Examination of the Impact of Performance Appraisal on Employees at Workplace

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Employee Performance Appraisals
Research and practice in performance appraisal: evaluating employee performance in America's largest companies. Abstract:
There is a growing debate about the relevance of employee performance appraisals. On the one hand, performance ratings are considered by many academics and practicing managers as essential personnel management tools. They are used in recruiting and hiring, in compensation administration, in training and development, and as a motivational tool. On the other hand, a sizeable number of business managers believe that this practice may generate more problems than it solves. For one thing, the design of performance appraisal systems is usually flawed. A recent survey of Fortune 100 companies shows that practicing managers and performance appraisal researchers have very different concerns. For instance, the former tend to place more importance on the appraisals' processes and behaviors, while the latter attaches more value on its cognitive aspects. Subject:

Performance appraisals (Evaluation)
Authors:
Thomas, Steven L.
Bretz, Robert D., Jr.
Pub Date:
03/22/1994
Publication:
Name: SAM Advanced Management Journal Publisher: Society for the Advancement of Management Audience: Trade Format: Magazine/Journal Subject: Business; Business, general Copyright: COPYRIGHT 1994 Society for the Advancement of Management ISSN: 0036-0805 Issue:

Date: Spring, 1994 Source Volume: v59 Source Issue: n2
Accession Number:
15703609
Full Text:
Introduction

Many academics and practicing managers regard performance appraisal as one of the most valuable human resource tools. It is a vital component in recruiting and hiring employees, where it is used to validate selection tests, and in staffing, where transfer, layoff, termination, or promotion decisions are made on the basis of appraisal results. In compensation administration, performance appraisal forms the basis for the administration of merit pay systems. Most important, performance appraisal can be used as a motivational tool for communicating performance expectations to employees and providing them with feedback. Finally, performance appraisal is indispensable in training and development activities to assess potential and identify training needs.

On the other hand, there appears to be a growing debate about whether the consequences of the performance appraisal are truly beneficial to many organizations. A significant number of practicing managers appear to be saying that performance appraisal may create more problems than it solves. W. Edward Deming, for example, has proposed that we should abolish production standards that specify numerical goals and eliminate all individual performance appraisal in favor of systems that evaluate performance at the unit or plant level.(1)

Regardless of one's perspective, performance appraisal systems are likely to be a subject of concern for managers and employees alike for some time to come. In fact, the trend in organizations appears to be toward merit or other performance-based pay plans, promising even more emphasis on the appraisal process. Despite the trend, and even though a stream of appraisal research has flowed unabated for years, performance appraisal, as commonly practiced, has remained a largely unsatisfactory endeavor. Performance appraisal systems often suffer from design flaws. Managers receive poor training in appraisal administration and are seldom rewarded for accuracy in appraisal. In addition, for reasons summarized in Table 1, both managers and employees tend to approach appraisal feedback sessions with fear and loathing.

Table 1 Why Managers and Employees Dislike the Appraisal Process 1. Neither rarely has any sense of ownership. They are not involved in the design or the administration of the system; they frequently are not trained to use the system, and their reactions to the system are seldom solicited and acted upon....
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