3.1 Performance Management
Armstrong and Baron (1998) define performance management as a “process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance. As such, it established shared understanding about what is to be achieved and an approach to leading and developing people which will ensure it is achieved”(Armstrong, M. and Baron, A. 1998). They further emphasize the fact that it is “a strategy which relates to every activity of the organization set in the context of its human resource policies, culture, style and communication systems. The nature of the strategy depends on the organizational context and can very from organization to organization” (Armstrong, M. and Baron, A. 1998).
A simple illustration of performance management would be that it is a source of action which is taken by an organization to teach their employees and improve performance.
3.2 Performance Appraisal
Performance appraisal is a way of giving employees feedback about their performance at work. According to ACAS (2003) “Performance appraisal is an assessment of employee’s performance, potential and development needs. Performance appraisal is an opportunity to take an overall view of work content, loads and volumes, to look back on what has been achieved during the reporting period and agree objectives for the next”( ACAS, 2003).
A comparison between Performance Management and Performance Appraisal can be described as follows. Performance Management as of its definition is a process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance. Performance Management has a broad organizational focus, it is used to identify performance weaknesses and helps to improve along with provided measures whereas Performance appraisal is the process used to evaluate how the employees perform their jobs and indicates the level of accomplishment. A better way of describing the comparison is that Performance management is the course of action taken by companies to teach their employees to improve performance and performance appraisal contributes in decision making to performance management.
4. Three Methodology of Performance Appraisal
There are several different methodologies used by corporations world wide for Performance Appraisal, we will only discuss three common methodologies used globally.
4.1 360-Degree Feedback
An appraisal method in which the employee’s performance feedback comes from such sources “as self assessment, peers, team members, managers in the organizational hierarchy, and also from external sources such as customers, suppliers and other interested stakeholders has become very popular in contemporary organizations” (Decenzo, D and Robbins, S. 2001)
360-Degree appraisal is a very useful tool, the data for appraisal is collected from a wide range of resources and it provides a very through picture of how an individual’s performance is viewed and can be an extremely powerful tool in analyzing performance. According to Foot and Hook. (2005) they state. “To have any genuine value or meaningful impact, 360○ feedback must be far more than a standalone activity. It should involve managing the individual’s expectations, aligning questionnaires to competency frameworks, setting goals to integrate the exercise into personal development plans and providing feedback from trained facilitators. The process surrounding the 360○ process itself is complex, and how well HR and learning managers plan that process will determine what impact it will have” this shows that while 360○ feedback is not an easy process to introduce into an organization, ‘it does nevertheless provides a powerful tool that fits well with the performance management and performance appraisal approach’ (Foot, M. and Hook, C. 2005)
4.2 Paired Comparison
A performance appraisal method that “ranks individuals performance by counting the number of times any one individual is the preferred member when compared with all other employees in an organization” (Decenzo, D and Robbins, S. 2001)
According to Rue and Byars (2003) they illustrate the Paired Comparison Method using an example “Suppose a manager is to evaluate six employees. The manager firstly compares the first employee with the second employee on a chosen performance criterion, such as quantity of work. If the manager thinks the first employee has produced more work then the second employee, he or she gets a higher rating. The first employee is then compared to the third, fourth, fifth and sixth employee on the same performance criterion. A better rating is given to the employee who produced the most work in each of these paired comparisons. The process is repeated until each employee has been compared to every other employee on all the chosen performance criteria. The employee with the best rating is considered to be the best performer. Likewise, the employee with the lowest rating is the lowest performer”. The main drawback of this method is that it can be used only in small organizations, with small numbers of employees, but in large organizations with large number of employees, it is difficult to compare each employee with every other employee in the organization.
4.3 Critical Incident Method
Critical Incident appraisal method can be defined by Decenzo and Robbins (2001) “managers have to keep a written record of the facts that focuses on those critical or key behaviors that make the difference between doing a job effectively and doing it ineffectively”. They further illustrate Critical Incident Method using an example “a police sergeant might write the following critical incident about one of her officers: Brought order to a volatile situation by calmly discussing options with an armed suspect during hostage situation which resulted in all hostages being released, and the suspect being apprehended without injury to any individual. The main strength of critical incident method is that it looks at behaviors. A behavior report such as critical incident is more job related and it judges performances rather then personalities” (Decenzo, D and Robbins, S. 2001).
The main drawbacks of such method is that managers are required to note down incidents as they occur which can be a burdensome and time consuming task.
5. Performance Appraisal System used by Casio electronics and Virginia Commonwealth University Health system.
Casio Electronics is very famous brand globally, Casio has ‘13013 employees world wide’ (Casio, 2007). Casio Evaluate its employee performance through the “human resource system and one of the subsystems is Appraisal system. In the Appraisal system employees are evaluated in three areas, namely, target achievement under management by objectives, work performance (competency) in their job type, and contribution made towards the department. The evaluation is made on a five point scale, relative to other employees, and the results are reflected in remuneration. Superiors discuss the evaluation results individually with each employee in order to seek a high level of understanding” (Casio Corporate Report, 2006).
Virginia Commonwealth University’s Health System evaluates “employee’s performance at the end of a performance cycle of one year. The employees supervisor is required to complete the employees performance appraisal from at the end of each performance cycle, a self assessment form will also be submit by the employee. The result from the assessment indicates the overall rating earned by the employee during the performance cycle”. (VCU Human Recourse 2007)
Casio Electronics and VCU Health System has different methods to evaluate their employees performance, if we compare the two performance systems, they both have a different approach Casio appraises its employees using a management by objective appraisal method and VCU Health System evaluates by acquiring feedback from the employees supervisors and self-assessment, this appraisal approach is infect 360-Degree method.
6. Conclusion
Performance management is necessary for the development of company’s employees better performance, while performance appraisal is a method, by which the employees are appraised upon their performance, their behavior and amount of work they have done. There are various methodologies to appraise employee’s performance, in this report we have focused on only three methods, 360-Degree Feedback, Paired Comparison and Critical Incident Method, all of the three methods uses different approaches to verify the employee’s performance but the main purpose of all performance appraisal methods is to appraise employee’s performance. Different appraisal methods are used by corporation world wide to appraise their employees; we have discussed the appraisal methods used by Casio electronics and VCU Health System. Casio Electronics uses the Management by Objective appraisal method in which the employees are appraised on their job well done. While VCU Health System uses the 360- Degree Feedback method to appraise their employees, the feedback mainly comes from internal sources, such as employee’s supervisor, managers and self-assessment. Performance management and performance appraisal are the tools used to maintain and improve employees performance and productivity. Appraising employees performance makes them feel proud and motivate them for further improvement in their work.
7. References
ACAS (2007) Introducing the general Principles: What are appraisals [online] available from <> [30 June 2007]
Armstrong, M. and Baron, A. (1998) Performance Management: The new Realities, London: The Institute of Personal Development
Bowen, J. (2007) Performance Appraisal [online lecture] delivered for module HRM at Lewis- Clark State Collage available from < > [29 June 2007]
Casio (2007) Corporate Info [online] available from < > [30 June 2007]
Casio Corporate Report (2006) Casio and Employee [online] Available from < > [30 July 2007]
Decenzo, D and Robbins, S. (2001) Human Resource Management. New York: Van Hoffman Press
Foot, M. and Hook, C. (2005) Introducing Human resource Management. London: Pearson
Rue, L. and Byars, L. (2003) Management Skills and Application. New York: McGrew-Hill
VCU Health System (2007) About Us [online] Available from <> [30 June 2007]
VCU Human Recourse (2007) Performance Management [online] Available From
< > [30 June 2007]
Wikipedia Free Encyclopedia (2007) Casio [online], Available from <> [29 June 2007]
