The problems with performance appraisal

Introduction

Formal performance appraisals form an integral part of overall performance management programs in many organisations. Indeed, for many decades performance appraisals have been a key method for monitoring employee performance and they often play a major role in promotion or salary increments. However, though appraisals continue to be widely used, there is significant and ongoing debate about the validity of results obtained, as well as their effectiveness in positively influencing employee productivity and performance.

This paper examines performance appraisals in the modern organisation. It discusses the development of performance appraisal theory, the perceived problems with performance appraisal systems as well as the potential performance and productivity improvements that may be achieved with their use. OK!

Performance Appraisals

It is widely contended that many (if not most) organisations conduct regular employee performance appraisals (Gliddon 2004; Varma & Pichler 2007). Thus, it is understandable that there is a very large body of literature around the subject (Schraeder & Simpson 2006). Indeed DeNisi and Pritchard (2006, p. 253) state that ‘performance appraisal has been the focus of considerable research for almost a century’. Yet there is surprisingly little consensus on any aspect of performance appraisals, not merely in terms of how they should be constructed or conducted, but even whether or not they offer any value at all (Connell & Nolan 2004; Waite & Stites-Doe 2000).

When studying the literature and the seeming lack of progress or consensus, it is clear that even on a terminology level, there is significant divergence. DeNisi and Pritchard (2006) define performance appraisal as being a formal evaluation process that assigns quantitative scores to employee performance.