Hiyerarşik bulanık Topsis yöntemi ile hastane yöneticilerinin performans değerlendirmesi

Selcuk University

Graduate School of Social Science

Department of Management

Program of Management Organization

Performance Evaluation of Hospital Managers via Hierarchical

Fuzzy TOPSIS Method

Hiyerarşik Bulanık TOPSIS Yöntemi İle Hastane Yöneticilerinin

Performans Değerlendirmesi

Ali Ibrahim Mohammed AL-BAYATI

Master Thesis

Advisor: Asst. Prof. Dr. Burcu DOĞANALP

T. C.

SELÇUK ÜNİVERSİTESİ Sosyal Bilimler Enstitüsü Müdürlüğü

Bilimsel Etik Sayfası

Ö ğr en ci n in

Adı Soyadı Ali Ibrahim Mohammed AL-BAYATI

Numarası 144227012001

Ana Bilim / Bilim

Dalı İşletme / Yönetim Organizasyon

Programı _{Tezli Yüksek Lisans Doktora}

Tezin Adı Bulanık Hiyerarşik TOPSIS Yöntemi İle Hastane Yöneticilerinin Performans Değerlendirmesi

Bu tezin proje safhasından sonuçlanmasına kadarki bütün süreçlerde bilimsel etiğe ve akademik kurallara özenle riayet edildiğini, tez içindeki bütün bilgilerin etik davranış ve akademik kurallar çerçevesinde elde edilerek sunulduğunu, ayrıca tez yazım kurallarına uygun olarak hazırlanan bu çalışmada başkalarının eserlerinden yararlanılması durumunda bilimsel kurallara uygun olarak atıf yapıldığını bildiririm.

Öğrencinin imzası (İmza)

T. C.

SELÇUK ÜNİVERSİTESİ Sosyal Bilimler Enstitüsü Müdürlüğü

Yüksek Lisans Tezi Kabul Formu

Ö ğr en ci n in

Adı Soyadı Ali Ibrahim Mohammed AL-BAYATI

Numarası 144227012001

Ana Bilim / Bilim

Dalı İşletme / Yönetim Organizasyon

Programı _{Tezli Yüksek Lisans Doktora} Tez Danışmanı Yrd. Doç. Dr. Burcu DOĞANALP

Tezin İngilizce Adı Bulanık Hiyerarşik TOPSIS Yöntemi İle Hastane Yöneticilerinin Performans Değerlendirmesi

ÖNSÖZ

Yüksek lisansım süresince ve özellikle tez çalışmam boyunca eleştiri ve önerileri ile her zaman desteğini hissettiğim değerli hocam Yrd. Doç. Dr. Burcu DOĞANALP başta olmak üzere, desteklerini benden hiçbir zaman esirgemeyen aileme ve tüm sevdiklerime sonsuz teşekkürlerimi sunuyorum.

Ali Ibrahim Mohammed AL-BAYATI Mayıs 2017

T. C.

SELÇUK ÜNİVERSİTESİ Sosyal Bilimler Enstitüsü Müdürlüğü

Ö ğr en ci n in

Adı Soyadı Ali Ibrahim Mohammed AL-BAYATI

Numarası 144227012001

Ana Bilim / Bilim

Dalı İşletme / Yönetim Organizasyon

Programı _{Tezli Yüksek Lisans Doktora} Tez Danışmanı Yrd. Doç. Dr. Burcu DOĞANALP

Tezin Adı Bulanık Hiyerarşik TOPSIS Yöntemi İle Hastane Yöneticilerinin Performans Değerlendirmesi

ÖZET

Günümüzde, herhangi bir organizasyonun hedeflerine ulaşma başarısı organizasyon yöneticilerinin performans derecesine büyük ölçüde bağlıdır. Yöneticiler, hizmet kalitesini artırarak ve örgütsel performansı etkin bir şekilde teşvik ederek kaynak dağılımında önemli bir rol oynamaktadır. Performans değerlendirme, performans yönetim sistemlerinde önemli bir role sahiptir. Ayrıca, performans değerlendirme planları, birçok organizasyonel ve bireysel ihtiyaçlarla örtüşecek şekilde tasarlanmıştır. İnsan düşüncelerinin ve kararlarının çoğu zaman belirsiz olduğu ve insanların düşünce sürecinin kesin sayısal değerlerle ifade edilememesi nedeniyle sayısal değerler yerine dilsel değişkenlerin kullanılması daha gerçekçi bir yaklaşım olabilmektedir. FCDM yöntemlerinden biri olan FTOPSIS, karar verme problemini bulanık ortamda çözmek için çok uygundur. Ayrıca, FCDM metodu çoklu ölçüt değerlendirmesi veya alternatif seçimini içeren karar verme problemlerini ele almaktadır. Önemli BÇKKV tekniklerinden birisi hiyerarşik bulanık TOPSIS (HFTOPSIS). Bu teknik, örgüt yöneticisinin performansını değerlendirmek için çeşitli çalışmalarda kullanılmıştır. Özet olarak, bu çalışmanın temel amacı Selçuk hastane yöneticilerinin performansını değerlendirmek için Hiyerarşik Bulanık TOPSİS (HFTOPSİS) tekniği ile bir model önermektir.

Anahtar Kelimeler: Performans Değerlendirme, Karar Verme, Bulanık Mantık, Bulanık Çok Kriterli Karar Verme, Hiyerarşik Bulanık TOPSİS

T. C.

SELÇUK ÜNİVERSİTESİ Sosyal Bilimler Enstitüsü Müdürlüğü

Ö ğr en ci n in

Adı Soyadı Ali Ibrahim Mohammed AL-BAYATI

Numarası 144227012001

Ana Bilim / Bilim

Dalı İşletme / Yönetim Organizasyon

Programı _{Tezli Yüksek Lisans Doktora} Tez Danışmanı Yrd. Doç. Dr. Burcu DOĞANALP

Tezin İngilizce Adı Performance Evaluation of Hospital Managers via Fuzzy Hierarchical TOPSIS Method

SUMMARY

Today, the success of any organization to achieve its goals is highly dependent on the performance degree of the organizational managers. Managers play an important role in resource allocation by improving the quality of services and effectually encouraging the organizational performance. As a matter of fact, performance evaluation has an essential role in performance management systems. Also, performance evaluation plans are designed to coincide with many organizational and individual needs. Because of the fact that human considerations and judgments are often vague and human process of thought is not adaptable to be expressed in exact numerical values, a more realistic approach may be to use linguistic variables instead of numerical values. FTOPSIS, one of the FCDM method, is very suitable for solving the decision making problem under fuzzy environment. In addition, the FCDM techniques deal with decision making problems including multiple criteria evaluation or alternative’s selection. One of the crucial techniques is hierarchical fuzzy TOPSIS (HFTOPSIS). This technique has been used in various studies to evaluate organizational manager’s performance. To sum up, the main goal of this study is to suggest a model for evaluating the performance of Selcuk hospital managers via Hierarchical Fuzzy TOPSIS (HFTOPSIS) technique.

Keywords: Performance Evaluation, Decision Making, Fuzzy Set, Fuzzy Multi Criteria Decision Making, Hierarchical Fuzzy TOPSIS

CONTENTS

Page Numbers

BİLİMSEL ETİK SAYFASI ...i

YÜKSEK LİSANS TEZİ KABUL FORMU ... ii

ÖNSÖZ ... iii SUMMARY ... iv ÖZET ... v CONTENTS ... vi TABLES ... x FIGURES ... xi INTRODUCTION ... 1 CHAPTER ONE Performance Evaluation ... 3

1.1. The Concept of Performance Evaluation ... 3

1.2. The History of Performance Evaluation ... 4

1.3. Performance Evaluation and Performance Management ... 6

1.4. The Benefits of Performance Evaluation ... 9

1.5. The Approaches of Performance Evaluation ... 11

1.5.1. Administrative Approach ... 11

1.5.2. Developmental Approach ... 11

1.6. Guidelines for an Effective Performance Evaluation ... 12

1.6.1. Effective System Design ... 13

1.6.2. Effective Manager Rating Practices ... 13

1.6.3. Effective Appraisal Support ... 14

1.7. The Methods of Performance Evaluation ... 15

1.7.1. Traditional (Past Oriented) Performance Evaluation Methods ... 15

1.7.1.1. Rating Scale Method ... 15

1.7.1.2. The Checklist Method ... 16

1.7.1.3. Critical Incident Method ... 16

1.7.1.4. Narrative Essay Method ... 16

1.7.1.5. Forced Choice Method ... 17

1.7.2. Modern (Future Oriented) Performance Evaluation Methods ... 17

1.7.2.1. Management by Objectives Method ... 17

1.7.2.3. Assessment Center Method ... 18

1.7.2.4. Behaviorally Anchored Rating Scale (BARS) Method ... 18

1.7.2.5. Human Resources Accounting Method ... 19

1.7.2.6. 360 Degree Feedback Method ... 19

1.7.2.6. 720 Degree Feedback Method ... 20

1.8. The Errors in Performance Evaluation ... 21

1.8.1. The “Halo or Horn” Rating Error ... 21

1.8.2. The “Leniency” Rating Error ... 22

1.8.3. The “Central Tendency” Rating Error ... 22

1.8.4. The “Strictness” Rating Error ... 23

1.8.5. The “Primacy” Rating Error ... 23

1.8.6. The “Recency” Rating Error ... 24

1.8.7. The “Similarity” Rating Error ... 24

1.8.8. The “Contrast” Rating Error ... 24

1.8.9. The “Stereotyping” Rating Error ... 25

1.9. The Challenges of Performance Evaluation ... 25

CHAPTER TWO Decision Making Process and Fuzzy Set Theory ... 28

2.1. Decision Making ... 28

2.2. Decision Making Process ... 29

2.2.1 Identifying the Problem ... 29

2.2.2. Determining Requirements ... 29

2.2.3. Establishing Goals ... 30

2.2.4. Identifying Alternatives ... 30

2.2.5. Defining Criteria ... 30

2.2.6. Selecting a Decision Making Tool ... 30

2.2.7. Evaluating Alternative against Criteria ... 30

2.2.8. Validating Solutions against Problem Statement ... 31

2.3. Decision Making Models ... 31

2.3.1. Decision Making under Pure Certainty ... 31

2.3.2. Decision Making under Risk ... 32

2.3.3. Decision Making under Pure Uncertainty ... 32

2.4. Types of Decision Making ... 33

2.4.1.1. Individual Decision Making ... 33

2.4.1.2. Group Decision Making ... 33

2.4.2. Decision Making according to Criteria Numbers ... 34

2.4.2.1. Singular Criteria Decision Making ... 34

2.4.2.2. Multi-Criteria Decision Making ... 34

2.4. Fuzzy Set Theory ... 35

2.5.1. The Association between Aristotle’s Logic and Fuzzy Set Theory ... 37

2.5.2. Linguistic Variables ... 38

2.5.3. Linguistic Uncertainty ... 38

CHAPTER THREE Performance Evaluation of Hospital Managers via Hierarchical Fuzzy TOPSIS Method: A Study Case in Selcuk Faculty of Medicine Hospital ... 40

3.1. The Importance of Study... 40

3.2. The Objective of Study ... 40

3.3. The Limitations of Study ... 40

3.4. The Methodology of Study ... 40

3.5. Literature Review ... 48

3.6. Performance Evaluation of Hospital Managers via Hierarchical Fuzzy TOPSIS Method ... 49

3.6.1. Information about Study Field: Selcuk University, Faculty of Medicine Hospital ... 49

3.6.1.1. The Concept of Healthcare Service and Hospital Management ... 50

3.6.1.2. Professional Hospital Management Features ... 51

3.6.1.3. Hospital Management Model in Turkey ... 52

3.6.2. Determination of Main and Sub Decision Criteria for the Alternatives ... 53

3.6.3. Preparation of Evaluation Forms ... 57

3.6.4. Determination of the Importance Weights of Main and Sub Decision Criteria ... 57

3.6.5. Evaluation of Alternatives (Managers) ... 60

3.6.6. Determination of the Normalized Fuzzy Decision Matrix ... 65

3.6.7. Determination of the Weighted Normalized Fuzzy Decision Matrix ... 67

3.6.8. Determination of Positive and Negative Ideal Solution ... 68

3.6.9. Determination of the Distance from Positive Ideal Solution and Negative Ideal Solution ... 70

3.6.10. Determination of the Closeness Coefficient ... 74

Conclusion ... 77

References ... 79

TABLES

Table 1. The Content of the Civil Service Reform Act of 1978 ... 6

Table 2. Performance Evaluation Compared to Performance Management ... 8

Table 3. The Benefits of Performance Evaluation ... 10

Table 4. Linguistic Variables for Importance Weight of Each Criteria ... 42

Table 5. Linguistic Variables for the Evaluation of Alternatives ... 43

Table 6. Assessment Status of Selected Alternative according to Its Closeness Coefficient ... 48

Table 7. The General Organizational Model for Public Hospitals in Turkey ... 52

Table 8. The Evaluation of Importance Weight of Main Criteria ... 57

Table 9. I Matrix for Evaluating Manager’s Performance ... 58

Table 10. The Evaluation of Main Criteria’s Importance Weight of Manager’s Performance ... 59

Table 11. I Matrix for Evaluating Manager’s Performance ... 60

Table 12. The First Decision Maker’s Performance Evaluation of Managers ... 61

Table 13. The Second Decision Maker’s Performance Evaluation of Managers ... 62

Table 14. The Third Decision Maker’s Performance Evaluation of Managers ... 62

Table 15. The Fourth Decision Maker’s Performance Evaluation of Managers ... 63

Table 16. I Matrix for Evaluating Manager’s Performance ... 64

Table 17. R Values for Evaluating Manager’s Performance ... 66

Table 18. V Values for Evaluating Manager’s Performance ... 67

Table 19. M v Values for Evaluating Manager’s Performance ... 69

Table 20. D∗ Values for Evaluating Manager’s Performance ... 71

Table 21. D Values for Evaluating Manager’s Performance ... 72

Table 22. S∗ _{and S Values for Evaluating Manager’s Performance ... 73}

Table 23. (C ) and (NC ) Values for Evaluating Manager’s Performance ... 74

FIGURES

Figure 1. A Systems Approach to Effective Performance Appraisals ... 12

Figure 2. Leniency, Central Tendency and Strictness Rating Errors ... 23

Figure 3. Known Ideas about a Glass of Water and a Captain in a Rough Sea ... 32

Figure 4. A Triangular Fuzzy Number ... 36

Figure 5. The Hierarchy of Main, Sub Criteria and Alternative for Selecting the Ideal Performed Manager ... 54

Introduction

The success of any organization to accomplish its goals is highly reliant on the performance degree of the organization managers. Managers play a significant role in resource allocation by improving the quality of services and effectually encouraging the organizational performance. The issue becomes more noticeable in the terms of health care organizations which deals with human lives. As a matter of fact, the role of hospital supervisors is different from the role of supervisors of other organizations and industries. Both of them require skills and knowledge in management and organization development. However, hospital managers are significantly responsible for operating the goals and visions considered by policy-makers in order to enhance the welfare and well-being of the community (Shafii et al., 2016: 137).

In the organizational framework, performance is generally recognized as the extent to which organizational members attempt to achieve the goals of the organization. Performance evaluation is defined as the process of identifying, assessing and developing the performance of organizational individuals, so that organizational goals and objectives could be effectively accomplished. In addition to that, it should be supporting employees in terms of recognition, receiving feedback, and offering career guidance. Evaluation capability is the source of adjusting the effectiveness of other capabilities in the organization. The terms “performance appraisal”, “performance assessment”, “performance management” are also used to describe the process of performance evaluation system (Islam & bin Mohd Rasad, 2006: 163).

A significant goal of performance evaluation for organizations is the development of employee job performance. It is usually accepted that performance evaluation is an important part of an effective performance development method. Performance evaluation allows organizations to notify their employees about their rates of competencies, their growth and their potentials. It offers the employees the opportunity to be intentional in forming their individual developmental goals to expand their personal growth. Sometimes, there might be some disagreements that if performance appraisal has been done well, it could serve a very beneficial role in reconciling the requirements of the individual and the requirements of the organization. Also, performance appraisal is an effective tool that organizations have to manage and coordinate the power of each employee towards the accomplishment of organizational strategic goals if it has been used in a good form. Performance evaluation can motivate employees mindfully to emphasize on the organization’s mission, vision, and core values. Nevertheless, if performance evaluation has not been done well, the process of evaluation can become an object of jokes and a target of ridicule (Flaniken, 2009: 3).

In this study, the process of evaluating the hospital managers’ performance has been handled with Hierarchical Fuzzy TOPSIS (HFTOPSIS) method. TOPSIS (Technique for Order Preference by Similarity to Ideal Solution), one of the MCDM method has been suggested by Hwang and Yoon (1981), and it has been widely used in the literature. TOPSIS technique relies on selecting the alternatives that obtains the shortest distance from the positive ideal solution and the farthest from the negative ideal solution (Chen, 2000: 2). For the reason that human observations and judgments are habitually uncertain and human process of thought cannot be expressed in exact numerical values, a more logical approach might be using linguistic variables instead of numerical values. Fuzzy TOPSIS is one of the fuzzy multi-criteria decision making method. It is very appropriate technique for solving the decision making problems under fuzzy circumstances. In this technique, the importance weights of different criteria and the evaluations of the alternatives with respect to the criteria are recognized as linguistic variables (Chen, 2000: 4-5). Hierarchical Fuzzy TOPSIS method which involves , and differs from FTOPSIS method with the presence of sub-criteria.

The main of goal of this study is to propose a FCDM model for evaluating the performance of Selcuk University, Faculty of Medicine Hospital managers via Hierarchical Fuzzy TOPSIS method. In the first chapter, the study is going to cover the concept, brief history, benefits and administrative and developmental approach of performance evaluation. Also, it attempts to explain the guidelines and methods of an effective performance evaluation. In the second chapter, the study is going to explain the process, models and types of decision making and fuzzy set theory. Finally, the third chapter is going to include the importance, objectives, limitations and methodology of the study and figure out the ideal performed alternative in Selcuk University, Faculty of Medicine Hospital through using Hierarchical Fuzzy TOPSIS method.

CHAPTER ONE Performance Evaluation

In this chapter, the study is going to explain the concept, brief history, benefits of performance evaluation. Also, it attempts to demonstrate the similarities and differences between performance evaluation and performance management. The chapter makes an explanation about the guidelines and challenges, which could emerge through performance evaluation process.

1.1. The Concept of Performance Evaluation

Performance evaluation has numerous definitions. It is considered as a principal process of performance management process, and defined as an assessment of an individual’s work performance in order to arrive to an objective personal decision. Performance appraisal could be defined as a process of identifying, evaluating and developing the whole processes of work performance of employees inside organizations. For that reason, the organizational objectives and goals would be effectively accomplished and the employees would be benefiting from recognition, receiving feedback and provided by work needs and career principles (Seniwoliba, 2014: 601).

Performance evaluation denotes to identification of measurement factors or criteria in order to assess performance, review of performance levels which are achieved by individuals and development of subsequent performance (Carroll & Schneier, 1982: 3). Performance evaluation plans have been designed to match organizational and individual requirements. These plans provide systematic judgments to reinforce salary increases, transfers, promotions, terminations and demotions. In addition, performance evaluation is a mean for assessing and communicating job performance status to a subordinate employee and support needed changes in attitude, behavior, skills or job knowledge. It is also used as a source for a supervisor to train and guide the individuals as well as to identify and cope with performance deficiencies (Lieber, 2011: 866).

To assess and monitor the individual performance and integrate these assessments to the organizational objective to achieve expected results would be caused by performance evaluation. The strategic objectives of the organization relies on individual performance through the interaction among three levels which are organizational, process and job. The organizational rationales that are implemented based on appraisal report are salary administration, retention, promotion, or discharge. Evaluation encompasses increment decisions, bonuses, incentives, and for the long periods promotion decisions, identification of

low-level performers, determination of termination and lay-off. Also, the development purpose of performance evaluation includes identifying the strengths and weaknesses and provide feedback, consequently preparing the developmental requirement of individuals (Sanyal & Biswas, 2014: 184).

Performance appraisal has been broadly defıned as activities through which organizations attempt to assess employees and improve their competence, enhance their performance and distribute their rewards. The focus in the definition of performance appraisal was limited; however, recently it has been broadened and currently addressed to the social and motivational aspects. Performance appraisal is also defined as a system of review and evaluation of an individual‘s or team performance and the process of appraising performance within organizations. The focus on the organizational signals is a further evolution in the nature of performance appraisal (Capadosa, 2013: 13).

The evaluation of job performance provides the bottom lines of effective job designs and identifies training requirements and many other personnel needs. The scope for mutual goal setting, multisource feedback, self-evaluation, and inspires employee for better performance and developed productivity. Hunter’s Model, 1983, which observed a causal relationship among job knowledge, task proficiency and supervisory rating, and recognized a relational model among accomplishment orientation, individual ability, reliability, job knowledge, awards, task proficiency, disciplinary act and finally to supervisory rating (Sanyal & Biswas, 2014: 184).

1.2. The History of Performance Evaluation

One of the earliest evidence of Performance Evaluation was perceived in the 3rd century when a Chinese philosopher Sin Yu complained a biased evaluator of the Wei Dynasty. The Imperial Evaluator of Wei Dynasty rarely appraises men by their merit and courage but always evaluated them according to his believes and attitudes. In 1648, Performance evaluation was appreciated further on when it was stated that the Dublin Evening Post assessed legislators using a rating scale relied on personal qualities. After that, performance appraisal became a more formal practice, initially in the 1800’s when a General in the US Army deferred an evaluation of his militaries to the War Department. The Army General attempted to use a global assessment, which defined his soldiers as either “a good-natured man” or “a knave despised by all,” (Farrell, 2013: 14).

One of the first laws on performance evaluation was legislated in 1912 and required all agencies to establish a uniform efficiency rating system. This uniform efficiency rating system

was used till 1950 when the Performance Rating Act was enacted. The Performance Rating Act intended to identify the weakest and strongest employees and required all federal agencies to develop appraisal systems which received a prior approval from the Civil Service Commission. During this period, there was no act that required an assembly between appraisal and base pay, and there was not an act that required case awards. Through the Incentive Awards Act of 1954, cash awards for superior achievement, propositions, special acts or services, inventions or other personal efforts were approved (Kim, 2014: 11).

A recent law which affected performance evaluation includes the Civil Rights Act of 1964 and the Civil Service Reform Act of 1978. The Civil Right Act of 1964 and the Civil Service Reform Act of 1978, and other interrelated court cases and legislations impacted evaluation in both the public and private sectors. According to these laws, organizations are required to authorize evaluation systems to ensure that their management rates criteria which are interrelated to the job performance and has no discrimination in intent or practice. Organizations cannot easily declare evaluation systems as they are valid or nondiscriminatory, however; they should document the validity of these systems in a manner that could withstand judicial inquiry (Rubin, 2011: 5).

According to Mlay (2012: 13), as management systems formally assessing work performance was found sixty years ago when Walter Dill Scott could persuade the United States Army to implement man-to-man rating system in evaluating military officers after the 2nd world war. In 1950, it became an accepted and established regulation in many organizations in the United States. It shifted simply to be a system that can be implemented to justify incomes of individuals and their capacity and the evaluation processes were associated with material productivity.

In 1977, the President of Personnel Management Project made an observation for the civil service system and recommended employing an innovative human resource management practice. This notion became the foundation for the Civil Service Reform Act (CSRA) of 1978 which required private and public organizations to develop performance evaluation systems for all federal employees. In addition, this practice created significant changes such as establishing the U.S. Office of Personnel Management. “Consequently, U.S. Office of Personnel Management was in charge of measuring performance-based evaluation standards; encouraging employee participation in setting performance standards; promoting the use of performance appraisal results as a basis for training, rewarding, re-assigning, promoting, demoting, retaining and removing employees; and authorizing the removal of employees,” (Kim, 2014: 12). Table 1 shows the content of the Civil Service Reform Act of 1978.

Table 1. The Content of the Civil Service Reform Act of 1978 Section 4302. Establishment of performance appraisal systems

(a) Each agency shall develop one or more performance appraisal systems which: (1) provide for periodic appraisals of job performance of employees;

(2) encourage employee participation in establishing performance standards; and

(3) use the results of performance appraisals as a basis for training, rewarding, reassigning, promoting, reducing in grade, retaining, and removing employees.

(b) Under regulations which the Office of Personnel Management shall prescribe, each performance appraisal system shall provide for:

(1) establishing performance standards which will, to the maximum extent feasible, permit the accurate evaluation of job performance on the basis of objective criteria (which may include the extent of courtesy demonstrated to the public) related to the job in question for each employee

(2) or position under the system;

(3) as soon as practicable, but not later than October 1, 1981, with respect to initial appraisal periods, and thereafter at the beginning of each following appraisal period, communicating to

(4) each employee the performance standards and the critical elements of the employee’s position;

(5) evaluating each employee during the appraisal period on such standards; (6) recognizing and rewarding employees whose performance so warrants; (7) assisting employees in improving unacceptable performance; and

(8) reassigning, reducing in grade, or removing employees who continue to have unacceptable performance but only after an opportunity to demonstrate acceptable performance.

(c) In accordance with regulations which the Office shall prescribe, the head of an agency may administer and maintain a performance appraisal system

Source: (Kim, 2014: 13)

Today, performance evaluation still plays an important role in organizations. According to Farrell (2013: 14), a report which is supported by the CIPD in 2009 stated that 81.3% of organizations surveyed were implementing performance appraisal system in their organization as part of their performance management.

1.3. Performance Evaluation and Performance Management

Performance evaluation has an essential role in performance management systems. It is typically the vehicle beyond which the organizational objectives and goals are translated into an individual’s objective. In addition, it is the primary approach of discussing and acting on the development of the individual. As a part of performance management system, performance evaluation is much more strongly associated with the larger business environment. Performance

management recognized as a general set of activities which are handled by the organization to improve employee performance. Though performance management typically depends on performance appraisals, performance management is a comprehensive and more incorporating process and considered the crucial goal of performance appraisal activities. Performance management has a beneficial return to the organization and its successful management leads to organizational commitment and especially, job satisfaction (Farrell, 2013: 19-20).

According to Den Hartog et al. (2004: 558), performance evaluation is a significant part of performance management. Nowadays, performance evaluation has become a part of the strategic approach to integrate Human Resources practices and business policies. There is apparently an association between Human Resources Management and performance management. Performance management includes aligning HRM practices in a way that both of them maximize present as well as future employee performance, which consequently is anticipated to affect organizational performance. Performance management includes the setting of organizational, departmental, team, and individual objectives, it works to adjust strategic goals to a more meaningful set of targets for every individual. The use of performance evaluation systems; proper reward strategies and schemes; development strategies and plans and training; communication, feedback, and coaching; individual profession planning; mechanisms for observing the efficiency of performance management system and interventions and even managing culture. Therefore, performance management encompasses the daily management, and the support and development of employees.

Both performance management systems and performance evaluation systems confront substantial implementation challenges. One of the major challenges confronted by both performance appraisal and performance management systems is the conflict of goals. On performance management side, the conflicting goals of governmental programs, namely fair process, equity, efficiency, and effectiveness involve competing performance measure to certify that none is ignored or minimized. In performance evaluation systems, the identification of professional development opportunities may conflict with the requirement of documenting weaknesses and differences in employee performance in order to inform other personnel decisions like raises, promotions, or discipline. Other similarities among organizational performance management systems and individual performance evaluation systems are abound. Both systems are criticized by representing the end in themselves instead of representing the mean to the end of improved performance. Under both systems, performance can be rated objectively, and the struggle lays on how to gather and process performance data (Rubin, 2011: 9-10).

On the other side, performance management system and performance appraisal system have different challenges. Performance appraisal gets discredited because it has been working as a top-down and largely bureaucratic system which is owned by the HR department rather than by the line managers. Performance appraisal tends to be backward looking, focusing on what had gone wrong, rather than concentrating on future development requirements. Performance appraisal systems exist in isolation. There is little or no link between them and the requirements of the business. Line managers frequently refuses performance appraisal schemes as being timewasting and irrelevant. Individuals resents the superficial nature with which evaluations have been directed by managers who lack the significant skills required, then tend to be biased and are basically going through the motions (Armstrong, 1999: 500). However, performance management works to manage a real-time performance to certify performance reaches the preferred levels. It is more a continuous proactive approach to manage the performance of an employee attains the set targets on a real-time basis. It is considered as a line activity and embeds in the employee’s day to day work (Toppo & Leena, 2012: 4). The comparison between performance appraisal and performance management has been shown in Table 2.

Table 2. Performance Evaluation Compared to Performance Management Performance Evaluation Performance Management Top down assessment Joint process through dialogue

Annual appraisal meeting Continuous review with one or more formal reviews

Use of ratings Ratings are less common

Monolithic system Flexible process

Focus on quantified objectives Focus on values and behaviors as well as objectives

Owned by the HR department Owned by the managers

1.4. The Benefits of Performance Evaluation

Performance evaluation is one of the most important requirements for human resources policies and successful businesses. Motivating and rewarding the productive performance inside organizations, in addition to that; recognizing the ineffective performers or other ineffective individual actions would be essential for human resources management. Consequently, the appraisal of the organizations supports in determining the effectiveness and productivity and facilitates future decisions of the organization. It is often believed that organizational main input is the performance of the organizational individuals. Therefore, the measurement of individuals’ efforts and identifying their strengths and weaknesses is imperative for organizational success (Seniwoliba, 2014: 602). According to (Flaniken, 2009: 5-6), performance evaluation can be beneficial for organizations as below:

 Performance evaluation can improve organizational decisions such as reward allocation, promotions, layoffs and transfers.

 Performance evaluation can enhance individual career decisions and improves decisions which motivates employees to focus on time and expand their effort. Individuals must make many decisions regarding their present and future positions in an organization.  Performance evaluation can help organizations by preparing a set of tools for appraising

the effectiveness and productivity of current or planned ways of operation.

 Performance evaluation can affect employees’ thoughts and commitment to their organization. The value of performance evaluation and feedback has an important role in the insights of the justice, legitimacy, and rationality of a wide range of organizational practices.

According to Islam and bin Mohd Rasad (2006: 163), employee performance evaluation has been practiced by enormous organizations since centuries. Performance evaluations are required to rationalize a wide range of human resource decisions such as promotions, pay raises, demotions and terminations. It is also required to provide employees with training needs. However, necessary caution should be perceived in implementing appraisal system. Ineffectual appraisal system can results by many problems such as low morale, decreased employee productivity, a lessening of an employee’s enthusiasm and support for the organization.

According to Dechev (2010: 9-10), the benefits of organizational appraisal gets divided into three categories:

1- Benefits for the Organization: Performance evaluation can be an influencing source of management information which is given to employees. Performance evaluations are concentrated on contributions to the organizational goals. The results of performance

evaluation can lead to improvements in work performance and consequently enhancing overall business performance.

2- Benefits for the Manager: Performance appraisal creates an opportunity for the manager to formally recognize good performance and this would lead to more incentive from the workers. Performance appraisal system depersonalize problems. Managers emphasizes on behaviors and results, rather than focusing on personalities. This system supports continuous communications, feedbacks and dialogues about organizational goals. In addition, this system assists the communication between an employee and a manager. Performance appraisal generates a clear target of job values and priorities and creates more trust on the relation between the employee and manager (Atmaca, 2010: 14-15).

3- Benefits for the Employee: Performance appraisal system works to record the past performance of the employees and emphasizes on the enhancement of the future performance of the employees. It creates the opportunity for the staffs to express their thoughts and expectations for the strategic goals of the company (Dechev, 2010: 10). The workers can find what is anticipated from them and what the results of their performance are (Uyarlar, 2010: 27).

Table 3. The Benefits of Performance Evaluation

Performance Improvement

Performance feedback allows the employee, manager and personnel specialists to intervene with appropriate actions to improve performance

Compensation Adjustments

Performance evaluation help decision-makers determine who should receive pay rises. Many firms grant part or all of their pay increases and bonuses based upon merit, which is determined mostly through performance appraisals.

Placement Decisions Promotions, transfers and demotions are usually based on past or anticipated

performance. Often promotions are a reward for past performance.

Training and Developmental Needs

Poor performance may indicate the need for retraining. Likewise, good performance may indicate untapped potential that should be developed.

Career Planning And Development

Performance feedback guide career decision about specific career paths one should investigate.

Staffing Process Deficiencies

Good or bad performance implies strengths or weaknesses in the personnel department’s staffing procedures.

Information Inaccuracies

Poor performance may indicate errors in job analysis information, human resource plans, or other parts of the personnel management information system. Reliance on inaccurate information may have led to inappropriate hiring, training, or counselling decisions.

Job Design Errors Poor performance may be a symptom of ill-conceived job designs. Appraisals help

diagnose these errors.

Equal Employment Opportunity

Accurate performance appraisals that actually measure job related performance ensure that internal placement decisions are not discriminatory.

Performance appraisal system has a broad effect on organizational goals as it was mentioned in different articles. In addition to that, the evaluative system has been used for far reaching areas inside organization as it is shown in Table 3.

1.5. The Approaches of Performance Evaluation

Performance evaluation has been directed for two basic approaches which are administrative and developmental approaches:

1.5.1. Administrative Approach:

The administrative approach of performance evaluation occurs when an individual‘s performance is assessed as basis for the promotion, pay increase, reassignment or transfer, and termination. The administrative approach of performance evaluation works in a manner that articulates the difference among individuals or appraises individuals against the measuring system. Significantly, Judgments for administrative approach would be in need for information on what is happening (Capadosa, 2013: 22).

The aim of performance evaluation has been essentially backward or historically oriented in a way which stated that performance has been appraised according to the results achieved. Performance evaluation implementing the administrative approach has attended the following purposes (Hansen, 1984: 17-18):

1- Separation, promotion, and transfer decisions. 2- Feedback about the employee performance.

3- Assessments of relative contributions prepared by employees and entire departments of the organization in accomplishing higher level objectives.

4- Standards for appraising the effectiveness of selection and placement decisions, such as the relativity of the information which is used in making decisions within the organization. 5- Reward assessments, such as merit increases, promotions, etc.

6- Identifying and diagnosing training and development decisions.

7- Criteria for appraising the success of training and development decisions.

8- Information upon which work plan would be valuable, budgeting, and human resources planning can be implemented as well.

1.5.2. Developmental Approach:

The developmental approach of performance evaluation occurs when evaluation is completed for soliciting information to further individual‘s enhancement in the performance or

as a source for enhancing the functions of the organization such as recruiting, selecting, placing, and training of employees. Judgments for developmental approach would be in need for information on how the outcome occurred (Capadosa, 2013: 22).

According to Hansen (1984: 19), the developmental approach of performance evaluation includes all the purposes of the administrative approach and the following additional purposes: 1- Creating the opportunity for individuals to formally show the direction and levels of the employee's goals.

2- Showing organizational interests in individual development, which supports the organizational retain ambitious, also preserving skilled employees instead of losing them to competitors.

3- Establishing a structure for communications between individuals and management to support the clarification for the expectations of the employee by management and the employee. 4- Creating satisfaction and motivation to the employee who has been attempting to perform well.

1.6. Guidelines for An Effective Performance Evaluation

Many studies have been concerned with performance appraisal process in order to reach to the goal of determining the mechanisms of a successful performance appraisal system. An effective performance appraisal system includes three critical components: systems design, managerial practice, and appraisal system support, with each component containing several factors as it is shown in Figure 1 (Flaniken, 2009: 43).

Figure 1. A Systems Approach to Effective Performance Appraisals

1.6.1. Effective System Design

First of all, the systems design component necessitates a clear defined objectives for conducting performance appraisal. All organizational employees must recognize why performance evaluation is being conducted and its exact goals. The exact goals will permit the managers to select performance criteria that will assist the organizational overall objectives and increase the motivation of the managers to carry out the performance appraisals in a proper way (Flaniken, 2009: 43).

The second factor of effective systems design is having the input of managers and employees in the system design, development, and in selecting the performance criteria used in the performance appraisal system. This stimulates an acceptance and ownership of the appraisal system by the individuals which consequently increases the effectiveness of the system. The absence of manager’s input factor can eliminate the support and credibility of the users of the appraisal system and can short-circuit their sense of ownership of the system. Employee participation in the system is a useful tool for increasing employee autonomy toward their job, which is a principal requirement for employee growth. Employee involvement offers employees the right in the appraisal process which creates the opportunity for them to refute performance ratings, documentation, or verbal feedback. If the employees get persuaded with the appraisal process for its fairness, they would be more likely to acknowledge their performance ratings (Cintrón & Flaniken, 2011: 31).

The final factor of an effective appraisal system design is understanding the appraisal process by both managers and their employees and their roles in this system. This entails that both managers and employees are in need to have training and education. This factor emphasizes on the importance of friendly using and easily understanding appraisal procedures and forms. The rating procedures, performance criteria and feedback should be relevant and meaningful for managers and their employees. The appraisal forms should enable communication between the managers and the employees regarding their behaviors, work processes, and opportunities to progress (Islam & bin Mohd Rasad, 2006: 167).

1.6.2. Effective Manager Rating Practices

Effective manager rating practices involve three factors concerning managerial systems practices. The first factor is managers must consult performance planning in the creation of the appraisal cycle. Performance planning comprises writing a job description and reviewing it with the employees, setting and approving goals, and communicating the prospects of behaviors and results that the employees will be held responsibility. The second factor is that managers must

prepare ongoing, informal feedback to their employees through the course of the appraisal cycle. Consequently, there will be no surprises when the formal performance appraisal takes place. Frequently, using informal feedback permits minor issues to be assigned punctually rather than progressing into more serious issues over time (Flaniken, 2009: 44). In order to have an effective performance appraisal system, formal and informal performance feedback must be supervised by managers. “Feedback is essential in gaining the maximum benefits from goal setting. Without feedback, employees are unable to make adjustments in job performance or receive positive reinforcement for effective job behavior. Effective performance feedback is timely, specific, behavioral in nature, and presented by a credible source. Performance feedback is effective in changing employee work behavior and enhances employee job satisfaction and performance,” (Islam & bin Mohd Rasad, 2006: 166).

The final factor of the effective managerial systems practices is that managers must be motivated and encouraged to carry out effective performance appraisals. This could be accomplished in the best way when the managers themselves are given effective appraisals by their supervisor because it provides a good example of how evaluation should be done and it designates the significance of evaluation in the organization (Cintrón & Flaniken, 2011: 32).

1.6.3. Effective Appraisal Support

The final component of an effective performance appraisal system focuses on organizational support of the performance appraisal system. The first factor is that performance appraisal systems must be supported and managed by the top administration. This can be achieved by the top administrators giving an effective appraisal system themselves, and by managers and employees interconnecting appraisals through memos, organizational newsletters, and recommendations (Flaniken, 2009: 45).

According to Farrell (2013: 20), the second factor is that performance ratings must be linked to organizational rewards. More rewards should be related to higher job performance because this link increases the incentive of the employees to perform better. The absence of this link would push employees to perform only to minimum standards and settings. According Cintrón and Flaniken (2011: 32), the final factor is that performance appraisal systems require ongoing appraisal systems review and continuing improvements to certify that procedures are being followed in a correct and effective way. This could be achieved by measuring the approval and trust of the system by the individuals, linking the performance ratings and rewards, and reviewing the reliability of implementation of appraisal policies and procedures across all departments and locations.

According to (Rocky Mountain College: 2-3), the qualities of an effective evaluation system should be as below:

1- It should be factual that refers to specific performance and can be supported by evidence, if it is necessary.

2- It should be fair that shows a system of evaluation that the supervisor implements consistently in appraising employee performance.

3- It should describe the whole period that avoids concentrating on just the most recent and most simply remembered times.

4- It should describe the whole job that avoids allowing good or bad performance on some portions of the job prejudgment evaluation of the other parts.

5- It should have no surprises for the employee that all issues were talked about by the supervisor and employee earlier times when they occurred.

1.7. The Methods of Performance Evaluation

There are numerous methods which are used for conducting performance evaluations, each of these methods are having their own advantages and disadvantages. Relying on the requirements of an employee or an organization a performance evaluation method should be selected. All methods of performance appraisal can be divided into two different categories: traditional (past oriented) methods and modern (future oriented) methods (Singh, 2015: 37).

1.7.1. Traditional (Past Oriented) Performance Evaluation Methods

Traditional (past oriented) performance evaluation methods are relatively older methods. These methods are established to review the personal qualities of the individuals. These methods may include initiative, knowledge, judgment, leadership and loyalty (Aggarwal & Thakur, 2013: 617). Traditional performance appraisal methods attempts to concentrate on the past performance of the employee. These methods could be listed as below:

1.7.1.1. Rating Scale Method

According to Singh (2015: 37), rating scales are considered one of the old and popular methods to implement performance appraisals. This method contains several numerical scales demonstrating job related performance criterions as quantity of work, quality of work, initiative, dependability, attitude, judgment, attendance, cooperation etc. Rating scales can involve five components such as Unsatisfactory, Fair, Satisfactory, Good and Outstanding. The total numerical scores are calculated to reach to the final conclusions. The advantages of rating scale

method are: less time consuming and cost effective, easy to use and do not require formal training, offer quantitative comparison, suggest simple ways to communicate and can be practiced in every type of job. The disadvantages of rating scale method are: rater’s biases and data variation because of different appraiser’s usage.

1.7.1.2. The Checklist Method

In this appraisal method, the rater has a list of statements and situations with which the employees compared. The checklist technique is a presentation of employee performance and characteristics. The results could be quantitative and could be responded by “Yes” or “No,” (Seniwoliba, 2014: 603).

1.7.1.3. Critical Incident Method

The method was formally arranged by the works of Fitts and Jones in 1947 for categorizing pilot error experiences in interpreting and reading aircraft instruments. Fitts and Jones implemented the term “errors” instead of “critical incidents”. In contrast to Fitts and Jones method of collecting data, data collecting during job performance is nowadays considered a defining standard for critical incident methods. The work of John Flanagan in 1954 came to be the landmark for critical incident method, after his title “The Critical Incident Technique” appeared in the psychological bulletin. The critical incident method is defined as a set of procedures designed to define human behavior by gathering the description of events having special meaning and meeting defined criteria. Flanagan initially used trained observers to gather critical incident identification. During task performance, an identification of the critical incidents can be an individual process or a mutual process among users and appraisers (Aggarwal & Thakur, 2013: 617-618).

Critical incident method is focused on certain critical behaviors of employee which makes important differences in the performance. This method attempts to keep a record of unusually employee’s work associated behavior and review it with the employee at planned times (Shaout & Yousif, 2014: 967).

1.7.1.4. Narrative Essay Method

Narrative essay method simply requires the evaluators to write a series of explanations regarding an individual’s strengths, weaknesses, past performance and potential for promotion (Obisi, 2011: 96). According to Singh (2015: 39), this method is a non-quantitative method and is often linked with the graphic rating scale. The advantages of narrative essay method are:

useful in filing information gaps which usually happen in a better-structured methods the disadvantages of this method are: highly reliant on the writing skills of the evaluator, and highly reliant on memory power of the evaluator.

1.7.1.5. Forced Choice Method

In Forced choice method, the evaluator is given a series of statements about the performance of an employee. These statements could be organized in blocks of 2 or more, and the evaluator indicates which statement is more or less descriptive for the performance of the employee. In opposition to the checklist method, the appraiser is simply expected to choose the statements that describe the evaluation. However, this method is known as the forced choice method because the appraiser is forced to select statements, which are already made. The benefit of this technique is the absence of personal bias in evaluation. The shortcoming of this approach is that the statements may not be appropriately framed and they may not be exactly descriptive of the evaluated individual’s traits (Seniwoliba, 2014: 603).

1.7.2. Modern (Future Oriented) Performance Evaluation Methods

Modern (future oriented) methods were created to improve the traditional (past oriented) methods. These methods attempted to overcome the shortcomings of the traditional performance evaluation methods such as biasness, subjectivity, etc.

1.7.2.1. Management by Objectives Method

Peter F. Drucker presented “Management By Objective” in his book “The Practice of Management” in 1954. It included three building categories: object formulation, execution process and performance feedback. In 2000, Weihrich proposed a new method: the system approach to MBO which is abbreviated to (SAMBO). The System Approach to Management by Objectives method comprises seven fundamentals: strategic planning and hierarchy of objects, setting objectives, planning for action, implementation of Management by Objectives, control and evaluation, subsystems, and management and organizational development (Aggarwal & Thakur, 2013: 618).

Evaluation by objectives set (Management by Objectives) is an approach which occurs when the employee enters into a contract with his or her employer on the principal objectives of their task for a definite period of time. Through this contract, the employee will be able to identify when and which objectives should be met, which criteria should be appraised whether

the objective is a method and the objectives are regularly appraised until the agreed expire period (Šalková, 2013: 94).

1.7.2.2. Psychological Appraisal Method

Psychological appraisal method is used to evaluate employee’s prospective for future performance instead of the past performance. It gets implemented by using detailed interviews, psychological tests, and discussion with supervisors. This method concentrates on employee's emotional, intellectual, and motivational and other personal features affecting his or her performance. The advantage of psychological appraisal method is: useful for recognizing employees who may have considerable potential for future performance. However, the disadvantages of psychological appraisal method are: time consuming and expensive and highly reliant on the skills of psychologists (Singh, 2015: 39).

1.7.2.3. Assessment Center Method

The Assessment Centre (AC) method detects the social features and the characteristics of the employee. The employee’s information gets obtained through testing and solving case studies and practices when the evaluated employees are observed and assessed by various evaluators. The assessment center method is a diagnostic and training program depends on a simulation series of typical managerial task activities when the task ability of the evaluated employee for a managerial post is tested. The disadvantage of assessment center method is that it focuses on the current performance of the employee in artificial circumstances, and it is not significant that such performance would match with their performance in real work (Šalková, 2013: 96).

An assessment center is a dominant location where managers may come together to participate in job related exercises evaluated by trained observers. It is more concentrated on the observation of behaviors across a series of selected practices or work samples. Evaluated employees are requested to participate in in-basket practices, work groups, computer programs, fact finding practices, analysis and decision making problems, role playing and oral presentation exercises (Shaout & Yousif, 2014: 967).

1.7.2.4. Behaviorally Anchored Rating Scale (BARS) Method

Behaviorally anchored rating scale methods were first identified by Smith and Kendall in 1963 with the attention of researchers regarding to the issue of performance ratings’ reliability and validity. Behavioral anchor rating scale methods are more informative than simple

numbers. Behaviorally anchored performance dimensions are operational and conceptual and can be differentiated from one another. The evaluator in this method acts like an observer and does not act like a judge. BARS support the rater to concentrate on specific desirable and undesirable incidents of work behavior which can work as an examples in the evaluation process. Behaviorally anchored rating scales use behavioral statements or concrete examples to demonstrate multiple levels of performance for each component of performance (Aggarwal & Thakur, 2013: 618).

The BARS Methods attempts to rate the behavior which is required for a successful work performance. It emphasizes on the approach of work, monitor the work procedures and performance efficiency. The BARS Method depends on creating rating scales for employee work behavior aspects and on the definition of the needed work behavior in a certain working place as a prerequisite for efficient work performance (Šalková, 2013: 95).

1.7.2.5. Human Resources Accounting Method

In 1691, Sir William Petty has developed the concept of human resource accounting. The studies about human resource accounting truly activated in the 1960 by Rensis Likert. Prof. Flamholtz describes human resource accounting for people as an organizational resource. The core theory underlying the human resources accounting method is that the individuals are valuable resources of an organization or enterprise and information on investment and value of human resource is advantageous for decision making in the organization (Aggarwal & Thakur, 2013: 618). In human resources accounting method, the performance is judged as a cost by the contribution of the employees (Shaout & Yousif, 2014: 967).

1.7.2.6. 360 Degree Feedback Method

The major rationale for 360 degree feedback method has been expressed by Turnow as 360-degree techniques are usually grounded on two assumptions. These two assumptions are that the recognition of any discrepancy between how we perceive ourselves and how others perceive us increases self-awareness, and that enriched self-awareness is the key to maximum performance as a leader. Thus, 360 degree feedback method becomes a foundation for leadership and management development programs. The rationale for 360-degree feedback method is as following (Armstrong & Baron, 2000: 159-160):

1. 360-degree feedback can become an influential organizational involvement to increase awareness of the significance of aligning leader behavior, work unit outcomes, and

consumer expectations, as well as growing employee participation in leadership development and work unit efficiency.

2. 360-degree feedback identifies the complexity of management and the value of input from different sources. It is obvious that managers should not be evaluating behaviors that they cannot observe, and the leadership behaviors of subordinates may not be recognized by their managers.

3. 360-degree feedback focuses on important performance dimensions that may previously have been ignored by the organization.

According to Šalková (2013: 96), 360-degree feedback is also sometimes called a three hundred and sixty degree multi criterion performance evaluation or multi source appraisal and it is implemented for a complex, multi-rater feedback concerning to the employee performance. It is intended to prepare a complex overview on the employee´s activities. The evaluators could be supervisors, consumers, direct and indirect, and sometimes also subordinates and even self-evaluations.

According to Avazpour et al. (2013: 970), some of the 360 degree feedback appraisal system’s benefits are as below:

1. It is more extensive due to its fundamental assessment which collects information from different points of perspectives.

2. It decreases the biasness and prejudice because the information collected from several people, and not just one person.

3. It supports the Human Resources Department to establish policies of internal selection in a clear way through the results of the evaluation process.

4. It defines training and development strategies for employees depending on individual and group performance evaluation outcomes.

5. It permits companies to distinguish successful people more easily with the purpose of reinforcing, recognizing and motivating their results.

1.7.2.7. 720 Degree Feedback Method

Rick Gal breath was not satisfied with 360 degree feedback performance appraisal technique. Therefore, he started using the 720 degree feedback method and defined it as a more intense, modified and above all greater observations of the high level managers that brings in the perception of their customers or investors, as well as subordinates. 720 degree method concentrates on what matters mostly, which is the customer’s or investor’s perception of their work. 720 degree approach offers individuals a very different view of themselves as leaders

and growing decision makers. 360 degree evaluation method has been practiced twice. When the 360 Degree evaluation is done, then the performance of the employee has been evaluated and having a good feedback approach, the supervisor meets his or her employee again a second time and offers to him feedback and tips on accomplishing the set targets (Aggarwal & Thakur, 2013: 618).

1.8. The Errors in Performance Evaluation

A lot of errors happens in the process of performance evaluation which are mostly occur when the criteria and incentives linked with rating accuracy are not clearly identified in rating process (Capadosa, 2013: 26). During the evaluative consultation process, the managers should avoid making mistakes in rating process because it could damage the main objective of the organization (Lunenburg, 2012: 7).

According to Lieber (2011: 102), managers bring their own biases to the performance evaluation process. The errors in rating performance can be detrimental to the objectives, legally invulnerable evaluation that has direct effects on employee performance. It can also be problematic when it becomes inconsistent with the organization’s standards. An innovative employee or more likely their attorneys can use these evaluation errors to prove that the employee was treated illegally in comparison to their coworkers.

This study is going to provide some of the judgmental or rating errors that emerges during the performance evaluation process:

1.8.1. The “Halo or Horn” Rating Error

This rating error is a tendency to think of an individual as more or less good or bad which is approved by specific performance ratings. This kind of rating performance error relies on rating employees according to their sex, race, or age. In either case, the performance rater doesn‘t make significant distinctions when assessing specific dimensions of performance. All criteria of employee performance are rated either high (halo) or low (horn) (Capadosa, 2013: 27).

Halo error happens when a rater allocates ratings for several dimensions of employee performance by depending on the overall impression of the evaluation. The individual’s performance is totally evaluated on the basis of an observed positive quality, trait or feature. Horn error, on the other hand; occurs when the individual’s performance is completely evaluated on the basis of a negative quality, features or traits perceived. As a result, there will be an overall lower rating than it might be warranted. Some of the examples about this rating

error could be related to the informal dressing of employee in the organization or the individual rarely smiles. Hence, it leads to this kind of misjudgment that he or she hasn’t good interpersonal relationships (Rao & Rani, 2014: 5).

1.8.2. The “Leniency” Rating Error

In this kind of evaluative errors, individuals are rated higher than the expected rate. This occurs when managers aren’t penalized or punished for giving the employees high ratings and when dimensional assessments aren‘t required (Capadosa, 2013: 27). Relying on the rater’s own standards or believes, values and physical or mental makeup at the time of appraisal, the employee performance may be evaluated very leniently. In addition to that, the rater wants to give everyone high scores in the positive leniency (Esfahani et al., 2014: 38).

According to Rao and Rani (2014: 6), lenient evaluation error occurs when ratings are constrained to the high portion of the rating scale. Some raters think that everything is as good as possible because they are lenient raters. If all the employees in the organization gets a high rate that means the evaluation system has done nothing to differentiate among the high performed and low performed employees.

1.8.3. The “Central Tendency” Rating Error

According to Lieber (2011: 103), some raters are risk adverse and evaluate all employees in the middle of the performance range. While this attitude is less argumentative, it can result in a legal liability for the organization. Logically, not every employee has adequate or effective job performance. It is problematic issue to defend disciplinary action or a dissolution when an employee is steadily evaluated as “Exceeds Expectations” or “Meets Expectations.”

According to Rao and Rani (2014: 6), the raters evaluate all individuals as average performers. Clearly, it is an approach to rate people as neither low nor high and keep them in the middle path. In instance, a Manager, who has a view of playing it safe, might give a class grade approximately equal to B, though the differences in individual performances. Another explanation for this kind of evaluative error is some raters dislike being too strict with employees by giving them an enormously low ratings, and they may think that none of the employees ever deserves to have the highest possible rating. The result of this type of attitude would have negative return to the organization (Lunenburg, 2012: 8).