Each performance evaluation refers 3 things about each unit of the job.
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Explanation:
senior executive in charge of a failing operation. His only directive was “Get it in the black.” Within two years of that injunction, the new executive moved the operation from a deficit position to one that showed a profit of several million. Fresh from his triumph, the executive announced himself as a candidate for a higher-level position, and indicated that he was already receiving offers from other companies.
The corporate president, however, did not share the executive’s positive opinions of his behavior. In fact, the president was not at all pleased with the way the executive had handled things.
Naturally the executive was dismayed, and when he asked what he had done wrong, the corporate president told him that he had indeed accomplished what he had been asked to do, but he had done it single-handedly, by the sheer force of his own personality. Furthermore, the executive was told, he had replaced people whom the company thought to be good employees with those it regarded as compliant. In effect, by demonstrating his own strength, he had made the organization weaker. Until the executive changed his authoritarian manner, his boss said, it was unlikely that he would be promoted further.
Implicit in this vignette is the major fault in performance appraisal and management by objectives—namely, a fundamental misconception of what is to be appraised.
Performance appraisal has three basic functions: (1) to provide adequate feedback to each person on his or her performance; (2) to serve as a basis for modifying or changing behavior toward more effective working habits; and (3) to provide data to managers with which they may judge future job assignments and compensation. The performance appraisal concept is central to effective management. Much hard and imaginative work has gone into developing and refining it. In fact, there is a great deal of evidence to indicate how useful and effective performance appraisal is. Yet present systems of performance appraisal do not serve any of these functions well.
As it is customarily defined and used, performance appraisal focuses not on behavior but on outcomes of behavior. But even though the executive in the example achieved his objective, he was evaluated on how he attained it. Thus, while the system purports to appraise results, in practice, people are really appraised on how they do things—which is not formally described in the setting of objectives, and for which there are rarely data on record.
In my experience, the crucial aspect of any manager’s job and the source of most failures, which is practically never described, is the “how.” As long as managers appraise the ends yet actually give greater weight to the means, employ a static job description base which does not describe the “how,” and do not have support mechanisms for the appraisal process, widespread dissatisfaction with performance appraisal is bound to continue. In fact, one personnel authority speaks of performance appraisal as “the Achilles heel of our profession…”1
Just how these inadequacies affect performance appraisal systems and how they can be corrected to provide managers with realistic bases for making judgments about employees’ performance is the subject of this article.