M5D1: Performance Appraisal and the Reality of Work

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Performance Appraisal and Management

Linking individual performance to organizational success is a difficult task in the simplest of environments. It is, however, an extremely important piece of the HR puzzle; especially when the context is global.

Employees are able to improve their performance and develop their KSAs (knowledge, skills and abilities) faster if they know what they are doing right and what they are doing wrong. So, an accurate performance appraisal offers the prospect of helping employees reach their full potential sooner rather than later.

Secondly, performance appraisal can also help ensure employees see a connection between their performance and the rewards (e.g., compensation) they receive. These two objectives, however, can compete with one another when one appraisal is used to fulfill both.

If the appraisal is developmental, it is important for both the employee and his/her manager to have an open discussion on the employee’s strengths and weaknesses with a goal of identifying steps to be taken to help the employee reach his/her potential. It is difficult for this type of conversation to take place, if the appraisal also is used to allocate rewards (e.g. pay increases, bonuses).

Does the performance appraisal process where you work get used to fulfill more than one purpose? Do you think it fairly measures your performance? What would you change about the system if it was up to you?


For this discussion activity, suppose you work for a company whose performance appraisal process is used to fulfill more than one purpose. Share your views on whether this process fairly measures performance. Draw upon your readings and, if possible, your personal experience to justify your views. Then discuss what you would change about the system if it was up to you. Explain.