We conducted a survey of 89 randomly selected New Zealand organizations
with at least 300 employees to determine 1) what purposes performance appraisal
systems serve, 2) characteristics of those systems, and 3) any difficulties
organizations have had in implementing them. Human resource directors
indicated that appraisal information was used most often to give individual
performance feedback. Links between appraisals and pay were widespread, but
generally indirect and informal. In contrast to the emphasis of past research
on rating errors and cognitive processes in performance evaluations , primary
difficulties identified by these human resource directors were 1) managers failing
to discuss and improve performance problems with subordinates, and 2) the
setting of vague performance objectives. The most frequently cited change which
organizations made and were considering making was simplifying appraisal
forms and procedures. Ways in which organizations can improve how appraisal
systems meet their primary objectives and overcome difficulties are discussed.
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