Consequences of Performance Appraisal Experiences on Hrm

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Consequences of the performance
appraisal experience

Performance
appraisal
experience

Michelle Brown
Department of Management, Faculty of Economics and Commerce, University of Melbourne, Melbourne, Australia

Douglas Hyatt
Rotman School of Management, University of Toronto, Toronto, Canada, and

375
Received 7 August 2008
Revised September 2008
Accepted 4 July 2009

John Benson
School of Management, University of South Australia, Adelaide, Australia Abstract
Purpose – The purpose of this paper is to examine the role of low quality performance appraisals (PA) on three human resource management outcomes ( job satisfaction, organisational commitment and intention to quit).

Design/methodology/approach – Using data from 2,336 public sector employees clusters of PA experiences (low, mixed and high) were identified. Regression analysis was then employed to examine the relationship between low quality PA experiences and job satisfaction, organisational commitment and intention to quit.

Findings – Employees with low quality PA experiences (relative to those with mixed and high quality PA experiences) were more likely to be dissatisfied with their job, be less committed to the organisation and more likely to be contemplating leaving the organisation. Research limitations/implications – The data were collected in a large public sector research organisation where the results of the appraisal were linked to pay increments. Further research is needed to determine the applicability of the results to private sector employees. Practical implications – The quality of the PA experience varies and a low quality experience results in lower job satisfaction and organisational commitment and higher quit intentions. The challenge for human resource (HR) practitioners is to decide whether the allocation of additional resources to ensure that all employees have a uniformly high quality PA experience is a worthwhile investment.

Originality/value – Research has tended to focus on the relationship between a single feature of a PA process and HR outcomes. Organisations need to acknowledge the importance of the overall PA experience when evaluating its consequences for HRM outcomes. Keywords Performance appraisal, Performance management, Job satisfaction, Pay, Organizational behaviour, Employee turnover

Paper type Research paper

There is an increasing use being made of the performance appraisal process (Millward et al., 2000; Nankervis and Compton, 2006; Wiese and Buckley, 1998) generally This research was funded by grants received from the Faculty of Economics and Commerce, University of Melbourne. The authors would like to thank management and staff of public sector research (PSR) and the officials of the Community and Public Sector Union for their support for the project.

Personnel Review
Vol. 39 No. 3, 2010
pp. 375-396
q Emerald Group Publishing Limited
0048-3486
DOI 10.1108/00483481011030557

PR
39,3

376

motivated by an organisational desire to affect employee behaviours and attitudes and, ultimately, organisational performance (Aguinis, 2009; Gardner, 2008; Murphy and Cleveland, 1991; Shields, 2007). This occurs as a consequence of the establishment of goals at the beginning of the evaluation cycle which provide employees with clear performance targets, the monitoring of performance during the evaluation cycle (which can be used to assist poor performers) and the reinforcement provided for good performance through the provision of rewards, usually in the form of higher pay (Milkovich and Wigdor, 1991). This process is seen to encourage employee performance in subsequent performance cycles (Heneman and Werner, 2005; Mani, 2002).

The capacity to achieve these positive outcomes will be a function of the quality of the performance appraisal (PA) experience. Taking a lead from the operations...
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