Performance Appraisal System Effectiveness: A Conceptual Review

Performance Appraisal System Effectiveness: A Conceptual Review

Chandra Sekhar Patro
DOI: 10.4018/978-1-5225-2568-4.ch007
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Performance appraisal system (PAS) has been noticed to be one of the most challenging activities of human resource management and is even a destructive effect on the relationship of employees and employers. It not only motivates the employee but also improves the productivity level of an organization. Performance appraisal is considered to be a key instrument and is practiced in almost all types of organizations, but with a few differences. In an effort to change the behaviors and attitudes of employees in the organizations, performance appraisal systems have incorporated the new values and desired behaviors. In this contemporary state the organizations have become more enthusiastic to augment the performance of their employees. The chapter aims at identifying the performance appraisal system undertaken in the organizations and its influence on employees' competency and efficiency. It emphasizes on the problems and consequences faced by the organizations, and also the best practices undertaken for successful execution.
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Historical Background

The evaluation of job performance has been called by many different names throughout the years as a tool of management, a control process, a critical element in human resources allocation, and many others. The first appraisal systems were just methods for determining whether the salary of the employees in the organizations was fair or not. Later, some empirical studies have shown that reduction or future pay were not the main effects of the process (Cardy & Dobbins, 1994). However, appraisal has been present throughout history and has advanced significantly over time. The earliest evidence of performance appraisal was seen in the 3rd century when a Chinese philosopher Sin Yu criticized a biased rater of the Wei Dynasty on the grounds that the Imperial Rater of Nine Grades rarely rates men by their merits but always rates them according to his likes and dislikes (Patten, 1977).

Key Terms in this Chapter

Trait Focused Appraisals: It motivates employees to be competitive in a fair manner and yet be available for helping out colleagues if need be. It considers attributes like helpfulness, dependability, punctuality, etc for being appraised by the organization.

Performance Appraisal: It facilitates the management in hauling out the administrative decisions relating to promotions, firings, layoffs and pay increases.

Performance Management: It is the process of directing and supporting individuals to work as effectively as possible in streak with the needs of the organization.

Appraiser: An individual responsible for evaluating an individual’s work performance.

Appraise: An individual being evaluated on work performance.

Work Performance: It is an accomplishment of the assigned tasks for achieving organization’s goal.

360-Degree Appraisal: This approach involves gathering performance information from individuals on all sides of the manager - above, beside, below and so forth.

Behaviorally Anchored Rating Scales (BARS): Behaviorally Anchored Rating Scales is a formatted performance appraisal method based on making rates on behaviors or sets of indicators to determine the effectiveness or ineffectiveness of employees work performance.

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