Benefits of performance appraisal pdf

A performance appraisal , also referred to as a performance review , performance evaluation , [1] career development discussion , [2] or employee appraisal [3] is a method by which the job performance of an employee is documented and evaluated. Performance appraisals are a part of career development and consist of regular reviews of employee performance within organizations. It is an element of the principal-agent framework, that describes the relationship of information between the employer and employee, and in this case the direct effect and response received when a performance review is conducted. A performance appraisal is a systematic, general and periodic process that assesses an individual employee's job performance and productivity in relation to certain pre-established criteria and organizational objectives. To collect PA data, there are three main methods: objective production, personnel, and judgmental evaluation. Judgmental evaluations are the most commonly used with a large variety of evaluation methods.

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Content:

• THE IMPORTANCE OF PERFORMANCE APPRAISAL IN ORGANIZATIONS
• Appraisal and the Small Company
• What Are the Benefits of a Performance Management System?
• References
• PERFORMANCE APPRAISAL SYSTEM AND ITS IMPACT ON EMPLOYEES
• Traditional Performance Appraisal Systems: The Deming Challenge
• Why Performance Appraisals are important
• Effectiveness of Performance Appraisal System and its Effect on Employee Motivation
• Performance Appraisal

WATCH RELATED VIDEO: Advantages and limitations of Performance Appraisal

THE IMPORTANCE OF PERFORMANCE APPRAISAL IN ORGANIZATIONS

The journal aims to provide a forum for publication and dissemination of scientific research conducted in the fields of management, as well as promote the interconnection of academic research with practical reality. It is intended to disseminate the scientific results obtained by academics and professionals, both nationally or internationally.

The journal is based on a process of double blind review. The present work aims at: 1 assessing whether the Portuguese public sector employees are or are not satisfied with their appraisal system; 2 dissecting the relationship between perceptions of justice and accuracy of performance appraisal and satisfaction with that appraisal. After statistical analysis of the data collected, with a descriptive and an inferential component, results point towards the fact that employees who have a better perception of justice and accuracy of performance appraisal tend to reveal greater satisfaction with it.

However, in general terms, the elements of the sample considered the appraisal process as being unjust, inaccurate and were not satisfied with it.. Very briefly, we may consider that this system has introduced individual appraisal for all levels services, managers, workers , in a logic of management by objectives, and forms the basis of career progression and awards.

Moura posits that performance appraisal of the public sector, of its leaders and its employees is a critical tool for the attainment of a new culture for the Portuguese public sector, considering that only a demanding integrated appraisal model will detect imbalances and shortfalls of Portuguese public organisations, gear them towards achieving their goals and, simultaneously, engage all those who carry out their professional activity there.

Furthermore, this appraisal system is one of the most notable reforms in the Portuguese public sector of managerial inspiration, as it reveals the introduction of management by objectives in this sector, which can be considered as a switch matrix, by linking the goals to the results obtained, seeking to introduce a culture of merit and results appraisal, ceasing, thus, automatic and regular progressions based on seniority cf.

However, it should be noted that literature has revealed that reactions to performance appraisal and to the appraisal process have a significant impact on the overall effectiveness of the appraisal systems, as well as on their acceptance and validity cf. For example, Murphy and Cleveland establish that reactions are almost always relevant and an unfavourable reaction can condemn even the most carefully designed performance appraisal system.

This is the context of the present research study on the satisfaction of appraisees with a system of performance appraisal in the public sector, more exactly SIADAP. This study emerges after a gap in Portuguese literature has been detected: to the best of our knowledge, there is no scientific work focusing on this issue in the way that we will present hereafter. But what is, specifically, the importance of a study that addresses satisfaction with a performance appraisal system, both in the public and in the private sector?

It is very simple: several studies have concluded that the extent of the effect of performance appraisal on employee's attitudes and behaviours, such as professional performance, productivity, motivation or organisational commitment, derives from their satisfaction with that appraisal cf.

Cawley et al. Therefore, the purpose of this study is to assess whether Portuguese public sector employees, whose performance appraisal derives from the application of SIADAP, are or are not satisfied with this appraisal system. Furthermore, and on the basis of Cook and Crossman's view, in literature the causes of satisfaction or dissatisfaction with performance appraisal have been attributed to a number of different reasons, hence it is essential to know them, given the influence of this satisfaction on other organisational variables, as referred above.

Only by knowing them may organisations increase this kind of satisfaction. In this work we will not analyse, obviously, all possible causes. After defining of the goals of our research study, we may assert that the present work is organised around four main moments: theoretical construction and development; methodological framework of the empirical study; analysis and discussion of results; main conclusions attained. For example, Kuvaas reported that satisfaction with performance appraisal revealed by the appraisees determines their performance at work.

Moreover, other studies have shown that employee's satisfaction with performance appraisal affects other variables, such as productivity, motivation and organisational commitment cf. The importance of satisfaction with performance appraisal on the part of employees and its preponderance regarding other organisational variables is established from the outset, as was seen in the previous paragraph. It is, thus, necessary to dissect the causes of this satisfaction or dissatisfaction.

One of the directions followed by research studies in this area was the verification of the fact that the expressed dissatisfaction with the performance appraisal system may be related to organisational justice. And the result attained by these studies was positive: the relationship between organisational justice and satisfaction with performance appraisal has already been understood. Similar findings have been attained by Tang and Sarsfield-Baldwin , who found, in their study, evidence that the elements of organisational justice are important in the prediction of satisfaction with performance appraisal.

As an aside, a short reference to the perception of justice is made. It should also be referred that organisational justice encompasses several dimensions, insofar as the different research studies on this topic have clearly demonstrated that human beings, in an organisational context, have clear concerns about the justice of outcomes distributive justice , procedures procedural justice and interpersonal treatment interactional justice, being possible to identify within it two facets or sub-dimensions: interpersonal justice and informational justice.

In short, from the preceding paragraphs, we may consider the hypothesis that the levels of satisfaction with the performance appraisal system are clearly related to the perceived justice and equity of the system by the appraisees cf. This leads to the first hypothesis of this research: Hypothesis 1 The perception of justice of performance appraisal is positively related to the satisfaction felt towards that appraisal.

On the other hand, we will also assess whether there is any relationship between the perception that appraisees have of the accuracy and precision of SIADAP and the satisfaction with performance appraisal resulting from this system.

In other words, the level of accuracy or inaccuracy of the appraisal system will depend on the human perception and awareness regarding the process and the results of performance appraisal cf. However, it will, inevitably, be affected by something: the inaccuracies of the appraisal process, such as the halo effect, the horn effect, the leniency error, the amplitude constraint error, the central tendency error, the contrast error or the first impression error. Their existence raises, from the outset, pertinent questions about the accuracy or inaccuracy of performance appraisal.

That said, we should point out that the acceptance of the appraisal process by the appraisees increases when performance appraisal systems are perceived as accurate in their results cf. From this perspective, when workers perceive an inefficient and somewhat loose performance appraisal, they quickly deny the accuracy of that system cf. Almeida, ; Blau, ; Roberts, ; Wilson, , withdrawing any meaning or purpose from it, inasmuch as they stop accepting or trusting in it cf.

Although Selvarajan and Cloninger state that literature has not directly addressed the aforementioned relationship yet perception of the accuracy of performance appraisal and satisfaction with it , the truth is that these authors have advocated it, considering the following logic: if workers perceive appraisals of their performance as being accurate, they will be prone to truly trust them; therefore, the possibility of having favourable attitudes towards such appraisals is real.

Hence, performance appraisals that are perceived as accurate are perceived positively by workers, and this may lead to higher satisfaction with the performance appraisal system. This hypothesis was verified in the empirical study carried out by the aforementioned authors, that is, they concluded that performance appraisals perceived as being more accurate were related to higher levels of satisfaction with those appraisals.

Hence our second working hypothesis: Hypothesis 2 The perception of accuracy of performance appraisal is positively related to the satisfaction felt towards that appraisal. The target universe of this research is composed of the set of Portuguese civil servants who are subject to the appraisal of their performance through the precepts of SIADAP.

It should be reminded that this is not to say that the target universe is composed of the set of all Portuguese civil servants. These two universes are distinct, given that the members of several special careers are not appraised by the aforementioned appraisal system.

Given the large dimension of this universe, we have chosen to include only the civil servants whose performance is appraised according to the SIADAP standards, working at the three existing public higher education institutions in a given city, district capital, from Centre mainland Portugal.

In essence, we have one university, one polytechnic institute and one school of polytechnic nature, although not integrated. We sent the questionnaire to all elements of the population, a total of individuals, through the various organisational units that make up the three selected HEIs Higher Education Institutions.

There was obtained, in return, questionnaires completed and considered valid. Furthermore, there is a uniform distribution in terms of group age, except for the extremes: only 13 individuals had up to 29 years of age i. Sociodemographic characteristics of the subjects from the sample. Drifting our analysis into the professional characteristics of the subjects from the sample, depicted in Table 2 , we find that almost half of respondents The values of the other categories are quite distant from these: operational assistant with 7.

Professional characteristics of the subjects from the sample. Finally, regarding the institution where respondents carried out their work, the majority Only 9 i.

The operationalisation of the concepts used in this research was carried out mainly through the use of scales developed in previous empirical studies, which presupposes purified scales as to reliability and validity. Thus, we present, hereafter, the selected scales that were part of the questionnaire submitted to the pre-test.

When necessary, the items of the chosen scales were adapted to the context of this research Table 3. Adapted scales in the delineation of the questionnaire used in the pre-test. The only exception is the request for a final comment, optional, which is, naturally, an open question, given its nature.

This first version of the questionnaire was subjected to a preliminary study applied to individuals from the research target universe but not to the elements to be surveyed at the implementation of the final study. Specifically, the questionnaire was sent via email to various public institutions, both from the local, regional and central administration. After assessing the reliability of the scales used, performed on the basis of the calculation of the item—total correlation and internal consistency of each of these scales using the Cronbach's alpha coefficient, without forgetting the reading of the numerous suggestions and comments, some problems were found that were needed to be corrected.

For example, no changes arising from statistical analysis were performed, given that results equal or higher than 0. However, comments and suggestions made by respondents within the scope of this preliminary study led to the reformulation of some items, in order to make them more concise, direct and noticeable, or to the removal of some items of scales, when they were redundant, so as to shorten the questionnaire.

To note that the latter group continues to include questions about age, gender, educational qualifications, professional category, etc. In addition, this group maintains an open question, allowing respondents to add their opinion on the issues included in the questionnaire. As this research is cross-cutting, in temporal terms, the questionnaires were administered between May and June More precisely, we used the self-administered online questionnaire survey, based on the LimeSurvey platform and available from the website survey.

We cannot fail to mention that the contact was not made at the individual level, but rather at the institutional level, with the email described previously having been sent to each department of the three chosen HEIs, with a request for disclosure amongst their workforce by so as to be self-administered by them. There was a dual purpose regarding this option: to obtain permission from the various organisations; and to reach the entire population in a timely and error-free manner.

Later, when the answers stopped occurring for three consecutive days, a reminder of this commitment was carried out, in a way identical to that reported above. After the period of data collection, the data attained were exported from the LimeSurvey platform to Excel and, subsequently, to the Statistical Package for the Social Sciences software, version So as to verify the reliability of the items that made up the final versions of the scales used, which was confirmed, the item—total correlation and the internal consistency, using Cronbach's alpha, were calculated.

Before carrying out the test of the hypotheses of this research, it was necessary to perform a previous task with a very clear goal: to have all scales scored in a range from 0. Thus, we were able to calculate the results presented in Table 4 , on the basis of the responses obtained.

Results observed for the scales used. The values of the measures of central tendency mean and median reveal that the respondents tended to show that they have a low perception of accuracy of that appraisal Results also show that the subjects from the sample have a reasonable perception of interactional justice Clues about some of the reasons behind these such low values may be drawn from the comments to the aforementioned open question.

Imposition of quotas for the best ratings, given that, in no. Lack of practical effects from SIADAP, given the interdiction on remuneration revaluations, even if employees meet the legal requirements in terms of performance appraisal cf. The latter topic leaves the door open to another factor that may have influenced the results obtained by this research: the current global economic and financial crisis, mainly because of the profound implications for public finances.

This crisis had, as a clear result, troubled times for all workers from the Portuguese public sector, as a consequence of the many austerity measures made real or not examples: wage cuts, freeze on career progressions and promotions; decrease in the number of civil servants through dismissal; increase in the weekly working hours of civil servants in 5 h, from 35 to 40 h; increase in the contributions to the health subsystems that are specific of the public sector; loss of holiday and Christmas bonuses, etc.

Table 4 also presents the results of the significance of the normality test Kolmogorov—Smirnov. This led us to opt for non-parametric techniques to test the hypotheses. We carried out some further studies to the collected data, using the Mann—Whitney U test and the Kruskal—Wallis test. Thus, we compared the results of the diverse scales used in term of gender, age group, academic qualifications, professional category and institution of work.

The main conclusion to be drawn is that results are similar, regardless of age group, gender, etc. The comparative analysis of measures of central tendency ordinal mean, mean and median revealed that employees with higher academic qualifications tend to show lower perceptions of procedural justice. So as to test hypothesis 1 « the perception of justice of performance appraisal is positively related to the satisfaction felt towards that appraisal », we studied the correlation using the Spearman correlation coefficient and the respective significance test.

The hypothesis was tested in all scales of justice and, as it may be verified in the results displayed in Table 5 , all correlations are positive and highly significant p 0. We conclude that the hypothesis is confirmed, that is, employees who have a better perception of justice in performance appraisal tend to show greater satisfaction with it.

Correlation between satisfaction and perception of justice of performance appraisal. So as to test the second hypothesis « the perception of accuracy of performance appraisal is positively related to the satisfaction felt towards that appraisal », we studied the correlation between the values of two variables applying, again, the Spearman correlation coefficient and its test significance.

The result reveals a positive and highly significant correlation p 0. We conclude that workers who have a better perception of the accuracy of performance appraisal tend to show greater satisfaction with that appraisal Table 6.

Appraisal and the Small Company

Getting the most out of employees has always been challenging. Changing public and business attitudes have only led to tougher conditions for workplace success. That said, getting the best performance from employees can dramatically impact customer satisfaction, which the business directly benefits from , and one way of promoting this is with the use of performance appraisals. Performance management is not just about dealing with poor performers. It is a process that begins with getting the right people , setting the right employee expectations , coaching employees to deliver efficient, high-quality service and dealing with under-performance in a proportionate and appropriate manner. Last week, we discussed how you can stay compliant with employee labour law. The next article in our series of how small changes can affect your business in a big way explores why you should think about doing performance appraisals with your employees and how you can carry them out.

What Are the Benefits of a Performance Management System?

In many large organisations appraisal systems are an essential component in professional personnel practice. However, there are many difficulties in managing formal appraisals and in some places the system has decayed into disrepute and disuse. To managers in the small company the costs of implementing such a system may appear to outweigh the potential benefits. This paper examines some of these issues and describes how one small company attempted to develop its own appraisal system. Murphy, A. Report bugs here. Please share your general feedback. You can join in the discussion by joining the community or logging in here.

References

Often in an organization, we see that the concepts of performance management and performance appraisal are used interchangeably. But little do we realize that both the concepts are very different from each other. The reason for this confusion is that both the concepts deal with evaluating performance and both come under the same umbrella term of the performance management system. Let us start by defining both the concepts first.

PERFORMANCE APPRAISAL SYSTEM AND ITS IMPACT ON EMPLOYEES

A corporate president put a senior executive in charge of a failing operation. Fresh from his triumph, the executive announced himself as a candidate for a higher-level position, and indicated that he was already receiving offers from other companies. In fact, the president was not at all pleased with the way the executive had handled things. Naturally the executive was dismayed, and when he asked what he had done wrong, the corporate president told him that he had indeed accomplished what he had been asked to do, but he had done it single-handedly, by the sheer force of his own personality. Furthermore, the executive was told, he had replaced people whom the company thought to be good employees with those it regarded as compliant. In effect, by demonstrating his own strength, he had made the organization weaker.

Traditional Performance Appraisal Systems: The Deming Challenge

The journal aims to provide a forum for publication and dissemination of scientific research conducted in the fields of management, as well as promote the interconnection of academic research with practical reality. It is intended to disseminate the scientific results obtained by academics and professionals, both nationally or internationally. The journal is based on a process of double blind review. The present work aims at: 1 assessing whether the Portuguese public sector employees are or are not satisfied with their appraisal system; 2 dissecting the relationship between perceptions of justice and accuracy of performance appraisal and satisfaction with that appraisal. After statistical analysis of the data collected, with a descriptive and an inferential component, results point towards the fact that employees who have a better perception of justice and accuracy of performance appraisal tend to reveal greater satisfaction with it. However, in general terms, the elements of the sample considered the appraisal process as being unjust, inaccurate and were not satisfied with it.. Very briefly, we may consider that this system has introduced individual appraisal for all levels services, managers, workers , in a logic of management by objectives, and forms the basis of career progression and awards.

Why Performance Appraisals are important

As manager, your role is to set expectations, gather data, and provide ongoing feedback to your employees to assist them in utilizing their skills, expertise and ideas in a way that produces results. One of the key times for providing this direction and guidance is during performance appraisals. As part of the selection and hiring process, employees are considered probationary employees for their first days of employment.

Effectiveness of Performance Appraisal System and its Effect on Employee Motivation

Appraisal systems always aim at improving the performance of employees. It helps to analyse and evaluate opportunity factors such as technology and social process. Any deficiency of employees can be detected and corrective steps can be taken through appraisal system. Performance appraisal serves as a valuable tool in the case of career planning to the employees, since it helps in preparing SWOT analysis of every employee. Performance appraisal also helps the management in deciding about the promotions, transfers and rewards of the employee.

Performance Appraisal

By Madhuri Thakur. Everyone loves appreciation, and everyone loves to be appreciated, so the company appreciates someone; it does not keep it a secret. The organizations express their appreciation in the form of what we call performance appraisal or performance reviews. Based on the evaluations and assessment for the performance rating, the employee is awarded and rewarded in the form of promotions, cash awards, certificates, etc. This is a guide to the Importance of Performance Appraisal. Here we discuss the purpose of carrying out performance appraisals, tips, and merits. You may also look at the following article to learn more —.

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