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The value of HRM to business organisations

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The value of HRM to business organizations (08BSP020) Performance appraisal Section I: Introduction This paper introduces performance appraisal which used to evaluate the employee performance and how performance appraisal works in practice. In order to better understand and control the organization system, the organization normally use performance appraisal for making reward decision, motivating employee, identify the training needs and improving the organization's performance. There may have slight difference between traditional appraisal system and modern appraisal system. For traditional performance appraisal, it focuses on employee abilities. However, in modern performance appraisal, the employee is claimed by supervisor to participate in setting goals of organization. In the other words "the hallmarks of modern appraisal philosophy are performance orientation, focus on goals or objective, and mutual goal setting between supervisor and employee"1. The organization emphasizes the employee participate in mutual setting the goals, because through working in organization, the employee expect to satisfy their needs, performance a good work and share group efforts. Moreover, if employee participates in mutual setting goals of organization it will reflects that the employee shows a better performance. Another important reason is that they are going to work harder to achieve the goals which they participated to set. The performance has widely used by organizations not only in western countries, but also in non western countries, such as China, Japan and Africa. Until 1980s the percentage of organizations adopt performance appraisal increase from 89% to 94%( Locher and Teel 1988).Now the performance appraisal could broadly used in many fields like school, local authorities and civil service. There are several systems included in performance appraisal, such as ranking scheme, standard and competency-based systems, rating scheme, competency based and 360 degree appraisal. ...read more.


The second case is about the Xerox Corporation. The company found that it is in the problem with discouraged and disgruntled employees during the mid 1980's. Regarding to this, the company decided to create another performance appraisal system. The previous system includes seven basic rules. In this system, the company valuate employees' performance once a year; each employee should provide a document about their achievements during the past year; the managers then evaluate these achievements with numerical ratings; the appraisal includes a summary about the employee's achievements and a rating from 1(the worst) to 5(the best); the average level of the rating is forced to be controlled at the level of no higher than 3; reward increases will be related to the rating on the summary; reward increase information and performance appraisal about the employee occurs in one session. As a result of the system used in mid 1980's, 95 percent of Xerox's employees were rated on the level 3 and 4. That is to say, most of Xerox's employees received a reward increase of 1 to 2 percent, no matter how an employee performs in the past year. To fix this problem, Xerox created a new system which is totally different from the old one. First, the appraisal occurs once in six months, and the numerical rating system was put away, the new appraisal system also includes a provision of development planning7. The new system appraises employees in 3 steps. At beginning of each year, the manager meets with every employee to make an arrangement on the employee's main task in the coming year. The objective of each employee was standardized with measurable terms. As the second step, in the mid-term of the year, another meeting will take place between manager and every employee for a feedback. ...read more.


A well created performance appraisal can also improve workers performance, identify training needs. It can also encourage workers to contribute to team work11. Moreover, the performance appraisal provide an opportunity to identify the exist problem and fix it on the future performance. The old-fashioned individual performance appraisal system will no longer be appropriate. The case of St. Luke's hospital and the Xerox Corporation gave a clear evidence to prove this. Reference Tom R & Adrian W (2006) Contemporary Human Resource Management (Text and Cases) Prentice Hall Roger Seifert (1996) Human Resource Management in Schools, Pitman Publishing Stephen B & Keith S (Ed.) (2001) Personnel Management (third edition), Blackwell Publishing William A, Pamela P & Michele K (1996) Strategic Human Resource Management, The Dryden Press James J, Yongmei L & David J (2007) The value of human resource management for organizational performance, Business horizon, p503-511 Giulio C, Roberto F & Paolo P (2002) Performance-related pay or pay for participation? The case of Emilia Romagna, Human Systems Management p43-61 Robert M & Keith W (2007) The impact of varying types of performance-related pay and employee participation on earnings, Int. J. of Human Resource Management 18:6 1004-1025 Sarah B & John G (2006) Some Evidence on the Relationship between Performance-Related Pay and the Shape of the Experience-Earnings Profile, Southern Economic 72(3). 66-676 (Words: 2879) 1 Keith Davis, John W. Newstrom, 1989 2 Perrewe and Kacmar, 1996 3 Perrewe and Kacmar, 1996 4 Keith Davis, John W. Newstrom, 1989. 5 William P. al et., 1996 6 William P. al et., 1996 7 Anthony, Perrewe, Kacmar, Strategic Human Resource Management, P.378 8 Anthony, Perrewe, Kacmar, Strategic Human Resource Management, P. 347, "Case: Xerox Revamps Performance Appraisal System" 9 Anthony, Perrewe, Kacmar, Strategic Human Resource Management, P. 348 10 Wright,McCormick, Sherman, &McMahan, 1999 11 Anthony, Perrewe, Kacmar, Strategic Human Resource Management, P. 347 ?? ?? ?? ?? 1 ...read more.

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