and organizational goals and objectives. In respect to comparative approach, an employee’s achievements are compared with other employees in the same department. This implies that the management evaluates what the employee has achieved in a given period and correlates with the organizational goals. Behavioural approach focuses on evaluating employees’ performance based on the behaviour the workers explicate. Managers believe that when employees’ inculcate certain behaviours they will perform effectively and increase their productivity (Wilmouth, 2002). However, the bottom line is that both approaches are designed to correlate employees’ performance and organizational goals.
In both approaches, employees are provided with feedback explaining their employer’s expectations of them as regarding performance and conduct. After analysing employees’ performance based on these two approaches, managers provide employees’ with a guideline and feedback on how they will enhance their performance next time. Employees are also able to identify key areas that they need to improve as well as decide on effective ways to implement change. Employees’ with high credentials are motivated through promotions, rewards and other incentives whereas those employees with low performance are encouraged to improve.
Both approaches use ranking scale strategy in evaluating employees’ performance. Comparative approach employs simple ranking scale where employees are ranked from the top to the lowest level. Behavioural approach use behaviourally anchored ranting scale strategy where certain behavioural anchors are used to depict certain performance levels. Employees’ performance is correlated with the behavioural anchors thus ranking them in an ascending order.
Contrast
Comparative approach involves the process of comparing and ranking employees’ performance with other employees in the same department whereas, behavioural approach evaluates employees’ achievement based on behaviours they explicate.
Behavioural approach is applicable to the entire organization unlike, comparative approach, which is applicable to all employees in the same department. Behavioural approach assumes that stated behavioural values are applicable to all employees irrespective of their roles in the organization. On the other hand, comparative approach articulates that employees have different abilities, but they should have similar goals and objectives to attain.
- Comparative approach
Starbucks Coffee Corporation is a leading company in the coffee industry. Since its invention in 1971, the company has established more than 19900 coffeehouse outlets in 60 countries worldwide. The company sells salads, hot and cold coffee, snacks, sandwiches, coffee beans and tumblers. The company has employed 150,000 workers in all its coffee outlets. In 2009, the company recorded $10.9 billion revenue collection, which was an increase of 25% higher than the previous year. This immerse success can be attributed to several factors, but effective performance management system is the contributor. However, implementation of the comparative approach system will play a pivotal role in enhancing productivity.
Advantages
It helps in decision-making process in the organization. Through the comparative approach, managers are able to formulate and implement policies that aim at enhancing employees’ productivity. It also managers make administrative policies related to pay increment, promotions and vocational training.
It is an effective tool in eliminating central tendency among the employees: Through comparative approach, the company management team will be able to evaluate employee performance fairly. Those employees’ who are focused, determined and hardworking will be identified and be rewards accordingly. Consequently, lazy employees will be warned about their dismal performance so that to enhance productivity.
It effectively links organizational goals and objectives with employ performance: This approach is goal oriented and helps the managers to evaluate how well different departments and employees work towards realizing organizational goals.
Easy to make and commonly acceptable by employees: Other approaches are complicated and hard to use; an idea that make employees feel that they are evaluated wrongly. However, comparative approach evaluate employees’ fairly thus making it acceptable.
Increases employee productivity: The fact that comparative approach compares an employee achievement with others creates a competitive environment thus increasing productivity. Additionally, managers are able to identify and nurture unique talents and abilities among the employees.
Disadvantages
It is vulnerable to many interpretations because of lack of standardized evaluative raters: Comparative approach use more than two ranting scales to evaluate employee performance. Managers are required to their knowledge and skills to interpret the information thus leading to incorrect evaluation.
Subject to biases: Sometimes managers manipulate the information so that to favour certain employees thus leading to biases. Employees with close association with managers are evaluated fairly than their counterparts thus jeopardizing the entire evaluation process.
Low validity and reliability: The approach has low validity due to the influence of extraneous variables thus giving wrong information about employee performance. The information collected also lacks consistency over a given period; an idea that gives incorrect data.
Time consuming. This approach is tedious and time consuming when the performance evaluation is done on many employees. This aspect is evident when managers used paired comparison method.
Lack of specificity on feedback purpose: This implies that employees are unable to identify certain areas that need correction. This is because comparative approach used many later scales, which do not point one area that needs to be adjusted.
References
Reinhart, C., (2000). “How to Leap over Barriers to Performance,” Training and Development,(2) pp: 20–24
Starbucks History. Retrieved on 16th November 2012 from
http://www.starbucks.com/about-us/company-information
Wilmouth, C., (2002) “HPT Models: An Overview of the Major Models in the Field,” Performance Improvement 41: pp. 14–21.