An Analysis of Human Resource Performance Appraisal: A case study of oil Company in Cambodia

Dr. Kao Kveng Hong* Date: August, 2013

ABSTRACT
Oil Company has emerged as a big company within the Cambodian petroleum industry in recent years, outsurpassing its rivals in market share. Although the company has had great success in its business operations, yet, it is not clear how its human resources have contributed to its success and how the company has been caring for its employees. On the request of Oil Campanys new administrative officer, the researcher carried out an assessment of the current appraisal system in Oil Company with the objectives of finding out the perspectives of the employees on the current appraisal system, assess its effectiveness based on the employees feedback as well as benchmarking against a reputed competitor, and to make recommendation for strengthening the performance appraisal system. In order to achieve these objectives, a descriptive design based on the administration of a prevalidated questionnaire to all the 48 employees (total enumeration method) working in the companys head office was chosen. Secondary data was collected by referring to a variety of company documents. Analysis of data collected has revealed that the employees are far from satisfied with the companys performance appraisal system because of the vagueness of procedure and process, lack of formal forms to fill, lack of clarity on the rating process, lack of transparency, lack of feedback, lack of involvement in the process, etc. Caltexs performance appraisal system was found to be more effective than SOKIMEXs. It is recommended that SOKIMEX should develop a lucid and formal model; an employeefriendly, effective, open and transparent performance appraisal system; and clearly linked to salary, benefits, promotions, rewards, punishment, etc.

BACKGROUND OF THE STUDY

Sok Kung Import and Export Co., Ltd. (SOKIMEX) was established in 1990 when the Royal Government of Cambodia opted for the free market policy. This company was the first local company that invested in petroleum industry, specifically in petroleum imports with an initial capital of 500, 000 USD. Its capital rose to 95 million USD in 2000, as a result of the profits made in the business and new shareholders. Initially, the company's operations were not only to import petroleum to supply the government in exchange with rubber or cash, and export agricultural products but also included the supply of some materials to Ministry of National Defense and Interior such as caps, shoes, uniforms, etc. In 1992, SOKIMEX imported petroleum to sell to the government based on the offer of Ministry of Commerce, and then supplied to UNTAC. Since 1993, the company's distribution channels have been expanded in order to deliver its products to customers all over the country. After continuous success in business, the company has expanded and diversified its operations. It has invested in other areas such as garments, hotel, tourism, import and export, rubber plantation,

jetty, and transportation. All these areas of operations are under the direct control of SOKIMEX including the Petroleum Company. SOKIMEX Company has in recent years emerged as a big company within the Cambodian petroleum industry. It has a much larger market share than its competitors. Its present operations include the import of petroleum from Thailand and Singapore to cater to the demand in Cambodia. The imported products include: Super gasoline (EA.97); Regular gasoline (EA.92); Fuel oil (FO); Diesel oil (DO); Kerosene oil (KO); Jet A1; Gas and Lubricant for all kinds of vehicles SOKIMEX has a large capacity storage tank terminal and owns a jetty in Sihanouk Ville, and still maintains the leadership position in terms of its storage tank terminal, which is located in 5 different areas. The total storage capacity of SOKIMEX is equivalent to 66% of the total capacity of all storage tanks in Cambodia. Although it must be acknowledged that SOKIMEX has had great success in its business operations, yet, we do not know how its people have contributed to its success and how it cares for its employees since many organizations of late have been concentrating more and more on their human resources. These organizations treat their people as the greatest and the worthiest asset of the organizations. It is people who produce everything. An operation or business can be successful if the people in that organization succeeds in attaining their individual objectives and responsibilities. On the other hand, it meets with failure if the individuals fail to achieve their individual objectives and responsibilities. Human beings are not heartless robots that are expected to perform mechanistically. Unlike robots, they have brains, intelligence, emotions, feelings, etc., which they bring with them to the workplace. Many of these factors can affect their performances. Moreover, ill use of human resources is one factor among the others such as poor product design, poor planning, poor communication with customers, etc., which are all contributing factors to organizational failure. Therefore, like in any battle, victory emerges because of peoples performance and management. In this case, performance appraisal plays an important role in order to evaluate the performance of people. Furthermore, it is difficult to find the best way to motivate people. Some claim that money is the best way to motivate staff. However, it is not the only key to human motivation in spite of the fact that it is certainly useful. Employees today expect to be rewarded for putting in that extra effort. To clearly understand what motivates and what does not, performance appraisal is desirable. Performance appraisal is very crucial for any organizations as well as for SOKIMEX, the company that the researcher seeks to study. The new administrative officer at SOKIMEX has been concerned that the performance appraisal system he inherited is rather unstructured and informal (no form to be filled). He has requested the researcher to assess the current appraisal system and suggest improvements. Therefore, the researcher aimed to answer the following research questions through this study: - How does SOKIMEX implement its performance appraisal? - How effective is the process of performance appraisal in SOKIMEX Company?

OBJECTIVE OF THE RESEARCH

The objectives of the study were: To find out SOKIMEXs existing performance appraisal system through the perspectives of the currently serving company employees To assess the effectiveness of that system based on the feedback provided by the employees and benchmarking against a reputed competitor operating in Cambodia. To make recommendations for strengthening the performance appraisal system

LITERATURE REVIEW Human resource in the organization

People can affect organizational profitability, adaptability, flexibility, and productivity as well as competitive advantage. Recently, many business firms have been attempting to compete with other through their people. The success of an organization depends on its peoples knowledge, skills and abilities since excellent people can create excellent organization. Harris et al., (1996) outlined some of the beliefs associated with creating excellent people in the organization. People are the most valuable resource, which is also the most difficult resource to cope with, when compared to others. On the other hand, they are a type of resources, which grow over time. Many firms have treated people as their potential assets not liabilities, which need serious caring because they can increase value of the organization, decrease cost, and provide something unique to customers through their efforts. The creativity of organizational members is a vital input to the development and improvement process. The members must themselves grow over time to be capable of handling the jobs, which results in responding to environmental changes effectively. Unlike products or services that can be copied in somehow; moreover, humans skills, knowledge, and ability cannot be copied easily. These are source of competitive edge if they are not available to all competitors (Kenneth, 2003). Making excellent people is a great challenge to the various organizations, which need to ensure the integration of the role of human resource function to meet the organization mission. Harris et al., (1996) have identified the key aspects of people preparation to the human resource function in order to strengthen the organization as following: Discipline is the critical essence of a company. Without it, there will be a lack of quality and safety standards. Discipline is shared set of values, rather than an imposed set of rules. Flexibility refers to expansion of peoples capabilities by consistent and longterm training programs in new skills. Equality is the removal of unfair personnel policies, which create division among the company members, such as different pay structures and staff car parks, etc. Autonomy results in delegation of authority for running the work area to company members who carry out the work itself. Examples of autonomy are authority to stop the line, routine material control and problem solving activities. Quality of working life refers to measures which set out to improve the sense of involvement of company members, their security of employment, an their senses of enjoyment of working life. Creativity harnesses the natural curiosity of company members to make improvements, which affect the work they do. While this may seem to be opposed to the concept of discipline, if the aim of the job is made clear, company members can be given discretion as to how it is carried out. However, in order to lead the above to success, it is important to do good performance appraisal

(PA) of employees by using the various processes available (Chea, 1999). He also added that good PA could provide information upon which promotion and salary decisions can be made. Management of people plays a major role in creating organizational capability and creates and sustains competitive advantage. Good human resource management can lead the organization to achieve its objectives and results in gaining success in business; contrarily, bad management can lead the organization to failure (Bateman et al., 1999). Therefore, we must understand what human resource management is and how it benefits the organization.

Human resource management

Whether a human resource management function or department even exists in a firm, every manager must be concerned with people. Ivancevich (2001) defined human resource management as the function performed in organizations that facilitates the most effective use of people to achieve organizational and individual goals. Armstrong (1994) defined human resource management as a strategic and coherent approach to the management of an organizations most valued assets the people working there, who individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage (cited by Kenneth, 2003). Neela (2000) cited that,
Almost every writer who believed that human resource management is an approach to manage people effectively agreed that people is the key factor; valued assets in which to invest and sustainable competitive edge can be achieved through them. Organizations can use human resource management to gain competitive advantage because it is difficult for competitors to duplicate.

In short, human resource management is any designed activities used to prepare and coordinate people in an organization to achieve its goals. Ivancevich (2001) mentioned that the contributions HRM makes to organizational effectiveness include the following: Helping the organization to reach its goals Employing the skills and abilities of the work efficiently Providing the organization with well-trained and well-motivated employees Increasing to the fullest the employees job satisfaction and self-actualization Developing and maintaining a quality of work life that males employment in the organization desirable Communicating HRM policies to all employees Helping to maintain ethical policies and socially responsible behavior Managing change to the mutual advantage of individuals, groups, the enterprise, and the public In other words, Neela (2000) pointed out that the aims of human resource management are to place the right people with the right skills in the right jobs for the right cost at the right time. Human resource management consists of variety of activities. Those include equal employment opportunity (EEO) compliance, job analysis, human resource planning (HRP), recruitment, selection, motivation, orientation, PA, compensation, training and development, and labor relations. EEO is the right of all employees to work and advance on the basis of performance, ability, and potential, be away of the discrimination of race, color, religion, sex, national origin,

minority, or handicap (Bateman et al., 1999). Job analysis is the process of collecting, analyzing, and synthesizing data about jobs (Torrington et al., 1994). HRP is the process of analyzing the movement of people into, within and out of an organization in order to achieve the optimum use of human resources and to have the correct number and types of employees needed to meet its goals, according to Kenneth (2003). It involves in forecasting labor demand for the organization, comparing the demand with the existing workforce available within the organization, screening the supply from both internal and external the organization, and determining the numbers and types of employees to be recruited. Hiring refers to the process of recruiting, and selecting candidates whose abilities, attitudes, skills and knowledge best meet the needed selection criteria for the position available so as to help the organization achieve its objectives. "Hiring the whole person" means hiring someone not only to a job, but also that person's brain, senses and potential for further development. When they leave the organization, they bring with them skills, experiences, knowledge, abilities, company secrets, etc. It may a serious case if they leave for joining the organizations competitors. The human resource experts need to be clear in the role of human resource function, Cenzo et al (1996). Motivation the attitudes that predispose a person to act in a specific goal-directed way. It is an internal state that directs a persons behavior (Ivancevich, 2001). Orientation is defined as the activities that introduce new employees to the organization and to their tasks, supervisors, and work groups (Zweig, 1991). PA is the process of evaluating the employees performance with the aim of improving their performance as well as the performance of the organization as a whole. Compensation is the HRM function that deals with every type of reward that individual receive in return for performing organizational tasks (Ivancevich, 2001). Training and development refers to the process of upgrade the level of employees in terms of skills, abilities and knowledge in order to improve their performance and complete their works efficiently and effectively. Labor relations refer to the relationship between a group of employees (i.e. a union) and management (i.e. employer). Ivancevich (2001) pointed out, of all the relationships between PA and other HRM activities, none has been more crucial to understand than the one between evaluations and EEO, especially as it applies to promotions and terminations. Unless evaluations are considered fair and decisions made using them treat everyone with dignity, there will likely be intense conflict.

What is performance appraisal?

Performance appraisal is the process used by management to inform employees individually how well they are doing in the eyes of the company (Zweig, 1991). Bateman et al., (1999) stated that PA is the assessment of an employees job performance. Ivancevich (2001) defined Performance Evaluation as the activity used to determine the extent to which an employee performs work effectively. Although there are many definitions, most still agree that PA is the process of evaluating peoples performance with the aim of improving the performance of individuals and organization in order to achieve their objectives. According to Cane (1996) and Dessler (2000), PA goes by many different names in the industry and in the literature. These are employee appraisal, performance evaluation, employee evaluation, employee review, performance review, personnel review, merit review, performance rating, personnel rating, and merit rating.

The benefits of performance appraisal to the organization

Torrington et al (1994) confirmed that PA provides an opportunity for managers and subordinate to sit down together and review the work-related behavior such as business awareness, communication skills, employees ability, process, decision-making, flexibility, adaptability, improvement, training, reward, terminate and so on. According to Storey (1994), PA provides opportunities for manager to plan, change, and correct all the activities in organization effectively. Finally, PA can makes manager see the strength and weaknesses in the central career. Thus, we can state that PA system will help the organization to ensure the abilities and energies of individuals are being deployed as effectively as possible in the organization, without talent being ignored. Through PA; secondly, it will assist the process of HRP. It will the organization especially planners identify skills shortages and succession needs. Also, it will help them identify training and development needs so that the contribution of individuals to the future development of the organization can be enhanced and the individuals himself be strength, and become skillful and self-confident with a wider range of job prospects. Last but not least, PA provides opportunities to formalize the process for setting short term goals specifically goals and work objectives for the employees, to rectify individual and organizational goals, to discuss the career progressing opportunities in order to assist promotion decisions. Kenneth (2003) added that the PA system results in a fair and valid basis for recognizing and rewarding individual performance, and encourages the communications among the individuals in organization during appraisal process. This constitutes an important part of the organizational management system. It also gives an opportunity to employees to express their concerns about the company and their positions. Moreover, regular PA can help organization reduce the employee turnover rate. For individuals, appraisers and appraisees may gain new insight into each other through PA. The appraisers would also be in a better position to understand the problems faced by the appraisees, and the appraisees jobs may be clarified and better defined. In positive point of view, appraisees may be happier and more productive knowing their current and future job performances, and the organizations high achievers are identified and then bring them to the attention of others within the organization that results in improving appraisees job performance. Finally, it gives feedback to employees regarding their performance, so that any corrective actions can be taken to rectify any weaknesses, which leads to more effective performance and increased productivity. The following are also reasons why junior staffs may wish to be appraised by their senior in an organization (Chea, 1999): - Performance: one's ability to do job may be enhanced by an emphasis on strengths and an understanding of what changes are needs. - Motivation: the reassurance and direction that should come from an effective appraisal can increase the level of enthusiasm and commitment to the job and to the organization in which the job is located. - Career: individuals can get guidance and indicators about possible job changes.

What are the objectives of performance appraisal?

Bateman et al., (1999) stated that there are two basic purposes of doing PA, which benefit organization. First, appraisal serves an administrative purpose. It provides information for making salary, promotion, and layoff decisions, as well as providing documentation that can justify these decisions in court. Second, it serves as developmental purpose. The information can

be used to diagnose training needs, career planning, and the like. Feedback and coaching based on PA information provide the basis for improving day-to-day performance. Kenneth (1980) stated that there are four reasons why appraise performance as following: - First, appraisals provide information upon which promotion and salary decisions can be made. - Second, they provide an opportunity for you and your subordinate to review the subordinates work-related behavior. This in turn lets both of you develop a plan for correcting any deficiencies the appraisal might have unearthed, and reinforce the things being done right. - Third, appraisal is part of the firms career planning process, because it provides an opportunity to review the persons career plans in light of his her exhibited strengths and weaknesses. - Finally (and in keeping with reasons 1 through 3 above), appraisals can, as well see, help you better manage and improve your organizations performance. Essentially, the objective of PA is to make employees be aware of their current and future performance and to improve their performance as well as the organization which results in increasing productivity, improving quality of performance, and encouraging positive work attitudes, and end results in achieving individuals and organizational objectives. Other objectives of PA is to test out the performance results in order to make rewarding, further training and development, and promotion decision, and HRP, to evaluate training programs, to help in future recruitment and selection decisions on the characteristics of the best-performed employees, and to facilitate communication within the organization.

The steps in doing performance appraisal

Dessler (1994) defined that PA involves in three steps: First is defined job: means making sure that you and your subordinate agreed on his or her duties and job standards Second is appraise performance: means comparing subordinate's actual performance to standards set in step one; this usually involves some type of rating form. Third is provide feedback: PA usually requires one or more feedback sessions during which the subordinate's performance and progress are discussed and during which plans are made for any development required.

Ivancevich (2001) raised that there are six steps in PA process: 1. Establish performance standards for each position and the criteria for evaluation. According to Wayne (1991), an effective criteria of performance evaluation should possess the following characteristics: Reliability: A measure of performance must be consistent. Perhaps the most important type of consistency for a performance measure is inter-rater reliability. If different raters view the same worker, they should arrive at similar conclusions about the quality of that workers output. Relevance: A measure of performance must be related to actual output of an incumbent as logically as possible.

Sensitivity: Any criterion must be able to reflect the difference between high and low performers. That is, high and low performers must receive criterion scores that accurately represent the difference in their performance. Practically: The criterion must be measurable, and data collection cannot be inefficient or too disruptive.

2. Establish performance evaluation policies on when to rate, how often to rate, and who should rate 3. Have raters gather data on employees performance 4. Have raters (and employees in some systems) evaluate employees performance 5. Discuss the evaluation with the employee 6. Make decisions and file the evaluation

The process of performance appraisal

Zweig (1991), process of PA in interval is better if the organization review it every six months or every three months. And the process of it should be as follow: All new employees will have a PA within 90 days of starting employment. The employee's next appraisal will take place on his or her six-month employment anniversary, and appraisals will be conducted at six-month interval based on employment anniversary date thereafter. All employees will have PA at six-month interval based on their individual employment anniversary date. The appraisal will be completed by the employee's immediate supervisor sometime during the week of the employee's employment anniversary. Additional appraisal session can be held at the direction of the employee's supervisor as long as the scheduled appraisals occur at their normal times. The Human Resources Department on the first of each month will send notification of PA due to the employee's immediate supervisor. The immediate supervisor will conduct the appraisal session during the week it is scheduled. Employees will have the opportunity to do a self-evaluation. The employees to be appraised will be sent a copy of the self-evaluation from Personnel on the first of the month his or her PA meeting. The PA is viewed as an opportunity to give the individual constructive feedback to improve performance, as well as an opportunity to reinforce positive behaviors. It is a chance to determine if any misunderstandings exist between the employee and supervisor. The same PA form is used for all employees. It represents a starting place and individual appraisers may decide to attach additional notes or comments. Managers' supervisors and the human resources manager will be available to supervisors for assistance in preparing appraisal form and conducting appraisal meetings. All managers and employees should understand that the PA process is completely separate from the wage-and -salary review process. Wage and salary reviews occur four times per year, on January 1, April 1, July 1, and October 1, and/or at the discretion of department managers. Complete appraisal and self-evaluation forms should be stapled together and routed through the individual's department head (if not coming from the department head) to the appropriate division director of branch manager, to the vice president of the area the employees works in, to the president, and finally to the employee's personnel file in the headquarter office. The routing should, of course, always be handled confidentially in sealed envelopes. Staff members may not want just anyone to see their appraisals. Routing of

completed PA should be clearly spelled out and always handled in a manner consistent with established company policy.

The performance appraisal session

Although no doubt the actual PA session will vary according to the instrument selected, there are some general guidelines that will apply in almost all cases, Johansen et al (1994); Zweig (1991); Dessler (1994): The PA session should be nothing to fear, providing the appraiser regularly communicates with the employees regarding how he or she is doing. The appraiser/employee relationship is not unlike a marriage. Appraisal should be performed carefully, objectively, and honestly. Glowing reports should be given only when deserved. The tendency of some managers to give glowing reviews to all of their staff is sometimes referred to ask the "halo effects". Positive reports on mediocre performers are bad for everyone involved both employees and the company. Any meetings to discuss an individual's PA should be held privately. Ideally, here should only two people present at this meeting - the appraiser and the employee. Only when meeting involves a disciplinary action or termination should consider having someone else sit in as a witness. Appraisers who do not have private offices should use a conference room or someone else's office. Typical PA discussion should last a minimum of 20 to 30 minutes, and possibly up to 45 minutes. Discussions lasting longer than that are probably out of control and indicate poor communication between the employees and manger. Managers giving what is a largely negative appraisal should refrain from making personal attacks on the employee. If an employee's performance is substandard, state why it is, giving a full explanation of the appraisal without condemning the employee as a person. If appraiser is uncertain how to deliver the bad news or if problems with the employees are anticipated, assistance from whoever is in charge of human resource (or the appraiser's immediate supervisor) should be sought. PA session is an excellent time to establish some specific short-term goals for the employee (six months to a year). Attach extra sheets to accommodate these goals and objective is the appraisal instrument does not provide enough space. The appraiser prior to the appraisal discussion should review goals and objectives from the previous PA session. Appraiser should practice good listening skills and be sensitive to the nonverbal communication cues they might give off, including such things as body language, shuffling papers, tolerating frequent interruptions from others, and so on. Whatever your PA form or instrument is, it should be signed by both the employee and reviewer. It is good idea to print a disclaimer under the space for the employee's signature stating that the employees does not necessarily agree with the appraisal but acknowledges it took place. It does not want employees who are terminated for poor performance to deny having been warned. Employees who are unhappy with their reviews may refuse to sign if this disclaimer is not clearly present. After the review was meeting; the employee's reaction to the review should be noted in the appropriate section of the appraisal instrument. According to Brien et al., (1996), in the United States a majority of organizations continue to evaluate performance on an annual basis. A small proportion (15.6 percent) evaluate performance twice a year, and an even smaller proportion (3.6 percent) have implemented quarterly evaluations.

Who does performance appraisal?

Human resource department serves a policymaking and advisory role. Based on a survey, about 80% of the firms responding said that the human resource department provides advice and assistance regarding the appraisal tool to use, but leaves final decisions on appraisal procedures to operating division heads; in the rest of the firms the personnel office prepares detailed forms and procedures and insists that all departments use them (Dessler, 1994). In spite of that, answering to the question Who should be involved in appraisals? is very crucial since appraisals cannot be done without appraisers. There are several options available to who can get involved in evaluation such as employee self-evaluation, peers, immediate supervisor/manager, rating committees, upwards appraisal, customers, someone outside the immediate work situation, and 360-degree feedback. Employee self-evaluation Good appraisal systems involve employees fully, taking their views into account before and during the appraisal. Self-criticism is a good deal more acceptable than criticism from another and if employees are facilitated to self-evaluation, they are likely to be a great deal more committed to put development projects into actions. It is also useful for supervisors/managers; they will know the appraiser-appraisee differences. In spite of that, employee self-evaluation has advantages and disadvantages. Cane pointed out the advantages and disadvantages as following: + Advantages - Greater employee commitment to the outcome - Less employee defensiveness - Greater openness about problems - Encourage employees to think about their own performance and development needs in a constructive way - Lead to a more objective assessment + Disadvantages - Can be taken too far there is no more value in basing the process exclusively on the employees view than those of the manager - Risk of obtaining over-lenient staff assessments - Employees may not report accurately on their own behavior Peers Employees performances are evaluated by their colleagues or members of their teamwork. In this system, co-workers must know the level of performance of the employees being appraised. This approach may be useful when the tasks of work unit require frequent working contact among peers. However, peer evaluation is also double-edge sword issue. It has advantages and disadvantages. + Advantages - Very suitable for organizations without formal, hierarchical structures - Peers are often in a position to give a unique insight into an individuals tea contribution - Increased participation leads to increased commitment to deal with outcome + Disadvantages - Very time consuming to collect peer-ratings - Potential to cause friction and disrupt team harmony - Generally, peer rating is not very accurate or unbiased - Lead to problem if peers are in competition for raises and promotions

Immediate supervisor/manager Performance appraisal is one of the HRM activities that involve cooperation between the operating managers (immediate supervisor/manager) and the HR specialists. The operating manager is the person responsible for conducting the actual appraisal. Supervisor usually does the actually appraising and must be familiar with the appraisal techniques, understanding (and avoid) problems that can cripple and appraisal, and conduct the appraisal fairly. Immediate supervisor/manager rating still are the heart of most appraisal systems. Getting a supervisors appraisal is relatively easy and also makes great deal of sense. The supervisor/manager should be in the best position to observe and evaluate the subordinates performance, and is responsible for that persons performance. + Advantages - Know clearly appraisees performances + Disadvantages - Can be subject to bias since outcomes have come from a single person Rating committees Appraisees can be evaluated by immediate supervisor/manager and other supervisors and managers who are most likely to come to get in touch with the appraisees. + Advantages - Very useful when changes in working practice make it difficult to identify only one person who should conduct the interview + Disadvantages - If the employee has no input into whom the nominated spokesperson is, there may be resentment. It is vital that agreement is reached. Upward appraisal It can be called Bottom-Up evaluation. In this system, employees are motivated to appraise their supervisors/managers. Team members appraise their team leaders; team leaders appraise their managers, and so on. Every one does appraisal hierarchically (see figure 2-2 below). It is valuable when used for developmental rather than evaluative purposes (Manuel et al., 1994). According to Cane (1996), Upward Appraisal is now becoming more popular in the USA and is creating increasing interest in the UK. However, Upward Appraisal consists of both advantages and disadvantages. + Advantages - Facilitates the enablement of employees and the holistic approach to people - Can lead to improved managerial effectiveness, particularly in relationship to leadership and people-management by providing a source of direct feedback - Can contribute to a more effective management style which may make the company a more attractive place to work - Avoids possible single rater bias as each manger is now appraised by several team members, not just one manager. + Disadvantages Very time consuming High levels of administration Managers may feel undermined and react badly Employees may not be frank enough to make meaningful comments Employees may use the opportunity to exercise grudges Employees may fear retaliatory punitive action by managers

Customers Customers are also involved in performance appraisal. Performance evaluation seeks evaluation on the employees from both external and internal customers. + Advantages - Can see employees performance from different facet from both internal and external - More accuracy + Disadvantages - Impossible if customers do not work with appraisees frequently - Time consuming - Can be bias accordingly to the customers affection Someone outside the immediate work situation Appraisees can be appraised by someone outside the immediate work situation who is specialized appraiser such as human resource specialist. + Advantages - More accurate - Not bias on appraisees performance - Can be arbitrage in appraisal if accusation of prejudice occurs + Disadvantages - High cost - May not know clearly the appraisees performance - May not have data in relation to the appraisees as much as internal appraiser 360-degree feedback Performance information is collected through many people around appraisees i.e. supervisors/managers, peers, subordinates, customers, and anyone who have working relationship with the appraisees. According to one recent study issued on BNA Bulletin to Management (1997), 29% of the responding employers already use 360-degree feedback (also called multisource assessment), and another 11% had plans to implement it shortly. The appraisal feedback is generally used for training and development, rather than for pay increases. However, 360-degree feedback has advantages and disadvantages. + Advantages - Provide more accurate view of the appraisees performances as possible since it gets inputs from all angles - More objective, as more people are involved in the process - More complete picture of employee. This should promote high levels of confidence in the process - Useful where geographical spread or working practices make it hard for a single supervisor to monitor a persons performance effectively + Disadvantages - Very time consuming - Administratively heavy if more than a small number of people are involved - Some people may need help to learn from this feedback because it may spring some comfortable surprises - Can give rise to mutual praise

The problems in performance appraisal

Usually, managers dread carrying out appraisal interviews nearly as much as appraises fear the upcoming appraisal. This is partly due to the difficulty of finding a suitable way of appraising performance, not least because appraisal involves both judgment and reporting, neither of which are invariably reliable. Judgment has to be sound and well informed, and appraisal judgment has to be reported to others in order to give them some values. It is very difficult to report in consistent way and for the reported judgments to be understood in consistent way by whoever reads the reports. There are, however, many problems consisted in systems, which are described in. the literature. For those implementing the appraisal, many things can impair their judgment or reporting. For example: - Prejudice- An appraiser may produce flawed judgments though holding a prejudice, or may hesitate to produce a judgment through fear of being prejudice, or being seen as prejudiced. - The "motion" of general likes ability or recent events-Are you appraising the performance or the person? Someone can be very pleasant, cheerful and obliging at the same tine as performing the job only moderately. On the other hand someone who you dislike may be an excellent performer. Also, there may be tendency to judge what has happened in the last few weeks, because it is fresh in your mind, rather than taking a review of a longer period. - The difficulty of distinguishing appraisees from the context in which they workAppraiser have to appraise people doing similar jobs, but in very different circumstances, and have to consider the effectiveness of the performance within the context in which it was produce. - Different perceptions of which standards are appropriate-Although not a common problem, sometimes appraisee, expecting fully competent performance from someone whom has yet reached that standard Problems for both the appraiser and the appraise include: - The formality - the interview needed to be relatively formal in order to be taken seriously by both parties and to ensure proper preparation this introduces a degree of stiffness into the encounter which both are likely to find awkward, - The paperwork- Any schemes aiming at consistent reporting tends to be associated with voluminous documentation, which discourages managers from taking the trouble of doing what is needed. - "Just above average"- It is hard for a manager to say that the appraisee is outstanding, as there will then be and expectation of more money or promotion. It is depressing to most people to hear that they are average, so appraisers tend to say things, which can interpreted as saying that the appraisee is above average, which is both acceptable and safe/ It is however, misleading.

What are the reasons for the failure of performance appraisal system?
Deming listed a number of reasons why performance evaluation failed (Breisch et., al. 1992): - They nourished short-term performance and deflect attention from long-term planning

They leave ratees bitter, desolate and feeling inferior and unfit for work because they are afraid to present a divergent point of view. They are detrimental to teamwork because they foster rivalry, politics, and fear. Employees are rewarded for promoting themselves for their own good. They focus on the end product, not leadership to help people The measures used to evaluate performance are not meaningful, because supervisors and subordinates are pressured to use numbers and count something. The measures discourage quality. People will concentrate on meeting numbers: they wont take time to improve a design if their goals involve quantity or deadlines.

On the other hand, performance appraisal system fails because managers avoid performance appraisal due to: - fear of delivering bad news - feeling that praise is unnecessary for professionals - taking too much time - not objective and meaningless

How to establish an effective performance appraisal program

Different organizations have different cultures and structures. Thus, there is no single appraisal system will be suitable for all. It is necessary for each organization to develop its own framework and processes. To establish an effective performance appraisal program; first of all, it should establish performance standards; secondly, decide who should do performance appraisal; finally, choose the indicators should be used in appraising. Performance standard should link to the organizational goals and competencies. Appraisers and methods used should be suitable for the real situation of the organization. Furthermore, the evaluation should be: - human factors not financial targets - link to business needs - run by team leaders or line managers - open - participative - an integrated approach - single status - adaptable - team element - on-going and informal Key stages in implementation: - consider changing the name Appraisal with other names that have positive aspect; for example, Personal development - find out what people think of current system and what they would like to see in its place - communicate the changes through out the organization - consult everyone who would be involved - Train all those who will carry out the appraisals

Methods in performance appraisal and its strengths and weaknesses

A survey of Fortune 500 companies showed that only about 10 percent of employees were

satisfied with their organizations performance evaluation methods (Mary, 1996). According to Bateman and Snell, performance measures fall into one of three basic categories: traits, behaviors and results. - Trait appraisals involve subjective judgments about employee performance. They contain dimensions such as initiative, leadership, and attitude, and ask raters to indicate how much of each trait the employee possesses. - Behavior appraisals are still subjective as trait appraisals, but they focus more on observable aspects of performance. They were actually developed in response to the problems of trait appraisals. These scales focus on specific, prescribed behaviors, which can help to ensure that all the parties understand what the ratings are really measuring. Because they are less ambiguous, they also can help provide useful feedback. - Result appraisals tend to be more objective and can focus on production data such as sales volume, units produced, or profit. Because trait scales tend to be ambiguous (as well as subjective), they often lead to personal bias and may not be suitable for obtaining useful feedback. So while this approach is extremely common trait scales are easy to develop and implement they unfortunately are often not valid.

Some examples of PA forms and processes

Reproductive Health Association of Cambodia (RHAC)'s performance appraisal form and process In RHAC, it has formal form for doing performance evaluation (see appendix 1). Both appraisees and appraisers are involved in the performance appraisal process. Firstly, appraisees do self-evaluation. They state all their responsibilities, what they have achieved after the previous appraisal, and their needs for further development (see part 1 of the RHACs PA in appendix). Secondly, the supervisors appraise their subordinates. At last, they show the results to the appraisees whether they agree with the results or not; if not, give their comments. PA is done annually. The contents used in the evaluation are focused on job knowledge, responsibility, organizing ability, adaptability, interpersonal skills, communication skills, initiative, teamwork, and leadership. Performance appraisal form and process of Minnesota State University Moorhead Like RHAC, Minnesota State University Moorhead also has formal form for doing performance evaluation (see appendix 2). Unlike RHAC, Minnesota State University Moorhead has applied self-evaluation method in employees performance evaluation. Similarly, contents used in the evaluation are focused on job knowledge, responsibility, ability, adaptability, interpersonal skills, communication skills, initiative, teamwork, and goals. Caltex's performance appraisal process In Caltex, supervisors are appraisers. They do performance appraisal once a year. Also, they have formal form to fill and assist their employee performance appraisal. In Caltex, appraisers appraise appraises accordingly to the job descriptions.

Beyond that, they do appraisal with the aims of doing promotion and compensation, and finding out the areas need improvement

RESEARCH METHODOLOGY Research design

A descriptive design has been selected for this research. It has been descriptive since attempts have been made to describe how SOKIMEX head office evaluates its employees performance from the perspective of its employees and an assessment has been made to describe the effectiveness of that performance appraisal system based on the employees' perception as well as through comparison with the system being followed by one of SOKIMEX's competitors.

Respondents
To accomplish the research objectives, a predesigned and pretested questionnaire was administered to all the 48 employees (10 officers and 38 staffs) working in the head office.

Sampling technique
The researcher requested for an introduction to all the staff at the earliest monthly meeting possible. During the meeting, the objectives and the purposes of the study were explained and the research instrument contents (questionnaire) were summarized. Doubts and clarifications were responded to. All the staffs were requested to fill in the questionnaires during their leisure time and return back the questionnaires to the researcher in a period of two weeks. Since the total number of employees in the head office was only 48 (see the SOKIMEXs organizational structure below), total enumeration was resorted to and questionnaires were administered to everyone of them. However, total compliance could not be achieved. The study was stopped after obtaining 40 filled in questionnaires.

Research instrument
Primary Data was gathered through the administration of a predesigned and validated questionnaire. The questionnaire was thoroughly pre-tested before being administered to improve the quality of the measuring instrument. Moreover, the questionnaire was translated to Khmer language in order to assist the respondents in answering and to facilitate the process of collecting data. Secondary Data The secondary data sources for this research comprised of: + Brochure of the company + Human resource management journals and theories + Bulletins + Textbooks and websites + Performance Appraisal related documents from different types of organization especially from RHAC and Caltex in Cambodia for the purpose of benchmarking.

Data gathering procedure

After the questionnaires were received, all the filled in formats were scrutinized. Then, the raw data was edited, entered in the computer files, and processed by using Microsoft Excel Program to provide a comprehensive set of tables for the study. The tables included the number of respondents and percentages by response to each question.

Statistical tools
For this research, no sophisticated statistical tools were required. The resulting data set was analyzed by applying Percentages, Proportions and Means. Once the data from SOKIMEX was

analyzed, comparisons will be made with RHAC's and Caltexs procedures and process in performance appraisal, the latter being chosen as the benchmarking agency in the same field.

Conceptual framework
Figure 1-1 illustrated the conceptual framework used in undertaking the assessment of the Performance Appraisal system in SOKIMEX. While the employees have expectations with regard to their jobs from supervisors/managers, the latter desire a certain level and standard from performance from the former. While employees need to set personal objectives for themselves, the supervisors/managers expect a certain range of achievements by the employees. The study was expected to lead to the learning about the current performance appraisal practices by studying only one of the two groups; the employees and not their supervisors/managers (because of constraints of time and resources and associated operational difficulties); and then, identify both positive features that may need to be reinforced as well as areas for improvement. Figure 1-1: Conceptual framework used in assessing performance appraisal system in SOKIMEX

Employees
Knowledge Attitudes Practices Experiences

Expectation Desired Performance

Supervisors/ Managers

Objectives
Expected Achievements

Study the Current Practices of Performance Appraisal

Identify
Positive Features Areas for Improvement

ANALYSIS OF THE RESULT

Data analysis and interpretation

A detailed analysis of the data obtained through the administration of a prevalidated questionnaire, revealed the following findings. I. Demographic characteristics of the employees A. Gender distribution:

Table 4-1: Gender distribution Gender Male Female Number 12 28 Percentage 30 70

Total 40 100%

Table 4-1 reveal that there is a female preponderance among the respondents, with more than two-thirds (70%) belonging to the female gender and less than a third being male (30%). This is a good indication of the progress made by women in Phnom Penh. B. Age distribution: Table 4-2: Age distribution of respondents Age group Number Percentage 18 - 24 4 10 25 - 34 5 13 35 44 3 7 45 - 54 26 65 55 64 2 5 65 0 0 Total 40 100%

Table 4-2 show that nearly two-third (26 respondents or 65%) of the respondents are aged between 45 and 54 years old, approximately one-seventh (5 respondents or 13%) are in the age group of 25-34 years, and one-tenth (4 respondents or 10%) are very young in the age group of 18-24 years. A mere 3 respondents (or 7%) are aged 35-44 years, and the remaining 2 respondents (or 5%) are elderly being 55-64 years old. C. Educational background: Table 4-3: Educational qualification of the respondents Educational Number Percentage Qualification Associate Degree 16 40 Bachelor's Degree 12 30 Masters Degree 5 13 Doctoral Degree 0 0 Any others (high school, 7 17 short course training, etc.) Total 40 100% Table 4-3 show that overall the employees of SOKIMEX are fairly well-educated with two-fifth (16 respondents or 40%) possessing an associate degree, slightly less than a third (12 respondents or 30%) having a bachelor's degree and nearly one-seventh (5 respondents or 13%) being qualified at the master's level. The remaining 7 respondents (17%) finished high school or some short course trainings. D. Duration of service in the company: Table 4-4: Duration of service of respondents in the company Service Duration Number Percentage

<1 year 1 - 5 years 6-10 years 11-15years 2 5 5 13 4 10 26 65

>15 years 3 7

Total 40 100%

Table 4-4 demonstrate that a majority of the respondents (26 or 65%) have been working in the company for a duration ranging between 11 to 15 years. Around one-seventh (5 respondents

or13%) have been working in the company for 1 to 5 years, one-tenth (10%) have been working for a duration of 6 to 10 years, while just 3 respondents (7%) have been working for more than 15 years, and a mere 2 respondents (5%) have been working for company for less than 1 year. The gradation in duration of service nearly corresponds to the gradation in age distribution revealing that nearly two-third of the respondents are in the age group of 45-54 years and have put in a service of between 11 to 15 years in the company. II. Respondents' perspectives on performance appraisal system A. Existence of formal performance appraisal system Table 4-5: Respondents response as to whether the company had a formal performance appraisal system Formal Appraisal System Number Percentage Yes 6 15 No 2 5 Dont Know 32 80 Total 40 100%

Table 4-5 reveal the shocking fact that four-fifth of the employees (32 respondents or 80%) are not aware of the existence of a formal performance evaluation process in the company. Only 6 respondents (15%) confirmed that there was a formal system in operation. On the other hand, 2 respondents (5%) provided an emphatic "No" response. These findings reveal that the Administrative Department will have to make considerable efforts to make the employees realize the existence, scale and process of performance appraisal system or else the company's competitive strength in the form of knowledge, experienced and skillful employees, may receive a setback in the near future. B. Frequency of performance appraisals Table 4-6: Respondents response on the frequency of PAs in the company Frequency of appraisal Number Percentage Monthly 0 0 Bimonthly 0 0 Quarterly 0 0 Half-yearly 0 0 Annually 40 100 Don't know 0 Total 40 100% Table 4-6 reveal that although most employees did not know about the existence of a formal performance appraisal system in the company, all of them were united (100%) in responding that performance appraisals were being carried out annually.

C. Use made of performance appraisals Table 4-7: Respondents' perceptions on the use made of the companys performance appraisal system Perceptions on Use Made Number Percentage Finalizing job descriptions 1 2.50 Considering promotions 5 12.50 Deciding on compensation and benefits 7 17.50 Identifying training and development 2 5.00 needs Identifying safety and health needs 1 2.50 Recommending career development plans 3 7.50 Subtotal 19 47.50 No response 21 52.50 Total 40 100% Table 4-7 that less than half of those surveyed could identify the use of performance appraisals, 7 respondents (37%) stated that performance appraisal was used for deciding on compensation and benefits. 26% stated that performance appraisal was used for considering promotions. 16% stated that performance appraisal was used for recommending career development plans. 11% stated that performance appraisal was used for identifying training and development needs. 5% stated that performance appraisal was used for finalizing job descriptions, and another 5% stated that performance appraisal was used for identifying safety and health needs. D. Type of involvement in company's performance appraisal system Table 4-8: Type of involvement in company's performance appraisal system Type of Involvement Number Percentage Carried out a Performance 0 0 Appraisal Been Appraised 28 70 Both of the above 7 17 Don't know 5 13 Total 40 100% Table 4-8 show that out of the 40 respondents, slightly more than two-thirds (70%) had been appraised their performance. 7 of the respondents (17%) have themselves carried out performance appraisal of their subordinates while all being appraised by their own supervisors/managers. However, one-eighth (13%) of the employees did not know who appraised their performances, revealing a lack of openness in the performance appraisal system currently in vogue in the company. E. Contents of performance appraisal Table 4-9: Contents of SOKIMEXs performance appraisal system Contents of Appraisal Job Knowledge Quantity of work Communication Self-improvement Number of frequency 7 7 2 3 Percentage 17 17 5 7

Planning and 1 2 organizing Technical 7 17 knowledge Cooperation 1 2 Attendance at 0 0 meeting Quality of work 7 17 Judgment 3 7 Dependability 3 7 Any others 1 2 Total 42 100% Table 4-9 show that multiple responses were obtained when the employees were asked to identify the contents of the performance appraisal system. 17% of the responses identified job knowledge as being a content of the appraisal. Likewise, another 17% of responses were that quantity of work was also used as a content of appraisal. Yet another similar proportion of 17% of responses was in favor of technical knowledge being used as a content of appraisal. An equal proportion of 17% of responses recognized that quality of work was used as a content of appraisal. Among the rest, 5% of responses focused on communication, 7% cited selfimprovement, 2% identified planning and organizing, 2% emphasized cooperation, 7% focused on judgment, 7% prioritized dependability, and 2% identified discipline as the content of appraising. Based on Tables 4-7, 4-8, and 4-9, an inference may be made that the employees lacked clarity on the use, advantages, and content of performance appraisal system being implemented within the company, and the urgent need to bring about an openness with regard to the system in vogue and any improvements sought to be made. F. Awareness about the setting of performance standards Table 4-10: Respondents' awareness about the setting the performance standards Aware Yes No Dont Know Total Number 1 6 33 40 Percentage 2 15 83 100% Table 4-10 reveal the unfortunate situation that a vast majority of the total respondents, accounting for more than four-fifths (83%) did not know whether the company had set performance standards for its employees or not. 15% of them stated that the company did not set any performance standards for its employees. While one single respondent (2%) affirmed that the company set some specific performance standards for its employees. Again these findings clearly point to the need for introduction of more transparency and clarity with regard to the performance appraisal process within the company. G. Categories of appraisers Table 4-11: Categories of appraisers identified by the respondents Type of appraiser Manager/Supervisor Peer Number 40 0 Percentage 100 0

Customers 0 0 Self-evaluation 0 0 No one appraised me 0 0 Any others 0 0 Total 40 100% Table 4-11reveals that all the respondents (100%) pointed that their appraisers were their own supervisors/managers. H. Categories of appraisees Table 4-12: Categories of appraisees identified by the respondents

Type of Appraisees Number Percentage Manager/Supervisor 0 Subordinate 6 15 Colleague 1 3 I did not appraise anyone 33 82 Total 40 100% Table 4-12 reveal that of the total respondents, 33 respondents or more than four-fifths (82%) had never appraised anyone's performance. Only 1 employee (3%) had appraised a colleague. The 6 respondents (15%) remaining had appraised their subordinates in the past. I. Location of performance appraisal interview Table 4-13: Location of performance appraisal interview Location of Interview At my desk In front of my colleague At a restaurant Any others (never attend the interview) Total Number 5 1 0 34 40 Percentage 12 3 0 85 100%

Table 4-13 demonstrate that more than four-fifths (85%) of the employees had never participated in a performance appraisal interview. When this finding is examined against the finding from Table 4-8 which revealed that 87% of the employees either were appraised or were also involved in appraising others, it may be inferred that the performance appraisal process is not an open one and suggesting that supervisors were probably assessing their subordinates as a one-way process. Only 5 respondents (12%) stated that the interview took place at their desk, while just one respondent (2%) claimed that it took place in front of his colleague. These findings confirm the earlier hypothesis that there is widespread lack of clarity, transparency and openness with regard to the companys performance appraisal system. J. Average duration of performance appraisal interview Table 4-14: Average duration of performance appraisal interview

Duration of Interview Number Percentage Less than half an hour 4 67 Half an hour-1 hour 2 33 1 2 hours 0 0 3 5 hours 0 0 More than 5 hours 0 0 Any others 0 0 Total 6 100% Table 4-14 reveal that two-thirds of the respondents participated in a performance appraisal interview (67%) stated that the interview took less than half an hour while the remaining onethird (33%) stated that the interview was held for about half an hour to 1 hour duration. These findings clearly point to the inadequacy of the time and importance given to the performance appraisal interview process currently being implemented within the company. K. Respondents views on whether a formal model for performance appraisal was being implemented Table 4-15: Respondent's response to the company's formal model in applying Performance Appraisal Formal Model Applied Number Percentage Yes 11 27 No 6 15 Don't know 23 58 Total 40 100%

Table 4-15 demonstrate the state of confusion prevailing among the respondents minds on whether a formal model from performance appraisal was being applied in the company. While nearly three-fifths (58%) did not know whether such a model was being applied, slightly more than a quarter (27%) stated that a formal model was being applied while 15% opined that such model exited. However those who stated that a formal model was being applied could not clarify what the model was. They just felt it may be existing. These findings clearly point to the need for introducing a transparent and lucid model of performance appraisal within the company and then to educate all the employees on the model itself in order that the appraisals are carried out in a fair and just manner without leading to any disgruntlement and complaints. L. Whether feedback as provided Table 4-16: Whether feedback was provided by the reviewer on completion of performance appraisal Feedback provided Number Percentage Yes 5 12 No 35 88 Total 40 100%

Table 4-16 reveal that according to a vast majority (35 respondents or 88%) no feedback was provided by the reviewer on completion of the performance appraisal process. Just 5 respondents or 12% stated that they received feedback from the reviewer on their performance after the completion of the appraisal process. When probed faster, all those who said no feedback was provided, pointed out that it was a confidential appraisal process that was being implemented and hence was not open for everyone. These findings point out the need for doing away with the traditional and bureaucratic approach of keeping the appraisal process a highly confidential one. If SOKIMEX believes in the power and effectiveness of its human resources, then it must adopt an open approach and a two-way process so that the employees learn from their past performance as well as draw inspiration from those performing extremely well, and in turn improve their own performance. Such a strategic shift in the appraisal process will serve to enhance not only the effectiveness of the performance appraisal process but also help in the realization of organizational objectives. M. Time interval between interview and feedback Table 4-17: Time interval between performance appraisal interview and communication of feedback Time Interval Immediate Within 1 week Within 2 weeks Total Number 3 1 1 5 Percentage 60 20 20 100%

Table 4-17 demonstrate that out of the 5 total respondents who were provided a feedback, 3 respondents or 60% got their feedback immediately after the evaluation. One respondent (20%) waited for the feedback for less than a week. The remaining respondent (20%) waited for the feedback up to 2 weeks period. These findings point out to the need for ensuring that immediate feedback was provided to the employees, following the completion of the performance appraisal interview. N. Manner in which feedback was provided Table 4-18: Manner in which feedback was provided Manner of Providing Feedback In private, during the appraisal interview In private, after the appraisal interview In public Total Number 0 5 0 5 Percentage 0 100 0 100%

Table 4-18 show that all the 5 respondents got the feedback in private after completion of the appraisal interview process. O. Whether feedback matched employees expectations Table 4-19: Respondents' perceptions as to whether the feedback matched their expectations

Match with Expectation As per their expectations Better than their expectations Worse than their expectations Total

Number 2 1 2 5

Percentage 40 20 40 100%

Table 4-19 reveal that two-fifths of the respondents (40%) perceived that the feedback matched their expectations. An equal proportion (40%) felt totally disappointed the feedback was worse than their expectations. The remaining one-fifth (20%) stated that the feedback was actually better than their expectations. P. Reflections on accuracy of appraisal process Table 4-20: Respondents reflections on the accuracy of appraisal process Accuracy Reflections Number Percentage Yes 3 60 No 0 0 Cant say 2 40 Total 5 100%

Table 4-20 show that of the 5 respondents who obtained feedback, three-fifths (3 respondents or 60%) opined that the appraisal reflected their work on the job accurately. However the remaining two-fifths of the respondents (40%) could not comment on the accuracy of the appraisal results as related to their work on the job. Q. Results of last performance appraisal Table 4-21: Results of the last performance appraisal Results Got a salary raise Got a promotion Continued at the same level and scale Warned to improve performance Any other (bonuses at year end) Total Number of frequency 4 1 3 0 40 48 Percentage 8 2 7 0 83 100%

Table 4-21 reveal that multiple responses were obtained from the respondents on the question relating to the results of the last performance appraisal. More than four-fifths (83%) of the responses got bonuses (by the end of the year), while 8% of the responses indicated a salary raise, 7% indicated retention at same level and scale and 2% indicated a promotion. In the absence of an open and well laid out performance appraisal system, it is very difficult to comment on whether the results were commensurate with appraisal or not. III. Respondents satisfaction with the companys performance appraisal system

Table 4-22: Respondents satisfaction with the companys performance appraisal system Satisfied Yes No Total Number 9 31 40 Percentage 23 77 100% Table 4-22 show that only less than a fourth (23%) of the respondents are satisfied with the performance appraisal system prevailing in SOKIMEX while the majority who comprise more than three-fourths (77%) of the respondents are not satisfied; thus indicating a clear need for a thorough investigation and review of the current appraisal system and the introduction of an employee friendly, effective, open and transparent system. Such a system should be able to demonstrate the different between poor performance and good performance and be linked to clearly identified salary, benefits, promotions, rewards, punishment, training and development and related decisions. Those who stated that they were satisfied attributed their satisfaction to the fact that their performance appraisal was carried out directly by the top management. On the other hand, those who were not satisfied, cited a number of reasons such as vagueness of the procedure and process, lack of formal forms to fill, lack of clarity on the rating process, lack of transparency, and lack of involvement in the process of conducting of performance appraisals. The respondents provided their overall comments on the companys performance appraisal process as follows: It lacks transparency. It fails to involve the employees no scope for self-appraisal, no scope for mutual agreement/disagreement. It is unsatisfactory. The process and procedures are not clear.

In addition to the overall comments on the performance appraisal system in the company, the respondents made the following suggestions: Design and implement a new process of performance appraisal Introduce a formal form and clear process including specification of procedures Ensure transparency during the process and at the time of decision-making Provide feedback as well as comments on areas which need improvement to appraisees at the of appraisal process Appraisals should be carried out by immediate supervisors/managers Appraisals should include quality of work, quantity of work, work discipline, etc.

Table 4-23: Relationship between age and satisfaction with the companys performance appraisal system Satisfied Unsatisfied Total Age Group No % No % No % 18 24 0 0 4 100 4 100 25 34 1 20 4 80 5 100 35 44 1 33 2 67 3 100 45 54 5 19 21 81 26 100 55 64 2 100 0 0 2 100 23 77 Total 9 31 40 100

Table 4-23 show the relationship between age and satisfaction with the company's performance appraisal system. It is clear that the younger employees are relatively more dissatisfied as compared to the older employees. Thus all respondents aged between 18 and 24 years (100%) are dissatisfied with the companys performance appraisal system. Similarly, four-fifths (80%) of those aged 25-34 years are dissatisfied and two-thirds (67%) of those aged 35-44 years are also dissatisfied. While four-fifths (81%) of those aged between 45 and 54 years are dissatisfied with the companys performance appraisal system, all those aged between 55 and 64 years are satisfied. On the other hand, one-fifth (20%) of those aged 25 and 34 years, one-third (33%) of the age group of 35 and 44 years and nearly one-fifth (19%) of 45-55 years age group are satisfied with the companys performance appraisal system. Table 4-24: Contribution of different age group to satisfaction/dissatisfaction with the companys performance appraisal system Satisfied No 0 1 1 5 2 9 % 0 11 11 56 22 100 Not Satisfied No 4 4 2 21 0 31 % 13 13 6 68 0 100

Age Group 18-24 25-34 35-44 45-54 55-64 Total

Table 4-24 show the relative contribution of different age groups to employees' satisfaction and dissatisfaction with the company's performance appraisal system. More than half of those satisfied (56%) were from the age group of 45-54 years. More than a fifth (22%) of the satisfied employees were aged 55-64 years. Around a tenth of the satisfied employees each belong to the age group of 25-34 years and 35-44 years respectively. None of those aged 18-24 years were satisfied revealing that the younger age groups have different expectations from the more experienced older employees. More than two-thirds (68%) of the satisfied employees were also from the 45-54 years, probably reflecting on the numerical predominance of the aged group within the head office of SOKIMEX. Two equal proportion of 13% each of the dissatisfied employees were from the age group of 18-24 years and 25-34 years respectively. While 6% of the dissatisfied employees were aged 35-44 years, none of those belonging to the age group of 55-64 years were dissatisfied. Table 4-25: Relationship between age and overall comments on the companys performance appraisal Overall comments Lack of transparency and lack of employees' involvement. Very unsatisfactory The process and procedure is not clear.

18 - 24 25 - 34 35 - 44

45 - 54 55 - 64

The process and procedure is not clear. No comments

Table 4-25 shows that the overall comments made by different age groups on the company's performance appraisal system. While the oldest age group offered no comments, the youngest age group of 18-24 years lamented on the lacks of transparency and employee involvement. The other age group expressed dissatisfaction and commented that the process and procedure were not clear. Table 4-26: Relationship between age and suggestions regarding the companys performance appraisal Suggestions 18 24 25 34 35 44 45 54 55 64 Improve the performance appraisal system Reorganize the contents of the evaluation Give feedback as well as comments on areas needing improvement to appraisees after appraisal is completed. No suggestions

Table 4-26 reveals the suggestions offered by the different age groups. While the younger age groups spanning 18 to 34 years suggested that the performance appraisal system be improved, the oldest age group of 55-64 years had no suggestions to make; probably they were all satisfied with the existing system. The age group of 35-44 years desired that the contents of the evaluation be reorganized. Those in age group of 45-54 years emphasized on the importance of providing feedback to the appraisees after the completion of the appraisal process. Table 4-27: Relationship between duration of service and satisfaction with the companys performance appraisal system Satisfied Unsatisfied Total No % No % No % <1 year 0 0 2 100 2 100 1 - 5 years 2 40 3 60 5 100 6-10 years 1 25 3 75 4 100 11-15years 5 19 21 81 26 100 >15 years 1 33 2 67 3 100 23 77 Total 9 31 40 100 Table 4-27 reveals the relationship between duration of services of employees and their Duration of Service satisfaction/dissatisfaction with the company's performance appraisal system. 100% of respondents who have work seniority less than 1 year dissatisfied with the companys performance appraisal. 6% of those who dissatisfied with the companys performance appraisal have work seniority less than 1 year. 60% of those who have work seniority from 1 to 5 years dissatisfied with the companys performance appraisal. And 40% of those who have work seniority from 1 to 5 years satisfied with the companys performance appraisal.

75% of those who have work seniority from 6 to 10 years dissatisfied with the companys performance appraisal. And 25% of those who have work seniority from 6 to 10 years satisfied with the companys performance appraisal. 81% of those who have work seniority from 11 to 15 years dissatisfied with the companys performance appraisal. And 19% of those who have work seniority from 11 to 15 years satisfied with the companys performance appraisal. 67% of those who have work seniority more than 15 years dissatisfied with the companys performance appraisal. And 33% of those who have work seniority more than 15 years satisfied with the companys performance appraisal. Table 27: Relationship between work seniority and suggestions on the companys performance appraisal Suggestions Adapt a new process Have formal form and process Transparency Give feedback as well as comments on area need improvement to appraisees after appraising Should be done by immediate supervisors/managers Include quality of work, quantity of work, discipline in evaluation contents

<1 year 1 - 5 years 6-10 years 11-15years >15 years

Table 28: Relationship educational qualification and suggestions on the companys performance appraisal Suggestions No suggestions The process and procedure should be improved. No suggestions

Associate Degree Bachelor's Degree Masters Degree Doctoral Degree Any others

Comparison the company's performance appraisal system and Caltex's

The company PA is done annually Appraisees is appraised by top management only Appraisees are appraised based on the appraisers' point of views It has no formal model It has no clear content for evaluation It is varied based on the appraisers' point of views. It has no clear method It is mostly used for evaluation in terms of providing bonuses and incentives. Appraisers use essay method It is used for finding out the strength, areas for improvement, and for HR functions. It is systematic. Caltex PA is done annually Appraisees are appraised by immediate supervisor or manager Appraisees are appraised based on job description. It has formal model It has clear content for evaluation

In short, the Caltex's performance appraisal system is better the Sokimex's.

Finding Summary
Based on the finding, the researcher found out as following: Most of Sokimex's employees in the head office are female. Of those surveyed, most of them are in middle age. There are 17 people or 43% have high education. And there are 33 people or 82% have been working for the company more than 5 years. Of the surveyed, most of the company's employees did not know whether the company has the formal performance system or not. The company often does the performance appraisal annually. It is frequently used for deciding on compensation and benefit and considering on employee promotion. Sometimes, it is used for recommending career development plans, identifying training and development needs, identifying safety and health needs, and finalizing job descriptions. Furthermore, the evaluation is based on job knowledge, quantity of work, technical knowledge, and quality of work. Of the surveyed, there were only 7 people or 17% have been involved in the performance appraisal process, and 5 people did not know their performances are appraised. Additionally, only 7 people did not know whether the company set the performance standard or not, still they were not sure with that issue because their answers are not in conformity. Beyond that, only

appraisers have known the content used in and the uses of the performance appraisal in the company. In the company, the performance appraisal is normally done by top management; sometimes it is done by immediate supervisors/managers. Contrarily, the employees have no chance to appraise anyone. Out of the total respondents, there were 6 people got involved in the performance appraisal interview. The interview often took less than haft an hour. Again, most respondents did not know whether the company had the formal model in applying evaluation. Even though there were 17 people had known, they were not sure due to answering different answers among them and some just thought and made up of the issue. After appraising, most respondents had never get any feedbacks because the evaluation was done secretly. Somehow, there were only 12% of respondents got the feedbacks. The feedbacks were provided privately after the appraisal interview. Of the surveyed, the results of the appraisal reflected the performance of the appraisees slightly accurate. Most of the respondents did not satisfied with the company's performance appraisal process, and there were only 9 people out of 40 satisfied with the company's performance appraisal process. They did not satisfied because it lacked of transparency and involvement. In the respondents' points of views, the company's performance appraisal was less effective and unsatisfied. To solve these problems, they suggested that the performance appraisal system should be improved. It should be formal, transparent and involved. The comments and feedbacks should be provided after each evaluation. Most of the respondents who have age under 54 did not satisfied with the company's performance appraisal process. Likewise, the senior employees did not satisfied with the company's performance appraisal process. Those who have age between 55 and 64 years old had no neither comments nor suggestions on the company's performance appraisal process. Those whose ages is less than 44 years old suggested the company improve its performance appraisal system. For those whose age between 45 and 54 years old wanted to get feedbacks and comments after evaluations. CONCLUSION AND RECOMMENDATION

Conclusion
Based on the result of finding, the researchers would like to conclude as following: The company's performance appraisal system was slightly good. There was no clear content and method used in employees' performance evaluation. The methods and contents used varied by appraisers. They choose indicators based on their own understanding and preferences.

There was a gap between management and employees; the feedbacks were not mostly provided to employees after appraising. Most of the employees did not clear with the process of doing appraisal in the company. Also, they did not involve in the process. In the company, performance appraisal was frequently used for deciding on providing compensation and benefit to its employees. It was normally done by top management; sometimes it was also done by immediate supervisors and managers. Although there were different views from different people who have different backgrounds such as ages, educations, satisfactions, and work seniorities, on the company's performance appraisal system, it can be concluded that most of them did not satisfy with and had no different views on the company's performance appraisal system. They also suggested improving the system and the process of doing appraisal in their company. If compared to Caltex, the company's performance appraisal system is worse than Caltex's.

Recommendations
Based on the findings, the researcher would like to recommend that the company should firstly develop a formal model and system for appraising. The system should be tranparent and open. Secondly, the objectives of the employee appraising should not only focus on the deciding on compensation and benefits for employees but also make use of it and serve other human resource functions. Thirdly, both management and employees should get involved in the performance appraisal process. Also, the company should included self-evaluation method in the system. Likewise, they should have a chance to evaluate their supervisors and mangers in order to narrow the gaps between them. Fourthly, the company should introduce an intensive training course to its employees in relation to performance appraisal in the company such as the model, contents of appraising, the objectives, the uses...etc. Thus, the employees will be clear with the process and take advantages from it. Last but not least, the feedbacks and comments on employees' performance should be provided to them after each evaluation. References

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*Dr. Kao Kveng Hong is Professor of Business & Economics at Angkor Khemara University and Cambodian University of Specialty, Phnom Penh, Cambodia. He holds a Bachelors Degree in Economic Science, a MBA and a Ph.D. in Business Administration. Prior to entering academic life Dr. Hong was active in business; he remains the CEO of Asia Marketing Solution Company, a company he founded in 2006. Dr. Hong is also a qualified teacher. He began his career as an English and Japanese teacher in private schools in Siem Reap. These days he teaches Marketing, Media, Management and sales subjects to undergraduates and MBA students. He may be reached at kvenghong@ams-groups.com