hr - expats challenges in china, pre-departure training, pre-departure training measurement,...

1. Table of Contents

1. 1a. ................................................................................................................... 2

1.1 Introduction ...................................................................................................................... 2

1.2 Culture & Society ............................................................................................................. 2 1.3 Chinese Language ............................................................................................................ 3 1.4 Air Pollution ..................................................................................................................... 3 1.5 Conclusion ........................................................................................................................ 4

2. 1b) .................................................................................................................. 5

2.1 Introduction ...................................................................................................................... 5 2.2 Chinese Culture ................................................................................................................ 5 2.3 Language .......................................................................................................................... 6

2.4 Business Ethics and practice in China.............................................................................. 7 2.5 Socio-political .................................................................................................................. 7

2.6 General Knowledge about China ..................................................................................... 8

2.7 Conclusion ........................................................................................................................ 9

3. 1c) ................................................................................................................. 10

3.1 Introduction .................................................................................................................... 10 3.2 The Kirkpatrick model ................................................................................................... 10

3.2.1 Stage 1 – Reaction/Satisfaction .............................................................................. 11

3.2.2 Stage 2 – Learning, Knowledge .............................................................................. 11 3.3 Return on Investment (ROI) ........................................................................................... 12 3.4 Assessment – pre and post training ................................................................................ 12

3.5 Conclusion ...................................................................................................................... 13

4. Part 2 ........................................................................................................... 14

Abstract .............................................................................................................. 14

4.1 Introduction .................................................................................................................... 15 4.2 Definition ....................................................................................................................... 15 4.3 Performance Management Model and Theories ............................................................ 16

4.4 Critique ........................................................................................................................... 19 4.4.1 Issues with the Purpose and Goals of PA ............................................................... 19

4.4.2 Issues With Who is Involved in PA ........................................................................ 20 4.4.3 Issues With What is Measured and How ................................................................ 22

4.4.4 Issues With the System and Process of PA ............................................................. 22 4.5 Recommendation ............................................................................................................ 23

4.5.1 New rules of Goal Setting – Clarifying the Goals .................................................. 25 4.5.2 Define culture of the organization, i.e. the behavior that lead to success ............... 25

4.5.3 Conduct regular check-ins – at least monthly or quarterly to review performance 25 4.5.4 Focus on the behavior, not the person when providing feedback. .......................... 26 4.5.5 Discuss investment trade-off, not forced rankings ................................................. 26

4.5.6 Perform the Recommended Changes ...................................................................... 26

5. Conclusion ................................................................................................... 26

References .......................................................................................................... 27

BMHR5103 - Assignment Q1 a b c – Q2 Nor Helmee Bin Abd Halim

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1. 1a.

1.1 Introduction

China, (People’s Republic of China) is situated in eastern Asia, bounded by the Pacific in the east.

It is the largest country in Asia and the third largest country in the world, next to Canada and

Russia. Beijing is the capital city of China and most of this country is mountainous. China is one

of the four oldest civilizations in the world, has a written history of 4,000 years and boasts rich

cultural relics and historical sites. It is the inventor of compass, paper-making, gunpowder and

printing. Total population of 1.3 billion People represent one fifth of the world’s population.

An emerging economy like China offers new business opportunities to Multinational

Enterprises (MNEs). Expatriation has been a popular method for MNEs to implement the parent

company’s strategy and practices in their foreign subsidiaries. However, a large proportion of

expatriates fail to complete their assignments satisfactorily (Katz and Seifer, 1996, Romero, 2002)

which is consequence of the fact that many expatriates experience difficulties in adjustment or lack

of readiness in facing global challenges. Culture & Society, Language and Air Pollution are some

of the challenges to name a few.

1.2 Culture & Society

China has a very specific and different culture in their business and lifestyle. Cultural differences

have to be taken into account when on a short term or long term assignment in China. In a study

done by (Goodall et al. 2006) it is said that Chinese culture creates barriers for expatriates who

work in China. The Chinese business culture is vastly different from Malaysian for instance.

Business negotiations in China require a much more patient approach. Personal relationships and

trust play vital roles in Chinese society. Reason simply they want to want to determine if the

relationships can be develop to a stage where both parties are comfortable doing business with the

other. Personal Expats need to build a good relationship and communication to reach a good

decision. ‘Good relationships with the customs bureau, the local administration for industry and

commerce, and other regulatory organizations (…) are as good as gold in China’ (Seligman, 1999)


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When comes to dining culture, our home culture especially Malays use fingers of the

right hand or commonly using fork and spoon by others to eat, while the Chinese use chopsticks

in general. We must respect the chopsticks as it is the most important tool in China’s table. As

expatriates, we must learn how to use chopstick in a proper way.

Another example of cultural difference is food is shared with others. Plates are placed

in the middle of the table and shared by all. It means we should feel free to help ourselves not only

at the beginning but the whole meals as well. It also, take it as a sign of honor and offer thanks

when host China to take a food from the center of the table and put it on our plate. Unlike here in

Malaysia, we usually order and eat food on our own.

1.3 Chinese Language

For expatriates going to China, the language barrier is the most obvious negative factor

encountered (Goodall et al., 2006). The Chinese language is an essential part of Chinese culture,

and Chinese are very proud of it. It’s not only a way to communicate but also as mean to transfer

their cultural values.

The official language in China is Mandarin and it is quite hard to learn for people

who are used to having an alphabet. Although most of the world uses English as main

communication, the Chinese are not fluent in English communication. This definitely cause

communication challenge when expatriate indulges in community as well as in the work place.

Learn and understand couple of basic words and sentences in Chinese would be an advantage to

the expat.

1.4 Air Pollution

The recent Bloomberg Businessweek article (Liza Lin and Natasha Khan, 2014) indicates that poor

air quality in China’s major cities contributed as one of the global challenges for expatriates. Few

alarming stats in the articles offers: “Smog in Beijing exceeded government pollution standards

most days last year, and environment ministry statistics show that 71 of 74 China cities failed to


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meet air quality standards”. In the other note says: “Forty percent of the 7 million annual deaths

attributed to air pollution worldwide occur in the Asia-Pacific region.”

Air pollution situation is quite concerning to most of the expatriates in China

especially those on long term assignment. They will usually bring their family to live together with

them. Living and raising a family under such unhealthy condition definitely give an impact to the

health of entire family. The worse possible is the effect on child’s growth and some may lead to

death.

1.5 Conclusion

Global challenges for expatriates in China have a mix of good and bad experiences. MNEs are still

able to attract expats, because knowledge of the China market is becoming crucial to career

advancement in many industries. On the other positive note, it is a great opportunity for expatriates

to overcome the global challenges, to learn, explore as well as to position them well in the society.


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2. 1b)

2.1 Introduction

There are many different components of pre-departure training. There can be cultural awareness

training, preliminary visits, language training, host country historical background, diversity

training, practical assistance, preliminary visits and many more. Pre-departure cultural training

(CCT) helps the employees understand and anticipate cultural challenges that may encounter in

China. China specific training includes components about Chinese culture, language, business

ethics and practices, socio-political and general knowledge about China.

2.2 Chinese Culture

Chinese culture is one of the world’s oldest and most complex cultures in the world. The culture

of China has been influenced by China’s long history and by its diverse ethnic groups which

customs and traditions could vary greatly between towns, cities and provinces. It is a complex

system of moral, social behavior, political, philosophical and religion which has influence on the

culture and history of China.

In China, much of the business is arranged and negotiated at the dining table. Since

the Chinese prefer to do business with who they know well, dining and drinking are the best media

for building relationships and connections or known as “guanxi”. In Mandarin, “guan” means

“gate” and “xi” means “link”. The concept represents a gateway connection between two people

created by a link of mutual obligations and benefits. (Daniel W. Lund, Ronald Jean Degen. 2010).

Besides “guanxi”, food is an important part of life in China. Rice and noodles are the

two staples in the Chinese cuisine. In Chinese tradition, five grains of rice are seen as more

important than pearls or jade, and noodles are soon as a symbol of longevity. Mandarin is the

official language of China and has been recognized as one of the seven United Nations languages.

In term of religion, there are two main religions in Chinese culture i.e. Taoism and Buddhism.


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China has a hierarchical and formal social structure for example, in the family,

children are expected to respect their eldest with the eldest family member commanding the

greatest respect. Finally, in term of morals and values, humility and respect are very important in

Chinese culture.

Why expatriates need to know and learn about Chinese cultures?

According to Treven (2003), the most essential piece of expatriate training is a cross-

cultural training. This aspect helps to prepare expatriate to live and work in a different cultural

environment. It is so important, since dealing with new surroundings appears to be even more

difficult than the assignment itself. Cultural training helps individuals to adjust quicker to the new

culture and to be more effective in the jobs (Shen, J. 2004).

Cross-cultural training helps to remove obstacles in business and personal life. It is

also about communicating with people clearly and avoiding misunderstandings. This allows for

teams to cooperative more effectively, managers to direct their colleagues more efficiently, sales

personnel to be more attentive to their client’s concern and staff generally to get a job done.

2.3 Language

Communication barrier is the most common difficulties which expatriates have to suffer when on

assignment to China. (Goodall et al. 2006) found that all expatriates who live and work in China

usually experience some degree of culture shock. Communication barrier contributed to the

challenge as expatriates find it is difficult to communicate with the citizens. Most Chinese do not

know how to speak English or speak it very poorly.

Under such situation, it is imperative to conduct intensive language training for

expatriates relocating to China. The training should be conducted by professional to cover various

soft-skills from daily conversation, business conversation to writing and reading. Proficiency in

Mandarin language will benefits both expatriates and local people. It’s not only improving their

direct communication but will also enhance relationships among them.


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Language training may be one of the hardest and longest courses for expatriates

relocating to China but the outcome of mastering host country language will lead to variety results

to the expatriates in work and general adjustments, to the organization – less attrition rate (Shaffer

& Harrison, 1998), increased satisfaction as well as better performance (Kraimer et al., 2001;

Parker & McEvoy. 1993).

2.4 Business Ethics and practice in China

Personal relationships and trust play vital roles in Chinese society and this also include business.

The business culture is very different from the Western business culture. Work and life are two

different things in the West but in China, relationships are much more important than business

transactions, and work and social life are inter-connected. In other words, business relationships

come first and the actual business later. The Chinese rather fall back on friendship and trust than

on formal contracts (Buttery and Leung, 1998). Therefore, expatriates should understand how they

can build up and maintain business relationship with local firms.

Business negotiations in China require a much more patient approach and it is all

about trust and again relationship. A unique approach is required with the Chinese to reach a good

decision. As explained earlier, doing business in China is based on the principle of “guanxi”.

Therefore, strong understanding of business culture is very important living and working in China.

Furthermore, Abramson and Ai (1999) highlight the importance of having a good relationship

network (guanxiwang) for business success in China. Those who do not understand the Chinese

business ethics will find it hard to adjust and survive in China as quoted by Zamet and Bovanick

(1986), “Expatriate failure occurs more frequently in China than is the case elsewhere”.

2.5 Socio-political

Another hurdle is the socio-political environment that needs to be understood to do business. The

ruling political party in China, the Communist Party of China, has great influence on the Chinese


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economy. Although the Chinese market is increasingly liberalizing, the power of the Communist

Party is still significant. Weiss and Bloom (1990) found that not being prepared for understanding

the ‘interaction between China’s political and work situations’ initially left expatriate managers

disadvantaged in their jobs.

In China, many organizations are part of the governmental system leading to an overlap of

private and public interests in the workplace. Hence, knowledge about how Chinese institutions

work will give the expatriate an advantage when working in China and will also help the

adjustment, as the expatriate will not feel too lost.

2.6 General Knowledge about China

General knowledge about China which is covered under general orientation that expatriates (and

their families) receive before departure has a major impact on the success of the overseas

assignment. Individuals selected to go abroad need to answer to many specific questions about

their host country such as geographic, climatic conditions, working culture, society, environmental

conditions like air pollution level and general living condition like housing, neighborhood, schools,

traffic law etc. are topics frequently covered in the orientation.

As soon as they arrive in the host country, they need to “settle in” as quickly as

possible. Activities like obtaining housing, bank accounts, driving license, school admission as

well as medical assistance procedure have to take place soon after arrival. Without having the basic

understanding of the host country may complicate the process of said activities.

In this general orientation session is also appropriate for expatriates to ask question

or concerns about host country. One of the biggest concerns expatriates may have in mind before

relocating to China is bad air pollution in the major cities. Expatriate may ask questions about

safety & health awareness, medical insurance coverage or perhaps negotiate a better hardship

allowance for under such condition. The sooner the expatriates (and their families) can establish

a “normal” life, the better the adjustment will be and less likely expatriate failure will occur.


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2.7 Conclusion

To ensure success of the relocation task, employees must attend and complete the list of China

specific pre-departure training components as mentioned and explained above. It helps preparing

the employee to be mentally and physically prepared prior leaving to China.


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3. 1c)

3.1 Introduction

Training program has to be measured to gauge effectiveness and to ensure cost and time spent

provides a good return to the organization. It has been discussed in many forums which recognize

training effectiveness as a crucial issue for organizations. Expatriate performance and productivity

can be measurably improved if training is effective.

There is number of ways, model or approach in order to measure success as well as

lesson-learnt for a better training program in the future. Using Kirkpatrick’s (1976) Four-Level

training evaluation model is one of the most extensively used methods for evaluating effectiveness

(Alliger & Janak, 1989). The last two level of Kirkpatrick which is behavior and results will not

be discussed since the last two levels are meant for post-training evaluation. Other methods of

measuring effectiveness of training include ROI – Return on Investment and pre and post-training

assessment.

3.2 The Kirkpatrick model

In the 1960’s Donald Kirkpatrick wrote a series of articles on evaluation where he identified four

stages (or levels of evaluation). Despite its age, Kirkpatrick’s model continues to be used in

contemporary research (Schmidt et al, 2009 and Elliott et al, 2009). One of the strengths of this

model is in its simplicity which was design to allow it to be understood and used easily by HR

practitioners. Kirkpatrick divided the evaluation process into four segments or stages as shown

below in Figure 3.1.


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Figure 3.1 – Kickpatrick’s model

3.2.1 Stage 1 – Reaction/Satisfaction

This level measures how the learners reacted to the training. Ultimate goal for this measurement

is to gauge trainee’s level of satisfaction towards the training component like instructor, topic

covered, training material, presentation as well as venue.

This stage determines how well the training was received by the audience and the

outcome helps the organizer to improve the program in the future. Reaction can be measured by

using post-training surveys, questionnaires or addressing questions like (1) Overall ratings of the

program (2) The biggest strengths and the biggest weaknesses (3) The ratings for selection of

venue and presentation style.

3.2.2 Stage 2 – Learning, Knowledge

Stage 2 focuses on what learners learned (competencies) during the program. A learning test is

helpful to ensure the learners have absorbed the content and know how to use it properly. It is often

helpful to measure this stage both before and after training. Test the learners to determine the

knowledge, skill levels and attitude. Once training is finished, test the learners a second time to

measure what they have learned or conducting verbal assessment.


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The outcome will then determine what learners have learned and acquired from the

training. Other missing elements will be used as an improvement in future training. As mentioned

earlier, stage 3 and 4 are not relevant to pre-departure training and will not be elaborated further.

3.3 Return on Investment (ROI)

Return on investment (ROI) is a measure of the monetary benefits obtained by an organization

over a specified time period in return for a given investment in a training program. This can simply

put as ROI is the extent to which the benefits (outputs) of training exceed the costs (inputs). ROI

can be considered as an extension to the existing Kirkpatrick’s four stages.

In this context, the quicker learners or expatriates adapt the cross-cultural change in

the host country, the greater benefits to the organizations and the expatriates. Organizations should

view such investment as something vital to safeguard the success of the international assignment.

It should be kept in mind that failed assignment would cost the company even more (Mendenhall

and Oddou, 1985; Romero, 2002)

3.4 Assessment – pre and post training

The other important measurement to be considered is assessment before and after training. The pre

training assessment is to understand the background of the learners as well as to understand the

current level of knowledge. This method is appropriate for trainer to set the right mode of training

prior starting a class. At the same time, assessment provides learners the opportunity to evaluate

their pre training knowledge and use the result as to which areas that they need to focus and

participate more in the class.

Post training assessment is used to identify how much knowledge is transferred

successfully and to identify how well learners absorb the topics covered in the training. It is crucial

to the learner’s confidence to face the international relocation assignment soon.


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3.5 Conclusion

Measuring pre-departure training effectiveness is important as it covers at least four or more

aspects. They include:

i. How well the pre-departure training program met the learners needs and objectives

ii. What knowledge and skills it has imparted to learners

iii. What desirable change, in this case motivational change in preparation for the

relocation assignment

iv. What benefits to the trainer, organization, policy-maker and the most important

audience is the learners who soon to be abroad for a period of time to carry out

international duties.


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4. Part 2

Abstract

The selected topic for this report is issues within Performance Management Appraisal. The report

tells about the difference and relation between performance management and performance

appraisal. The report also discuss about performance management models, some motivation

theories, critical analysis, the current performance appraisal process and propositions on how to

improve the current process. The report is based on the following journals:

1. Fred C. Lunenburg. Performance Appraisal: Methods and Ratings Errors. International

Journal of Scholarly Academic Intellectual Diversity Vol. 14, Number 1, 2012.

2. Kondrasuk, J. N. (2011). So What Would An Ideal Performance Appraisal Look Like?.

Journal Of Applied Business & Economics, 12(1), 57.

3. Kondrasuk, J. N. (2012). THE IDEAL PERFORMANCE APPRAISAL IS A FORMAT,

NOT A FORM. Academy Of Strategic Management Journal, 11(1), 115-130.

4. KUMARI, N., & MALHOTRA, R. (2012). Effective Performance Management System

For Enhancing Growth. Global Management Journal, 4(1/2), 77-85.

5. Siaguru, F. (2011). Performance Appraisal Systems: Procedural and Implementation Issues

in Papua New Guinea. Journal Of Management Policy & Practice, 12(5), 116-127.

6. Wendt, L. (2014). FROM MEASUREMENT TO OWNERSHIP: THE EVOLUTION

AND ORGANIZATIONAL IMPLICATIONS OF MODERN PERFORMANCE

MANAGEMENT. Cornell HR Review, 1.

7. Hantula, D. A. (2011). What Performance Management Needs Is a Good Theory: A

Behavioral Perspective. Industrial & Organizational Psychology, 4(2), 194-197.

doi:10.1111/j.1754-9434.2011.01325.x


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4.1 Introduction

Performance management is a concept in the field of human resource management which is many

mistaken as performance appraisal. Performance appraisal is part of the bigger picture of

performance management. More details about the two concepts will be further discussed in the

succeeding sections.

4.2 Definition

Performance management is critical to any organization’s success, yet it’s something many fail to

do well. “Performance management is a continuous process of identifying, measuring and

developing the performance of individuals and aligning performance with the strategic goals of

the organization” (Aguinis, 2009). Basically, the concept is to figure out how well employees

perform and then to ultimately improve that performance level. Performance management is a

systematic analysis and measurement of worker performance that used to improve performance

further. On the other hand, “performance appraisal is the ongoing process of evaluating employee

performance. Performance appraisals are reviews of employee performance over period of time,

therefore appraisal is a subset or part of performance management.

Figure 4.1 is a process diagram that provides a graphical view of the major difference between the

two processes.


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Figure 4.1 – Graphical view of the different between Performance Management and Performance

Appraisal

4.3 Performance Management Model and Theories

According to Neeraj Kumari and Ruchi Malhotra (2012), there is no fix model in performance

management system. Whatever system or model is adopted needs to be congruent with the culture

and principles that pervade the organization. As Lloyd and Payne (2004) observe, “not only is

there no clear definition of the model, but there is also a fundamental lack of agreement about the

specific practices it should and should not incorporate, as well as the meanings that are ascribed to

those practices’.

Figure 4.2 illustrates the typical components of performance management model.


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Figure 4.2 – The Performance Management Model

An effective performance management model establishes the groundwork for excellence

by:

Linking individual employee goals with the organization’s mission and strategic plans. The

employee has a clear concept of how they contribute to the achievement the overall

business goals

Focusing on setting clear performance objectives and expectations through the use of

results, actions and behaviors

Defining clear development plans as part of the process, and

Conducting regular discussions throughout the performance cycle which include activity

like coaching, mentoring, feedback and assessment.


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Traditionally, performance management is viewed to be the responsibility of immediate

supervisor (Barnes-Farrel, 2001), but due to different challenges such lack of experience, scattered

workforces, size spans of control and different view and expectations of employees caused

supervisors to be ineffective on employee’s performance. Nowadays, employees are now expected

to be more involved in development and progress of performance management process which has

impact on them. (Mohrman et al. 1989).

From academic perspective, motivation theories play a role on how organization manages

performance. There are number of modern motivational theories like Goal Setting Theory,

Expectancy Theory, Justice Theory, and Self-determination Theory. Some motivation theories

which have received most attention recently are Goal Setting Theory, Expectancy Theory,

Cognitive Evaluation Theory, Equity Theory, and Cognitive Evaluation Theory. (Donovan, 2001).

Brief description some of the theories are;

Goal Setting Theory – One popular results-oriented approach. Found to be exceptionally reliable,

valid, and useful across diverse work situations (Locke et al., 1981). Difficult and specific goals

led to higher performance when compared to vague do-your-best goals (Locke and Latham, 2002).

Control Theory – Also referred to as feedback control or cybernetics. It is described in self-

regulation terms as an ongoing comparative process aimed at reducing the discrepancy standards

for behavior and the observed effects of actual behavior (Carver and Scheier, 1981, 1998).

Social Cognitive Theory – Motivation is influenced by interaction of three elements: work

environment itself, what the performer thinks, and what the performer does (Bandura, 1986).

Strong performance requires positive self-beliefs of efficacy in addition to appropriate skills and

abilities.


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4.4 Critique

From the journals and articles referred in completing this report, there are number of common

issues or problems found in the current performance management appraisal system. The

succeeding sections of this report will discuss some of the common issues. According to

Kondrasuk (2011), there are about 76 common issues in present performance appraisal systems.

Conflict between administrative & developmental goals, lack of mutual goal setting between

evaluator and performer, lack of training to perform PA are some of the common issues.

Kondrasuk (2011) further reduced and categorized it into four categories. The categories are

problem with:

1. The purpose of Performance Appraisal (PA)

2. Those involved with PA

3. What is measured and how

4. The system and process of PA

4.4.1 Issues with the Purpose and Goals of PA

There are two main purposes of a PA system (Kondrasuk. 2012);

Developmental – One state goal of PA is to learn what the employee is or is not doing well as

possible and help the employee to improve his job performance. This is basically a counselling or

guidance role that the evaluator plays in this role.

Administrative – The second goal of PA is to use the PA results to help make administrative

decisions such as how much salary increments to give, what training is necessary or helpful to

improve employee performance, and other uses such as a test validation criteria. This second goal

places the evaluator in the role of judge.

Supervisor needs to achieve both goals. However, it is very difficult for the supervisor to

concurrently be a counselor while trying to be a judge at the same time. Employee is likely to be


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very open and admit shortcomings to a counselor but cannot be too candid to a judge who may cut

his pay raise or reduce his promotional opportunities.

Another issue is inconsistent evaluator perceptions. Inconsistent perceptions may cause the

entire system performance appraisal system off. It means if evaluators have different view on the

purposes of their specific performance appraisal, the process will be conflicting as well as unsure

what to do with the results. The way appraisal is conducted will be different depending on the

purpose of it, for instance there will be two different scenarios of conducting appraisal for

employee who need more training to achieve organizational goal and scenario of conducting

appraisal to determine how much pay raise for the employees. The scenario gets more problematic

when more participants are added in the discussion.

4.4.2 Issues With Who is Involved in PA

There are three categories of people involved in PA; 1) appraisers, 2) evaluatees, and other users.

The evaluator can be a variety of individuals or groups of people. Traditionally, line manager will

evaluate his subordinates. However, there is other approach which “the evaluator” could be

employee’s peer, subordinate, customers or any person the appraisee interacts with. Regardless of

who does the evaluation, they need the support of the total organization.

According to Kondrasuk (2012), major issue is caused by lack of integration of PA between

the organization’s daily functions and overarching ideology. PA system often fails without getting

the full support of integrating the PA process from the top all the way down. Lack of commitment

from the organization leads to evaluators do not take the process seriously enough.

If those who are involved do not have sufficient skills to conduct PA, the results will be

less than ideal. Evaluators are frequently not given the necessary training to perform the PA

effectively and consistently. Evaluatees are seldom trained in the PA process or their requirements

in it. Also, upper management seldom is trained properly in how to use this data for organizational

improvement (Roberts, 1998).


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4.4.2.1 Biases

Personal bias is the most common defect in the evaluator’s role of effective performance

appraisals. Common biases include; Central tendency, leniency, severity, recency effect,

favoritism, halo effect. Figure 4.3 depicts examples of strictness, leniency and central tendency

biases. The distribution of ratings on the left of the figure indicates a strictness error; those in the

middle indicate a central tendency error; and the cluster of the right indicates a leniency error.

Figure 4.3 – Strictness, central tendency, and leniency performance ratings

Personal bias is apparent in different ways. Evaluators may simply give satisfactory or

unsatisfactory appraisals to individuals who do not deserve them. (Roberts. 1998). Favoritism,

leniency, leadership styles, personality, mood characteristics and personal disposition can cause

fluctuations in the effectiveness of the performance appraisals

4.4.2.2 Evaluatee’s Perception

The perceptions and expectations evaluatees have of the PA process may be a significant inhibitor

of PA success. Evaluatees often refuse to agree to PA approaches and conclusions because they

do not meet their expectations of the process. (Roberts. 1998). Furthermore, evaluatees may argue

with the evaluation if it does not match the results of past satisfactory performance appraisals. It

appears that some evaluatees are often reluctant to take the evaluation process seriously.

(Kondrasuk. 2011). In many instances, PA systems do not provide for effective communication.


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4.4.3 Issues With What is Measured and How

For PA to be effective, employee’s individual goals must work to achieve the bigger goal of the

organization. Many firms use inappropriate assessments because correct tools for designing the

system is not used. Two basic considerations in designing the actual appraisal tool are what to

measure and how to measure it. (Dessler, 2011). What to measure refers to the way in which to

measure the employee’s performance, such as quantity, quality and timeliness of work. In terms

of how to measure it, there are various methodologies that are available for implementation

(Dessler, 2011).

Some measurement techniques include graphic rating scales, forced distributions, and

ranking to measure traits. MBO can be used to assess results. However, how to choose the

instrument for a particular situation and how to score a combination of instruments is problematic.

4.4.4 Issues With the System and Process of PA

As Russell and Russell (2011) recently pointed out about performance management and applies to

PA as a system, it is a process and not a single event – a format and not a form. Some critics

maintain that there is a lack of resources provided by the organization to adequately institute the

process (Roberts, 1998). Roberts (1998) also commented that an organization’s goal are not always

considered when a PA system is designed and another apparent challenge for PA to be effective is

that they are not given enough time to be completed. Another problem with typical PA systems is

that they only seem to accurately and reliably measure extreme performances and do not reliably

differentiate middle-range performances. In sum, many PA systems have low reliability (rating

errors), which must be take into consideration when analyzing them for their efficacy (Roberts,

1998).


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4.4.4.1 Time and Timing of PA

Timing (Yearly? Mid-year?) which is when to conduct the PA has caused much trouble and

become a big issue in the PA process. Performance appraisals is time consuming and there is not

always enough time to allow for a full appraisal of an employee even for mid-year review.

Another problem with the PA deals with the decision of when to bring in new objectives.

And evaluator may believe that the evaluate should be given new objectives to further advance

their progress of working success, but when and where to introduce the objectives is unclear.

4.4.4.2 Use of Results

Another big problem with the PA is deciding what to do with the information gathered from the

appraisal. The appraisal is meaningless when the results is not properly implemented. A major

issue with results is that managers may go through the entire process and ignore the results

altogether. Some questions are what will happen to the employee based on the results of the

evaluation, should the evaluatee receive a pay increase? If the evaluate receives a bad appraisal,

should the evaluatee be fired or demoted? Because there is lack of standardization most managers

don’t know how to about implementing the results.

4.5 Recommendation

Academic scholars and industrial practitioners have suggested many aspects to change, add or

tweak. Grote (2010) recently state that the ideal PA should consists of 5-steps process:

1. Establishing expectations for employees’ performance - Employee performance planning

where the manager meets with each employee for an hour at the beginning of the year to

discuss goals for the year.

2. Allowing the employee to perform the job - Employee performance execution where the

employee performs his job and seeks to achieve his established goals. At the middle of the

year, the manager and subordinate meet to discuss progress toward achieving those goals.


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3. Appraising employee’s job performance - Employee performance assessment where the

manager fills out the PA form and discusses it with his line manager before discussing it

with the subordinate. Manager also decides administrative decisions like compensation at

this time.

4. Reviewing the appraisal process - Employee PA interview where the manager meets with

the appraisee for an hour to discuss the manager’s appraisals, the subordinate’s self-

appraisal, and how to improve. They set a date to reconvene to set next year’s goals or start

the process over. Grote (2010) and others have also stated that individual

development/improvement plans should also be employed. Some have stated that the goals

of performance appraisal should include retaining employees and aligning organizational

goals.

Regarding what is measured and how, managers and subordinates both be more involved

in the development of the general PA system/process as well as the PA forms used. The

suggestion is supported by Thomas and Bretz (1994). They also suggested that there should

be more rewards for appropriately using the PA system. Strive for clear, specific,

measureable expectations.

Training on conducting PA should be provided to all managers and also to those involved

in the PA system. Present employees should go through refresher training annually to brush

up or learn new and improved elements of the PA process.

5. Continuing the cycle steps 1-4

The current 5-steps process should be retained in general. On top of that, there are few more aspects

to be considered to improve the PA system.


25

4.5.1 New rules of Goal Setting – Clarifying the Goals

Ordonez et al. (2009) conclude by saying “Rather than dispensing goal setting as a benign, over-

the-counter treatment for students of management, experts need to conceptualize goal setting as a

prescription-strength medication that requires careful dosing, consideration of harmful side effects,

and close supervision”. Better goals: keep them somewhat vague. This gives people control and

choice over how they do their jobs. When people are given vaguer goals they can take into account

more factors: in short it makes them think for themselves. It’s no wonder that having control is

strongly linked with job satisfaction. It is also imperative to clearly separate the two goals

mentioned earlier – administrative and developmental, so that both the employees and the

managers know when each purpose is occurring. It should be clear when the manager is evaluating

the employee on administrative standards (tied to organization only) or on developmental goals

(tied to what the employee personally wants to achieve in that work setting).

4.5.2 Define culture of the organization, i.e. the behavior that lead to success

Recruit people who demonstrate those behaviors. Hire only people who fit the organization’s

culture. Most employee performance problems are hiring problems. (Doug Blizzard. 2014, July

1). Managers hire people who don’t fit organization’s culture and then waste valuable time trying

to “fix” them. On the other hand, the employee must behave differently to achieve different and

better results. Doing the same thing should get the same results so improve job performance, the

behaviors and the motivation, attitude should change as well.

4.5.3 Conduct regular check-ins – at least monthly or quarterly to review performance

One good technique is called “five by five”. Manager prepares a sheet with the employee’s four to

six performance goals for the year as well as the employee’s development goal. Below those goals,

the employee lists five activities he or she plans to work on over the next month to accomplish the

annual goals.

At the next monthly meeting, the employee reports his or her progress on those activities.

Then, the employee set five activities for the next month. The manager provides feedback and


26

input. This process is repeated monthly. For this system to work, the manager must make it clear

that the employees own their performance, which is another tenet of effective performance

management.

4.5.4 Focus on the behavior, not the person when providing feedback.

The ultimate objective here is more good behavior and less bad behavior. Managers can learn how

to provide appropriate performance feedback. Success in this area leads directly to improved

employee performance, and that translates into improved financial performance.

4.5.5 Discuss investment trade-off, not forced rankings

Many organization maybe struggling with a shortage of incentives for example salary increases,

stock grants, promotions, new assignments and development opportunity remain scarce. Managers

need a way to allocate these resources fairly and provide the best outcomes for the business. Rather

than ranking, rating and automatically applying the results to a pay matrix, organizations would

be wide to return focus on the qualitative performance conversation and talent reviews (Amy

Wilson. 2014).

4.5.6 Perform the Recommended Changes

Last but not least, perform the recommended changes above for a better and solid performance

management appraisal system.

5. Conclusion

Performance management appraisal is a process that involves setting expectations of the supervisor

and subordinate, having the subordinate perform to achieve the expectations, of appraising and

feeding back the results, and applying the results of the assessment in ways that benefits the

organization, the supervisor, and the subordinate that involved in the process.


27

Supervisors must make an enduring commitment to their subordinate’s development by

shaping and supporting performance appraisal system design and administration that truly benefits

the employee. Supervisors have to be smart, flexible, communicate prolifically, knowledgeable,

demonstrate fairness and transparent when conducting performance management appraisal with

the subordinates.

Employees must actively prepare to ensure success of their performance management

appraisal. By properly preparing for an appraisal meeting with supervisor, rest assured supervisor

has a broader picture of employee’s performance and career goal. Employee must also actively

participate in the discussion and take charge of own career progression.

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