KOZMINSKI UNIVERSITY

Human Resources Management

Individual Assignment
Critically Assess the Effectiveness of Performance
Appraisal Systems for both the Employer and Employee

Busuyi Afolabi, 23135

Submission Date – 05-01-2011

Academic Year 2010/2011

Semester: Fall

I hereby certify that I am the author of this paper and all sources I used
have been reported.

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Signature

© Kozminski University 2010

Critically Assess the Effectiveness of Performance
Appraisal Systems for both the employer and employee.

Abstract:
This paper assesses the effectiveness of performance appraisal system on employer, employees and the
organization, the conclusion is that, compared with what has long been mention of as a good
organizational practice, several claims indicated that performance appraisal has helped employers on
good decision making process and good relationship between the employees and the employers, through
interpersonal communication while the appraisal system is in progress, although, the practice has been
under criticism in one way or the other and I have highlighted several criteria in this report to how
effectiveness the system has become to really meet the organizational purpose of conducting such system.

1. Introduction

Performance appraisal process is a step-by-step system that an organization can adopt to promote
exceptional performance (Stephanie Lyster & Antigone Eteoklis 2004), performance appraisal is mainly
use for the purpose of improve performance of individual, it is kind of systematic way of evaluating
individual with respect to his or her performance or his/her potential for development, performance
appraisal is highly interesting topic. This basically provides information that is relevant for many personal
or organization decisions including increase in wages, transfer, training programs and recommendation
for promotion and of course as well as for performance feedback and employee development (Kafry,
Jacobs & Zedeck, 1980). There are different types of methods used in evaluating performances appraisal
system, such as performance ranking methods, management by observation, paired comparison analysis
and 360 degree performance appraisal which seems to be the most used method in performance appraisal
system but I am not going to go into details on that in this report.

Performance appraisal systems always involves few or multiple conflicting purpose of performing it or
goals (Kane & Lawler, 1979; McGregor, 1957; Meyer Kay, & French, 1965)(Jeanette N, Kevin Murphy
& Richard E, 1989) for instances, if an organization feel like using performance appraisal as a tools for
recommendation for promotion and as well as they can also use it as instrument for guiding employee
development. Many organizations are using performance appraisal for basically promotion
recommendation rather than using it to focus on comparisons between employees and of course
individual comparisons are necessary to determine the level of employees training and development
needed for certain task (Drenth, 1984). The worldwide use of system can be accredited to academics,
human resources specialist and consultant who declare that performances appraisal critically tools needed
for effective human resource management, this in other words, based on the fact that an effectively
designed and administered performance appraisal system can give the organization, the employers and the
employees a myriad of benefits.

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2. Conducting Effective Performance Appraisal System

There are many method and criteria use in quantifying how to better assess the effectiveness of
performance appraisal, in the past many performance appraisal is done under merely observation of actual
performance under standard conditions (Bernadin & Beathy, 1984), perhaps, it is not surprising that there
are many criteria use nowadays to assess predictor effectiveness such criteria can also be use for
appraisal, in selecting criteria to ascertain a performance appraisal system, it is vital to first consider the
purpose and the goals of appraisal in the organization, Smith made a suggestion that any framework for
selecting criteria should definitely emphasize that the criteria choice depends on the goals of the
performance appraisal system (smith, 1976), moreover, the framework should acknowledge that different
people or employers involved in the performance appraisal system may have overlapping, similar or
different objective when evaluating the effectiveness of the system. Different objectives may leads to
different conclusion on what part of performance appraisal should be checked and which criteria should
be taken to examine those aspects, for instances, three different constituencies can classified who have
interest in evaluating effectiveness of performance appraisal system (Kevin R murphy, Frank E Saal,
1990) e.g:

 Raters responsible for conducting the appraisals process

 Ratees who are being evaluated by the performance appraisal system
 The organization that support and promote the performance appraisal system

Within each of the listed constituency, different individual may also have different interest and aims when
evaluating the performance appraisal system, in a nut shell, raters who are responsible for evaluation
many ratees might have different notions of the effectiveness of the performance appraisal system than
the rater who are required to evaluate only one ratee.

We can simply look at effectiveness of performance appraisal in an organization perspective; an

organization’s goals or an employer’s goal for performing the appraisal system may include higher
company profits, increase employees productivity, compatibility with other organizational functions
(production or compensation) and defensibility in court against charge of discrimination. The employer
may have different objectives for performance appraisal system, raters may concentrate on how easy the
system is to use, on positive rates behaviors toward the performances appraisal system, on the absences of
role manipulation or overloading and also on improvements in rate work motivation (Kevin R. Murphy
1990). Ratees or employees aims and objectives may consists of a performance appraisal system which
can be trusted, that provides fair access to rewards and of course which provides accurate and accurate
feedback which can be used for direct future performance.

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3. Effectiveness of Performance Appraisal system for Employers & Employees

In this report, I have to focus my attention into certain approach of performance appraisal effectiveness to
surround a broader range effectiveness criteria which includes a measures that may emulate the principal
interests of employers – whether employees productivity improved, in addition, I tempt to look at the
correct measure of performance appraisal effectiveness which really differs depending on the individual
making that determination is an employer who might concentrate on firing decisions or correctness of
promotion or an employees (person being evaluated) by the system who might focus on the accuracy and
representativeness of critical incidents provided during the performance appraisal interview. Given all this
criteria, it is easier to evaluate the effectiveness of performance appraisal in the aspect of employers to
employee’s relationship, however, there are certain goals that should be meet in evaluating effectiveness
of performances appraisal, the performance appraisal can also be divided into several segment like – input
into the performance appraisal system (rater selection, rating purpose, rating training, instruction) and
appraisal of system such as giving feedback, monitoring performance, completing the rating instrument
and lastly, output of the system which can simply be generalized outcome result of the all performance
appraisal system such as personnel decision, performance rating and feedbacks (Kevin R Murphy, Frank
E. Saal, 1990) all of this aspect of the system provide array of information for evaluating the effectiveness
of performances appraisal system for both employers and employees in an organization.

I believe that performance appraisal system can help an organization significantly and as well, help the
employer and employees of such organization, for instances, it can enhance the quality of employer’s
decisions such as promotion, reward allocation, transfer and of course layoff, secondly, performance
appraisal can also increase the quality of the employer’s decision by helping he/she to focus their
attention to a particular area where help is really needed in terms of effort and job allocations for
example, if an employee is not performing very well in one sector, he or she can perform very well in
another sector of the company, so the performance appraisal somehow helps the employer’s decision
whether to layoff or just transfer the individual to another section where he/she will be very productive.
And this in turn, helps the employees not to lose his/her own job but to discover his/her potentials to meet
the employer’s targets.

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4. Conclusion

At the end of an effective performance appraisal system, the employers and employees, should be able to
identify the purpose and what they have gain in introducing such techniques to evaluate workers
performances, a thorough, well conceived performances appraisal system should provides many benefits
to the organization at large, the employer, as well as to the employees alike including:

 Indentifying area of needing improvement

 Enhancing employee’s self-esteem by promoting employee participation in setting of the

organization goals and future development, this will make them feel as part of the organization.

 Providing a well standard, organizational-wide approach for measuring employee performance

against job standard

 Motivating and Encouraging constructive communications between employers and employees

regarding job performance

 Assisting the organization in indentifying individuals with promotions potential and rewards and
also constitute opportunities for future career development.
 Helping the employees to recognize his or her own lapses on some areas that need development

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References

Kevin R. Murphy & Frank E. Saal (1990) psychology in organization. Integrating science and practice

Jacobs, R., Kafry, D., & Zedeck, S. (1980). Expectations of behaviourally anchored rating scales.
Personnel Psychology. 33, 595-620

Kevin R. Murphy & Jeanette Cleveland (1995) understanding performance appraisal: Social,
organizational and goal based

Herbert H. Meyer, Emanuel Kay & John R. P. French, Jr. (1965). Split roles in performance appraisal.
Havard Business review. 43. 123-129

Drenth P.D. (1984). Personnel appraisal. In P. Drenth, H. Thienry, P, Williams, & C. deWolf, Handbook
of work and organizational psychology: Vol. 1 (pp. 197-222). New York: Wiley.

Stephanie Lyster, Antigone Eteoklis Arthur and Anne Arthur. (2007) 199 pre-written employee
performance appraisals, the complete guide to successful employee evaluation and documentation.
Atlantic Publishing group.

Jeanette N. Cleveland, Kevin R. Murphy, and Richard E. Williams, Journal of applied Psychology 1989,
vol 74 No 1, 130-135: Multiple Uses of Performance Appraisal: Prevalence and Correlated

Smith, P. C. (1976). Behaviors, results, and organizational effectiveness: The problem of criteria. In M.
D. Dunnette. Handbook of industrial and organizational psychology.

Richard C. Grote (1996) the complete guide to performance appraisal.

The side road, employee performance appraisal by Shawn Smith

<http://www.sideroad.com/Human_Resources/employee_performance_appraisal.html> accessed on
11/11/2010)

Performance appraisal system by Charles S, (Published: 9/16/2010) URL

<http://www.buzzle.com/articles/performance-appraisal-system.html> accessed on 12/11/2010)

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