BBPB2103_BI

TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT 85

The types of advertisements used by the organisation depend on the type of
job vacancy that needs to be filled, and the type of the labour market. It also
depends on the cost that the organisation is willing to bear.

(b) Internal Application
Organisations often receive applications from internal candidates without
having to advertise. However, the percentage of internal applicants is low.
Even though the percentage is low, organisations cannot ignore self
applicants as they might prove to be good employees at a later date.

(c) Proposed by Staff
Existing staff can suggest candidates who are qualified. Organisations may
encourage them to continue the effort of searching for the right candidate
by giving a bonus for each successful employment. The risk of this sort of
employment is nepotism, which is the tendency to propose oneÊs own
family member.

(d) Executive Search Firms
This source assists employers in searching for a suitable employee to fill the
job offered. The fee rate is normally 30% to 40% of the annual salary of the
position that needs to be filled. For senior executive positions, payment is
usually made by the organisation engaging the particular executive search
firm.

(e) Higher Learning Institutions (Public and Private)
Through institutions, the potential candidates are young, and formally
trained but they have less experience.

(f) Professional Organisations
Usually, professional organisations help its members get jobs as this is one
of the benefits of joining such organisations.

(g) Public Employment Agencies
Public employment agencies such as the Labour Department help job
applicants to look for jobs which are suited to their qualifications.

(h) Private Employment Agencies
Normally, private employment agencies charge a certain fixed rate to help
applicants look for jobs. The fee may be paid by the job seeker or potential
employer.

(i) Agencies Providing Temporary Will
Normally, these types of agencies provide temporary workers to employers
who require temporary workers such as letter dispatchers.

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86 TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT

(j) Employee Leasing
In employee leasing, an employee who has been retrenched or dismissed by
an organisation is hired by another company that offers employee leasing
services to interested companies.

(k) Internet Recruitment
The Internet is a source of recruitment that is increasingly popular.
Applicants can surf websites to register online.

(l) EmployeesÊ Union
The employeesÊ union is a good source to obtain employees for certain
positions in the supporting level.

Sometimes, it can be difficult for organisations to determine the effectiveness of
their sources in detecting the suitable candidates at a minimum cost. However,
there are a few things that can be done by a manager to overcome the problems.

Some of the steps that can be taken to increase the effectiveness of external
recruitment are:

(a) Calculating Result Ratio
Result ratio is the percentage of applicants from one source that are
qualified to go to the next level from the selection process. The result ratio
will show the most effective recruitment source.

An example of how to calculate recruitment cost is as shown below:

SC/H= (AC+AF+RB+NC)/H

Whereby:

SC/H = source cost for every intake of recruiter
AC = advertising cost
AF = agency fee
RB = recommenderÊs bonus
NC = non-cost intake
H = total number of employee intakes

(b) Training Organisation Recruiters
In a big organisation, the recruitment process will be performed by
professional human resource staff. In a small organisation, this process is
carried out by the human resource manager, unit manager or supervisor.

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TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT 87

The recruiter can influence a candidate whether to accept or reject a job
offer. Therefore, the recruiter must be trained so that he or she is able to
attract more qualified applicants.

(c) Realistic Job Previews (RJP)
Through RJP, a candidate is provided with information on all the job
aspects, be it positive or negative. Those who practise RJP believe that
applicants who are given explanation on their jobs will stay on longer and
be more successful in their jobs.

External recruitment has a few advantages. Among them are as follows:

(a) When an employee is promoted or resigns from an organisation, his or her
position must be filled. If his or her successor is chosen from within the
organisation, then it is easier for the organisation to assess his or her
capability. Further, it will motivate the staff to stay longer in the company.
Attracting external applicants will have the advantage of getting talented or
high performing workers that are not easily available.

(b) External recruitment is done for the purpose of injecting new influence into
an organisation so that the existing work culture can be stimulated.

However, in implementing the external recruitment process, the position of the
labour market, be it tight or loose, and a candidateÊs preparedness to transfer
must be considered. The labour market is an area where candidates can be
recruited. To attract the interest of applicants, the organisation must identify the
types of jobs and their suitability to the applicants.

ACTIVITY 4.5

From research, it is found that employees hired through referrals and
self applications stay on longer in an organisation and show better
performance compared to employees hired through normal methods,
such as advertising. Based on your work experience, do you agree?
Discuss.

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88 TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT

EXERCISE 4.3

TRUE (T) or FALSE (F) Statements

1. Employees need not be informed about promotion policies as
they do not influence employee motivation.

2. It is usual for competing companies such as those in high
technology field to try and get secrets from their competitors
by persuading their competitorsÊ employees to work for them.

3. It is better to avoid using employee referrals as a recruitment
source as the applicantÊs quality may be questioned.

4. The result ratio helps an organisation to identify which
recruitment source is least effective in producing qualified
candidates.

5. The person who should perform recruitment depends on the
size of the organisation. For a big company, a professional
human resource officer will be chosen and trained to find new
employees.

Match the concepts to the suitable statements.

1. Predicting manpower needs based (a) Human resource planning
on the organisationÊs index.

2. An area where applicants can be (b) Labour market
recruited.

3. The processes of forecasting and (c) Realistic job preview
preparing employee movement
into, within and out of the
organisation.

4. Informing applicants on all matters (d) Trend analysis
pertaining to the job, including
positive and negative matters.

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TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT 89

Multiple Choice Questions

1. There is a relationship between the successes of recruitment through
advertising and _______________.
A. The accuracy and total nature of the advertisement
B. The simplicity of the advertisement
C. The positive characteristics of the advertisement
D. The coverage of the advertisement

2. Human resource planning and strategic planning are related
through:
A. Relating both human resource planning and strategic planning
processes.
B. Determining the types of employees that exist in the
organisation.
C. Ensuring the suitability and flexibility of human resource
planning in an organisation's strategy.
D. All of the above.

3. Through human resource planning, an organisation strives to
balance between requirements and human resource supply. Human
resource requirements are based on ___________.
A. Where candidates can be obtained
B. How candidates can be obtained
C. When applicants can be employed
D. Trend forecasting in business activities

4. Methods that enable an organisation to identify qualified internal
candidates include all these, EXCEPT ______________.
A. Announcement of job vacancy
B. Re-hiring employees that have been retrenched.
C. Computerised record system
D. Word of mouth

Essay Question

1. Differentiate between quantitative approach and qualitative
approach in the forecast of human resource needs.

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90 TOPIC 4 PLANNING AND EMPLOYEE RECRUITMENT

In planning an organisationÊs future, the top management and strategic
planner must realise that strategic planning decisions will affect human
resource planning, and vice versa.

Human resource planning can be reactive and proactive towards an
organisationÊs human resource needs.

Human resource planning is a systematic process involving the forecasting
process of human resource needs, implementation of human resource supply
analysis, and balancing between existing supplies and the actual needs of
human resource.

In implementing recruitment functions, the management finds that internal
recruitment offers a lot of advantages to the organisation and also its
employees.

Through internal recruitment, the management is able to reimburse all
expenditures invested in employees during employee training and
development.

For the employees, it is seen as an encouragement to further improve
themselves in the company. However, internal recruitment can cause
employee cloning.

External recruitment has to be carried out when there are no internal
candidates eligible to fill a vacancy.

Recruiting employees outside of the organisation can help the organisation
acquire new ideas.

The recruitment sources used by an organisation depend on the types of jobs
and the labour market.

External recruitment Internal recruitment
Human resource planning Strategic planning

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Topic Selection

5

LEARNING OUTCOMES

By the end of this topic, you should be able to:
1. State the objectives of an employee selection process;
2. Identify the types of information sources that can be used in the

selection process;
3. Describe the types of employment tests;
4. Discuss the approaches in carrying out job interviews; and
5. Examine the strategies of achieving results in selection.

INTRODUCTION

We are often exposed to news on deviation, misuse of power and sexual
harassment in the workplace. Therefore, the selection of suitable candidates is
very important to ensure the success of an organisation.

If in recruitment, an organisation tries to obtain as many applicants for a
position; in selection, the number of candidates is reduced by selecting the most
eligible candidates.

The main purpose of selection is to maximise the accuracy of selecting qualified
employees and to avoid not taking qualified employees. Even though the human
resource department is responsible in carrying out the selection process, the
decision to hire a candidate is usually done by the departmentÊs manager.

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5.1 SELECTION PROCESS

What do you understand about the selection process?

Selection is a process of selecting individuals who possess suitable
qualifications to fill an existing or future job vacancy.

The selection process is an ongoing process and involves a few steps. Among the
steps in the selection processes are as follows:
(a) Completing the application form.
(b) Preliminary interview at the human resource department.
(c) Employment test (cognitive aptitude test, achievement test).
(d) Investigating the candidateÊs background.
(e) Preliminary selection at the human resource department.
(f) Team/supervisor interview.
(g) Medical check-up/drug test.
(h) Recruitment result.
From the steps above, we can see that an organisation uses various ways to
obtain information about applicants. Among the methods used are application
forms, interviews, employment tests, medical check-up and background checks
on applicants/candidates.

ACTIVITY 5.1

In your opinion, why are some applicants exempted from certain
steps in the selection process while other applicants have to go
through the whole selection process?

Visit www.hr-guide.com/selection.htm to obtain information on how the
selection process is carried out and how information on employees is obtained.

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5.2 INFORMATION RELIABILITY AND
VALIDITY

Information on job applicants and candidates must be accurate, reliable and
valid. This is to ensure the selection purpose, which is to hire employees who are
really eligible and to avoid not hiring those who are eligible, can be fulfilled.

5.2.1 Information Reliability

Reliability means the level where an interview, test and other selection
procedures show consistent data every time, even when using other
methods of measurement.

Reliability, thus, means how far a selection tool is able to give consistent data.
Table 5.1 and Table 5.2 are examples of stable and consistent reliabilities.

Table 5.1: Reliability as Stability over Time

Applicant A. High Reliability Re-test score
Ahmad 93
Chin Test score 62
Rama 90 105
Kuntum 65 78
110
Applicant 80 Re-test score
Ahmad 72
Chin B. Low Reliability 88
Rama 67
Kuntum Test score 111
90
65
110
80

Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources
(15th ed.). Ohio: South-western College Publishing.

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Table 5.2: Reliability as Consistency

Applicant A. High Reliability Evaluator 3
Evaluator 1 Evaluator 2

Ahmad 9 8 8
Chin 5 6 5
Rama 4 5 5
Kuntum 8 8 8

Applicant B. Low Reliability Evaluator 3
Evaluator 1 Evaluator 2

Ahmad 9 5 6
Chin 5 9 4
Rama 4 2 7
Kuntum 8 4 2

Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources
(15th ed.). Ohio: South-western College Publishing.

5.2.2 Information Validity

Validity means the level where a selection test or procedure is able to
measure a personÊs characteristics.

There are three types of information validity, which are:
(a) Criterion-related validity;
(b) Content validity; and
(c) Construct validity.

Figure 5.1 shows how a test score is validated by applying the criteria evaluation
(one type of information validity).

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TOPIC 5 SELECTION 95

Figure 5.1: Valid test and invalid test
Source: Adapted from Bohlander, Snell and Sherman. (2009). Managing human resources

(15th ed.). Ohio: South-western College Publishing.

(a) Criterion-related Validity
Criterion-related validity is the level where selection tools which are chosen
are able to forecast or have a correlation with the main elements of work
behaviour (Bohlander, Snell and Sherman, 2004). The performance from a
certain test will be compared to the actual production records, supervisorÊs
evaluation, result from training, and different success measurements which
are suitable to a particular job. For example, the criteria for a job in the
production sector are quality and product quantity, whereas the criterion
for a salespersonÊs job is total sales.

Criterion-related validity can be divided into two types:

(i) Concurrent Validity
Concurrent validity means how far a test score or other forecasted
information matches the criteria data obtained from existing
employees. For example, a supervisor carries out a work evaluation
on a few clerks by giving them aptitude tests on clerical matters. Test
scores will be compared to the supervisorÊs evaluation to see whether
or not a relationship exists between the test scores and the
supervisorÊs evaluation.

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(ii) Predictive Validity
Predictive validity means how far the score of a test done by an
applicant before he or she was hired matches the data obtained from
the applicant or the employee after they are hired, after a certain
period.

Cross validation can be done to strengthen the validity of a test. Cross
validation strengthens the validation of a particular validity result by
running a test on a different sample from the same population.

(b) Content Validity
Content validity measures how far a selection tool, such as a type of test, is
able to sample knowledge and skills which are needed to perform a certain
job. The higher the relationship between the test contents and the actual
work requirements, the higher the content validity. For example, a test to
become a kindergarten teacher should not contain activities on solving
accounts problems.

(c) Construct Validity
Construct validity measures how far a selection tool is able to measure
construct or potential employeesÊ characteristics theoretically. Construct
examples are intelligence, an understanding in mechanical matters and
anxiety.

ACTIVITY 5.2

Refer to Table 5.2. How does Table 5.2 relate the three validity
concepts?

5.3 SELECTION METHODS

Through selection methods, we will discuss how to:
(a) Obtain information about applicants and potential job candidates;
(b) Test candidates for the purpose of identifying those who are most qualified

for a particular job;
(c) Obtain information through effective interviews; and
(d) Decide on determining qualified candidates for the job offer.

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5.3.1 Information Sources

When you apply for a job, do you have to fill in your personal information? What
are the methods used at that time?

There are a few methods which are trusted and valid in order to obtain
information about candidates. Figure 5.2 shows a few techniques of obtaining
information in the selection process and its effectiveness.

Figure 5.2: The effectiveness of selection methods

The following are some types of information sources usually used by an
organisation to obtain information about a job candidate:

(a) Application Form
An application form provides information as to whether an applicant has
experience and educational background, and other matters related to the
job. Information from the application form will be made the basis, by the
interviewer, for questions about the applicantÊs background and checks on
references provided by the applicant. Among the items included in an
application form are date of application, educational background,
experience, criminal records, nationality and disabilities.

(b) Biographical Information Blank (BIB)
Through the BIB, questions asked are more on family life, interests or
hobbies, club membership and experience in sales and investments.
Therefore, the BIB is able to give a general description of the applicantÊs
behaviour.

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(c) Investigating CandidateÊs Background
When an interviewer feels that a candidate has potential, some of the
information obtained from previous employers or other information given
by the candidate will be investigated. Among the methods are:
(i) Calling the previous managers;
(ii) Writing a letter to get information;
(iii) Obtaining a written permission from the candidate so that the
interviewer can get information from previous employers; and
(iv) Going through the credit report to look at the applicantÊs or
candidateÊs financial position.

(d) Polygraph Test
A polygraph test is an equipment to detect lies. It measures changes in
breathing rate, blood pressure and an individualÊs pulse when the person is
being questioned. Questions asked often include matters involving drug
abuse, theft or criminal offences that are not detected by others.

(e) Honesty and Integrity Tests
Honesty and integrity tests are usually used by an organisation where its
employees have access to money and sales items. Questions often asked
relate to values and attitudes towards issues such as theft and punishment
for thieves. A total analysis will become an assumption of work
performance and disciplinary problems.

(f) Graphology
Graphology refers to a system that analyses handwriting. Through a
candidateÊs handwriting, a graphologist makes an assumption of the nature
of his or her intelligence, energy level, organisational abilities and emotions.

ACTIVITY 5.3

For which job should a candidate be tested by using graphology?

(g) Health Examination
A health examination is done to ensure that the applicantÊs health level
fulfils the job requirements.

(h) Drug Test
A drug test aims at ensuring future employees are free from hazardous
drugs. The sampling method is usually implemented.

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TOPIC 5 SELECTION 99

EXERCISE 5.1

TRUE (T) or FALSE (F) Statements
1. The selection procedure does not have to be validated before it is used.
2. The more related the contents of a selection tool with the actual

work sample, the higher the value of content validity.
3. Construct validity is a level where a certain selection tool is able to

measure characteristics or constructs theoretically.
4. Most organisations require application forms to be filled because

application forms provide fast and systematic information about
the applicants.
5. To filter and select applicants as well as predict their performance,
organisations have to go through applicantsÊ information through
their source of reference.

5.3.2 Employment Test

Another method of obtaining information about candidates is through
employment tests. Some organisations employ consultants to perform
employment tests. An employment test is an objective and standard way to
measure knowledge, skills, abilities and other candidatesÊ characteristics.

Employment tests can be categorised into two, which are:

Aptitude test
An aptitude test measures an individualÊs capacity or ability in learning and
mastering new skills.

Achievement test
An achievement test measures what an individual knows or is able to do at
this frame of time.

Among the types of employment tests are:
(a) Cognitive Aptitude Test

A test that measures an individualÊs mental abilities such as aptitude,
fluency, calculating ability, reasoning ability, thinking and drawing
conclusions. The test is believed to be able to represent an individualÊs
general intelligence.

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100 TOPIC 5 SELECTION

(b) Job Knowledge Test
A test to measure an individualÊs knowledge and understanding of a job.

(c) Work Sample Test
A test that requires applicants to perform tasks that are part of the duties
for the position applied. For example, a test on reading maps for traffic
officer candidates, and judgement and decision making tests for an
administrative officer candidate.

(d) Personality and Interest Inventory
A test to measure an individualÊs disposition and temperament.

There are five dimensions that reflect an individualÊs personality, i.e.:

(i) Extroversion
Extroversion projects the external characteristics, i.e. at a level where
an individual talks a lot, is sociable, active, aggressive and cheerful.

(ii) Agreeableness
Agreeableness is a level where an individual can be trusted, is warm,
generous, able to compromise, honest, cooperative and able to discuss.

(iii) Conscientiousness
A level where an individual can be depended on, is rule abiding and
perseveres in carrying out duties.

(iv) Emotional Stability
Emotional stability is a level where an individual feels secure, is calm,
independent and autonomous.

(v) Open to Experience
This involves being open to new experiences, i.e. an individualÊs level
of intelligence, philosophy, in-depth understanding, creativity, artistic
abilities and curiosity.

ACTIVITY 5.4

In the personality and interest inventory, there are five personality
dimensions. Which one reflects your personality, and based on
your personality, what type of job would be suitable for you?

(e) Physical Ability Test
This test aims at examining an individualÊs physical abilities in performing
a task in a particular job. Risky jobs such as those of a fireman and lorry
driver need physical strength and endurance. This limits applications from
women and those who are handicapped.

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TOPIC 5 SELECTION 101

ACTIVITY 5.5

Classify these job tests according to their categories (aptitude test
or achievement test).

Type of test Category
Cognitive Ability Test
Job Knowledge Test
Work Sample Test
Personality and Interest Test
Physical Ability Test

5.3.3 Job Interview

Information about candidates can be obtained through a job interview.

An interview, traditionally, is the main tool for most organisations to gather
information about candidates. Even though many researchers are still sceptical
about its validity, this method remains the main choice when conducting a
selection process. This is because:

An interview is easy to carry out, especially when the number of applicants is
small.

Apart from aiming to gather information, it also aims to get to know the
candidate better.

Recruiters believe and are confident that it enables them to judge the
candidates.

In a job interview, there are three important factors that one should be aware of:

Types of interview;

The variables that influence an interview; and

Guidelines for the interviewer.

(a) Types of Job Interview
There are several types of job interviews such as:
(i) Non-directive Interview
During a non-directive interview, an applicant has the freedom to
give his or her opinion. The interviewer tries not to influence any
opinions offered by the candidate. Usually, the interviewer will ask

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102 TOPIC 5 SELECTION

general questions such as the candidateÊs experiences in his or her
previous company.

(ii) Structured Interview
This type of interview contains a set of standard questions together
with pre-determined answers. The questions are based on a job
analysis that has been carried out beforehand. Information from a
structured interview is able to reduce unfairness in the perspective of
the law.

(iii) Situational Interview
Through this interview, the applicant is given a situation or an event
to which he or she needs to respond. The feedback given will be
evaluated based on standardised answers. This type of interview is a
part of structured interview.

(iv) Behavioural Interview
Through this interview, applicants will be asked their response in
dealing with specific circumstances. For example, from an applicantÊs
previous experience, what were the actions taken against employees
who practise truancy. This approach is based on the critical incident
method of the job analysis.

(v) Panel Interview
Through panel interview, a group of interviewers will question and
observe the candidate. The number of interviewers is between three
and five people. The interviewers will compare their observations and
reach a consensus concerning the candidate. This method has a high
level of validity.

(vi) Computer Interview
Through this interview, candidates are required to answer multiple
choice questions (from 75 to 125 questions) that are related to the job.
The answers given will be compared to an answer profile developed
from previous candidatesÊ answers. A computer interview is usually
used as an additional interview for a common or conventional
interview.

(b) Variables in a Job Interview
An interview process is influenced by the interviewer, the applicant and the
interview context. Figure 5.3 shows these variables and the processes
involved in a job interview.

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TOPIC 5 SELECTION 103

Figure 5.3: Variables in a job interview
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources

(15th ed.). Ohio: South-western College Publishing.

(c) Guidelines for the Interviewer

ACTIVITY 5.6

Bias can occur during an interview process. The interviewer is
often influenced by negative information about the candidate. In
your opinion, what should be done by interviewers to prevent this
from happening?

A job interviewer can influence candidates on whether to accept or reject a
job offer. Therefore, an organisation must be careful in choosing
interviewers. An interviewer needs to have attributes such as humbleness,
objectivity, maturity and composure. Communication skills are also
needed. The interviewer should not talk too much, be excessive in giving
opinions and show bias.

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104 TOPIC 5 SELECTION

Some of the guidelines that can be observed by interviewers are as follows:

(i) Set Interview Plans
Go through the purpose of the interview and determine the subjects
and questions that will be asked. Get related information.

(ii) Determine and Maintain Rapport
This can be done by welcoming the candidate, explaining the
interview purpose and showing interest in the candidate.

(iii) Be a Good Listener
Try to understand what the candidate means.

(iv) Pay Attention to Body Language
Observe the candidateÊs facial reactions, movement of head and
hands, body positions and other movements that can indicate his or
her attitude and feelings. However, an interviewer must be careful
with his or her own body language too.

(v) Give Information Properly and Sincerely
Answer the candidateÊs questions properly and sincerely. Provide a
clear picture of the job offered.

(vi) Use Questions Effectively
Avoid from questioning a candidate while he or she is still answering
a question. Give opportunities to the candidate to guess what must be
answered.

(vii) Separate Facts from Opinions
During an interview session, the interviewer needs to note down
facts. The interviewerÊs conclusion can then be compared with those
of the other interviewers.

(viii) Identify between Bias and Stereotypes
Most often, bias happens during an interview when the interviewer
easily accepts candidates who are compatible with him or her.
Stereotyping also happens during interviews. A candidate is often
judged based on race and appearance.

(ix) Control Interview Direction
Follow what has been planned. Give opportunities for candidates to
speak. However, the interviewer needs to monitor the situation so
that the objective of the interview can be achieved.

(x) Standardise Questions
Ask the same questions to all candidates that are interviewed for the
same position. This can increase reliability and avoid discrimination.

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EXERCISE 5.2

TRUE (T) or FALSE (F) Statements

1. Even though it has good potential, a physical ability test can
give a negative effect to women and handicapped applicants.

2. An achievement test requires applicants to carry out tasks
that are part of the actual work.

3. In using a non-directive interview approach, the interviewer
listens attentively and does not interrupt candidates or
change topics suddenly.

4. A panel interview is a situation where three to five
interviewers interview a group of future employees at the
same time.

5.3.4 Reaching Selection Decision

When the necessary information is obtained, the process to determine the
candidate to be offered the job is done. At this level, there are three important
things to be observed, i.e.:

Simplify a candidateÊs information;

Decision strategy; and

Final decision.

This level is important as it involves cost. Therefore, there has to be an
information checklist on the candidates, as well as strategy options in selecting a
candidate.

(a) Simplifying Candidate Information
The management is usually interested to know what can be done and what
will be done by a candidate in his or her job. The management must take
these two factors into account when evaluating candidates. Factors of what
candidates are able to do include knowledge, skills and ability to gain new
knowledge and skills. Factors of what candidates will do include
motivation, interest and other personality traits (refer to Figure 5.4).

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106 TOPIC 5 SELECTION

Figure 5.4: „Able to do‰ and „will do‰ factors
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources

(15th ed.). Ohio: South-western College Publishing.

An employee who has the ability to do something but has no interest to do
it is better than an employee who has interest but not the ability. It is easier
to measure what an applicant is able to do rather than what he or she will
do. Test scores can be used as a tool to measure a candidateÊs abilities. The
result of the interview can be a basis to assume what the candidate will be
able to do in future.

(b) Decision Strategy
The decision strategy used in hiring personnel differs according to the
different job categories. For example, the strategy used to hire a manager is
different from the strategy used to hire a clerk.

Some factors need to be observed by the management before any decision
on staff intake is made. They are as follows:

(i) Is the hiring of a particular individual based on his or her ability, or is
it based on the organisationÊs needs?

(ii) What is the starting fee for the individual that is offered a particular job?

(iii) Is selection based on the candidateÊs suitability for the job, or does it
take into account the candidateÊs career opportunities in the
organisation?

(iv) How far would those who are less qualified be put under
consideration?

(v) Will an individual who is more than qualified for the post be
considered and offered the job?

(vi) What are the effects of a candidateÊs intake on the regulations and
employee diversity in an organisation?

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TOPIC 5 SELECTION 107

The management must also determine the types of approach to be
implemented in deciding to hire an individual for a particular job. The
approach can be clinical approach or statistical approach.

(i) Clinical Approach
Through clinical approach, those involved in the selection process will
go through all data on the candidates again. Decision will be made
based on the interviewersÊ understanding of a particular job, and their
observations of the individuals who are successful in that particular
job. The clinical approach is subjective in nature but is often practised
in most organisations.

(ii) Statistical Approach
The statistical approach is more objective in nature and is better
compared to the clinical approach. The data obtained about the
candidates will be considered in detail and the forecaster will be
identified statistically.

There are a few models in the statistical approach. They are as follows:

Compensatory model
Through the compensatory model, the high score that a candidate
obtains in one particular part of a test will be able to assist a lower score
obtained in another part.

Multiple cut-off model
Through the multiple cut-off model, a candidate must reach a particular
level or a minimum score for all selection dimensions.

Multiple hurdle model
Through the multiple hurdle model, candidates who obtain high scores
in the entry test will be allowed to go to the next stage. This can save
cost if the selection cost is high.

The number of sufficient candidates is important so that the selection
process runs smoothly. If the number of candidates for a particular position
is not enough, the selection method can be questioned. There may be
circumstances where an unqualified candidate is hired as the organisation
does not have other choices.

A selection ratio is able to illustrate the effectiveness of a selection process.
A selection ratio is the number of applicants hired compared to the number
of applicants who applied (Mondy. Noe and Premeaux, 2002).

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108 TOPIC 5 SELECTION

ACTIVITY 5.7

Figure 5.5: Test score distribution with hypothetical cutoff
Based on Figure 5.5, candidates from Quadrants 1 and 2 will be hired
to work. What will the effect be if the acceptance cutoff is moved to
the left to increase the number of eligible candidates when the
number of manpower is still insufficient?

(c) Final Decision
After going through the pre-selection process, a candidate who is qualified
will be referred to sections or units where there are vacancies to be filled
up. The manager or supervisor in these sections or units will interview the
candidate and decide whether or not he or she can fill the vacancy. The
human resource department is responsible for delivering the result of the
candidateÊs application, as well as providing work details of the job if the
candidate is offered the job.

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EXERCISE 5.3 (c) Aptitude test
(d) Validity
Fill in the Blanks

(a) Selection
(b) Multiple hurdle model

1. _______________ The process of selecting a qualified
individual to fill a vacancy at present and in the future.

2. _______________ A continuous strategy whereby only
applicants who obtain the highest scores in the preliminary
test are allowed to proceed to the next test.

3. _______________ Measures an individualÊs ability to learn or
acquire new skills.

4. _______________ How far a test or selection procedure
measures a personÊs characteristics.

Multiple Choice Questions

1. Generally, the selection procedure is the responsibility of the
human resource department. However, the decision to hire
someone to work in a unit or section is made by
__________________.
A. Operations personnel
B. The department manager
C. The staff manager
D. A management consultant

2. To save cost, _________________ is performed as a final step
in the selection process.
A. An interview
B. A background check
C. A job test
D. A medical check up

3. A tool to measure mental abilities such as intelligence,
eloquence, ability to calculate and ability to rationalise is the
__________________.
A. Personality test
B. Achievement test
C. Cognitive test
D. Evaluation centre

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110 TOPIC 5 SELECTION

4. Even though every step in the selection process is important, the
most critical is the decision to _________________.
A. Accept or reject candidates
B. Implement a job test
C. Use application forms
D. Check references

Essay Question

1. What is meant by the term „criterion‰ as it is used in selecting
personnel? List some examples of criteria used for jobs that you
know of.

The selection process is supposed to give reliable and valid information about
an applicant. An interview is one of the methods used to obtain information
about an applicant.

The interview method can be used together with application form,
biographical information blanks, references, background check, cognitive test
and job sample test.

A job test is more objective than an interview and is able to give a wider
behaviour sample.

Each type of test has a specific purpose, such as the work knowledge and
work sample tests which are designed to determine whether a person
requires training or not.

A variety of methods can be used in the interview process. An interview can
be performed structurally or non-structurally, as well as on a one-on-one
basis or with a panel.

In the process of deciding whether a candidate will be offered a post, factors
that are taken into account are what the candidate can do, and what he or she
will be able to do. The recruitment section may use a clinical or statistical
approach.

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TOPIC 5 SELECTION 111

Biographical Information Blank (BIB) Reliability
Employment test Validity
Graphalogy

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Topic Performance

6 Evaluation

LEARNING OUTCOMES

By the end of this topic, you should be able to:
1. Explain the roles of performance evaluation;
2. Describe the processes of performance evaluation;
3. Discuss the main sources to evaluate employee performance;
4. Compare the main methods to evaluate employee performance; and
5. Examine the effective performance evaluation system

characteristics.

INTRODUCTION

The previous topics focused more on how an organisation can attract and
develop productive, flexible and motivated human resources. This topic will
focus on the aspects of maintaining human resource productivity in an
organisation. Although, initially, all supervisors or managers will observe their
employeesÊ work behaviour, and evaluate their performance at the end of the
year, they must also focus on the non-cost value increase to the organisation. The
unconcerned attitude of supervisors and managers is a challenge to the human
resource department to develop supervisors and managers who are able to
motivate employees to improve their performance. Supervisors and employeesÊ
acceptance of and commitment to performance improvement are critical in order
to determine the productivity increase in the organisation. Due to this problem,
performance evaluation is seen as a complicated activity but is important to the
organisationÊs competitiveness in the market.

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6.1 DEFINITION OF PERFORMANCE
EVALUATION

Before we start our discussion on the performance evaluation system, we need to
know what is meant by performance and performance evaluation. Harvey (1996)
defined performance as carrying out a task with the result of being able to reach
the job goals or certain activities throughout the duration given. Bernardin (1998)
stated that performance is a record on results shown based on work functions or
certain activities throughout the duration allocated.

Performance evaluation is a formal system that examines and evaluates
employee performance periodically (Mondy, 1999). It is also a process that
measures employee performance whereby employee performance is the degree
to which an employee completes all the work requirements given. Cardy (1994)
defined performance evaluation as a process of identifying, observing,
measuring and developing employee performance in an organisation. Therefore,
performance evaluation not only functions as a tool to measure performance but
also as a tool to develop employees.

Many terms can be used to refer to performance evaluation. Some of the more
often used are performance rating, performance study and merit rating.

SELF-CHECK 6.1

What is performance evaluation?

6.2 PURPOSE AND USES OF PERFORMANCE
EVALUATION

Performance evaluation basically aims to increase employee and organisation
productivity effectively but specifically, the roles played by performance
evaluation are much more than that. According to Ivancevich (2001), among the
roles played by performance evaluation are:

(a) Development
Determines which employees need training. This will enhance employee-
supervisor relationship and encourage the supervisor to contribute to the
reinforcement process of employee behaviour.

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114 TOPIC 6 PERFORMANCE EVALUATION

(b) Motivation
Encourages attempts, develops responsibilities and propels efforts towards
improving performance.

(c) Human Resource Planning
Functions as a valuable input to human resource planning activities.

(d) Communication
Acts as a basis for discussion between the supervisor and employees
regarding work matters through daily interaction.

(e) Compliance to Regulations
Acts as a valid foundation for promotions, transfers, rewards and employee
terminations.

(f) Human Resource Management Research
Verifies methods or techniques used in human resource management
activities. For example, during the selection activity, improving or selecting
the effective selection test.

Apart from general and specific purposes listed above, performance evaluation
can also be used for administrative and employee development purposes
(Bohlander, 2001). From the administrative aspect, performance evaluation is an
input that can be used in human resource management activities while the
development aspect focuses on feedback of employeesÊ strengths and
weaknesses, and stresses on performance improvement. Among the uses of
performance evaluation for administrative and development purposes are as
follows:

(a) Administrative Purposes

(i) Salary administration

(ii) Promotion

(iii) Decision to terminate or transfer employees

(iv) Reinforce authority structure

(v) Human resource planning

(vi) Documentation on human resource decisions

(b) Development Purposes

(i) Performance feedback

(ii) Identify the strengths and weaknesses of employeesÊ performance

(iii) Acknowledge employeeÊs outstanding performance

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(iv) Identify training needs
(v) Determine employee development programmes

ACTIVITY 6.1

Based on your experience, has performance evaluation helped in
your career? Explain.

6.3 MAIN CAUSES OF PERFORMANCE
EVALUATION FAILURE

Basically, the performance evaluation process is seen as a simple process whereby a
supervisor or manager only needs to observe the work performance of their staff
and give feedback on their performance from time to time. In reality, this process is
not that simple. The supervisor or manager as well as the staff often have different
opinions on performance evaluation. Some of the factors that lead to the failure of
the performance evaluation process, according to Bohlander, (2001), are:
(a) The supervisor or manager does not have sufficient information about

employeesÊ real work performance.
(b) The standard of measuring performance is not clear.
(c) The supervisor or manager does not have the skills to evaluate employee

performance.
(d) The supervisor or manager is not prepared to evaluate employee

performance, as he or she does not want to be seen as a judge who is giving
out an unfair sentence.
(e) Employees do not receive constant performance feedback.
(f) The supervisor or manager is not sincere during the performance
evaluation process.
(g) Performance evaluation is not focused on employee development.
(h) The supervisor or manager uses language that is unclear to the employees
during the performance evaluation process.
(i) Employees feel that the organisation does not allocate sufficient resources
for performance rewards.

These factors can influence the effectiveness of the performance evaluation
process and create a gap in the relationship between supervisor and staff.
Performance evaluation activities are often annual activities and focus more on

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116 TOPIC 6 PERFORMANCE EVALUATION

employeesÊ annual salary movement. The disagreement that exists and the
misunderstanding of performance evaluation have caused the performance
evaluation process to fail. Therefore, support from the top management is
important in order for performance evaluation to succeed so that the
organisation will be able to compete in the market.

SELF-CHECK 6.1

How far is the precision of an employeeÊs performance evaluation?

EXERCISE 6.1

1. What is meant by performance evaluation?
2. State the uses of performance evaluation from the

administrative aspect.
3. State five reasons why the performance evaluation process

fails to be implemented successfully.

6.4 PERFORMANCE EVALUATION PROCESS

Figure 6.1 shows the steps involved in the performance evaluation process:
Identifying performance evaluation objectives.
Developing performance standards.
Monitoring employee work performance.
Evaluating performance.
Discussing evaluation with employees.

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Figure 6.1: Performance evaluation process
Source: Adapted from Mondy, Noe & Premeaux. (2002). Human resource management

(7th ed.). New Jersey: Prentice Hall International.

(a) Identifying Performance Evaluation Objectives
The performance evaluation process begins by developing performance
evaluation objectives. The development of objectives must be related to the
organisationÊs objectives so that there will be work performance increase
shown by employees. For example, some organisationsÊ philosophy is to
focus on employee development aspects while other organisations focus on
the administrative aspects such as salary standardisation.

(b) Developing Performance Standards
After the performance evaluation objectives are set, a standard performance
will be developed. The purpose is to make the comparison between real
work performance and the organisationÊs expected work performance
easier. Basically, performance standards must be developed based on a
particular workÊs requirements and these requirements result from the job
analysis. A good performance standard is able to translate an organisationÊs
strategic objectives to a particular work. Figure 6.2 shows the four
important elements that must be present when developing performance
standards.

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118 TOPIC 6 PERFORMANCE EVALUATION

Figure 6.2: Performance standard development
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources

(15th ed.). Ohio: South-western College Publishing.

(i) Strategic Relevance
The standards that are developed must be related to the
organisationÊs strategic objectives. Indirectly, the organisationÊs
strategic objectives need to be translated into the performance
standards. For example, 95% of customer complaints must be solved
on the same day. With this in mind, employees who are in contact
with the customers must take into account this strategic objective
when developing their standards.

(ii) Criteria Contamination
Criteria contamination happens when factors that are out of the
employeesÊ control influence their performance. For example, a typist
needs a computer to type and produce quality output. If the
organisation only has a typewriter, then the quality produced may not
be as good as the output quality produced by a computer. Therefore,
the computer becomes a factor that contaminates the typistÊs
performance.

(iii) Reliability
Reliability refers to the consistency of the standards that are
developed. Consistency means how far an employee is able to
maintain a level of performance in a particular timeline. For example,
the evaluation comparison done by two managers on an employee,

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TOPIC 6 PERFORMANCE EVALUATION 119

for a promotion, will determine the reliability of the employeeÊs
performance.

(iv) Criterion Deficiency
The development of performance standards must take into account all
the responsibilities of the employee. If the standard that is developed
only takes one aspect of the job, then criterion deficiency occurs. For
example, a salespersonÊs performance evaluation is only measured
through his or her sales volume without taking into account another
important criterion, i.e. customer satisfaction.

(c) Monitor Work Performance
After developing performance standards, the next step is to monitor the
employeesÊ work performance so that the performance demonstrated is in
line with the standards set. If the real performance shown by employees
deviates far from the set standards, then the standards developed must be
re-analysed to ensure that they are clear, attainable, measurable and state
the time period to be carried out. An unclear standard must be altered so
that employees are able to carry out their duties effectively.

(d) Evaluating Performance
Usually, at the end of the year, employee performance will be evaluated to
ensure that the organisationÊs strategic objectives are achieved. The real
performance shown by employees will be compared to the standards that
have been developed.

(e) Discussion on Performance
Employees and managers will review the employeesÊ performance together
based on set standards. A performance discussion will determine how far
the employee is able to achieve the organisationÊs strategic objectives,
identify the problems that obstructed the achievement and find alternatives
to solve the problems. This discussion will also include developing
objectives for the next year.

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ACTIVITY 6.2

State whether you agree or disagree on the following issues
regarding performance evaluation, and give a solid reason for
your answers.

1. Performance evaluation is the managementÊs technique to
control employee behaviour.
(a) Agree
(b) Disagree

2. Performance evaluation creates employee groups who are
individualistic and selfish.
(a) Agree
(b) Disagree

3. Performance evaluation helps employees to improve their
performance.
(a) Agree
(b) Disagree

EXERCISE 6.2

1. State the main elements in developing an effective
performance standard.

2. Explain the key steps involved in the performance
evaluation process.

6.5 RESPONSIBILITY OF EVALUATING

Usually, the manager of a department or unit will be responsible for the
evaluation of his or her employeesÊ work performance. The work difficulties
today have caused some managers to be unable to monitor or evaluate their
employeesÊ work performance. If a department or unit has a small number of
employees, then there is a possibility that only one manager is needed to evaluate
his or her employeesÊ performance. However, for a department or unit that has a
large number of employees, the responsibility to evaluate can be assigned to
other sources such as colleagues, self evaluation, customers and subordinates.

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(a) Immediate Supervisor
This traditional method stresses that performance evaluation must be done
by an employeeÊs immediate supervisor. A supervisor is the most eligible
person to observe and evaluate his or her employeesÊ work performance,
and he or she is also responsible for the management of the unit or
department. Since the immediate supervisor will evaluate the employees, it
goes without saying that the training and development aspects of the
employees become important elements that should be focused on.

If seen from a negative perspective, the immediate supervisor may stress on
certain performance aspects and ignore other performance aspects. For
example, he or she may only stress on the quantity aspect and ignore the
quality aspect.

(b) Self Evaluation
If an employee understands the objectives that must be achieved and is
involved in the development of performance standards, then he or she is
qualified to evaluate himself or herself. This is because the employee knows
what has to be done and how to carry out the task effectively. Moreover, an
employeeÊs involvement in the performance evaluation process is critical so
that an increase in productivity is possible.

From the negative perspective, an employee is more keen to illustrate his or
her strengths and try to cover up his or her weaknesses. With this in mind,
self-evaluation is more suitable to be used for self-development and not as a
basis for promotion or salary increments.

(c) Subordinates
The most suitable people to evaluate a manager are his or her subordinates.
This method is effective because the subordinates are the best source to
observe the effectiveness of the manager. Moreover, the subordinates are
always in contact with the manager. This type of evaluation is more for the
managerÊs self-development so that he or she is able to rectify his/her
weaknesses. The negative aspect of this evaluation is that the subordinate
may either give a good evaluation of his or her manager if they have a good
working relationship, or evaluate the manager poorly if they are at odds
with each other.

(d) Peers
Peers can be an effective evaluation approach as peers often interact and are
able to identify their colleaguesÊ strengths and weaknesses. Peer evaluation
can also give an accurate and valid input.

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122 TOPIC 6 PERFORMANCE EVALUATION

However, peer evaluation will also create problems if it is used as a basis to
give favours or seek revenge. For example, employee A often helps
employee B carry out his duties. Therefore, when the time comes for
evaluation, employee B will give high marks to employee A in return for all
the assistance that was given.

(e) Customer Evaluation
Customer satisfaction determines the success of an organisation. Based on
this idea, most organisations feel that they should obtain their employeesÊ
performance input from customers. Basically, there are two types of
customers, namely, internal and external customers. Internal customers are
employees from a certain department who depend on the output or other
employeesÊ work results for their input. For example, output that is
produced by employee A from Department A is an input for employee B
from Department B. In this case, employee B is the customer of employee A.
External customers are outside people who use the products or services
produced by an organisation.

(f) 360-degree Evaluation
Apart from the sources stated above, an organisation may also use the 360-
degree evaluation method to assess their employees. This approach is very
popular and is an alternative to the traditional method as the organisation
gets complete information about employeesÊ performance. This is important
to increase the organisationÊs competitiveness in the market. Basically, the
360-degree method uses a combination of various evaluation sources as
stated above. Usually, an organisation uses this method for the purpose of
employeesÊ development only. The restrictions of this method are that it is
expensive and takes a long time as it involves many parties in the
evaluation process.

SELF-CHECK 6.2

Who is involved in an employeeÊs performance evaluation?

EXERCISE 6.3

Explain briefly the sources involved in evaluating employee
performance.

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TOPIC 6 PERFORMANCE EVALUATION 123

Visit http://www.work911.com/performance/particles/stupman.htm for
information on the ten negative things a manager does in his or her employeeÊs
performance evaluation.

6.6 PERFORMANCE EVALUATION METHOD

There are a few methods or approaches that can be used to evaluate employee
performance. The selection of certain methods depends on the purpose of the
performance evaluation system of an organisation. If emphasis is placed on
promotions, trainings and rewards based on merit, then a method like rating
scale is more appropriate. In fact, a combination of a few methods is more
appropriate to develop employee performance and help them produce a more
effective performance. There are three main methods that can be used by an
organisation, i.e.:

(a) Trait

(b) Behaviour

(c) Result

6.6.1 Trait Methods

Trait is designed to measure how far an employee is able to acquire certain
characteristics such as creativity, innovation, leadership and dependency that are
seen as important in carrying out oneÊs work. Among the methods categorised in
the trait method are:

(a) Graphic Rating Scale
The graphic rating scale focuses on employee evaluation that is based on a
scale or on certain characteristics that have been developed, and employees
will be evaluated on how far they have acquired each skill in that particular
scale. The graphic rating scale is as shown in Figure 6.3. This method is easy
to use as the evaluation and measurement characteristics are given.

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124 TOPIC 6 PERFORMANCE EVALUATION

Please tick ( “) at the appropriate space

Evaluation Poor Below Average Average Good Excellent
Factor (Does not meet (Needs (Fulfils (Often exceeds (Exceeds
requirements) requirements requirements) requirements
improvement as consistently) consistently)
requirements
are often not
met)

Work Quantity
Work Quality
Commitment
to Work
Initiative
Cooperation

SUITABILITY OF PROMOTION

Capable and able for promotion according to circumstances
Given priority for promotion due to high capabilities and abilities
Not suitable for promotion due to few capabilities and abilities

Figure 6.3: Graphic rating scale
Source: Adapted from Mondy, Noe & Premeaux. (2002). Human resource management

(7th ed.). New Jersey: Prentice Hall International, Inc.

(b) Essay
This method is the easiest method because supervisors only have to write
statements depicting employeesÊ performances. Supervisors will talk about
the strengths and weaknesses of employeesÊ behaviours and give
recommendations to improve on the weaknesses. Even though this method
is easy, it takes a long time, and is too subjective as the supervisor needs to
illustrate employeesÊ overall yearly performance.

(c) Forced-choice Method

This approach needs the appraiser to choose a few statements which are
provided to differentiate between good and bad performances. Figure 6.4
shows the statements which have to be chosen by appraisers. These
statements are developed by experts in the human resource field and
appraisers need to determine the statements which depict the effectiveness
of work behaviour demonstrated. Neutral statements are sometimes
included in the choices. Appraisers not only choose statements which
depict employeesÊ work behaviour but also arrange the statements from
good to poor.

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TOPIC 6 PERFORMANCE EVALUATION 125

Rate these statements from 1 to 4 to illustrate the
employeeÊs work behaviour.

1 Good
4 Not good

EmployeeÊs Name: __________________________

_____ Difficult to accept change
_____ Understands explanations quickly
_____ Seldom wastes time
_____ Easily approachable for interaction
_____ Becomes the leader in group activities
_____ A hardworking employee
_____ Always meets deadline
_____ Produces low quality output
_____ An employee committed to his/her tasks

Figure 6.4: Forced-choice method
Source: Adapted from Ivancevich. (2006). Human resource management (10th ed.).

Boston: McGraw-Hill Irwin.

ACTIVITY 6.3

Do you agree that rewards need to be stressed during the
performance evaluation process? State the reasons for your
answer.

6.6.2 Behavioural Methods

This method focuses on behaviour aspects based on a scale that illustrates certain
behavioural descriptions. These descriptions enable appraisers to identify
employee performance based on certain behaviours from weak to excellent. Some
of the methods included in the behaviour method are:

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126 TOPIC 6 PERFORMANCE EVALUATION

(a) Critical Incident Method
The critical incident method technique needs the appraiser to keep records
or log books on employeesÊ behaviour. The supervisor needs to observe the
employeesÊ critical behaviour all year long and record them in the log book.
When an action demonstrated by an employee affects the effectiveness of
the department, the supervisor has to record that particular behaviour, be it
positive or negative. Indirectly, the supervisor has to record workersÊ
behaviour seen as critical and which can influence the departmentÊs
effectiveness.

During the evaluation period, the supervisor will use the records together
with other information to evaluate employeesÊ performance. The advantage
of this method is that it illustrates the employeesÊ overall real performance
whereas the disadvantage of this method is that the supervisor has to
observe the critical work behaviour of all of his or her employees. If there
are too many employees in the supervisorÊs department, the observation
will require a long time. Examples of the critical incident method which are
positive and negative in nature are as follows:

(i) First critical incident
4 January 2002: Ali patiently listened to a complaint from his
customer, answered each of the customerÊs questions, took back the
product and refunded the customer. Ali was very polite to the
customer, prompt and showed interest in listening to the customerÊs
problems.

(ii) Second critical incident
20 April 2002: Today was a very busy day due to product inventory.
Even though it was a hectic day, Ali went to the canteen for 15
minutes. Throughout the time he was at the canteen, the store
manager called him three times asking about the inventory in the
store.

(b) Behavioural Checklist and Weighted Checklist
These are easy approaches to utilise as these checklists are statements
describing characteristics of work behaviour. The supervisor only has to
mark the statements which describe the work behaviour demonstrated by
the employees. If the statements given do not show employeesÊ work
behaviour, then the supervisor need not mark the allocated space.

Supervisors can also weigh each work behaviour demonstrated. Then, each
mark is totalled. An example of the weighted checklist is as shown in
Figure 6.5.

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TOPIC 6 PERFORMANCE EVALUATION 127

_____ Makes decisions quickly Weight
_____ Understands explanations fast 10.0
_____ Seldom wastes time
_____ Always meets deadline 8.7
6.5
8.8

Figure 6.5: Weighted checklist

(c) Behaviourally Anchored Rating Scale (BARS)
This technique is based on critical incidents. Evaluation is done based on a
scale of 1 to 9, for example, and each scale has a description of certain
behaviour, be it positive or negative. An example of the use of this
technique for a teacherÊs evaluation is as shown in Figure 6.6.

Figure 6.6: Behaviourally Anchored Rating Scale (BARS)

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128 TOPIC 6 PERFORMANCE EVALUATION

(d) Behaviour Observation Scale (BOS)
This technique is also based on critical incident just like BARS which
identifies a few behaviour dimensions critical in a certain job. The obvious
difference between BARS and BOS is that BOS focuses more on the
frequency of a particular behaviour throughout the year. An example of
BOS is as shown in Figure 6.7.

Examples of items for site supervisor

1. Preparing an accurate cost report Often done
Never done 1 2 3 4 5

2. Supervising project employees effectively

Never done 1 2 3 4 5 Often done

3. Always on site when employees are in trouble

Never done 1 2 3 4 5 Often done

4. Preparing a good and fair duty roster

Never done 1 2 3 4 5 Often done

5. Able to solve problems quickly without procrastination

Never done 1 2 3 4 5 Often done

Figure 6.7: Behaviour Observation Scale (BOS)
Source: Adapted from Ivancevich. (2001). Human resource management (8th ed.). Boston:

McGraw-Hill Irwin.

6.6.3 Result Methods

Aside from behaviour and trait methods, an organisation can also utilise the
result method to evaluate their employeesÊ performance. This method enables
supervisors to evaluate the results achieved by employees. Therefore, it is more
quantitative in nature, objective and empowerment can be present. This in turn
will lessen bias. This technique also stresses that employees be responsible for all
results achieved. There are two techniques which can be categorised in this
group, i.e.:

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(a) Productivity Measures
There are many measurement techniques to evaluate the performance of an
employee. A salesperson will be measured through his or her sales volume
(in unit and ringgit) whereas a production operatorÊs performance will be
measured through output produced and the volume of scrap found. In fact,
each measurement is directly related to the achievement shown by an
employee. Indirectly, the performance achieved by an employee is related
to the organisationÊs strategic objectives and employee objectives.

Even though this measurement technique seems easy, it may be influenced
by „criteria pollution‰ because performance result may be tainted by factors
which are out of the employeeÊs control. For example, a production
operator may not achieve his or her target as the raw materials needed are
insufficient.

In addition, measurement based on result may be short term and
employees may ignore the organisationÊs long-term strategy objectives.
Aside from that, factors such as cooperation, initiative and suitability in
teams are important in achieving set targets. Therefore, to achieve an
effective evaluation, result and process have to be taken into account in the
evaluation.

(b) Management by Objectives (MBO)
This technique can be used as an alternative to prevent problems in the
productivity measurement technique. MBO stresses that each employee
form his or her performance objective at the beginning of the year through
discussions with the supervisor. The objectives act as a standard which will
be used to evaluate the employeeÊs performance at the end of the year.

Figure 6.8 shows the performance evaluation cycle based on the MBO
method. After the setting of objectives is agreed upon by the supervisor and
employee, duties are carried out and the supervisor needs to observe the
employeeÊs work behaviour. An interim study has to be carried out, usually
in the middle of the year, to make sure the objectives formed are suitable
and achievable.

If the objectives are not clear and difficult to achieve, the supervisor and
employee will formulate other objectives which are more realistic and
achievable. At the end of the year, performance will be evaluated based on
the set objectives. After that, the organisationÊs performance will be
reviewed based on the overall employee performance. If the performance
shows no improvement, then the organisationÊs goals need to be studied
and changed in order to be more realistic.

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130 TOPIC 6 PERFORMANCE EVALUATION

Figure 6.8: Management by Objectives (MBO)
Source: Adapted from Bohlander, Snell & Sherman. (2009). Managing human resources

(15th ed.). Ohio: South-western College Publishing.

EXERCISE 6.4

Explain briefly the three main methods which can be used in
evaluating employee performance.

6.7 ERRORS IN PERFORMANCE EVALUATION

In the effort to increase effectiveness in the performance evaluation system, there
are various errors which will emerge due to human errors. In theory,
performance evaluation seems easy but in reality, performance evaluation is not
as easy as it is thought to be because appraisers are often exposed to the errors
which occur during the performance evaluation process. Some of the errors or
mistakes which occur during evaluation are:

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TOPIC 6 PERFORMANCE EVALUATION 131

(a) Halo Effect
This effect happens when an appraiser conducts a total evaluation based on
only one aspect of performance. For example, an appraiser who places
importance on the quantity aspect will give a high value to an employee
without considering other aspects such as communication, involvement
and quality. In other words, an appraiser sees the employee as being
efficient in all his or her work aspects when he or she is able to meet the
quantity required by the organisation.

(b) Central Tendency
Central tendency happens when an appraiser awards the same evaluation
to all evaluated employees. The appraiser is inclined to give an average
evaluation to all employees with the excuses of maintaining good working
relationship with everyone so that friction does not occur.

(c) Recency Error
The recency error is one of the problems in the performance evaluation
process. An appraiser often focuses on work performance that is close to the
evaluation period as it is difficult to remember work performance in the
beginning of the year.

(d) Contrast Error
This error happens when a manager compares an employeeÊs performance
with another colleague who has already been evaluated, and not based on
set standards. For example, employee A is seen as innovative and
participates actively in his or her work; when employee CÊs turn for
evaluation comes up, his or her performance will be compared to employee
AÊs performance, and not based on the set standards.

(e) Leniency/Strictness Error
Leniency error is an error made by an appraiser when he or she gives a
high rating to the employee being evaluated because the appraiser does not
have the heart to give a low rating. Strictness error happens when an
appraiser awards a low rating to the employee being evaluated because he
or she feels that none of the employees deserve a high rating.

(f) Similar-to-me Error
This error happens when an appraiser gives a high rating because the
employee who is being evaluated has similar personal characteristics with
the appraiser. For example, an appraiser awards a high mark to the
employee because they both like to drink tea.

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132 TOPIC 6 PERFORMANCE EVALUATION

In order to ensure a manager or supervisor does not make the same mistakes, he
or she has to be given training on how to evaluate their employees effectively
and fairly, as well as focusing only on the employeesÊ work performance. This
training aims to increase the appraiserÊs skills in observing and giving feedback
to employees. Employees also need to give support by giving information which
is needed by the appraiser in order to ensure that the evaluation is done justly.

SELF-CHECK 6.3

What are the factors which cause errors in performance
evaluation?

ACTIVITY 6.4

State whether you agree or disagree on the following issues
regarding performance evaluation and give one reason for your
answer.

1. The performance evaluation process should be conducted as
often as possible so that employees know about their
strengths and weaknesses.
(a) Agree
(b) Disagree

2. All employees need to be informed about their performance
evaluation marks.
(a) Agree
(b) Disagree

EXERCISE 6.5

Explain briefly the mistakes or errors which are often made by
appraisers when they evaluate their employees.

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TOPIC 6 PERFORMANCE EVALUATION 133

6.8 PERFORMANCE INTERVIEW

A performance interview is an important process in the performance evaluation
system as appraisers need to give effective feedback about the employeesÊ
performance achievement. Apart from that, appraisers also need to ensure that
employee performance improvement occurs. Managers or supervisors need to
conduct formal performance interviews at the end of each year even though they
face a lot of problems in evaluating their employeesÊ work performance.

The success of a performance interview depends on how the manager or
supervisor continuously interacts with the employees, focuses on responsibilities
in the development of employees and receives support from the top
management. Stone (1998) stated that performance interviews are conducted for
the purposes of:

(a) Studying employeesÊ work responsibilities together;

(b) Evaluating employee performance together;

(c) Exploring the alternatives together in ensuring that performance
improvement happens; and

(d) Studying the short-term and long-term objectives together.

An effective interview has to be planned and structured well in order for the
supervisor and employees to view the interview as a problem-solving session
and not as a „fault finding‰ session (Mondy, 1999). A supervisor has to ensure
that these three elements are considered when planning a performance interview,
i.e. the discussion must:

(a) Be based on the employeesÊ performance and not their personality.

(b) Help employees set work objectives and career development plan.

(c) Give suggestions and help to achieve objectives which have been set as well
as gain support from top management.

Apart from that, Stone (1998) stated that an effective performance interview
needs to consider these three factors:

(a) A supervisor needs to possess information about employeesÊ performance
and work.

(b) A supervisor needs to give support and assistance to employees at all times.

(c) A supervisor needs to involve employees during performance discussions.

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134 TOPIC 6 PERFORMANCE EVALUATION

Before the performance interview session, the supervisor needs to inform
employees about the date of interviews so that employees are given the
opportunity to re-examine their job description, analyse any problems faced and
compare their real performance with the set standards.

The supervisor needs to collect information about employees whose work
performance is being evaluated, study the job description of every employee to
ensure they are still correct, read the performance report to identify matters that
need to be focused on, compare their real performance with the set performance
standards, list matters that need to be discussed and ensure that the time
allocated is sufficient as well as no disturbance occurs during the interview
process.

The supervisor must realise that there are differences among individuals. The
supervisor must also know how to criticise an employeeÊs weakness and praise
when necessary so that there is no dissatisfaction between the supervisor and
employee. By this, a fair and transparent performance evaluation can be
presented to the employee who is being evaluated. Performance improvement
can then occur after the interview session.

The performance evaluation process does not end after the performance
interview session. In fact, a supervisor needs to ensure that all the alternatives
which were proposed are carried out effectively and monitor employeesÊ
performance from time to time by giving feedback.

ACTIVITY 6.5

Visit http://www.performance-appraisal.com/intro.htm for
information on four performance evaluation methods which are listed.
Then, visit http://www.opm.gov/perform/articles/pdf8.htm and
elaborate on the methods used in evaluating group performance.

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