copy of thesis 1[1]

Seminar in Economic Policy

SEMINAR IN ECONOMIC POLICY

THESIS ON MULTI RATER/ SOURCEPERFORMACE APPRAISAL

HYPOTHESIS

“Employee performance evaluation is perceived to be better in 360 degree multi-source

feedback than in single source feedback system.”

SUBMITTED TO: M R. A SHRAF J ANJUA

SUBMITTED BY: S HAHZAD s ALIM

I D: 2001-1-27-1859

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HYPOTHESIS

“Employee performance evaluation is perceived to be better in 360 degree multi-source

feedback than in single source feedback system.”

OBJECTIVE OF THESIS

The purpose of my thesis is to study whether the Multi source performance appraisal is

more comprehensive, credible and effective performance measure for the organization as

compared to the single rater appraisal system.

INTRODUCTION

MULTI RATER/SOURCE PERFORMANCE ASSESSMENT

(360-DEGREE)

CONCEPT

Typically, performance appraisal has been limited to a feedback process between

employees and supervisors. However, with the increased focus on teamwork, employee

development, and customer service, the emphasis has shifted to employee feedback from

the full circle of sources.

.

It is a tool that provides each employee the opportunity to receive performance feedback

from his or her supervisor and four to eight peers, reporting staff members, co-workers

and customers. 360-degree feedback allows each individual to understand how others

view his/her effectiveness as an employee, co-worker, or staff member. The feedback

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provides insight about the skills and behaviors desired in the organization to accomplish

the mission, vision, and goals and live the values. The feedback is firmly planted in

behaviors needed to exceed customer expectations.

The organizational culture and mission must be considered, and the purpose of

feedback will differ with each source. For example, subordinate assessments of a

supervisor’s performance can provide valuable developmental guidance, peer feedback

can be the heart of excellence in teamwork, and customer service feedback focuses on the

quality of the team’s or agency’s results. The objectives of performance appraisal and the

particular aspects of performance that are to be assessed must be established before

determining which sources are appropriate.

SELF-ASSESSMENT

This form of performance information is actually quite common but usually used only as

an informal part of the supervisor-employee appraisal feedback session. Supervisors

frequently open the discussion with: “How do you feel you have performed?” In a

somewhat more formal approach, supervisors ask employees to identify the key

accomplishments they feel best represent their performance in critical and non-critical

performance elements. In a 360-degree approach, if self-ratings are going to be included,

structured forms and formal procedures are recommended.

BENEFITS

The most significant contribution of self-ratings is the improved communication

between supervisors and subordinates that results.

Self-ratings are particularly useful if the entire cycle of performance management

involves the employee in a self-assessment. For example, the employee should

keep notes of task accomplishments and failures throughout the performance-

monitoring period.

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SUPERIORS

Evaluations by superiors are the most traditional source of employee feedback. This form

of evaluation includes both the ratings of individuals by supervisors on elements in an

employee’s performance plan and the evaluation of programs and teams by senior

managers The danger in supervisory evaluations is the substantial amount of power and

influence wielded, often by the hand of a single rater.

BENEFITS

The first-line supervisor is often in the best position to effectively carry out the

full cycle of performance management

The supervisor may also have the broadest perspective on the work requirements

and be able to take into account shifts in those requirements.

PEERS

Reduced hierarchies in organizations, as well as the increasing use of teams and group

accountability, peers are often the most pertinent evaluators of their colleagues’

performance. Peers have a unique perspective on a co-worker’s job performance and

employees are generally very receptive to the concept of rating each other. Peer ratings

can be used when the employee’s expertise is known or the performance and results can

be observed. There are both significant contributions and serious pitfalls that must be

carefully considered before including this type of feedback in a multifaceted appraisal

program.

BENEFIT

¨The addition of peer feedback can help move the supervisor into a coaching role rather

than a purely judging role.

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SUBORDINATE.

Formal evaluation by subordinates is unusual, although from time to time subordinates

may be asked for input into the evaluation of their supervisor. When subordinates have an

input into their supervisor’s evaluation, supervisors have been known to improve their

interpersonal relations and reduce management by intimidation. Issues of anonymity and

adequate sampling of subordinates may be important in traditional appraisals.

BENEFITS

A formalized subordinate feedback program will give supervisors a more

comprehensive picture of employee issues and needs. Managers and supervisors

who assume they will sufficiently stay in touch with their employees’ needs by

relying solely on an “open door” policy get very inconsistent feedback at best.

Employees feel they have a greater voice in organizational decision-making and,

in fact, they do. Through managerial action plans and changes in work processes,

the employees can see the direct results of the feedback they have provided.

CUSTOMERS

Evaluations by outside clientele may be useful in instances when there is much personal

contact with outsiders or when the person being evaluated knows more about aspects of

the job than the supervisor. Internal customers are defined as users of products or services

supplied by another employee or group within the agency or organization may contribute

significant input

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SINGLE-RATER PERFORMANCE EVALUATION

Single Source Performance Appraisal relies heavily on supervisor opinion & judgment

Moreover, they usually don’t work; they neither differentiate levels of performance nor

motivate employees to improve performance.

PROBLEM IN SINGLE RATER PERFORMANCE ASSESSMENT

Nepotism and Politics may dilute assessment. It may reflect the quality of the

rater-ratee relationship, not the actual work performance of employees.

Once a worker is classified as a poor performer, it may take a long time for a

supervisor to notice the worker has improved.

One particularly good or poor trait may contaminate other performance areas

considered in the evaluation.

Different supervisors may have different standards in making evaluation

decisions

Supervisors may tend to rate workers as average, especially when rating forms

require a written justification for a high or low rating.

Hence an employee’s supervisor-only performance appraisal may not truly reflect the

individual’s actual job performance. High-performing employees may receive poor

appraisals that limit their opportunity for rewards such as pay increases and promotions

due to the idiosyncrasies of the supervisor.

Recent performance appraisals have also included self-appraisals. In which employees

rate their own performance and skills development. Self-appraisals are often used to

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complement supervisor appraisals. However, self-appraisals offer limited information for

employee improvement.

Leaders and employees at all levels of organizations are changing the way they receive

feedback in order to improve the quality of information. The new model for performance

feedback and appraisal turns the assessment process upside down. People are asking for

performance feedback from those with knowledge of their work behaviors, as well as

from their supervisor. This information, that comes from many asking for and getting

information from people rather than just is more honest, reliable and valid than traditional

appraisals from supervisor only. Moreover, feedback from these multiple sources has a

more powerful impact on people than information from a single source, such as a

supervisor. In fact, no organization action has more power for motivating employee

behavior change than feedback from credible work associates.

METHODOLOGY

SAMPLE SIZE

The sample size includes two organizations, one using Multi source appraisal system and

the other using the Single-Source appraisal system.

Getz Pharma pharmaceuticals Company. (Uses Multi Source feedback)

EVA edible oil company (uses Single-Source appraisal system)

RESPONDENTS

A total number of 12 respondents will be included in this research- 6 each. The

respondents are employees at the high / middle management level and are assessor in the

appraisal process.

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QUESTIONNAIRE

Q1. What Performance assessment tool is used in your organization?

Single-Source appraisal system

Multi source appraisal system

Q 2. Who are the Raters Involved in the Process

Self

Manager (Boss)

Direct Reports (Department Head)

Peers

Internal Customers

External Customers

Supervisor

Others (if any please Identify) __________________________

Q 3 What are the possible reasons for using the current appraisal system?

Objectivity in evaluation

Influences employee motivation, performance, and job satisfaction

Provides a broader perspective of employee performance

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Increases accountability of employees to their customers

Encourages two way communication

Assist in creating healthy changes in organization

Helps managers with their personal and professional development planning

Provides input for performance appraisals

Helps in an organizations succession planning

Q4 Are there any evaluator accountability checks in your appraisal system?

Yes No

If yes please explain ____________________________________

Q5. What are the weights allocated to each of

Self Peers

Internal Customers

External Customers

Manager (Boss)

Direct Reports

Supervisor

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Others (if any please identify) __________________________________

Q6. What levels of employees are assessed through the appraisal?

Upper Management

Middle Management

Lower Management

Q7. What are the assessment criteria?

Responsibility: Knowledge and the fulfillment of task assigned and empowered

to deliver it on time.

Team Work: Use of teams and group accountability. Making most out of the

collective expertise. Builds consensus and shares relevant information

Problem-Solving. Ability to take prudent & timely decision

.

Listens actively to internal and external customers

Takes initiative to make things happen.

Identifies, understands and responds to appropriate needs of business and

demonstrates broad business knowledge

Stretch- outperforming the targets

Effective & relevant communication

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Q8. Are the results of the appraisal shared with the participants (evaluators &

evaluates)?

Yes No

Q9. What has been the impact on the following participants after the appraisal?

Positive Change Negative Change No Change

Upper Management

Middle Management

Lower Management

Q .10 What is the aftereffect of performance appraisal on the following areas?

Negative Positive

External Customer responsiveness

Building relationships (with customers)

Value maximization

Voluntary Termination

Absenteeism

Employee Productivity

Costs Competitiveness

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QUESTIONNAIRE ANALYSIS

QUESTION. 1

What is the form of appraisal prevailing in your organization?

Single-Source appraisal system

Multi Source appraisal system

There are two organizations in this research; one implements the single source appraisal

system (EVA edible oil company) and the other GETZ PHARMA implements the 360-

degree form of system

360-degree appraisal system Getz Pharma

Single source appraisal system EVA edible oil company.

QUESTION .2

What are the objectives behind using the current appraisal?

360-degree appraisal

system (GETZ

PHARMA)

Single source

appraisal system

(EVA)

Provides a broader perspective of employee performance 5 3

Objectivity in evaluation 5 0

Encourages two way communication 5 5

Assist in creating healthy changes in organization 2 0

Increases accountability of employees to their customers 2 0

Align employee performance with organization vision &

values

5 3

Provides input for performance appraisals 0 0

Platform for promoting Internal recruitment Policy 4 2

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Influence employee development, motivation and job

satisfaction

3 0

Analysis

100% of the respondents using the single source appraisal system stated that it

appreciates two-way communication. 60% of the respondents were of the view that the

single source appraisal system allows to have a broader look at employee’s performance

as compared to 100% in Multi Source appraisal. The above analysis indicates that

employee perceive more objectivity and fairness in 360 degree appraisal

Multi source appraisal showed better results about the skills and behaviors desired in the

organization to accomplish the mission, vision, and goals.60% of the respondents stated

that it assists each individual to understand his or her strengths and weaknesses, and to

contribute insights into aspects of his or her work. The feedback can firmly be planted in

behaviors needed to exceed customer expectations

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QUESTION .3

. Who are the Raters Involved in the Process

Self

Manager (Boss)

Direct Reports

Peers

Internal Customers

External Customers

Supervisor

Others (if any please Identify) __________________________

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Evaluators Single source

appraisal

360-degree appraisal

SELF No Yes

MANAGER Yes Yes

DIRECT REPORT Yes Yes

SUPERVISOR No No

INTERNAL CUSTOMER No Yes

EXTERNAL CUSTOMER No Yes

PEERS None Yes

Analysis

The Multi source appraisal involves all Managers, Department Heads Customers, Peers

and Supervisors to minimize biasness, prejudice and deficiencies that are prevalent in

single rate system. Although this approach can be time consuming but it can pay

dividends for the company in the long run in the form of productivity, low turn over and

loyalty etc.

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QUESTION .4

Is there any assessor answerability verification in your performance evaluation

system?

Yes No

If yes please explain ____________________________

Appraisal form Evaluator accountability

Verification

Single Source Appraisal No

Multi Source Appraisal Yes

Analysis

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There are no accountability checks in the single source appraisal system. Whereas in the

360-degree appraisal system there are accountability checks; at GETZ PHARMA

employees get an opportunity to express their views both verbally and on the document

itself.

QUESTION .5

What are the weightages allocated to each of these evaluators?

Self Internal Customers

Manager (Boss) External Customers

Direct Reports Supervisor

Peers

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WEIGHTAGES ASSIGNED


Evaluators Single source appraisal 360-degree appraisal

SELF None 17%

MANAGER None 17%

DIRECT REPORT None 17%

SUPERVISORS None 17%

INTERNAL

CUSTOMER

None 8.5%

EXTERNAL

CUSTOMER

None 8.5%

PEERS & OTHERS None 8.5%+8.5%

Analysis

The above figure reveals that equal weight age is assigned to all the key assessors to

minimize the undue / substantial influence of one or two evaluators. The consensus of

opinion enhances the credibility of the evaluation process .In the single source appraisal

system there are no weightages assigned to both the supervisor and the section /

department head.

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QUESTION .5

What layers of management are assessed through the appraisal?

Upper Management

Middle Management

Lower Management

Management Layers Single source appraisal 360-degree appraisal

Upper Management Yes Yes

Middle Management Yes Yes

Lower Management Yes Yes

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Analysis

All the management layers are assessed in both the single source appraisal system and the

multi source 360-degree appraisal system.

QUESTION .7






.


Takes initiative to make things happen.


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Effective & relevant communication

Assessment Criteria Single source appraisal 360-degree appraisal

Responsibility Yes Yes

Team work Yes Yes

Problem Solving Yes Yes

Target Fulfillment Yes Yes

Customer Service No Yes

Proactive No No

Business Skills No Yes

Communication Yes Yes

Analysis

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The above question was targeted to explore the assessment criteria used in both the single

source and Multi Source appraisal system. According to the answers given by the

participants, the single source appraisal system in EVA assesses:







Effective & relevant communication.

Whereas the answers provided by respondents at GETZ PHARMA, the 360-degree

appraisal system assesses the above 5 mentioned criteria including the




None of the appraisal system focused on employee,s initiative taking ability probably

due to lower & upper managment limited span of control.

QUESTION .8

Are the results of the appraisal shared with the participants (evaluators &

evaluates)?

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Yes No

Single source appraisal Yes

360-degree appraisal YES

Analysis

Respondents in both the forms of appraisal system stated that the results are shared with

them (the ratee’s).

QUESTION .9

What has been the impact on all the layers of Management after the appraisal?

Positive Change Negative Change No Change

Upper Management

Middle Management

Lower Management

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SHARING OF RESULTS


Single source appraisal 360-degree appraisal

Positive

Change

Negative

Change

No

Change

Positive

change

Negative

Change

No

Change

Upper Management 5 0 0 5 0 0

Middle Management 5 0 0 5 0 0

Lower Management 3 0 2 5 0 0

Analysis

This question was aimed at finding out the changes that occurred after the appraisal was

carried out.

After the single source appraisal, 100% respondents felt a positive change in the upper

management and the middle management levels, in terms of the efforts being made.

Whereas 60% felt a positive change, 40% felt no change in the lower management level.

After the 360-degree appraisal, 100% respondents felt a positive change in all the three

management levels.

QUESTION. 10

What is the aftereffect of performance appraisal on the following areas?

Negative Positive

External Customer responsiveness

Building relationships (with customers)

Value maximization

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Voluntary Termination

Absenteeism

Employee Productivity

Costs Competitiveness

Single source appraisal 360-degree appraisal

Negative Positive Negative Positive

External Customer

responsiveness

0 0 0 4

Building relationships (with

customers)

0 0 0 5

Value maximization 0 0 0 3

Voluntary Termination 0 0 0 2

Absenteeism 0 0 0 3

Employee Productivity 0 0 0 2

Costs Competitiveness 0 0 0 0

Analysis

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This question was aimed at finding out the impact on the various aspects stated above,

after the appraisal in both the organizations.

As far as the single source appraisal is concerned, all the respondents felt that there was

no direct link between this form of appraisal and the stated areas.

Whereas at GETZ PHARMA (implementing the 360-degree form of appraisal), 100%

respondents felt a positive impact on customer feedback and building lasting

relationships (with customers). Where as 40% of respondents tend to believe that

employee appraisal assist in creating maximum value to all stakeholder and employee

sense of belongingness to the company. Employee strive harder when they perceive merit

based evaluation and the constructive relation between performance & rewards

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S UMMARY OF FINDINGS

Performance appraisal is the process through which an employee’s job performance is

formally assessed. 360-degree feedback allows each individual to understand how others

view his/her effectiveness as an employee, co-worker, or staff member. The 100% of the

respondents were of the view that Multi Source Appraisal is aligned with the skills and

behaviors desired in the organization as compared to 60% in Single Source Performance

Appraisal that relies heavily on supervisor opinion & judgment. The Questionnaire

response showed 80% of participant’s believe that diversity & consensus of opinion in

Multi source appraisal provides a platform for organization succession planning and

enhances the credibility of the evaluation process. The above findings also revealed that

Employees are assessed on wider range of criteria’s i.e Responsibility, Teamwork,

Problem Solving, Target Fulfillment, Customer satisfaction and Business Skills in multi

rater appraisal as compared to single rater appraisal. The multi rated appraisal included

Self, Manager (Boss), Direct Reports (Department Head), Peers, Internal Customers,

external Customers and Supervisor, Where as Single Rated Appraisal included only

supervisor & department head. The danger in supervisory evaluations is the substantial

amount of power and influence wielded, often gifted in few hands. 100% respondents felt

a positive impact on customer feedback and building lasting relationships (with

customers) in multi rated appraisal. Where as 40% of respondents tend to believe that

(Single rated) employee appraisal assist in creating maximum value to all stakeholder

and employee sense of belongingness to the company.

CONCLUSION:

I may conclude that it has been proved Multi source performance appraisal is more

comprehensive, credible and effective performance measure for the organization as

compared to the single rater appraisal system and the hypothesis states true that

“Employee performance evaluation is perceived to be better in 360 degree multi-

source feedback than in single source feedback system.”

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copy of thesis 1[1]

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