Performance Appraisal Issues and Challenges

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I. Introduction:
The theory, research, and practice of Human Resource Management (HRM) has evolved considerably over the past century, and experienced a major transformation in form and function primarily within the past two decades (Ferris et al, 1999). This tremendous transformation is driven by the outcome of globalization, growth and rapid technology changes, and changes in employee’s expectation, among many. Hence, the right skill in managing HRM is fast becoming one of the emerging company’s current issues. Professionals in this department of a successful business must be talented and capable in dealing with employee’s issues to be able to focus in performance management, which is a deep concern for HRM. This paper aims to cover the particular aspect of Performance Appraisal Issues and Challenges in the performance management to manage a globally responsive business in today’s immense businesses. Performance appraisal has immense research debates up to today and covers an important point of view, which is the Employees – the people of the organization. Although many developments have been derived from many research works, there is still room for advancement to proceed to a better effective performance appraisal management. Despite the progress that has been made in this section, the paper highlights the following issues that still need to be considered in the context of running a successful Performance Appraisal procedure.

1)Instrument Problems – includes problems related to the appraisal forms for evaluation
2)Employee and management issues – includes employee situation during performance evaluation and lack of management commitment
3) Compensation, benefits and reward issues – employees impact on their salary and benefits This yet highlights another subject of further concern in the context of HRM effectiveness. There are two standpoints of HRM effectiveness in need of theoretical and empirical attention:

(1) The effectiveness with which performance appraisal policies and practices are implemented in relation to theory; And
(2) The effectiveness of these policies and practices in producing desired results by measuring and evaluating performance appraisal. The only study to date examining these issues were conducted by measures using balanced score cards and 360 degree feedback. This paper will present with immense research work in terms of these aspects and also allow future progress in a better performance management in organizations set as examples.

II. Issues and challenges:
One of the most significant processes of HR in any company is performance appraisal system which is the critical step in performance management. Performance appraisal or evaluation is a periodic system that evaluates employees’ performance yearly or twice a year. The aim of performance review is to understand the needs of training and development, promotion, termination, reward and testing employees. Performance appraisal can be challenging if conducted effectively. Most of employees are displeased with their performance appraisal system because it has many flaws. Here are several issues that might occur in most of international companies: 1. Instrument problems: Instrument problems are appraisal evaluation forms. An organization designs similar performance appraisal forms based on employee job title. However, they should differ depending on the job title. (Sullivan, J, 2011). For instance, in health care industry, the performance appraisal forms should be different for doctors and management. For writing and designing effective format of performance appraisal form, managers should apply a precise and simple clear rating scale based on job performance and description. Errors in rating, judgment and evaluation are most common issues in some companies. (Sullivan, J, 2011) ‘The errors that may arise in instrumental problems are:

* “Halo effect”: Effect of rating a competence on other competence...
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