An Analysis of Human Resource Performance Appraisal- Kao Kveng Hong

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An Analysis of Human Resource Performance Appraisal: A case

studyof oil Company in Cambodia

Dr. Kao Kveng Hong*

Date: August, 2013

ABSTRACT

Oil Company has emerged as a big company within the Cambodian petroleum industry in recent

years, outsurpassing its rivals in market share. Although the company has had great success in

its business operations, yet, it is not clear how its human resources have contributed to its

success and how the company has been caring for its employees.

On the request of Oil Campanys new administrative officer, the researcher carried out an

assessment of the current appraisal system in Oil Company with the objectives of finding out the

perspectives of the employees on the current appraisal system, assess its effectiveness based onthe employees feedback as well as benchmarking against a reputed competitor, and to make

recommendation for strengthening the performance appraisal system. In order to achieve these

objectives, a descriptive design based on the administration of a prevalidated questionnaire to

all the 48 employees (total enumeration method) working in the companys head office was

chosen. Secondary data was collected by referring to a variety of company documents.

Analysis of data collected has revealed that the employees are far from satisfied with the

companys performance appraisal system because of the vagueness of procedure and process,

lack of formal forms to fill, lack of clarity on the rating process, lack of transparency, lack of

feedback, lack of involvement in the process, etc. Caltexs performance appraisal system was

found to be more effective than SOKIMEXs.

It is recommended that SOKIMEX should develop a lucid and formal model; an employee-

friendly, effective, open and transparent performance appraisal system; and clearly linked to

salary, benefits, promotions, rewards, punishment, etc.

BACKGROUND OF THE STUDY

Sok Kung Import and Export Co., Ltd. (SOKIMEX) was established in 1990 when the Royal

Government of Cambodia opted for the free market policy. This company was the first localcompany that invested in petroleum industry, specifically in petroleum imports with an initial

capital of 500, 000 USD. Its capital rose to 95 million USD in 2000, as a result of the profits

made in the business and new shareholders.

Initially, the company's operations were not only to import petroleum to supply the government

in exchange with rubber or cash, and export agricultural products but also included the supply of

some materials to Ministry of National Defense and Interior such as caps, shoes, uniforms, etc.

In 1992, SOKIMEX imported petroleum to sell to the government based on the offer of Ministry

of Commerce, and then supplied to UNTAC. Since 1993, the company's distribution channels

have been expanded in order to deliver its products to customers all over the country.

After continuous success in business, the company has expanded and diversified its operations. It

has invested in other areas such as garments, hotel, tourism, import and export, rubber plantation,


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jetty, and transportation. All these areas of operations are under the direct control of SOKIMEX

including the Petroleum Company.

SOKIMEX Company has in recent years emerged as a big company within the Cambodian

petroleum industry. It has a much larger market share than its competitors. Its present operations

include the import of petroleum from Thailand and Singapore to cater to the demand in

Cambodia. The imported products include:

Super gasoline (EA.97); Regular gasoline (EA.92); Fuel oil (FO); Diesel oil (DO); Kerosene oil

(KO); Jet A1; Gas and Lubricant for all kinds of vehicles

SOKIMEX has a large capacity storage tank terminal and owns a jetty in Sihanouk Ville, and

still maintains the leadership position in terms of its storage tank terminal, which is located in 5

different areas. The total storage capacity of SOKIMEX is equivalent to 66% of the total

capacity of all storage tanks in Cambodia.

Although it must be acknowledged that SOKIMEX has had great success in its business

operations, yet, we do not know how its people have contributed to its success and how it caresfor its employees since many organizations of late have been concentrating more and more on

their human resources. These organizations treat their people as the greatest and the worthiest

asset of the organizations.

It is people who produce everything. An operation or business can be successful if the people in

that organization succeeds in attaining their individual objectives and responsibilities. On the

other hand, it meets with failure if the individuals fail to achieve their individual objectives and

responsibilities. Human beings are not heartless robots that are expected to perform

mechanistically. Unlike robots, they have brains, intelligence, emotions, feelings, etc., which

they bring with them to the workplace. Many of these factors can affect their performances.

Moreover, ill use of human resources is one factor among the others such as poor product design,poor planning, poor communication with customers, etc., which are all contributing factors to

organizational failure. Therefore, like in any battle, victory emerges because of peoples

performance and management. In this case, performance appraisal plays an important role in

order to evaluate the performance of people.

Furthermore, it is difficult to find the best way to motivate people. Some claim that money is the

best way to motivate staff. However, it is not the only key to human motivation in spite of the

fact that it is certainly useful. Employees today expect to be rewarded for putting in that extra

effort. To clearly understand what motivates and what does not, performance appraisal is

desirable.

Performance appraisal is very crucial for any organizations as well as for SOKIMEX, the

company that the researcher seeks to study.

The new administrative officer at SOKIMEX has been concerned that the performance appraisal

system he inherited is rather unstructured and informal (no form to be filled). He has requested

the researcher to assess the current appraisal system and suggest improvements. Therefore, the

researcher aimed to answer the following research questions through this study:

- How does SOKIMEX implement its performance appraisal?

- How effective is the process of performance appraisal in SOKIMEX Company?

OBJECTIVE OF THE RESEARCH


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The objectives of the study were:

- To find out SOKIMEXs existing performance appraisal system through theperspectives of the currently serving company employees

- To assess the effectiveness of that system based on the feedback provided by theemployees and benchmarking against a reputed competitor operating in Cambodia.

- To make recommendations for strengthening the performance appraisal systemLITERATURE REVIEW

Human resource in the organizationPeople can affect organizational profitability, adaptability, flexibility, and productivity as well as

competitive advantage. Recently, many business firms have been attempting to compete with

other through their people. The success of an organization depends on its peoples knowledge,

skills and abilities since excellent people can create excellent organization. Harris et al., (1996)

outlined some of the beliefs associated with creating excellent people in the organization.

People are the most valuable resource, which is also the most difficult resource to cope with,

when compared to others. On the other hand, they are a type of resources, which grow over time.

Many firms have treated people as their potential assets not liabilities, which need serious caring

because they can increase value of the organization, decrease cost, and provide something unique

to customers through their efforts. The creativity of organizational members is a vital input to the

development and improvement process. The members must themselves grow over time to be

capable of handling the jobs, which results in responding to environmental changes effectively.

Unlike products or services that can be copied in somehow; moreover, humans skills,

knowledge, and ability cannot be copied easily. These are source of competitive edge if they are

not available to all competitors (Kenneth, 2003).

Making excellent people is a great challenge to the various organizations, which need to ensure

the integration of the role of human resource function to meet the organization mission. Harris et

al., (1996) have identified the key aspects of people preparation to the human resource function

in order to strengthen the organization as following:

Disciplineis the critical essence of a company. Without it, there will be a lack of

quality and safety standards. Discipline is shared set of values, rather than an imposed set

of rules.

Flexibility refers to expansion of peoples capabilities by consistent and long-

term training programs in new skills.

Equalityis the removal of unfair personnel policies, which create division amongthe company members, such as different pay structures and staff car parks, etc.

Autonomyresults in delegation of authority for running the work area to company

members who carry out the work itself. Examples of autonomy are authority to stop the

line, routine material control and problem solving activities.

Quality of working li ferefers to measures which set out to improve the sense of

involvement of company members, their security of employment, an their senses of

enjoyment of working life.

Creativityharnesses the natural curiosity of company members to make

improvements, which affect the work they do. While this may seem to be opposed to the

concept of discipline, if the aim of the job is made clear, company members can be given

discretion as to how it is carried out.

However, in order to lead the above to success, it is important to do good performance appraisal


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(PA) of employees by using the various processes available (Chea, 1999). He also added that

good PA could provide information upon which promotion and salary decisions can be made.

Management of people plays a major role in creating organizational capability and creates and

sustains competitive advantage. Good human resource management can lead the organization to

achieve its objectives and results in gaining success in business; contrarily, bad management can

lead the organization to failure (Bateman et al., 1999). Therefore, we must understand whathuman resource management is and how it benefits the organization.

Human resource management

Whether a human resource management function or department even exists in a firm, every

manager must be concerned with people. Ivancevich (2001) defined human resource

management as the function performed in organizations that facilitates the most effective use of

people to achieve organizational and individual goals. Armstrong (1994) defined human resource

management as a strategic and coherent approach to the management of an organizations most

valued assets the people working there, who individually and collectively contribute to the

achievement of its objectives for sustainable competitive advantage (cited by Kenneth, 2003).Neela (2000) cited that,

Almost every writer who believed that human resource management is an approach to manage

people effectively agreed that people is the key factor; valued assets in which to invest andsustainable competitive edge can be achieved through them. Organizations can use human

resource management to gain competitive advantage because it is difficult for competitors toduplicate.

In short, human resource management is any designed activities used to prepare and coordinate

people in an organization to achieve its goals.

Ivancevich (2001) mentioned that the contributions HRM makes to organizational effectiveness

include the following:

Helping the organization to reach its goalsEmploying the skills and abilities of the work efficientlyProviding the organization with well-trained and well-motivated employeesIncreasing to the fullest the employees job satisfaction and self-actualization

Developing and maintaining a quality of work life that males employment in the organizationdesirable

Communicating HRM policies to all employees

Helping to maintain ethical policies and socially responsible behaviorManaging change to the mutual advantage of individuals, groups, the enterprise, and the

public

In other words, Neela (2000) pointed out that the aims of human resource management are to

place the right people with the right skills in the right jobs for the right cost at the right time.

Human resource management consists of variety of activities. Those include equal employment

opportunity (EEO) compliance, job analysis, human resource planning (HRP), recruitment,

selection, motivation, orientation, PA, compensation, training and development, and labor

relations.EEOis the right of all employees to work and advance on the basis of performance,

ability, and potential, be away of the discrimination of race, color, religion, sex, national origin,


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minority, or handicap (Bateman et al., 1999).

Job analysisis the process of collecting, analyzing, and synthesizing data about jobs

(Torrington et al., 1994).

HRPis the process of analyzing the movement of people into, within and out of an

organization in order to achieve the optimum use of human resources and to have the correct

number and types of employees needed to meet its goals, according to Kenneth (2003). It

involves in forecasting labor demand for the organization, comparing the demand with theexisting workforce available within the organization, screening the supply from both internal and

external the organization, and determining the numbers and types of employees to be recruited.

Hir ingrefers to the process of recruiting, and selecting candidates whose abilities,

attitudes, skills and knowledge best meet the needed selection criteria for the position available

so as to help the organization achieve its objectives. "Hiring the whole person" means hiring

someone not only to a job, but also that person's brain, senses and potential for further

development. When they leave the organization, they bring with them skills, experiences,

knowledge, abilities, company secrets, etc. It may a serious case if they leave for joining the

organizations competitors. The human resource experts need to be clear in the role of human

resource function, Cenzo et al(1996).

Motivationthe attitudes that predispose a person to act in a specific goal-directed way. Itis an internal state that directs a persons behavior (Ivancevich, 2001).

Orientationis defined as the activities that introduce new employees to the organization

and to their tasks, supervisors, and work groups (Zweig, 1991).

PA is the process of evaluating the employees performance with the aim o f improving

their performance as well as the performance of the organization as a whole.

Compensation is the HRM function that deals with every type of reward that individual receive

in return for performing organizational tasks (Ivancevich, 2001).

Train ing and developmentrefers to the process of upgrade the level of employees in

terms of skills, abilities and knowledge in order to improve their performance and complete their

works efficiently and effectively.

Labor r elationsrefer to the relationship between a group of employees (i.e. a union) andmanagement (i.e. employer).

Ivancevich (2001) pointed out, of all the relationships between PA and other HRM activities,

none has been more crucial to understand than the one between evaluations and EEO, especially

as it applies to promotions and terminations. Unless evaluations are considered fair and decisions

made using them treat everyone with dignity, there will likely be intense conflict.

What is performance appraisal?

Performance appraisal is the process used by management to inform employees individually howwell they are doing in the eyes of the company (Zweig, 1991). Bateman et al., (1999) stated that

PA is the assessment of an employees job performance. Ivancevich (2001) defined

Performance Evaluation as the activity used to determine the extent to which an employee

performs work effectively.

Although there are many definitions, most still agree that PA is the process of evaluating

peoples performance with the aim of improving the performance of individuals and organization

in order to achieve their objectives.

According to Cane (1996) and Dessler (2000), PA goes by many different names in the industry

and in the literature. These are employee appraisal, performance evaluation, employeeevaluation, employee review, performance review, personnel review, merit review, performance

rating, personnel rating, and merit rating.


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The benefits of performance appraisal to the organization

Torrington et al(1994) confirmed that PA provides an opportunity for managers and subordinate

to sit down together and review the work-related behavior such as business awareness,

communication skills, employees ability, process, decision-making, flexibility, adaptability,

improvement, training, reward, terminate and so on.

According to Storey (1994), PA provides opportunities for manager to plan, change, and correct

all the activities in organization effectively. Finally, PA can makes manager see the strength and

weaknesses in the central career.

Thus, we can state that PA system will help the organization to ensure the abilities and energies

of individuals are being deployed as effectively as possible in the organization, without talent

being ignored. Through PA; secondly, it will assist the process of HRP. It will the organization

especially planners identify skills shortages and succession needs. Also, it will help them identify

training and development needs so that the contribution of individuals to the future development

of the organization can be enhanced and the individuals himself be strength, and become skillfuland self-confident with a wider range of job prospects. Last but not least, PA provides

opportunities to formalize the process for setting short term goals specifically goals and work

objectives for the employees, to rectify individual and organizational goals, to discuss the career

progressing opportunities in order to assist promotion decisions. Kenneth (2003) added that the

PA system results in a fair and valid basis for recognizing and rewarding individual performance,

and encourages the communications among the individuals in organization during appraisal

process. This constitutes an important part of the organizational management system. It also

gives an opportunity to employees to express their concerns about the company and their

positions. Moreover, regular PA can help organization reduce the employee turnover rate. For

individuals, appraisers and appraisees may gain new insight into each other through PA. The

appraisers would also be in a better position to understand the problems faced by the appraisees,

and the appraisees jobs may be clarified and better defined. In positive point of view, appraisees

may be happier and more productive knowing their current and future job performances, and the

organizations high achievers are identified and then bring them to the attention of others within

the organization that results in improving appraisees job performance. Finally, it gives feedback

to employees regarding their performance, so that any corrective actions can be taken to rectify

any weaknesses, which leads to more effective performance and increased productivity.

The following are also reasons why junior staffs may wish to be appraised by their senior in an

organization (Chea, 1999):

- Performance: one's ability to do job may be enhanced by an emphasis on strengths andan understanding of what changes are needs.

- Motivation: the reassurance and direction that should come from an effective appraisal

can increase the level of enthusiasm and commitment to the job and to the organization in which

the job is located.

- Career: individuals can get guidance and indicators about possible job changes.

What are the objectives of performance appraisal?

Bateman et al., (1999) stated that there are two basic purposes of doing PA, which benefit

organization. First, appraisal serves an administrative purpose. It provides information for

making salary, promotion, and layoff decisions, as well as providing documentation that canjustify these decisions in court. Second, it serves as developmental purpose. The information can


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be used to diagnose training needs, career planning, and the like. Feedback and coaching based

on PA information provide the basis for improving day-to-day performance.

Kenneth (1980) stated that there are four reasons why appraise performance as following:

- First, appraisals provide information upon which promotion and salary decisions can bemade.

- Second, they provide an opportunity for you and your subordinate to review thesubordinates work-related behavior. This in turn lets both of you develop a plan for

correcting any deficiencies the appraisal might have unearthed, and reinforce the things

being done right.

- Third, appraisal is part of the firms career planning process, because it provides anopportunity to review the persons career plans in light of his her exhibited strengths

and weaknesses.

- Finally (and in keeping with reasons 1 through 3 above), appraisals can, as well see,help you better manage and improve your organizations performance.

Essentially, the objective of PA is to make employees be aware of their current and futureperformance and to improve their performance as well as the organization which results in

increasing productivity, improving quality of performance, and encouraging positive work

attitudes, and end results in achieving individuals and organizational objectives. Other objectives

of PA is to test out the performance results in order to make rewarding, further training and

development, and promotion decision, and HRP, to evaluate training programs, to help in future

recruitment and selection decisions on the characteristics of the best-performed employees, and

to facilitate communication within the organization.

The steps in doing performance appraisal

Dessler (1994) defined that PA involves in three steps:

- First is defined job: means making sure that you and your subordinate agreed on hisor her duties and job standards

- Second is appraise performance: means comparing subordinate's actual performanceto standards set in step one; this usually involves some type of rating form.

- Third is provide feedback: PA usually requires one or more feedback sessions duringwhich the subordinate's performance and progress are discussed and during which

plans are made for any development required.

Ivancevich (2001) raised that there are six steps in PA process:

1. Establish performance standards for each position and the criteria for evaluation.According to Wayne (1991), an effective criteria of performance evaluation should possess the

following characteristics:

Reliability: A measure of performance must be consistent. Perhaps the mostimportant type of consistency for a performance measure is inter-rater reliability.

If different raters view the same worker, they should arrive at similar conclusions

about the quality of that workers output.

Relevance: A measure of performance must be related to actual output of anincumbent as logically as possible.


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Sensitivity: Any criterion must be able to reflect the difference between high andlow performers. That is, high and low performers must receive criterion scores

that accurately represent the difference in their performance.

Practically: The criterion must be measurable, and data collection cannot beinefficient or too disruptive.

2. Establish performance evaluation policies on when to rate, how often to rate, and whoshould rate3. Have raters gather data on employees performance4. Have raters (and employees in some systems) evaluate employees performance5. Discuss the evaluation with the employee6. Make decisions and file the evaluation

The process of performance appraisal

Zweig (1991), process of PA in interval is better if the organization review it every six months or

every three months. And the process of it should be as follow:

- All new employees will have a PA within 90 days of starting employment. Theemployee's next appraisal will take place on his or her six-month employment

anniversary, and appraisals will be conducted at six-month interval based on

employment anniversary date thereafter.

- All employees will have PA at six-month interval based on their individualemployment anniversary date. The appraisal will be completed by the employee's

immediate supervisor sometime during the week of the employee's employment

anniversary. Additional appraisal session can be held at the direction of the

employee's supervisor as long as the scheduled appraisals occur at their normal times.

-

The Human Resources Department on the first of each month will send notification ofPA due to the employee's immediate supervisor. The immediate supervisor will

conduct the appraisal session during the week it is scheduled.

- Employees will have the opportunity to do a self-evaluation. The employees to beappraised will be sent a copy of the self-evaluation from Personnel on the first of the

month his or her PA meeting.

- The PA is viewed as an opportunity to give the individual constructive feedback toimprove performance, as well as an opportunity to reinforce positive behaviors. It is a

chance to determine if any misunderstandings exist between the employee and

supervisor.

- The same PA form is used for all employees. It represents a starting place andindividual appraisers may decide to attach additional notes or comments. Managers'supervisors and the human resources manager will be available to supervisors for

assistance in preparing appraisal form and conducting appraisal meetings.

- All managers and employees should understand that the PA process is completelyseparate from the wage-and -salary review process. Wage and salary reviews occur

four times per year, on January 1, April 1, July 1, and October 1, and/or at the

discretion of department managers.

- Complete appraisal and self-evaluation forms should be stapled together and routedthrough the individual's department head (if not coming from the department head) to

the appropriate division director of branch manager, to the vice president of the area

the employees works in, to the president, and finally to the employee's personnel file

in the headquarter office.- The routing should, of course, always be handled confidentially in sealed envelopes.

Staff members may not want just anyone to see their appraisals. Routing of


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completed PA should be clearly spelled out and always handled in a manner

consistent with established company policy.

The performance appraisal session

Although no doubt the actual PA session will vary according to the instrument selected, there are

some general guidelines that will apply in almost all cases, Johansen etal(1994); Zweig (1991);Dessler (1994):

The PA session should be nothing to fear, providing the appraiser regularly communicateswith the employees regarding how he or she is doing. The appraiser/employee relationship

is not unlike a marriage.

Appraisal should be performed carefully, objectively, and honestly. Glowing reports shouldbe given only when deserved. The tendency of some managers to give glowing reviews to

all of their staff is sometimes referred to ask the "halo effects". Positive reports on

mediocre performers are bad for everyone involved both employees and the company.

Any meetings to discuss an individual's PA should be held privately. Ideally, here shouldonly two people present at this meeting - the appraiser and the employee. Only when

meeting involves a disciplinary action or termination should consider having someone else

sit in as a witness. Appraisers who do not have private offices should use a conference

room or someone else's office.

Typical PA discussion should last a minimum of 20 to 30 minutes, and possibly up to 45minutes. Discussions lasting longer than that are probably out of control and indicate poor

communication between the employees and manger.

Managers giving what is a largely negative appraisal should refrain from making personalattacks on the employee. If an employee's performance is substandard, state why it is,

giving a full explanation of the appraisal without condemning the employee as a person. If

appraiser is uncertain how to deliver the bad news or if problems with the employees areanticipated, assistance from whoever is in charge of human resource (or the appraiser's

immediate supervisor) should be sought.

PA session is an excellent time to establish some specific short-term goals for the employee(six months to a year). Attach extra sheets to accommodate these goals and objective is the

appraisal instrument does not provide enough space. The appraiser prior to the appraisal

discussion should review goals and objectives from the previous PA session.

Appraiser should practice good listening skills and be sensitive to the nonverbalcommunication cues they might give off, including such things as body language, shuffling

papers, tolerating frequent interruptions from others, and so on.

Whatever your PA form or instrument is, it should be signed by both the employee andreviewer. It is good idea to print a disclaimer under the space for the employee's signaturestating that the employees does not necessarily agree with the appraisal but acknowledges

it took place. It does not want employees who are terminated for poor performance to deny

having been warned. Employees who are unhappy with their reviews may refuse to sign if

this disclaimer is not clearly present.

After the review was meeting; the employee's reaction to the review should be noted in theappropriate section of the appraisal instrument.

According to Brien et al., (1996), in the United States a majority of organizations continue to

evaluate performance on an annual basis. A small proportion (15.6 percent) evaluate

performance twice a year, and an even smaller proportion (3.6 percent) have implemented

quarterly evaluations.


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Who does performance appraisal?

Human resource department serves a policymaking and advisory role. Based on a survey, about

80% of the firms responding said that the human resource department provides advice and

assistance regarding the appraisal tool to use, but leaves final decisions on appraisal procedures

to operating division heads; in the rest of the firms the personnel office prepares detailed forms

and procedures and insists that all departments use them (Dessler, 1994). In spite of that,answering to the question Who should be involved in appraisals? is very crucial since

appraisals cannot be done without appraisers. There are several options available to who can get

involved in evaluation such as employee self-evaluation, peers, immediate supervisor/manager,

rating committees, upwards appraisal, customers, someone outside the immediate work situation,

and 360-degree feedback.

Employee self -evaluati onGood appraisal systems involve employees fully, taking their

views into account before and during the appraisal. Self-criticism is a good deal more acceptable

than criticism from another and if employees are facilitated to self-evaluation, they are likely to

be a great deal more committed to put development projects into actions. It is also useful for

supervisors/managers; they will know the appraiser-appraisee differences. In spite of that,

employee self-evaluation has advantages and disadvantages. Cane pointed out the advantagesand disadvantages as following:

+ Advantages- Greater employee commitment to the outcome- Less employee defensiveness- Greater openness about problems- Encourage employees to think about their own performance and

development needs in a constructive way

- Lead to a more objective assessment+ Disadvantages

- Can be taken too far there is no more value in basing the processexclusively on the employees view than those of the manager

- Risk of obtaining over-lenient staff assessments- Employees may not report accurately on their own behavior

PeersEmployees performances are evaluated by their colleagues or members of theirteamwork. In this system, co-workers must know the level of performance of the employees

being appraised.

This approach may be useful when the tasks of work unit require frequent working contactamong peers. However, peer evaluation is also double-edge sword issue. It has advantages and

disadvantages.

+ Advantages- Very suitable for organizations without formal, hierarchical structures- Peers are often in a position to give a unique insight into an individuals tea

contribution

- Increased participation leads to increased commitment to deal with outcome-

+ Disadvantages- Very time consuming to collect peer-ratings- Potential to cause friction and disrupt team harmony- Generally, peer rating is not very accurate or unbiased- Lead to problem if peers are in competition for raises and promotions


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Immediate supervisor/managerPerformance appraisal is one of the HRM activities that

involve cooperation between the operating managers (immediate supervisor/manager) and the

HR specialists.

The operating manager is the person responsible for conducting the actual appraisal. Supervisor

usually does the actually appraising and must be familiar with the appraisal techniques,understanding (and avoid) problems that can cripple and appraisal, and conduct the appraisal

fairly.

Immediate supervisor/manager rating still are the heart of most appraisal systems. Getting a

supervisors appraisal is relatively easy and also makes great deal of sense. The

supervisor/manager should be in the best position to observe and evaluate the subordinates

performance, and is responsible for that persons performance.

+ Advantages- Know clearly appraisees performances

+ Disadvantages

- Can be subject to bias since outcomes have come from a single personRating committees Appraisees can be evaluated by immediate supervisor/manager and

other supervisors and managers who are most likely to come to get in touch with the appraisees.

+ Advantages- Very useful when changes in working practice make it difficult to identify

only one person who should conduct the interview

+ Disadvantages- If the employee has no input into whom the nominated spokesperson is,

there may be resentment. It is vital that agreement is reached.

Upward apprai salIt can be called Bottom-Up evaluation. In this system, employees are

motivated to appraise their supervisors/managers. Team members appraise their team leaders;

team leaders appraise their managers, and so on. Every one does appraisal hierarchically (see

figure 2-2 below). It is valuable when used for developmental rather than evaluative purposes

(Manuel et al., 1994). According to Cane (1996), Upward Appraisal is now becoming more

popular in the USA and is creating increasing interest in the UK. However, Upward Appraisal

consists of both advantages and disadvantages.

+ Advantages- Facilitates the enablement of employees and the holistic approach to people- Can lead to improved managerial effectiveness, particularly in relationship

to leadership and people-management by providing a source of directfeedback

- Can contribute to a more effective management style which may make thecompany a more attractive place to work

- Avoids possible single rater bias as each manger is now appraised by severalteam members, not just one manager.

+ Disadvantages

- Very time consuming- High levels of administration- Managers may feel undermined and react badly- Employees may not be frank enough to make meaningful comments- Employees may use the opportunity to exercise grudges- Employees may fear retaliatory punitive action by managers


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Customers Customers are also involved in performance appraisal. Performance

evaluation seeks evaluation on the employees from both external and internal customers.

+ Advantages

- Can see employees performance from different facet from both internaland external

- More accuracy+ Disadvantages

- Impossible if customers do not work with appraisees frequently- Time consuming- Can be bias accordingly to the customers affection

Someone outside the immediate work situationAppraisees can be appraised by someone

outside the immediate work situation who is specialized appraiser such as human resource

specialist.

+ Advantages- More accurate- Not bias on appraisees performance- Can be arbitrage in appraisal if accusation of prejudice occurs

+ Disadvantages- High cost- May not know clearly the appraisees performance- May not have data in relation to the appraisees as much as internal appraiser

360-degree feedbackPerformance information is collected through many people around

appraisees i.e. supervisors/managers, peers, subordinates, customers, and anyone who haveworking relationship with the appraisees. According to one recent study issued on BNA Bulletin

to Management (1997), 29% of the responding employers already use 360-degree feedback (also

called multisource assessment), and another 11% had plans to implement it shortly. The

appraisal feedback is generally used for training and development, rather than for pay increases.

However, 360-degree feedback has advantages and disadvantages.

+ Advantages- Provide more accurate view of the appraisees performances as possible

since it gets inputs from all angles- More objective, as more people are involved in the process- More complete picture of employee. This should promote high levels of

confidence in the process

- Useful where geographical spread or working practices make it hard for asingle supervisor to monitor a persons performance effectively

+ Disadvantages- Very time consuming- Administratively heavy if more than a small number of people are involved- Some people may need help to learn from this feedback because it may

spring some comfortable surprises- Can give rise to mutual praise


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The problems in performance appraisal

Usually, managers dread carrying out appraisal interviews nearly as much as appraises fear the

upcoming appraisal. This is partly due to the difficulty of finding a suitable way of appraising

performance, not least because appraisal involves both judgment and reporting, neither of which

are invariably reliable. Judgment has to be sound and well informed, and appraisal judgment hasto be reported to others in order to give them some values. It is very difficult to report in

consistent way and for the reported judgments to be understood in consistent way by whoever

reads the reports.

There are, however, many problems consisted in systems, which are described in. the literature.

For those implementing the appraisal, many things can impair their judgment or reporting. For

example:

- Prejudice- An appraiser may produce flawed judgments though holding a prejudice, or

may hesitate to produce a judgment through fear of being prejudice, or being seen as prejudiced.

- The "motion" of general likes ability or recent events-Are you appraising the

performance or the person? Someone can be very pleasant, cheerful and obliging at the same tine

as performing the job only moderately. On the other hand someone who you dislike may be an

excellent performer. Also, there may be tendency to judge what has happened in the last few

weeks, because it is fresh in your mind, rather than taking a review of a longer period.

- The difficulty of distinguishing appraisees from the context in which they work-

Appraiser have to appraise people doing similar jobs, but in very different circumstances, and

have to consider the effectiveness of the performance within the context in which it was produce.

- Different perceptions of which standards are appropriate-Although not a common

problem, sometimes appraisee, expecting fully competent performance from someone whom has

yet reached that standard

Problems for both the appraiser and the appraise include:

- The formality - the interview needed to be relatively formal in order to be taken

seriously by both parties and to ensure proper preparation this introduces a degree of stiffness

into the encounter which both are likely to find awkward,

- The paperwork- Any schemes aiming at consistent reporting tends to be associated withvoluminous documentation, which discourages managers from taking the trouble of doing what

is needed.

- "Just above average"- It is hard for a manager to say that the appraisee is outstanding, as

there will then be and expectation of more money or promotion. It is depressing to most people

to hear that they are average, so appraisers tend to say things, which can interpreted as saying

that the appraisee is above average, which is both acceptable and safe/ It is however, misleading.

What are the reasons for the failure of performance appraisal system?

Deming listed a number of reasons why performance evaluation failed (Breisch et., al. 1992):- They nourished short-term performance and deflect attention from long-term

planning


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- They leave ratees bitter, desolate and feeling inferior and unfit for work because theyare afraid to present a divergent point of view.

- They are detrimental to teamwork because they foster rivalry, politics, and fear.Employees are rewarded for promoting themselves for their own good.

- They focus on the end product, not leadership to help people- The measures used to evaluate performance are not meaningful, because supervisors

and subordinates are pressured to use numbers and count something.- The measures discourage quality. People will concentrate on meeting numbers: they

wont take time to improve a design if their goals involve quantity or deadlines.

On the other hand, performance appraisal system fails because managers avoid performance

appraisal due to:

- fear of delivering bad news- feeling that praise is unnecessary for professionals- taking too much time- not objective and meaningless

How to establish an effective performance appraisal program

Different organizations have different cultures and structures. Thus, there is no single appraisal

system will be suitable for all. It is necessary for each organization to develop its own framework

and processes.

To establish an effective performance appraisal program; first of all, it should establish

performance standards; secondly, decide who should do performance appraisal; finally, choose

the indicators should be used in appraising. Performance standard should link to the

organizational goals and competencies. Appraisers and methods used should be suitable for the

real situation of the organization.

Furthermore, the evaluation should be:

- human factors not financial targets- link to business needs- run by team leaders or line managers- open- participative- an integrated approach- single status- adaptable- team element-

on-going and informal

Key stages in implementation:

- consider changing the name Appraisal with other names that have positive aspect;for example, Personal development

- find out what people think of current system and what they would like to see in itsplace

- communicate the changes through out the organization- consult everyone who would be involved- Train all those who will carry out the appraisals

Methods in performance appraisal and its strengths and weaknesses

A survey of Fortune 500 companies showed that only about 10 percent of employees were


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satisfied with their organizations performance evaluation methods (Mary, 1996).According to

Bateman and Snell, performance measures fall into one of three basic categories: traits,

behaviors and results.

- Trait appraisals involve subjective judgments about employee performance. They

contain dimensions such as initiative, leadership, and attitude, and ask raters to indicate how

much of each trait the employee possesses.

- Behavior appraisals are still subjective as trait appraisals, but they focus more onobservable aspects of performance. They were actually developed in response to the problems of

trait appraisals. These scales focus on specific, prescribed behaviors, which can help to ensure

that all the parties understand what the ratings are really measuring. Because they are less

ambiguous, they also can help provide useful feedback.

- Result appraisals tend to be more objective and can focus on production data such as

sales volume, units produced, or profit.

Because trait scales tend to be ambiguous (as well as subjective), they often lead to personal bias

and may not be suitable for obtaining useful feedback. So while this approach is extremely

common trait scales are easy to develop and implement they unfortunately are often not

valid.

Some examples of PA forms and processes

Reproductive Health Association of Cambodia (RHAC)'s performance appraisal form and

process

In RHAC, it has formal form for doing performance evaluation (see appendix 1). Both

appraisees and appraisers are involved in the performance appraisal process. Firstly, appraisees

do self-evaluation. They state all their responsibilities, what they have achieved after the

previous appraisal, and their needs for further development (see part 1 of the RHACs PA in

appendix). Secondly, the supervisors appraise their subordinates. At last, they show the results to

the appraisees whether they agree with the results or not; if not, give their comments.

PA is done annually. The contents used in the evaluation are focused on job knowledge,

responsibility, organizing ability, adaptability, interpersonal skills, communication skills,

initiative, teamwork, and leadership.

Performance appraisal form and process of Minnesota State University Moorhead

Like RHAC, Minnesota State University Moorhead also has formal form for doing performanceevaluation (see appendix 2). Unlike RHAC, Minnesota State University Moorhead has applied

self-evaluation method in employees performance evaluation.

Similarly, contents used in the evaluation are focused on job knowledge, responsibility, ability,

adaptability, interpersonal skills, communication skills, initiative, teamwork, and goals.

Caltex's performance appraisal process

In Caltex, supervisors are appraisers. They do performance appraisal once a year. Also, they

have formal form to fill and assist their employee performance appraisal. In Caltex, appraisers

appraise appraises accordingly to the job descriptions.


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Beyond that, they do appraisal with the aims of doing promotion and compensation, and finding

out the areas need improvement

RESEARCH METHODOLOGY

Research designA descriptive design has been selected for this research. It has been descriptive since attempts

have been made to describe how SOKIMEX head office evaluates its employees performance

from the perspective of its employees and an assessment has been made to describe the

effectiveness of that performance appraisal system based on the employees' perception as well as

through comparison with the system being followed by one of SOKIMEX's competitors.

RespondentsTo accomplish the research objectives, a predesigned and pretested questionnaire was

administered to all the 48 employees (10 officers and 38 staffs) working in the head office.

Sampling technique

The researcher requested for an introduction to all the staff at the earliest monthly meetingpossible. During the meeting, the objectives and the purposes of the study were explained and

the research instrument contents (questionnaire) were summarized. Doubts and clarifications

were responded to. All the staffs were requested to fill in the questionnaires during their leisure

time and return back the questionnaires to the researcher in a period of two weeks.

Since the total number of employees in the head office was only 48 (see the SOKIMEXs

organizational structure below), total enumeration was resorted to and questionnaires were

administered to everyone of them. However, total compliance could not be achieved. The study

was stopped after obtaining 40 filled in questionnaires.

Research instrumentPrimary Data was gathered through the administration of a predesigned and validated

questionnaire. The questionnaire was thoroughly pre-tested before being administered to

improve the quality of the measuring instrument. Moreover, the questionnaire was translated to

Khmer language in order to assist the respondents in answering and to facilitate the process of

collecting data.

Secondary Data The secondary data sources for this research comprised of:

+ Brochure of the company

+ Human resource management journals and theories

+ Bulletins

+ Textbooks and websites

+ Performance Appraisal related documents from different types of organization

especially from RHAC and Caltex in Cambodia for the purpose of benchmarking.

Data gathering procedureAfter the questionnaires were received, all the filled in formats were scrutinized. Then, the raw

data was edited, entered in the computer files, and processed by using Microsoft Excel Program

to provide a comprehensive set of tables for the study. The tables included the number of

respondents and percentages by response to each question.

Statistical toolsFor this research, no sophisticated statistical tools were required. The resulting data set was

analyzed by applying Percentages, Proportions and Means. Once the data from SOKIMEX was


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analyzed, comparisons will be made with RHAC's and Caltexs procedures and process in

performance appraisal, the latter being chosen as the benchmarking agency in the same field.

Conceptual frameworkFigure 1-1 illustrated the conceptual framework used in undertaking the assessment of the

Performance Appraisal system in SOKIMEX. While the employees have expectations with

regard to their jobs from supervisors/managers, the latter desire a certain level and standard fromperformance from the former. While employees need to set personal objectives for themselves,

the supervisors/managers expect a certain range of achievements by the employees. The study

was expected to lead to the learning about the current performance appraisal practices by

studying only one of the two groups; the employees and not their supervisors/managers (because

of constraints of time and resources and associated operational difficulties); and then, identify

both positive features that may need to be reinforced as well as areas for improvement.

Figure 1-1: Conceptual framework used in assessing performance appraisal system in

SOKIMEX

ANALYSIS OF THE RESULT

Data analysis and interpretation

A detailed analysis of the data obtained through the administration of a prevalidated

questionnaire, revealed the following findings.

I. Demographic characteristics of the employeesA. Gender distribution:

Employees

Knowledge

Attitudes

Practices

Supervisors/

Managers

Expectation

Desired Performance

Expected Achievements

Study the Current Practices of

Performance Appraisal

Identify

Positive Features

Areas for Improvement


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Table 4-1: Gender distribution

Gender Male Female Total

Number 12 28 40

Percentage 30 70 100%

Table 4-1 reveal that there is a female preponderance among the respondents, with more than

two-thirds (70%) belonging to the female gender and less than a third being male (30%). This isa good indication of the progress made by women in Phnom Penh.

B. Age distribution:

Table 4-2: Age distribution of respondents

Age

group

18 - 24 25 - 34 3544 45 - 54 5564 65 Total

Number 4 5 3 26 2 0 40

Percentage 10 13 7 65 5 0 100%

Table 4-2 show that nearly two-third (26 respondents or 65%) of the respondents are aged

between 45 and 54 years old, approximately one-seventh (5 respondents or 13%) are in the age

group of 25-34 years, and one-tenth (4 respondents or 10%) are very young in the age group of

18-24 years. A mere 3 respondents (or 7%) are aged 35-44 years, and the remaining 2

respondents (or 5%) are elderly being 55-64 years old.

C. Educational background:Table 4-3: Educational qualification of the respondents

Educational

Qualification

Number Percentage

Associate Degree 16 40

Bachelor's Degree 12 30

Masters Degree 5 13

Doctoral Degree 0 0

Any others (high school,

short course training, etc.)

7 17

Total 40 100%

Table 4-3 show that overall the employees of SOKIMEX are fairly well-educated with two-fifth

(16 respondents or 40%) possessing an associate degree, slightly less than a third (12

respondents or 30%) having a bachelor's degree and nearly one-seventh (5 respondents or 13%)

being qualified at the master's level. The remaining 7 respondents (17%) finished high school orsome short course trainings.

D. Duration of service in the company:

Table 4-4: Duration of service of respondents in the company

Service

Duration15 years Total

Number 2 5 4 26 3 40

Percentage 5 13 10 65 7 100%

Table 4-4 demonstrate that a majority of the respondents (26 or 65%) have been working in the

company for a duration ranging between 11 to 15 years. Around one-seventh (5 respondents


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or13%) have been working in the company for 1 to 5 years, one-tenth (10%) have been working

for a duration of 6 to 10 years, while just 3 respondents (7%) have been working for more than

15 years, and a mere 2 respondents (5%) have been working for company for less than 1 year.

The gradation in duration of service nearly corresponds to the gradation in age distribution

revealing that nearly two-third of the respondents are in the age group of 45-54 years and have

put in a service of between 11 to 15 years in the company.

II. Respondents' perspectives on performance appraisal system

A. Existence of formal performance appraisal system

Table 4-5: Respondents response as to whether the company had a formal performance

appraisal system

Formal Appraisal System Yes No Dont Know Total

Number 6 2 32 40

Percentage 15 5 80 100%

Table 4-5 reveal the shocking fact that four-fifth of the employees (32 respondents or 80%) are

not aware of the existence of a formal performance evaluation process in the company. Only 6

respondents (15%) confirmed that there was a formal system in operation. On the other hand, 2

respondents (5%) provided an emphatic "No" response. These findings reveal that the

Administrative Department will have to make considerable efforts to make the employees realize

the existence, scale and process of performance appraisal system or else the company's

competitive strength in the form of knowledge, experienced and skillful employees, may receive

a setback in the near future.

B. Frequency of performance appraisalsTable 4-6: Respondents response on the frequency of PAs in the company

Frequency of appraisal Number Percentage

Monthly 0 0

Bimonthly 0 0

Quarterly 0 0

Half-yearly 0 0

Annually 40 100

Don't know 0

Total 40 100%Table 4-6 reveal that although most employees did not know about the existence of a formal

performance appraisal system in the company, all of them were united (100%) in responding that

performance appraisals were being carried out annually.


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C. Use made of performance appraisalsTable 4-7: Respondents' perceptions on the use made of the companys performance appraisal

system

Perceptions on Use Made Number Percentage

Finalizing job descriptions 1 2.50

Considering promotions 5 12.50

Deciding on compensation and benefits 7 17.50

Identifying training and development

needs

2 5.00

Identifying safety and health needs 1 2.50

Recommending career development plans 3 7.50

Subtotal 19 47.50

No response 21 52.50

Total 40 100%

Table 4-7 that less than half of those surveyed could identify the use of performance appraisals, 7

respondents (37%) stated that performance appraisal was used for deciding on compensation andbenefits. 26% stated that performance appraisal was used for considering promotions. 16% stated

that performance appraisal was used for recommending career development plans. 11% stated

that performance appraisal was used for identifying training and development needs. 5% stated

that performance appraisal was used for finalizing job descriptions, and another 5% stated that

performance appraisal was used for identifying safety and health needs.

D. Type of involvement in company's performance appraisal system

Table 4-8: Type of involvement in company's performance appraisal system

Type of Involvement Number Percentage

Carried out a Performance

Appraisal

0 0

Been Appraised 28 70

Both of the above 7 17

Don't know 5 13

Total 40 100%

Table 4-8 show that out of the 40 respondents, slightly more than two-thirds (70%) had been

appraised their performance. 7 of the respondents (17%) have themselves carried out

performance appraisal of their subordinates while all being appraised by their own

supervisors/managers. However, one-eighth (13%) of the employees did not know whoappraised their performances, revealing a lack of openness in the performance appraisal system

currently in vogue in the company.

E. Contents of performance appraisal

Table 4-9:Contents of SOKIMEXs performance appraisal system

Contents of

Appraisal

Number of

frequency

Percentage

Job Knowledge 7 17

Quantity of work 7 17

Communication 2 5

Self-improvement 3 7


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Planning and

organizing

1 2

Technical

knowledge

7 17

Cooperation 1 2

Attendance at

meeting

0 0

Quality of work 7 17

Judgment 3 7

Dependability 3 7

Any others 1 2

Total 42 100%

Table 4-9 show that multiple responses were obtained when the employees were asked to

identify the contents of the performance appraisal system. 17% of the responses identified job

knowledge as being a content of the appraisal. Likewise, another 17% of responses were that

quantity of work was also used as a content of appraisal. Yet another similar proportion of 17%

of responses was in favor of technical knowledge being used as a content of appraisal. An equal

proportion of 17% of responses recognized that quality of work was used as a content of

appraisal. Among the rest, 5% of responses focused on communication, 7% cited self-

improvement, 2% identified planning and organizing, 2% emphasized cooperation, 7% focused

on judgment, 7% prioritized dependability, and 2% identified discipline as the content of

appraising.

Based on Tables 4-7, 4-8, and 4-9, an inference may be made that the employees lacked clarity

on the use, advantages, and content of performance appraisal system being implemented within

the company, and the urgent need to bring about an openness with regard to the system in vogue

and any improvements sought to be made.

F. Awareness about the setting of performance standards

Table 4-10: Respondents' awareness about the setting the performance standards

Aware Yes No Dont Know Total

Number 1 6 33 40


Table 4-10 reveal the unfortunate situation that a vast majority of the total respondents,

accounting for more than four-fifths (83%) did not know whether the company had set

performance standards for its employees or not. 15% of them stated that the company did not setany performance standards for its employees. While one single respondent (2%) affirmed that

the company set some specific performance standards for its employees.

Again these findings clearly point to the need for introduction of more transparency and clarity

with regard to the performance appraisal process within the company.

G. Categories of appraisers

Table 4-11: Categories of appraisers identified by the respondents

Type of appraiser Number PercentageManager/Supervisor 40 100

Peer 0 0


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Customers 0 0

Self-evaluation 0 0

No one appraised me 0 0

Any others 0 0

Total 40 100%

Table 4-11reveals that all the respondents (100%) pointed that their appraisers were their own

supervisors/managers.

H. Categories of appraisees

Table 4-12: Categories of appraisees identified by the respondents

Type of Appraisees Number Percentage

Manager/Supervisor 0

Subordinate 6 15

Colleague 1 3

I did not appraise anyone 33 82Total 40 100%

Table 4-12 reveal that of the total respondents, 33 respondents or more than four-fifths (82%)

had never appraised anyone's performance. Only 1 employee (3%) had appraised a colleague.

The 6 respondents (15%) remaining had appraised their subordinates in the past.

I. Location of performance appraisal interview

Table 4-13: Location of performance appraisal interview

Location of Interview Number PercentageAt my desk 5 12

In front of my colleague 1 3

At a restaurant 0 0

Any others (never attend the

interview)

34 85

Total 40 100%

Table 4-13 demonstrate that more than four-fifths (85%) of the employees had never participated

in a performance appraisal interview. When this finding is examined against the finding from

Table 4-8 which revealed that 87% of the employees either were appraised or were also involvedin appraising others, it may be inferred that the performance appraisal process is not an open one

and suggesting that supervisors were probably assessing their subordinates as a one-way process.

Only 5 respondents (12%) stated that the interview took place at their desk, while just one

respondent (2%) claimed that it took place in front of his colleague. These findings confirm the

earlier hypothesis that there is widespread lack of clarity, transparency and openness with regard

to the companys performance appraisal system.

J. Average duration of performance appraisal interview

Table 4-14: Average duration of performance appraisal interview


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Duration of Interview Number Percentage

Less than half an hour 4 67

Half an hour-1 hour 2 33

12 hours 0 0

35 hours 0 0

More than 5 hours 0 0

Any others 0 0Total 6 100%

Table 4-14 reveal that two-thirds of the respondents participated in a performance appraisal

interview (67%) stated that the interview took less than half an hour while the remaining one-

third (33%) stated that the interview was held for about half an hour to 1 hour duration.

These findings clearly point to the inadequacy of the time and importance given to the

performance appraisal interview process currently being implemented within the company.

K. Respondents views on whether a formal model for performance appraisal was being

implementedTable 4-15: Respondent's response to the company's formal model in applying Performance

Appraisal

Formal Model Applied Yes No Don't

know

Total

Number 11 6 23 40


Table 4-15 demonstrate the state of confusion prevailing among the respondents minds on

whether a formal model from performance appraisal was being applied in the company. Whilenearly three-fifths (58%) did not know whether such a model was being applied, slightly more

than a quarter (27%) stated that a formal model was being applied while 15% opined that such

model exited.

However those who stated that a formal model was being applied could not clarify what the

model was. They just felt it may be existing.

These findings clearly point to the need for introducing a transparent and lucid model of

performance appraisal within the company and then to educate all the employees on the model

itself in order that the appraisals are carried out in a fair and just manner without leading to any

disgruntlement and complaints.

L. Whether feedback as provided

Table 4-16: Whether feedback was provided by the reviewer on completion of performance

appraisal

Feedback provided Yes No Total

Number 5 35 40



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Match with Expectation Number Percentage

As per their expectations 2 40

Better than their

expectations

1 20

Worse than their

expectations

2 40

Total 5 100%

Table 4-19 reveal that two-fifths of the respondents (40%) perceived that the feedback matched

their expectations. An equal proportion (40%) felt totally disappointedthe feedback was worse

than their expectations. The remaining one-fifth (20%) stated that the feedback was actually

better than their expectations.

P. Reflections on accuracy of appraisal process

Table 4-20:Respondents reflections on the accuracy of appraisal process

Accuracy Reflections Yes No Cant say Total

Number 3 0 2 5


Table 4-20 show that of the 5 respondents who obtained feedback, three-fifths (3 respondents or

60%) opined that the appraisal reflected their work on the job accurately. However the remaining

two-fifths of the respondents (40%) could not comment on the accuracy of the appraisal results

as related to their work on the job.

Q. Results of last performance appraisal

Table 4-21: Results of the last performance appraisal

Results Number of

frequency

Percentage

Got a salary raise 4 8

Got a promotion 1 2

Continued at the same level and

scale

3 7

Warned to improve performance 0 0

Any other (bonuses at year end) 40 83Total 48 100%

Table 4-21 reveal that multiple responses were obtained from the respondents on the question

relating to the results of the last performance appraisal. More than four-fifths (83%) of the

responses got bonuses (by the end of the year), while 8% of the responses indicated a salary

raise, 7% indicated retention at same level and scale and 2% indicated a promotion. In the

absence of an open and well laid out performance appraisal system, it is very difficult to

comment on whether the results were commensurate with appraisal or not.

III. Respondents satisfaction with the companys performance appraisal system


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Table 4-22:Respondents satisfaction with the companys performance appraisal system

Satisfied Yes No Total

Number 9 31 40


Table 4-22 show that only less than a fourth (23%) of the respondents are satisfied with the

performance appraisal system prevailing in SOKIMEX while the majority who comprise more

than three-fourths (77%) of the respondents are not satisfied; thus indicating a clear need for a

thorough investigation and review of the current appraisal system and the introduction of an

employee friendly, effective, open and transparent system. Such a system should be able to

demonstrate the different between poor performance and good performance and be linked to

clearly identified salary, benefits, promotions, rewards, punishment, training and development

and related decisions.

Those who stated that they were satisfied attributed their satisfaction to the fact that their

performance appraisal was carried out directly by the top management. On the other hand, those

who were not satisfied, cited a number of reasons such as vagueness of the procedure and

process, lack of formal forms to fill, lack of clarity on the rating process, lack of transparency,and lack of involvement in the process of conducting of performance appraisals.

The respondents provided their overall comments on the companys performance appraisal

process as follows:

- It lacks transparency.- It fails to involve the employees no scope for self-appraisal, no scope for mutual

agreement/disagreement.

- It is unsatisfactory.- The process and procedures are not clear.

In addition to the overall comments on the performance appraisal system in the company, the

respondents made the following suggestions:

- Design and implement a new process of performance appraisal- Introduce a formal form and clear process including specification of procedures- Ensure transparency during the process and at the time of decision-making- Provide feedback as well as comments on areas which need improvement to appraisees at

the of appraisal process

- Appraisals should be carried out by immediate supervisors/managers-

Appraisals should include quality of work, quantity of work, work discipline, etc.

Table 4-23:Relationship between age and satisfaction with the companys performance

appraisal system

Age GroupSatisfied Unsatisfied Total

No % No % No %

1824 0 0 4 100 4 100

2534 1 20 4 80 5 100

3544 1 33 2 67 3 100

4554 5 19 21 81 26 100

5564 2 100 0 0 2 100

Total 9 23 31 77 40 100


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Table 4-23 show the relationship between age and satisfaction with the company's performance

appraisal system. It is clear that the younger employees are relatively more dissatisfied as

compared to the older employees. Thus all respondents aged between 18 and 24 years (100%)

are dissatisfied with the companys performance appraisal system. Similarly, four-fifths (80%) of

those aged 25-34 years are dissatisfied and two-thirds (67%) of those aged 35-44 years are also

dissatisfied. While four-fifths (81%) of those aged between 45 and 54 years are dissatisfied with

the companys performance appraisal system, all those aged between 55 and 64 years aresatisfied.

On the other hand, one-fifth (20%) of those aged 25 and 34 years, one-third (33%) of the age

group of 35 and 44 years and nearly one-fifth (19%) of 45-55 years age group are satisfied with

the companys performance appraisal system.

Table 4-24: Contribution of different age group to satisfaction/dissatisfaction with the

companys performance appraisal system

Age Group Satisfied Not SatisfiedNo % No %

18-24 0 0 4 13

25-34 1 11 4 13

35-44 1 11 2 6

45-54 5 56 21 68

55-64 2 22 0 0

Total 9 100 31 100

Table 4-24 show the relative contribution of different age groups to employees' satisfaction and

dissatisfaction with the company's performance appraisal system. More than half of those

satisfied (56%) were from the age group of 45-54 years. More than a fifth (22%) of the satisfied

employees were aged 55-64 years. Around a tenth of the satisfied employees each belong to the

age group of 25-34 years and 35-44 years respectively. None of those aged 18-24 years were

satisfied revealing that the younger age groups have different expectations from the more

experienced older employees.

More than two-thirds (68%) of the satisfied employees were also from the 45-54 years, probablyreflecting on the numerical predominance of the aged group within the head office of

SOKIMEX. Two equal proportion of 13% each of the dissatisfied employees were from the age

group of 18-24 years and 25-34 years respectively. While 6% of the dissatisfied employees were

aged 35-44 years, none of those belonging to the age group of 55-64 years were dissatisfied.

Table 4-25: Relationship between age and overall comments on the companys performance

appraisal

Overall comments

18 - 24 Lack of transparency and lack of employees'

involvement.Very unsatisfactory

The process and procedure is not clear.

25 - 3435 - 44


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45 - 54 The process and procedure is not clear.

55 - 64 No comments

Table 4-25 shows that the overall comments made by different age groups on the company's

performance appraisal system. While the oldest age group offered no comments, the youngest

age group of 18-24 years lamented on the lacks of transparency and employee involvement. The

other age group expressed dissatisfaction and commented that the process and procedure werenot clear.

Table 4-26:Relationship between age and suggestions regarding the companys performance

appraisal

Suggestions

1824Improve the performance appraisal system

2534

3544 Reorganize the contents of the evaluation

4554Give feedback as well as comments on areas needing improvement to

appraisees after appraisal is completed.

5564 No suggestions

Table 4-26 reveals the suggestions offered by the different age groups. While the younger age

groups spanning 18 to 34 years suggested that the performance appraisal system be improved,

the oldest age group of 55-64 years had no suggestions to make; probably they were all satisfied

with the existing system. The age group of 35-44 years desired that the contents of the evaluation

be reorganized. Those in age group of 45-54 years emphasized on the importance of providing

feedback to the appraisees after the completion of the appraisal process.

Table 4-27:Relationship between duration of service and satisfaction with the companysperformance appraisal system

Duration of ServiceSatisfied Unsatisfied Total

No % No % No %

15 years 1 33 2 67 3 100

Total 9 23 31 77 40 100

Table 4-27 reveals the relationship between duration of services of employees and their

satisfaction/dissatisfaction with the company's performance appraisal system. 100% of

respondents who have work seniority less than 1 year dissatisfied with the companys

performance appraisal. 6% of those who dissatisfied with the companys performance appraisal

have work seniority less than 1 year.

60% of those who have work seniority from 1 to 5 years dissatisfied with the companys

performance appraisal. And 40% of those who have work seniority from 1 to 5 years satisfied

with the companys performance appraisal.


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67% of those who have work seniority more than 15 years dissatisfied with the companys

performance appraisal. And 33% of those who have work seniority more than 15 years satisfied


Table 27:Relationship between work seniority and suggestions on the companys performance

appraisal

Suggestions

15 years

Table 28:Relationship educational qualification and suggestions on the companys performance

appraisal

Suggestions

Associate Degree No suggestions

Bachelor's Degree The process and procedure

should be improved.Masters Degree

Doctoral Degree

Any others No suggestions


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appraisers have known the content used in and the uses of the performance appraisal in the

company.

In the company, the performance appraisal is normally done by top management; sometimes it is

done by immediate supervisors/managers. Contrarily, the employees have no chance to appraise

anyone.

Out of the total respondents, there were 6 people got involved in the performance appraisal

interview. The interview often took less than haft an hour.

Again, most respondents did not know whether the company had the formal model in applying

evaluation. Even though there were 17 people had known, they were not sure due to answering

different answers among them and some just thought and made up of the issue.

After appraising, most respondents had never get any feedbacks because the evaluation was done

secretly. Somehow, there were only 12% of respondents got the feedbacks. The feedbacks were

provided privately after the appraisal interview.

Of the surveyed, the results of the appraisal reflected the performance of the appraisees slightly

accurate.

Most of the respondents did not satisfied with the company's performance appraisal process, and

there were only 9 people out of 40 satisfied with the company's performance appraisal process.

They did not satisfied because it lacked of transparency and involvement.

In the respondents' points of views, the company's performance appraisal was less effective and

unsatisfied. To solve these problems, they suggested that the performance appraisal system

should be improved. It should be formal, transparent and involved. The comments and feedbacks

should be provided after each evaluation.

Most of the respondents who have age under 54 did not satisfied with the company's

performance appraisal process. Likewise, the senior employees did not satisfied with the

company's performance appraisal process.

Those who have age between 55 and 64 years old had no neither comments nor suggestions on

the company's performance appraisal process.

Those whose ages is less than 44 years old suggested the company improve its performance

appraisal system. For those whose age between 45 and 54 years old wanted to get feedbacks and

comments after evaluations.

CONCLUSION AND RECOMMENDATION

ConclusionBased on the result of finding, the researchers would like to conclude as following:

The company's performance appraisal system was slightly good. There was no clear content and

method used in employees' performance evaluation. The methods and contents used varied by

appraisers. They choose indicators based on their own understanding and preferences.


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There was a gap between management and employees; the feedbacks were not mostly provided

to employees after appraising. Most of the employees did not clear with the process of doing

appraisal in the company. Also, they did not involve in the process.

In the company, performance appraisal was frequently used for deciding on providing

compensation and benefit to its employees. It was normally done by top management; sometimes

it was also done by immediate supervisors and managers.

Although there were different views from different people who have different backgrounds such

as ages, educations, satisfactions, and work seniorities, on the company's performance appraisal

system, it can be concluded that most of them did not satisfy with and had no different views on

the company's performance appraisal system. They also suggested improving the system and the

process of doing appraisal in their company.

If compared to Caltex, the company's performance appraisal system is worse than Caltex's.

Recommendations

Based on the findings, the researcher would like to recommend that the company should firstly

develop a formal model and system for appraising. The system should be tranparent and open.

Secondly, the objectives of the employee appraising should not only focus on the deciding on

compensation and benefits for employees but also make use of it and serve other human resource

functions.

Thirdly, both management and employees should get involved in the performance appraisal

process. Also, the company should included self-evaluation method in the system. Likewise,

they should have a chance to evaluate their supervisors and mangers in order to narrow the gaps

between them.

Fourthly, the company should introduce an intensive training course to its employees in relation

to performance appraisal in the company such as the model, contents of appraising, the

objectives, the uses...etc. Thus, the employees will be clear with the process and take advantages

from it.

Last but not least, the feedbacks and comments on employees' performance should be provided

to them after each evaluation.

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An Analysis of Human Resource Performance Appraisal- Kao Kveng Hong

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