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Performance appraisals are used by modern organizations and corporations to evaluate employees contributions towards the achievement of the organizations overall aims and objectives. The organizations strategy for business growth is imperative for success and employees play a major role towards the realization of the company’s strategy. The creation of performance management systems and processes can help organizations to realize success. Effective performance management systems comprise of the elements of employee monitoring and evaluation as well as employee rewards programs.
Performance appraisals, however, do not usually work for the organizations sometimes they work against them. In this paper we explore the various advantages and disadvantages of performance appraisals and how they contribute to the achievement of strategic objectives of the organization. This paper will also discuss the forms of bias within the appraisal system. This paper will consider the concept of performance appraisal as a key strategy for the realization of specific company targets. Ko & Hur (2014, 178) presumes that performance appraisals positively advance organizations purpose, mission and vision.
Explain the strategic advantages of performance appraisals
Performance appraisals have multiple advantages for any organization in the world today. One advantage is that performance appraisals aim at providing evidence of employee performance within a specific duration of time. Another advantage is that they help to provide a platform on which managers and employees can interact to resolve emerging performance management issues. Employees can self-evaluate in order to help enhance his or her involvement in organizational matters, processes and activities. Employees also get the chance to reassess their goals and clarify their expectations and the expectations of the organization they work for. Performance appraisals do motivate employees if they are associated to organizational employees merit reward systems. These advantages, among others not here mentioned, are essential towards the achievement of organization’s objectives and goals (Duterhoff, 2014, p. 268).
Performance appraisals also do come with obvious disadvantages for the organization, its managers as well as employees. One disadvantage is that if not properly institutionalized, performance appraisals can generate bad blood among employees and between employers and employees (Ko, 2014, pp. 167-70). Another one is that performance appraisals consume a lot of time and can be especially tasking to employees and managers alike. When they not done correctly, performance appraisals can be a waste of time and resources and can create a stressful work environment which will work against the organization’s purpose. Performance appraisals are only as good as the performance management system within which they operate. These disadvantages can have drastic negative consequences for the execution of company’s vision (Duterhoff, 2014, p. 270).
The potential forms of bias within the appraisal system
A bias is a prejudice. Performance appraisals major impediment is bias. Free and fair employee appraisals are important because an appraisal that is not fair cannot and will not give a proper assessment of employee contributions. One bias is the Contrast Bias and it is where managers evaluate employee’s performance using other employee’s contribution as a standard for assessment. Proper appraisals are done using the company’s or organization’s standards for checks and balance. Another bias is the Halo Bias which manifests itself when an employee is rated highly because of something they do quite well however they are not holistic in their approach to meeting company standards.
These employees are given a free pass for many things that will earn sanctions for other employees. Horn Bias, is another performance appraisal bias and it is where the opposite of the Halo bias occurs. In his case the employee is rated very poorly because of one thing that they do badly and this despite the fact that they are exceptionally good in other things (Camps, 2012, pp. 7-8).
Leniency bias is the bias where a manager will give every employee a satisfactory rating either because of favoritism or because of manager’s lack of interest. Recency bias is a situation where an employee’s recent behavior plays a crucial determinant role in the appraisal. A very bad employee might have done something very good recently and because of it his entire record is expunged. The vice versa can also happen, where a consistently good performer is rated poorly because of something bad he or she has done in the recent past.
Purposeful bias occurs when a manager gives a negative rating to an employee because he or she feels that his position is threatened by that particular employee. This can also be because an employee has shown a sense of defiance of business orders or has a tendency to disregard the organization’s chain of command. Self-bias does occur when employee’s former appraisals influence employee attitude. If a previous appraisal has indicted an employee’s poor performance, such an employee may persist in his or her poor performance. The vice versa is also true for workers or employees with good track records. These are some of the major biases in executing performance evaluations through appraisals (Camps, 2012, pp. 15-6).
How performance appraisals contribute to the achievement of strategic objectives
Performance appraisals can be used to improve employee morale because managers and employees can identify weak points in their contributions towards the achievement of overall organization’s strategic goals. Effective performance appraisals should and must identify and reward top performers. Performance appraisals can also be used in budgeting because it offers the organization a foundation background on which to reward employees. Employee Rewards programs are very costly and they consume adequate financial resources in remuneration expenses. When there is clarity of employee performance, rewards costs can be appropriately allocated so as to maintain employee’s morale.
Performance appraisals are also important in setting short term as well as long term goals. Performance evaluation offers managers and employees time to discuss aspects of professional capacity enhancement and development. Managers can focus on company’s expected growth and how that can be achieved through proper performance management systems (Adler, 2016, pp. 223, 248).
Dusterhoff, C., Cunningham, J. B., & MacGregor, J. N. (2014). The effects of performance rating, leader–member exchange, perceived utility, and organizational justice on performance appraisal satisfaction: Applying a moral judgment perspective. Journal of Business Ethics, 119(2), 265-273.
Adler, S., Campion, M., Colquitt, A., Grubb, A., Murphy, K., Ollander-Krane, R., & Pulakos, E. D. (2016). Getting rid of performance ratings: Genius or folly? A debate. Industrial and Organizational Psychology: Perspectives on Science and Practice, 9(2), 219-252.
Ko, J., & Hur, S. (2014). The impacts of employee benefits, procedural justice, and managerial trustworthiness on work attitudes: Integrated understanding based on social exchange theory. Public Administration Review, 74(2), 176-187.
Camps, J., & Luna‐Arocas, R. (2012). A matter of learning: How human resources affect organizational performance. British Journal of Management, 23(1), 1-21.
Organizations have to recruit their employees on a regular basis to deal with the ones that move out of the companies due to termination of services or the deliberate cessation of services by the employees themselves. Recruitment is the process of attracting the qualified employees to the organization on a timely basis to fill the positions left vacant by the employees that move out of the organization. Recruitment has to focus on the time factor, the qualification aspect and the nature of the tasks that the person is supposed to be doing (Dessler, 2000). Human resource planning caters for the definition of the qualifications.
Whenever the human resource department indicates that there is a need for the additional labor, the organization has to make an array of choices. One of the decisions made is the full-scale recruitments and selection process. However, it is not the best approach for the organization to hire additional labor to meet the needs (Dessler, 2000). There could be some approaches that the firm can enact from within that could be sufficient to meet the labor needs.
Alternatives to recruitment of new employees include the outsourcing of some of the non-core operations to the specialized firms (Gilmore & Williams, 2009). Outsourcing of the functions essentially means that the organization does not have to hire new employees to fulfill the needs of the organization. Contingent labor is also an alternative that the organization has to hiring new employees.
Recruitment also selection is often a costly activity that the management has to control. Therefore, the organization ought to hire the new set of employees after there is a careful consideration of the importance of the employees and the contributions that the employees will bring to the organization (Gilmore & Williams, 2009). In the event that the work volume is fluctuating temporarily, it is prudent for the organization to hire the workers on a part time basis.
Hiring of new employees for a long term must be conducted after there is an establishment of the need for the employee and the long-term contribution that he or she will bring to the organization. For instance, the replacement of the supervisory and managerial employees often runs between 50% to over 100% of the employee salary that they used to earn before moving out. Therefore, hiring of the employees has to be conducted if there is a direct evidence that the position has to be filled using the means (Dessler, 2000).
Retaining the employees also has to be exploited as a means of ensuring that the cost incurred in the replacement is necessary. Therefore, the process of recruitment will come into focus only after all the other avenues of providing the demanded service are exploited fully and exhausted. Recruitment of the employees is the first step taken in the management of labor. The process can take place in two location; internal and external environments (Mondy, Noe & Gowan, 2005).
Promotion from within the company
The promotion policy of the company often has a significant effect on the entre process of recruitment (Gilmore & Williams, 2009). In the event that the vacant position is above the entry levels, it could be prudent for the company to promote a person that has been working with the company. There are different advantages of promoting the person who has been working with an organization. Internal promotions increase the morale of other employees to work hard so that they can get the upcoming positions. The motivation to work hard contributes to the ultimate success of the organization in the end. Promotion also ensures that the person filling the vacant position is not blank on the traditions of the company and the nature of the operations undertaken (Mondy, Noe & Gowan, 2005). This means that he will be able to relate with the policies and practices that the company has adopted all along. He can relate with the top management as well as other employees. Internal promotions ensure that the transition into the new position is occurring at a smooth and consistent manner. Promotions are important tools of encouraging performance in the organizations more so in the stagnant economy whereby there is no significant gain in switching organizations.
In the stagnant economic conditions, the employees have a better chance of career development and advancement if they work up the ladder from within instead of moving to the other organizations. The use of internal promotions also leads to the development of the opinion that the organization recognizes efforts and loyalty. Promotions may not have associated monetary benefits but the simple title is enough to encourage person to double the output or increase it. The only issue with the internal promotions is that the promoted person will leave a staffing gap in the positions that he previously held (Gilmore & Williams, 2009). Therefore, it is not a sufficient means of recruitment since the gap left has to be filled with another recruitment drive. However, the gap that the employee leaves can be easily filled since the position is highly likely to be at a lower level.
The advantage of promoting the employee from within is that the employee is well versed with the organization culture. The employee could have played a vital role in the development of the policies. This makes it easier for the employee to get to speed with the culture of the organization (Mondy, Noe & Gowan, 2005). The transition will be faster. There is also no need of a longer incubation period. The disadvantage of promoting from within is that the organization loses the opportunity of acquiring outside perspectives that the new employees bring to the organization.
The external insights could be vital in changing the performance of the organization. Therefore, there are advantages and disadvantages of promoting from within as opposed to hiring a new person. There is no way right of conducting the hiring process. The selection of the approach to use depends on the organization policy, the nature of the vacancy being filled and the level of the position in the organization hierarchy (Gilmore & Williams, 2009). Higher-level jobs are most likely going to be filled using the internal promotions as opposed to hiring the outsiders since they require more strategic understanding of the organization.
Promotion from within also create the issue of nepotism. Nepotism is the hiring of the relatives of the employees. The internal recruitment drives often create the temptation of the staff members to recommend their relatives to the human resource department. It is important for the human resource manager to understand the organization’s policy as far as hiring of the relatives is concerned (Martin, 2009). The company policy on nepotism informs the human resource department on the best approach to adopt in the hiring process. In the hiring of the relatives of the staff members, it is important to understand the civil right ramification of the decision. In most of the sates, there are explicit rules on the recruitment of the relative over the other applicants.
A civil law suit could be filed against the organization by the aggrieved parties and cite that the organization hires the employees according to their relations and not merit (Gilmore & Williams, 2009).
This aspect must be in focus all the time to ensure that the organization does not incur litigation liability. Issues that the human resource managers ought to know is that refusal to hire a person due to the marital status is illegal and could lead to lawsuits. Therefore, decision on hiring the employees that are related to the workers is controlled by the organization policy and the law of the land. Finding out the stand of the organization on the nepotism issues can help in the avoidance of the traps that arise from the need to hire relatives of the employees. It is also important to separate the related employees such that they work in different departments and there is no chance of favoritism. Hiring of the related people should be done in consideration of the morale issues that will stem from the working environment being dominated by people that come from the same background. How the hiring of a relative affects the morale of the employees is the main determinant of the decision to hire based on nepotism.
The selection of the employee should be an addition to the productivity of the company and not a deterrent to performance. The second criteria in this kind of hiring are the ability of the employee to deliver. The selection of the employee ought to be based on the ability of the said employee to deliver according to the job requirements. It is not appropriate when the immediate supervisor of the employee is a relation by blood or marriage. Therefore, the consideration of a myriad of factor is called for in the event that the company decided to hire employees that are related to the existing employees. Internal recruitment has to consider the aforementioned factors in order for it to be successful (Gilmore & Williams, 2009). Diligent consideration is called for in the event that the position being filled is filled using the internal promotion or when the employees being hired are related in one way or the other to the existing members of staff.
The recruitment of the employees has to consider the external environment and the prevailing condition in the labor market (Martin, 2009). The ability of the company to attract and retain the high level and qualified employees depends on the prevailing market conditions. In the vent that the economy is strong, there is little unemployment (Mathis & Jackson, 2003). The organization has to work harder in the times of strong economy to hire the best employees. There is a high competition of the employees in the labor market with the companies trying to attract the best talent to their stables. The wining company in the competition is the one that has the highest promise of better remuneration and the additional benefits. Incentivizing the recruitment process occurs during the times of high economic performance.
The incentives could be the only thing that differentiates an offer from one company and the other. This means that the recruitment process is particularly expensive during the times of high economic performance (Noe, 2006). In the soft economy, the opposite is true. In this case, the qualified employees are so many such that the issue is no longer finding the right employee but managing the applications that keep flowing in the organization (Mathis & Jackson, 2003). The management of the applications includes paring down the applications to arrive at the few good applications. The conditions in the local labor market and the industry affect the filling of the non-managerial and supervisory positions in the organization. If the organization has global operations, its labor situation will also be affected by the global considerations.
The second external issue that affects recruitment is the legal issues. All markets are controlled by some laws seeking to govern the labor relations. The laws also touch on the process of hiring new employees. For instance, the civil rights act of 1964 outlaws the discrimination of the applicants based on color, race or sex. This law is applicable to the organizations of 15 employees or more (Martin, 2009). There are also laws passed on the discrimination of the employees according to the age. Other laws have been passed on the treatment of the applicants with disabilities. The Americans with disabilities act of 1990 outlaws the discrimination of the employees based on their disabilities.
The law also requires that the employer provide the disabled employee with the reasonable accommodation for the disabled such that if they are hired they will be able to carry out their duties in the desired manner (Mathis & Jackson, 2003). The accommodation is provided by the states department of labor. The employers should not see the employment test as a means of disqualifying the disabled members. However, the test can only be used in the event that the test is for the valid skills that are required to conduct the job. It also has to be administered to all the applicants and not the disabled only (Martin, 2009).
In addition to the federal law on discrimination, there are other laws passed by the sates in a bid to curb the prevalence of the actions of discrimination against the applicants for some positions. The best approach to employment understands the state laws and the federal laws on discrimination (Martin, 2009). The constant updates on the laws on discrimination is important since most of the companies incur a lot of money in law suits brought against them by the employees that feel that they were discriminated against due to their color or race or any other parameter that is outlawed by the federal or state government.
In addition to the financial losses that the employers incur, the organization loses many valuable hours strategizing on the ways to win the suits. The reputation of the company is also affected once it is associated with discriminatory practices. In order for the organization to avoid the negative effect of class action suits based on discriminatory practices, the organization ought to accommodate all the people (Mathis & Jackson, 2003). The recruitment ought to be based on the job skills and qualifications that the person brings to the organization. Hiring ought to endeavor to find the best-suited person to fill the vacant position. The human resource department ought to research and consult the legal experts on the practices that would otherwise amount to discrimination and endeavor to avoid conducting the business of the organization in the discriminatory manner.
The inclusivity of the organization ought to be understood by all the employees since any indication of favoritism and discrimination could culminate in the lawsuits. All employees have to understand the importance of accepting all the people regardless of their physical outlook. The understanding on the equality of all the people among the employees is important since it determines the effectiveness of the accommodation policy even after the company has hired a minority employee (Mathis & Jackson, 2003).
Job posting is one of the most commonly used approaches of recruiting employees from within the origination. The traditional way of posting a job opening was by writing a notice and posting it on the notice board. This is the source of the term posting. The modern way of posting job is by electronic means (Gilmore & Williams, 2009). The job opening could be sent using the intranet or email to the individual employee. Alternatively, the company could print the job vacancy in flyers and distribute them to the employees.
Irrespective of the approach that the company uses, the job posting contains the information on the job, qualifications and the procedures of how to apply for the job. In the event of the internal job posting, the practice requires that all the employees are made aware of the available vacancy. The positing should take special care of notifying the minority workers so that they are aware of the job vacancies in the organization. In as much as not all the employees may be qualified to fill the position, informing them about the vacancy creates the feeling of inclusion among the employees (Gilmore & Williams, 2009). The disadvantage of the job posting method is that it creates cynicism among the employees immediately after the job opening is advertised. The cynicism can lead to the development of competition and unfair mistrust among the employees hence affecting the delivery of the services in the same context.
The second way of recruiting internally is the employee referrals. The practice is based on the belief held by the majority of the employers that the best employees come from the referrals from the trusted and existing employees (Martin, 2009). Current employees could be instrumental in the hiring of new employees. In some cases, the organization pays the employees for all the successful referrals that come from them (Mathis & Jackson, 2003). The gifts are cheaper ways of recruiting since the development of the recruitment process for the position by the organization will cost more than what the average gift certificate costs. However, the referral system does not have to be used entirely. It may be detrimental to the attainment of workforce diversity. Therefore, the system ought to be used sparingly.
There are different ways of generating applicant pools. The approach selected by an organization depends on the organization policies and the budget set aside for the hiring process. If the organization has the right size of resources, it may use the recruitment agencies to identify the best way of recruiting the employees for the position. Outsourcing the hiring and recruitment process to the agency shifts the burden of pooling applicant to the agency. The agency can screen the unqualified applicants. The downside of suing the agencies is that they are often expensive and prohibitive to the small sized organizations (Martin, 2009). Unsolicited walk in applicants could be considered for the position too. However, the walk-in applicants are never sufficient to create a homogeneous pool of applicant from which to select.
In the large organizations, they hire the in-house recruiter that is focused on the generation of the qualified candidates to fill in the positions as they arise. Recruiters are common in the highly technical industries. They direct their efforts to the technical schools and colleges. The internal recruiters are employees of the organization hence their conduct will determine the perception of the applicant on the organization (Mathis & Jackson, 2003). Therefore, it is important that the internal recruiters maintain their image and hold it in the highest light possible since they may cost the organization the right employees by presenting the wrong image.
The organization may decide to advertise for the vacancy on the dailies and the yellow pages. Advertising could vary from a simple statement to a comprehensive media campaign. The adverts may also have options of a URL link that can be used in the application process. Local newspapers are used for the advertisements of the entry-level jobs (Mathis & Jackson, 2003). The newspapers are low cost and can generate the required number of people to fill the positions. Jobs that require technical skills not easily found in the local labor market, it is advisable for the adverts to be placed on media that has a wider reach. In some cases, the recruitment could demand the professional input of employment specialists.
In other situations, the jobs could be offered to interns. The internship is an arrangement that place the student at the organization without any obligation to the organization or the student to take up the position and make it permanent. The internship opportunities increase the chance of the student being employed at the organization since the student has a record of accomplishment of doing the organization requirements (Martin, 2009). He or she is also well versed with the practices of the company in some matters. The origination and the student have the clear understanding of what they are settling for and can make a decision based on facts.
All recruitment activities have to be conducted with the aim of including the most diverse employees. Diversity is the driving force for the attainment of synergy and new perspectives of issues that affect the organization. The diversity ensures that the organization is better suited to serve different and diverse sections of the market.
Selection is the process of picking the most qualified employee from the pool of applicants. The selection process looks at the differentiating factors between the shortlisted candidates. The selection can be conducted using the human metrics results. Analysis of the shortlisted candidates can be conducted in an interview or through a psychometric test. Scores of the employees determine the best choice for the organization.
Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.
Gilmore, S., & Williams, S. (2009). Human resource management. Oxford: Oxford University Press.
Martin, J. (2009). Human resource management. Los Angeles: SAGE.
Mathis, R., & Jackson, J. (2003). Human resource management. Mason, Ohio: Thomson/South-western.
Mondy, R., Noe, R., & Gowan, M. (2005). Human resource management. Upper Saddle River, N.J.: Pearson Prentice Hall.
Noe, R. (2006). Human resource management. Boston, Mass.: McGraw-Hill.
Business performance refers to the measure of output in a business given certain standard measures. A business only achieves high performance if there is cohesion between the management and the work force. The management combines planning, organizing, leadership and control in order to achieve the set goals efficiently and effectively (Chapter, 2014). Efficiency and effectiveness are important factors in a business environment. This paper aims at exploring what is meant by effectiveness and efficiency in the business context.
Business performance is highest when an organization consistently achieves all its goals within the set duration (Chapter, 2014). Efficiency is concerned with the use of resources. Efficiency in business organizations refers to the use of resources that maximizes output. The target for every organization that cares about efficiency aims at using the available resources optimally. One of the most important resources is time. Achieving the goals in time means that the organization is efficient. In addition to effective time management, the ability to meet the set goals is also a measure of efficiency.
Effectiveness in the business context refers to the measure of how appropriate the set goals are to the company mission. When the goals are relevant to the company mission the company is said to be effective. The degree at which the goals are being achieved is also an important factor in determining the effectiveness of an organization (Chapter, 2014). While setting appropriate goals is vital, making sure that they are achieved is equally important. In most business organizations, effectiveness is given a higher priority than efficiency. However, lack of efficiency may lead to ineffectiveness. If an organization fails to utilize it resources well, it may be difficult for the company to meet its goals.
Chapter 1. (2014). Managers and managing.JPG File.
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