Cognitive Bias In Performance Evaluation

In an organization employees are the important asset and play a significant role in the progress of an organization. Nowadays firms usually focus on the human capital in the form of the employees by giving them training, assisting them in career development and also work on performance management in order to keep the employees motivated and dedicated by giving them feedback through performance appraisals. Through these performance appraisals the employees are informed about their strengths that they can enhance and about their weaknesses that they can improve in the future.

“Performance appraisal is the process through which employee performance is assessed, feedback is provided to the employee, and corrective action plans are designed.” (Youssef, 2012). Performance appraisals can be very effective, by doing them carefully it will improve employee performance. Consistency with the evaluations is an important part of the process. During the evaluation express positive and negative accomplishments from the employee by using examples. Use goals, job related data that support ratings and focus on outcomes the employee can control and work towards. List specific areas the employee can improve on. Also it is important to compliment and show your appreciation to the employee.

First, we need to ask what performance appraisals are. They are “The identification, measurement and management of human performances within an organization.” (GOMEZ-MEJIA, 2010) Performace appraisals are popular and used world wide to measure personal and team performace. Performance management has increased with the gripping economy and having less to do more. Managers have always thought of optimal performance, yet a poorly written performce appraisal has a devistating impact on the employee, the manager, and the company.

It is known that cognitive biases are an influence to an individuals method of decision making.

Cook, S., & Macaulay, S. (2007). How an integrated approach to performance appraisal and the

The annual performance review seems ineffective, a waste of time, or it becomes demotivating for employees and thus counterproductive. Employee appraisal is a method of measuring and evaluating employee job performance. The employee evaluation consists of regular reviews at different intervals every six months or yearly reviews. The evaluations are a pre-determined set of criteria centered on organizational goals. A manager conducts performance evaluations and discusses the employee’s strengths, weaknesses, employee behaviors, productivity. A performance appraisal is essential for refinement, maintaining, or increasing job performance. These reports give the employee insight to where improvement is needed, and it provides an opportunity for development.

“Performance appraisals can enhance employee performance as well as advance the mission and goals of an organization. There are many advantages of performance appraisals if they are applied fairly, consistently and objectively. Performance appraisals not applied fairly can be counterproductive and even destructive to

Performance management is the foundation for employee performance and engagement…it is larger than the annual performance review (“Guide to,” 2016). It is not merely a tool, but rather an act – an act of management (Ammons, 2015). One key best practice of performance management is having an effective appraisal cycle, as well as knowing how vital performance feedback is to the appraisal cycle and to the overall wellbeing of the human resources and to the company.

In a typical and effective process of performance management, as demonstrated in Figure 2.1, performance appraisal is not the only but a vital element because it is the activity which evaluate the outcome of the work, recognize the achievement and weaknesses and give employees and managers a straightforward result on these(Armstrong, 2009, Hutchinson, 2013). From a modern perspective, performance appraisal covers more areas not only on what have been achieved but also on the attitude and contribution of the operator (Hutchinson, 2013), which enhance the functions of identifying training needs.

The process of performance improvement and the role of performance management has become an increasingly important topic in recent years as organizations work to become more effective in their execution of business strategy in a competitive and highly globalized economy (MacMillan, 1). The online business dictionary defines performance assessments (PA) as, “The process by which a manager or consultant examines and evaluates an employee’s work behavior by comparing it to preset standards…and uses the results to provide feedback to the employee to show where improvements are needed and why.”

“Performance is about keeping public and nonprofit organization up-to-date, vibrant, and relevant to society. It is about ensuring that agency programs and policies connect with the important challenges that people, communities, and the nation face.” (Berman, pg. 3) Managing this includes setting goals, developing and training employees, as well as merging appraisal of performance and rewarding performance into a single tool. The key to performance management is to ensure that the employee’s performance is helping meet and reach the goals set forth by the organization or company. If management process are strategically planed, created, implemented and carried out in the proper manner, great incremental changes can be made throughout an organization to increase growth of the business. If employees do not perform or stakeholders are not happy, business can fail in many ways. Gordmans in Okemos may not fail as a business just yet, but without evaluating their performance thus far, it may lead them down a dark path if measures are not evaluated now.

What is performance appraisals, how are they beneficial or damaging to the key characteristics of an effective system; and how does this system effect one’s own experience as to their own performance evaluation. So, what is performance appraisal, “it’s the evaluation of a person’s performance” (Kelly & Williams, 2016, pg. 92). This performance evaluation helps one’s manager in compiling information as to an employee’s conduct as to their performance and work ethics, through the usage of systematic process that was designed to rate their performance using one’s own

Due to the growing focus on the personnel’s development, there is an increasing concern regarding the use of effective assessment methods. Performance appraisals are being used by a large number of organizations for assessing their employee’s performance and its effects on the organization as a whole. Similarly, universities make use of the assessment methods to assess the learning of their students. Despite the Popularity of performance appraisals there is an ongoing debate regarding the effectiveness of the assessment methods and use of performance appraisals (Schraeder, Becton & Protis, 2007). This believe can be further strengthen up by the research done by Clinton O & Stephen J, which shows that less that 20

Today performance appraisal has increasingly become part of a more strategic approach to integrating human resource activities and business policies and may now be seen as a generic term convincing a Varity of activities through which organization seek to assess employees and develop their competence, enhance performance and distribute rewards.

Organizational psychologists have devoted a lot of attention to performance appraisals because they can be used for numerous purposes. For example, organizations might use performance appraisals to make decisions on promotion, identify training needs, or for termination purposes. Performance appraisals are usually conducted by managers or supervisors to evaluate subordinates’ performance on different types of rating scales. Researchers have been examining factors that might influence performance ratings. For example, some researchers (Bernardin, Cooke, & Villanova, 2000; Schaubroeck and Lam, 2002) believe that personality can influence the performance rating scale, while other researchers (Ployhart, Eiechmann, Schmitt, Sacco, & Rogg, 2003) believe cultural differences can influence the validity of performance ratings. Specifically, experts (Saffie-Robertson & Brutus, 2014) in the field have examined cultural differences in the self-construal dimension, and how individuals’ self-construal can interact with performance ratings. It is critical for organizations to be aware of how raters’ personality and self-construal can affect their performance ratings. Examining how performance ratings can be influenced by personality and self-construal can help organizations to develop training programs to raise employees’ level of sensitivity and awareness of their own personal factors that might have an unintentional effect on their appraisal process. Moreover, organizations can predict