The Effectiveness of Performance Appraisal Systems: Employee Relations and Human Resource Management
©2014
Textbook
94 Pages
Summary
Performance Appraisals (PA) is a tool which is associated with employee performance evaluation. Researchers tend to disagree on the effectiveness of these systems. Academics claim that PAs improve employees’ performance through commitment, motivation and output increases, whilst providing an optimal basis for a reward system and training needs. Conversely, it is argued that PAs are flawed from inception since they are subjective, biased and unfair. The study critically assesses research on PAs and their effectiveness towards company goals, whilst identifying a set of criteria to test the extent of their effectiveness.<br>The findings reject the notion that PAs are totally flawed and ineffective. The investigation discloses that HR Practitioners experience difficulties in assessing PAs fairness. The author recommends a number of initiatives to improve appraisees’ productivity as a direct result of PAs outcome, thus ensuring their effectiveness. Although the study reaffirms the scholars’ claim that PAs effectiveness is a very debatable subject, HR Practitioners still consider PAs as vital to manage employee performance throughout the foreseeable future.
Excerpt
Table Of Contents
2.8.3
The relevance of competent raters in a Performance Appraisal system
... 33
2.8.4
Segmenting the function of Performance Appraisals An innovative
approach
... 33
2.9 Chapter
summary
...
34
3.
METHODOLOGY ... 35
3.1
Chapter introduction
... 35
3.2 Research
development
...
35
3.3
The contribution of primary and secondary research ... 35
3.4.
DISTINGUISHING BETWEEN QUALITATIVE AND
QUANTITATIVE DATA ... 36
3.5
Selecting the sampling technique ... 36
3.6
Self-selection sampling data gathering method ... 37
3.6.1
Identifying participating firms for the field research
... 37
3.6.2
Option 1: Self-completion questionnaire
... 40
3.6.3
Option 2: Participant observation
... 41
3.6.4
Option 3: Internet and intranet-mediated questionnaires
... 42
3.6.5
Option 4: Telephone questionnaires
... 42
3.6.6
Option 5: Interviews
... 42
3.7 Interview
methods
...
43
3.7.1
Non-standard interviews
... 43
3.7.2
Semi-structured interviews
... 43
3.7.3
One-to-one interviews
... 44
3.7.4
Face-to-face interviews
... 44
3.8
Designing the interview questionnaire ... 44
3.9
Logistical preparation for the interview ... 45
3.10 Interview pilot test ... 45
3.11 The interviews outcome reliability ... 46
3.12 Ethical considerations when conducting interviews ... 46
3.13 Evaluation of the field research findings ... 47
3.14 Chapter
summary
...
49
4.
RESEARCH FINDINGS AND ANALYSIS ... 50
4.1 Chapter
introduction
...
50
4.1.1
Chapter overview
... 50
4.1.2
The respondents' role and their participation in the field research study
... 50
4.2
Overview of the interviews approach ... 50
4.3 Research
findings
...
51
4.3.1
The composition of manufacturing firms in Malta and their HR set-up
... 51
4.3.2
Reasons for undertaking Performance Appraisals
... 55
4.3.2.1
Performance Appraisals as a control mechanism
... 56
4.3.2.2
The link of Performance Appraisals to a reward system
... 56
4.3.2.3
Performance Appraisals as a training needs identification tool
... 56
4.3.2.4
The link of Performance Appraisals to develop and build
working relationships
... 57
4.3.2.5
The link of Performance Appraisals to increase productivity levels
... 57
4.3.3
Claimed benefits and flaws within Performance Appraisals
... 58
4.3.3.1
Unfairness of Performance Appraisal due to subjectivity and
biased opinions of managers
... 59
4.3.3.2
Do Performance Appraisals serve as a control mechanism and
limit creativity?
... 59
4.3.3.3
Are Performance Appraisal's flawed by the managers
negative feedback?
... 59
4.3.3.4
Reluctance by managers to undertake Performance Appraisals
... 60
4.3.3.5
Political motivation
... 60
4.3.3.6
The claimed benefits of Performance Appraisals
... 61
4.3.3.7
Productivity improvements as a direct result of Performance Appraisals'
interview outcome
... 63
4.3.3.8
Increase in production output
... 64
4.3.3.9 Quality and accuracy levels
... 64
4.3.3.10 Statistical data
... 64
4.3.3.11Cost savings
... 64
4.3.4
The extent of intended purpose of Performance Appraisals
... 65
4.3.4.1
Are Performance Appraisals being applied as intended?
... 65
4.3.4.2
Perceived fairness of Performance Appraisals
... 66
4.3.4.3
Communication process and time allocation for Performance Appraisals
... 67
4.3.4.4
The fairness of Performance Appraisals when appraisers ratings
are compared
... 67
4.3.5
Performance Appraisals' effectiveness distinct perspectives by
HR Practitioners
... 67
4.3.5.1
Definition of effectiveness
... 67
4.3.5.2
Recommendations for enhancing effectiveness of Performance
Appraisals
... 68
4.3.5.3
Recommendation for Performance Appraisal improvements specifically
in terms of productivity
... 68
4.4
Chapter Summary ... 68
5
CONCLUSION ... 70
5.1 Chapter
introduction
...
70
5.2
Conclusions from research analysis and discussion ... 70
5.2.1
The influence of HR Practitioners on Performance Appraisals
effectiveness in manufacturing firms
... 70
5.2.2
The objectives of Performance Appraisals
... 70
5.2.3
Benefits and flaws of Performance Appraisals
... 71
5.2.4
Defining `effectiveness'
... 71
5.2.5
The extent of Performance Appraisals fairness
... 72
5.2.6
Improvements in productivity
... 72
5.3
Conclusive statements on the dissertation objectives ... 73
5.4 Recommendations
...
74
5.4.1
Initiatives that can be practically applied
... 74
5.4.2
The opportunities and challenges posed by these recommendations
in their practical application
... 76
5.5 Reflections
...
76
5.5.1
Research strengths
... 76
5.5.2
Research limitations
... 77
5.5.3
Final comments
... 77
REFERENCES ... 79
APPENDICES ... 89
12
List of tables
Table 1.1 Manufacturing firms in Malta selected for the field research ... 19
Table 3.1 Categorisation of manufacturing firms based on EU standards ... 39
Table 3.2 Use of different types of interview in each of the research
categories
...
43
Table 3.3 Allocating values to each response of the interviews undertaken
with HR Practitioners in manufacturing firms in Malta ... 48
Table 3.4 Classifications of ratings for the respondants' answer ... 48
Table 4.1 Categorisation of interview questions in themes ... 51
Table 4.2 Rated and evaluated response to Q5 ... 55
Table 4.3 Rates and evaluated response to Q9 ... 56
Table 4.4 Rates and evaluated response to Q7 ... 58
Table 4.5 Rates and evaluated response to Q8 ... 61
Table 4.6 Rates and evaluated response to Q11 ... 63
Table 4.7 Rates and evaluated response to Q10 ... 65
Table 4.8 Rates and evaluated response to Q6 ... 66
13
List of figures
Figure 1.1 The dissertation scope within the performance management
cycle: performance review and assessment ... 20
Figure 2.1 Factors influencing employees' behaviour ... 26
Figure 3.1 Methodology for selecting the non-probability and self-selection
sampling
technique
...
38
Figure 3.2 Sample selection method for data gathered from manufacturing
firms in Malta ... 40
Figure 4.1 Percentage representing the presence of manufacturing firms
operating in Malta throughout the years ... 52
Figure 4.2 Percentage of manufacturing firms and their adoption of
Performance Appraisals throughout the years ... 52
Figure 4.3 Percentage of manufacturing firms in terms of their market
orientations
...
53
Figure 4.4 Percentage of manufacturing firms and their trade union
representation
...
53
Figure 4.5 Percentage of HR Practitioners in terms of the years of experience
within the company's HR Department ... 54
Figure 4.6 Percentage of manufacturing firms in relation to the Performance
Appraisals
applied
...
54
14
List of abbreviations
BSC
Balance Score Card
EU
European
Union
HR
Human
Resource
HRM
Human Resource Management
ICT
Information and Communication Technology
NSO
National Statistics Office
PA
Performance
Appraisal
Q Question
US
United
States
15
1.
Introduction
1.1
Study background
Business organisations set realistic goals to ensure their competitiveness and
profitability on a long-term basis. Herman (2005) sustains that PAs are a pro-
cess that managers use to assess employees' performance in order to attain
company's goals. PAs represent a strategic tool for evaluating performances
defined as "the formal assessment and rating of individuals by their managers
at or after a review meeting" (Armstrong 2009:618). Sheal (1992) stresses that
the main objective of an appraisal system is to upgrade performances within
individual and organisational structures. The potential benefits of appraisal sys-
tems have been expounded in detail by various researchers including Cascio
(1986). Conversely, Taylor et al. (1995) sustains that appraisals tend to be per-
ceived and even over rated as the cure to all challenges directly linked with
employee performance.
Managers need to manage their manpower resource efficiently and effectively
and therefore it is imperative that periodic upgrading of employees perfor-
mance is undertaken (Bowman 1994). Although there is a pressing need so as
to step up productivity, businesses are more than ever constantly questioning
the reliability and validity of the design of PAs systems (ibid). Lawler III et al.
(1984) highlight, that an insightful assessment of PAs should focus on the no-
tion of effectiveness underpinning the whole system, in terms of the perspec-
tives of both the appraiser and appraisee. This is sustained by Campbell and
Barron (cited in Nathan et al. 1991:365) advocating that "Organisations are of-
ten dissatisfied with the efficacy of performance Appraisals". Finally, the de-
gree how far PAs impact employee performance and work attitude, is still to be
determined in substantial depth (Nathan et al. 1991). Since empirical evidence
is highly restricted, a high degree of research is essential in assessing PAs effi-
ciency.
Lawler III (2003) advocates that the criteria established to ensure an effective
PAs system are still highly disputed among researchers. There is definitely lack
of agreement among researchers concerning the effective steps which need
to be undertaken in the design of PAs, so that employee performance particu-
larly in terms of productivity, can be upgraded. Longenecker and Gioia (1988)
indicate that PAs are considered by most researchers and likewise HR Practi-
16
tioners as ineffective. This belief is strongly testified by Bratton and Gold
(2007:285) who claim that "appraisal is arguably the most contentious and
least popular among those who are involved". Deming (1986) and Joiner
(1994) sustain that appraisal targeted to individual employees are in an essence
dysfunctional.
1.2
Defining Performance Appraisal effectiveness within manufacturing
firms
Within the context of PA, Reddin (1970) views effectiveness as the degree to
which a manager attains the targeted outputs within pre-determined time
schedules. Furthermore Longenecker and Fink (1999) indicate three strategic
criteria underpinning the effectiveness of PA systems. These include:
· Effective appraisal program
· Effective appraisal planning and practices
· Ongoing review and support
Jacobs et al. (1980) specify three criteria which are deemed as indispensable
in ensuring the holistic effectiveness of appraisal systems. These embrace
both the quantitative and qualitative criteria together with evaluation of per-
formance practices (ibid).
It needs to be admitted that the importance of PAs are meaningful to both
managers and subordinates. The latter are ranked in terms of their perfor-
mance, and their overall contribution towards the fulfilment of pre-
determined business goals. From a practical dimension managers are con-
fronting challenges to benchmark the effectiveness of PA systems. This is be-
cause manufacturing firms across the wide spectrum of the economy are dis-
tinct in terms of size, industry sector, market related features, business cul-
tures adopted and management design systems. Managers are persistently
facing aggressive competitive pressure to hold the advancing impact of low-
cost based firms.
17
1.3
Performance Appraisal within manufacturing firms operating in
Malta
The year 1964 was of pivotal importance for Malta, not only as regards the at-
tainment of its political independence, but also in setting a secure platform for
manufacturing firms. So far, manufacturing firms were geared to meet the
needs of the local market. Companies faced multiple problems foremost lack of
capital, diseconomies of scale due to the limitations of the local market, lack of
expertise in technical skills, and lack of government support. One cannot ex-
clude the high degree of competition which the local product faced from their
overseas counterparts. However, after 1964, consecutive Maltese administra-
tors sought to invest in upgrading the necessary employment, technology, capi-
tal and general infrastructure, so as to attract and entice both local as well as
foreign manufacturing firms (Gonzi 2005).
Malta's competitive advantage within the sub-period 1964 - 1980 was the pro-
vision of cheap labour. However throughout the past two decades, manufactur-
ing businesses based in Malta, in line with the Western counterparts, have been
finding it extremely challenging to compete with low labour cost economies
located within the Far-East region. Moreover East European countries are still
providing low-cost labour. Apart from the challenge to compete with these
countries, firms based in Malta are facing high employee turnover. This is be-
cause new career opportunities are emerging for the Maltese workforce within
the financial services, ICT, I-gaming and construction.
HR Practitioners are highly interested in assessing employee performances to
ensure the long-term sustainability of their manufacturing firms. The effective-
ness of PA systems plays a pivotal role within these circumstances. The strate-
gic role of HR Practitioners as the primary intermediaries between the ap-
praisee and appraiser in PAs is both vital and beneficial. Failure to evaluate
employee performance and continuously improving productivity is not an op-
tion for manufacturing firms operating in Malta but a strategic imperative.
18
1.4 Research
objectives
Although there are substantial insightful research and empirical findings on
PAs, the researcher identified a gap in the available literature, as regards to the
effectiveness of PAs particularly on productivity improvements within manu-
facturing organisations. Thus, this dissertation aims to answer the following re-
search questions:
·
Are PAs effective in improving productivity levels of subordinates?
·
What are the key elements that make PAs effective?
·
What could be the criteria to test the effectiveness of such systems?
·
Does company size matter when evaluating the effectiveness of PAs in
manufacturing firms?
·
Does productivity increase, decrease or remain unaffected after undertak-
ing PAs?
As Murray (2006) argues, having clear objectives is fundamentally important
in a dissertation and therefore the study objectives are defined hereunder:
(i)
Identify the current research on PAs and critically describe their rele-
vance in terms of their effectiveness within firms. Moreover, the re-
searcher aims to assess the `gap' within the literature findings in terms of
productivity improvements.
(ii) Undertake a field research so as to evaluate the extent of PA systems as
an effective tool to improve appraisees' productivity performance in
manufacturing firms operating in Malta.
(iii) Evaluate the effectiveness of PAs on criteria sourced from the literature
review and compare it to what is actually being applied in manufacturing
firms in Malta.
(iv) Identify factors that can improve appraisees' productivity as a direct re-
sult of an effective PA system.
19
1.5 Dissertation
scope
It is deemed imperative from the onset, that the dissertation scope is defined
within the ambit of manufacturing firms in Malta. The term `manufacturing' is
specifically defined within the context of this study, as being the integration of
a wide range of activities, facilitating the transformation of raw materials into
finished tangible products. Beamon (1998) perceives `manufacturing' as a set
of inter-related yet distinct processes and systems, that once integrated translate
into the output of another product. The manufacturing firms that participated in
this study are listed in table 1.1.
Actavis Malta Limited
Baxter (Malta) Trading Company Limited
Carlo Gavazzi Limited (Malta)
Dedicated Micros (Malta) Limited
De la Rue Currency and Security Print Limited
Hotset Malta Limited
Malta Dairy Products Limited
Media Link Communications Limited
Methode Electronics Malta Limited
Microtek Medical Malta Limited
Playmobil (Malta) Limited
Raesch Quarz (Malta) Limited
Seifert Mtm Systems Malta Limited
Simonds Farsons Cisk plc
Stainless Steel Products Limited
ST Microelectronics (Malta) Limited
The General Soft Drinks Company Limited
Yellow Pages (Malta) Limited
Table 1.1: Manufacturing firms in Malta selected for the field research
20
The study will investigate the `effectiveness' of PAs as viewed by HR Practi-
tioners engaged in these firms.
HR Practitioners perform the role of a mediator
linking the Functional Manager and the appraisee in the PA process. A justifi-
cation and explanation of this approach is provided in section 4.1.2.
For the purpose of this dissertation, the term `appraisee' employed by manufac-
turing firms in Malta, refers specifically to non-managerial employees working
directly in production areas. Therefore it excludes support services employees
(e.g. maintenance, logistics and security people) together with clerical or ad-
ministrative staff. The terms appraiser, rater, respondent and interviewee are
used interchangeable for the person undertaking the appraisal.
Finally, it is worth stating that the definition of PA is limited to interviews
conducted on a periodic basis as indicated by Erdogan (2002) which can also
be referred to in the framework suggested by Armstrong (2009) illustrated in
Figure 1.1.
Figure 1.1: The dissertation scope within the performance management cycle: perfor-
mance review and assessment
Adapted from Armstrong (2009:621)
Performance
and devel-
opment
agreement
Managing
performance
throughout
the year
Performance
review and
assessment
DISSERTATION
SCOPE
21
1.6
Dissertation structure
The structure of the dissertation is provided with a brief overview of the four
chapters that follow after Chapter 1.
Chapter 2
This chapter includes the academic review findings undertaken in past studies.
PA's definitions, various applications and methods, claimed benefits and flaws,
and the effectiveness of such systems are critically examined, contrasted and
compared.
Chapter 3
The study then proceeds with a detailed account of the methods employed in
undertaking this study, starting from the selection of the dissertation topic,
moving towards the selection of primary and secondary research. The justifica-
tion of each method employed is provided.
Chapter 4
The dissertation progresses with a description of the findings derived from the
field research undertaken in conjunction with HR Practitioners in a selected
sample of manufacturing firms operating in Malta. The findings are categorised
in specific themes guided by the literature review outcomes. These findings are
then evaluated on a set of criteria derived from the literature. A commentary
follows on whether the interview outcomes support, conflict or have a neutral
outcome when compared with the theoretical findings.
Chapter 5
This conclusive chapter includes the final dissertation conclusions derived
from the findings in the previous chapter. Their relevance towards the
achievement of the study's objectives is discussed. A list of recommendations
on how PAs can be more effective in manufacturing firms follows. Moreover,
the study's reflections including limitations and areas for further research are
provided.
22
2. Literature
Review
2.1 Chapter
introduction
Literature review findings on the subject matter are presented in this chapter.
Every effort was undertaken by the researcher to critically evaluate, contrast,
and compare the distinct views presented by various researchers. An overview
of past studies on PAs commences this chapter, followed by theoretical defini-
tions. After evaluating the objective for undertaking PAs the term `effective-
ness' is defined within the context of PAs outcome. The respective flaws and
benefits of PAs are likewise indicated, backed by a theoretical perspective on
how these can be improved.
2.2
Studies on Performance Appraisals
There is a general consensus linking business professionals and academics, that
the importance of intellectual capabilities within business organisations is cru-
cial for corporate survival. Companies strive to ensure that their human asset is
maximised, since this determines the successful organisational outcomes (Fal-
cone 2007). It is therefore no surprise that employees' performances have been
under critical scrutiny by practitioners adopting HRM orientation. PAs have
been investigated throughout the past eight decades by various academics
(Landy and Farr 1980; Fletcher 2002).
Stroul (1987), claims that this practice has been an on-going process since
1957. However, Brutus (2010) argues that research on PAs has primarily fo-
cused on performance ratings. Tziner and Murphy (1999) sustain that only mi-
nor attention was granted to political factors regarding PAs within the context
of academic research. Others, including McGregor (1972) argue that PAs have
become a benchmark in HRM. However, there are conflicting views whether
PAs are effective or otherwise within organisations. There is quite a considera-
ble volume of research suggesting that PAs are effective since they tend to
augment worker performance and productivity (Rodgers and Hunter 1991).
Conversely, Kuvaas (2007) suggests that since no conclusive evidence can be
provided as to whether PAs affects employee work performance or not, future
research on this topic is recommended.
Martin and Bartol (1998) argue that
although the arena of PAs has been extensively researched, very limited atten-
tion has been directed on how PAs are effectively maintained.
23
2.3
Defining Performance Appraisals
"Performance Appraisal is defined as the formal process of evaluating organi-
sational members ...including establishment of performance standards, apprais-
al related behaviours of raters, ...determination of performance rating, and
communication of the rating to the ratee" (Erdogan 2002:556). Falcone (2007)
incorporates a step wise approach in the holistic cycle of PA. These include
goal setting, the constant provision of feedback and training, backed by a fully
fledged appraisal and reward mechanism (ibid). PA takes place when there is a
long-term relationship between the appraisee and the appraiser (ibid). Lee
(1985:323) sustains that PA refers "to the accuracy of performance observa-
tions and ratings as well as the ability of the performance appraisal process to
improve the ratee's future performance". It is also relatively important that the
maintenance of the system is explained by HR Practitioners to appraisees
(Martin and Bartol 1998).
2.4
The purpose to undertake Performance Appraisals
Some scholars maintain that one of the main purposes of endorsing PAs is to
provide feedback to employees on how they can upgrade organisational per-
formance within the holistic dimension of the organisation (
Asmuß
2008;
Peretz and Fried 2008). Fletcher and Williams (1996) remark that this exercise
is intended to encourage commitment by the employee, as well as to upgrade
the organisation's effectiveness. Patz (1975) advocates that the most common
reason to undertake PA is salary justification. Chu and Chen (2007) argue that
PA refers to a method that enables the management to keep full control within
the organisation and provides information so that reasonable decisions can be
effectively taken as regards promotions, transfers, incentives and training.
Chu and Chen (2007) advocate that within manufacturing companies, PAs are
mostly employed to sustain a competitive advantage. This is attained by
providing the necessary training and by sustainably developing employees'
skills and abilities (ibid). A more distinct approach adopted towards the plan-
ning and implementation of the appraisal system is derived by Ritchie and
O'Malley (2009:2) who claim that this is essentially an "emotional transac-
tion".
24
McGregor (1972) and Beer (1981) sustain that PAs provide judgments to es-
tablished salaries, promotions and demotions. Moreover McGregor (1972) and
Beer (1981) ventured a step further by stating that PAs serve as a unique op-
portunity for managers to inform subordinates regarding their respective per-
formance. From a critical perspective, PAs also provides the exclusive oppor-
tunity to deliver periodic coaching and counselling by the superior (ibid). It is
appropriate to state, that after collating all these distinct theoretical approaches,
the researcher identified that the primary objective in undertaking PAs is to
have "...formal evaluation of an employee's job performance in order to deter-
mine the degree to which the employee is performing effectively" (Griffin and
Ebert cited in Schraeder et al. 2007:20).
2.5
The extent of Performance Appraisals' effectiveness
2.5.1 Conflicting
perspectives
The output of PAs is one of the major debates which motivated researchers to
disseminate the final result of this measuring method. In fact, Schraeder et al.
(2007), claim that many researchers and HR Practitioners questioned the effi-
ciency of PAs in terms of their own respective organisation. Kuvaas (2006) ar-
gues that the effectiveness of PAs tends to be assumed and thus lacks empirical
evidence. Conversely, Stroul (1987) emphasises that after capitalising on PAs
for a period beyond 35 years, manufacturing organisations studied within his
research managed to produce highly effective and successful business out-
comes. Although there are still questions whether PAs are effective, it has been
admitted by many researchers that inbuilt issues will jeopardise the effective-
ness of PAs (Schraeder et al. 2007).
2.5.2
A holistic definition of `effectiveness'
Drucker (2002:1) defines `effective' as "getting the right things done" and
`effectiveness' is about getting the right things done right. McCrimmon
(2007) classifies `effectiveness' within a management context as doing the
right things at the least cost. On the same lines of thinking, Hackett (2003)
labels the same term as the degree to which organisational goals are met.
Wojtczak (2002) defines `effectiveness' as the activity that attains the intend-
ed purpose of use. When analysing the various definitions of `effectiveness',
the researcher qualifies this term as the degree to which a task is achieving its
25
pre-set objectives undertaken in the right time, place and manner. From a
subjective perspective, the definition of `effectiveness' entails a determining
factor in the actual results of this study, since PAs will be evaluated on the
merit of their effectiveness within manufacturing firms.
2.5.3
The implications of organisational culture on the effectiveness of Perfor-
mance Appraisals
A study undertaken by CRANET
1
in 21 countries around the globe identified
that the effectiveness of PAs is directly embedded within the social values and
norms (Peretz and Fried 2008). Apart from establishing cross-cultural connec-
tions, the distinct organisational conditions have directly impacted their em-
ployees (ibid). Moreover, studies revealed that PAs effectiveness can be effect-
ed by various factors such as "social ...nature of the task, the ...work group,
...rater and ratee's attitude [and] ...judgemental error" (Lee 1985:330). In a
study undertaken by Kuvaas (2006:514), PAs were found to be "...more effec-
tive in influencing attitudes and behavioural intentions than in increasing work
performance''. This notion can be further illustrated in figure 2.1 where em-
ployees' motivation, skills and knowledge will influence their behaviour in
their work performance.
1
Cranet stands for: The Cranfield Network on International Human Resource Management
26
Figure 2.1: Factors influencing employees' behaviour
Source: Haringey Council (2007:11)
Bretz Jr et al. (1992) and Schraeder et al. (2007) remark that in order to be ef-
fective, PAs must be implemented as an on-going process. Stonich (1984) and
Nathan et al. (1991) claim that PAs must be linked to the firm's organisational
culture and in essence serve as quality improvement on-going programmes.
These theories strongly suggest that PAs are directly influenced and further-
more shaped by both organisational behaviour and culture.
2.5.4
Performance Appraisal's effectiveness in assessing employees' perfor-
mance
Past research on PAs effectiveness is related to the applicability and practicali-
ty of using this tool to assess appraisees' performances at the workplace. In
fact, Orpen (1997) argues that PAs are mostly effective in assessing perfor-
mance of employees whenever there are applicable, reliable and quantifiable
measures. This could be more appropriate in manufacturing companies espe-
cially where production quotas are in place. Similarly, appraisees can be tested
on their ability to produce to specific quality product standards. In line with
this thinking, Roberts and Reeds (1996) advocate that whenever there is a
common standard of performance, PAs can prove to be highly effective in im-
proving productivity. Once PAs are applied on a common standard of perfor-
mance, appraisees may be motivated to produce more. Pettijohn et al. (2001)
SKILLS
BEHAVIOUR
KNOWLEDGE
MOTIVATION
27
sustain that PAs are expected to influence employee work performance in a
healthy manner. Furthermore, Boswell and Boudreau (2002) suggest that the
ultimate objective of PAs is to improve employee performance, and thus help
in sustaining a competitive advantage to the respective organisation.
It may also be the case the PAs can be used as a way to have a formal method
of recording employees' performance and use these records to monitor im-
provements throughout the year. This idea is shared by Lawler III et al. (1984)
revealing that PAs are mostly effective when they manage to document per-
formance for further detailed analysis. Practical examples of this approach are
found in a study undertaken by Sanwong (2008) in Thailand, were it was re-
vealed that PAs serve as a tool to upgrade employees' performances. Through
PA outcomes, HR Practitioners can assess appraisees' needs and improvement
areas for further career advancement and progress. Supporting this premise,
Wanguri (1995) maintains that PAs can be effective when these are specifically
linked to training and development needs.
2.5.5
Appraiser and appraisee's perception on Performance Appraisals' effec-
tiveness
In order to assess whether PAs are effective, one has to take into account a set
of inter-related factors. Firstly, one has to assess the manner PAs are being per-
ceived by the manager and at a later stage the manner by which PAs are criti-
cally judged by the appraisee (Lawler III et al. 1984). Ideally it should fulfil
both perceptions
(ibid). This approach is also agreed upon by Longenecker and
Goff (1992) when they seek to critically assert whether the two criteria embed-
ded within a PA is effective or not. Both the appraisee and the appraiser must
agree on defining the set of functions for which the PA is being employed
within a particular situational context. At a later stage, both the appraiser and
the appraisee have to seek agreement whether PA is rightfully serving its in-
tended purpose. PAs must not be enacted in a vacuum, but must occur within
an interpersonal relationship linking both managers and employees (Nathan et
al. 1991).
Details
- Pages
- Type of Edition
- Erstausgabe
- Year
- 2014
- ISBN (eBook)
- 9783954897292
- ISBN (Softcover)
- 9783954892297
- File size
- 2.7 MB
- Language
- English
- Publication date
- 2014 (March)
- Keywords
- Performance Appriasal Systems Human Resource Management Employee Relations
