Introduction
Performance appraisal is an integral part of work on projects and contributes to increasing employee motivation and satisfaction. However, since in many companies, employees have to make such assessments themselves, their motivation and satisfaction are reduced. Self-assessment also creates chaos that leads to inequitable rewards and wasted time. Therefore, this paper aims to explore various assessment methods and develop advice for businesses to remedy the situation. The most effective recommendations include conducting training for employees, collaborating with HRM, engaging line and project managers in the performance appraisal using the latest assessment methods and tools.
The performance appraisal is a critical determinant of employee satisfaction, career aspirations, creativity, and productivity. In companies that use traditional approaches and have a developed vertical hierarchical structure, employee performance evaluation is usually an integral part of the team managers’ daily work. However, in companies engaged in project work, project managers, line managers, and even HRMs are often unable to produce employees’ performance appraisals. The reasons include the geographic remoteness of project participants, their large number, and the short time of joint work that requires direct contact (Keegan and Hartog, 2019).
Therefore, employees themselves carry out their performance appraisals, requesting estimates from clients, contractors, or other sources. As a result, HRM or line managers may or may not include provided information in assessment reports (Keegan and Hartog, 2019). In other cases, the employees may use only the feedback they see fit. This paper aims to discuss which type of performance appraisal is most effective and how project managers and participants can develop new approaches to performance appraisal.
Background
Working in project management differs from the traditional business since all employees’ efforts are focused on the implementation of projects following the client’s task, deadlines, and ensuring high quality. Work on projects can be performed by a group of employees who work at one place or in various remote foreign offices. As a rule, each project participant is assigned a certain area of work, which must be completed following the client’s requirements, the plan for completing tasks set by the line or project manager, on time, and often with the use of an individual creative approach to implementation.
Problem Statement
Since the employees’ assessment by project managers, line managers, and HRMs is difficult in such conditions, the employees themselves carry out their performance appraisal. This approach is ineffective, as it takes a lot of employees’ time and provides poor objectivity of the assessment; employees may also use inappropriate assessment tools.
Aims and Objectives
The purpose of this paper is to study the literature regarding performance appraisal in project management and develop approaches that provide a viable alternative to existing ones.
Scope and Constraints
This paper analyzes 18 peer-reviewed articles to determine how well scientists studied a given issue. The literature review provides a comprehensive picture of research in this area. However, it has certain limitations since relatively few studies directly address issues regarding the performance appraisal systems in projects and their impact on employee productivity. Nevertheless, the literature review provides a sufficient basis to draw conclusions about the processes of performance appraisal and recommends new approaches.
Literature Review
The issue of performance appraisal systems in projects has not been studied adequately. Only two studies provide detailed reports on the effectiveness of assessment processes in projects. Other articles study assessment methods and practices and the specifics of working on projects in a team. Keegan and Hartog (2019) took a deep dive into performance appraisal in projects and its impact on employee productivity. The authors presented the results of a study based on an analysis of two case studies of MANCONL and ITCONL located in Holland, subsidiaries of the CONCO Group, “which operates in more than 40 countries and employs almost 150,000 people worldwide” (p. 223). According to the study results based on 25 personal interviews, scientists made exciting observations.
According to Keegan and Hartog (2019), the main challenge in conducting a performance appraisal in companies was the need to place this responsibility on employees. Project managers, line managers, and HRMs were unable to make performance assessments due to distance, including spatial distance and control range (number of subordinates per manager). Managers constantly faced various dilemmas, including invisibility, when the performance of the evaluated employees is not visible to line managers, and lack of time.
Another unpleasant dilemma was the dubious nature of the input when the managers supposedly responsible for the assessment could not make it because they did not have enough sources of information about the employee. The questionable nature of the input was determined by employees’ central role in collecting the feedback. Line managers, having no observant, sometimes influenced which assessments were included or not included.
The interviewees noted that line managers could often emphasize or ignore the feedback data, which became a big problem for the subordinates’ careers. Therefore, scientists have identified the danger due to the lack of supervision and biases. Keegan and Hartog (2019) made recommendations to remedy the situation â providing training for employees to teach them the best ways of their performance appraisal, the possibility of involving HRMs as a third independent observer and HRMs’ help in the self-appraisal process.
Notably, Lu et al. (2017) examined the impact of interactions between intra-organizational and inter-organizational control on product development success. Scientists have identified the importance of intra-organizational formal oversight and inter-organizational trust for project success. This evidence can be considered as an argument to perform the intra-organizational assessment of employees.
Interestingly, the self-appraisal approach used by MANCONL and ITCONL is used in agile project management and has supporters. Trost (2017) claims that traditional yearly performance appraisal is not applicable in a project environment because it is intended for hierarchical business structures. Therefore, today companies reject this approach in favor of “less rigid structuring” (Trost, 2017, p. 3). Ismail and Rishani (2018) examined the impact of performance measurement on job satisfaction, career ambitions, and employee creativity. The researchers noted that satisfaction with the assessment has a positive effect on the development of these factors.
Demirkesen and Ozorhon (2017) analyzed project management practices in construction projects and found that “project integration, communication, safety, risk, human resource, financial and cost management” have a direct impact on productivity (p. 258). Scientists have also recognized that managing project scale and time has an indirect effect on productivity.
Idowu (2017) studied the impact of performance appraisal on employee motivation. Employee assessment was seen as a moderating tool; researchers have found that using more performance appraisal helps achieve greater satisfaction and motivation. Specific motivation techniques include linking performance to rewards, setting goals and targets, and identifying employee strengths and weaknesses. CaniĂ«ls et al. (2019) noted that performance, skill levels, and a motivational climate driven by goal-setting and based on prosocial motivation improve teamwork. Tereso et al. (2019) note that private organizations often use “introductory meetings, activity lists, progress meetings, Gantt charts, and baselines” when working on projects (p. 6). They also found that organizations tend to use a diversified set of tools to manage and evaluate projects.
Other scholars have explored the possibilities presented by different assessment approaches and assessment tools. Islami et al. (2018) discussed the opportunities of using management by objectives (MBO) as an assessment tool. The researchers noted that “evaluating the performance of individual employees and clearly defining results are the most important parameters among other activities of the MBO method” (p. 94). The results were based on a survey of 172 participants working in 13 firms in Kosovo.
Maghsoodi et al. (2018) presented the MULTIMOORA approach allowing for performance evaluation based on multiple criteria. According to scientists, it is the criteria that help to choose the optimal method of performance appraisal. The scholars also believe that 360-degree feedback is the best outcome for any assessment. PetroviÄ et al. (2018) presented a step-by-step ELECTRE performance model to improve the input data accuracy. Scientists presented an algorithm similar to benchmarking, which allows translating descriptive, non-numeric assessments into measurable parameters.
Bayo-Moriones et al. (2020) studied a sample of Spanish manufacturing firms. They found that managerial autonomy was positively associated with their use of subjective criteria in assessing subordinates’ performance. Scientists also found that when evaluating the work of teams, the subjectivity of the criteria decreases. Soltani and Wilkinson (2020) found a link between total quality management (TQM) and performance management. According to scholars, âmanager-controlled, individual-oriented, past-oriented, long-term and narrowly defined performance appraisal systemsâ have been best applied to uncovering the TQM potential in six UK auto parts companies (p. 57).
Stewart et al. (2017) explored the potential for performance measurement when working with millennials. They found that millennials have a specific view regarding organizational commitment and workplace culture. Managers can change that attitude by shifting their managerial focus to debt, aspiration, and reward. The scholars believe that changing performance metrics to cover more metrics can provide “a complete picture of an employee’s performance and thus affect their sense of duty” (Stewart et al., 2017, p. 45). They also noted that ensuring transparency in the workplace would allow for a clear demonstration of remuneration, which would increase employee productivity.
Studies on performance evaluation in IT projects present useful insights. Silva et al. (2017a) provided a review of performance appraisal approaches in IT project management. The scholars found that systematic methods of analyzing and collecting performance information improve employee performance and include an analysis of training needs. They also developed handy appraisal methods oriented at personality, behavior, comparison, and results. Prabaharan and Perera (2017) noted the importance of performance evaluation and examined a matrix-based and rating-scale system for assessing project employees. The scholars have developed improved quality assessment criteria based on measurable attributes with an index of employee performance on the executive dashboard to simplify the work with data.
Silva et al. (2017b) noted that, in emerging markets, systematic appraisals and information gathering improve project performance. The scientists also presented an overview of the sources of performance information for IT projects. Taherdoost (2018) studied the success and risk factors in IT project management and proposed a 5P approach considering presiding, people, pragmatic, process, and performance to achieve sustainable success.
Analysis
According to the sources above, evaluating employees is of paramount importance to their motivation and productivity. Many assessment methods use different metrics to suit the individual needs of projects. Interestingly, although the metrics for construction and IT projects may differ, scientists agree that a more diversified assessment leads to better results. Scholars acknowledge that evaluating performance is categorically more preferable to the project success than not-evaluating it. The most important findings were presented by Keegan and Hartog (2019), who identified the problem of self-appraisal in project teams and provided effective recommendations. The scientists studied the case of MANCONL and ITCONL companies, subsidiaries of the CONCO Group, operating in 40 countries and employing up to 150,000 people.
Based on 25 personal interviews the scholars determined the main problems related to performance assessment and self-assessment practices. The company is running its business all over the world, and employees often work in multi-national teams of managers and subordinates. As a rule, managers do not have access to the information about the employeesâ performance, and the latter make self-assessments. This practice had a deteriorating impact on employeesâ motivation, job satisfaction, and creativity. The scholars recommended providing the employees with handy tools, training, and HRMs’ support to make self-assessment. Therefore, even in the most challenging circumstances, there is a chance to change the situation.
Findings
The main finding is the need for immediate intervention in the self-appraisal process of project employees. The lack of defined assessment mechanisms creates chaos, lowers productivity, leads to inequities in career promotions, and hence rewards policies. Employees spend a lot of time assessing their work and do not have the necessary knowledge to conduct such an appraisal qualitatively.
Recommendations
Since many large companies’ employees engaged in project management have to conduct self-appraisal, this creates chaos and reduces productivity and motivation. Scientists offer two possible solutions â training employees in the correct ways of evaluation and providing support of HR managers in this process. It should be added that despite the challenges that line managers and project managers face in assessing the performance of project contributors, they must actively and responsibly participate. In this regard, it is recommended to use the evaluation tools outlined in the literature review to streamline and simplify appraisal processes.
For example, managers can use a technique developed by Prabaharan and Perera (2017), an improved scoring model with an employee performance index displayed on the executive dashboard. The ELECTRE method developed by PetroviÄ et al. (2018) is also of unique value. It should be used by managers, since its algorithm translates descriptive, non-numerical estimates into measurable parameters.
Reference List
Bayo-Moriones, A., Galdon-Sanchez, J.E. and Martinez-de-Morentin, S. (2020) âPerformance appraisal: dimensions and determinantsâ, The International Journal of Human Resource Management, 31(15), pp.1984-2015.
CaniĂ«ls, M.C., Chiocchio, F. and van Loon, N.P. (2019) âCollaboration in project teams: the role of mastery and performance climatesâ, International Journal of Project Management, 37(1), pp.1-13.
Demirkesen, S. and Ozorhon, B. (2017) âMeasuring project management performance: case of construction industryâ, Engineering Management Journal, 29(4), pp. 258-277.
Idowu, A. (2017) âEffectiveness of performance appraisal system and its effect on employee motivationâ, Nile Journal of Business and Economics, 3(5), pp.15-39.
Islami, X., Mulolli, E. and Mustafa, N. (2018) âUsing Management by Objectives as a performance appraisal tool for employee satisfactionâ, Future Business Journal, 4(1), pp. 94-108.
Ismail, H.N. and Rishani, M. (2018) âThe relationships among performance appraisal satisfaction, career development and creative behaviorâ, The Journal of Developing Areas, 52(3), pp.109-124.
Keegan, A. and Den Hartog, D. (2019) âDoing it for themselves? Performance appraisal in projectâbased organizations, the role of employees, and challenges to theoryâ, Human Resource Management Journal, 29(2), pp. 217-237.
Lu, P., Yuan, S. and Wu, J. (2017) âThe interaction effect between intra-organizational and inter-organizational control on the project performance of new product development in open innovationâ, International Journal of Project Management, 35(8), pp. 1627-1638.
Maghsoodi, A.I., Abouhamzeh, G., Khalilzadeh, M. and Zavadskas, E.K. (2018) âRanking and selecting the best performance appraisal method using the MULTIMOORA approach integrated Shannonâs entropyâ, Frontiers of Business Research in China, 12(1), pp.1-21.
Prabaharan, P. and Perera, I. (2017) âTool support for effective employee performance appraisal in software engineering industryâ, In 2017 Moratuwa Engineering Research Conference (MERCon) (pp. 473-478). IEEE.
PetroviÄ, M., BojkoviÄ, N., StamenkoviÄ, M. and AniÄ, I. (2018) âSupporting performance appraisal in ELECTRE based stepwise benchmarking modelâ, Omega, 78, pp. 237-251.
Silva, A., VarajĂŁo, J., Pereira, J.L. and Pinto, C.S. (2017a) âPerformance appraisal approaches and methods for IT/IS projects: a reviewâ, International Journal of Human Capital and Information Technology Professionals (IJHCITP), 8(3), pp. 15-28.
Silva, A., VarajĂŁo, J., Pinto, C.S. and e SĂĄ, J.O. (2017b) âWho can assess HR performance in IT/IS projects: a reviewâ, In World Conference on Information Systems and Technologies (pp. 779-789). Springer, Cham.
Soltani, E. and Wilkinson, A. (2020) âTQM and performance appraisal: complementary or incompatible?â, European Management Review, 17(1), pp. 57-82.
Stewart, J.S., Oliver, E.G., Cravens, K.S. and Oishi, S. (2017) âManaging millennials: embracing generational differencesâ, Business Horizons, 60(1), pp. 45-54.
Taherdoost, H. (2018) âHow to lead to sustainable and successful IT project management? Propose 5Ps guidelineâ, Propose 5Ps Guideline, 8(1), pp. 1-13.
Tereso, A., Ribeiro, P., Fernandes, G., Loureiro, I. and Ferreira, M. (2019) âProject management practices in private organizationsâ, Project Management Journal, 50(1), pp. 6-22.
Trost, A., 2017. The end of performance appraisal: a practitioners’ guide to alternatives in agile organizations. Springer.