Benefits of performance appraisals

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Even though the performance appraisal methods are criticized often, no one has suggested any other process that can provide feedback, develop motivation, identify training needs, and justify the reward (Prowse, P. and Prowse, J., 2009). The research by Lawler III, Benson and McDermott (2012) shows that performance appraisal can be effective if they are properly designed and conducted. A properly designed performance review can be used as a tool to improve the employee performance and organizational performance (Bacal, 2004).

 

Literature reviews have identified plenty of benefits and applications in performance appraisal process (Rothwell, Lindholm, Yarrish and Zaballero, 2012 ; Bacal, 2004; Russell, J. and Russell, L., 2009). Benefits of performance appraisal include,

  • Enhance employee commitment.
  • Provide employee feedback on performance.
  • Build the self-confidence.
  • The appraisers get to know the strengths and weaknesses of the appraisees.
  • Job role and the existence is validated.
  • Individual goals will be set, driven by the organizational goals.
  • Appraiser expectations and organizational expectations are communicated to the appraisee.
  • Transparency about the performance to pay relationship.

Applications of performance appraisals those can be used as a tool for,

  • Reward and recognition programs.
  • Counseling or advising the employees.
  • Assessing the employee skills and talents.
  • Identifying and providing the trainings.
  • Betterment of interpersonal relationship between the manager and employees.
  • Identifying and setting the career goals for the employees.
  • Identifying the blocking issues to perform.
  • Identifying the employees who can take more responsibilities and exploring the potential future contributions.
  • Documenting and justifying the disciplinary and remedial actions as negative consequences

 

 According to Bacal (2004) and Grubb (2007), there are drawbacks and hidden damages in the performance appraisal process especially when it is ineffective.

  • The cost of performance appraisal
  • Rating errors (Halo/Horn effect, Leniency, Central tendency etc.)
  • Employee intrapersonal conflict, employee-employee conflict, employee-supervisor conflict, supervisor-leadership conflict, employee-organizational conflict, supervisor-organizational conflict.
  • Managers lose the credibility by conducting ineffective performance reviews.
  • Time and resource wastage.
  • Adversely affect the HR functions like talent management

 

The performance Appraisals are used in both the developmental and evaluative dimensions.   In the development dimension performance appraisals can be used to identify the weaknesses especially in poor performers and to provide feedback and trainings. When considering the evaluative dimension, employees are often benefitted with a performance related pay or a recognition (Kampkötter, 2017). According to the research done by Kampkötter (2017), performance appraisals without any reward or recognition, have no significant effect on job satisfaction. Conversely, punishment will lead to frustration.


References

  • Bacal, R., 2004. Manager's guide to performance reviews. McGraw-Hill Education.
  • Grubb, T., 2007. Performance appraisal reappraised: It’s not all positive. Journal of Human Resources Education, 1(1).
  • Kampkötter, P., 2017. Performance appraisals and job satisfaction. The International Journal of Human Resource Management, 28(5), pp.750-774.
  • Lawler III, E.E., Benson, G.S. and McDermott, M., 2012. What makes performance appraisals effective? Compensation & Benefits Review, 44(4), pp.191-200.
  • Prowse, P. and Prowse, J., 2009. The dilemma of performance appraisal. Measuring business excellence.
  • Rothwell, W.J., Lindholm, J., Yarrish, K.K. and Zaballero, A.G., 2012. The encyclopedia of human resource management. USA, Pfeiffer.
  • Russell, J. and Russell, L., 2009. Ultimate Performance Management: Training to Transform Performance Reviews into Performance Partnerships. 1st ed. USA: ASTD Press.

Comments

  1. Nimshi RanawanaSeptember 2, 2022 at 8:38 AM

    I agree. Performance appraisals will motivate employees and make them feel more valued which will positively affect their productivity.

    ReplyDelete
    Replies
    1. Dulshan EdirisuriyaSeptember 4, 2022 at 12:23 PM

      Yes Nimshi, even though the performance appraisal methods are criticized often, no one has suggested any other process that can provide feedback, develop motivation, identify training needs, and justify the reward (Prowse, P. and Prowse, J., 2009).

      Delete

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