Rethinking Performance Appraisal

Abstract

The task of assessing the job performance of their staff is one of the least-liked tasks that managers can be asked to carry out each year. Despite significant investments by most large and many medium-sized organizations in developing performance appraisal systems, the appraisal process rarely seems to deliver the promised improvements in communication, employee motivation and job performance. This paper examines the confused nature of the 'overall performance' rating that typically is the culmination of the appraisal process and the basis for determining salary adjustments and other rewards. It is argued that appraisal systems are more likely to deliver their promised benefits if they focus upon assessing the extent to which managers, subordinates and others are initiating and implementing actions that enhance individual capacity and motivation (i.e. potential') and the opportunities and support available in the job for individuals to fully realize theirpotential to contribute to strategic objectives (i. e. job 'scope').