Performance Appraisal: An Official Method Of Assessment And Evaluation Of Employees

Organisations face a universal competitive burden of producing more effectively, efficiently and at a cheaper rate. According to Gomes and Romao (2012), effective organisations react to the restrictions of the new business environment by establishing three key approaches, which include: ensuring that employees are trained in utilising structures and technologies, selecting collaborative programmes that include all pertinent stakeholders in the business process and discovering effective methods and frameworks that will help identify greater performance. Performance management (PM) is a goal-focused procedure aimed at guaranteeing that a business’ procedures are in place to enhance the efficiency of employees, teams and ultimately, the business (Core, 2020). Therefore, it is regarded as a dynamic and continuous approach, which is vital in measuring and enhancing the usefulness of staff as they are guided to meeting strategic objectives (Core, 2020).

According to much research, PM has the potential to be beneficial and useless. It has been critiqued for having a limited effect on decision-making procedures, repressing originality and learning, as well as encouraging pertinacious actions (Micheli and Manzoni, 2010). Nevertheless, PM can support businesses in outlining and accomplishing their intentional objectives, as well as bringing into line behaviours and attitudes (Rao, 2004). Consequently, this can create a positive impact on organisational performance. Therefore, organisations should focus on developing approaches that make PM an asset, rather than a liability. Ultimately, low performance management can have a detrimental effect on society; a high percentage of low performance management can lead to an increase in unemployment and if unemployment increases, real wage could fall, thereby leading to GDP per capita decreasing. Therefore, the long-term effects of this impact everyone, including employees as their standard of life declines.

According to Robert J. Greene, who is the CEO of Reward Systems Inc., “Performance management is the single largest contributor to organizational effectiveness. If you ignore performance management, you fail” (Core, 2020; p. 236). Atkinson et al. (1997) states that it is vital for PM to do the following:

1. Assist an organisation in evaluating if expected contributions and suppliers are received.
2. Evaluate if an organisation provides every stakeholder group with assistance in supporting the organisation to meet its key objectives.
3. Helping an organisation to develop and apply procedures which will help to meet strategic goals.
4. Assist the organisation in overseeing and measuring whether strategic planning is linked to the agreed targets and values of the central stakeholders.

Performance appraisal (PA) is an official method of assessment and evaluation of employees and a team, which is used in the performance management process (Core, 2020). PA should include frequent and continuous open communication and reviews of performance after performance expectations have been outlined. Therefore, it should be regarded as an opportunity to solve problems, rather than highlight faults in the employees’ performance. However, the appraisal process has been criticised for a lack of objectivity, the halo/horn error, recent behaviour bias, central tendency error, leniency/strictness, causing conflict between managers and their juniors, failing to motivate employees and failing to direct employees’ development (Core, 2020). Therefore, a corporation should implement a strategic method to PA where the corporation’s values, vision and mission coincide with the PM method. Similarly, Micheli and Manzoni (2010) argue that defining the roles of PM is vital in shaping its effectiveness and influence on an organisation’s performance. As well as this, businesses should outline whether PM will be implemented for the purpose of control or developing knowledge. Therefore, businesses should establish whether PM is linked to an established strategy which empowers and positively adapts strategies.