Performance appraisal systems have beena common element in the workforce since 1914, when Lord and Taylor Companyinstituted a formal performance evaluation system in which they started ratingtheir employees annually against pre-established performance objectives(Fletcher, 2001). The performance appraisal systems have been a main element ofbusiness management ever since. Since the flourishing of theManagement-by-Objectives (MBO) movement, performance appraisal has become analmost universal element in management. The performance appraisal practice is arguably one of the more crucialones in terms of organisational performance and appears to be an indispensablepart of nearly any human resource management system (Shrivastava & Purang,2011). It can be called performance reviews, annual reviews, merit ratings,performance ratings, employee ratings, or some other title.
Appraisals whichcreate feelings of justice and trust among employees result in increasedemployee motivation. Employees know about their strengths and weaknessesthrough performance appraisal implementation and it also help both employee andmanagers to improve on-the-job performance. Performance appraisal assists inhuman resource planning by analysing training and development needs and byidentifying high level performers in the organisation.
Employees become awareof the organisation’s expectations after performance appraisal, which helpsthem in improving their performance so as to match the organisation’s standards(Dessler, 2011). Performance appraisal has over time been referred to as an instrument orform that is used to assess an employee’s job performance, an interview wherean employee’s job performance is assessed and feedback is given to theemployee, a system of setting employee job expectations, employee actual jobperformance, assessing that performance and feedback to the employee on theperformance assessment and how to improve it in the future or setting new goalsand expectations for another period, or performance management with jobperformance appraisal a part of it (Dessler, 2011). According to Grobler,Warnich, Carrel, Elbert and Hatfied (2006) performance appraisal is animportant element in the development of institutions’ most important resources,employees.
They also declare that the development of employees could not beachieved by any other human resource programme than performance appraisal.Richards (2010) indicated that performance appraisal can provide an indicationof areas of training need as well as direction for leadership development,performance improvement, and succession planning. The performance appraisal canbe referred to a management method where the performances of employees areassessed for reward or punishment. Performance appraisal can be defined as the assessment of employees atthe end of the performance process in order to see how they have performed interms of achieving the targets as set out in the performance agreement andperformance improvement plans. This process is conducted between supervisor andsubordinate. Performance appraisal has been differently defined by manyscholars, some of which are as follows; Performance appraisal is theidentification, measurement, and management of human performance in anorganization (Gomez & Cardy, 2001). According to (Van der Waldt, 2004)performance appraisal is a platformfor performance management by establishing targets and making a range ofdecisions aimed at improving the performance of employees in an institution.
“Performance appraisal (PA) is the ongoing process of evaluating and managing both thebehavior and outcomes in the work place” (Grobler et al., 2006). Performanceappraisal is defined as a structuredformal interaction between a subordinate and supervisor, which usually takesthe form of a periodic interview in which the work performance of thesubordinate is examined and discussed, with a view to identifying weaknessesand strength as well as opportunities for improvement and skills development(Agyenim-Boateng, 2006). Performance appraisal involves measuring job performance in which mainlycaptures an essential element of the performance appraisal process withoutspecifying the actual techniques used for measurement (Kavanagh, Benson &Brown, 2007). The above definitions suggest that, performance appraisal servesas a basis for future decisions since it focuses on reviewing the pastperformance in order to improve the future performance success of theorganisation. Employee Performance An Employee is a primary source ofcompetitive advantage in an organisation.
No matter how solid a business model may be, it definitely needs greatpeople or workforce to back it up and deliver on the company’s promise to theirstakeholders (Boyce, 2014). Carter, Klein & Day (1992) defines performanceas a multi-dimensional concept which covers dimensions such as quality,effectiveness, responsiveness, equity and efficiency. Perceptions on what makes up high ranks oforganisational performance are possible to differ according to stakeholdersgroup which may include both internal and external stakeholders (Walker andBoyne 2006). Employee performance is a behaviourthat is relevant to organisational goals and falls within the control of theemployee or staff (Campbell, McColy, Oppler & Sager, 1992).
Employeeperformance may include; value of productivity, measure of output, timeline ofoutput, commitment to work and employee co-cooperativeness (Gungor, 2011). Accordingto Kumar (2015), employee performance is the action expected of an employee andhow well those actions are carried out. Employee performance which is deemed tobe good has been correlated with improved customer view of the quality ofservice whereas lowly employee performance has been related with immerse clientgrievances especially with regards to organisations who deal with clientsdirectly. Organisations normally assessthe performance of each employee annually in order to aid employees spotrecommended areas that need to be improved.