1 INTRODUCING A PERFORMANCE APPRAISAL SYSTEM AT CNV VAKCENTRALE
Master thesis, Human Resource Management
University of Groningen, Faculty of Management and Organization
June 19, 2012
MARIJN TANGE Studentnumber: 1702289
Broekfinne 17 9213 RL De Wilgen Tel.: +31 06-41800885 e-mail: m.e.tange@student.rug.nl
Supervisor/ university J. van Polen P. H. van der Meer
Supervisor/ field of study T. van Lagen
Manager HRM at CNV Vakcentrale, Utrecht
Acknowledgements: I would like to thank Hans van Polen for his useful feedback and support during the writing process. I would also like to thank Theo van Lagen for giving me the opportunity to conduct research at CNV Vakcentrale and for providing me access to all
relevant information within the organization.
2 ABSTRACT
Purpose – This study aims to investigate the best kind of performance appraisal system for CNV Vakcentrale by examining five different approaches for performance appraisal. The cultural values, strategy, and job descriptions were identified at CNV Vakcentrale to be able to draw a conclusion.
Design/ methodology/ approach – One board manager and seven department managers were interviewed. Organizational documents and direct observations were used as data collection methods. These data were analyzed according to the constant comparison analysis.
Findings – The quality approach appeared to be the best kind of performance appraisal system for CNV Vakcentrale.
Research limitations/ implications – Non- profit organizations are better aware of which factors to take into account when choosing a performance appraisal system. Ways to enhance the success of choosing a performance appraisal system are suggested. Further research is needed to increase generalizability.
Originality/ value – Empirical evidence to support the choice for a performance appraisal system.
Keywords – Performance appraisal system, strategic purpose, administrative purpose, developmental purpose, performance appraisal approaches, non-profit organization.
Paper type – Case study
3 INTRODUCTION
Organizations are paying more attention than ever to the performance and productivity of employees in order to remain competitive or to survive which makes the human resource function more important (Wright, 2002). And if an organization wants to have an integrated human resource system that supports its business plan, it is important to have performance appraisal (Lawler III, Mohrman & Resnick, 1984). This also has to be done well, because it influences the effectiveness of the overall human resource management system (Lawler III et al., 1984). Judge & Ferris (1993) also acknowledge the importance of performance evaluation systems by claiming that it could be one of the most important human resource systems.
Furthermore, ‘performance appraisal can be a critical part of a company’s success because it allows the organization to retain and reward high performers and offer guidance and
improvement for poor performers’ (Smith & Rupp, 2003, p. 107). However, performance appraisal still faces system failures (Wright, 2002). Henderson (1984) found that it is difficult to develop a performance appraisal system that accurately reflects employee performance and that performance appraisal systems are not generic or easily passed on from organization to organization. These studies show the importance of performance appraisal systems for organizations, however they also indicate that adopting a performance appraisal system successfully is easier said than done.
A performance appraisal system can have multiple purposes, Noe, Hollenbeck, Gerhart & Wright (2008) divided the purposes into three sections: strategic, developmental and administrative. Firstly, the strategic purpose is realized through goal setting and feedback (Lee et.al., 2010) which are set in line with the business strategy. Feedback is used for
strategic purposes by monitoring whether employee performance is in line with the previously set goals (Jackson& Schuler, 2003). Secondly, objectives of performance appraisal systems are developmental ones, these are attained through monitoring, coaching and motivating employees (Noe et al., 2008; Jawahar, 2003; Brumback, 1988 & Nickols, 2007). Thirdly, performance appraisal systems have administrative purposes, they are used for decisions such as pay increase, promotion and retention (Jawahar, 2003).
The previous section showed that a performance appraisal system has the potential to be an important HR tool for an organization and that it has multiple purposes. CNV
Vakcentrale is about to adopt a performance appraisal system and is questioning which performance appraisal system would best fit their organization. This case study wants to find
4 out which performance appraisal system will fit CNV Vakcentrale. The main research
question which is derived from this is:
What kind of performance appraisal system fits best with CNV Vakcentrale?
In the theory section, performance appraisal systems are clarified and its purposes are elaborated. Furthermore, criteria for effective performance appraisal are identified. The comparative, attributive, behavioral, results and quality approach to designing a performance appraisal system are elaborated. The theory section ends with factors which are important in the choice of a performance appraisal system. This is followed by the method section which is followed by data analysis and results. This study will end with a discussion and conclusion part. In this part, the results will be discussed and advice is given to CNV Vakcentrale.
THEORY
In this chapter, performance appraisal systems are further elaborated and its uses are pointed out. Performance appraisal systems are defined in many ways, however, all
definitions agree that it is a systematic approach to evaluating performance (Nord, 1979;
Schuler & Jackson, 2003; Seldon & Sowa, 2011; Mondy, Noe & Premeaux, 2002; Gómez- Mejía et al., 2006; DeNisi, 2000; Cardy & Dobbins, 1994; Noe et. al, 2008; Den Hartog et al., 2004; Fletcher, 2001). However, these authors do not all agree on how performance should be evaluated. For instance, should the evaluation be conducted by one qualified person (Nord, 1979) or should it be done by multiple sources using 360 degree feedback (Schuler &
Jackson, 2003; Seldon & Sowa, 2011; Mondy et al., 2002)? Another part of debate is the extent to which the performance appraisal is considered systematic: should the performance appraisal system have a systematic or standardized approach to indicate the level of individual performance (Nord, 1979; Seldon & Sowa, 2011; DeNisi, 2000) or should it be more of a process which links individual performance to organizational performance (Den Hartog et al., 2004; Fletcher, 2001; Cardy & Dobbins, 1994)? The variability in defining performance appraisal systems is caused by the environment in which it operates, the function of a performance appraisal system is dependent on the organization in which it is present (Den Hartog et. al, 2004; Fletcher, 2001; Cardy & Dobbins, 1994). To find out whether an organization adopted a performance appraisal system successfully, the system has to be effective. A general definition of effective performance appraisal is the extent to how good a performance appraisal system is operating as a tool for the assessment of performance (Cardy
5
& Dobbins, 1994). The effectiveness of a performance appraisal system is best regarded as an ultimate criterion (Aguinis & Cascio, 2005) that cannot directly be measured but rather is assessed through the measurement of other subordinate criteria (Cardy & Dobbins, 1994).
These subordinate criteria for effective performance appraisal will be extensively discussed later on this chapter.
As was briefly mentioned before, a performance appraisal system can have a strategic, a developmental and an administrative purpose. (Noe et al., 2010; Scott & Einstein, 2001;
Cleveland et al., 1989; Youngcourt, Leiva & Jones, 2007). The strategic purpose can be described as connecting employee activities to organizational goals (Noe et al., 2008; Bach, 2005). This purpose can be attained through defining the results, behaviors, and, to some extend employee characteristics that are necessary for carrying out the strategy. Then, measurement and feedback systems have to be developed that will maximize the extent to which employees exhibit the characteristics, engage in the behaviors and produce the results (Noe et al., 2008). In the view of Barney (1991) & Barney, Wright & Ketchen (2001), the competitive advantage of organizations is dependent on how valuable, rare, difficult to imitate and difficult to replace its resources are. The way that employees, as resources, are managed can therefore be a source of competitive advantage which indicates the strategic purpose of performance management systems (Youngcourt et al., 2007).
The developmental purpose is attained through identifying the needs of employees to improve their performance, a well designed performance appraisal system not only identifies deficiencies in employee performance but also indentifies the causes of deficiencies (Noe et al., 2008). Murphy & Cleveland (1995) stress the importance of the within-person distinctions as a purpose of performance appraisal systems, this purpose is met through using appraisal to identify training needs, make placement and transfer decisions and provide feedback.
Research indicates that the structure of an organization has influence on the developmental purpose of the performance appraisal system (Cleveland, Murphy & Williams, 1989). They found that flat organizations with few departments use feedback in a performance appraisal system to support the strategy more often than large bureaucratic organizations. Furthermore, in organizations where the coordination is high, organizations use the developmental purpose of performance appraisal systems more often. This can be explained by the high need of technically and interpersonally skilled employees in these companies (Cleveland et al., 1989).
Lastly, performance appraisal systems can have an administrative purpose (Noe et al., 2008). When the system supports this purpose, the organization uses the performance
appraisal information for decisions about pay raises, promotions, retention-termination,
6 layoffs, and recognition of individual performance (Cleveland et al., 1989; Baron & Kreps, 1999; Gómez-Mejía, Balking & Cardy, 2006; Bach, 2005; Aguinis & Cascio, 2005). This purpose is also acknowledged by Murphy & Cleveland (1995), who name it between-person distinctions. Now the purposes which a performance appraisal system can pursue are
elaborated, criteria for attaining those purposes are discussed.
Criteria for effective performance appraisal
As was stated above, a performance appraisal system is considered effective when it is operating well as a tool for the assessment of performance. A system is operating well when it pursues its intended purposes successfully, to evaluate the effectiveness of a performance appraisal system Noe et al. (2008) use five different criteria. These criteria make sure that the performance appraisal system optimally pursues the above mentioned purposes (Noe et al., 2008). Noe, Hollenbeck, Gerhart, and Wright (2008) identified strategic congruence, validity, reliability, acceptability, and specificity. The five different criteria for effective performance appraisal are elaborated in the next section.
Strategic congruence can be defined as the extent to which the performance management system elicits job performance that is consistent with the organization’s strategy, goals, and culture (Noe et al., 2008). The alignment of HR practices will result in higher firm
performance (Huselid, 1995). Once the performance appraisal system is implemented it should be kept up to date. When the firm’s strategy changes, the performance appraisal system has to change with it (Noe et al., 2008; Schuler & Jackson, 1987). The importance of strategic fit will be further elaborated in a later section of this study, since it is also a factor which influences the choice of performance appraisal system.
Validity is the extent to which a performance measure assesses all the relevant and only the relevant aspects of job performance (Noe et al., 2008). It is concerned with maximizing the overlap between actual job performance and the measure of job performance. This is referred to as content validity (Noe et al., 2008). In other words, a performance appraisal system has to measure all aspects relevant to performance. When it does not measure all aspects the system is deficient. However, when the system also measures aspects of performance which are irrelevant it is contaminated. Both contamination and deficiency should be minimized in the performance appraisal system. Validity is seen as an accurate criterion for measuring
performance appraisal system effectiveness (Kluytmans, 2001; Longenecker & Nykodym, 1996 & Noe et al., 2008; Bretz, Milkovich & Read, 1992 & Lee, 1985).
7 Reliability refers to the consistency of a performance measure; the degree to which a
performance measure is free from random error (Noe et al., 2008). There are various types of reliability; firstly, interrater reliability refers to the consistency among the individuals who evaluate the employee’s performance. It is reliable when two different raters give one ratee the same evaluation. Secondly, internal consistency reliability refers to the extent to which the items rated are internally consistent (Noe et al., 2008). The third and last type of reliability is test-retest reliability and refers to the consistency of a measure over time. For example, when an employee is evaluated on number of clients successfully helped, this should be measured on a monthly basis and not only for the number of clients helped in a certain month.
Reliability has proven to be an accurate criterion for evaluating performance appraisal system effectiveness (Kluytmans, 2001; Longenecker & Nykodym, 1996 & Noe et al., 2008; Bretz et al., 1992 & Lee, 1985).
Acceptability is the extent to which a performance measure is deemed to be satisfactory or adequate by those who use it (Noe et al., 2008). Those who use it refer to the raters and ratees who use the performance appraisal system (Noe et al., 2008). Ratee acceptance is an
important criterion in the effectiveness of the performance appraisal system (Cardy &
Dobbins, 1994; Carrol & Schneier, 1982; Lawler, 1967; Murphy & Cleveland, 1995). High ratee acceptance will lead to higher motivation and productivity, and improves the
organization’s ability to retain high performing employees (Roberts, 1992). However, low system acceptance can cause the ratees to reject the performance appraisal system (Bernadin
& Beaty, 1984). One way to increase ratee acceptance is to enhance their participation in the performance appraisal process (Greenberg 1986; Evans and McShane, 1988; Dobbins, Cardy
& Platz- Vieno, 1990; Cawley, Keeping & Levy, 1998). Cawley et al. (1998) found that employee participation was positively related to employee satisfaction with the appraisal session, the appraisal system, perceived utility of the appraisal, motivation of employees to improve performance, and perceived fairness of the system. When participation is missing, the rating is more likely to be perceived as improper (Greenberg & Folger, 1983). Whereas, participation can enhance the perception that the rating is calculated and perceived as a rational judgment. The participation can be enhanced through the use of two way communication in the performance appraisal which means that the ratee also has the opportunity to give his or her opinion about the appraisal (Dobbins et al., 1990).
Rater acceptance of the performance appraisal system is important for the
effectiveness of the system (Ilgen, Fisher & Taylor, 1979; Jawahar, 2007; Klein, Snell &
Wexley, 1987). After all, the rater is burdened with the difficult task of constantly observing
8 employees and transferring information to assign ratings (Roberts, 1992). This means, that the attitude of the rater towards the system is of great influence in the effectiveness of the
performance appraisal system (Bettenhausen & Fedor, 1997; Carroll & Schneier, 1982).
When raters have low acceptance of the system they tend to appraise in such a way that will maximize their own profit (Fedor, Bettenhause & Davis, 1999). Furthermore, low acceptance can lead to rater errors, general or ambiguous feedback, inadequate documentation of the ratings, and lack of confidence in the usefulness of the performance appraisal system (Carrol
& Schneier, 1982; Roberts, 1994). These occurrences will result in a loss of effectiveness or even ineffectiveness of the performance appraisal system (Bernadin & Beatty, 1984; Roberts, 1994).
Specificity is the extent to which a performance measure gives detailed guidance to
employees about what is expected of them and how they can meet these expectations (Noe et al., 2008). This criterion is especially relevant to the strategic and developmental purpose of performance management appraisal. When a measure does not specify what is expected of an employee, he or she does not know what he or she has to do for the organization to achieve its strategic goals. This way the performance appraisal system cannot fulfill its strategic purpose (Noe et al., 2008). Furthermore, it is critical that a measure indicates performance problems of employees, otherwise, it is almost impossible for the employees to correct their performance (Noe et al., 2008).
Performance appraisal system approaches
Performance can be managed by focusing on employee attributes, behaviors or outcomes (Noe et al., 2008; Scott & Einstein, 2001; Scheneier, Richard & Lloyd, 1986).
Employees attributes or competencies are the skills, abilities, knowledge, and so on which employees have to possess in order to perform a job (Scheneier et al., 1986). Behavior is what employees have to do to perform a job. For instance, a sales person with good product
knowledge and interpersonal skills can talk about the advantages of various brands and can be friendly and helpful (Noe et al., 2008). The outcomes are the measurable, tangible outputs of the work (Noe et al., 2008). Furthermore, individual performance can be measured in a relative way by making overall comparisons among individuals, finally, a measurement system can be developed that combines the preceding measures. Noe et al. (2008) indicate five approaches to establish a performance appraisal system, the comparative, the attributive, the behavioral, the result and the quality approach. These approaches serve as means for achieving the former mentioned purposes. They will be discussed next and are evaluated on
9 the above elaborated criteria for effective performance appraisal. The different approaches with their purposes are listed in table 1.
Comparative Approach requires that the rater compares individual’s performance with that of other individuals (Gómez-Mejía et al., 2006). This approach is effective in differentiating between employee performance which eliminates problems of leniency, central tendency and strictness (Noe et al., 2008; Aguinis & Cascio, 2005). Leniency and strictness occur when a rater gives ratings that differ substantially from the scale midpoint. When the ratings are overly high (leniency) or overly low (strictness) these problems occur. Central tendency is assumed when ratings cluster near the scale midpoint (Murphy & Cleveland, 1991).
Comparative approach systems are valuable when the results are used for administrative decision making such as pay raises and promotions, furthermore, these systems are relatively easy to develop and easy to use (Noe et al., 2008). This approach is best suited for adopting a performance appraisal system which needs to attain the administrative purpose (Meyers, 1999).
There are, however, some problems with this technique. Firstly, this technique is not suited for the strategic purpose because the link between evaluation and the extent to which individuals’ performance support the strategy is rarely made explicit (Noe et al., 2008). A second problem is the subjectivity of the ratings, this makes the actual validity and reliability dependent on the rater. This problem can be reduced by using multiple raters, however, most organizations do not do this which makes the validity and reliability modest (Noe et al., 2008). The third problem with this approach is that it is not suited for the developmental purpose, because it lacks in giving specific feedback (Gómez-Mejía et al., 2006). Due to their relative rankings, individuals do not know what they must do to improve their ranking and performance. This causes managers to give complementary feedback beyond the system which makes the approach score low on specificity (Noe et al., 2008). A last problem with this approach concerns the acceptability of the system. Because employee performance evaluations depend on how employee’s performance relates to other employees rather than to an objective/absolute standard, managers and employees may perceive the system to be unfair, the system will not be fully accepted which results in low effectiveness (Roberts, 1992).
Attributive Approach focuses on the extent to which individuals have certain attributes believed desirable for the company’s success. When this approach is used, individuals are evaluated on personal attributes (Ilgen & Favero, 1985). The techniques are easy to develop and are generalizable across a variety of jobs, strategies, and organizations which makes this
10 the most used approach in organizations and suits the administrative purpose best (Noe et al., 2008). Furthermore, when attention is devoted to identifying relevant attributes for job performance, the reliability and validity can be moderately high (Noe et al., 2008).
There are some drawbacks to this approach, the strategic congruence of this approach is usually low, due to general goals which result in interpretation differences (Noe et al., 2008). This results in very general and vague performance standards that can be applied to multiple strategies which can make them ineffective for a specific strategy (Henderson, 1984), this makes the approach not suited for organizations that pursue the strategic purpose.
Furthermore, the varying interpretations by raters will result in low validity and reliability, this can occur when there are circumstances in which rated attributes do not take place (Enzle
& Schopflocher, 1978). These methods do not provide specific guidance on how an employee can improve which results in insufficient support for attaining the developmental purpose (Noe et al., 2008).
Behavioral Approach attempts to define the behaviors an employee must exhibit to be effective in the job. Various techniques define those behaviors and then require managers to assess the extent to which employees exhibit them (Noe et al., 2008). A technique that is often used is the critical incidents approach which requires managers to keep a record of specific examples of effective and ineffective performance on the part of each employee. Another well known technique is the behaviorally anchored rating scales (BARS) technique, it is designed to specifically define performance dimensions by developing behavioral anchors associated with different levels of performance (Smith & Kendall, 1963). These are two examples of the variety of techniques available for the behavioral approach. This approach can be very
effective, through the gathering of behavioral data effective behaviors can be identified which can support organizational goals (Kearney, 1976). This makes the approach score higher on strategic congruence than the afore mentioned, therefore, this approach can be used for the attainment of the strategic purpose. Most of the techniques used in this approach rely on in- depth job analysis, this results in valid measurements (Noe et al., 2008). To successfully implement this approach, a substantial investment has to be made in training raters which make the techniques reasonably reliable (Noe et al., 2008). Another advantage of this approach is that employees receive very specific feedback, they know exactly what is
expected of them which makes it appropriate for the developmental purpose (Kearney, 1976).
The administrative purpose can be attained by making decisions about pay raises and promotions based on displayed behavior.
11 A drawback to the behavioral approach is the time it takes to develop a system. Every job has to be specified in detail and effective and ineffective behavior has to be specified (Kearney, 1976). This makes the acceptability of the system moderate (Noe et al., 2008).
Furthermore, raters must have the opportunity to observe the ratees which can be very time consuming. Another drawback is that it assumes that there is one best way to do the job (Noe et al., 2008) which can result in standardized employees (Kearney, 1976). This makes the approach more suitable for less complex jobs, where there is one best way to achieve results.
However, in jobs where there are multiple ways to perform the job successfully, the behavioral approach is less suited (Noe et al., 2008).
Results Approach focuses on managing the objective, measurable results of a job or work group (Noe et al., 2008). This approach assumes that subjectivity can be eliminated from the measurement process and that results are the closest indicator of one’s contribution to organizational effectiveness (Patten, 1982). The most famous technique in this approach is Management By Objectives which sets goals for employees, based on results, which are in line with the organizational strategy (Locke & Latham, 1990). These goals are used as standards by which an individual’s performance is evaluated (Carroll & Tosi, 1973) which makes the approach suitable for the administrative purpose. The strategic congruence of this approach is high because its techniques are able to structure the long and short term goals (Wohlking, 1972). Furthermore, this approach scores high on specificity, through setting goals, employees know exactly what is expected of them (Huse, & Kay, 1964, Meyer, Kay &
French, 1965). Its objective and quantifiable indicators of performance make this approach also highly accepted by raters and ratees (Noe et al., 2008). High specificity and high strategic congruence indicate that this approach can be used to pursue the strategic and developmental purposes successful.
However, there are some disadvantages to the results approach. The techniques can be both deficient and contaminated (Noe et al., 2008). It can be contaminated by things that are not under the employee’s control. For instance, when a sales person has to make a certain amount of sales, but does not reach this goal due to an economical crisis. It is deficient when not all important aspects are included in the set objectives. Another disadvantage of the results approach is that individuals tend to become focused on aspects of their own performance and are not willing to help coworkers (Wright, George, Farnsworth & McMahan, 1993).
Quality Approach focuses more on performance of the system instead of individual
performance (Waldman & Kennet, 1990). Furthermore, its focus is on improving customer satisfaction, internally and externally (Noe et al., 2008). Such a system emphasizes on factors
12 which influence the appraisal system and employee (Bowen & Lawler III, 1992), it also emphasizes on solving performance problems between managers and subordinates together. It also advocates multiple sources of to evaluate person and system factors (Cardy, 1998). The focus of this evaluation should be on how employees can continually improve their
performance which makes this approach suitable for organizations that are pursuing the developmental purpose (Noe et al, 2008; Bowman, 1994; Jawahar & Selegna, 2003).
Subjective feedback about the personal qualities of the employee has to be given by peers, managers and customers. Employees should be evaluated on dimensions such as cooperation, attitude, initiative and communication skills. Objective feedback based on the work process itself should be given by using statistical quality control methods (Noe et al., 2008). The quality approach argues that employees should not be held accountable for outcomes effected by system factors, it is believed that this results in dysfunctional behavior. Furthermore, because employees do not have control over the quality of the system in which they work, employee performance evaluations should not be linked to compensation. Compensation rates should be based on prevailing market rates of pay, seniority, and business results which are distributed equitably among all employees (Noe et al., 2008). This makes a performance appraisal system itself not very suitable for the administrative purpose because it undermines the quality approach philosophy. Since the system is developed by both managers and employees, the acceptability is high (Noe et al., 2008). Through the extensive feedback and continuous improvement the strategic congruence of the quality approach is also high which makes the quality approach suitable for the strategic purpose. The validity and reliability of this approach can be high but is dependent on the measures used (Noe et al., 2008). When the system measures all and only the relevant measures it is valid. However, when the rater and ratee agree on measures which do not include all the relevant measures, the system can score low on validity. The quality approach combines two traditional approaches and merges them into one system, according to Noe et al. (2008) it combines mostly the attributes and the results approach, however, Jawahar and Selegna (2003) say it combines behavioral and results approach. Which means that it is probably possible to combine different approaches in the quality approach that suit the organization best.
13 TABLE 1
Approaches to performance appraisal and its purposes.
Choosing a performance appraisal system.
In this section, the factors which influence the choice of performance appraisal system are discussed. There are many paths that can be taken in de design and implementation of a performance appraisal system. However, independent of the organization, there are several factors that influence the content of the performance appraisal system (Armstrong, 2009;
Weatherly, 2004). If the performance appraisal system has to meet the strategic,
administrative, and developmental purpose, these factors have to be taken into consideration for the best match possible between the organization and the performance appraisal system.
These factors are cultural values, strategy, job description (Noe et al., 2008; Weatherly, 2004).
These factors will be elaborated now.
Cultural Values. Denison (1996) found that organizational culture can reinforce the link between an HR system and firm performance. Performance appraisal works best when it fits the organizational values of the organization (Armstrong, 2009, Weatherly 2004, Ghorpade &
Chen, 1995). An often used perspective on culture is Schein’s (1992) perspective. He defines organizational culture as ‘a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration, which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems’. According to him the best way to analyze the organizational culture is to divide it into four different levels, these levels are:
artefacts, norms, values, and basic assumptions. Artefacts are the visible symbols of the deeper levels of culture, an example of an artefact is the observable behavior of its members (Schein, 1992). A slightly deeper level include the norms which are guiding how members should behave in a particular situation. In most cases, these are explicit and laid down, like a smoking ban (Hagedoorn & Bloemers, 1997). The third level is represented by values, these prescribe what ought to be in organizations. They tell members what is important and they are supported by the artefacts and norms (Schein, 1992). The deepest level of organizational
Approach Administrative purpose
Developmental purpose
Strategic purpose
Comparative - -
Attributive - -
Behavior Results
Quality -
14 culture consist of basic assumptions. Basic assumptions consist of taken-for-granted
assumptions, they tell members how to perceive, feel, and think about things (Schein, 1992).
These different levels of culture make clear that organizational culture is a complex and broad concept, it comprises a comprehensive, interrelated and ambiguous set of factors (Cameron &
Quinn, 2006). Focussing on the most important factors of culture makes it easier to manage (Kamann, 1996). The organizational values are seen as the heart of the culture (Boxx, Odom
& Dunn, 1991; Hagedoorn & Bloemers, 1997; Kamann, 1996; Posner, Kouzes & Schmidt, 1985; Deal & Kennedy, 1982). Organizational values are acquired and experienced as the only correct way of thinking feeling and acting (Neuijen, 1992; Soeters, 1990). Therefore, the performance appraisal system should fit the organizational values (Noe et. al, 2008;
Armstrong, 2009).
Strategy. The performance appraisal system has to be aligned with the critical performance measurements which represent the organizations strategy and vision (Weatherly, 2004). In order to be able to adapt the right performance appraisal system, the critical performance measurements should be identified and used in the performance appraisal system (Noe et al., 2008). Wei (2006) found that it is critical for an organization that it develops an effective HR system to align this system with the organizational strategy, this helps in creating a
competitive advantage (Noe et al., 2008). Lawler et al. (1984) suggest that the performance appraisal system should be linked to the human resource strategy. Torrington, Hall, Taylor &
Atkinson (2011) also say that performance systems have to be linked to the objectives of the organization, so that the resulting performance is more likely to meet the organizational needs. This believe is confirmed by Murphy & Cleveland (1995) who found that performance management systems are most effective when they support organizational goals. Performance appraisal links the activities of individuals to organizational effectiveness (Scott & Einstein, 2001; Grote, 2002), this can be accomplished by setting personal goals in performance appraisal which contribute to organizational goals. By providing employees with insight of how they are contributing to the organizations goals, a cynical stand towards the
organization’s strategy can be prevented (Tosi, Rizzo & Carrol, 1970; Levinson, 2003).
Job description. Employees need to see the direct relationship between their job descriptions and the goals and objectives which are targeted in the performance appraisal system
(Weatherly, 2004). This should be done by linking the performance appraisal system clearly to the job descriptions, by doing this, the employees will be able to see the link between their job requirements, job descriptions and the goals and objectives included in the performance appraisal system (Noe et al., 2008). According to Nelson & Macleod (1994) a job description
15 outlines tasks, duties, and responsibilities of a particular job. When performance appraisal matches the job descriptions the effectiveness of the performance appraisal system will be enhanced (Lee, 1985). Nelson and Macleod (1994) also say that performance appraisal has to be based on job descriptions which increases the accuracy of the performance appraisal.
More specifically, the focus of performance appraisal format should be based on job descriptions. For example, if the goal of the job is to develop alternative ways to get an
outcome, the appraisal system should not be focused on specific behaviours. Instead, it should be focused on task outcomes and should generate creativity with regard to ways of achieving these outcomes (Cummings, 1984). According to Gómez-Méjia, Balkin, and Cardy (2001) the first step in developing a performance appraisal system is developing performance dimensions which are aspects of performance that determines effective job performance. These
dimensions are based on job descriptions. In other words, the effectiveness of the performance appraisal system is dependent on the link between the performance appraisal system and job descriptions.
METHOD Procedure
In order to answer the research question, data was collected at CNV Vakcentrale which is a non- profit, union organization and consists of 220 workers. In this case study, triangulation of sources was used, because it created depth and increased the scope of the study, furthermore, it enhanced the validity of the research (Denzin & Lincoln, 2000). By using this method, data about the cultural values, strategy and job descriptions of CNV Vakcentale was collected, in order to be able to choose the best fitting performance appraisal system. Triangulation of sources is ideal in fieldwork through a combination of interviews, observation and organizational documents (Patton, 1999). Therefore, these methods have been used in this case study.
Interviews give a rich amount of data and the opportunity to capture perceptions and opinions of respondents (Barnball & While, 1994). This was relevant for this study since the cultural values and opinions about the uses and fit of performance appraisal systems at CNV Vakcentrale had to be explored in order to be able to make the best fit between a performance appraisal system and CNV Vakcentrale. The interviews contained open ended questions and consisted of three different parts. In the first part, the participants were asked to answer questions about the cultural values which was followed by a part with questions about the strategy of CNV Vakcentrale. The final part of the interview consisted of questions about the
16 possible fit between a performance appraisal system and the job descriptions at CNV
Vakcentrale. These different parts are further elaborated below in the measures. The interviews took about an hour and half and were recorded for the data analysis. In the introduction, the interviewees were informed about the purpose and procedure of the interview. The questions were asked in a open not misleading way in order to have the participants give honest answers (DiCicco-Bloom & Craptree, 2006).
The second method used in triangulation of data sources was direct observation (Yin, 2003). The strength of direct observation lies with its capability to add a new dimension to a phenomenon or context under study (Yin, 2003) and is useful to fully understand the
complexity of what people say in interviews (Patton, 2002). Here, direct observation was used to form an accurate view of the cultural values of CNV Vakcentrale, through feeling and experiencing them (Kamann, 1996). According to Yin (2003), direct observations can range from formal to informal, for this study a less formal way of direct observation was used. This qualitative approach (Tashakkori & Teddlie, 2003) of direct observation was used to describe the experienced cultural values. This was done by taking extensive notes of attended business meetings and business lunches (Schein, 1990). According to Sriramesh et al. (1996)
qualitative observation is useful when little data of the organizational culture exist. Therefore, regular working activities, coffee breaks and informal activities were also observed in order to receive more relevant data. During these activities, attention was paid to the extent to which the cultural values which emerged from the interviews were translated towards regular activities. Reactivity can be a problem in direct observation (Yin, 2003), the displayed behavior of the participants can be altered through the presence of an observer. This study tried to reduce the reactivity by observing multiple times over a period of 6 months, this way the participants had time to adapt and become familiar to the observer process (Sulzer- Azaroff & Mayer, 1977). Furthermore, the observer tried to reduce reactivity by explaining the purpose of the study to the participants, but the specific cultural values were not pointed out. This was done to prevent emphasis on preferred possible cultural values by participants.
The third source of data consisted out of organizational documents which were HR- organizer, A3-annual plan, risk inventory & evaluation plan, and Passion, Focus and
Performance. HR-organizer is a system in which every task at CNV Vakcentrale is specified and documented. Passion, Focus and Performance is a document that contains information about the organizational strategy and vision for the upcoming years. The A3-annual plans are strategic maps for every department at CNV Vakcentrale. In the risk inventory & evaluation plan are the working conditions at CNV Vakcentrale defined.
17 These organizational documents served as an extra dimension of data, to interpret the
interviews and observations. In HR-organizer the job descriptions are extensively written down. How these documents were used is described below in the measures section.
Participants
A member of the board and the managers of departments (7) were interviewed for this study. The member of the board was selected for his extensive knowledge about the
organizations strategy and the organizational values which CNV Vakcentrale wants to exhibit and how the performance appraisal system could fit in. The managers of the departments were interviewed for information about the execution of the strategy at the departmental level, how the organizational values are perceived and executed, and what kind of performance appraisal system could fit their department.
Measures
Cultural Values. Data about cultural values were collected through the use of interviews, organizational documents, and observation. This multi method approach for gathering data about cultural values is recommended by Hofstede (1998) and Thöne (1990).
By doing this, a complete and correct picture is created about the cultural values of an organization (Hofstede, 1998; Thöne, 1990). As mentioned in the theory section, cultural values have to match a performance appraisal system in order to be effective, therefore, data about the cultural values were gathered at CNV Vakcentrale. This data was obtained by interviewing a member of the board and the department managers. They represent the heroes at CNV Vakcentrale. Heroes personify the organizational values of an organization, they are great motivators and the persons in the organization where everyone will count on when things get though (Deal & Kennedy, 1982). These participants were chosen because they lead the organization and generate and execute the organizational culture of CNV Vakcentrale (Van Reenen & Waisfizs, 1995), therefore their view on what performance appraisal system would fit into the culture is important. The open interview questions were about the current culture of the organization, the aspects of the culture they wanted to change, and about what performance appraisal system would best fit, see the appendix for the interview schedule. An example of a question is: ‘What values do CNV Vakcentrale employees have to posess?’. The questions about the cultural values are based on Schein (1992) and the question about the fit with a performance appraisal system are based on Noe et al. (2008) and Armstrong (2009).
The risk inventory & evaluation plan was used for supplementing data about the
18 organization’s culture and provided an extra dimension which increased the validity of the study. As a third source, observation was used to identify the cultural values of CNV
Vakcentrale which was done to fully understand the interviews and organizational documents.
This enhanced the validity of the research Several activities were observed as mentioned above, during these observations attention was paid to the expression of the cultural values that were pointed out in the interviews. Furthermore, attention was paid to additional cultural values which did not became apparent during the interviews. This approach was used since there it is almost impossible to determine all the relevant cultural values on forehand (Schein, 1990)
Strategy. The other part of the interviews consisted out of open questions about CNV Vakcentrale’s strategy and how and what performance appraisal system could best fit the strategy, see the appendix for the interview schedule. For example: ‘What are the
requirements of a performance appraisal system to be effective at CNV Vakcentrale?’.
Questions about the strategic fit were asked because a strategic fit is essential for the
effectiveness of a performance appraisal system (Wei, 2006). The interview questions about the strategy were based on Torrington et al. (2011), questions about the fit with a performance appraisal system were based on Wheatherly (2004), Murphy and Cleveland (1995), and Wei (2006). The departmental managers and the member of the board were interviewed about this subject, they were chosen because they are responsible for developing the strategy and have the power to influence events, such as choosing a performance appraisal system (Child &
Smith, 1987). For this measure, the organizational documents Passion, focus, and
performance and the A3-annual plans have been used as additional source to enhance the validity and the depth of the study. Passion, focus, and performance contains a strategic plan for CNV Vakcentrale as a whole and what the aims of the organization are in the upcoming years. This was done to add a new dimension to the research. The A3-annual plans are written documents that represent the specific goals of each department, they were used as a guideline for the strategic part of the interviews with the department managers which increased the relevancy of the interviews.
Job description. To obtain the information for the job description at CNV
Vakcentrale, organizational documents and interviews have been used. The last part of the interview concerned the job descriptions, since the accuracy and effectiveness of the
performance appraisal system is dependent on its match with the job descriptions (Nelson &
Macleod, 1994). The department managers were selected for this subject since they have extensive knowledge of the job descriptions at their departments (Noe et al., 2008). The
19 managers were asked what kind of system would best fit the job descriptions at their
department, for example: ‘What are the core activities at your department, and how could a performance appraisal system fit in?’. These questions were based on Nelson and Macleod (1994) and Lee (1985). To increase the validity of the research, HR-organizer was also used as a source of collecting data. HR-organizer contains information about all the jobs at CNV Vakcentrale, the responsibilities, duties and tasks are written down in this system. This makes HR-organizer very useful for analyzing the jobs at CNV Vakcentrale.
Data analysis
The data was analyzed by using the constant comparison analysis method which was created by Glaser and Strauss (1967) and is the most often used method for analyzing
qualitative data (Leech & Onwuegbuzie, 2007). This method is useful in analyzing interview, observational, and documental data in a case study and is appropriate for interpreting different perceptions of data (Leech & Onwuegbuzie, 2007). Therefore, the constant comparison method was used in this study. The triangulation of sources was used to validate the perceptions of the interviews (Patton, 1999). The constant comparison analysis begun with reading the entire set of data which consisted of the interviews, the organizational documents and observations, secondly the data was cut into smaller, more meaningful parts. Then the parts were labeled with a descriptive codes, every new part of data was compared with the previous codes. This way similar parts were labeled with the same codes. When the coding was completed, the similar codes were grouped together and a theme was identified and based on each grouping. Afterwards, the themes were analyzed for finding the best fit between a performance appraisal system and the organization under study. When writing the results, it was necessary to divide them in broad themes (Glaser, 1965) which consisted of cultural values, strategy, and job description.
RESULTS
After the method section the results will be elaborated beneath. In order to choose the best fitting performance appraisal system for CNV Vakcentrale, the cultural values, strategy and job descriptions of CNV Vakcentrale were measured. These three themes are linked to the three purposes of performance appraisal systems which are the administrative, strategic, and developmental purpose.
Cultural values. In this section the results about the cultural values of CNV Vakcentrale are elaborated. When a performance appraisal system is adapted, it has to match the culture of the
20 organization to function optimally. First the results about the cultural values of CNV
vakcentrale will be described which is followed by the fit between a performance appraisal system and the cultural values of CNV Vakcentrale.
All managers indicate that a cultural change is necessary and they are all in the process of establishing that. Originally, CNV Vakcentrale had an open culture where mistakes were not pointed out and people did not communicate about their work, as the manager of the Shared Service Centre (SSC) HR pointed out: ‘From an historic view, people used to become automatically member of CNV Vakcentrale, therefore our organization was very rich. The employees who worked here did not have to care about money and did not have to be result oriented. However, this has changed, employees have to become more result oriented and customer focused in order to retain and attract members.’ Another cultural aspect that the managers want to change is the customer focused view of the employees, they are used to doing their work according to their own schedule. This has to change towards a large customer focus, as the manager of Info puts it: ‘the culture at CNV Vakcentrale is that we already exist for a 100 years and we will exist for another 100 years. The behavior that results from this kind of mindset is that the workers are internal focused and think that the customers will wait on them. However, this has changed and we need every customer badly in order to survive, therefore we need to treat the customers differently.’ Furthermore, 6 of the 8 interviews say that employees are intrinsically motivated and are not used to competition.
This became apparent during direct observation of a business meeting when there was
discussion about the introduction of performance management, when employees showed their doubts about the success of pay for performance. Another cultural aspect of CNV Vakcentrale is that people are used to have elaborate consultation and discussion before decisions are implemented. An example of this are the multiple times that a plan for employee development had to be revised after consultation of the works council (direct observation).
These cultural aspects have to be altered and combined to the desired cultural values which are shown in table 2. These wanted cultural values are divided per department and established by the managers.
21 Table 2
Cultural Values per Department Department: Most important values:
Management Social responsibility Transparency Flexible Critical SSC Finances Social responsibility Supportive Transparency Honesty SSC HR Customer focused Proactive Result oriented Security SSC Facility Social responsibility Flexibility Result oriented Transparency
SSC ICT Proactive Coherent Transparency Critical
Member service Transparency Trust Flexibility Critical
Legal Aid Economic responsibility Transparency Security Customer focused Info Transparency Flexibility Organized chaos Customer focused
The organization emphasizes on transparency, this is important for the employees because by showing what you are doing employees will be likely to accept decisions from coworkers and managers (Member of the board, Manager SSC Finances, Manager SSC Facility, Manager Member service, Manager Legal Aid, Manager Info, Manager SSC ICT). To enforce this, the employees of SSC ICT have the ability to log in at the computer of their manager to check certain contacts (direct observation). Furthermore, the employees of CNV Vakcentrale ought to behave in a social responsible way, this value is a consequence of the political and social background of CNV Vakcentrale (Member of the board, Manager SSC Finances, Manager SSC Facility). This means that the employees are considerate and tolerant towards each other and the customers. ‘Since the environment of CNV Vakcentrale is changing we have to be flexible in order to be able to adjust to the wishes of the customer’ (Member of the board).
Next to being flexible, a critical working attitude is also important for multiple departments, by being critical, employees are able to learn from each other (Manager SSC ICT). Another endorsed cultural value is acting proactive to find new ways to satisfy the customers better (Manager SSC HR). Another important value is that CNV Vakcentrale workers have to become more result oriented in order attain goals and become more efficient (Manager SSC Facility). The manager of SSC ICT pointed out that her department has to become one and be coherent to the outside world so customers know what they can expect. According to the manager of Legal Aid, economical responsibility is a cultural value that has to be reinforced, the employees are not used to be considerate of the costs made. Direct observations confirmed this when an employee at this department wanted to start an expensive lawsuit instead of
22 paying a small fine which gave the same result for the customer. This cultural aspect has to be changed in order to become more efficient (Manager Legal Aid). The manager of Member service indicates that trust is an important value for employees to feel free to accomplish their tasks. According to the manager of the Info department, organized chaos is necessary for the department to perform at their best which means that his department functions best when there is a lot of rumor and busy people who are constantly walking and talking at the workplace. This is in contrast with the other departments where employees work in a calm ambiance (direct observation).
When the data was analyzed, it became apparent that the cultural values at CNV Vakcentrale indicate that the performance appraisal system should support the developmental purpose (interviews, direct observation). All employees at the Info department had positive attitudes, after a meeting where recorded phone calls were analyzed in order to improve the communication skills of the employees (direct observation). Furthermore, all interviewees said that they wanted a performance appraisal system that supports the developmental
purpose. However, the managers of Info and SSC Finances also indicated that they would like to use the performance appraisal system for the administrative purpose to give their
employees an extrinsic reason to attain goals. The strategic purpose was linked to the cultural values of CNV Vakcentrale by stimulating flexible employees which makes the organization more likely to adjust to its environment (Member of the board). Table 3 represents the purposes of a performance appraisal system per department linked to the cultural values.
Table 3
Purpose of PAS per department linked to cultural values
Purpose Strategic Developmental Administrative
Management x x
SSC Finances x x
SSC HR x x
SSC Facility x
SSC ICT x
Member service x x
Legal Aid x x
Info x x x
Strategy. As was mentioned before, for a performance appraisal system to be effective, it has to be aligned with the organizational strategy. The vision of CNV Vakcentrale for the
23 upcoming two years is: ‘Be a financially healthy organization, with reliable suppliers who offers a qualitative good service to their customers. To become the first choice as a service center for the connected unions. CNV Vakcentrale works with committed, and competent employees in a creative, open, and collaborating atmosphere’ (Focus, Passion, and Performance). On the organizational level, CNV Vakcentrale wants to accomplish this to make sure that they have employees who are qualified, experienced, take initiative, and are constantly trying to improve their work, through training and education (Focus, Passion, and Performance). These employees have to deliver a high quality product against low prices (Passion, Focus, and Performance, member of the board). Customer satisfaction is very important which is attained by setting clear guidelines with them and be a flexible organization that can adjust easily (A3 annual plan). Furthermore, customer satisfaction should be enhanced by outstanding communication skills (Focus, Passion, and Performance).
The low prices are realized by emphasizing effectiveness and efficiency (Focus, Passion, and Performance), this should be attained by a more simple and cheaper organizational structure and by working harder and smarter (Member of the board). Table 4 shows the strategic goals of CNV Vakcentrale at the organizational level.
Table 4
Strategy of CNV Vakcentrale Strategic Goals of CNV Vakcentrale
customer focused organization committed and qualified employees
focus on development and sharing of knowledge and talent financial healthy and preserve continuity
transparent open to feedback unite forces trust each other
This corporate strategy was implemented in November 2011 and has been translated to every department (A3 annual plans), according to the interviewed managers of the
departments, customer satisfaction and competent employees are highlighted in their department strategy. For instance, ´at the end of 2012, 90 % of the employees at Legal Aid have to be considered competent and 75% of the customers are satisfied’ (A3 annual plan of the department Legal Aid). Another strategic focus is uniting the departments and focus on efficiency (Member of the board, Focus, Passion, and Performance). Five of the seven departments are implementing new systems to increase efficiency (Manager SSC HR,
24 Manager Legal Aid, Manager SSC Facility, Manager SSC Finance, Manager Member
service). All interviewees wanted to set clear guidelines with their employees to successfully implement the new strategy. A performance appraisal system that aligns the strategy with individual goals fits with CNV Vakcentrale (Focus, Passion, and Performance).
Job description. For effectiveness and accuracy reasons a performance appraisal system has to be based on the job descriptions at CNV Vakcentrale. The core jobs performed at the departments at CNV Vakcentrale are summarized in table 5. At the SSC Finance department, the jobs are measurable (HR organizer). The department has to register and control financial data of customers, in order to give correct, time bound, and complete information to those customers (Manager SSC Finance). Within those tasks, the employees need to be customer focused, time bound, accurate and need to work together (HR organizer). ‘Employees should be appraised on personal skills and displayed behavior’ (Manager SSC Finances).
Table 5
Core jobs at CNV Vakcentrale departments Job descriptions
SSC Finances Give time bound, complete, and recent information to unions, so they have controlling information. This is all administrative information.
SSC HR Front office: give HR advice on a reactive and proactive basis
Back office: salary administration which needs to be accurate and time bound SSC Facility Responsible for buildings and hardware, facilitating and supporting software,
and responsible for project control and systems SSC ICT Responsible for anything that has to do with ICT
Member service Organize training, tax service, and education for the members of the unions Legal Aid Insurance company which gives legal aid to insured people
Info Call centre, 1st line: helpdesk, 2nd line: legal advice, 3th line: member recruitment
The SSC HR department consists of two parts, a back office and a front office, the performed jobs in the back office are concerned with salary administration (Manager SSC HR). This administration has to be accurate, and on time, the employees are best appraised on behavior and results (HR organizer). The displayed behavior should lead to optimal customer
satisfaction (Manager SSC HR). Customer satisfaction is also the main parameter for the front office, the main task is giving customers advice on all areas that have to do with HR
(Manager SSC HR). Since this is also a Shared Service Centre (SSC), normally the customers will ask for advice. However, to enhance the customer satisfaction the front office also has to be proactive and foresee problems in the future and respond to them in advance. ‘One of our aims with the front office is that we want to act on a more strategic level, therefore we need to
25 be convincing and act proactive. The front office can best be appraised on behavior and results, the results are the hard side but are attained through the soft side which is the displayed behavior’ (Manager SSC HR). The SSC Facility department has just been
restructured and are now working with more generalist workers who have to perform multiple tasks (Manager SSC Facility). The department is responsible for the buildings, hardware, software, and project and system control (Manager SSC Facility). They have to deliver high quality service to enhance customer satisfaction which has to be done in a time bound and financial responsible way (HR organizer). The employees at this department can best be appraised on competences and behavior, since they consider results as a nasty term (Manager SSC Facility). The core tasks performed at SSC ICT all involve anything that has to do with ICT to make the customer satisfied (Manager SSC ICT). They are about to change the design of the department, at this moment they have three different sections (HR organizer), this will change into two sections; a front and a back office (Manager SSC ICT). By doing this the department is better able to act as one to the outside world (Manager SSC ICT). This
department makes use of job rotation in order to become more efficient and more productive (Manager SSC ICT). ‘Employees are responsible for their own work and are allowed to make mistakes, they are appraised on a combination of behavior and results because they are linked to each other’ (Manager SSC ICT). The jobs performed at the Member service department differ from the rest because they work with volunteers (Manager Member service). These volunteers give training, tax service, and education to members of CNV Unions, these volunteers are coordinated by Memberservice. ‘Our coordinators have to control the volunteers and keep them enthusiastic in order to keep the quality of the training programs as high as possible. Furthermore, they have to have good contacts with the unions because our success is dependent on their actions.’ (Manager Member service). Important criteria for Member service employees are customer focus, working together, financial
responsible, and goal attainment (HR organizer). According to the manager of Memberservice the employees can best be appraised on competences and behavior. ‘In an insurance company the employees need to give legal aid to insured, and the jobs at the Legal aid department are not different. The core job here is that when an insured person has a problem, the legal department has to solve that problem’ (Manager Legal Aid). These problems have to be solved in a way that the customer is satisfied, they try to attain this by giving high quality service in a financial responsible way. ‘Every individual case is different, that requires
knowledge, but also skills and the correct displayed behavior in order to give the customer its rightful legal outcome. Therefore, my employees can best be appraised on a combination of
26 competences and behavior’ (Manager Legal Aid). Employees who work here have to be time bound, financial responsible, customer focused, critical, team oriented, innovative (HR organizer). At the Info department call center jobs are performed and consist of three teams (HR organizer). They have a helpdesk team which is concerned with incoming calls of members (HR organizer). The second team is concerned with incoming calls from members who have legal problems about their work situation and the third team consist of member recruiters who perform outgoing calls (HR organizer). In these jobs, clarity and customer satisfaction is important (HR organizer). This can best be appraised on results and behavior, because the jobs are measurable and controllable (Manager Info). All the managers want to link the tasks and responsibilities at their departments to the developmental purpose. The managers of the HR department and the Member service department claim that it should also attain the strategic goal, so these job descriptions should also be linked to the organizational objectives (Manager SSC HR & Manager Member service). The managers of the Finance and Info department also want to use the system for the administrative purpose because the tasks performed at their departments are measurable and can easily be linked to rewards, as is shown in table 6.
Table 6
Purpose of PAS per department linked to job descriptions Purpose Strategic Developmental Administrative
SSC Finances x x
SSC HR x x
SSC Facility x
SSC ICT x
Member service
x x
Legal Aid x
Info x x
27 DISCUSSION
The aim of this study was to investigate what the best kind of performance appraisal system would fit CNV Vakcentrale. Based on previous studies, this was done by focusing on the three goals (strategic, developmental, and administrative) a performance appraisal system can attain. These goals were linked to five performance appraisal system approaches
(comparative, attributive, behavioral, results, and quality). Cultural values, strategy, and job descriptions appeared to be the most important variables in choosing the best fitting
performance appraisal system. In this section the findings will be discussed and a conclusion will be drawn. Furthermore, strengths & limitations and practical implications will be
discussed. This study ends with suggestions for future research.
Discussion & Conclusion
According to the findings, the cultural values fit best with the strategic and developmental goal. However, the findings were not unambiguous about the fit between cultural values and the administrative purpose. When the findings are linked to the
performance appraisal system approaches, it has a possible match with three approaches: the behavioral, the results, and the quality approach. The behavior approach could be suited because the specific behaviors could reduce the discussion and consultation time about measures in the performance appraisal system which could speed up decision time. However, the moderate acceptability of the system could also give the employees more reason to discuss the outcomes of the system which could slow the process down. Furthermore, developing the different behaviors is very time consuming (Noe et al., 2008) which will even take more time in a discussion and consultation culture. Another possible match is the results approach, it also supports the desired performance appraisal goals of the organization under study.
However, this approach has the tendency to create a hostile punishment-reward environment in the organization which creates competition between employees and groups (Levinson, 2003). The results indicate that a culture has to be created in which departments work together and act as one, therefore the results approach is not the best fit with the cultural values. The third possibility is the quality approach, this approach focusses on solving performance problems together between employer and employees (Bowen & Lawler III, 1992) which matches the discussion and consultation culture of CNV Vakcentrale. The findings indicate that there is some ambiguity whether the cultural values can support the administrative purpose. Two interviewees indicated that they wanted to implement a performance appraisal
28 system which pursues the administrative goal. This means that the quality approach is not very well suited. On the other hand, the observational data indicated that workers at CNV Vakcentrale are intrinsic motivated. This is not in line with the administrative purpose because it gives workers an external inducement to work harder and is therefore not very useful for intrinsic motivated employees (Seong & Lewis, 2009).
The results about the strategy indicated a link with the quality approach, the strategy focuses on customer satisfaction and on development and sharing of knowledge. The findings about the strategy also indicate that the organization under study wants to work with
competent workers which is attained by training and education which links the strategy to the developmental purpose. Furthermore, transparency and feedback are important in the new strategy. The quality approach also focuses on these aspects, its objective is to satisfy internal and external customers and create an environment of continuous improvement (Bowman, 1994). In the quality approach, information of all actors is involved which makes the system transparent and uses elaborate feedback (Noe et al, 2008).
The findings suggest that the job descriptions at the departments have more or less the same goals which are derived from the organizational strategy, however the nature of the tasks in the departments differ. Some tasks are relatively easy to measure and there are tasks which need more proactive acting in order to anticipate on the customers, another aspect which makes the jobs more divergent is that not every department works for the same customers. The findings show that there is a need to fulfill all the three purposes of
performance appraisal systems but the developmental goal is the most prevalent. This means that the behavioral or the results approach could be suited. The behavioral approach would fit the departments where the jobs are specified and measurable, this would save time in
developing the system (Kearney, 1976). Another advantage of this approach at these departments is that it provides specific feedback on the task (Kearney, 1976). However, the behavioral approach does not fit well with the departments where proactive performances are required, since it assumes that there is one best way to perform a job (Noe et al., 2008). At these departments the results approach would be more suitable, as it allows for multiple ways to attain objectives (Cummings, 1984). Another possibility could be the quality approach, data analysis showed that managers want to appraise their employees on a combination of
performance appraisal system approaches. A feature of the quality approach is that it has the ability to combine approaches (Jawahar & Selegna, 2003; Noe et al., 2008), however, as was pointed out earlier, this approach has problems in fulfilling the administrative purpose.
