PERFORMANCE
APPRAISAL SYSTEMS
Group A1: Pauline, Swati, Rasmus and
Fabienne.
CONTENTS
• Introduction to Performance Appraisal System
• Positive and Negative Effects on Motivation
• Positive and Negative Effects on Behaviours and
Teamwork
• Summary of Disadvantages
• Conclusion
Performance Appraisal Systems
• Performance Appraisal (PA) organizes time set aside to
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discuss performance management within a company.
One-on-one discussions.
Two way relationships between leaders, managers and
employees with the intention to guide individuals towards
the organization’s goals.
The individual gets feedback on their performance.
Action will be taken based on such feedback gathered
through these discussions.
The purpose of PA is to determine the performance level
of individuals in the organizations and to improve the
current performance through this feedback.
Positive and Negative Effects on
Motivation
If not done right – creates de-motivation.
If done right – creates motivation (Gomez- Mejia, 1990)
Positive effect
Negative effect
Giving tangible rewards has a positive
effect on motivation(Milne, 2007)
Appraisal systems which focus on
individuals creates a demotivated
competitive team culture(Elmuti,
Kathawala, & Wayland, 1992)
Compliment those who gets motivated
for being recognised (Becton, Giles, &
Schraeder, 2007)
Appraisal systems can ruin the internal
motivation some employees have
(Becton, Giles, & Schraeder, 2007)
Setting, the right goals and
expectations motivates(Gomez-Mejia,
1990)
Tangible rewards will increase over
time- we simply want more (Shore,
2004)
Positive and Negative Effects on Behaviours
and Teamwork
Positive effect
Negative effect
Feeling of accomplishment
Creates Low Self-Esteem
Identifying Training Needs/ Areas for
Improvement
Pressure to perform
Leadership Development
Creates Biases and Labels
Identifying areas of strength
encourages to working harder
The increasingly widespread teamwork focus in many
industries is promoting self-monitoring as a 'people skill'.
Thus, self-monitoring may affect performance ratings,
particularly in cases where appraisals occur in a team
setting in which social skills play a substantial role (Miller
et al, 2000).
Documented History of Employee
Performance
Competition between team members
Creates Fear
Richards (2009)
Pearce and Porter (1986)
Summary of Disadvantages
• Encourages competitiveness, which may eventually
demotivate and cause negative social effects between
individuals, which will in turn, effect team work.
• The PA standardizes the individuals. Organizations are
made up of different characters who respond differently to
different methods of motivation.
• All team may receive the same amount of credibility. Not a
fair conclusion on the individuals in a team who’s work
effort and standard may vary, despite their difference in
contribution.
• Negative feedback and pressure may affect the quality of
work and cause decreased level of performance.
Conclusion
• Any PA is successful if followed correctly.
• However, the areas of difficulty will be due to the
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individuals varying characters and levels of discipline.
It should be up to the employee to be proactive.
Employees should be engaged.
Employee Engagement: win-win solution. It cannot be
required, but only offered by the employee.
Employees must engage out of choice. They will promote
the brand and be committed to the organization and its
values.
Promote positive employer-employee relationship; which
will help attract and retain employees
References
• Becton, J. B., Giles, W. F., & Schraeder, M. (2007). Evaluating and rewarding OCBs: Potential
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consequences of formally incorporating organisational citizenship behaviour in performance
appraisal and reward systems. Employee Relations , 494-514.
Pearce, J. L., Porter, L. W., (1986) Employee responses to formal performance appraisal feedback.
Duarte, T. N, Goodson, R. J and Klich R. N (1994), ‘Effects of Dyadic Quality and Duration on
Performance Appraisal’, Academy of Management Journal, Vol. 37, No. 3, 499-521
Smart Management (2010), Advantages and Disadvantages of Performance Management, available
online at: http://smartchurchmanagement.com/advantages-and-disadvantages-of-performancemanagement/ (accessed 02.02.2012)
Richards, L (2009) ‘The effects of performance appraisal on organizational performance’, available
online at: http://smallbusiness.chron.com/effects-performance-appraisal-organizationalperformance-1762.html (accessed 02.02.2012)
Elmuti, D., Kathawala, Y., & Wayland, R. (1992). Traditional Performance Appraisal Systems: The
Deming Challenge. Management Decision , 42-48.
Gomez-Mejia, L. R. (1990). Increasing Productivity: Performance Appraisal and Reward Systems.
Personnel Review , 21-26.
Milne, P. (2007). Motivation, Icentives and organisational culture. Journal of Knowledge
management , 28-38.
Janice S Miller, Robert L Cardy. Journal of Organizational Behavior. Chichester: Sep 2000. Vol. 21,
Iss. 6; pg. 609
Lam, Simon S. K.; Schaubroeck, J. Total quality management and performance appraisal: An
experimental study of process versus Individual Approaches. Journal of Organizational Behavior,
Jul99, Vol. 20 Issue 4, p445, 12p;
www.cipd.co.uk/hr-resources/factsheets/employee-engagement