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Portraying an employee performance management system based on multi-criteria decision analysis
and visual techniques
Vijay Edward Pereira
Department of Organisation Studies and HRM,
University of Portsmouth Business School, Portsmouth, England, and
Alessio Ishizaka
Department of Operations and Systems Management, University of Portsmouth Business School,
Portsmouth, England
Abstract
Purpose – Performance appraisal is one of the most critical and indispensable human resource practices
for organisations. However, it generates dissatisfaction among employees as it is often viewed as complex
and ineffective. The purpose of this paper is to present a new performance management system that
integrates multi-criteria decision analysis (MCDA) methods – the analytic network process (ANP) and
PROMETHEE – with the visual techniques of the GAIA plane and the stacked bar chart. MCDA methods
allow a structured and consistent evaluation integrating qualitative and quantitative criteria.
Design/methodology/approach – The authors developed a structured and transparent performance
management system. It is based on the MCDA methods PROMETHEE and ANP.
It also incorporates the visual techniques: GAIA and stacked bar chart. Feedback for trainings and
developments can precisely be formulated.
Findings – Visual techniques permit clear identification and quantification, for each employee, of the
areas that need improvement through training and development, which contributes to the resource-based
view of organisations. A real case study has been portrayed to show the added value of the MCDA
methods and the visual techniques in employee performance management.
Originality/value – The paper describes a new employee performance system adopted in an organisation.
The multi-criteria analysis transparently combines qualitative and quantitative decision criteria into a
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holistic and transparent evaluation. The visual techniques permit us to gain a deep insight into the
employees’ skills profile and capture fine details where individuals perform or underperform.
Keywords: MCDA, ANP, PROMETHEE, Visual techniques, Personnel evaluation, Performance
management
1. Introduction
Companies need to measure and improve their performances in all business areas if they want to
remain competitive. Employees’ performance is not an exception, especially as employees are often
considered the most important and complex asset of an organisation (Coff 1997, Vaiman and Vance
2008). Performance appraisals evaluate the job performance of employees and the results are then
communicated to and discussed with the relevant employees. It measures how well employees perform
job-relevant tasks and further helps in distinguishing the more efficient employees. According to
Workman (2009), managers are not only “…involved in the gathering of information about employees
such as their performance measurements compared to their objectives and other work-related activities”,
but they also “monitor” employees’ attitudes, organisational behaviour and absenteeism. Performance
evaluations are thus the basis for determining the development and training needs of employees.
The motivation for conducting our study is thus. Reviewing and evaluating the performance of
employees is an important task as critical decisions for employees, such as those relating to promotions,
pay rises, rewards, retention, training needs etc., rely on the accurate assessment of employees. Many
researchers, such as Cho and Lee (2012) and Liu et al. (2007), have also highlighted that performance
management leads to better organisational performance. Paradoxically, it is claimed that managers often
trivialise the process or even totally avoid it (Pettijohn et al. 2001). The results of a US survey (Watson
Wyatt Worldwide 2004) of 1,200 employees, in which 90% of the respondents participated in a
performance management programme, showed that only 30% believed the process helped them to
improve their performance. Furthermore, less than 40% said the system established clear performance
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goals or generated honest feedback. It is therefore not surprising that employees see it as a bureaucratic
process and a waste of time that does not add much value. Few managerial tasks are viewed more
negatively or performed as unevenly as performance review or appraisal (Aguinis et al. 2011). Often,
performance appraisals are months overdue (Heathfield 2007), at times leading to a lapse in trust and
leadership ability (Reinke 2003). This contradiction between the notional high benefits and neglect in
practice may be attributed to managers being ill-equipped to conduct effective appraisals.
It is also argued that most performance appraisals are a ‘managerial prerogative’ (see arguments
made by Biron et al. (2011)) and hence is a ‘behavioural performance appraisal’ (Snell and Youndt 1995).
The drawback here is that it could be biased and unfair. Others argue that there are aspects of ‘employee
initiatives’, where, certain behaviours can lead to increased performance (e.g. Wood and Marshall 2008).
It is understood that robust selection and training initiatives by organisations helps to socialise employees,
ensuring that they have the requisite abilities required by organisations (e.g. Selvarajan and Cloninger
2012). However, here too performance appraisals cannot be solely based on ‘employee initiative’.
Further, there are ‘mutually agreed’ performance parameters that lead to certain agreed performance
behaviours and outcomes (e.g. Gruman and Saks 2011), but again these cannot be assessed in isolation.
The key here is to have a combination of criterion, which this study aims to portray through a case study.
In addition, it is argued that “…the use of eHR software in people management gives a new
momentum and increased dominance to key Western-originated practices, such as HR based performance
management” (Alcaraz et al. 2012, p. 106). In addition, “cultural” differences in managing people in the
subsidiaries of global organisations worldwide can be a challenge in settings such as global software
organizations, which “represent one kind of workplace setting within the new economy” (D'Mello and
Eriksen 2010, p. 81). Such “new economy” organisations face fresh challenges, as for example in call
centres where the “…‘gaze’ of the electronic boards displaying their unceasing demands on sta
combined with tele-computing and the automatic distribution of calls (ACD) ensures that backlogs are
always driving performance” (Alferoff and Knights 2008, p. 31).
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It is therefore important to design and implement a transparent, unbiased, structured and effective
performance management method. Responding to this contemporary and critical challenge, this paper
introduces a new transparent and structured employee performance appraisal method based on the
combination of two multi-criteria decision analysis (MCDA) methods, PROMETHEE (Brans 1982, Brans
and Vincke 1985) and the analytic network process (ANP) (Saaty 2001), complemented with visual
techniques (Nemery et al. 2012). This novel method aims to define the evaluation criteria clearly,
comparing and evaluating employees’ performances, which would lead to a transparent, structured and
competitive appraisal method. Employees’ strengths and weaknesses can thus be detected easily and
justified using visual techniques. Therefore, specific recommendations for improvements can be
formulated. The main advantage of PROMEHTEE is the setting of thresholds, which means that above
them the score does not contribute anymore to their overall performance appraisal. This particular feature
permits to avoid staff to strive to maximise their score on the considered criteria by concentring their time
and efforts and neglecting tasks that do not contribute.
The structure of the paper is as follows. In section 2, we assess the importance of performance
management by reviewing the extant literature. In section 3, we describe the MCDA evaluation method
and section 4 is devoted to the case study. Finally, in section 5 we provide conclusions and recommend
future research directions.
2. Literature review
A structured, consistent and transparent appraisal enhances organisational commitment and
organisational citizenship behaviour (Narcisse and Harcourt 2008, Organ 1988). In contrast, an inferior
appraisal method, in which employees and managers disagree about their contribution, can create conflict
(Heathfield 2007) and even lead to negative consequences, such as theft, vandalism, intentional idleness,
absenteeism (Sania Zaheer 2011) and intention to resign (Brown et al. 2008). Poor appraisals tend to
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avoid differentiation. The majority of the employees are wrongly ranked highly to avoid disappointment,
unhappiness (Heathfield 2007), inter-employee jealousy, hostility (Law 2007) and the manager’s
discomfort in providing negative feedback (Chen et al. 2007). A poor appraisal method also prevents any
true, transparent, structured, and honest, value adding development or improvement as everyone is
already “artificially” excellent. At an organisational level, performance management ensures that
employees’ performances and skills are aligned with the strategic goals of the company. A comprehensive
assessment can define whether the organisation has the necessary capacities in house (Merritt 2007). It
also supports the implementation of strategic changes (Amaratunga and Baldry 2002) and fosters good
workplace harmony (Heathfield 2007).
A detailed review of the literature on performance appraisals reveal four main characteristics that
lead to certain appraisal criterion. These are position characteristics, organisation characteristics, personal
characteristics, and task and target characteristics. The following table 1 defines and details these against
the literature.
Main characteristics and
criteria of performance
appraisal
Sub-characteristics and criteria
of performance appraisal
References
Position characteristics:
Defined as characteristics related
to the position held. The person
is assessed according to the
position held.
This is a ‘managerial
prerogative’.
Supervisory, managerial,
leadership, customer focus,
working relationships, initiatives
etc.
Because this is managerial
prerogative, this is mainly
conducted by managers. This
could be included in 360 degree
or goal setting.
(Landy and Farr 1980, Colquitt et
al. 2007, Armstrong and Taylor
2014, Prowse and Prowse 2009,
Beausaert et al. 2011, Biron et al.
2011, Obisi 2011, McCarthy and
Garavan 2001, McCarthy and
Garavan 1999)
Organisational characteristics:
Defined mainly as the person-
organisation fit. Person here is
Fit to organisational culture, fit to
business/sector/industry, fit to
business environment, etc.
Because this is managerial
prerogative, this is mainly
(Landy and Farr 1980, Salanova
et al. 2005, Armstrong and
Taylor 2014, Prowse and Prowse
2009, Beausaert et al. 2011,
Biron et al. 2011, Obisi 2011,
