AN EFFECTIVE METHOD OF PERFORMANCE APPRAISAL FOR
İstanbul Aydın Üniversitesi Dergisi 35, (2017) (1-12)AN EFFECTIVE METHOD OF PERFORMANCEAPPRAISAL FOR EMPLOYEE MOTIVATIONPınar KARAHANIstanbul Aydın Universitypinarkarahan@outlook.deBekir Emre KURTULMUŞIstanbul Aydin Universityemrekurtulmus@aydin.edu.trABSTRACTThe reward system of many organizations depends on performance appraisals,made by the managers. Certainly, appraising an employee’s performance is oftenmore difficult than people think. The manager gives a performance appraisalwith a subjective view, which affects the self-awareness of the employee andthe perception of the manager’s ability to evaluate performance. It is a tool toappraise the employee’s strength and weaknesses and provide helpful measuresto overcome weaknesses. Motivated employee will improve his workings to bemore effective in terms of quality and quantity, so he can participate efficient toachieve the objectives of the organization. This study is analysing the relationshipbetween performance appraisal and employee motivation. The research is basedon literature and also interviews, which are conducted with managers of leadingpositions, who have the ability and permission to evaluate employees. Theinterviews deliver primary data that represents the opinion and thoughts of themanagers.Keywords: Performance Appraisal, Employee Motivation, Motivation, HumanResources, Motivation, Employee Performance1
AN EFFECTIVE METHOD OF PERFORMANCE APPRAISAL FOR EMPLOYEE MOTIVATIONÇALIŞAN MOTİVASYONU İÇİN ETKİLİ BİR METOT OLARAKPERFORMANS DEĞERLENDİRMESİÖZBirçok organizasyonun ödül sistemleri, yöneticilerin yaptığı performansdeğerlemelerine bağlıdır. Bir çalışanın performansını değerlendirmek,sanıldığından daha zordur. Yöneticiler sübjektif bakış açısıyla çalışanınınfarkındalığını göz önünde bulundurarak performans değerlendirmesi yaparlar.Performans değerleme sitemleri, çalışanların güçlü ve zayıf yanlarını tespitetmek ve zayıflıklarının üstesinden gelmek için yararlı önlemler sağlayan biraraçtır. Motive edilmiş çalışan, daha etkin ve verimli olmak için çalışmalarınıiyileştirir ve bu şekilde kuruluşun amaçlarına da etkin bir şekilde katılmışolur. Ayrıca yöneticilerin çalışanlarını motive ederek daha adil bir sistemoluşturmak için sağlıklı bir çalışma ortamı sağlamak ve için mevcut sistemlerinigeliştirmek veya yeni performans değerleme sistemleri oluşturmak zorundadır.Bu nedenle bu tez, performans değerlemesi ile çalışan motivasyonu arasındadoğru orantılı bir ilişki olduğunu savunan ve bunu analiz eden tezdir.Anahtar Kelimeler: Motivasyon, Halka İlişkiler, İşçi Güdülemesi, PerformansDeğerlendirmesi, İş Değerlendirmesi1. IntroductionIn our lives, we are confronted with evaluation of our performance. It beginswith school life and continues with our work life. At school, students take examsin order to be tested and evaluated in knowledge. They face the same situationafter graduation. The supervisor evaluates the performances by giving tasks andappraising them by using different performance appraisal tools. That meansevaluation is a continuing process. The process of evaluating employees is acrucial part in today’s business life. Theorists have developed different methodsand tools to evaluate employees. The evaluation is important for supervisorsto understand the progress of each and every employee, but also to analyse thejob sequence. From the employee’s point of view, the evaluation is also of greatsignificance too. Firstly, it is a review of their performance. Secondly, it is anopportunity to see the strengths and weaknesses of oneself and that contributes inmaking an effort to perform better in the next business year. To put it in a nutshell,it is of big importance for both sides.From the organizational point of view, the topic evaluation is defined as a methodcalled ‘Performance Appraisal’. This method enables to evaluate the performanceof employees and to guide the employee in the right direction (oxforddictionaries.com).2
Pınar KARAHAN, Bekir Emre KURTULMUŞThe evaluation has one main target audience: The Employees. Therefore, allefforts are done for: Motivate employees and increase their commitmentAppropriate measurement of performance and skillsAppropriate reward and incentivesProvision of career opportunities (Olson,1981) (1)Another field of application is for motivational causes. The idea is to conduct theevaluation and communicate the results to the employees to help them encourageand improve themselves. According to a statistic concerning the employeemotivation, a lot of people are unsatisfied and demotivated at work. Theyrepresent different opinions and reasons for this issue. The motivation problemcauses 10% absence at work, which is a huge problem for work organizations.Furthermore, 34% of the employees justify their absence at work by claiming it isdue to a lack of appreciation. For instance, a study in the United States conductedwith 1000 employees, says that 63% of their discomfort is due to the same ation/) (2). Employee motivation isof big importance for today’s business life.They build the body of the organization, when it comes to achieving the goals.Individuals are different in their working style, motivation, discipline andambition. Some are intrinsic motivated, whereby others are extrinsic motivated.The key is to find the balance as well as tools to balance the performance andthe motivation of employees. Therefore, performance appraisal and its effect onmotivation is a perfect research niche.2. Literature ReviewThe motivation of the employees has a huge impact on the business life of theorganizations. Demotivated employees work inefficient and that causes costs.The reason for this is that they are paid even though their work is inefficient.According to a study of McLean & Company, employees with less commitmenttowards the organization cost estimated 3400 Dollar for 10.000 Dollar annualsalary ) (3-2). Another issue isthat managers, but also the organization itself, their top-level leaders includedbelieve that performance appraisal is time consuming, costly and ineffective.Although there is no evidence for it’s ineffectiveness. The named reasons arenot enough to proof the ineffectiveness of a tool. Furthermore, I couldn’t findany literature, article or journal with constructive criticism about performanceappraisal. Actually, performance appraisals have advantages of motivatingemployees, increasing commitment and developing skills. The main problem isİstanbul Aydın Üniversitesi Dergisi 35, (2017) (1-12)3
AN EFFECTIVE METHOD OF PERFORMANCE APPRAISAL FOR EMPLOYEE MOTIVATIONthat managers have prejudices and therefore they don’t take time to apply thistool appropriately.2.1. Performance Appraisal and MotivationMotivation is a mental event of human beings, which determines the course ofaction. It does not arise from what someone says about his or her own experiencesor their behaviour, therefore it is not an innate problem. Fact is that motivationis not a behavioural problem. There is no behaviour from which you can assumethat motivates. The theoretical dedication upon something in the behaviour itselfwill be assumed as motivated. Any definition to how motivated people look andwhat kind of behaviour we see as motivated depends on the explanation of howwe regard behaviour in general and how we explain it in general. Therefore, wecan assume, that motivation is neither a fact of experience nor a fact of behaviour,but a concept we use when we explain behaviour (Bolles, 1975) (4-2).Performance appraisal is a process, which will be described as tool for determiningand communicating the performance of employees. It provides information aboutthe workflow, stand of the work and how employees handle responsibilities.The evaluation is essential for the administrative part of the organization tomake future plans, because it identifies training needs and plans for employeedevelopment (Rue, Byars, 2005) (5-3).Furthermore, the appraisal is an important tool that seeks for better, more accurate,more cost-effective ways for apprising job performance and employee motivation(Murphy, Cleveland, 1991). At the same time, it is a demanded system with asignificant technique targeted to improve the performance of the employee withinthe organization (Rue, Byars, 2005). Additionally, an effective performanceappraisal is an integral part of organization’s human resource managementeffectiveness (Bach, Sisson, 2000) (6-4).The process of the performance appraisal system can be categorized into foursteps. Performance appraisal systems include performance standards, methodsfor determining individual performance, adjustment between standards andevaluations of performance. First step of arranging performance standardsconstitutes the responsibilities of the job description. The job standards are setagainst the worker performance. The second step is to determine the employeeperformance (such as traits, behavioural approach, ranking methods, resultsmethods, 360-degree evaluation and management by objectives (MBO). Afterdetermining the employee performance, ensues an adjustment of the standards.That means, the adjustment of the documented appraisal and the standards,settled in the job description (Bach, Sisson, 2000). Nevertheless, according4
Pınar KARAHAN, Bekir Emre KURTULMUŞto the literature and todays business some organizations are not satisfied withtheir performance appraisal system. This means that the performance appraisalsystem is not an appropriate method to increase employee motivation within theorganization (Rue, Byars, 2005). Although performance appraisal is consideredto be crucial to create a better work environment and improve the output ofemployees, issues such as mismanaged appraisal design, lack of knowledge,lack of giving feedback, time pressure also performance pressure of the topmanagement can lead to ineffectiveness (Arbor, 1970) (7-5). Therefore a welldesigned performance appraisal is of big importance for the positive effecton employee. At the same time, organizations have to be aware of differentmotivation theories, in order to prevent failure in performance appraisal.2.2. Meaning of AppraisingBefore designing an appraisal, it is important to understand the special meaningbehind the ‘Appraisal’ system. When you appraise something or someone, you sete certain value on it. An explanatory example is buying a house. There are differentcategories you have to consider in buying a house. The value of a house willdepend on insurance purposes, tax purposes, the costs spend to design, materialsand labor. Another aspect is the neighborhood, the distance to public transportationor any other environmental influences (Kellogg, 1965) (8-6). Form this appearsthat one has to consider a lot of aspects, before appraising. Naturally, you cannotcompare things with human beings. The point is that, the most difficult thing isto appraise human beings. People have no price or quoted figures to put a valueon these kind of criteria’s. The criteria might be ‘how worth is his work?’. Eventough, this question is an easy one, it is controversy among managers. Therefore,a manager has to recognize, that his appraisal is a subjective judgment based oninformation, which is not complete or precise. He can specify his appraisal bystinting his planned purposes (Mohrman, Resnick- West, Lawler III, 1989) (9-7).2.3. Who benefits from Appraisals?Managers often do appraisals, in order to influence his employees. His intentionis to push his employees to a certain direction, to help them making certaindecisions or steps. Some academicians believe that the tool for doing this is thediscussion about the appraisal with the employee. Consequently, the questionappears: ‘Is the appraisal helpful for the employee?’. Unfortunately, there is noaccurate answer. A manager, who makes appraisals, thinks that he needs it tomake important further decisions. An employee may ask for an appraisal, in orderto improve himself or make decisions about his further actions, but only if hetrusts his manager’s judgment. Mostly, appraisals are made without asking forthe need. In these cases, no one can predict or know whether an employee feels aneed for an appraisal or if he trusts or not. Depending on the results, the employeeİstanbul Aydın Üniversitesi Dergisi 35, (2017) (1-12)5
AN EFFECTIVE METHOD OF PERFORMANCE APPRAISAL FOR EMPLOYEE MOTIVATIONcan decide whether to heed the appraisal or not. The result of an appraisal isonly an input from manager’s, the heed of the information depends on severalfactors like, whether the employee trusts or not, the relationship between themand the validity of his appraisal (Kellogg, 1965) (10-6). For example, Susan whois stressed, because of the production of a certain product with a deadline, will notwelcome the well-intended discussion about her career prospects. On the otherhand, Ann, an inexperienced newcomer, will be grateful for any constructivefeedback. As said before, the information every manager gives, will only be apart of an employee’s decision about his further career prospects (Olson, 1981)(11-1). Appraisal is a necessary managerial task. It is a subjective value-basedjudgment of a person’s abilities and competences to fulfill given tasks. It requiresa well defined purpose, precise and relevant information. A professional appraisalserves as guideposts for a manager’s own actions and plans and also as a smallfootnote for an employee to review his actions (Olson, 1981) (12-1).2.4. Employee Motivation and PerformanceMotivation employees in order to generate higher performance are difficult. Amanager has to understand the employees, establish empathy and understand themotives, which lead to motivation. If an organization is aware of his employee’smotives, they can work on certain incentives to apply them at the proper time.Motivation, commitment and performance cannot be enforced, you can achieveit by communication, participation, fairness and constructive feedback. In thefollowing part, we will discuss motivators with effective contribution to employeemotivation.3. Sampling & MethodologyDue to better interaction with participants and data collection, the method used forthis study is a qualitative method. The semi- structured interviews are beneficial,because it delivers detailed information about certain problems and also clearinformation about their thoughts.As a result, the researcher can analyse different opinions and find a solution forcertain business issues (Berg, Ketchen, 2009) (13-8).The companies selected for the research were from different areas, in order to havea wide spectrum of opinions. In this research, the questions were prepared to answerthe question ‘Is performance appraisal an effective tool for employee motivation?’The interview was sent to 30 executives and leaders of organizations. The sectorsare a few of the mainly represented organizations in the area of Mannheim (myresidence, in Baden- Württemberg, Germany). The aim was to pick medium sized6
Pınar KARAHAN, Bekir Emre KURTULMUŞorganizations and also organizations of sectors, which are mainly represented inMannheim, in order to have a realistic analysis of the actual situation.The participant rate was because of the data privacy regulations low. The dataprivacy in Germany is very strict, but still 11 people have successfully participated.These 11 participants are all in leading positions, due to the purpose of this study,only executives were asked, not employees.The most appropriate method for this research was the semi- structured interviewmethod as a qualitative method. The semi - structured method with open- endedquestions is a good alternative to ask questions, which may digress from theinterview, but still provide important information about the topic. Moreover, thismethod allows to be prepared for a certain topic and eases the preparation ofthe interview. Also, from the participant’s point of view, this method is a, whichallows to feel free in writing their opinion in their own conditions. The reasonfor this decision was, that I wanted to have a discussion with managers and tounderstand their opinion about performance appraisals and also their opinionabout employee motivation.The participants of the interview were from different departments and differentorganizations. Due to data privacy regulations, the participants are anonymbecause of different regulations, so it was important to gain trust and promisethem, not to publish their names. The represented departments and positions were: Head of Global ProductionHead of Pigments Global Operational ControllingHead of SalesManager, PharmacyHead of ProductionHead of HRHead of DistributionThe interview was only for managers, head of departments and other leadingpositions of the organizations. The answers were quite different, but at the sametime it was able to find similarities. Furthermore, the answers of the managersreflect their working style and the atmosphere in their organization. It wasobvious to see, that every organization have issues concerning the performanceappraisals and also motivation of employees. Another fact is that; the differentsectors have different perspectives on that topic. Almost every organization isconducting a performance appraisal, but not in the right manner. This fact wasnoticeable pattern in several interviews.İstanbul Aydın Üniversitesi Dergisi 35, (2017) (1-12)7
AN EFFECTIVE METHOD OF PERFORMANCE APPRAISAL FOR EMPLOYEE MOTIVATION4. LimitationsThe problem by conducting of the interview was, that not every manager had timeto give detailed information about their performance appraisals. Several questionswere answered too short to analyze certain parts of the interview. Additionally, itwas really difficult to find managers, because every organization has other dataprivacy regulations. As mentioned before, every research and every method haslimitations. In every research, the researcher faces these kinds of problems.5. Data Analysis & DiscussionThe research Interview was conducted with ten managers, supervisors and teamleaders. Although the interview was sent to 30 different managers from differentorganizations, 11 managers responded. The main reason were limitations causedby the strict data privacy regulations, which need to be approved by the topmanagement. This procedure mostly ends with a long waiting period and strictrules about anonymity. The research method of the study was only a qualitativemethod, with semi- structured interviews with open- ended questions. In addition,this method is a good strategy to analyze the opinion of the managers about thatcertain issue.The results of the interviews show that except for the occasional one, most ofthe managers believe that performance appraisal has a positive and motivationaleffect on their employees. They observed, as they described in their interviews,that employees are motivated after appraisals, try to set new goals and achievethem. In addition, they observed a stronger commitment and closer cooperationwithin the teams. Most of the participants value the performance appraisal and seeroom for improvement. Despite the positive effects of the performance appraisal,from the results of the interviews, will be clear, that managers have to be awareof certain facts, in order to conduct an appropriate performance appraisal. Thereare still managers, who perceive performance appraisal as time consuming andineffective. Mostly, the cause of this opinion is the incorrect and misapplicationof the performance appraisal. A supposable reason for these issues is the wrongimplementation of the method into their business.The literature and the results of the interviews, show that feedback is a veryimportant point in case of performance appraisals. One of the research questionswas also to learn how to give feedback. Some organizations train their managersto g
APPRAISAL FOR EMPLOYEE MOTIVATION Pınar KARAHAN Istanbul Aydın University . Therefore, performance appraisal and its effect on motivation is a perfect research niche. 2. Literature Review The motivation of the employees has a huge impact on the business life of the organizations. Demo
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