Methods of Performance Assessment of Managers in Kosovo Businesses
Hidajet Azem Karaxha1
Abstract: The main purpose of this study is to evaluate employees' performance as a key component of employee performance management. The objectives of the study are: application of management techniques to identify the needs of employees, application of useful methods of employee performance evaluation of human resources, selection of case studies that apply the methods of employee performances. Methodology of study. To accomplish the purpose of the study, the objectives of the study were met using the linear regression methodology and the Pearson Chi - Square Test. The total number of cases in the study was 391 cases, with the study excluded 27 cases of study that did not apply any method of evaluation of employee performance. The results of the study show that businesses in Kosovo applying new management performance assessment methods are a determining factor of trustworthiness by providing high-performance organizational. The value of the study. This study contributes to the encouragement of businesses in Kosovo to apply new performance evaluation methods with other words successful implementation of the most effective methods.
Keywords: managerial staff; strategies; success; organizations JEL Classification: M12; L25
1. Introduction
Performance evaluation can increase employee motivation through the feedback process and can give an estimate of working conditions and can improve employee productivity by encouraging strong areas and modifying the weaknesses. Applying useful methods of employee performance appraisal from human resources is considered as a very important asset of the company.
The success of any business depends largely on the use of methods and its ability to accurately measure the performance of its members. In this study, work performance assessment methods were addressed including general performance analysis, narrative estimates, compulsory distribution, ranking tasks, quota systems, and visual evaluation methods. Also in this study are the traditional methods and modern methods applied by Kosovar businesses. The paper incorporates the use of
1 PhD Candidate, Republic of Kosovo, Address: n.n. 10000 Pristina, Republic of Kosovo, Corresponding author: [email protected].
AUDŒ, Vol. 15, no. 4/2019, pp. 149-164
contemporary literature related to employee performance evaluation methods. The linear regression method was used to determine the application of the methods of evaluation of the performance of the managers. Data processing and analysis is implemented through software package for statistical analysis SPSS 20.
Performance assessment is a key factor for developing an organization effectively and efficiently. Individual performance assessment is very useful for the growth dynamics of the organization as a whole. Evolutionary change represents an attempt to improve aspects of the organization that lead to better performance and does not affect the basic nature of business (Burke, 2008). Performance and satisfaction increase the level of acceptance of the proposed change (Holt et al, 2007). Usually rewards are used as a tool to effect change in staff behavior and performance (Balog
& Hope Hailey, 2008). Performance Measurement has a significant role before and after change and enables control during change Oakland & Tanner (2007). Zahra et al. (2006) states that one of the reasons for increasing interest in dynamic skills is their ability to influence the organization’s performance. Liuhto (2001), points out that the age of new organizations is linked to positive change in performance.
Change is not just an exercise to persuade employees to change; it is an exercise with negotiation and compromise (Cunningham & Kempling, 2009). Public Management Literature contains evidence of the importance of determining the need for change by communicating through a continuous exchange process between as many actors and participants as possible (Abramson & Laerence, 2001; Rossotti, 2005) (quoted in Fernandez & Rainey, 2006).
2. Literature Review
Moreover, in respect of the definition of performance evaluation Grote (2002) stated that “Performance evaluation is a formal management system that provides the assessment of individual performance quality in an organization.” Performance assessment is the “process of assessing how well employees perform their jobs when compared to a set of standards and then communicating those information to these employees” (Prasetya & Kato, 2011, p. 20). According to Armstrong (2006), there are seven ways to evaluate performance:
1 Overall performance analysis;
2 Performance writing narrative;
3 Mandatory distribution;
4 Mandatory referral;
5 Quota system;
6 Method of visual evaluation.
When public organization operations are to a large extent based on rules and procedures, there is little need for transformative behavior where leadership is intended to create trust in others, values and attitudes of employees (the big eel, 1999;
Paar & Eastman, 1997) (Quoted to Quoted, Voet, Kuipers & Groeneveld, 2013). In the process of appraisal based on a Critical Incident Technique (Wagnerová, 2008;
Bogardus, 2007; Durai, 2010), or the critical incident or using the Critical Incident Method (Duda, 2008; Hroník, 2006) the appraiser is obliged to keep written records on positive and negative actions related to the work of the employee in question (Durai, 2010).
In practice, a general analysis is a form of assessment as it will reveal the strengths and weaknesses that show where development can be achieved in order for managers to reach an understanding with their staff who wants to evaluate the best work they are doing. Businesses with a performance scheme or wage-related contributions may disagree with this general approach on the grounds that estimates are needed to inform paid decisions (Armstrong, 2006, p. 103). Management should always try to keep the learning environment in the organization. an understanding of the organizational culture that leads to the improvement of the employee’s performance (Shahzad, Luqman, Khan & Shabbir, 2012, pp. 975-976).
A story rating is simply a written summary of views about the level of performance achieved. This at least ensures that managers need to collect their thoughts together and put them on paper. It is better to provide action plans to emerge from systematic performance analysis in terms of results and behavior that should occur during the course of a review meeting (Armstrong, 2006, pp. 104-105). Documentation and descriptive texts are the basic components of the narrative approach, which includes:
critical incident and essay methods. In the critical incident method, the manager keeps written notes of both highly favorable and unfavorable actions performed by an employee throughout the evaluation period. Critical incident method can be used with other methods to document the reasons why an employee has provided a certain estimate. The Essay Method requires a manager to write a short essay describing the work of each employee during the evaluation period. The evaluator usually categorizes comments under some general headlines. (Mathis & Jackson, 2010, p.
345) The narrative approach offers evaluators the ability to provide written evaluation information, so this method can be applied to evaluate individually either a project or a team (Tabassum, 2012, p. 7).
Forced distribution means that managers need to comply with a disaggregated distribution across the different levels. A typical normal distribution of evaluation is: A = 5%, B = 15%, C = 60%, D = 15% and E = 5%. Forced distribution achieves consistency of one type, but managers and staff rightly hesitate to apply this method (M. Armstrong, 2006, pp. 104-114). Forced distribution is a distribution method that requires the appraiser to assign the employee to the category based on their
performance, but to limit the percentage of employees that can be placed in each category as seen in the table below.
Table 1. Forced distribution
Evaluation %
A 5-10
B 10-15
C 60
D 15
E 5
Source: (Dechev, 2010, p. 17).
Top compulsory distribution is 5% -10% and at the end 5% of employees are in the highest and lowest category and the others are distributed in medium groups (Dechev, 2010, p. 17). A compulsory distribution system is good for organizations, it is good for individuals, because it takes people who are failing from situations that are bad for them and the company. Because of this he can lead to decisions that cannot be protected when it has a negative impact. On the other hand, its proponents say it puts a rigor and discipline in the performance management system that overcomes all too common tendency with tenderness managers (Lawler, 2003, pp.
2-3).
Forced ranking is a development of forced distribution. Managers are required to set their staff so that order can be generated directly by assigning categories of employees (eg A, B and C), or indirectly through the transformation of performance evaluation in groups of employees. The problem with compulsory typing as well as forced delivery and other general evaluation systems is that the notion of performance is unclear. (Armstrong, 2006, p. 114). Performance assessment systems are one of the most commonly used systems by human resource management in today’s organizations. However, despite their widespread use, previous research has identified some problems with implementing performance appraisals, they are evaluative superstition. Consequently, these prejudices result in the lack of high, middle and low interpreting differentials. According to Schleicher, Bull and Jeshil (2009), forced ranking is a type of performance evaluation, where evaluations are necessary to fit along the lines of a certain distribution (Aune & Roed, 2011, pp. 2 - 3). In a forced distribution system, employees are ranked from positive to negative in comparison to the same place to be judged based on independent standards.
Human resource professionals have expressed concern that this practice leads to reduced productivity and distrust of management, reduces collaboration and teamwork resulting in high costs during evaluation periods (Marlinga, 2006, p. 21).
Quota systems determine what distribution of estimates should be and adjust the ratings of some managers after the event to ensure that quotas at each level are completed. They are usually applied retrospectively to ensure that, if salaries are
related to performance, the cost of rising is within the budget. (Armstrong, 2011, p.
115)
Performance evaluation can be categorized in two groups:
1) traditional methods (oriented in the past) and
2) Modern methods (future-oriented). Other researchers have classified existing methods in three groups; absolute standards, standards and relative objectives. The performance evaluation methods are:
Traditional methods are relatively old performance evaluation methods. These methods were approaches oriented to the past, which focused only on past performance. Below are the traditional methods that were used in the past:
a. Method of Order;
b. Graphic Evaluation Scales;
c. Critical Incident Method;
d. Especially narrative.
Ordering Method - The superior made the rankings of his employees based on the merits of the best to the worst.
Graphical grading scales are a scale that shows a number of features and a performance range for each. The employee then is evaluated by finding the best score that determines his performance level for each feature.
Critical Incident Method This method is focused on certain critical employee behaviors that make significant performance differences.
The narrative essay method in this method administrator writes an explanation of the strength and weaknesses of the employee for improvement at the end of the evaluation time. This approach mainly tries to focus on behavior (Shaout & Yousif, 2014, pp. 966-967).
Performance evaluation is important because it plays a vital role in any human resource organization. There are clear benefits from managing individual and team performance to achieve organizational objectives. Modern methods would treat the following. Management by Objectives is a method of performance evaluation in which managers or employers determine a list of objectives and make evaluations on their performance on a regular basis and finally make awards based on the results obtained (Khanna & Kumar, 2014, pp. 51-56). Performance is assessed in achieving the objectives set by management. MBO includes three main processes; facility formulation, execution process and performance feedback (Shaout & Yousif, 2014, p. 967). Objective Management is a useful tool for developing and preparing staff for future roles within an organization and assessing skill levels in their current
organizational roles (Huang, Chen & Yien, 2011, p. 274). Objective Management (MBO) is a systematic and organized approach that allows management to focus on achievable goals and achieve the best possible outcomes from available resources.
MBO includes continuous tracking and responses in process to achieve targets as it goes down in the figure below (Ghicajanu, 2008, p. 2239).
Figure 1. MBO process steps Source: (Ghicajanu, 2008)
Comments on how to describe the 360 degree feedback interpretation and the development of important steps are seen below:
a. Feedback is essential to learning. Your report contains information that can help you achieve success if you are open to feedback;
b. Persuasion is a reality.
Do not create feedback if we disagree because there are many people responding based on their perception. And this is a perception that needs to be addressed. D.
Observations often contain surprises and individuals can improve their relationships and their work. e. You are responsible for your development. This report raises awareness that feedback becomes effective (Kane, 2013, p. 1). Typically, performance assessment, are limited to a feedback process between employees and superiors. With increased focus and teamwork, employee development, and
Organizational objectives reivewed
Employee objectives set
Progress monitored
Performance evaluated Achievers
rewarded MBO for the next operating
period begins
customer service, emphasis has shifted employees’ feedback from the full range of resources. This highly input for performance feedback is called “360 degree assessment” as shown in the figure below.
Figure 2. 360 degree fideleku Source: (Reddy & Pradesh, 2012)
This system is a holistic approach incorporating many-angles views, with many sources of assessment levels (Reddy & Pradesh, 2012, pp. 92-93).
An assessment center is a central place where managers can come together to participate in performance-related exercises evaluated by trained observers.
Assessors are required to participate in group exercises, work groups, computer simulations, fact-finding exercises, analysis/decision-making problems, role play, and oral presentation exercises (Shaout & Yousif, 2014, p. 967). The main purpose of conducting the assessment center is to find out how the candidate works in typical management situations. With the help of this method, employees get a broader perspective and performance review that makes it able to understand its stability and lack (Tripathi, 2016, p. 31). Advantages of Evaluation Centers:
1) useful for forecasting future performance;
Self- Assessment
Supervisor
Colleagues
Students Itself
2) high availability, content availability, and predictive capability compared to other methods;
3) helpful in determining criteria for selection and promotion.
Disadvantages of Evaluation Centers:
1) Costly Process (Singh, 2015, p. 39).
This method is used to assess the employee’s potential for future performance rather than the past. It’s done using interviews, psychological tests, and discussions with managers. This method focuses on the emotional, intellectual and motivational characteristics of the employee and other personal characteristics that affect his or her work. Advantages of psychological evaluations:
1. Useful for identifying employees who may have considerable potential.
Disadvantages of Psychological Assessments:
1. Consumable and Costly Time
2. Various of the Psychoanalytic Skills (Singh, 2015, p. 39).
Performance capability may be one of the factors influencing stress assessment, and vice versa, an assessment of such a situation can affect performance (Rith-Najarian, 2011, p. 32).
3. Methods
The questionnaire was developed to determine the methods for assessing the performance of managerial staff. This questionnaire is addressed to owners/co- owners, directors, general directors, and all other level managers in Kosovo businesses. The compilation of the questionnaire is standard for all businesses surveyed in Kosovo. In compiling the questionnaire, factors that affect the enhancement of validity and credibility such as the size of businesses and their managerial organization have been taken into account.
Out of the total number of 391 study cases, 27 cases were excluded from the study because they did not apply any evaluation method of managerial staff. The data were analyzed through the SPSS 20 program.
The use of formulas to estimate the size of samples is as follows:
( Yamane,1967), N- Number of population elements n-the number of elements of choice
e- the error limit
The confidence level is 95%
5% error limit. –
The econometric linear regression model testing in this study was used to justify the relationship between dependent variables - enterprise success and independent variables - performance evaluation of management staff applying modern methods for assessment and performance of managerial staff.
The econometric regression model is presented as follows:
Y = dependent variables - enterprise success β 1 = constant
β 2 = coefficient close to independent variables X2 = independent variables
β 3 = coefficient close to independent variables X3 = independent variables
4. Results and Discussion
The linear regression model is used to test the impact of the application of management performance assessment methods.
Table 2. Applying methods for assessing the performance of managerial staff
Coefficients
Model Non-standardized Coefficients Standardized Coefficients of
t Sig./p- value
B Error Std. Beta
1
(Constants) 8.403 .178 47.112 .001
Do you use new
management performance assessment methods?
-.535 .162 -.165 -3.294 .001
Summary of Model
Model R ‘R Square’ Adjusted square’ Evaluation Error Std.
1 .165a .027 .025 .814
From the data in the table above we can conclude that the Model has the form
By testing independent variables for its significance through the importance of hypotheses, H0 and Ha.
H0: β2 = 0 meaning that variable X2 is not statistically significant If: β2 ≠ 0 which means that variable X2 is statistically significant
The table above shows the probability of the coefficient β2 is Prob./Sig./p- value=0.001 which means that it is smaller than '<' p = 0.05 which consequently shows that hypothesis H0 falls and stays hypothesis Ha that variable X2 is statistically significant.
The Model Interpretation shows that: New Management Performance Management Assessment Methods, Increased by 1 Units and Other Factors Keeping
“CentrixParapus” Effect on Organizational Performance Management Challenges as Affecting Factors of Valuation Reliability with -53.5%. Thus, there is a statistically significant positive link between the challenges of organization performance management systems as influencing factors of assessment reliability and new managerial staff performance assessment methods. Explanation of this Model is 2.5%.
Moreover, we can say that the econometric model of ANOVA linear regression gives us the same conclusion.
Table 3. ANOVA applying methods for assessing the performance of managerial staff ANOVAa
Model Square amount df ‘Mean’ on square F Sig./p-value 1
Regression 7.189 1 7.189 10.853 .001b
The remaining 257.670 389 .662
Total 264.859 390
Based on the results provided by the analysis presented in the table where the regression significance is p-0.001 <that is smaller than (p-0.05), which represents the relationship between dependent variables (a. Dependent variables: A Do your organization’s performance management systems experience any of the following challenges which are influencing factors of assessment reliability?) and independent variables (b) Predictors: (Constant), Do New Management Performance Methods Approve Management Performance ?) Are significant among themselves.
The application of modern (communicative) performance evaluation methods is an influencing factor of the credibility of the assessment.
Table 4. Challenges in performance management systems and use of new managerial staff assessment methods
Do your organization's performance management systems experience any of the following challenges, which are influencing factors of appreciation? * Do you use new management performance assessment methods?
Do you use new management performance assessment methods?
Total
Yes No
Do your
organization's performance management systems experience any of the following challenges,
which are
influencing factors of appreciation?
Documentation consistent with performance by supervisors
No. 2 0 2
% of Total
0.5% 0.0% 0.5%
Poor performance management system connection with other Human Resource practices
No. 0 1 1
% of Total
0.0% 0.3% 0.3%
Poor forms with design rating
No. 1 2 3
% of Total
0.3% 0.5% 0.8%
Lack of accountability of employees to meet performance goals or performance criteria
No. 4 0 4
% of Total
1.0% 0.0% 1.0%
Non-compliance with ratings
No. 6 0 6
% of Total
1.5% 0.0% 1.5%
Failure of supervisors to provide ongoing feedback
No. 5 2 7
% of Total
1.3% 0.5% 1.8%
None of these No. 346 22 368
% of Total
88.5% 5.6% 94.1%
Total No. 364 27 391
% of Total
93.1% 6.9% 100.0%
Challenges in performance management systems should be included in the study of human resource management. Businesses in Kosovo At an organizational level of analysis, businesses surveyed in Kosovo assume that an organization that has a good performance is one that achieves its objectives successfully and uses new management performance management assessment methods with In other words; it
is effectively implementing an appropriate strategy. Referring to the data presented in table form, surveyed businesses estimate that the use of new performance evaluation methods is a significant factor in assessing credibility. While addressing challenges in performance management systems, related documentation consistent with supervisor performance, poor performance management relationship with other Human Resource practices, poor design patterns, lack of employee accountability for meeting performance goals or criteria, failure to comply with ratings, failure of supervisors to consistently provide feedback, where 364 or 93% of them stated that they did not experience any of the above-mentioned challenges.
Chi-Square Test Results - Reliability between challenges in performance management systems and the use of new managerial staff assessment methods.
Table 5. Test “Chi-Square”
Vlera df Asymp. Sig. (2-sided) Pearson Chi-Square 36.642a 6 .001
Proportion of chance 17.624 6 .007
Nr. valid case 391
10 cells (71.4%) is assumed no. less than 5. The acceptable minimum of no. is .07.
The Chi-Square test analysis confirms that there is strong evidence of the relationship between the challenges of performance management systems and the use of new managerial staff assessment methods, which is also evidenced through the Pearson-Chi- square “is = .001 with the degree of freedom” df '= 6, p <0.001, and since the p value is less than 0.05 this analysis verifies the relationship of significant importance to the variables between them.
Table 6. Types of use of methods in assessing the performance of managerial staff and the ability to experience the challenges that can experience performance management
systems as influencing factors of credibility of assessment
Which of these methods does your business use to evaluate the performance of management staff?
Surve y
Intervie w
Questionnair e analysis
Checklist s
Overall performanc e analysis
Performanc e (Narrative) Assessment
Forced distributio n
Forced Rankin g
Metode of visual evaluatio n
No. No. No. No. No. No. No. No. No.
Do your organization' s performance management systems experience any of the following challenges, which are influencing factors of appreciation?
Documentatio n consistent with performance by supervisors
2 2 2 2 2 2 2 2 2
Poor performance management system connection with other Human Resource practices
0 1 1 1 1 0 0 0 0
Poor forms with design rating
2 3 3 3 2 1 1 1 1
Application contrary to systems by supervisors
0 0 0 0 0 0 0 0 0
Lack of
accountability of employees
to meet
performance goals or performance criteria
3 3 3 4 4 3 3 3 3
Non- compliance with ratings
3 4 5 6 5 4 4 4 4
Failure of supervisors to provide ongoing feedback
6 6 7 7 7 6 6 6 6
None of these 251 299 331 320 294 273 246 233 224
The cross-tabled 2 chart outlines the types of methods used in assessing the performance of management staff and the ability to experience challenges that can experience performance management systems as influencing factors of appreciation.
So from the findings that are presented by the total number of surveyed businesses, 251 businesses use observation as a method of assessing the performance of managerial staff, 299 businesses use the interview, 331 businesses use questionnaire analysis, 320 businesses use checklists, 294 businesspeople use general performance analysis, 273 businesses use narrative written performance estimate, 246 deployed distribution, 233 of them use bulletins, and 224 use the visual evaluation method.
All these methods used by businesses in Kosovo to assess performance are influencing factors of reliability, the evaluation.
The Chi-Square test results - the correlation between the types of use of managerial staff performance assessment methods and the ability to experience the challenges that can experience performance management systems as influencing factors of assessment assurance.
Table 7. Test “Chi-Square”
Which of these methods does your business use to evaluate the performance of management staff?
Do your organization's performance management systems experience any of the following challenges, which are influencing factors of appreciation?
Chi-
square 41.962
df 54
Sig. .024a,b
The Chi-Square test analysis proves that there is strong evidence of the relationship between the types of use of management staff performance assessment methods and the ability to experience the challenges that can experience performance management systems as influential factors of confidence and the Pearson-Chi-square
statistical value is = 41.962 with the degree of freedom 'df' = 54, p <0.001, significance = .024 and since the p value is less than 0.05 this the analysis confirms the relationship of significance to the variables between them.
5. Conclusions
Of the cases studied, the most widely used method for assessing the performance of managerial staff is the questionnaire analysis followed by the checklist method, then interview and at least as a method of using the visual evaluation method. All of these performance evaluation methods are influencing factors of appreciation.
Interpretation of the linear regression model shows that the variables have a statistically significant positive correlation between the challenges of the organization’s performance management systems as influencing factors of assessment reliability and new managerial staff performance assessment methods.
Performance evaluation is a process that involves taking intentional success actions that an individual or organization has accomplished in performing certain tasks or meeting certain goals over a period of time. Therefore, it shows that performance assessment practices should be intentional rather than casual. Performance evaluation processes in Kosovo businesses are seen to be systematic and regular and are often characterized by personal impacts caused by business concerns to use an assessment system that obstructs objectivity and fairness. Another feature that we have encountered in the field businesses often ignore management by objectives, critical incidents to personal prejudices. This is retrogressive as it affects the overall performance of the individual. Meanwhile, traditional employee valuation methods are being compensated by modern methods of assessment. For Kosovo businesses Objective Management is seen as a performance appraisal method in which managers or employers set a list of objectives and makes assessments of their performance on a regular basis and ultimately determines remuneration based on the achieved results set by management. The 360 degree assessment method, where superiors and appraisals of their subordinates, subordinates evaluate their supervisor and the appraiser evaluates himself and the average of all estimates obtained to reach the final assessment score should now be considered by the organizations. Also after- evaluation counseling through which the results of the assessment are analyzed to explain the strengths and weaknesses and set the agenda for a better performance in the future. Organizations should stop paying less attention to the assessment of their employees and accept that organizational training needs can only be identified by performance evaluation results
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