HRM544

PERFORMANCE MANAGEMENT
INDIVIDUAL ASSIGNMENT
(TERM PAPER)
ARTICLE TITLE: THE CHALLENGES OF
SUBJECTIVITY IN TEAM PERFORMANCE
EVALUATION

PREPARED BY NURIZZATI BINTI MOHAMAD

STUDENT’S ID 2020862014

GROUP KBA2434D

PREPARED FOR DR. SHAZWANI BINTI MOHD SALLEH

SUBMISSION DATE 20 NOVEMBER 2021

 ACKNOWLEDGEMENT
Alhamdulillah, first of all, I would like to thank Allah as I finally able to finish this
report that has been assigned to me. It was such an interesting work that was given to me by
my lecturer.

In performing this report and assignment, I had to take help and guideline from some
respected person, who deserved the gratitude, I would like to say thank you to the lecturer of
Performance Management subject which is Dr Shazwani Binti Mohd Salleh. She guided me
from the beginning until the end of this assignment.

Special thanks to my family that always supports me from the start until the end. I
appreciate their contribution in kind of moral support and also helped me in completing this
assignment. Moreover, their help by giving me financial support during the time I was finishing
this assignment is very huge.

I also would like to thank my friends who have helped share knowledge and opinions
with me while completing this assignment.

Thank you.
 TABLE OF CONTENT

BILL CONTENT PAGE

1. Introduction 1

2. Advantages Of Subjectivity in Team Performance Evaluation 2

3. Disadvantages Of Subjectivity in Team Performance Evaluation 3

4. Challenges Of Subjectivity in Team Performance Evaluation 4-5

5. Issues Of Subjectivity in Team Performance Evaluation 6

6. Recommendation 7

7. Conclusion 8
 INTRODUCTION
Effective working in a team is one of a significant sources of sustainable competitive
advantages in businesses. Companies depend on team members to achieve the organization's
goals because teams accommodate the management of different, mutually beneficial
organizational activities. The manner in which a business runs its performance evaluation
system is a critical factor in the workings of a team.

Performance evaluations can be carried out in a variety of ways. The degree of

subjectivity used throughout the assessment process is one beneficial way of categorizing
performance evaluations. Objective performance evaluations are those that relate quantitative
performance measures to pre-defined quality standards, such as an expenditure. Subjective
evaluations, on the other hand, are based on the evaluators' personal opinions. When making
evaluative judgments, the evaluators may or may not consider taking quantitative performance
indicators into account.

A subjective performance evaluation is a method of assessing an employee that is not

based on numerical data. Supervisors rate their employees based on how well they perform and
the value they put into the business. This could be because they are performing a role that is
difficult to quantify numerical results but is critical to procedures, such as customer satisfaction
or acting as a go-between for managers and a difficult client. Subjective performance
evaluation is also the use of non-verifiable data by a superior in the performance appraisal
system of a group such as a subordinate, a department, or an organizational unit rather than
rationally quantifiable and trustworthy data.

Subjectivity in performance evaluation generally manifests itself in the use of

performance measures which can be verified and thus cannot be shown in an agreement, such
as managerial skills or an individual's contribution to team outcome, the manager's adaptability
in assessing multiple objective performance measures in analyzing worker performance, or ex
post voluntary modifications to ex ramping described goal performance measures a worker's
performance. Finally, in a team setting, SPE can refer to a superior's voluntary distribution of
a team incentive to her group's staff members.

1
 CONTENT
Advantages Of Subjectivity In Team Performance Evaluation

To begin, a subjective performance evaluation has the advantage of allowing managers

to correct flaws in compensation plans and bonus structures. This is crucial if focusing entirely
on quantitative metrics would result in the loss of valuable employees. It is especially important
if they are unclear of their metrics and assume they are grading workers on attributes that are
not the best indicator of their productivity. Numbers are just figures and it is up to them to
assign the weight they believe they deserve while taking into account other variables.

Furthermore, subjective performance evaluation allows for the consideration of non-

verifiable information that would otherwise be ineligible for inclusion in a documented reward
agreement. As the informativeness concept suggests, the use of such extra information for
subjective performance evaluation aims to minimize performance evaluation risk without
restricting rewards. SPE based on non-verifiable personal data from a superior is frequently
used in teams as a relation to the fact that basic performance results typically only shown
accumulated team performance indicators, rather than an objectively determined the definition
of employee efforts.

Lastly, in multi-task difficulties, SPE also allows for the mitigation of incentive
distortions. That is, when objective performance measures cannot cover all aspects of a multi-
task issue, subjective performance analysis enables employees' performance in the unexposed
aspects to be taken into account, thereby minimizing the possibility incentive deformation
caused by the non-measurement of orders given measurements.

2
Disadvantages Of Subjectivity In Team Performance Evaluation

Firstly, the disadvantage is that the supervisor can tamper with subjective performance
indicators. If the supervisor does not want to give the employee a reward or promote him, he
can always downplay the performance of the employee. If the bonus or pay raise is paid from
the supervisor's spending plan, the supervisor may have an opportunity to understate the
employee's performance. Nevertheless, in the long term, the supervisor is inspired to gain
credibility as a transparent performance evaluator. Employees have no motivation to work if
he does not have such a good name because their achievement will have no bearing on their
chances of receiving a bonus or promotion.

Another disadvantage of subjective measures is that workers can affect a supervisor's

decision without working to improve their own performance. They may try to sabotage others
or conduct their business in a more favorable light without actually doing any jobs. In other
words, employees may be enticed to spend less time being effective and more time attempting
to influence a supervisor's assessment. These latter actions are sometimes referred to as "rent-
seeking."

Finally, on the negative side, the economic theories correspond to SPE possibly being
associated with welfare in the sight of an employee, as it allows a superior to intuitively reduce
the amount of compensation paid below what has to be paid purely rational performance
measures. In a long-term relationship where both parties are concerned about their public image
for future interactions, this risk may be minimal. Another claim is that SPE can lower the risk
of performance assessment by reducing measurement uncertainty.

3
Challenges Of Subjectivity In Team Performance Evaluation

Firstly, as stated in the article, prior research has established and demonstrated that SPE
can restore the perceived fairness of performance evaluation and its procedure. Prior research,
on the other hand, has mostly focused on situations where fairness criteria are fairly clear-cut
and frequently coincide with the actors' self-interest. Burt et al., for example, look at the impact
of SPE in a situation where a recognisable extracellular event has a bad impact on employee
performance. As a result, any compensation provided by the superior for the unexpected event
should result in increased in employee compensation, and it is unusual that a worker would
consider compensation for a negative external factor to be "unfair."

In another case, Maas et al. examine superior authority in assigning team bonuses in a
scenario in which the superior accepts unequivocal details about employees' specific
effectiveness on team outcome and can terminate employees who contributed less. Employee
contributions to team outcome are ambiguous in their context, and signals to superiors are not
muddled by noise. As a result, it is fairly clear which team member deserved a higher salary in
terms of equality.

In many cases, fairness standards are less definite than in the examples above. In many
cases, it is difficult to determine whether poor performance is the result of negative external
events or poor employee effectiveness. Similarly, external events may boost performance
without requiring employee effort. Finally, in teams with a diverse set of employee abilities,
the question of how well a employee contributes to the group may be observed by various staff
members, because even when all employees perform in the same level of work, their output
responsibilities differ owing to variation in functionality.

Moreover, in team settings, where team performance is the total amount of all workers'
efforts and employees can only provide show that the best to the group, SPE has been studied
frequently. These basic contexts are useful because it allows for the establishment of a
benchmark for employee response to SPE in a setting with free-rider issues, which are common
in team work. Nevertheless, they are unable to obtain all of the characteristics that characterise
teamwork in practise. As a result, this section examines recent research into team settings,
focusing on two elements of group work that are extremely important but are frequently
overlooked.

4
 Interdependence between tasks is a common feature of many team settings. The extent
to which an individual's hard work improves group performance is dependent on the initiative
and abilities of other staff members is referred to as team effectiveness. Indeed, task
interdependence may be viewed as a key indicator of teamwork versus groupwork. Task
interdependence can be seen in situations where a team is building an item on a production line
or developing the greatest available marketing campaign for a company. Failure to properly
install any part in the former situation can result in a product that performs poorly. As a result,
the entire team's performance relies on the least effective employee, and other staff members
have a critical role to play in assisting this employee in improving teamwork, which is known
as conjunctive task interdependence. In the latter situation, the greatest proposal from the group
should be preferred, and the entire team's performance is heavily reliant on the successful
results, which is disjunctive task interdependence. To enhance the system and maximise the
team's success, all workers must invest steps to build on the thoughts of others.

While SPE may be extremely effective in places of work with interdependence within
the company because cooperation and supporting conduct are rarely well documented by
reasonable indicators, this is only accurate if the useful facts is used successfully by the higher
authority. However, when superiors screw up to use personal data effectively when assigning
team bonuses to workers under task interdependence, SPE's efficiency in improving group
performance may be significantly reduced.

There are two reasons why top management may perform poorly to use their personal
information effectively under task interdependence. First, when there is task interdependence,
assigning the rewards becomes more difficult since not all hard work presented improves team
effectiveness. For instance, under conjunctive task interdependence, a worker may intend to
pursue functioning on his own outcome rather than assisting the least effective group member
optimise his outcome. Such an initiative would be unproductive because it would not deliver
the best results. Superiors, on the other hand, are probably to praise such wasteful hard work,
at least to some extent, since they are possibly biased in assigning ineffective effort to
situational variables further than an individual's influence instead of to the worker himself, and
also due to their equitable choice. Superiors, on the other hand, are probable to reward
ineffective hard work, at least to some extent, because they are biased in assigning ineffective
effort to contextual variables beyond an individual's influence instead of the worker himself,
as well as their honesty priorities.

5
Issues Of Subjectivity In Team Performance Evaluation

Subjective performance evaluations, are risky and many company owners discover that
hiring on intuition does not always function out. Employees constantly assume that individual
perceptions result in special treatment of co-workers, especially when those considered to
performing poorly by indicators receive massive bonuses and incentives. Subjectivity makes
employees vulnerable to accusations of bias if their assessments are viewed to favour certain
employees over others. Superiors must entertain the probability that poor numbers represent
the individual's value more accurately than their own opinions. Even in a subjective assessment,
it's critical to look at the figures and have a reasonable cause for devaluing metrics. Managers
and leaders are secured to get the individuals they need into correct spots through subjective
evaluations, but if their perspectives are incorrect, the results may not be what they desire.

6
 RECOMMENDATION
Managers require a consistent structure and specific targets to reduce bias in
assessments and drive better outcomes for the whole of the organisation. As a result, here's a
few suggestions for reducing subjectivity in team performance evaluation.

Firstly, company must align personal and business objectives. Employees can freely
link their objectives to specific business goals when business objectives are fully transparent.
The ability to see the real-world impact on the business will improve the validity in evaluations.
Personal goals should be revised as priorities have shifted so that individuals aren't wrongfully
judged against out-of-date benchmarks. Gender bias can be reduced by matching individual
and career objectives. Women are supposed than men to face criticism that is straightforwardly
responsible for the business outcomes, which may explain why they carry only 24% of senior
positions.

Following that, analytical techniques can be used to detect possible bias. Hr

practitioners are frequently reluctant to use statistics to aid in decision-making. However, when
it comes to the very systemic issue of bias, analytics can be useful, especially because managers
may be accused of bias if they do not have evidence to back up their claim of bias. When
workers are given a negative evaluation but managers can see that they met all of their
objectives and played a role significantly to the overall organisational goals, there is a clear
possibility of bias in the data. If the report shows that a manager did not conduct routine
performance-related verification with a worker, the overview should be investigated for
recency bias.

Finally, the company should avoid using an open box. The "open box" is to held
responsible for a significant portion of the implicit bias in performance reviews. Many
assessment methods are unorganised, providing managers with only a few open-ended
questionnaires and a large empty space to fill. With so little guidance and so much room for
mistakes, it's no surprise that some biases sneak into evaluations. To assist organisations in
improving, train them how to collaborate with their workers to establish and align objectives,
and how to provide appropriate, development-oriented feedback. Motivate individuals to
connect more frequently in order to reduce recency bias, and provide them with new technology
that shows them to check in with their team and everything they need to discuss.

7
 CONCLUSION
Subjective performance evaluations are used in almost every job, from the lowest levels
of the organisation to the CEO. Subjectivity could be used to improve employee-firm
orientation and minimise risk. The benefits of subjectivity are strongest in firms with
complicated work situations, where job models incorporate various duties and choice, and in
businesses where employees are exposed to important unpredictability.

The paper demonstrates that current findings using more complicated contexts than
previous work leads to more careful findings about the efficacy of SPE. Staff's self-serving
understandings of the equality of reward distributions in contexts where equality standards are
unclear can lead to group conflict about how the supervisors should divide up the team rewards,
ultimately resulting in lower effectiveness due to a greater sense of being treated poorly.
Furthermore, in more complicated and dynamic group settings where superiors face more
difficult voluntary bonus decision making, managers' unconscious biases lead to poor bonus
allocation, reducing team effectiveness.

To sum up, there are compelling economic and behavioural reasons why SPE can
enhance performance assessment; therefore, this article does not advocate for its abolition.
Instead, it cautions SPE users to exercise caution when assessing the potential impact of SPE
because it is created by individuals with all of their cognitive distortions. That implies that
ideas to raise subjective bonus pool allotments in workgroups may need to be cautiously
evaluated in order to reflect workers' contribution to the group and to enhance coordination and
communication within the team. This appears to be represented in business strategy, as
observational facts show that, in clear contravention of the informativeness concept, many
companies are reluctant to give supervisors complete discretion over staff members'
performance evaluations even while they have personal non-verifiable details.

8
 REFERENCES

1. Challenges of subjectivity in team performance evaluation | Emerald Insight.

(2020). Pacific Accounting Review. https://doi.org/10.1108\/PAR
2. Subjectivity performance evaluation: the good, the bad and the ugly. (2012,
October 10). Management Accounting Education; Management Accounting
Education. https://acctuwa.wordpress.com/2012/10/10/subjectivity-performance-
evaluation-the-good-the-bad-and-the-ugly/
3. What Is a Subjective Performance Evaluation? (2013). Your Business.
https://yourbusiness.azcentral.com/subjective-performance-evaluation-23227.html
4. 4 Ways to Reduce Bias in Performance Reviews. (2019). Hrtechnologist.com.
https://www.hrtechnologist.com/articles/performance-management-hcm/4-ways-
to-reduce-bias-in-performance-reviews/
5. Objective Vs. Subjective Performance Evaluations. (2019). Small Business -
Chron.com. https://smallbusiness.chron.com/objective-vs-subjective-performance-
evaluations-4848.html

9
TERM PAPER
ORIGINALITY REPORT

10 %
SIMILARITY INDEX
0%
INTERNET SOURCES
8%
PUBLICATIONS
2%
STUDENT PAPERS

PRIMARY SOURCES

1
Markus Arnold. "Challenges of subjectivity in
team performance evaluation", Pacific
8%
Accounting Review, 2021
Publication

2
Submitted to Cork Institute of Technology
Student Paper 2%

Exclude quotes On Exclude matches Off

Exclude bibliography On
 FACULTY OF BUSINESS AND MANAGEMENT
ASSIGNMENT/ PROJECT DECLARATION FORM

Student’s Name : NURIZZATI BINTI MOHAMAD

Student’s ID : 2020862014 Student’s I/C No. : 990422026450

Program Code : BA243 Part : 4 Course Code : HRM544

Course
Name : PERFORMANCE MANAGEMENT

Assignment/ Due Submission

Project No. : 1 Date : 20/11/2021 Date : 15/11/2021

Assignment/
Project Title : ASSIGNMENT 1 - TERM PAPER

Lecturer’s Name : DR. SHAZWANI BINTI MOHD SALLEH

I hereby declare that the work in this assignment/ project was carried out in accordance with the
regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless
otherwise indicated or acknowledged as referenced work. This assignment/ project has not been
submitted to any other academic institution or non-academic institution for any degree or qualification.

I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti
Teknologi MARA’s Bachelor Degree students, regulating the conduct of my study and exams.

I hereby declare that this assignment/ project is written by me and:

i. is a result of my own work;
ii. has not been used for another assessment at another department/ university/ university college
in Malaysia or another country;
iii. does not refer to/quote works of others or own previous writings without stating it both in the text
and in the reference list;
iv. mentions explicitly all sources of information in the reference list; and
v. will go through similarity check (Turnitin).

I am aware that disciplinary action (which may include the deduction of marks in the assignment/
project) will be taken against me if I am found to be an offender.

15/11/2021
Date Student’s Signature

/ SAT FBM Sep 2020