Copyright James F. R. Wright 2000.
James F. R. Wright wrote this Essay while studying for a BSc. in Psychology at the University of Leeds:-
http://www.psyc.leeds.ac.uk
His Occupational Psychology Tutor Mr Colin Gill (c.gill@psychsol.com) subsequently gave him a First.
Assessment and Appraisal Essay
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Critically Evaluate three appraisal methods
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Abstract
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The three appraisal methods evaluated by this essay are: Assessment Centres, Management by Objectives and the Appraisal Interview. The evaluation will attempt to extend beyond the constraints of teleological and utilitarian viewpoints to include considerations of wider social and ethical issues.
Introduction
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"Appraisal means to determine value according to objective criteria"(Hendrick & Hendrick, 1992).
However, according to Randell (1994), the predominant paradigm of Appraisal in Britain is a "performance control approach"; characterised by the categorisation and subsequent measurement of what traits and behaviours are deemed to produce appropriate performance. In contrast to managers who cling to McGregor's (1960) Theory X or Likert's (1961) System 1, managers adopting a performance control approach tend to be scientifically-minded. Their appraisals focus more on personality traits rather than output, to judge how people could be improved. Randell goes on to warn that the "evaluation of the effectiveness of any process or technique of personnel management is both highly desirable and exceedingly complex. It is notoriously difficult to design such validation studies and then to generate data of sufficient quality to enable causal conclusions to be drawn. There is the further complication of the bias of auspices, when the promulgators of the concepts and training produce evidence of its effectiveness themselves". Randell opines that the mere adoption of an appraisal system by a company will make the staff assume that the system must be effective.
Locke and Latham (1984: 89) state that performance is typically appraised in one of three ways: by the use of trait scales, by objective outcome measures, or by Behavioural Observation Scales. Intriguingly, Herriot (1989) divides tests into two groups: personality questionnaires and cognitive tests. His latter group subdivides into tests of achievement and aptitude.
Recent research describes an individualistic initiative emerging in appraisal contexts in the form of Feedback Seeking Behaviour. Gupta, Govindarajan and Malhotra (1999) assert that higher levels of feedback-seeking by all members of an organisational community should contribute positively to long-term effectiveness. This concurs with Beveridge's (1974) assertion that an appraisee's perceived utility of the appraisal procedure correlates significantly with the amount of opportunity he or she has to discuss organisational issues which he or she perceives to be relevant to his or her own work performance. And Doeringer (1969) dolefully points out that many men would prefer to remain unemployed rather than accept dead-end, demeaning jobs. Clearly an appropriate style of appraisal would be one conveying a sense of autonomy, concern and compassion; enhancing self-esteem through allowing the participant to identify self-improvement targets.
A rather intriguing appraisal strategy is to seek out "Positive deviants" within organisations (unconventional people who nevertheless outperform others) and to observe their behavioural strategies(Sternin & Choo, 2000).
The Appraisal Interview
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An interview has been described as "a conversation within a specific context and having a specific purpose, the pattern of which is directed by the interviewer" (Beveridge, 1968).
A survey by Robertson and Makin (1986) found that over 80 per cent of companies frequently use interviews. This has been replicated (Shackleton and Newell, 1994).
This appraisal technique appears to be very popular with employees, who welcome more participation, supervisory support and problem-solving (see Burke, Weitzel & Weir, 1978; Burke & Wilcox, 1969; Ilgen, Peterson, Martin, & Boeschen, 1981; Kay, Meyer, & French, 1965; Maier, 1958; Nemeroff & Wexley, 1979; Wexley, 1979). However, according to DeNisi (1996), there is a concern that because of the halo effect an appraisal showing greater variations across the measurement dimensions will be regarded as more accurate.
Interviews are easy to arrange and usually considered intrinsic to the promotion process (Fletcher 1993a); however, "the typical, unstructured interview by the untrained interviewer remains an abysmal selection tool"!
The main problem in interviewing is the manifestation of bias. Hyman (1954) regards expectational bias (the interviewer hears what he or she expects to hear) over ideological bias (the interviewer hears what she or he wishes to hear) as the cause for most concern. Beveridge (1975) warns against the following causes of bias: asking a leading question, embarrassing the interviewee or making evaluative or pejorative comments.
Bartlett (1932) observes that the longer the interviewer delays before recording information about the interviewee, the less likely it is to be accurate. Argyle (1969), maintains that an interviewer should give equal attention to maintaining eye-contact, in order to acknowledge the interviewee and place him or her at ease.
An Interview should not be conducted in a way that overemphasises its function or importance as this may intimidate the interviewee(Pratt, 1985).
A study by Burnett & Motowidlo(1998) revealed that visual cues have an effect on interview ratings above and beyond the content of responses, and that nonverbal cues such as physical attractiveness and gaze seem to affect both content-based and visual-based interview ratings.
Fried et al (1999) found that raters tend to inflate performance appraisal when labouring under negative affect. This effect is exacerbated when documentation is low (inadequate) and appraisal visibility is high. This study dramatically illustrates the powerful effect of inter-rater peer pressure in appraisal situations.
According to Phillips (1996) the usual reward for negotiating a first interview is a second interview! The critical flaws are that the method is “purely interview-based, it's likely to be unacceptably subjective". However, organisations "which stick to so-called 'second interviews' are increasingly adopting the more sophisticated methods of assessment centres". This suggests that appraisal interviews are becoming obsolete in some contexts.
However, where it is felt that Assessment Centres and tests are not the most appropriate techniques, the development of behavioural interviewing has a lot to offer (Fletcher, 1993a). These seem to predict performance with some success(Harris, 1989; Eder & Ferris, 1989). Situational interviews have also demonstrated validity(Latham & Saari, 1984), probably because a critical-incidents approach lends an appropriate yet not overwhelming element of objectivity(Flanagan, 1954). All such structured interviews are likely to be better at yielding accurate assessments than unstructured interviews(Wright et al, 1989; Weekly and Gier, 1987; Janz, 1982; Orpen, 1985). One-to-one interviews seem to be inferior to Panel interviews in this respect(Wiesner & Cronshaw, 1989). Without the use of behaviourally based methods, the interview as a means of assessing potential is likely to be little more than an exercise in impression management(Fletcher, 1989). According to Arnold et al(1998), the social rules of an interview involve considerable restrictions on the applicants behaviour, making it far more predictable; this results in an ambiguity over whether interview behaviour is due to the applicant's personality or not. Also, considering the emphasis interviews place on personality characteristics, it is alarming that Epstein and O'Brien(1985) found that trait measures cannot predict how a person will respond in any particular situation.
However, the validity of interviews seems to be confirmed in meta-analytic studies(Weisner & Cronshaw, 1988; Huffcut and Arthur, 1994) although the fact that a meta-analysis is necessary suggests that finding this validity is quite difficult.
Management by Objectives
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According to Humble (1972), Management by Objectives is "a system that integrates the company's goals of profit and growth with the manager's need to contribute and develop himself personally".
But according to Mali (1986), Management by Objectives is "a participative system of managing in which managers look ahead for improvements, think strategically, set performance stretch objectives at the beginning of a period, develop action and supporting plans, and ensure accountability for results at the end of the period". Mali describes four distinct "basic and natural" motives managers have: urge to achieve; need to move toward excellence; desire to contribute; and need for identity. Mali asserts that Management by Objectives works because it fulfils these motives, listing copious benefits to the Company, Managers and Employees.
Harry Levinson (cited in Humble) points out that Management by Objectives fails to take account of the deeper emotional roots of a manager's motivation, placing the manager in "the same position as the rat in the psychologist's laboratory maze". Humble goes on to state that Management by Objectives will create its own problems in the long run if it is not treated as an approach which must grow and develop organically to meet the changing needs of the business.
Bretz and Milkovichs' (1989) survey of Fortune 100 companies revealed that Management by Objectives is the preferred method of assessing an employee's contribution to the bottom line. Advocates of Management by Objectives emphasise the principles of goal-setting and feedback (Drucker, 1973; Odiorne, 1970). Unique to Management by Objectives, however, is its emphasis on the bottom line (Latham & Wexley, 1993). The setting of specific attainable but difficult goals has been shown to be one of the most robust motivational techniques in the psychological literature for increasing employee performance (Locke & Latham, 1990). Once senior managers have set specific stretch goals for their subordinates the effect cascades throughout the organisation. However, an employee can be motivated to set easy goals and deviously represent them as difficult to his or her superiors. Meyer (1981) warns that in some contexts, unexpected problems will arise.
A direct criticism of Management by Objectives is the fact that employees may feel that an overemphasis on quantitative goals (such as Cost-related outcomes) means that no credit is being awarded for important qualitative aspects of their jobs (Ivancevich, Donnelly & Lyon, 1970). Proponents of Management by Objectives argue that the objectivity gained through concrete, tangible measures eliminates errors in judgement and observation that frequently occur when ratings are used. Yet human judgement and careful observation remains a necessity for evaluating the meaning of objective performance criterion (Smith, 1976). Also, Cost-related factors sometimes take into account factors for which the individual is not responsible (Deming, 1986). Inadequate environmental factors demotivate employees and if the consequences of this exogenous demotivation are recorded as evidence of bad performance ability such employees are likely to quit(O'Conner et al, 1984).
The Management by Objectives movement of the 1950s heralded an era of results-oriented appraisal (Macdonnell, 1989) although it is acknowledged that Management by Objectives is more comprehensive and systematic than results-oriented schemes.
Schaffer (1991) criticised the "heavy paper snowstorms" created by Management by Objectives "in which managers can escape from demand making". Also, he warned that "the focus is diffused, bulk is confused with quality, and energy is spent on the mechanics rather than the results. A manager [when challenged] can safely point to the packet of papers."
According to Armstrong & Baron (1998), this appraisal method has become unfashionable because too much emphasis is placed on the quantification of objectives and the process became a top-down affair with little dialogue, tending to focus narrowly on the objectives of individual managers without relating them to corporate goals. Since the system focuses on managers the rest of the staff would be issued an old-fashioned merit-rating scheme, presumably because it was thought they did not deserve anything better.
Assessment Centres
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Assessment Centres were introduced in this country as a method of identifying potential during World War II and was subsequently used by the Civil Service (Pratt, 1985).
The term assessment centre refers to a standardised method for assessing managerial effectiveness off-the-job(Latham & Wexley, 1993). No two programs are identical, but all place heavy emphasis on the observation of behaviour in simulated situations, as well as the use of multiple methods of assessment(Moses & Byham, 1977). They typically involve: In-basket tests, where individual must demonstrate administrative skills regarding decision-making and organisation planning; Business problems, where individuals partake in games involving the use of pretend capital to establish themselves in business and thus demonstrate skills in areas such as energy, human relations and resistance to stress; and Leaderless Group Discussion, where a competitive or co-operative decision-making conference is held to allow participants to demonstrate oral communication, behavioural flexibility and personal impact qualities. The assessors are typically line managers of two levels seniority.
The advantage of this approach is that as many as seven individuals may be assessed at once under standardised condition; argued to be the best way to ensure objective evaluations(Wallace, 1965; McCall & DeVries, 1976). An obvious disadvantage of this methodology is that simulated performance is used to appraise on the job performance, which may lead to resentment among the appraisees. However the reliability and validity of Assessment Centres for predicting success in higher level jobs is impressive (Latham & Wexley, 1993).
Woodruffe (1993), asserts that the validation of Assessment Centres depends upon their purpose. In the case of personal selection, the most appropriate validation would be whether the competency dimensions are measured efficiently and predict future performance; in the case of providing impetus to a management development program, "it does not matter so much if the assessments are accurate as long as they provide a spur to individuals and the corporate culture in the direction of development".
Blackham and Smith (1989) demonstrated the importance of examining the performance of extant Assessment centres in case modifications are required.
It is usual practice to have two, preferably more, Assessment Centre assessment techniques contributing to the assessment of each dimension; ensuring that the behaviour in question is sampled on separate occasions on differing tasks, possibly by differing assessors, providing a basis for making reliable judgements(Fletcher, 1993). However, problems of Assessment Centres involve: self-fulfilling prophesies, inadequate feedback, high expense, candidate intimidation and ascertaining the validity of the measurement dimensions(Fletcher, 1993). It has been demonstrated that incorporating too many dimensions results in bad judgements (Gaugler et al, 1987). Also, assessment centres become unwieldy and highly politicised if used to assess senior staff.
According to Wilson (1995), "research has shown that the assessment centre is the most effective method for predicting successful performance in the job that candidates are applying for" and "60 per cent of member organisations surveyed by the Association of Graduate Recruitment now use them".
However, some concerns have been raised over the content validity; convergent and discriminant validity is poor (Sackett & Dreher, 1982; Robertson et al, 1987; Reilly et al, 1990).
47% of UK organisations employing over 1000 staff members use assessment centres (Mabey, 1992).
General Discussion
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Grint (1993), observes that there seems to be considerable dislike of and dissatisfaction with all performance-appraisal systems.
A difficult problem in performance appraisal is determining what to appraise (Smither, 1997). Many factors affect job performance, including task difficulty, job complexity, number of tasks to be performed, quality or number of product produced (Quiñones, Ford, & Teachout, 1995). Mohrman & Mohrman (1995) emphasise that it is necessary to tie all aspects of managing performance to business objectives and to regard the organisation as a sum of its performing units. Until recently performance appraisal has concentrated only on rating individual merit (Armstrong & Baron 1998); the characteristic approach involving a top down system coordinated by the Personnel Department isolated from what the business does and what the people in it do has given performance appraisal a bad name.
Intriguingly, according to Rowe (1964) managers do not like "playing at being God", nor the whole rigmarole of the appraisal process.
An important philosophical point was made by Long (1986): "There is no such thing as a perfect performance review system...the relative success or failure of performance review, as with any other organisational system, depends very much on the attitudinal response it arouses".
Fletcher (1993b) makes a distinctly bleak forecast. He states that: "What we are seeing is the demise of the traditional, monolithic appraisal system...In its place are evolving a number of separate but linked processes applied in different ways according to the needs of local circumstances and staff levels. The various elements in this may go by different names, and perhaps the term appraisal has in some ways outlived its usefulness". Armstrong & Murlis(1994) caution that it can easily become "a dishonest annual ritual".
As Furnham (1996)comments "The question is why this fundamental process (performance appraisal) is so rare and, when done at all, is frequently done badly?" Newton & Findlay(1996) recommend that "a greater understanding of the organisational context in which appraisal takes place and, consequently, of appraisal itself, requires an acknowledgement of the differences of interests between appraisers and appraisees".
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