AN APPRASIAL OF THE EFFECT OF EMPLOYEE PERFORMANCE APPRAISAL ON ORGANIZATIONAL PRODUCTIVITY
Abstract
This manuscript is an attempt of the researchers to highlight the significance of performance appraisal in the
organizations and business world. Appraisal is one of the most significant and effective tool that can lead an
organization to vanquish their ultimate goals by improving the efficiency and effectiveness of the employees.
Performance appraisal helps managers to identify the gap between desired and actual performance and in case of
deficiency, it can be removed by imparting required training. Fair performance evaluation and proper training
motivates employees that results in improved performance and achieve organizational competitiveness.
Keywords: Performance Appraisal, Employee Performance
- Introduction
To evaluate the impact of performance appraisal on employee’s performance, we need to firmly know what is
performance appraisal and employee performance. Performance appraisal is one of the most significant aspects
of human resource activities designed and performed in the companies as well as in every walk of life. In terms
of definition, it is an act of formally evaluating performance of non managerial staff at least once in a year (John
T.Addison, Clive R.Belfield, 2007). Performance appraisal can be defined as an act of testing, evaluating,
measuring and justifying the performance displayed by the employees during a specific period of time (Meysam
Fakharyan, Mohammad Reza Jalilvand, Behrooz Dini, Ebrahim Dehafarin, 2012). The companies may change
the time interval of performance appraisals according to their nature of business and requirement. Historically,
performance evaluation was first time studied in the spinning factory in Scotland more than two hundred years
ago. With the passage of time and the evolution process, performance appraisal has gained so much importance
that, not only in corporate sector but almost in all sectors, the decision of awarding reward and punishment is
based on it. Now performance appraisal is defined as an act of managers to examine and evaluate employee’s
performance comparing it with the set benchmark and document the results and giving feedback to the
employees to indicate where there is deficiency which needs to be improved. The main purpose of performance
appraisal to the management is that it assists them to determine who needs what training, who should be
promoted, demoted, retained or fired, basing on employee’s performance.
Employee performance is the set of actual (timely and accurate) accomplished tasks and duties by the employee.
The tasks and duties are set and evaluated by the management or the line manager. The employee performance is
so important that the ultimate goal of Human Resource Department is to achieve sustainable improvement in
employee performance by providing required training, work environment, rewards and care. - Literature Review
Performance appraisal is one of the most important practicing tools from human resource practices that is used to
evaluate performance of the employees on job (Tompkin, 1995). The objective of performance appraisal is to
The objective of performance appraisal is to
maintain the performance of the employees, up to desired levels, by motivating employees which depends on the
workplace environment and rules and regulations at work (Tassew Shiferaw Gizaw, 2010). Efficiency and
effectiveness are two important ingredients of performance and training is the method/ technique to improve
individual performance (Cook, 2000). Performance of any employee is measured with set standards by the
organization. Good and bad performance can be identified by the level of success in the given task when
measured to preset standards (Kenney, 1992).
Whenever in the organizations the performance appraisal reflects a performance gap that needs to be fulfilled,
requirement of proper training arises. In the development of any organization, training plays a cardiac role in
order to improve performance which results in improved productivity and putting the organization in competitive
mode (Benedicta Appiah, 2010). Training is a planed and systematic activity that, if practiced objectively,
results in improved knowledge, skills and competency which are required to perform efficiently and effectively
(Gordon, 1992). Job characteristics and firm background play a vital role in decisions regarding the selection of
training that will be imparted to the employees of the organization.
It is observed that there is a positive relationship between training and employee performance, the employees
when positively trained, take interest in the process with more motivation and resultantly their performance as
well as the performance of the organization amplifies. Training is beneficial for both the organization, by helping
it to achieve its desired level of results, and the employees by equipping them with different knowledge, skills
and other characterstics. If the trainee in a training process is willing and takes interest, the new knowledge and
skill will be acquired quickly and effectively (Afshan Sultana, Sobia Irum, Kamran Ahmed, Nasir Mehmood,
2012). Employee interest and involvement should be promoted in the organizational practices as employee
involvement and Feedback can play a key role in effectiveness of performance appraisal as there is positive
relationship between performance appraisal satisfaction and employee performance (Petti John et al, 2001). All
the organizational practices should be performed in good faith with objective of positive improvement in all the
processes and activities which reflect fair and credible performance evaluation otherwise each evaluation system
would be jeopardized ( cardy & Dobbins, 1994).
Although, number of researchers have indicated various factors effecting employees performance, yet none has
clearly focused on the impact of performance appraisal on employee’s performance. Therefore, there is a visible
gap in the study of knowledge which the present researchers have endeavored to fill in.
- Conceptual Framework
Impact of performance appraisal on employee performance is inevitable. The model presented by the researchers
show the impact of performance appraisal on the employee’s performance. According to this model first of all
the management or the line managers set the benchmark performance so that it helps in evaluating the
performance of the employees individually or collectively as a group. The benchmark performance may be
preset standards, best performance among the employees or any aspired performance/ results. Secondly the
actual or given performance of the employees should be matched with the benchmark performance and two
situations will appear, actual performance would be equal or above benchmark performance or actual
performance of the employees would be below benchmark performance. If the actual performance of the
employees is equal or above the required performance then the employees would be satisfied and their
motivation would be amplified to be consistent and meet the next benchmark resulting in improved employee’s
performance.
But if the actual performance of the employees is below the benchmark performance, in the result to an act of
performance appraisal by the management, the gap between actual and benchmark performance appears. This
gap between actual and benchmark performance may be because of deficiency in the employees knowledge,
skills or attitude toward the assigned job at workplace. The management’s role is now to identify the deficiency
in the employee’s knowledge, required skills or attitude and recommend and arrange the proper training required
to fulfill/ overcome the deficiency. Proper training to the employees would be beneficial to the employees,
equipping them with the latest knowledge and skills to perform the assigned job more efficiently and effectively
by creating the process interesting and elevating employee’s motivation levels, and also to the organization to
have workforce equipped with latest knowledge, skills and other characteristics assisting and directing
organization to achieve ultimate organizational goal.
