Catalyst Investors, mid-tier hedge fund located at 711 Fifth Avenue Suite 600 New York, is the firm whose employee evaluation form is used to carry out the study. Catalyst Investors use Behaviorally Anchored Rating Scales (BARS). Behaviorally Anchored Rating Scales (BARS) are descriptive in nature, such that the evaluator is required to rank the continuum of descriptive statements relating to behaviors ranging from the least effective to the most effective behavior relating to a given task which the employee possess (Aiken and Lewis 173). Through the ranking, the evaluator will identify which scale best describes an employee.
The Scale Used
. Behaviorally Anchored Rating Scales (BARS) was developed by Smith and Kendal with the aim of developing a better evaluation of the employee thus improving on the traditional methods. The method combines the benefits of both qualitative and quantitative approaches. As such, the method combines the benefits derived from narratives and events that are considered critical and quantifying the rating which is anchored on a quantified scale. In other words, Catalyst Investors benefit from BARS since the method differs with the standard methods of employee appraisal in that it focuses on behaviors that are relevant to the completion of a task as opposed to evaluating the general traits of the employees. These specific attributes are then quantified making the attribute comparable to the desired behaviors that are anchored to the numerical rating scale. As such, although the Behaviorally Anchored Rating Scales (BARS) are still criticized, the approach has numerous advantages over the traditional methods, thus offering better employee insights based on the required competencies that contribute to the organization overall performance and giving reduced consideration to events that do not have major contributions to the overall performance of the organization. However, in order to identify the most suitable behaviors for a given job, the human resource department applies the critical incidences techniques. These are procedures that are used to document human behaviors and their significance to a given job (Venkataratnam 131). This calls for expert opinion in each task since the significance is qualitatively defined, then quantified through a scale.
Alignment to Catalyst Investors Corporate Goals and Usefulness to Goal Setting
Catalyst Investors, just like any other organization, is driven by the desire to attain its goals. Therefore, the employee appraisal must be aligned in accordance with Catalyst Investors goals. As such, employee contribution Catalyst Investors in its quest to attain these goals must be evaluated thus facilitating key decisions to be made. The situation calls for a convergence of the appraisal system and the goals of the firm. In order to apply the critical incidence techniques, the Catalyst Investors may use comprehensive data that are collected from evaluating the incumbents of a given position through comprehensive task analysis. As such, in order align Catalyst Investors goals with the performance of the employees; the applicable evaluation form must be anchored towards these goals (Sims 91). As a result, when Catalyst Investors human resource function is developed the evaluation form, the following steps must have been followed for the convergence of the organizational goals and employee performance to be evaluated.
Catalyst Investors have been using BARS since inception. As such, the first step involved defining the effective and ineffective behavior from people with extensive knowledge in a given task since the firm could not obtain data from critical analysis of the task from the recent task because the firm had just started. Second, the data that was collected was then converted to a performance dimension relevant to the firm’s goals. In order to have the data converted into this dimension, the Catalyst Investors HR managers used the Q-sort technique to sort the data being used in homogeneous groups. Consequently, the group definitions were then developed to define each homogeneous group as a performance dimension. The third stage involved subject matter expert where the organization requires these experts to retranslate given behavior examples into respective performance dimensions. Through the process, the firm manages to discard various behaviors that the experts find a low level of agreement to the task thus low support to the Catalyst Investors organizational goals while retaining the ones that have a high level of agreement to the task hence showing support for the overall Catalyst Investors organization goals. As such, this ensures that the re-translation process will assist the Catalyst Investors in ensuring that the behaviors that are highly identified with a given task are easily identifiable and are used to form the performance dimension needed to evaluate the employee performance. The fourth stage will involve developing the rate of effectiveness. In this case, the subject expert will rate the effectiveness of each behavior and their suitability to the tasks. The experts will then develop a Likert-type scale used to rate the employees. For this organization, they were using a 5 point Likert scale for all their evaluations. The fifth stage will involve further filtering these behaviors using the concept of standard deviation. In this case, the behaviors that have a high standard deviation are discarded while the ones that have a low standard deviation are retained. Usually, a high standard deviation is regarded as a deviation with a value that exceeds 1.5. However, the experts may agree on a different value since the value is only set in order for the experts to have a consensus on the behaviors that will be included in the appraisal form. Finally, the behaviors that are used to measure each performance dimension are compiled to form the basis of evaluating Catalyst Investors employees which will be used as anchored scales (Aswathappa 263).
In developing these scales, not only do the experts consider the behaviors of the task, but also consider the overall goals of the firm since the objective of the entire process is to have a comprehensive measure that outlines the employee level of contribution to Catalyst Investors’ goals as guided by the firm mission and organizational culture. Examining Catalyst Investors form and its mission statement, employee evaluation focuses on three key broad areas, namely goal evaluation, leadership and competency evaluation and overall employee performance
Appropriateness in Evaluating All Employees
Catalyst Investors is a relatively large firm with varied responsibilities. However, considering the largest proportion of the employees, these employees are involved in tasks that require closely related skills. As such, the bulk of the employee re in fund management with a handful of employees being in the support department, such as ICT, accounting and human resources, account for less than 15% of the entire Catalyst Investors workforce. Therefore, the major tasks require highly similar behaviors. In addition, the evaluation is structured to support transferability of context in that it uses broad statements that can evaluate the core workforce while as the same form can also sufficiently evaluate the noncore staff. In this way, the evaluation covers all the employees.
Objectivity
Recommendation on Improvement
There are various limitations that are inherent in the use Behaviorally Anchored Rating Scales (BARS). These limitations are broad issues which this paper only notes of their existence. However, the focus in paper is the application of Behaviorally Anchored Rating Scale (BARS) by Catalyst Investors in evaluating its employee. Catalyst invertor uses a universal evaluation form based on the behaviors that are exhibited by employees in the hedge fund business. However, instead of having the universal evaluation form, the appraisal form should be structured along a given hierarchy or at least differentiate some of the sections to be specific to a given hierarchy level. For instance, fixed income requires similar skills with the differential occurring based on the management level since, despite a manager having passed the analyst state, there are traits that a manager must have that an analyst does not necessarily need to have. Therefore, the form should show more sensitivity to the hierarchy level of the employee.
Works Cited
Aiken, Lewis R., and Lewis R. Aiken. Personality Assessment: Methods and Practices. Seattle: Hogrefe & Huber, 2006. Print.
Aswathappa, K. Human Resource Management: Text and Cases. New Delhi: McGraw Hill Education, 2013. Print
Sims, Ronald R. Managing Organizational Behavior. Westport, CT: Quorum, 2002. Print.
Sukumar, Debnath C., Brian Lee, and Sudhir Tandon. "Fifty Years and Going Strong: What Makes Behaviorally Anchored Rating Scales So Perennial as an Appraisal Method?" International Journal of Business and Social Science (2015): 17-27. Web. 4 Apr. 2016.
Venkataratnam, A. Personnel Management and Human Resources. New Delhi: Tata McGraw-Hill Education, 2004. Print.
