Individual Performance Appraisal

Individual Performance Appraisal: 360-Degree Appraisal Introduction The effectiveness of performance appraisal tools is important in evaluating the performance of employees in an organization. It is important for managers to determine the best performance appraisal tool to ensure they obtain the best measures on the performance of their employees within the organization. According to Grote and Grote (2002, p. 1) “performance appraisal is a formal management system that provides for the evaluation of the quality of an individual’s performance in an organization.” Employees are assessed on different dimensions to determine their level of performance. Performance appraisal is a continuous process and managers should carry out the exercise through out the year. Performance appraisal is a very important exercise in an organization and accuracy is a very important aspect in carrying out the process (Miller, & Thornton, 2006). To complete this report, 360-degree feedback model was evaluated to identify its effectiveness in a health care organization. The hypothesis of this study stated that rating lower-level jobs is more accurate than rating jobs at a higher level. It was also hypothesized that ranks are better than ratings in determining the performance of employees in an organization.

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360-Degree Feedback Model The 360-degree feedback performance appraisal model is a tool that managers use to evaluate the performance of an employee from all dimensions. An employee is rated by peers, subordinates as well as supervisors. The 360 degree feedback also uses self assessment whereby an individual evaluates his or her performance. It also includes assessment by external partners such as customers and suppliers or any other individuals or organization affected by the activities of the organization. The data obtained from 360-degree feedback is very important in making decisions about promotion, pay hike, or when making decisions about administrative issues (Rao & Rao, 2005). The model has both advantages and disadvantages when implemented in an organization. The model is conclusive because all stakeholders are involved in the survey about the performance of employees in an organization.

In the study to evaluate the model different levels at the workplace were taken to evaluate the effectiveness of using 360-degree feedback as a tool for evaluating the performance of the employees. To evaluate the effectiveness of the model, four levels of employees were selected to identify their response to the performance evaluation tool. Level one consisted of employees who are not skilled, level two composed of skilled employees, level three was made up of professional jobs while the last level composed of employees at managerial level. Different rates and ranks for each employee were obtained to determine their performance at the organization.

Correlation coefficients were developed to explain the interaction between variables.

Correlations between variables helped determine the relationship between the rates

and ranks about the performance of employees as provided by different raters (Miller, & Thornton, 2006).

To determine the accuracy of the 360-degree appraisal model, three methods were used: coefficients of stability, alpha coefficients and inter-rater reliability.

Coefficients of stability refer to the rate-rerate coefficients. Alpha coefficients are used to determine the internal consistency of all variables used. Inter-rater reliability determines the ratings developed by two or more appraisers. Inter-rater reliability is the most common method used in determining the accuracy of an appraisal model.

This makes use of data on the ratings for an individual from two or more individuals and calculating the correlations between and among the data sets. The correlations have a range of between zero and one. As such, a correlation of one means that the individuals rating a specific person had absolute agreement and they provide the same rate to a specific employees (Miller, & Thornton, 2006).

Advantages and disadvantages of the 360-degree appraisal model.

From the study it has been identified that the 360-degree model helps appraise employees from all dimensions. The tool has the advantage that it helps employees determine their effectiveness and performance within the organization as perceived by different stakeholders. It is a strong tool in evaluating the performance of an organization because it reduces biases which may be generated from the reliance on one dimension of evaluation. The 360-degree feedback model is accurate in evaluating lower-level jobs. Employees at the lower levels are evaluated by their peers, managers and other stakeholders and minimal biases have been identified to arise when evaluating employees at this level. However, the model has been found to be ineffective in evaluating employees at higher-level jobs. Managers at higher-level positions have been found to be ineffective in rating other managers.

Therefore, the 360-degree appraisal model is not effective in determining the performance of employees at higher levels of the organization (Miller, & Thornton, 2006).

Using this model indicates that the use of ranks is better than the use of rates to evaluate the performance of employees in an organization. The use of ratings to perform the 360-degree appraisal is not accurate because it contains leniency error which may mislead the interpreter. There is no leniency error when using rankings to evaluate the performance of employees. Therefore, rankings are better than ratings when applying the 360-degree feedback. To explain this, suppose a rating of fivepoint scale is used to rate employees, several employees can achieve five points out of the five-point scale. However, when a rank is used such that all employees are ranked from top to bottom, only one employee can be ranked in the first position.

This means that ratings allow many elements to be grouped in one level of performance while rankings do not allow more than one employees to be categorized in one group of performance level (Miller, & Thornton, 2006).

Effects of 360-degree appraisal on employees Upper-level managers do not appraise managers fairly unless they have adequate knowledge about their performance. Upper level managers require to have worked with managers at other levels to understand them and rate them properly.

This implies that upper-level managers should be given enough time to learn the characteristics of other managers. Employees at other levels are similarly affected in their rating such that lack of adequate time to learn their peers may cause biases in the feedback they provide. Bias in rating employees may affect the performance of employees. Poor rating and ranking of the performance of employees may negatively affect their performance because they are not motivated to improve their

performance. It is encouraged that people used in the rating of employees be accurate and avoid biases because this may have a negative impact on the performance of employees. On the other hand, a rating higher than the actual rating may encourage an employee to increase performance. It is important for employers and managers to make proper decisions about implementing the results obtained from the 360-degree appraisal model (Miller, & Thornton, 2006). Conducting the appraisal of performance for all employees is an expensive exercise which should be actualized to ensure performance of employees is improved.

Effects of 360-degree appraisal on departmental performance Departmental heads have the obligation of collecting accurate information about the performance of employees under their jurisdiction. This can be done by ensuring that new employees are appraised after a substantial period of time to avoid biases about their performance. The performance of a department is affected by the feedback obtained about the performance of employees. When employees are rated or ranked poorly, their morale is reduced and they may reduce their level of performance. Positive appraisal motivates employees to improve their performance and may be effective in improving the performance of a department. The implementation of the findings of the 360-degree feedback is very important in ensuring that the departmental performance is maintained at a higher level. When the feedback about the performance of employees is negative, action must be taken to avoid the declining performance of employees. Positive feedback indicates that the performance of employees is increasing and the departmental heads should motivate their subordinates to continue improving their performance. Promotions and

increment in salary should be done on the basis of the information obtained about the performance of employees (McConnell, 2007).

Suggestions for Improvement When conducting 360-degree feedback appraisal it is important to separate data collected into two distinct categories. One of the groups should consist of employees who have known other employees for a period of more than one year.

The other group should consist of employees who have known their colleagues for a period of less than one year. By separating the groups of employees it will be possible to come up with unbiased feedback about the performance of employees.

Knowing a person for a period of more than one year helps develop the best rating and ranking for their performance. A short period of time of appraising employees may be biased because there is inadequate experience about their performance and may cause misleading feedbacks. To ensure reliability in the ratings about the performance of employees it is important to conduct rate-rerate correlations. This is a system where employees are required to rate their peers and they rate the same employees after a specific duration of time. This measures consistency in the rating of performance and helps reduce the level of biasness (Miller, & Thornton, 2006).

Conclusion From the findings of this paper it is evident that that rating a lower-level job is more accurate than rating a job at a higher level. The use of rankings is more efficient is evaluating the performance of employees compared to ratings.

Employees require enough time to learn about their peers so that they can rate them fairly. To obtain unbiased feedbacks about employee performance requires obtaining data from employees with adequate knowledge about their peers. Strategies on improving the performance of employees should be developed from the 360-degree

appraisal system to ensure employees are encouraged to continue with good performance while poor performance is discouraged. The 360-degree appraisal is a strong tool of evaluating the performance of employees and managers should apply such a system in improving the performance of employees.

References Grote, D. and Grote, R. C. (2002). The performance appraisal question and answer book: a survival guide for managers. AMACOM Div American Mgmt Assn.

ISBN 081447151X, 9780814471517.

Miller, C. E. and Thornton, C. L. (2006). How accurate are your performance appraisals? Public Personnel Management, 35(2), 153-162. Retrieved September 19, 2010, from ABI/INFORM Global. (Document ID: 1106671751).

McConnell, C. R. (2007). The health care managers human resources handbook, 1e.

ISBN: 0763725978. Jones and Bartlett Publishers.

Rao, T. V. and Rao, R. (2005). The power of 360 degree feedback: maximizing managerial and leadership effectiveness. SAGE. ISBN 0761932984, 9780761932987