Due to the growing focus on the personnel’s development, there is an increasing concern regarding the use of effective assessment methods. Performance appraisals are being used by a large number of organizations for assessing their employee’s performance and its effects on the organization as a whole. Similarly, universities make use of the assessment methods to assess the learning of their students. Despite the Popularity of performance appraisals there is an ongoing debate regarding the effectiveness of the assessment methods and use of performance appraisals (Schraeder, Becton & Protis, 2007). This believe can be further strengthen up by the research done by Clinton O & Stephen J, which shows that less that 20 percent of the performance appraisals are proved to be effective predictors of employee’s performances. Positive impacts of Performance Appraisal:
Performance appraisal has a very important role to play in managing individual and group performances (CIPD). There is a considerable amount of agreement among managers and researches about the positive impacts of personnel rating and evaluation of performance. Performance appraisals can proved to be very helpful and successful if they focus primarily on the improvement of organizational performance as a whole, and especially if it’s attributes are in line with those of the organizational aims and goals (Schraeder, et al., 2007). The significance of performance appraisals has been discussed in various studies by different authors, for example Larson (1984) described the feedback as integral part of the control system of any organization and this view point is also supported by other authors (Morris et al., 1991; DeCarlo and Leigh, 1996) in their findings, they defined performance appraisals as one of the most important job responsibilities of the line managers (Pettijohn, Parker, Pettijohn and Kent, 2001). There are number of potential benefits associated with the use of appraisals, like increasing effort, motivation level and performance (Churchil et al., 1985). Researches conducted at various times showed that performance appraisals helped in boosting the performance of organization as a whole as it reduces the ambiguity in the role, which ultimately leads towards the increase in effort, motivation, satisfaction, commitment and also decrease in turnover (Pettijohn et al., 2001). These performance ratings and predictors are also used for deciding the merit-based employee pay and other organizational rewards (Pettijohn et al., 2001). Performance ratings are good predictors for measuring the efficiency of organization’s selection and placement programmes, they help to identify the needed competencies in particular departments and for improving the training, learning and development process in the organization (Dubinsky et al., 1989; Thomas and Bretz, 1994). The main focus of the performance appraisals is upon the personnel development and continuous improvement in the performance, so it can impact the performance of an individual in a positive way (Jenks, 1991). The perceived benefits of a formal performance appraisal system include improved and effective communication, which is one of the most important factors affecting the employee motivational levels in organizations; enhancement of the employee focus through promoting trust, as argued by Argyris in 1964 that lack of trust among individuals heavily affect the performance and profitability of the organization as a whole; setting desired organizational goals, which are in line with the individual’s goals as they help to decrease the uncertainty in the job roles; boosting up individual’s performance, i.e. to determine the strong and weak points of individual performances and processes should be designed for improving the weak areas (Broady-Preston and Steel, 2002); determining the problem areas and developing the training programmes directly related to them to improve the individual’s...
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