Organisational background
Performance evaluation of the employees is important part of business organisation and important task of the human resource management department of an organisation. The present study has considered BHP Billiton of Australia to develop a research plan on the effectiveness of its performance evaluation system. BHP Billiton is global resource company based in Australia (bhpbilliton.com, 2017). In a large company like BHP Billiton performance evaluation of employees is important factor as the employee performance is directly related to the productivity of the organisation. Management of human resource in a large organisation is major concern in present business regime. Hence, this paper will be developing to study the effectiveness of the performance evaluation system of the company.
Performance evaluation method has different process. According to Viola et al. (2015), there are main three areas of performance evaluation such as individual task outcomes, behaviours and traits. Performance management system is required for the company to measure the progress of the human resource. A good evaluation system identifies the problems in the performance of every employee to bring efficiency in the work process (Moritz, Hill & Donohue, 2013). The literature review section highlights different aspects and measurement process of the evaluation system. In order to conduct quantitative study selection of dependent and independent are chosen. Dependent variable for this study is performance of employees. Independent variables are individual task outcome, behaviour of employees and traits of employees.
- Why performance measurement system is important for an organisation?
- What types of performance evaluation system is used in BHP Billiton?
- How is the performance evaluation system effective for the growth of the organisation?
- What are the recommendations for improvement of the performance evaluation system?
2.1 Measurement of performance evaluation system
As discussed by Lönnqvist, Verkasalo, Walkowitz & Wichardt (2015), performance evaluation system are used by organisations to develop employees into high skilled individual and to increase efficiency. Nuti, Seghieri & Vainieri (2013) studied performance evaluation system of a health care institution of Tuscany region. This study identified that the performance evaluation of the public health care sector is based on local needs and to achieve organisational goals. They use survey method upon employees they considered the variables such as leadership style, team work, budget process, training opportunities for performance evaluation. The feedbacks are verified by the top management to identify strengths, weakness and organisational conflicts. Awrangjeb & Fraser (2014) examined automatic and threshold free evaluation system, which do not requires any human judgement or threshold setting. This approach considers object and pixel-based evaluations as well as geometric accuracy. However, these processes are complicated compared to survey method and quantitative. Bernardin & Wiatrowski (2013) studied dependent and independent variables for the study of performance evaluation system. Appraisal system has been evaluated in this study.
In the view Alfes, Shantz Truss, & Soane (2013), evaluation of employee behaviour is problematic that tries to quantify variables, which cannot be measured objectively. The factors need to be considered during employee performance are promptness, consideration towards co-workers and willingness to assist others. Korschun, Bhattacharya, & Swain (2014) highlights that company needs to set goals and objectives for gathering data for employee performance. Programme modification needs to be identified in order to enhance performance. Proper resource allocation is also required to evaluate and enhance skill of employees. The last action that is required to take is continuous evaluation of results to ensure progress. Pinder (2014) stated four elements of performance measurement system such as service effort indicators, service accomplishment indicators, explanatory information and efficiency indicators. Service effort is measured in terms of monetary unit that is amount of money spent to provide effective service to the end users. Service accomplishment is the indicators of customer satisfaction measured through customer feedback. Efficiency indicators are the ratio of service effort indicator and service accomplishment indicator (Ashkanasy, Ayoko & Jehn, 2014). The last aspect is explanatory information that transforms data into usable criteria.
Research Questions
Performance management process can be administered by the technology. There are several steps of this process which starts with the incorporation of criteria from job role. It includes several measures of performance such as self assessment, feedbacks from peers and managerial report, review of senior leadership. This performance appraisal method is conducted annually, quarterly or weekly based on the nature of demand of job.
Individual task outcome is defined in terms of behaviours and actions of employees, rather than the results of these actions. These behaviours are under the control of the individual and exclude behaviours that are constrained by the environment. Streukens & Andreassen (2013) suggested several measurements of individual work outcome such as Stanford Presenteeism Scale, Performance Questionnaire, Work Productivity and Activity Impairment. Productivity interacts with other aspects of employee performance, financial controls, innovation, and competitive effectiveness, any one of which can lead to organizational failure. Individual task outcome has four major factors such as task capacity, individual capacity, individual effort, and uncontrollable interferences (Derler & Weibler, 2014). The last factor is not controlled by individual and it is controlled at organisational level.
As identified by Wisse, Barelds & Rietzschel (2015), employee behaviour can be measured against the value of the company. Researcher identifies the virtues such as integrity, accountability, passion, humility, simplicity and measurement of outcome. Some institutions use leadership traits, passion of work, collaboration, diversity and quality of employee. Kim (2014) suggested the alignment model of Gregory Bateson and Latterly Robert Dilts for assessing the behaviour with the organisation value. The model suggests that the organisation first needs to choose the purpose of business functioning. The purpose can be identified by the mission or vision statement. Attitude towards work is an indicator of the behaviour of the employee in the work place. An employee positive attitude is able to handle difficult situation in the workplace and has the power to influence positively. In order judge the employee behaviours review from co workers and the customers can be taken.
The second step of the alignment model is the identity of the worker. An employee can perform several roles such as facilitator, coach, educator, manager, designer, support. The values and personal belief influences the behaviour of the employees. Effective behaviour in the organisation is the reflection of the capability and above traits. Behaviour is sometimes unconscious that becomes habitual and determines the culture of the organisational environment. In the view of Gabriel (2016), individual behaviour can be adjudged from the observation of in individual managers and supervisors as well as workers to evaluate actual practice. Arrogance is detrimental for career growth. People need to be humble in workplace.
Employee trait is the intangible behaviour that is used in the performance review. Traits can be measured through three factors such as cooperativeness, dependability and judgement. Traits vary with the job role. Hence, before evaluation, requirement for the job role and the characteristics are needed to be studied. Next requirement is to match the trait with the behaviour. A performance log can be prepared to record every day attitude, behaviour and performance based on rating scale. The good traits an employee needs to possess in career development path are ambitions, humbleness, autonomous, passion, honesty, confidence, creativity, reliability, positivity and eagerness. An ambitious employee always wants to accomplish the goal, which is linked with the organisational goal. An employee, who has autonomy in the workplace, can work free to deliver their best quality. Integrity with the work process increases with the work process. Shields et al. (2015) mentioned that autonomous employee is better able to manage their time to improve work. People, who are responsible, can be delegated with tasks. They also help with the synergy in the office and make it easier for managers to entrust tasks.
Literature review
The hypotheses are as follows:
Hypothesis 1
H01: Individual task outcome is not a good measure of performance evaluation system.
H11: Individual task outcome is effective measure of performance evaluation system
Hypothesis 2
H02: Employee behaviour is not an effective measure of performance evaluation
H12: Employee behaviour is an effective measure of performance evaluation
Hypothesis 3
H03: Employee traits cannot evaluate performance of employee effectively
H13: Employee traits can effectively evaluate performance of employee effectively
Hypothesis 4
H04: Performance evaluation system of BHP Billiton is not very effective in increasing growth of the organisation
H14: Performance evaluation system of BHP Billiton is very effective in increasing growth of the organisation
Performance evaluation system will be evaluated in the present research using dependent and independent variables studied in the literature review. Individual task outcome is most important for the performance evaluation. Individual task outcome can be evaluated using four factors such as task capacity, individual effort and uncontrollable interferences. Related components are presented in the conceptual framework.
After a brief introduction to the study, participants need to be shown a list of all indicators per three independent variables in the study such as individual task outcome, behaviour and employee traits. Per dimension, participants will be asked to select the most important indicators, keeping in mind work performance on a generic level. Job-specific questionnaire will be prepared. Participants will be asked to fill out their gender, age, highest educational level completed, profession, years experience in this profession, number of people they manage, and branch of industry (Sykes, Venkatesh & Johnson, 2014). Questionnaire is made irrespective of any discrimination and based on several dimensions of employee performance system.
Research is started with the literature review. After reading and gathering knowledge on dependent and independent variable, next task is data collection. Third step data analysis and report writing. Data would be collected through primary and secondary method and analysis would be quantitative. Collected data will be analysed using software such as Excel or SPSS. Effect of independent variables on dependent variable will be measured through quantitative analysis. Analysis will be made to justify the hypotheses. Acceptance or rejection of research hypothesis depends on the statistical results (Nyberg, Pieper & Trevor, 2016). Primary data would be collected through survey on employees of BHP Billiton directly using questionnaire. Similar questions would be for all participants. Secondary research is also required for this study.
Simple random sampling will be appropriate for the study. This process of sampling is easy to understand and convenience for data collection. Simple random sampling is appropriate for the research, where sample is chosen randomly with equal probability of selection. Employees will be chosen randomly irrespective of gender, age, job role and caste. Total sample size will be 250.
Both primary and secondary data are required for the study. Primary data will be composed from end to end face to face method. Questionnaire will be distributed among participants. All questions will be close ended and prepared on Likert scale so that employees can answer unbiasedly. Questionnaire will be personally administered and mail questionnaire. Mail questionnaire is for international workers of this company. Questions will be there to evaluate both dependent and independent variables (Bernardin & Wiatrowski 2013). Along with primary data, secondary research is also needed to evaluate the actual performance evaluation system of BHP Billiton. Results will be discussed with the knowledge gathered in literature review. Secondary research will be helpful to answer some of research questions. Secondary data will be collected from annual report
Measurement of individual task outcome
Data will be collected and recorded on the excel spreadsheet. Data will be edited and categorised as per need of the data analysis. Pearson correlation, descriptive statistics, ANOVAs and regression analysis will be conducted. Pearson correlation finds out whether there is positive, negative or no relation between two variables. Descriptive statistics presents a summary statistics, which includes mean, median, mode, standard error, variation, skewness, kurtosis and range. 1st three results are measures of central tendency that measured pattern and characteristics of values. Others measures are the variables of dispersion, that measures deviation of values from the mean responses. These measures are helpful to assess variability and reliability of data. Simple multivariate regression analysis will be conducted. Descriptive statistics will be used to evaluate pattern of data. Multivariate regression analyses the relationship of several variables together and hence, it is multidimensional.
Ethical consideration is required for both primary and secondary data collection method. Researcher will make certain that he or she will keep the privacy of data collected from both employees so they their interest are not hampered. Researcher will ensure not to disclose the identity of the respondents to any other person or organisation related or not related to the research. Ethics need to consider for secondary data so that no data would be distorted to conduct the research.
Conclusion
This research proposal provides an outline for extensive research on the performance evaluation system in an organisation. The study considers the large resource company of Australia, BHP Billiton. This company has to manage a large number of employees for daily operation, Performance of the employees determine the growth and performance of the entire organisation. Several factors need to be considered in a performance evaluation method such individual work performance, employee behaviour and trait. The research outline has been presented for a quantitative research. It is recommended to use large sample to increase validity, reliability and robust result of this research. Sampling fluctuation and sampling error can be minimised by extending sample size.
References
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