In today’s dynamic global environment, organizations need to be agile and adaptive by practicing innovative strategies in order to sustain and remain competitive. One indicator of organizational sustainability is its productivity, which translates into the productivity and performance of employees in the organization. Performance evaluation of employees is an important step in measuring the employee productivity. Such evaluations are in general conducted annually using a performance appraisal system (PAS).
The annual appraisal using PAS has two major drawbacks. The first drawback is the long frequency of the appraisal process. As it is an annual affair, the errors such as subjectivity, recency error, bias, halo effect, stereotyping etc. creeps in, and as a result the evaluations will not be proper. The second drawback is with respect to fixation of target/goal achievement. While achieving the targets/goals which are fixed at the beginning of the appraisal period are important, any steps towards achieving such goals are equally important. These drawbacks can be addressed to an extent by having an ongoing or continuous method for performance evaluation of employees. Hence there is a need for continuous performance evaluation of employees (CPEE).
Although the importance of CPEE has been highlighted in the literature, we are not aware of any process by which CPEE could be operationalized. In order to implement and sustain, any organizational process, it should produce certain periodic outputs, which is meaningful to its administrators and beneficiaries. In the case of CPEE one such output could be to provide a proper and timely rewards and recognition (R&R). R&R is a motivational tool used for appreciation which could boost employee performance and productivity. Research underline that R&R is strongly and positively correlated to the performance of employees.
As defined in thesis, Reward is the materialistic part of the appreciation (such as memento, certificate etc.), while Recognition is the feeling of being appreciated (such as a pat on the back or a public applause). Both Reward and Recognition is considered in unison and considered as mutually inclusive in this thesis.
There is some variation of R&R practiced in organizations, known as employee awards. Such awards are motivating enough for the employees. In general, the employee awards are based on nominations from the managers, which are scrutinized by an individual committee and one among the nominated employees is offered the award. Nevertheless employees are often clueless about what performance fetched them the award. In other words the criteria for such awards are often unknown. Similar to PAS, the criteria for such evaluations are developed mostly by the employers with hardly any input from the employees. Additionally the employee awards are heavily dependent upon the PAS and it is mostly an annual affair. Hence the drawbacks for PAS are also applicable for the existing employee awards process.
In order to address these drawbacks, R&R should be given in an ongoing and continuous manner. Although the importance and the positive correlation between R&R and employee performance has been established, it has not known to be widely practiced in organizations. This could be due to a lack of proper framework to implement such programs. The CPEE process could be the basis for providing R&R. Therefore this thesis is aimed at developing a comprehensive framework for CPEE to offer R&R.
Performance of employee is a sum total of the performances across various dimensions (such as knowledge, skills, attitudes and behaviours). As the performance for employees is a multi-dimensional concept, the criteria for evaluation using CPEE process should also be based on multiple criteria. Therefore in order to effectively address the operational process of CPEE to offer R&R, a multi-criteria decision making (MCDM) method based model needs to be developed.
A focused review of the existing literature on performance evaluation of employees substantiated the research problem that there is a lack of proper framework for CPEE to offer R&R. In order to address this research problem, the main objective of this thesis is to develop a comprehensive, formal and objective method to evaluate the employee performance in a continuous manner based on multiple evaluation criteria from the perspectives of employees as well as employers to offer proper and timely reward and recognition to the best performing employee(s).
In order to address the main objective of the research, the following objectives are envisaged:
1. To identify the set of variables/criteria with respect to both employees’ and employers’ perspectives and to propose an initial framework for CPEE to offer R&R.
2. To develop a final framework for CPEE to offer R&R based on the initial proposed framework and descriptive research
3 To develop a multi-criteria-decision-making (MCDM) method for the proposed framework for CPEE to offer R&R
The scope of this research is limited to Information Technology (IT) organizations due to the alarming rate of attrition and the presence of younger population who are knowledge workers. They expect frequent appreciation and continuous feedback regarding their performance. In this thesis, employees are represented by Software Engineers (SEs) and the employers are represented by Project Managers (PMs).
Research Objective 1: In order to address the first research objective a six phased approach is planned. In the first phase, the available literature on existing performance evaluations in general and employee motivations are reviewed to identify the possible variables/criteria for CPEE to offer R&R. This resulted in 51 variables for performance evaluation. As it cannot be confidently asserted whether these variables are applicable to employees of IT organizations, a set of unstructured interviews are conducted with Software Engineers to prepare Case-lets. This Case-let approach with Software Engineers is carried out in the second phase and 7 Case-let reports are prepared.
From the analysis of the 7 Case-let reports, 27 variables are identified. As the variables identified from Case-let approach may not represent the entire IT employees, a series of semi structured interviews are conducted among 58 Software Engineers in the third phase to identify further variables/criteria and accordingly 35 variables are identified. In order to obtain the list of variables/criteria based on employers’ perspectives and to validate the set of variables/criteria suggested by Software Engineers,
31 Project Managers are interviewed following semi structured interview method in the fourth phase and 33 variables are identified. In the fifth phase, the variables identified from second to fourth phases are triangulated with those identified from literature (i.e. first phase) which resulted in 33 unique variables that could be used for CPEE of Software Engineers to offer R&R.
The final set of 33 variables/criteria are appropriately grouped into variables relating to Demographic Characteristics of Software Engineers (DCSE) and Performance of Software Engineers (PSE). Accordingly, 5 variables related to DCSE and 28 variables related to PSE out of the 33 variables finalized for CPEE to offer R&R, are grouped. Utilizing these grouped sets of variables in DCSE and PSE, an initial framework for CPEE to offer R&R is proposed in the sixth phase.
Research Objective 2: In order to validate and to statistically finalize the proposed initial framework, a descriptive research is conducted. For this the importance of each of the identified 33 variables are sought from 443 Software Engineers from 12 IT organizations. A bivariate analysis is planned to analyse the significance of variables of DCSE with the variables of PSE. As there are 28 variables in PSE, they are further grouped with respect to the latent structure using a factor analysis. The factor analysis yielded six factors for measuring PSE. The factors (called as main criteria) are Proactive, Prompt, Resourceful, Responsible, Diagnostic and Dynamic.
Based on the bivariate analysis among variables in DCSE and the six main criteria, only three variables, out of five variables of DCSE emerged as significant. Based on the factor analysis and bivariate analysis, the proposed initial framework is modified. Appropriate hypotheses are proposed to indicate the relation between DCSE, PSE and R&R in the modified framework. The modified framework is validated by developing suitable Structural Equation Model (SEM) to verify the hypotheses. The relative influence of DCSE, PSE and R&R are identified based on statistical validation and the framework is finalized.
Research Objective 3: As there are six main criteria identified in PSE for CPEE to offer R&R, the proposed framework could be appropriately modelled using MCDM method(s)/models(s). As CPEE is a continuous process, the performance evaluation using
CPEE should take only a minimum time for completion of evaluation process, and it should be easy to implement and administer and also should be flexible to accommodate any changes in the criteria or alternatives. These are the preconditions to select the suitable MCDM method(s)/model(s) to operationalize the process of CPEE to offer R&R.
In order to select a suitable MCDM method from the available methods, various MCDM methods are screened based on the expected preconditions of the framework. Pugh Matrix Method (PMM) is selected for the CPEE process and is modified to address the basic drawbacks of PMM so as to utilize in this thesis. Accordingly, the MCDM methods: AHP and a Modified Pugh Matrix Method (MPMM) (which are meeting the expected preconditions of the framework such as minimum time, maximum easiness and maximum flexibility) are considered to model the proposed framework for CPEE to offer R&R. The AHP is used to calculate the relative weights and the MPMM is used to compare the performance of employees to provide a relative score. Accordingly, the proposed MCDM based modelling framework for CPEE to offer R&R is demonstrated by developing a suitable example.
The MCDM method for CPEE to offer R&R developed in this thesis provides a performance score for every employee for every performance-cycle of CPEE. This score could be stored in a database which could be appropriately utilized during the periodic performance appraisal process using PAS.
Overall, the contributions of the research are:
(i) a new research problem on CPEE to offer R&R is identified
(ii) a set of variables/criteria are identified from both employees and employers perspective, particularly for IT Organizations and an initial framework for CPEE to offer R&R is proposed
(iii) a statistically finalized framework for CPEE to offer R&R is presented with the variables/ criteria identified
(iv) simple MCDM methods are developed for the operationalization of the proposed framework for CPEE to offer R&R and a possible integration with the organization’s existing PAS is also conceptually presented.
(ii) Although the research has accomplished its objectives, there are certain limitations such as (i) the focus of research is limited only to IT organizations, and hence cannot necessarily be generalized, the sampling is based on convenience and assumed to represent the entire IT population in the country and (iii) other MCDM methods are not explored so as to develop the proposed framework. Addressing these could be some of the future research directions in this area.
| Identifer | oai:union.ndltd.org:IISc/oai:etd.ncsi.iisc.ernet.in:2005/2741 |
| Date | January 2016 |
| Creators | Sreejith, S S |
| Contributors | Mathirajan, M |
| Source Sets | India Institute of Science |
| Language | en_US |
| Detected Language | English |
| Type | Thesis |
| Relation | G27840 |
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