Effective characteristics of modern performance appraisal systems

Performance Appraisal System

The modern day staff member is the most important organizational asset within the contemporaneous business community. It has in essence evolved from the force operating the machines into the force able to generate organizational value. The staff members are the ones who handle the manufacturing processes to create high quality products which generate consumer satisfaction and revenues sustainability.

The importance of the staff members is crucial within all categories of economic agents, but even more so important within service providing companies, in which the final business success depends on the skills of the staff members, their commitment levels and the nature of the interaction between the employees and the organizational customers. In such a context, economic agents continually seek new means in which to develop and motivate their employees. In this endeavor, performance appraisal systems play a crucial role.

Better characteristics of performance appraisal systems

The performance appraisal systems represent mechanisms by which the performances of the organizational staff members are assessed with the scope of supporting better informed decisions regarding the future of the relationship between the employer and the employees.

Like with any other economic model, the specialized literature is filled with models for performance appraisals, but fact remains that each firm has to develop its own system. In other words, economic agents cannot implement a performance appraisal system as it is revealed within the specialized literature and expect it to work, but they have to develop their own systems. The individual performance appraisal systems have to be personalized to the specific needs of the respective organizations, such as their sizes, the nature of the businesses they conduct, the features of the industry in which they operate and so on.

Regardless of the need for personalization, fact remains that effective performance appraisal system have to meet specific characteristics which enhance their success rates. In this order of ideas, the following are considered good characteristics of performance appraisal systems:

a) Full support from the managerial team

b) Adequate understanding of the system at the overall organizational level and by all organizational members

c) the appraisal system's commitment to fairness and equity and the perception of the system as fair and productive

d) the insurance that the performance appraisal is conducted through the objective lenses of the individual job description

e) the integration and communication of the criteria to be used in the appraisal

f) the insurance of transparency of the appraisal system

g) the high skills, fairness and training levels of the person conducting the evaluation

h) the development and implementation of adequate plans which support the evaluation of the employee performances (Bhat, 2010)

i) the ability to generate employee commitment and as such to support organizational productivity

j) the ability to identify training needs, but also to establish promotions

k) the ability to identify changing needs within the organization and to quickly and efficiently adapt to them (Gupta, 2007)

l) the ability to support efficient and high quality systems of decision making at the overall organizational level (Deb, 2006).

4. Conclusions and discussion

The modern day staff member is a highly evolved and rewarded individual, and has attained this position as a result of the tremendous role he plays within the business community in his support of business success. In such a context, it is crucial for the economic agents to develop and implement a specific performance appraisal system which meets a wide array of characteristics, such as support for productivity, efficiency, transparency, morale and so on.

At a more particular level, a customized performance appraisal system is able to generate benefits at the level of respect, personal development, responsible stewardship and integrity in organizations. In terms of personal development, the most important evidence is offered by the means in which effective performance appraisal identifies employee characteristics. In this order of ideas, the performance appraisals can identify employee limitations and correct them through specific training programs. When the employees are subjected to these programs, they perceive them as opportunities for personal and professional development.

At the level of respect, the evidence is less obvious, but it would be safe to assume that it existed. In this order of ideas, a properly constructed performance appraisal system is conducted with respect for the individual, which in turn attracts the respect of the individual towards the evaluator, as well as towards the firm. The same situation is also observed at the levels of the impact the performance appraisal systems generate on responsible stewardship as well as on the integrity of the firm. In other words, the impact is a salient one, with limited evidence, but it is nevertheless expected to exist. At a more specific level, it could be assumed that a high quality performance appraisal system generates integrity and responsibility in the relationship between the employer and the employees. Furthermore, the employees are formed in the culture of integrity and responsible behavior, and they extrapolate it in their own relationships regarding the organization, such as employee-employer relations, employee-employee relations or relationships between the employee and the various stakeholder categories, such as customers or business partners. In essence then, a high quality performance appraisal system creates a wide array of organizational strengths, which in turn materialize in competitive advantages.

References:

Bhat, V., 2010, Characteristics of an effective performance appraisal system, MBA Notes, http://www.mbanotesworld.in/2007/08/characteristics-of-effective.html last accessed on February 7, 2011

Deb, T., 2006, Strategic approach to human resource management, Atlantic Publishers & Distributors

Gupta, B.L., 2007, Governance and management of technical institutions, Concept Publishing Company

Masternak, R.L., 1999, HR guide to the internet: compensation: incentive plans: gainsharing, HR Guide, http://www.hr-guide.com/data/G443.htm last accessed on February 7, 2011