Performance Appraisal At Asda Management Essay

This brief report explores the performance appraisal methods for the employees at Asda, a premium British Supermarket chain. It is based on secondary data gathered from existing academic literature. It goes through the various appraisal programs prevalent everywhere. It notes the usage of 360 degree feedback by Asda and also recommends the usage of SMART criteria by the organization for more improved distribution of work and subsequently a more transparent appraisal process. It also suggests more serious skill audit processes for all the employees to enhance organizational performance of Tesco through the enhancement of Individual performance.

Aims and Objectives:

This brief report is exploring the performance appraisal strategies used at Asda and analyse them in a critical manner. The researcher has divided the modus operandi into the following specific objectives,

To understand the appraisal processes in general

The report tries to understand the appraisal processes in general by exploring the relevant literature

To understand the appraisal process used by Asda HR managers

This report also explores the appraisal methods used by Asda and analyses them based on theoretical foundation

To evaluate the these processes

The report also evaluates the quality of appraisal methods being used by Asda

Methodology:

It should be noted right at the beginning that it is a short report rather than a detailed and extensive research project and hence it mostly deals in secondary information about the subject that the researcher could access in the public domain and they are mostly done by previous researchers and also some data from the company sources. In a way, it can be considered to be following the grounded theory (Strauss and Corbin, 1990) to formulate the research. This method is all about avoiding preconceived notions, i.e. hypotheses and let the conclusions flow from the basic observations. So, based on the collected data, the researcher is building a theory that describes the appraisal methods used in Asda and analysing the same. However, considering the fact that it is only a short study based on secondary data, it is a bit limited in scope and it is just trying to make the most of available resources. But a more detailed study will require the researcher discussing the same with the employees of the organization in question and gather primary data through surveys and interviews etc. Nevertheless, this study remains limited to exploration of secondary literature.

Introduction:

In this report an effort is being made to explore the appraisal methods used at British supermarket chain Asda Stores. As we know, Asda is one of the largest retail chains in the UK. It has a sprawling business all over the country and a large workforce of 140 thousand to match. This leads to a requirement of efficient HR practices including those in employee appraisal in order to utilize such a large workforce with the right kind of policies and strategies to handle such a workforce in an efficient manner. The planned Performance appraisal method can lead to dissatisfaction and demoralisation among the employees, which eventually hurts the organizational efficiency and that is why a proper appraisal system must be in place.

Performance appraisal, in the modern competitive corporate sector is extremely vital. In the olden days there were fewer organizations. A few of them could monopolize the market and thus afford to maintain their workforce without regular appraisal because even the employees did not have much option. But in the modern economy, competition among the organizations is far higher and almost every sector is free from monopoly by a select few corporations. This also leads to a significant competition among the organizations to attract and retain skilled employees. Employees can leave an organization for various reasons including a lack of salary hike or a better offer from a competing organization. In order to avoid the same the organizations must be able to offer periodic increments and other bonuses to their valuable employees. In order to do that, they must judge the employees based on their performance in the past and that is what is known as performance appraisal. This is used by the organizations in order to ensure better performance by the employees. But for that purpose the organizations need specific performance appraisal methods to determine performance levels of their employees. This is the reason employee appraisal methods have received importance in the academic circuit and a lot of methodologies have been proposed for the same. However the efficacy of these methods varies depending on several factors including organizational culture as well as external circumstances.

Literature Review:

Purpose and objectives of performance Appraisal:

Performance appraisals are mainly done to provide feedback to the employee’s one their performance over a period of time. Through this process the management can also identify the weaker points or shortcomings of its employees and thus identify the training needs for them (Takeuchi et al., 2007). Another important function of appraisal is to figure out the eligibility of worthy employees for rewards, salary hike, promotions etc. At the same time, people with negative appraisal may have to face various actions or may be subjected to counselling and further training. So, in end performance appraisal processes are meant to improve the employee performances for the future by identifying their positives and negatives, rewarding competence and correcting shortcomings.

The researchers maintain that there is a correlation between performance appraisal and the immediate reaction of the employees who are affected by this process. Appraisal processes are meant to improve the human resources of the organization by providing support to those who need it and reward the ones who deserve it this ensuring a committed workforce whose personal issues are also taken care of by the organization (Arthur, 1994). However one can easily see that evaluative appraisal processes lead to negative reactions from the employees, from the ones who get negative feedbacks (leading to low increment and bonuses) and this leads to loss of employee morale and increasing intentions of quitting. Murphy and Cleveland (1995), notes that performance appraisal mainly involves evaluating and comparing the employees but it ends up causing dissent in most places.

Evaluative appraisal compares individual performance of the employees and also compares them to single out quality performers (Murphy and Cleveland, 1995). It enhances competition among the employees as they seek to win rewards and career growth by achieving better appraisal although at times they may try too hard to overtake each other thus leading to uncomfortable interpersonal equations (Deming, 1986). This kind of development may also lead to negative competition thus leading to a loss of social exchange and cooperation. This eventually leads to selfish thoughts among the employees in terms of proving themselves as the best performers which eventually does not really help the firm. Drenth (1984) notes that performance evaluation as based on negative traits can only evoke negative responses and even if not expressed openly, they harm at a psychological level. Criticism targeted at poor performers makes them feel insecure which may affect their performance or make them look for alternative jobs thus leading to attrition (Boswell and Boudreau, 2000).

Eventually the manner in which this process affects the employees depend on how much organizational justice is achieved by the same and how unbiased or neutral the reviews are. This is the reason why most of the employees are interested in the fairness of the very process of appraisal (Erdogan, 2002). Researchers have opined that balanced and justifiable procedures are the main factor that makes any performance appraisal method acceptable among the employees (Cawley et al., 1998). Nevertheless, the relationship between evaluative appraisal as well as broader competitive goals becomes stronger when procedural justice is done in the perception of the employees. In this case the employees trust that the process is justified and reasonable and the eligible people are rewarded. This line of thought can enhance competition in a more positive sense and encourage everyone to perform better in the organization and expect the management to be reasonable in the appraisal process (Lind and Tyler, 1988). A good track record of procedural justice allows the form to come across as a trusted person and so allows them to works towards achieving the bigger organizational goals in the future without bothering about their personal benefits only (De Cremer and Tyler, 2007, Siegel et al., 2005).

Different Types of Performance Appraisals Methods for Measuring Employee Performance:

After going through various literature regarding performance appraisal methods of the employees, it was noted that a few of them are quite widely used and popular.

Management by Objectives: In this method the organizational goals are described and the employees are given a set of targets to achieve within a certain period of time (De Cremer and Tyler, 2007). The performance of the employees based on these targets is checked periodically by the superiors and their performance is judged based on the same. The ones who meet the expectations benefit from the same while the rest may have to go through corrective measures or face consequences. It is a simplistic method which is easy to conduct and maintain and does not confuse anyone but it is not flexible enough to take into account various important aspects of the employee as well as the working environment.

360 Degree feedback: In the modern times, the 360 degree feedback method has emerged as one of the most popular methods of appraisal. As the name suggests, in this cases, it is not only the superiors inspecting the employees but it is about appraising each other mutually. So, here everybody in the organization gives feedback about everybody else. While the superiors judge the work of the people under them, the employees can also judge if the supervisor is doing enough for them. This basically helps in framing a balanced perspective where every viewpoint is considered and it is expected to be less biased than the previous method. It does take a bit more time and effort to implement but experts have noted that it mostly offers better result (Maylett & Riboldi, 2007).

Behaviourally Anchored Rating Scales (BARS): Behaviourally Anchored Rating Scales (BARS) is a more technically nuanced method that tries to create rating scales based on narratives and incidents that occur at the workplace and try achieve the difficult task of quantifying the soft data (Wells et al., 2007). But it is pretty complex and hence implementing the same is a pretty difficult task. It takes specially trained personnel as well as a lot of other resources. It may also be very difficult to explain to the employees and convince them into accepting the same as not everybody will understand the difficult methodology used to achieve it and hence will look at it suspiciously.

Results and Discussion:

The Performance appraisal Method used at Asda:

It has been noted that was noted that at Asda certain personal and professional skillsets are given utmost importance and employees are assessed based on the same. For slightly senior employees they consider coaching skills to be an essential part of leadership skills. In this process they judge how a person can train the subordinates. Apart from that it also judges the counselling skills of the people that help them in guiding the subordinates in expanding responsibility and capacity and delegate work according to their individual potential (Armstrong, 2007). Apart from the leadership related skills, Asda looks for multitasking skills from the individuals so that they can perform multiple tasks under pressure. Such skills help them achieve individual goals as well as the organizational goals by exceeding one’s own limited responsibilities (Bozall and Purcell, 2008).

360 degree Feedback

Asda used 360 degree feedbacks for appraisal process to judge the factors discussed above. The 360 degree feedback allows the employees to be judged by the superiors as well as by the peers and juniors. Asda uses this process sincerely to make sure that nobody can allege the process to be one sided and the managers to be too dictatorial (Maylett & Riboldi, 2007). It allows them to create a more egalitarian working environment organization where everybody has the power to appraise others. This helps reducing the power distance among the hierarchies and enhances interactions among them. At the same time, it has to be noted that they try to make these feedbacks anonymous and hence in case of negative feedbacks one cannot know who has provided the same and hence cannot have personal issues against them.

360 degree Performance appraisal method used in ASDA in the year of 2010-2012(Quarter)

ASDA has been redeveloped or redesigned 360 degree program to develop the employee performance through the process like Individual bonus, & Peer recognition

Individual bonus

The individual bonus factor other ways known as process of growth factor it is very transparent and flexible towards the performance of employees, this process is used to promote the efficiency in employee performance. This process aims the organisational objectives through the employee performance.

As the Result of this process, the employee survey conducted in ASDA that shows the individual bonus process will be a great success through the high level of employee commitments and improvements through the self-motivation.

Peer recognition

Peer recognition is the modern performance appraisal process also includes in the 360 degree process. This process is to award and acknowledge an individual for their outstanding performance in the company. An Important factor include in this process is not only just applause them for their achievement but also for keeping the company core values.

After the success of the individual goal & Peer recognition the high level authorities in HR department were got a chance to meet the CEO for improvise the 360 degree feedback in entire system. After negotiating with the chairperson of the ASDA and Ministry, the organisation decided to implement the new redesigned 360 degree process in entire operational areas of the firm.

Common Failings of 360 degree feedback method in Organisational Systems:

Performance appraisal can still fail in the organizations due to several reasons. It can fail due to the use of wrong methods as not every method is applicable at every place. For example a 360 degree feedback will not work in a highly hierarchical environment. Even if a chance is given, low rung employees may not voice their opinion openly regarding the top management in such a case. Another major issue is the resistance from employees, which can occur due to lack of sensitization (Maylett & Ribald, 2007). If they are not intimated and explained in a proper manner, they can be wary of performance appraisal measures and hence they can tend to resist such moves. Such issues are mainly dependant on the competence of HR managers who implement and handle the same.

Recommendations:

Apart from the existing measures (360 degree feedback) which were already used in ASDA, the researchers also suggest the use of SMART criteria for enhanced appraisal process. The SMART criteria can be explained through the diagram shown below in the form of an image. It tries to make sure that the workers always have realistic goals that are very specific, measurable as well as achievable within a certain time period (Doran, 1981). This basically indicates that the goals for the employees are defined considering the capacity and skills of the employee. This basically ensures that no one is given excessive workload or types of work they are not suitable for and so nobody is burdened with difficult goals. This clearly defines who has to do what and so the appraisal process afterwards becomes very transparent and easy and does not leave any opportunity for the employees to question the same on the basis of vagueness.

(Doran, 1981)

It should be noted that eventually Asda is a successful business venture its larger profit motive must not be affected while implementing such processes. But there should also be a balance in emphasizing on the profit oriented goals while ignoring employee motivation levels and performance. Some people may be overburdened by such goal orientation which can only harm their performance. By using SMART criteria Asda can define the organizational objectives in a way that is suitable for everyone as it takes personal capability into account (Boswell and Boudreau, 2000). It helps people to be sincere at work and allow them to identify the important tasks and prioritize accordingly.

Apart from that, a personal skill audit should also be applied to identify the strengths, weaknesses as well as scopes for training and development of the employees. Such a skills audit not only reviews the existing skills of an employee but also informs the type of skills that they need to hone in the near future. There are various tools that can be utilized for this purpose. For example the employees can even be asked to use self-assessment tools to find out where do they stand and how can they improve themselves in the future. Such processes will require significant involvement of the HRM team and they must be able to administer these processes periodically without allowing anyone to skip the same. Besides, the knowhow gathered through such processes regarding the individual skills and capacities will help them in future distribution of responsibilities.

Conclusion:

Through this brief report one can see that ASDA has been doing a decent job in terms of performance appraisal and their processes are well balanced to be acceptable to all. It has picked up widespread best practices like 360 degree feedbacks to ensure balanced and controversy free appraisal system. But it can still improve the same and make it more nuanced and accurate by the introduction of processes such as SMART criteria which can help them in creating an appraisal system where personal aspects of each and every employee is taken care of and their welfare is ensured even before the appraisal process begins.

Eventually it can be said that their ASDA can further improve their organizational performance by introducing certain developments in their employee appraisal system which will also help them in creating a workforce that is secure about their job and sure about their responsibilities.

This will enhance performance and eventually make the appraisal and reward process much easier. There may be a need to explore the internal and external factors affecting the performance including interrelationship among the employees which can significantly affect the performance. But it does not mean that the second types of people do not deserve to be there, they simply need to be in the right kind of work that suits them. Such nuances must be captured by the appraisal methods. So, the system can improve the same and make it more nuanced and accurate by the introduction of processes such as SMART criteria which can help them in creating an appraisal system. Where personal aspects of each and every employee is taken care of and their welfare is ensured even before the appraisal process begins.