EMPLOYEE PERCEPTION OF PERFORMANCE APPRAISAL : A CASE OFKERETAPI TANAHMELAYUBERHAD.

by

ROSENA BINTI MOHD.ALI

Supervisor

DR RADUAN CHE ROSE

Project paper submitted in partial fulfilment of the requirements for the degree ofMasters of Business Administration in the Malaysian Graduate School of Malaysia,

University Putra Malaysia.

May 2001

ACKNOWLEDGEMENT

In the name of ALLAH, the most beneficient and the most merciful. I am utmostthankful for the strength that He gives me throughout the period of completing thisproject and MBA programme.

My deepest gratitude goes to my advisor, Dr. Raduan Che Rose for his patience andassistance, advice and guidance.

My profound thanks also goes to all lecturers who taught the MBA programme.Thank you for the knowledge and experience that you have imparted to methroughout the programme.

My sincere appreciation is dedicated to my ex-employer, Keretapi Tanah MelayuBerhad for giving me the opportunity to obtain the information and for thesupport that I received from my ex-colleagues.

My word of thanks goes to the respondents who have honoured me with theinterviews. Thank you for your kind co-operation, time and effort

Last but not least, my appreciation is dedicated to my husband for his valuedguidance and my six children who has sacrificed tremendously in putting up withme during the whole period of this programme, mere words could not describe mythanks.

11

COPYRIGHT © UiTM

ABSTRACT

Performance appraisals and reviews have become a necessary part of most workenvironments, and -or better or worse - a reality in most organizations. However,as many companies are learning, traditional performance appraisals fail miserablyin positively influencing employee behaviour in today's organization.

In today's dynamic workforce, enlightened companies recognize that employeeswant an environment that encourages constant dialogue between the employer andemployee. Employees want to be recognized, rewarded for their accomplishmentsand need continuous performance feedback. Most employees want frequentfeedback and just annually if their performance is missing the mark so they canmake appropriate changes.

In KTMB's case, the performance appraisal is not used for developmental purposewhere the Human Resource Department treat it as an annual or once-a-yearprocess. Once the forms are filled in, then it is kept aside and most of the time noaction is taken on it More than half of employees surveyed agree that performanceappraisal rarely as accurate as they claim to be , hence, they manifestdisappointment with the practice.

To be truly successful, a performance appraisal system should involve theiremployees in the design and later - required revisions of their performanceappraisal. Feedback must be clear, objective and constructive by telling both sidesof the performance story - the positive and negative which will make the feedbackto be more credible, palatable and useful.

111

COPYRIGHT © UiTM

ABSTRAK

Penilaian prestasi dan kajian semula telah menjadi perkara penting dalampersekitaran pekerjaao samada untuk kebaikan atau keburukan telah menjadisuatu kenyataan didalam kebanyakan organisasL Bagaimana pun, organisasi masihdalam process mengkaji, penilaian prestasi tradisi telah gagal dalammempengaruhi secara positif tingkah laku pekerja.

Dalam sumber tenaga pekerja yang dinamik hari ini, organisasi sedar bahawakakitangan memerlukan persekitaran yang menggalakkan dialog yang kerapdiantara kakitangan dan majikan. Kebanyakan kakitangan mahukanmaklumbalas yang kerap dilakukan bukan hanya setahun sekali, sekiranyaprestasi mereka tidak baik supaya mereka dapat melakukan perubahan.

Di KTMB peniiain prestasi bukan di gunakan untuk tujuan pembangunansomber tenaga manusia malah ia nya di anggap sebagai kerja-kerja tahunan atauproses untuk setahun sekali. Apa yang berlaku di KTMB, bila borang telah di isimaka di simpan sahaja dan tidak ada tindak balas dibuat keatasnya. Mengikutkajian atas perkerja, lebih daripada separuh kakitangan setuju bahawa penilianperstasi ini jarang memberi keputusan yang tepat, dan tidak saperti yang diharapkan.

Keberkesanan dalam peniiain prestasi sepatutnya melibatkan kakitangan dalamproses design dan kemudian menkaji semula peniiain prestasi tersebut Maklum-balas mestilah tepat dan di fahami olih kedua-dua pihak mengenai aspek positifand negatif. Kerjasama yang rapat diantara kedua-dua pihak yang manakakitangan memahami kehendak penilaian dan pibak majikan pula mem puny a iamanah dalam melaksanalcan tugas amat lah penting dalam peniiain pertasi ini.

IV

COPYRIGHT © UiTM

LISTS OF ABBREVIATIONS

KTMB : Keretapi Tanah Melayu BerhadHRM : Human Resource ManagementPA : Performance Appraisal

LISTS OF APPENDICES

Appendix 1 Organization ChartAppendix 11 QuestionnairesAppendix HI Performance Appraisal Form

COPYRIGHT © UiTM

TABLE OF CONTENTS

CONTENTS Page

ACKNOWLEDGEMENTS iiABSTRACTS iiiLIST OF APPENDICES ivLIST OF ABBREVIATIONS iv

CHAPTER ONE

INTRODUCTION

1.0 Introduction 11.1 Role of HRM and Performance 2

Appraisal Towards AchievingOrganizational Objectives

1.2 Problem statement 313 Research Objectives 41.4 Significance of the Study 41.5 Hypotheses 51.6 Limitations and Scope of the research 51.7 Background of research 6-8

VI

COPYRIGHT © UiTM

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction 92.1 Performance Management 92.2 What is Performance Appraisal 10-13

2.2.1 Employee Viewpoint2.2.2 Organisational Viewpoint

23 Relationships of Performance Appraisal 14To other functions of HRM.2 J.I Training and Development2*3.2 Career Development

2.4 Performance Appraisal Systems 14-152*5 Who Should Do the Appraising 15-17

2.5.1 Manager/Supervisor Appraisal2.5.2 Superior's Superior2.53 Peer Appraisal2.5.4 Team Appraisal2.5.5 Customers Appraisal

2.6 Problems in Performance Appraisal 17-202.6.1 Problems of pay and performance2.6.2 Appraiser Problems2.6*3 Appraisals and rewards

2.6.1 Benefits of Performance Appraisal 20-21

VII

COPYRIGHT © UiTM

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction 223.1 Population, Sampling & Confidence Level 223.2 Research Methodology 223.3 Analytical Framework 223.4 Data Collection Method 233.5 Questionnaires Design 243.6 Data Analysis 24

CHAPTER FOUR

FINDINGS DATA ANALYSIS

4.0 Introduction 254.1 Performance Appraisal Forms 254.2 Data Analysis 264J Demographic Profile 26-284.4 Findings on Individuals Perception 29-36

towards Work diagnosis4.5 Findings on Perception towards 36-41

Organization.4.6 Success of Performance Appraisal 41-46

CHAPTER FIVE

CONCLUSION

5.0 Conclusion 45-46

vin

COPYRIGHT © UiTM

CHAPTER ONE

INTRODUCTION

1.1 Introduction

In today's world, managers face complex and challenging pressures and opportunities.Companies that seek to gain competitive advantage through employees must be able tomanage the behaviour and results of all employees especially in an increasingly complexenvironment and the rapid change of technology which have created some new

challenges to many organizations. Management and human resource managers must beequipped to address the changes in developing the employee's competencies and skills inresponse to customers* needs and competition. Although performance management hasbeen of concern recently in managing and integrating reward performance, mostorganizations still use the performance appraisal as a tool to measure employees'performance.

Traditionally the formal performance appraisal system has been viewed as the primarymeans of managing employee performance. Performance appraisal was an administrativeduty performed by managers and primarily the responsibility of the human resourcefunction. Managers view performance appraisal as an annual ritual - they quicklycomplete the form and use it to catalog all the negative information they have collectedon an employee over the previous years. Because they may dislike confrontation and notfeel that they know how to give effective evaluations, some managers spend as little timeas possible giving employees feedback. Not surprisingly, most managers and employeesdislike performance appraisals.

If performance appraisal is considered an important tool in monitoring and assessing theeffectiveness of employees' performance, it has to be properly designed andimplemented. Otherwise, its full potential is not realized and would merely serve tofulfill certain narrow aspects of the organization's objective. In reality, many

COPYRIGHT © UiTM

organizations make performance appraisal an activity that is more likely often stated inpolicy than in practice.

According to Lockett, (1992, p. 36) performance appraisal is considered as the "primemechanism for reviewing performance over the last year; setting targets for the next year;identifying training needs; discussing career development opportunities; reviewing thejob and seeing if there is a better way of carrying it out and agreeing merit by payincreases'. Maimunah (1997,p.78), identifies performance appraisal as the systematicevaluation of an employee's job performance, from which, his or her potential andshortcomings can be deduced and later enhanced or overcome, whichever is applicable.

Whatever the definition, performance appraisal is definitely an essential function in everyorganization, where in many large and medium size organizations, is the responsibility ofthe personnel or human resource department.

1.1 Role of HRM and Performance Appraisal Towards Achieving Organizational

Objectives

Performance appraisal should have a major role in human resource management andshould help define work roles, motivate performance, and aid in subordinate'sdevelopment. By focusing on the process and purposes of appraisal, the appraiser andappraisees can be more equal partners and pay actions and career consequences will seema natural part of the total appraisal discussion. In other words, appraisal events areparticularly more successful when they serve purposes of subordinates as well aspurposes of the managers and the organization.

It is well recognized that an organized and well-administered performance appraisalsystem serves to benefit both the individual employee and the organization. On the otherhand, the employee benefits because an appraisal can pinpoint an individual's strengthsand also weaknesses, which would determine room for improvement. It encourages

COPYRIGHT © UiTM

employees* communication with supervisors, identifies performance expectation andhelps build motivation. It also identifies the need for change in employees' behaviour andwork habits and enhances feedback from those being rewarded for job well done.

By using performance appraisal effectively, management would be able to stimulate workbehaviour to meet productivity demands and to reward desired behaviour and satisfyindividual goals. The management should ask itself as to whether the levels of employeeperformance throughout the organization is high enough to meet the new demands forinnovation, increased profitability and better quality of products? It can be seen that theeffectiveness of performance appraisal system affects every facet of the organization suchas the productivity, profitability, and manpower turnover. Everyone in the organization,may they be the human resource personnel , top management, appraisers or theappraisees themselves have their own roles and responsibilities to play in ensuring thesuccess of the performance appraisal system.

1.2 Problem Statement

In most cases, organizations focus on output, general performance, efficiency, andorganizational profit above all other objectives. It is also very uncommon for them not tolink most of human resource functions with performance appraisal. The Malaysianpublic has to recognize that the rail transport services in the country are today being runby a workforce, the majority of whom began as public sector employees and who havegone through the path of transformational changes to take them to where they are now.

This phenomenon is also found in KTMB a private rail operator, which serves as thefocus of this study. Here, performance appraisal does not seem to be given anyimportance or priority. It is done as an exercise, which has no relationship or bearing

with an individual's career development or other functions such as competency training,rewards and job transfer. Subsequently, appraisers are not given adequate exposure or

COPYRIGHT © UiTM

guidance on how to conduct an effective appraisal exercise and they are also notinformed as how to relate performance appraisal with other functions of human resource.

Under such circumstances, performance appraisal remains as a normal process and thefeedback is seldom used to improve the employees' performance. As a result, mostemployees perceive performance appraisal only as a routine yearly exercise to assesstheir performance against which they will be rewarded or penalized. The utilizedperformance appraisal forms would later be kept aside and forgotten until the nextexercise comes. John Lockett (1992) however said that appraisals should not be a one-off event and they should be and are part of an ongoing cycle of performancemanagement.

1.3 Research Objectives

The author finds that very little research has been done on the topic of employeeperception of performance appraisal in the organization in this country, as compared tothe developed countries, which has prompted her to carry out this study. The objectivesof the study can therefore be listed down as follows :-

<• To examine the performance appraisal system that currently exists in KTMB andits relationship with other functions of human resource management.

<* To gather factual information on how the staff of KTMB perceive the presentperformance appraisal system in relation to the organization's goals and also thesystem's strengths and weaknesses.

<* To recommend any enhancement or improvement to the current appraisal system.

1.4 Significance of the Study

This study focuses on the current system of performance appraisal in the Freight ServicesDivision of KTMB and its effectiveness both to KTMB and to individual employees.

COPYRIGHT © UiTM

According to Everden and Anderson (1992), performance appraisal will assist the

organization in succession planning, identifying gaps in human resources planning,ensuring organization's and individual's objectives are in harmony, improvingcommunication and performance. li is one of the many tools of managing people. In thisregard, Armstrong (1991), recommended that the principles in managing peopleembodies in the following : People are the most important resources in an organizationand must be managed effectively, as they are the key to the organization's success. Thehuman resource policies and procedures need to be closely linked so as to contribute tothe achievement objectives and strategic plans.

At the end of this study, it is hoped that recommendations made to the KTMB'sManagement for it to take certain corrective measures will be useful to improve thesituation involving staff performance appraisal and employees' performance so as toachieve the organization's effectiveness.

1.5 Hypotheses

1. The Performance Appraisal meets only some of the objectives of theorganization (mostly unrelated!).

2. The full potential of the Performance Appraisal is not being tapped.3. The Performance Appraisal system is not in line with the HRD/career

development programme.

1.6 Limitation and Scope of the research

The secondary data obtainable from the Freight Service Section is limited due toconfidentiality. The study is restricted to the Freight Division of KTMB and may not be

COPYRIGHT © UiTM

applicable to any other division, industry or organization. It does not in any way reflectthe happenings in any other organization or similar industry.

1.7 Background of research

Keretapi Tanah Melayu was founded in 1885 as a wholly owned Government entityunder the Ministry of Transport and is the sole provider of rail sen-ices in Malaysia.KTM was corporatised in August 1992, Marak Unggul Sdn. Bhd assumed themanagement control of KTMB. This is another turning point for KTMB and it is thenew management's intention to transform KTMB from a government entity into areliable, efficient and profitable transporter to cater for the freight, passenger andcommuter needs of Malaysia and its neighbouring countries.

The network is single track with a route length of 1658 km of meter gauge track. Thecompany has 135 stations, of which route from Singapore in the south links northwardwith the State of Railway of Thailand through Padang Besar in the west and SungeiGolok via Gemas in the east of the Peninsula.

KTM's mission is to be the preferred land transportation system by providing safe,efficient and reliable integrated rail services for people and goods. Therefore, KTM willbe competitive and responsive to the market needs and achieve the goals through a highlytrained and motivated workforce using modern technology and process innovation. KTMshall strive to provide reasonable profit and long-term growth to its shareholders.

COPYRIGHT © UiTM

FREIGHT SERVICES DIVISION

The freight sector has been for a long time been the major contributor to KTMB's majoroverall revenue. And now it is set to further enhance its role with the rapidly growingdemand for transportation of goods. Due to the affluent society, the society is demandingmany kinds of goods and services to meet their needs. KTMB carries many types ofcommodities such as containers 40%, cement 36%, followed by fuel at 7% and others at17%. Cement and petroluem are usually carried between two predetermined stations incomplete train load formations and usually dedicated to one specific client. Other typesof cargo usually go by General Purpose Goods Train.

A wide variety of wagons are available to move the cargo over the whole railway system.Cargo is generally, moved either in "open" or "covered" wagons. As a matter of policy,all "covered" wagons in future will be replaced by "containers", which allow addedflexibility in that they can also be dismounted and brought to the customers premisesthereby bringing the concept of door-to-door delivery to its most logical end.

The Benefits of Rail Service1. Speed and promptness - all consignments will reach their destinations as

scheduled.2. Customers service points - KTMB is served by 150 customers service points

throughout the country.

3. Cost effective - advantage of carrying bulk and long haul cargo at a competitiverate.

4. Coverage - the services covers all major cities of Peninsular Malaysia.5. Ease to Access - the round the clock operation are adjusted according to

customers' need.6. Reliability and safety - the consignment will be in the right place on agreed time

and and in the proper conditions.

COPYRIGHT © UiTM

7. High risk material transport - advantage of carrying high risk material transportcompared to other modes of transport example Ammonia and petroluemproducts.

8. No levy for Singapore bound freight - no levy is charged for the Singaporedestined freight thus reducing the transport cost for Singapore bound traffic.

9. Insurance coverage - for all the cargoes KTMB has provided for a FreightLiability Insurance Policy offering insurance coverage for carriage of wagons andcontainers by rail within Peninsular Malaysia and Singapore. To put it simply,the policy covers "liability of KTM Berhad" towards its customers or custosrriers'agents for loss of or damage to cargo, including physical loss or cargoes beingdestroyed during transit and handling.

COPYRIGHT © UiTM

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction

The purpose of this chapter is to undertake a literature survey of performance appraisaltheories and studies. This chapter will discuss the definitions, objectives, benefits, themethods and techniques of conducting performance appraisal and lastly is aboutproblems and how they can be solved.

2.1 Performance Management

Performance management is the process through which managers ensure that employees'activities and outputs are congruent with the organization's goals. Performancemanagement is central to gaining competitive advantage. Fletcher and Williams (1992)concept of performance management is associated with organizations and employeescreating a shared vision, objectives and aims that helps the employees to understand andrecognize the contribution will lead to the enhancement of performance of both theemployee and the organizations. When people (individuals and teams) know andunderstand what is expected of them, and have taken part informing these expectationsthey will us their best endeavour to meet them. The capacity to meet expectationsdepends on the levels of capability that can be achieved by individuals and teams, theprocesses, systems and resources made available to them and the level of support givenby management.

There are many untapped potentials in KTMB as such the organization have the capacityto pursue its success if the management focus on developing its most valuable assets itsemployees. KTMB should review its training programmes towards development of itsemployee's skills and competencies.

COPYRIGHT © UiTM

2.2 What is Performance Appraisal

Historically performance appraisal has always taken place in organization. This mayhave been a final process or may have occurred as part of the social interaction (Clark1988:232). The word performance denotes a qualified results or a set of obtainedresults, accomplishments, execution, or carrying out anything ordered or undertaken, tosomething performed or done, to a deed, achievement, or exploit and to the execution oraccomplishment of work. Nickols (1977, p. 14) defines performance as "the outcome ofbehaviour, Behaviour is individual activity whereas the outcomes of behaviour are theways in which the behaving individual's environment is somehow different as a result ofhis or her behaviour."

Gilbert (1974) equates performance with "accomplishments" that we value. Appraisalis one of the most intimidating words in the English Language. The definition in theWebster's dictionary is "to evaluate the worth, significance or status of...."

Performance appraisal system is one of the most important and difficult issues inpersonnel or human resource management. Various researchers and authors have writtenextensively on the issues of performance appraisal, but no one has come up with oneuniversal system which can satisfy the requirement of every organization's need foreffective performance appraisal system tailored to their organizational needs,philosophies, culture and politics. The effectiveness of performance appraisal systemaffects every facet of the organization such as the productivity , profitability andmanpower turnover.

Performance appraisal usually takes the form of periodic interview (annual or semi-annual), in which the work performance of the employee is examined and discussed, witha view to identify weaknesses and strengths as well as opportunities for improvement andskills development, Hunt (1986). In many organizations not all appraisal results areused, either directly or indirectly to determine the reward outcome. Performanceappraisal consists of a formal annual review of an employee's performance on the job, as

10

COPYRIGHT © UiTM

measured against specific criteria, delivered by the supervisor in a face-to-face meetingwith the employee , Scholes (1993).

Perhaps the most important purpose of performance appraisal is at least to maintain thelevel of effectiveness of people at work and hopefully to add to their performance andsatisfaction, Randelf (1989). But obviously, it is accepted that the performance appraisalsystem has its relationship with other functions of human resource management.

The performance appraisal system is developed for various reasons. Most privatecompanies typically have a formal appraisal system to measure or evaluate performancefor compensation purposes. Accordingly, the best predictor of future performance is pastperformance. It is also used for human resources development. Many people questionedthe main purpose of performance appraisal and are unclear of its main purpose. If thepurpose of the appraisal is unclear, therefore Deming's (1986) quotation stating thatappraisal seems to be more destructive than constructive may be valid.

Despite these failings, most experts agree that there are many valid reasons to use aperformance appraisal system. An objective appraisal process focuses on employee jobperformance toward agreed-on goals - not personality trails. It recognizes employeescontribution towards achieving organizational goals, addresses shortcomings, identifieseducation needs and is a meaningful part of a person's career-planning process. For mostorganization, this process is also the basis for determining employee compensationbenefits.

Effective performance reviews and appraisals help strengthen the communicationbetween a manager and an employee, and foster a relationship of trust and respect to benurtured over time. Appraisals no longer need to be viewed as a necessary evil but ratheras a tool that can be used to enhance the career of potential employees. Performanceappraisal is a method of ensuring that employees are aware management is monitoringtheir professional progress. If employees are aware, the objective of a performanceappraisal is specifically to identify their strengths and weaknesses and to organize

COPYRIGHT © UiTM

training programmes to further develop these strengths or overcome these weaknesses.They may be more willing to co-operate and allow their weaknesses to be disclosed.

Employees have tended to demonstrate a more favourable attitude when the purpose of aperformance appraisal has been perceived to be employee development (Daley 1983).

Appraisal has been often regarded as a tool for managerial control : as Townley puts it,'contributing to an overall approach to the handling of labour relations' (1991:92). Fromthe employee and the unions' point of view, it is frequently seen as means of maximizingthe financial rewards for the individual workers' effort. When properly organized andadministered the performance appraisal serves to benefit both the supervisor and theiremployees. The purpose is to measure progress, differentiate between levels ofperformance, pinpoint training neeeds, validate rewards and identify promotableemployees. Performance appraisal is a learning process by which the subordinate learnsof the organizational needs and the manager learns about individual needs.

Appraisals can generate accurate records of past performance which can aid in counselingand setting objectives for individual workers; management hopes to clarify theorganization's objective during appraisal sessions, and aims to ensure that the individual'sgoals are consistent with these objectives and that there is mutual awareness of whereboth organization and the individuals are heading.(Durey 1991, Cullen and Austen1987, Saville and Higgins: 1990; Stoner 1985; Schuler et al 1988; Palner 1988).

2.2.1 Employee Viewpoint

Torrington and Weightman (1989) suggest that from the individual's point

of view, appraisal may be seen as a time when they can gain feedback on theirperformance, reassurance, praise, encouragement, help in performing betterand some guidance on future career possibilities. The main objective ofperformance appraisal is to evaluate the subordinate. In addition, evaluating

12

COPYRIGHT © UiTM

(i.e, to judge) is also an ongoing source of tension, since evaluative anddevelopmental priorities appear too frequently in disagreement.

Although organizations have a distinct right or duty to conduct suchevaluations of performance, majority of Trade Unionist still rejects the idea.The explicit process of judgement can be dehumanizing and demoralizing anda source of anxiety and distress to employees.

2.2.2 Organisational Viewpoint

One of the most important reasons for having a system of performanceappraisal is to establish and uphold the principle of accountability. Fordecades, researchers have known that one of the leading causes oforganizational failure is "non-alignment of responsibility and accountability"."Non-alignment" occurs where employees are given responsibilities and

duties, but are not held accountable for the way in which those responsibilitiesand duties are performed. Ultimately, in the severely non-aligned system, noone is accountable for anything. In cases where non-alignment is not severe ,the organization may continue to function, albeit at reduced levels. For theorganization, performance appraisal provides a primary vehicle to monitorcontrol, and influence individual performance. One of the aims ofperformance appraisal is to make people accountable for their actions. Theobjective is to align, and realign, responsibility and accountability at everyorganizational level. (Cash 1993).

COPYRIGHT © UiTM

2.3 Relationship of Performance Appraisal to other functions of HRM

2.3.1 Training and Development

According to Nadler (1984) training is the organizational activity, which aims

to improve an employee's current performance. Performance appraisal offersan excellent opportunity for a supervisor and subordinate to recognize andagree upon individual training and development needs. Performance appraisalcan make the need for training more pressing and relevant by linking it

clearly to performance outcomes and future career aspirations.

2.3.2 Career development

Basically performance appraisal can assist in career development in two ways; appraisees are asked to fill in the form what are the next appointment theywant to fill or where they want to serve. This may be the simplest way where

the organization helps to match between career development and careerplanning. If the immediate superior is not very concern about the importantinformation with regards to career development, then its objective will not bemet. Consequently, appraisee may feel disillusion with the system.According to Muller(1970) people are the most important asset, their

development and career planning for the future responsibilities are of

particular importance.

2.4 Performance Appraisal Systems

There are various types of appraisal system and the most common is the behaviouroriented rating scales and behaviourally anchored rating scales (BARS). In the rating

scale, employees are rated on established for a number of defined factors. It is commonbecause it is the simplest and the fastest. Basically this type focus on characteristic ofemployees and their contribution to the organization.

14

COPYRIGHT © UiTM

BARS are combination of the critical incident method and rating scales. Job behaviuours

derived from critical incidents are described more objectively for both positive andnegative behaviours. This method is common because it is more reliable than many othermethods. Graphic Rating Scale is a common performance appraisal form which lists the

various factors that may affect job performance and usually includes a 5-point scale,ranging from outstanding to unsatisfactory. Supervisors check the print on the scaleswhere they believe an employee ranks. Such a form usually includes items on jobknowledge, attendance, punctuality and interaction with others. The form usually alsohas a few lines for comments on each point.

An advantage of this form is that it is easy to use; a disadvantage is that each rating issubjective. Another problem is supervisors' tendency to avoid rating people as eitheroutstanding or unsatisfactory. Finally , the criteria like those of other forms, may bedifficult to relate directly to what the employee does everyday or to customer satisfactionand overall organization objectives.

2.5 Who should do the Appraising

Individuals are appraised by a variety of people, including their immediate supervisor,their superior's superior, a member of the personnel department, themselves, their peersor their subordinates. Sometimes, assessment centers are used to carry out the appraisal.Brief summaries of individuals who become appraisers are as follows:-

2.5.1 Manager/Supervisor Appraisal

The employee's immediate manager carries out most appraisals. The advantageof this is that immediate supervisor usually has the most intimate knowledge ofthe tasks that an individual has been carrying out and how well they have beendone.

15

COPYRIGHT © UiTM

Research done by Bernardin (1979) on ratee's preference has indicated thatimmediate supervisors are the most trusted providers with accurate appraisalfeedback. Even when appraisal information is collected from a range of other

sources, it is the immediate manager who collates and uses this information withthe individual. However, a problem may arise when a subordinate is attached toanother department for a period of time and his immediate supervisor has noknowledge of his performance at the other end.

2.5.2 Superior's Superior

The level of authority above the immediate manager can be involved in theappraisal process in one or two different ways. First they may be called upon toconutersign the manager's appraisal of the employee in order to give the seal of

approval to indicate that the process has been fairly and properly carried out.Secondly, the manager's may directly carry out the appraisal. This is known asthe 'grandfather' approach appraisal. This is more likely to happen when theappraisal process is particularly concerned with making comparison betweenindividuals and the identifying of potential for promotion. It helps to overcomethe problems of double standard and that managers will appraise by differentstandardsand minimizes the possibility that svery high standards and is a 'hardmarker'. Grandfather appraisal is often used to demonstrate a fair play.

2.5.3 Peer Appraisal

Individuals of equal rank who work together are increasingly asked to evaluateeach other. A peer appraisal provides information that differs to some degree

from ratings by a superior, since peers often see different dimensions ofperformance. Peers can readily identify leadership and interpersonal skills alongwith other strengths and weaknesses of their co-workers. One advantage of peer

16

COPYRIGHT © UiTM