OTHER PAPERS BY amy
caloy jun meliza
Objective Based Managerial Performance System
An Input for Continuous Improvement in Office Systems and Procedures
by Alexander R. Madrigal1
It is imperative for organizations to continuously verify effectively the alignment and convergence of its goals or objectives, and the commitment of its personnel. Management and organization would therefore require a system of control and monitoring tool that will provide adequate measures on the accuracy of its direction and focus, both at the institutional and human resource level. It is in this context that the essence of a performance evaluation and appraisal system is well emphasized.
This paper is a documentation of the conceptual framework and experience of the author in an attempt to further improve management of an organization through the continuous enhancement of performance appraisal and evaluation system of the managerial and technical functions of personnel in a government agency.
This paper is also a supplemental requirement of a class exercise in MGT 201 (Principles and Practices in Management) at the University of the Philippines at Los Baños, wherein students are required to develop managerial concepts and initiatives that could be applied in their respective work areas and assignments.
II. Conceptual Framework
- Performance Appraisal System
1. What is Performance Appraisal?
Appraisal is, or should be, an integral part of a system of managing. Knowing how well a manager plans, organizes, staffs, leads, and controls is really the only way to ensure that those occupying managerial positions are actually managing effectively (Koontz et al. 1986). It is sometimes been referred to as the Achilles’ heel of managerial staffing.
The appraisal should measure both performance in accomplishing goals and plans and performance as a manager. An emerging view in performance appraisal is the netted relations of each individual performance as an element of an entire organic unit performing a common purpose contributing to the aggregates of accomplishment of the institution. In such cases the distinctive contribution of each person has to be thoroughly evaluated and validated to avoid impartiality in providing incentives and rewards. As such, the project based or goal & objective performance and management functional efficiency of each person has to have a strong conceptual framework and foundation wherein people are encouraged and could firmly be proud of his part in the growth of the organization.
Effective appraisal is important not only in career management and
Incentives systems but also in legal processes where complains and termination has to be supported with reliable and valid document.
2. Goals of Performance Appraisal
Brief in 1984 cited several reasons why there is a need to conduct performance appraisals as follows:
- As an Input to Personnel Decision Making
Transfers, promotions and termination of staff would require management deliberations based on an extensive appraisal of the individual. The employee’s current and past data indicating job performance will be an important part of such deliberations.
- Feedback to the Employee
The information provided to an employee in a form of a feedback regarding his or her action on the job could provide a self -assessment benchmark figure where further improvement of each individual could firmly be anchored.
- Individual Development Needs
Areas of needs for training and development could only be validated with adequate personnel evaluation rooted out from an effective appraisal system.
- Validation of Selection Techniques
Performance appraisal information may serve as a means of validating the appropriateness of a particular selection procedure. Inadequate performance measurement may not give the true employee performance and could possibly be disadvantaged in most cases by the less productive and mediocre counterparts.
- Human Resource Planning
The future of the organization relies strongly on its human resource. Without the accurate appraisal data of each employee, management plans and decisions related to personnel development and deployment will lack strategic foundations.
Donnel (1961) highlighted the importance of managers to differentiate between the current performance and the promotability (potential performance) of employees. It is not safe to assume that a person with the skill s and ability to perform well in one job will automatically perform well in a different or more responsible position. This is why people are often promoted to positions in which they cannot perform adequately.
The effectiveness of the evaluation technique used in performance appraisal should address the needs of the organization. It is imperative that assessment should only take place if there is agreement as to the goal(s) of the evaluation process (e.g. employee development, human resource planning, personnel decision making, etc.). The empirical and subjective data should also be derived in order to determine the extent to which the technique meets the expected outcome.
During formal appraisals, it will be helpful to have notes and files of specific actions during review periods to guide the rater to an accurate judgment. The rater could then specify examples to clarify points and help employees understand the ratings. In such manner, employees know not only why they were rated, but also why they received those ratings. Proper documentation could also support your decisions to defend job evaluations legally. Make documentation consistent with oral comments and actions.
In most instances, it will be helpful to anticipate unpredicted consequences of the appraisal process that tends to be an emotionally grounded exercise.
Some of the recommended guidelines for employee appraisal were outlined by Brief (1984) as follows:
- Appraisal should be formalized, standardized, and made as objective as possible
- Formal job descriptions for all positions evaluated should be
- Subjective ratings should be considered only as one of the component of an overall process.
- Evaluators should be trained in performance appraisal techniques that use written qualifications for transfer and promotion.
- Evaluators should have substantial daily contact with the employees with whom they evaluate.
- Weights should be fixed to various performance
- Whenever possible, evaluation should be conducted by more than one evaluator.
- Performance standards should be communicated to and understood by
- Clearly defined dimensions of job performance should be used.
- Performance dimensions should be behaviorally based and ratings should be supported by objective observable behaviors.
- Appraisal system should be validated and psychometrically sound.
- Provide a mechanism of appeal if an employee disagrees with a supervisor’s appraisal.
The use of evaluation tools is prone to human errors most often associated with rater. Awareness to such problems could aid the rater to avoid such errors. Foremost of which is the halo effect that occurs when a strong perception of the employee’s performance in one area distorts the rater’s judgment in other areas. Perceiving that an employee as motivated may lead to a preconception that the employee is also competent. There is spillover effect when conclusions from a past performance appraisal interfere with judgments on the current appraisal. When people in higher job level automatically receive better ratings than the lower job level, there is status effect. The rater’s judgment of all employees at the middle or average point in all performance dimensions contributes to the central-tendency effect. A continuous training of raters and evaluators could help improve their effectiveness.
3. Approaches to Performance Appraisal
Performance Appraisal in Accomplishing Goals Based on Verifiable Objectives
The best criteria of managerial performance relate to the ability to set goals intelligently, to plan programs that will accomplish those goals, and to succeed in achieving them. This system of appraising is almost adequate. However, it still has to be supplemented with other method that will take into consideration the elimination of sheer luck and uncontrollable failure factors.
The process of managing and appraising by objectives should not be perceived only as an appraisal technique but as an essential elements in the entire process of managing by objectives (MBO) whereby supervisors and subordinates mutually agree on measurable performance goals for a certain period of time. It offers an opportunity for both parties to develop plan of actions and specify resources for achieving them. Progress is then monitored and achievement of goals is evaluated in a performance-review session.
The key features of the MBO appraisal concept are
- Supervisor-subordinate interaction
- Supervisor-subordinate mutually set goals
- Supervisor-subordinate mutually set performance
- Emphasis on present and future
- Emphasis on results (not means)
- Frequent feedback
- Goal reassessment
- Performance criteria reassessment
- Work-related and career-oriented goals
In such a technique, employees have maximum input into the criteria by which their performance will be evaluated. Focus on job behavior and accomplishments rather on personal qualities, traits, or work attitudes are then achieved. Because objectives are jointly defined from the start, there is less uncertainty and defensiveness about the appraisal process thereby enhancing cooperation and communication in the workplace.
One of the major problems with the above-mentioned technique is the ownership of the goals defined in the evaluation criteria. Such problem may be avoided with a clear agreement of both parties that bounds all accomplishments under one common organizational objective. Such process could also eliminate the common weakness of including broader, less measurable, long-range objectives.
Appraising Managers as Managers
The fundamentals of management are the most appropriate standards to be used for appraising managers as managers (Koontz, et al, 1986). The program involves classifying the functions of the manager and reflecting on the effectiveness of the manager in each specific area. It could give the evaluator some benchmarks to measure how well subordinates understand and are following the functions of management. It is also more applicable than evaluation based on such broad standards as work and dress habits, cooperation, intelligence, judgment, or loyalty. When used in combination with appraisal of the performance of plans and goals, weaknesses in many appraisal systems is thoroughly addressed.
Some of the major areas of management functions covered in this technique involve planning organization/ staffing, delegation/ control, decision making/ directing, administration, compensation, and human resource development. Harold Koontz in the Chapters 5 & 6 and appendices 2-5 of his book Appraising Managers as Managers (New York: McGraw-Hill Book Company, 1971) provides a sample of key questions.
This method of evaluation gives operational meaning to what management really is. It also removes many of the semantics and communication difficulties commonly encountered because of the use of standard reference text for interpretation of concepts and terms. The program acts as a supplement to and a check on appraisals of managers’ effectiveness insetting and achieving goals.
In order to ensure its application to technical positions it is used in combination with the goal oriented appraisal system approach. It may take some form of complexity and time-consuming efforts but it is a time well spent.
- A New Perspective in Performance Appraisal: The Case of the WXY
1. The Standard Performance Appraisal System in the WXY
The Career Executive Service Guidelines
Performance of employees at the first and second levels of the civil service is periodically evaluated through the Career Performance Evaluation System or CPES developed and administered by the CES Board. The CPES, besides measuring the performance in accomplishing office objectives and projects, also gauges performance in undertaking managerial functions.
The main feature of the CPES is the performance contract (PC) entered into by the superior and subordinate. It contains a number of key result areas (KRAs) or a listing of specific undertakings and activities arising from official functions, including some proposed innovations for office problems to be solved within the year. It also contains the commitment of support of the superior to ensure success of the implementation of the
Superior and immediate subordinate using the prescribed forms conduct the evaluation. The two dimensions of performance that shall be considered are: accomplishment in the rating period and managerial competence. The big bulk of the rating in accomplishments shall come from the superior. On the other hand, the subordinates will focus more on the managerial competence.
Every agency is encourage to develop their own performance rating system based on the guidelines on performance appraisal issued by CPES on the premise that such system obtain approval form the Civil Service Commission.
The Stages of Development of the Appraisal System at WXY
- The Early Method
As early as 1983, the WXY Regional Office already adopts a performance rating system commonly used in the entire agency. It has 2 basic components; Part I that contributes 75% is focused on performance based on actual duties, activities and intervening tasks, and Part II is based on behavioral traits such as public relations, punctuality/ attendance, potential, and office regulation compliance (Annex A.).
The old system has several weaknesses as follows:
- Part I spell out the actual duties, activities and intervening tasks without defining the distribution of weights in terms of efforts and resources allocated nor considering the factor of priority programs and projects.
- The rating scale of 1-10 does not spell out the ranges to which an actual performance can be rated according to planned targets.
- The appraisal is unidirectional; supervisor rating the subordinate.
- Managerial competence is not the main focus in the second part of the evaluation but more on traits such as compliance to office regulation and public relation.
- Punctuality criteria can be subsumed in the office regulation compliance part.
- Public relations criteria requires further qualifying statement such as courtesy, respect, and other interpersonal traits.
- Decision-making and initiative traits is placed at a lower level compared to traits like leadership, creativity and innovativeness a shown in the point score allocation.
In general, the old system could be improved to a large extent by working on the mentioned weaknesses. The previous management until 1995 used the same form for the administrative and the technical staff.
- The Early Revisions
The institutionalization of the Planning, Monitoring and Evaluation Unit (PMEU) in 1995 as a functional unit under the Office of the Regional Director strengthened the control and evaluation function of the WXY management. One of the early improvements initiated by the said unit is the evolvement of a relevant and more effective means of appraising individual performance as an essential component contributing to the overall performance of the organization and its management.
The project-based objective performance target of the head of agency is linked to individual performance contract according to each level of responsibilities. There is hierarchal connection of performance commitment and appraisal within the organization. In such manner a sense of unified commitment is evolved in the organizational objectives.
The weaknesses mentioned in the earlier method were all addressed in the revisions that were made. Major revisions were on the area of program and project based goals and objective performance appraisal. The tasks, activities and intervening targets were replaced with KRAs. Aside from allocating percentage distribution to KRAs, ranges of values corresponding to each level of target dimensions (quantity, quality and time) were likewise introduced (Annex B1). The managerial competence replaced the traits based evaluation criteria.
Management of work, people, resources, linkages and constraints were included with varying degree of weights as required by the management. The higher allocation of points in the report and memorandum compliance part is a strategic move to encourage efficient submission of reports from the various provincial offices. Innovativeness receives least points due to the less priority of regional offices for research and development. Development needs were integrated in the evaluation form (Annex B2).
The revised method still offers some room for subjective judgment and bias. There is still some difficulty in qualifying and identifying qualitative dimension of target projects. Managerial competence criteria have not yet been clearly defined in terms of specific verifiable output.
Performance appraisal is still unidirectional.
- The New Concept
The desire to continuously improve the appraisal system compelled the WXY’s Planning, Monitoring and Evaluation Unit in year 2000 to propose another set of revision in the Performance Appraisal-Rating System focusing more on enhancing the area of managerial competency criteria and evaluation procedure. Applying the new CPES guiding principles, improvements were made to incorporate the multiple rater technique, level-based percentage weight distribution and the objectively measurable managerial functional behavior.
2. Key Principles and Concepts
The new framework integrates several relevant principles and key concepts in management and organization:
- Appraisal should assess, in verifiable terms, the managerial competency and the goals or objective accomplishment of the personnel.
- A comprehensive assessment of performance with limited bias and error is possible with the multiple appraiser method whereby overall perspective is reflective of the total performance of the individual. The multiple appraiser method requires an evaluation by the superior and by the subordinates.
- There is a sense of commitment derived from a management by objective and appraisal technique.
- Managerial competency should transcribe the performance of managers in the discharge of managerial functions.
- The appraisal is not an end but a means to support the career development of the employee.
- Proper documentation of the appraisal activities could aid the rater in performance interview or discussions and in the event of legal procedures.
3. Conceptual Model
- Performance Target and Appraisal Activities
- The Annual Plan spells out the target programs and projects and then translates the same into activities with key result areas and
bjectively verifiable parameters.
- Functional Groups or Units identifies and indicates commitments relative to approved projects and programs and discuss the targets
with respective superiors or supervisors.
- Members of each unit indicates their target KRAs and percentage weight distribution in all the three project dimension (quantity, quality and time) as part of the overall plans and programs
- Performance Target worksheet is finalized and signed by both parties and noted by the Regional Director.
- At the middle of the year an appraisal of performance is conducted using the concept mentioned previously.
- After thorough discussion and validation of information and data, the performance rating worksheet is finalized and signed by all parties.
- In case of unresolved cases wherein rater and ratee do not agree the matter is brought to the attention of the rating board to verify the validity of the rating output.
III. Views and Comments
- Strengths and Weaknesses of the New Performance Appraisal System
- It involves a multiple rater method that integrates the total perspective of the performance of the manager from the superior and subordinates’ point of view.
- It has enhanced the evaluation criteria for managerial competence at the superior and subordinate level.
- It incorporates a review procedure to address complaints related to rating.
- It encourages subordinate and superior interaction.
- It defines the areas of improvement that an employee has to address.
- It minimized to an extent the occurrence of bias and error.
- It is time and resources consuming and would require the involvement of more rater.
- It still has not improved on the quality dimension of project performance criteria.
Areas of Improvement
- The assignment of project activities and targets has to be rationalized and made relevant in relation to the varied job description and expertise of the employees.
- The quality parameter associated with project KRAs needs further definition and qualification to eliminate the remaining source of subjectivity and bias in the technique.
- A computer based software application could be developed based on the developed appraisal system to provide effective management tool in data processing, decision analysis, evaluation and career mapping..
Management continuously aspires to be effective in all of its functional areas of concern. In the process of developing its effectiveness and efficiency, it would require the deployment of an armament of management tools and techniques. Most of the basic foundation is inherent in the observance of basic management principles.
In the evolvement of an appropriate performance appraisal technique for a particular organization, the process of evolvement and conceptualization remains a continuous and cyclical activity that requires persistence, commitment to excellence in service and living the assigned role in the organization. All the efforts poured into the process and its implementation will all be in vain if it fails to encourage and develop the individual as an element of one wholeness.
Appraisal is to mirror oneself in order to view the window in a renewed
- Cyrill O. Donnel, " Ground Rules for Using Committees", Management Review. 72, No.10 (1961): 63-67.
- Arthur P. Brief, " Performance Appraisal: Current Issues in Performance Appraisal" In Andrew F. Sikula & John F. Mc Kemra, The Management of Human Resources (Canada: John Wiley and Sons, Inc. 1984) pp. 251-267.
- Cynthia Benyman-Fink, The Manager’s Desk Reference. ( New York: AMACOM, 1980) pp. 215-227.
- Civil Service Commission. "Career Executive Service Handbook". Philippines.
- Harold Koontz, Cyrill O. Donnel and Heinz Weihrich. Essentials of Management. McGraw-Hill Book Company. 4th Edititon. 1986.
- James F. Stoner, R. Edward Freeman, and Daniel R. Gilbert, Jr. Management. Prentice Hall International Editions. 6th Edition.2000.
1Supervising Science Research
Specialists and Planning Officer of the Department of Science and Technology
Region IV, Timugan, Los Baños, Laguna, Philippines