1. BACKGROUND TO THE STUDY
Performance appraisal is one of the most problematic components of human resource (HR) management (e.g. Allen and Mayfield, 1983). All involved parties â€” supervisors, employees, and HR administratorsâ€” typically are dissatisfied with their organization's performance appraisal system (Smith et al., 1996) and view the appraisal process as either a futile bureaucratic exercise or, worse, a destructive influence on the employee-supervisor relationship (e.g. Momeyer, 1986). This is certainly true of most organizations, at least in the USA, wherein surveys typically reveal widespread dissatisfaction with the appraisal process (Huber, 1983; Walsh, 1986). Despite these indictments, managers are reluctant to abandon performance appraisal which they still regard as an essential tool of HR management (Meyer, 1991).
Appraisal, according to Smith (2000), involves the identification of cause and effect relationships on which employment and labour policies are based or can be based and are a routine process that organizations use to evaluate their employees. It is a systematic assessment that is as objective as possible of an ongoing programme or policy, its design, implementation and results. Its aim is to appraise the relevance and fulfillment of objectives, efficiency, effectiveness, impact and sustainability.
Although, performance appraisal itself is often a process that involves documentation and communication, the tendency in recent years has been to formalize the appraisal process, whereas in years past, an informal approach with very little record keeping sufficed, now more documentation is required. Organizations usually formalize part of the process by using a standard form. Currently, many organisations are implementing or planning to implement, reward and/or recognition programmes believing that these will help bring about the desired cultural change. In some organisations, large amounts of money are being invested in these types of activities and some managers are required specifically to set aside a certain amount from their budgets for this purpose (Denning, 2001).
This rationale is based on the assumption that these types of incentives will encourage employee loyalty, foster teamwork and ultimately facilitate the development of the desired culture that encourages and supports knowledge sharing. Others maintain that to encourage knowledge-sharing organisations should design reward and recognition systems that stimulate sharing of all kinds: goals, tasks, vision as well as knowledge (Wright, 2004).
One factor that contributes to an effective performance appraisal system entails ensuring that the system focuses on performance variables as opposed to personal traits (Smither, 1998). Whereas experts disagree about whether performance should be measured in terms of the results produced by employees (e.g. Kane et al., 1995) or in terms of work-related behaviors (e.g. Murphy and Cleveland, 1991), they agree that measuring personal traits has several drawbacks. For example Jankowicz (2004) notes that the validity and reliability of trait-based performance appraisals is highly suspect because the rater's perceptions of the traits being assessed are affected by his/her opinions, biases, and experiences that may have little to do with the particular employee. In addition, appraisals based on personal traits have little value for providing diagnostic feedback to employees or for designing training and development programs to ameliorate identified skill deficiencies (Squires and Adler, 1998).
Furthermore, based on his review of the findings from several court cases involving performance appraisal, Malos (1998) concluded that, to be legally sound, appraisals should be job-related and based on behaviors rather than traits. For an appraisal system to be effective,...
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