Performance appraisal viewed as a key human resource practice for many organizations, is done to provide feedback to employees so that they can be able to improve on their performance. This practice has been under analysis and investigation by various researchers. The purpose of the study is to carry out an analysis on the performance appraisal systems of PSC Biotech and investigate the interactive effects of the appraisal system on the performance of the organization. Pharmaceutical Services Corporation, which has its headquarters in Pomona, California, has been providing professional consulting services for the last ten years.
The Corporation is in the business of delivering state of the art Information Technology services and also validation, compliance services and industry specific products to the pharmaceutical and biotechnology industries. It also provides expansive guidance and expertise in areas that include quality systems, computer and equipment validation, automated process systems (PSCBiotech, 2010). The IT consulting services designed to meet the needs of the manufacturing industry as well as the Clinical Research and Development industry.
Examples of products designed by the company include Auditca, which is audit software that provides a flexible and interactive interface for auditors to edit and compose compliance deficiencies noted during an audit. Another product is the Audit Utopia, which is a management application that organizes the process of regulatory inspections. Pharmaceutical Services is also an authorized distributor of testing, laboratory equipment and supplies. Such products include particle counters, laboratory Autoclaves, Microbial samplers, sensors, fume hoods and Biosafety cabinets (PSCBiotech, 2010).
PSC Biotech has the goal of being the industry leader in providing excellence in compliance and validation of products and services while at the same time maintaining competitive rates. PSC Biotech uses an appraisal system that mostly focused on the organization’s goals. The assessment system referred to as the SMART goal assessment system. This system focuses on the goals that an employee is meant to achieve when performing his job. The company uses this method of appraisal to weigh the duties of its employees by giving them clear and attainable benchmarks that have rewards for achievement.
The term SMART in this context means Specific, Measurable, Achievable, Realistic and Time framed goals (PSCBiotech, 2010). Specific goals need to have an explicit definition because goals that are have loosely been defined make it hard to know whether they have been achieved or not. An example of a loose goal is saying that every employee will train. This is general and it does not have a way of determining whether the training was achieved or not. A measurable goal is one that can be calculated to produce results. The goal has to be made with a vision of achieving results.
Achievable goals need to be within reach for the employees to be able to attain them. They should also not be too difficult (PSCBiotech, 2010). Realistic goals are designed to match with the employees needs in regards to their duties. These goals should be set with the knowledge of whether the employees have the ability and experience that needed to achieve the set goals. Guidance and assistance, is also needed to provide help to employees who are unable to achieve their goals. Time framed goals are those that have an amount of time that has been set aside to achieve them.
A period will give the goals a sense of structure and it will necessitate action on the part of the employee. It will also give them the motivation to get started on their goals (PSCBiotech, 2010). Although the company views goals as an important benchmark, it also considers employee competency as an important factor in determining performance when doing their duties. The core competencies account for fifty percent of an employee’s appraisal. The SMART goals are designed to ensure that employees perform their best, which is possible when they know what is expected from them.
It is most preferable to an employee to know where their focus should lie and what their management directives and priorities are. This prevents doubt and misunderstandings about their work performance considered when it comes to determining a reward for their efforts. One benefit of the SMART goals is to give the employees notice of how the company weighs their duties and gives them clear and attainable benchmarks with clearly defined rewards for their achievements (PSCBiotech, 2010).
Goal setting and feedback are key elements in the performance appraisal activities of organizations. The setting of goals and feedback on whether achieved is believed to affect the performance of employees positively by enhancing motivation that is necessary for work performance. The relationship between satisfaction with performance appraisal and employee outcomes will be mediated by motivation . Roberts and Reed (as cited by Kuvaas, 2006, p. 506) proposed that participation, goals and feedback influenced the appraisal process.
In their studies, Locke and Latham found that although the relationship between goal setting and performance moderated by several factors, it has contributed to the employee has perceived investment in work development (as cited by Kuvaas, 2006, p. 505). The social comparison theory is significant to the research of performance appraisal methods, built on the assumption that people are driven to evaluate themselves. The theory implies that it may be more effective to the raters of job performance to compare an employee to other employees.
This theory has the potential to inform on the development of performance appraisal processes because of comparative judgments of social stimuli on particular content dimensions (Goffin, Jelley, Powell & Johnston, 2009, p. 252). Goffin, Gellatly, Paunonen, Jackson and Meyer (1996) developed a rating system that takes advantage of the social comparison theory without having to incur the problems that usually compound the comparative methods of appraisal. The relative percentile method provides the means of scaling rater’s relative judgments’ of the ratees to allow for a meaningful comparison of the ratings provided.
The rating percentile method promotes the use of social comparisons by encouraging the simultaneous assessment of the ratees (Goffin et al, 2009, p. 253). Previous research on the percentile method of appraisal has shown the benefits of this method in two ways. In their studies of 1997, Wagner and Goffin (as cited by Goffin et al, 2009) demonstrated that the percentile method resulted in greater accuracy than the traditional absolute rating system of performance appraisal. The second study found that the percentile method had greater criterion-related validity when compared to the conventional absolute rating format.
Carty and Goffin found that the percentile method was more advantageous in the context of letters of reference and they found it improved on the levels of accuracy in personality ratings (Goffin et al, 2009, p. 254). A performance appraisal method will not be viable if the ratees and the raters believe that it is unfair. Adam’s equity theory claims that individuals formulate fairness perceptions by comparing their perceived work outcomes or rewards to their perceived contributions or inputs.
Employees therefore view appraisal systems as fair and ethical when they reflect the individual’s contributions (Narcisse & Harcourt, 2008, p. 1153). Greenberg (as cited by Narcisse & Harcourt, 2008) identified two factors that affect employee perceptions of performance appraisal and they are the perceived fairness of the appraisal system in relation to the employee’ performance and the perceived fairness of any appraisal that is related to pay increase or a promotion.
In addition to the social theory’s practical importance, its application to performance appraisal contributes to the social cognition of employees within an organization by demonstrating that the social comparative process improves the reliability of the appraisals. Recommendations: The approach taken in the relative percentile method in which other ratees serve as benchmarks meant likely to heighten both availability and relevancy of performance appraisal systems. The method uses employees in similar positions to be able to facilitate a meaningful percentile of their responses.
From previous studies, the percentile method has promoted the use of the social comparison theory by requiring the rater to consider the ratees simultaneously when making judgments based on performance. This method of parallel analysis of performance indicators is beneficial because the other ratees will serve as useful benchmarks through which the rater will be able to record accurately their ratings (Goffin et al, 2009). This method is different from the other conventional methods of performance rating where the ratee’ is considered individually.
The serial processing of the ratees performance results might fail to take advantage of the natural social comparative processes, which explains the low validity of noncomparative ratings in studies where the comparative and non- comparative formats have been evaluated and compared with each other (Goffin et al, 2009). Having good performance appraisal systems is important as it will help in the development of employees and enable them to improve on their work performance.
Performance appraisal methods used should have systems that ensure the process done is fair, ethical and clear way. The outcomes should also be relayed to the employees so that they can be able to know what areas of their work they can be able to improve on. References Narcisse, S. , & Harcourt, M. (2008). Employee fairness perceptions of performance appraisal: a Saint Lucian case study. International Journal of Human Resource Management, 19(6), p. 1152-1169. doi:10. 1080/09585190802051451. Goffin, R. , Jelley, R. , Powell, D. , & Johnston, N.
(2009). Taking advantage of social comparisons in performance appraisal: The relative percentile method. Human Resource Management, 48(2), p. 251-268. Retrieved from Business Source Complete database. Kuvaas, B. (2006). Performance appraisal satisfaction and employee outcomes: mediating and moderating roles of work motivation. International Journal of Human Resource Management, 17(3), p. 504-522. Retrieved from Business Source Complete database. PSCBiotech (2010) Introduction to PSC, Retrieved 7 May 2010, from http://www. biotech. com/introPSC. php