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Almost every company in one way or another goes through a periodic ritual, known as performance appraisals.

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Table of Contents Introduction 2 Literature Review 2 Performance appraisal definition 2 Approaches to Performance Appraisals 3 Purposes of Traditional Performance Appraisals 3 Developmental Performance Appraisal Purposes 4 Analysis 5 Common Methods 5 Common Mistakes 7 Successful Performance Appraisal 9 Conclusions 9 Recommendations 10 Bibliography 12 Introduction Almost every company in one way or another goes through a periodic ritual, known as performance appraisals. On hearing performance appraisals, people will pick up the typical painstaking and tedious process with piles of paper and much complexity. At the end of the day, most of the time, every employee gets a similar 'fairly good' evaluation. Sometimes people do ask 'What is the point of doing it?' That's one of the common failures of performance appraisals. Due to those failures, some researchers or professionals argue that performance appraisal is only a perfect idea in theory but it never works out in practice. There is always a reason for everything, and performance appraisal failures are no exception. Why it doesn't work? What are the problems? If we can find out where the problems lie in and overcome them, a well designed performance appraisal system, which is tailored for a company, will definitely work in practice. A successful example will be given and analyzed later in the analysis part. In the following parts, some commonly used methods of performance appraisals will be mentioned and along the advantages and disadvantages will be discussed. Key factors to the success of the system will be analyzed and advice and suggestions will be given on how to develop and implement an effective performance appraisal system. This assignment consists of five main parts, which are introduction, literature review, analysis of common mistakes, conclusions and recommendations. Literature Review Performance appraisal definition There is not a widely consented definition for performance appraisal. It is a most arguable concept in management. Too many different notions and systems have been developed or being developed. ...read more.


The primary problem with it is that their length and content can vary considerably, depending on the rater. Thus essay appraisals are difficult to compare. The writing skills of the rater can also affect the appraisal. Management by Objectives (MBO) To avoid, or to deal with, the feeling that they are being judged by unfairly high standards, employees in some organizations are being asked to set - or help set - their own performance goals. MBO has become so familiar to most managers. It can work out well for management level provided handled in the right way. It should be noted, however, that when MBO is applied at lower organizational levels, employees do not always want to be involved in their own goal setting. Many do not want self-direction or autonomy. As a result, more variations of MBO are becoming increasingly common, and some critics see MBO drifting into a kind of manipulative form of management in which pseudo-participation substitutes for the real thing. Some organizations, therefore, are introducing a work-standards approach to goal setting in which the goals are openly set by management. 360� Feedback 360 degree feedback is more likely to be easily introduced where openness, mutual trust and honesty are part of the corporate culture and there is a genuine interest in and desire for performance improvement. The adoption of a full 360 degree approach needs to stem from a steady evolution in appraisal and development practices. It is very unlikely that a 360 degree scheme would be accepted where there is no history of systematic feedback on performance. It would present too radical a step. 360 degree processes with a clear purpose and objectives are likely to be more effective, particularly when they are aligned with company strategies and goals and can be linked to existing processes within the company. The method is time consuming and requires fair evaluations from many parties which may be found difficult. ...read more.


* The appraisal system should have simple and easily understood documentation to support it. * The appraisal system should not be a part of the standard disciplinary procedures of the company. It must be subject to ongoing monitoring, review, evaluation and updating. As a business evolves, so must the appraisal procedures. * The system should be adaptable and encompass all levels of employees in the company. * A reward system should be separated from the appraisal system. If they wish, a company can give whatever names for their performance appraisal system, which they feel most comfortable with or suit their needs best. The term 'performance appraisal' tends to set up two opposite groups---appraisers and appraisees. That may cause employees' aversion and thus become a barrier for their buy-in of the system. Therefore 'softer' or neutral terms may be considered, such as 'Joint review and action planning'. It will be harmful for a company to try to squeeze or fix a theoretical appraisal system without thinking of the company's situation. First, none of those academic approaches works perfectly without any change. Second, different companies differ in many aspects. For instance, an IT company will by no means use the same performance appraisal system as that in a public, non-for-profit hospital. Companies have to consider their uniqueness in terms of the industry they are in, the organizational structure and their size, etc. Basically two questions should be asked when they evaluate their appraisal programme: Are we doing things right? (i.e., are the process and the rules being followed?) Are we doing the right things? (i.e., what effect does the programme have?) It should also be noted that a company will have a better idea about the employees' potential and their personal goals after performance appraisals. What the company can do is to transfer or promote the employee to help fulfill his expectation and therefore motivate him to perform better. At the same time, the company is able to cut the cost of external recruitment and utilize the existing human resources. ...read more.

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