Performance appraisal definition pdf

Performance Appraisal relates to job analysis, in the sense that job analysis establishes job requirement, which converts the analysis into standard, on which performance is judged, and results in defining the basis for performance appraisal. Data obtained from the appraisal of performance, are documented and used for different organizational purposes. The figure shown above is a standard performance appraisal process that takes place in an organization, wherein each step is important and arranged in a systematic manner.

The process is conducted periodically, usually twice a year, i. In the process of designing performance appraisal process, it is important to identify the best method for assessment. We will next discuss how better measurement became the goal in appraisal research rather than a step along the way. This research has also stopped at the point of performance appraisal, instead of integrating appraisals into the larger issues of performance management and performance improvement.

We will also discuss some developments and proposals from the practice arena, as well as a recent review that outlines what research has to offer practice in this area.

We will then propose adopting a motivational framework that might lead to research on how organizations can use appraisals to improve performance. We believe that by helping to re-direct appraisal research towards performance improvement, we can help narrow the gap between research and practice, and help organizations better to understand how to improve individual performance.

Measurement issues are important for the performance appraisal process, as are issues of rater motivation, so that effective appraisal systems are those where the raters have the ability to measure employee performance and the motivation to assign the most accurate ratings. See Murphy and Cleveland, , for an excellent discussion of the role of rater moti- vation in this process. Although performance appraisal information provides input for the performance management process, performance management focuses on ways to motivate employees to improve their performance.

Again, the goal of the performance management process is performance improvement, ini- tially at the level of the individual employee, and ultimately at the level of the organization. The ultimate goal of performance appraisal should be to provide information that will best enable managers to improve employee performance.

Thus, ideally, the performance appraisal provides information to help managers manage in such a way that employee performance improves.

The importance of these definitions becomes clear as we discuss the reasons why organizations conduct performance appraisals. Cleveland and her associates Cleve- land et al.

Those authors also noted that these pur- poses could often be in conflict and so it was important to keep them separate as much as possible. Yet these authors, as well as others e. That is, the problems in the area are largely because the critical link between performance appraisal and performance management has been forgotten. Performance Appraisals and Test Validation Employee performance, usually operationalized as performance ratings, has been the most commonly used criterion measure for validating selection tests.

The process of test validation is critical for any organization because it establishes a relationship between scores on the test and performance on the job. If there is not a meaningful relationship between these two, there is no reason or benefit to using the test for selection.

In fact, given that there are costs both real and opportunity costs associated with using tests or interviews as a basis for selection, it is eco- nomically irrational to use such a selection device unless validation has shown the measures to be meaningful predictors of job performance.

Thus, all books and articles on measurement emphasize how important it is to validate any test, but especially from our perspective in management to validate selection tests. Pritchard Specifically, organizations wishing to use tests for selection needed to find sta- tistically meaningful relationships between tests and performance.

Such relation- ships indicate that the test is measuring what was intended and could be useful in selecting employees. Clearly, it was important to find and use the best measures of job performance in order to maximize the likelihood of detecting a significant relationship. In a classic article, Dunnette noted that, in some cases, the reason why organizations failed to find meaningful relationships between tests and perfor- mance was not because of faulty tests, but because of faulty performance mea- sures.

That is, if we could develop reliable, valid, and accurate measures of performance we would increase the chances of finding significant relationships between test scores and performance. The statistical reasons for this statement lie beyond the scope of the article but basically, one obtains the strongest relationship with a reliable predictor and a reliable criterion.

So, assuming that organizations were using the best tests, the validation process would be easier if they also used reliable and valid performance measures. This article by Dunnette helped launch a drive towards increasing the reliability, validity, and ultimately the accu- racy of performance appraisals. Valid Appraisals as a Goal Improving the reliability, accuracy, and validity of performance appraisals is clearly a worthwhile goal.

But the research pursuing this goal began to view this as a worthwhile goal for its own sake. That is, performance appraisal research largely focused on better ways to measure performance without regard to the larger per- formance management goal of performance improvement. Even before the Dunnette article, appraisal research was concerned with elimination of rating errors, based on the assumption that ratings that were less prone to these errors would be more accurate, and valid as well.

In fact, the very earliest research on performance appraisals e. This approach characterized much of the appraisal research during the decades from the s to the s. There were various proposals for chang- ing the nature or number of rating points used on rating scales, to change the nature of the rating scales themselves, or to train raters to use the scales more effectively, but the primary focus was on the the rating scale as a source of rating errors see the review by Landy and Farr, Bernardin, LaShells, Smith, and Alvares, Bernardin and his associates Bernardin and Buckley, ; Bernardin and Pence, suggested that training raters to reduce rating errors might actually have the effect of decreasing rating accuracy.

They suggested that this training simply replaced one response set with another, but really did not help improve accuracy, and could reduce accuracy of ratings. This led to the devel- opment of other rater training programmes that were designed to increase rating accuracy rather than decrease rating errors e.

Murphy and Balzer effectively ended the assumption that error reduction led to increased accuracy, noting that there was almost no relationship between the two — except for some evidence that increasing rating errors actually increased rating accuracy.

But the concerns over rating accuracy continued. Some authors addressed important conceptual issues about the meaning of rating accuracy e. Throughout this time, rating accuracy was viewed as important not only in its own right, but also as a proxy for rating validity. This final assumption — that rating accuracy was the proper cri- terion for evaluating appraisal systems — was finally challenged by several authors e.

Other Developments in the Appraisal Area Not all of the research on performance appraisal and performance management has focused on measurement issues and accuracy, however. There were also some studies that attempted to investigate the relationship between ratings, or feedback from ratings which is more a part of performance management , and subsequent performance.

Much of this work was summarized in a meta-analysis looking at the relationship between Management By Objectives MBO primarily a per- formance management intervention, but with elements of performance appraisal as well and organizational productivity Rodgers and Hunter, Although their article dealt with organizational-level productivity, many of the measures included in the Rodgers and Hunter study related to individual perfor- mance as well.

Furthermore, those authors only included data from studies where there were before and after measures of productivity. They concluded that MBO programmes a specific approach to performance appraisal and management , when properly implemented and when supported by top management, had an almost universal positive effect on productivity.

Pritchard Although these results sound encouraging, Rodgers and Hunter noted that in 68 of the 70 studies there was no control group for comparison. Kluger and DeNisi cited the absence of control groups as a major problem for assessing the effectiveness of feedback interventions in general. In fact, they reported in their meta-analysis that, when proper controls were considered, feed- back actually had the effect of decreasing subsequent performance in one-third of the studies — and that these results were independent of the sign of the feedback received.

Thus, the question of direct evidence for the effectiveness of this per- formance management intervention for improving performance must still await a more definitive answer. There have also been more recent developments and approaches that have begun to bring us back to the basic problems of performance improvement.

Lawler compared ratings across different rating sources and noted that ratings obtained from different sources were seldom in agreement. He went on to note, however, that this might not be an indication that one source was better than another, rather that raters who had different relationships with a ratee might actu- ally observe different behaviours, and interpret those behaviours differently.

This idea was later expanded upon by Tsui and her associates e. Given these conditions, it is neither surprising nor troubling that we would find these differences in raters as a function of rating source.

These notions, then, led to the development of multi-source appraisals, ini- tially as a means of initiating effective organizational change, but eventually as part of what has been termed degree appraisals.

By the s, this type of appraisal was extremely widespread, and growing in popularity in both the research and practice arenas see for example, the review by Dalessio, Research on multi-source in general, or upward feedback and appraisal specifi- cally, became one of the dominant themes in the appraisal literature during much of the s.

Multi-source appraisals also became a major topic in the practice literature e. In both cases, the literature tends to con- centrate on technical issues, such as who should be solicited to provide ratings e. There was also, however, some concern over whether degree feedback was effective.

Furthermore, since these appraisal systems were so costly to implement, there were actually only a few studies that examined the impact of feedback from these systems on subsequent performance. As a result, the practice community seems to have become somewhat disenchanted with degree appraisals. Yet, research on multi-source and upward appraisals continues e.

Another trend in recent literature that has pointed in the right direction is research and discussion of the role of contextual factors in appraisals. Some studies in this arena have explicitly considered how non-core task performance often alternately referred to as Contextual Performance and Organizational Citizenship Behaviour can influence ratings of task performance e.

While this research has caused both scholars and practitioners to view the domain of performance more broadly, it has not really moved us much closer to understanding how to improve performance on the job. Research dealing with other contextual factors ranging from corporate goals cf.

Harris, to feed- back environment e. Yet another recent trend, which does have potential to get us back on track, is the focus on employee reactions to appraisals as an important outcome variable.

In fact, appraisal reactions such as satisfaction, acceptability, and motivation to use feedback, are cited as an important trend in the appraisal research during the past ten years in a recent review of that literature Levy and Williams, Although Levy and Williams cite several other trends as well, studies focusing on ratee reac- tions to appraisals and feedback e.

That is, we cannot expect to change behaviour through appraisals and feedback unless employees react to the feedback in the ways intended. While a focus on these reactions is a positive development, there is still the additional step of the employee actually changing behaviour to improve performance.

For that to happen, the employee must actually believe that there is a need to improve, and so must accept the feedback received. Therefore, we see research on employee reactions as an important step in getting us back on the right track. Developments on the Practice Front While these trends in academic research were playing out, there were also devel- opments on the practice front. Pritchard tice community was largely concerned with Management By Objectives Drucker, , which had a basis in academic motivation models such as goal setting, and participative decision-making, and which was also the focus of a fair amount of research see discussion of meta-analysis above.

In addition, a number of schol- ars doing research in the area of appraisal also wrote books or articles for the prac- tice community, based largely on the findings of their own research e. Although many of these books and articles had an impact on practice, most of the work discussed was still based upon research that focused on improving measurement.

Therefore, with the exception of the work on MBO, there was not much help for finding ways to improve performance. By the s, though, much of the attention in the practice community had shifted to multi-source appraisals and feedback.

There were articles, books, and symposia dealing with degree appraisal systems, but most of these were simply extended case studies where HR managers touted the advantages of the systems they had developed see, for example, various contributions in Tornow and London, It is worth noting that, at this point, it was the practice commu- nity that was driving the agenda for the academic community, rather than vice versa.

Although this has always been true to some extent, the work on multi-source ratings is a good example of a situation where the widespread adoption of the programmes by organizations actually led academicians to study whether or not they were effective.

An interesting development, beginning in the s and continuing through the next decade, has been the interest in multiple indicators of success. This movement suggests that organizations may be interested in moving beyond per- formance improvement as a goal for their performance management systems. It also suggests that scholars should begin considering other potential outcomes in addition to performance improvement.

These systems are less structured than the more traditional systems, with less emphasis on ratings or rankings, and more emphasis on developmental meetings between supervisors and employees as needed. Although a recent study Bladen, indicated that these approaches have been growing in popularity, most firms that have moved in this direction have devel- oped hybrid models, which still retain some aspects of the traditional systems.

These newer proposals seem to emphasize performance management activities over performance appraisal ratings. Pulakos reviews various bodies of research and presents a series of specific recom- mendations for organizations based on this research. These recommendations include guidelines for establishing effective performance goals, for providing feed- back effectively, for documenting employee accomplishments, and for addressing legal requirements.

The Pulakos report also includes a discussion of the impor- tance of performance standards, provides steps for the successful implementation of performance management systems, and discusses some advantages of automat- ing the appraisal system Bladen, also discusses automation at some length.

Although there is some discussion about ratings and rating scales Bladen, , the emphasis in this report is clearly on ways to manage performance, and per- formance appraisal is treated simply as a source of input for the performance man- agement process. Thus, it would seem that practitioner focus has been moving towards perfor- mance management, and that scholarly focus is moving in the same direction, although perhaps more slowly.

There is clearly an interest in ways to use appraisals to improve performance as well as to accomplish other goals , and that is consis- tent with the goals of this article. Clearly there is still more to be done, especially in the area of academic research, which should guide practice. Therefore, we propose a motivational framework for pushing the scholarly side to move a bit more quickly.

We apply an expectancy-based motivational framework model that focuses on the choice of where individuals should expend their effort, and this choice is important for the process of performance improvement. We should note, however, that others have approached performance manage- ment from a different motivational framework, including Agency Theory e. Bladen, Pritchard include many other factors, we believe that an expectancy theory approach is a more direct way to develop implications for better performance management.

Lastly, an expectancy-based framework is broad enough to allow us to bring together literatures on somewhat disparate topics. Although we began this article being fairly critical of the research on performance appraisals, we recognize that there have been a number of studies that can provide light on how to use appraisals to improve performance. We believe that a motiva- tional framework such as this can accommodate the various studies dealing with appraisals, performance management, and productivity enhancement that we reviewed earlier.

Thus, our goal is to use this motivation framework to bring together what we have learned in the past and formulate a more cohesive state- ment about how to improve performance through performance appraisal and per- formance management. We have therefore relied upon a model of motivation based on the work of Pritchard and his associates Naylor, Pritchard, and Ilgen, ; Pritchard and Payne, This model is a modification and extension of the basic expectancy model, which deals with decisions by employees as to where they should exert effort.

This model has been used as the basis for a programme of studies dealing with productivity enhancement, using a model known as ProMES cf. Pritchard et al. It therefore seems quite well suited for our present purposes. It is based on the motivation component of the Naylor, Pritchard, and Ilgen theory. We have modified the model in the present context. The model in the figure has performance improvement as its ultimate outcome.

The actual motivation process is depicted in the top row of the model, and is based on several assumptions. Individuals have a certain amount of energy that they can devote to work at any one time; individuals have certain needs at any time that they seek to satisfy; and individuals are more likely to exert time and effort in ways that maximize their anticipated need satisfaction. The motivation process, then, is one where people allocate energy to actions in a way that will maximize their anticipated need satisfaction.

That is, it refers to decisions made by a target person concerning where to exert effort or where to focus action. An expectancy-based motivation model for individual performance improvement models. The two links between results and evaluations and between evaluations and outcomes together are similar to instrumentality in traditional expectancy models.

These second-level outcomes have the potential for leading to need satisfaction. Thus, the model predicts effort, but, more specifically, it predicts how an employee will allocate that effort across actions that will lead to performance improvement.

We define effort here quite simply as the allocation of personal resources, in the form of time and energy, to actions. The key for performance appraisal and performance management, then, is to ensure that evaluations and outcomes are structured so that the employee will focus his or her actions in the ways desired by the organization, and will result in the kind of performance that is needed.

That is, the systems must be structured so that employee effort leads to outcomes desired by the organization, which are rewarded by the organization. Pritchard As with most expectancy theories, motivation is a future-oriented concept in that people anticipate the amount of need satisfaction that will occur when out- comes are received.

It is this anticipated satisfaction that determines behaviour. As the person makes choices of how much time and effort to devote to which tasks, the goal is maximizing the total anticipated need satisfaction. Motivation is based on perceptions.

It is the perceived relationship between applying energy to actions and need satisfaction that influences how much energy is devoted to that action. These perceptions may or may not be accurate. A critical part of the theory for our present purpose is the set of connections shown as arrows between the actions, results, evaluation outcome, and need satis- faction boxes in Figure 1.

These connections are similar to the concepts in other expectancy theories, and as we will discuss below, they represent the areas where performance appraisal is most likely to have an impact.

The person may see a very strong or a very weak relationship. There would be such a connection for each different result and for each evaluator. The evaluation-to-outcome E-O con- nection defines the perceived relationship between the level of the evaluation and the level of an outcome that will occur based on that evaluation.

The final type of connection is the outcome-to-need satisfaction O-NS connec- tion. This defines the relationships between how much of the outcome is received and the degree of anticipated need satisfaction that will result. Taken together, these connections provide the framework for understanding how appraisal and feedback can lead to improved performance.

Propositions on Motivation Connections, Performance Management, and Performance Appraisal Figure 1 also presents a number of critical factors that will influence the strength of the connections and so, the strength of the motivation to produce actions that can lead to a desired level of performance. These factors indicate the ways in which organizations can improve employee performance through performance appraisal and performance management interventions, which can strengthen the connections in the model.

Most of these are concerned with performance man- agement systems, but they require appraisal systems that are consistent as well. This is the major proposition underlying all the others that will follow. Determining the organization's future goals and objectives. Related: 5 Performance Appraisal Objectives. While performance appraisals can be instrumental tools in helping managers, they may present some challenges. There's the potential for biases in the reviews since they depend on human assessment.

Because performance appraisals occur every few months, or even once a year, the feedback may not reflect an employee's current work and behavior. Employers may also give generic comments that can result in confusion. Other possible drawbacks of performance appraisals include:. Developing unhealthy competition in the workplace.

To avoid these drawbacks, it's helpful to carefully consider which type of appraisal the best fit for your organization and to conduct these appraisals at regular intervals. It's also helpful to allow those conducting the appraisals enough time and resources to do so, as this can improve the quality of results and your employees' experiences with the appraisal process.

You might also consider using the feedback you receive from employees during their appraisals to determine if the metrics you use to measure employee performance are fair and up-to-date. Here are some tips for how to conduct exceptional performance appraisals:. Use an outline. Consider using a universal outline for your performance appraisals to help employees prepare for the meeting and create structure during the review.

Check in more frequently. To help your team of employees understand how they are doing, conduct performance evaluations more than once a year. For example, some organizations conduct performance reviews once per quarter. Document your sessions. When providing a performance appraisal, make sure to document your meeting and store the notes in a database system where you can locate them in the future when trying to make decisions about an employee. Find jobs. Company reviews.

Find salaries. Upload your resume. Sign in. Career Guide.