Evaluation of Performance Management System

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Nowadays, performance management plays an essential role within organizations as it is an imperative human resource practice. According to Mone and London (2018), performance management is a continuous process of communication between managers and employees designed to assess the current expertise of the latter in order to improve organizational effectiveness. The performance management system (PMS) includes such HR functions as continuous progress review, goal-setting, real-time feedback, high level of communication, setting benefits, and penalties based on performance, and employee training. To be effective, the PMS should be sustained by the company’s upper-level management. Furthermore, employees’ tasks have to be aligned with the enterprise’s goals, and the performance management cycle should be shorter in time, not annual.

Nevertheless, ineffective and complex performance appraisal may lead to dissatisfaction among employees. In the case of the Saudi Arabian company, customer service employees expressed their displeasure with the current PMS, especially blaming the rating approach for being inconsistent and inaccurate. They stated that appraisal criteria are not adequately put in line with the company’s goals. The senior HR manager is obliged to undertake rapid changes within the management system, addressing this issue in order to preserve quality employees. If those problems are not addressed, the company will suffer from a higher turnover of customer service employees. In that case, the company will better off improving the rating system and applying the rater training program for supervisors.

The Reasons for Rater Errors

The high level of customer service attracts new clients and helps to enhance business development, while poor customer service damages reputation by word-of-mouth advertising. The HR managers have to monitor the performance of staffers to ensure customer satisfaction and define areas for further improvement. The customer service evaluation checklist includes customer interaction, product knowledge, problem-solving, attitude, and behavior. The company also observes how its service representatives address customers’ issues, how they interact with the team, and analyzes customer feedback.

At first glance, those typical requirements seem to be easily monitored by professional HR supervisors, but in practice, it is challenging to establish an infallible appraisal system. According to Nankervis et al. (2019), there are six main errors managers usually make during the evaluation of employee performance. The halo effect occurs when the rater assesses positively or negatively all of the performance appraisals based on the employee’s progress in one area. For instance, a supervisor may ignore a worker’s chronic tardiness being amused by his/her problem-solving skills. Leniency error could be seen when the supervisor decides to rate all employees in a similar way in order to avoid conflict. In that case, a poor performer can get a high rating because the manager overemphasized the positive behaviors of others.

Similarly, central tendency error means that the rater tends to evaluate every person in the middle part of the scale, avoiding extreme judgments. Sometimes supervisors assess the entire individual’s performance focusing on the last ineffective or effective incident. In such a situation, the recent incident carries too much weight in the performance appraisal process, which makes it inaccurate. First impression error occurs when the initial opinion on workers’ performance becomes the main reason for the supervisor to rate them in the same way after the next period (Nankervis et al., 2019). The last error is called similar-to-me error and is about a situation when the rater tends to evaluate more positively those employees who are similar to them. This relation to people leads to biased performance evaluation, so objective measures should be established. All of those reasons may account for the current discontent among employees of the company concerning their performance ratings.

The Need for the Alignment

Nevertheless, it seems that the main reason for PMS failure is hidden in the poor alignment of employee goals with organizational goals and PMS itself. According to Ashdown (2018), alignment is “a key ingredient in successful performance management systems” (p. 2). Alignment is seen as a prerequisite of success in large companies because its employees have to be focused on business goals. Financial performance usually has a clear relationship with organizational performance management. The enterprise’s first objective is to see employee productivity surpassing the cost of salary, mainly when this business highly invests in HR. The organization should stimulate its employees to work in groups and individually to their full potential to receive a return on investment.

Even though a company’s performance can be measured in money terms, the compensation is not enough for employees to maintain their high-performance level. The key to alignment is spending significant resources on management and training to make staffers aware of the importance of their contributions and engagement. Employee alignment is more critical than plan alignment, as it increases a company’s performance (Ayers, 2015). It requires a top-to-bottom transformation, in which managers play the roles of leaders who disseminate expectations and goals and mutual understanding of what everyone must do to enhance the organization’s development.

Training Program Recommendation

Rater training programs were always believed to affect performance appraisal ratings positively. According to Gorman et al. (2015), there are four main training programs choices to implement: self-leadership training, behavioral observation training, rater error training, and frame-of-reference training. For the large Saudi Arabian company, one could recommend frame-of-reference training for supervisors because it is similar to the improved performance dimension training. It suits the particular company and the situation because it does not only provide raters with information about rating scales and performance measures but also aims to show them examples of negative and positive behaviors.

Moreover, this type of training requires special practice sessions, where supervisors receive feedback on their ratings. The raters should be taught to categorize behaviors into performance dimensions and accurately judge those behaviors in terms of their effectiveness (Gorman et al., 2015). The ultimate goal of this approach is to create common conceptualizations of performance, which will be used by raters. The frame-of-reference training will help to decrease the number of rating mistakes made by supervisors. However, this strategic measurement method must be aligned with organizational goals, therefore, HR management should conduct a goal-setting establishing needed standards and encouraging continuous communication.


To conclude, if a large service company strives to be successful, the proper performance management system should be established by its HR department. It is essential to align organizational goals with employee goals and the performance management system because, in the long run, it increases the company’s overall financial performance. Raters are error-prone and can make mistakes assessing the customer service employees. There are six main types of mistakes, including leniency error and hallo effect. Frame-of-reference training is the best choice that has the potential to decrease assessment mistakes. All those measures are expected to rectify the company’s possible issue of higher turnover.


Ashdown, L. (2018). Performance Management: A practical introduction (2d ed.). Kogan Page Publishers.

Ayers, R. S. (2015). Aligning individual and organizational performance: Goal alignment in federal government agency performance appraisal programs. Public Personnel Management, 44(2), 169-191.

Gorman, C. A., Lonkar, S. B., Mason, M., & Pittington, L. (2015). Current trends in rater training: A survey of rater training programs in American organizations. Trends in training, 1.

Mone, E. M., & London, M. (2018). Employee engagement through effective performance management: A practical guide for managers. Routledge.

Nankervis, A., Baird, M., Coffey, J., & Shields, J. (2019). Human resource management. Cengage AU.

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