confidence that the time and effort they devote to performanceevaluation is worthwhile and give

employees more interest in usingthe evaluations to change behaviors and improve performance.

8ob Anal&s#s

The second element of astern (an' 9td. performanceappraisal system is a sound job analysis system
that providescomprehensive and accurate descriptions of all jobs in theorgani-ation. They define their
job precisely and clearly so that anemployee)s job performance can be evaluated fairly. (ecause the
jobanalysis method used is a major determinant of the structure of thepay system that results,
management is very careful in selecting theproper job analysis techni&ues that suits the situation most.

Meas"re%ent of Perfor%ance

The management of astern (an' 9td. believes that thefoundation of a good performance measurement
system is themethod by which performance is measured. It helps managers withinformation necessary
for ma'ing decisions such as salaryadjustment, promotion, transfer and training. They believe that
themeasurement systems used in performance appraisals must be valid,reliable, and free of bias and
must not produce ratings that areconstantly too lenient or too severe that bunch up in the middle.
Theymust also be free of halo and timing errors. These factors for thesuccess of astern (an' 9td.
measurement program are discussedbriefly below3

Review of Performance Appraisal System of EBL

25

Validity

According to %red Gerlinger, when we &uestion the validity of a measure, we are as'ing whether it
measures what we thin' itmeasures. <alidity is the e"tent to which a method of measurementaccurately
reflects the object or characteristic being measured.

Reliability

To ma'e sure that the results of their measurement systemare consistent, astern (an' 9td. tries to ma'e
it reliable. If the sameperformance is measured several times in the same way and theresults are very
similar, the measurement can be called reliable.Fenerally, the reliability is high for the astern (an' 9td.,
showingconsistent result from the very beginning of its journey.

Freedom from bias

(ias is a personal preference or indication that hindersimpartial judgment, as in a prejudice for or

against some person or group of people based on race, age, se", seniority, or the li'e.Bowever, the
performance measurement system used by astern(an' 9td. seems to be free from biasness. They
generally use morethan one evaluator so there is a less possibility of biasness.

Restriction of range

9eniency, severity, and central*tendency problems inperformance evaluation are special cases of the
tendency of someraters to restrict the range of ratings they use. In each of these

Review of Performance Appraisal System of EBL

26

situations, the rater is unable to distinguish between differentperformance levels. In their performance
appraisal system, astern(an' 9td. tries to minimi-e the problems occurred by the restriction of range by
giving proper briefing to the rater or the evaluator.

Halo error

As other organi-ations performance appraisal techni&ues,astern (an' 9td. performance appraisal

techni&ue is not also free of halo error. It occurs when a rater consistently assigns the same ratingto all
aspects of a person)s performance, regardless of the actualperformance level, because the raters)
impression of the person.#everal factors, such as personal feelings and prior e"pectations, canresult in
halo errors of ratings. Balo error distorts performanceappraisal system information and, li'e other
problems of measurement, may compromise the objectives of the performanceappraisal system.

Timing errors

Timing has a major impact on astern (an' 9td. performanceappraisal techni&ue. In general, evaluations
made immediatelyfollowing the performance are more accurate. (ut as the ban' mainlyformally
performs performance evaluation once a year, this delaybetween performance and rating can
sometimes result in significantrating errors. A related timing problem, regency error also occurs insuch
situations when the rater remembers only the most recentbehaviors of in evaluating an employee.