The History Of Performance Evaluation Systems Business Essay

Abstract

This Study probes the impact of HR managerial practices and its impact on employee’s performance of health department of Punjab, Pakistan. The impact of Pay and benefits, Performance evaluation system & carrier development on Employees performance has been explained in context with the doctors working in health department of Punjab.200 questionnaires were distributed to collect the required data. Results show significant relationship between HR managerial practices and employees performance.

Key Words: HR Managerial Practices, Employee’s Performance,

Introduction

HR managerial practices in any organization are the most important asset for any organization and are source of achieving competitive advantage. HR managerial practices are concerned with a variety of activities that influence almost all areas of an organization. Due to globalize competitions, the Organizations have learned the importance of good relations with their workforce. The organization which does not realizes the importance of its human resource cannot progress. The employee also likes an organization which cares for them and rewards their services accordingly. Success of an organization largely depends on how effectively employees perform their jobs (Heneman 111 and Schwab, 1982).

Human resource managerial practices are most effective when matched with goals of an organization. The success of an organization depends mostly on the existence of a favorable HR managerial practices and an effective performance evaluation system combined with various other factors such as openness, team spirit, trust, autonomy, cooperation, integrity, recognition, participation, fair compensation, counseling, problem solving, valuing the assets, and respect for the individual, significantly enhance employees performance and increase organizational productivity. According to Maheswara Reddy& Suresh Chandra "The HRM practices are crucial in designing the structure for man power, staffing, performance appraisal, compensation, and training and development. HRM practices are a primary means for defining, communicating and rewarding desired role behaviors and desired role behaviors are a function of organizational characteristics".

No doubt that it is the human’s intellectual brain, human energy, individual’s foresight and human inventiveness, to hire, select and induct such brains that are compatible with the job description and job specifications that increase the performance of employees resulting in overall performance of an organization. So innovative HRM practices i.e. pay and benefit, performance evaluation system, career development can play an important role in changing the overall attitude of an organization and increased performance of its employees as well. The HRM practices in service sector especially in health department of Punjab have found significant importance in the present scenario. Punjab Health department is one of those service sectors where the need of qualitative human resources is highly expected.

Due to political instability and economics crises in country for last couple of decades, it appears that Health Department of Punjab has not received much attention in the area of effective HR managerial practices. So this paper highlights that proper implementation of HR practices not only uplift the standard of Punjab Health Department but also essential for the better performance of department, which definitely will improve the economy of country.

Research Objectives

The objective of this study is to determine the relationship of HR managerial practices, performance evaluation system and employee’s performance of Punjab Health Department.

Review of Literature

HR managerial practices

HRM is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training (Heathfield, 2006). These HRM practices include human resource planning, recruitment and selection, induction, training, performance appraisal, employee development, compensation plan, etc. According to Noe, Hollenbeck, Gerhart and Wright (2006), human resource management refers to the policies, practices and systems that influence employees’ behavior, attitudes, and performance. According to Wikipedia, a web based encyclopedia, HRM serves five key functions: 1) Hiring, 2) Compensation, 3) Evaluation and Management (of Performance), 4) Promotions, and 5) Managing Relations. According to Tewari (2012), "HRM practices refer to organizational activities directed at managing the pool of human resources and ensuring that the resources are employed towards the fulfillment of organizational goals. Managing human resources is very challenging as compared to managing technology or capital and for its effective management, organization requires effective HRM system". Human resources are the source of achieving competitive advantage because of its capability to convert the other resources (money, machine, methods and material) in to output (product/service). The competitor can acquire other resources like technology and capital but the human resource are unique. According to Khatri (1999), people are one of the most important factors providing flexibility and adaptability to organizations. Rundle (1997) argues that one needs to bear in mind that people (managers), not the firm, are the adaptive mechanism in determining how the firm will respond to the competitive environment. Several scholars have noted that managing people is more difficult than managing technology or capital (Barney, 1991; Lado and Wilson, 1994). However those firms that have learnt how to manage their human resources well would have an edge over others for a long time to come because acquiring and deploying human resources effectively is cumbersome and takes much longer (Wright et al., 1994). The ultimate aim of HRM is to ensure that at all times the business is correctly staffed by the right number of people with the skills relevant to the business needs (Islam, 2006). Thus HRM is meant to unlock the talent, experience, wisdom and common sense of many within the organization by making work simpler, quicker, rewarding, safer and fun.

Performance Evaluation Systems:

Employee performance evaluation is designed to assess each individual’s contribution to the organization. The performance of individuals against organizational goals determines whether the organization meets its goals. Thus PES (performance evaluation system) identifies measures and develops job performance of employees in an organization. Employee Performance Evaluation System is concerned with how far and how well employees perform their jobs. There are two basic objectives of performance evaluation system: firstly to reward employees for meeting organizational objectives and secondly to identify which objectives are not Achieved and to develop action plans to ensure they are achieved in future.

Performance appraisal is defined as "the process of identifying, evaluating and developing the work performance of the employee in the organization, so that organizational goals and objectives are effectively achieved while, at the same time, benefiting employees in terms of recognition, receiving feedback, and offering career guidance" (Lansbury, 1988).

In view of Judge and Ferris (1993), perhaps there is no more important human resources system in organizations other than performance evaluation and ratings of employees’ performance represent critical decisions that are key influences on a variety of subsequent human resources actions and outcomes. Effective EPE drives employees in a firm to produce excellent standards of performance and even beyond the excellent (exceptional) standards of performance.

Employees Performance

Employee Performance basically depend on many factors like performance appraisals, employee motivation, Pay & Benefits, Career development, Employee satisfaction, compensation, Training and development, job security, Organizational structure and other, but my area of study is focused only on three basic factors: Pay & Benefits, Performance appraisal system and career development. All these three factors highly influence the performance of employees. In the organizational context, performance is usually defined as the extent to which an organizational member contributes to achieving the goals of the organization.

Employee participation

In any case, if the employees perceive the appraisal system as biased, unfair and lacks rigor, then it is unlikely that they will accept the outcomes of the system. Participation gives an opportunity to the employees to raise their voice into the appraisal process. Performance standards, criteria for evaluation and the evaluation form itself – all can be developed with the help of employees.

Employee Motivation

According to Kreitner (1995) that the psychological process that gives behavior purpose and direction. According to Buford, Bedeian, & Lindner, (1995) that a predisposition to behave in a purposive manner to achieve specific, unmet needs. According to Bedeian, (1993) that an internal drives to satisfy an unsatisfied need and the will to achieve.

Problem Statement

Is there any relationship exists between HR managerial practices, Performance Evaluation System and the employee’s performance in personnel of Punjab Health Department?

Research Questions

The associated research Questions are:

1. How much variance in employee’s performance can be explained by implementation of HR management practices and PES?

2. Which one is the best predictor of employee’s performance: HRM practices or PES?

Hypothesis

H1: There is a positive and significant relationship between variance of employee’s performance and HRMP & PES.

H2: There is positive and significant relationship between each of independent variable toward the variance of employee’s performance,

H 3: HR managerial practices have more impact on organizational performance.

H4: PES has more impact of organizational performance.

Theoretical Framework:

Pay & Benefits

Employee’s performance

Performance Evaluation System

Carrier Development

Methodology:

Sampling Procedure

As current research focused on 3 important HR practices i.e. pay & benefits, Performance evaluation system, Career development and their impact on employee performance of health department of Punjab, Pakistan. Data used in this study came from all public sector Doctors of Health department working in different districts from all over Punjab, the most thickly populated province of Pakistan. Based on purposive sampling, 200 Doctors, from 10 different districts of Punjab including Rawalpindi, Bahawalpur, Gujranwala, Attock, Chakwal, Sargodha, Sahiwal, Jhang, Faisalabad and Gujarat were selected. Survey was conducted during the month of November and December. Questionnaire was personally distributed and mailed to all 200 doctors to complete and mail back to author. The author sent a reminder letter to all non respondents after one week.

Survey Instrument

The selected survey participants received 22 items survey instrument, design for an investigation on "impact of HR practices on employee’s performance". The instrument was used to measure 3 HR practices i.e. Pay & Benefits (7 items), Performance evaluation system (5items), Career development (4 items) and Employee Performance (6 items). The response was rated on 5-Point Likert Scale, with 5 indicating "Strongly agree" to 1 indicating "Strongly Disagree". In the process of operationalization of constructs and to ensure the measurement reliability, all items were taken from previous studies and were extended and modified by researcher after studying various literatures reviews from the field HR practices & Employee performance. Pay & Benefits (4 items for pay & 3 for benefits) and Career Development were measured through scales used by (Mc-Cook, 2002) and same were used by (Inam & Ramy, 2010). Both variables were modified by reducing the number of items by researcher, keeping respondents in view. Performance evaluation Scale was adopted from the study of (Delney & Huselid, 1996; Sing, 2003; Qureshi & Ramy 2007; Riaz & Ramy 2010).For Employee performance, keeping in view overall respondents, as public sector doctors, author used a composite of employee performance scale i.e. 3 items of empathy by (Parasuraman; Zalhmal & Berry 1998) and 3 from service provider performance by(Price, Arnold, Tierry 1995) and it was also supported by Jose, Marco .

Respondent characteristics

Out of 200 selected participants, 142 usable questionnaires were returned as an overall response rate of 72%. According to Dillman, 60% of return rate is required in survey. A brief demographic overview of 142 respondents is provided in table 1.

Statistics

AGE

Gender

MaritalStatus

Qualification

TotalExperience

CurrentExperience

PositionInOrganization

N

Valid

136

136

136

136

136

136

136

Missing

2

2

2

2

2

2

2

Majority of respondents identified themselves as male i.e. 68% and majority of respondents i.e. 72% were at least having 10 years of experience in same organization. All of them were having six year degree in surgery & medicine.

Reliability & Validity

Table 2 shows reliability estimates of all 4 variables, included in study.

Variables

Cronbach’s Alpha

No of items

Pay & Benefits

PES

CD

EP

.752

.537

.471

.665

7

5

4

6

Alpha value of our variables is Pay& Benefits, Performance Evaluation System, Career development, Employee Performance is .752, .537, .471, and .665 respectively. Sekaran, 2006 says that alpha value more than 0.6 shows that the research instrument is reliable So Cumulative alpha value .61 authenticate reliability of our instrument.

Statistical Method

Co-relation Matrix

Co-relation matrix tells that, is there any relationship exist between independent variable i.e. P&B, PES, CD and dependent variable EP.

Correlations

Pay & benefits

Performance Evaluation System

Employee Performance

Career Development

Pay & benefits

1

.432**

.392**

.351**

Performance Evaluation System

.432**

1

.652**

.478**

Employee Performance

.392**

.652**

1

.568**

Career Development

.351**

.478**

.568**

1

**. Correlation is significant at the 0.01 level (1-tailed).

Table shows that there is a positive co-relation between all independent variable and on dependent variable but P-Value of Performance Evaluation System .652 shows that there is strong and significant co-relation between Performance Evaluation System & Employee Performance. Career development has also significant correlation i.e.568.

Regression

In determining which one is the best predictor of employee performance, we use regression analysis. For the best predictor of EP, we found that PES have greatest Beta- coefficient value i.e. 0.466, which shows that PES is the best predictor.

Model Summary

Model

R

R Square

Adjusted R Square

Std. Error of the Estimate

1

.718a

.515

.504

2.68456

a. Predictors: (Constant), Career development, pay & benefits, performance evaluation system.

Coefficients

Model

Un standardized Coefficients

Standardized Coefficients

t

Sig.

B

Std. Error

Beta

1

(Constant)

4.225

1.526

2.769

.006

Pay & benefits

.051

.044

.079

1.155

.250

Performance Evaluation System

.578

.090

.466

6.401

.000

Career development

.433

.096

.318

4.531

.000

a. Dependent Variable: Employee performance

From the above regression analysis table value of R=0.718, shows that, there is 71 % correlation between Pay & Benefit, PES, CD & EP.

The value of R Square .515 tells that there is 51% variability in employee performance due to

Pay &benefits, PES & CD.

Result and Discussion

From the regression analysis results, Beta coefficient value validates and partially supports our hypothesis that, significant effect on employee performance is due to PES (B= 0.466, P less than

.001), CD (B=.318, P less than .001), while Pay & benefits has not shown any significant impact on employee performance due to their beta value (B=0.07, P less than 0.001).

Discussion

Effective performance evaluation system drives and motivates employees in an organization, to produce excellent standards of performance & some time to go above & beyond what is expected from them in the organization. According to (judge & Ferris 1993), there is no more important HR system in any organization, expect effective PES.

In regression result also the value of Beta co-efficient =.466 tells that "there is a significant impact of PES on employee’s performance. Effective PES is pre-requisite for doctor’s performance in Punjab.

In order to improve the performance of public sector doctors of Punjab the ‘Punjab health department’ must be greatly concerned with how far & how well, the Doctors are performing their job.

There are two justified suggestions for health officials to improve the doctor’s performance:

Higher authorities must reward employees for achieving organizational objectives.

They must identify that, which objectives are not achieved yet, and then developing action plans for their achievement in future.

In any case if the employee’s feel that PES is unfair, and lacks rigor, then it is hard nut to crack, that they will accept the outcome of that system.

Implication

Limitations and Future Indications

Tessema, M. and Soeters, J. (2006). Challenges and prospects of HRM in developing countries: testing the HRM-performance link in Eritrean civil service, International Journal of Human Resource Management, 17(1), 86- 105.

Pankaj Tiwari, 2012. "Human resource practices" Pakistan business review January 2012

Pay & Benifits

Timm, P., 1984. Supervision, St. Paul, Minn, West Publishing company.

Riaz,A and Ramy I,2010, Perspectives of Innovations, Economics & Business, Volume 4, Issue 1, 2010

Shapiro, H. and Wahba, M., 1978. "Pay satisfaction: an empirical test of a discrepancy model", Management Science, Vol. 24, No. 6. (Feb., 1978), pp. 612-622.

Career development:

Bernardin, H. and Russell, J., 1993. "Human resource management: An experiential approach", McGraw Hill International Edition, Management and organization series, pp. 322, 340.

Chen, T., Chang, P. and Yeh, C., 2004, "A study of career needs, career development programs, job satisfaction and the turnover Intentions of R&D personnel", Career Development International, Vol. 9 No. 4, pp. 424-437.

Donald E. Super Research and Development Unit, National Institute for Careers Education and Counseling, Published by Elsevier Inc; 2004.

Leary, J., 1997. "Developing a new mindset: the "career ambitious" individual", Women in Management Review

Volume 12, Number 3, pp. 91-99.

Noe, R., Hollenbeck, J., Gerhart, B., Wright, P., 2006. "Human resource management: Gaining a competitive advantage", 5th Edition, McGraw-Hill Irwin, pp. 719, 724.