The latest edition of one of the most prominent human resource management textbooks (Dessler, 2011) points out that "every manager needs some way to appraise employees' performance" (p. 306), that performance appraisal (PA) will be done in each case--whether by the supervising manager or others (e.g. peers), and "few things managers do are fraught with more peril than appraising subordinates; performance" (p. 321). The appraisal of employee job performance is one of the most important, most common, and probably the most disliked human resource management activity. Others have echoed these points.
Thomas and Bretz (1994) state that PA, as typically conducted, "has remained a largely unsatisfactory endeavor" for years even though it is a very important HRM area; "both managers and employees tend to approach appraisal feedback sessions with fear and loathing" (p. 28). Thomas and Bretz state that managers and employees dislike the PA process because neither was involved in developing the forms nor processes, neither's suggestions for changes are solicited nor acted upon, managers don't like to give nor do subordinates like to receive negative messages, negative PA ratings have negative effects on employee careers and perceptions of their managers, and there are no rewards for taking the manager's valuable time to appropriately conduct the PA. Performance appraisal has been said to be "one of six deadly diseases" that keep organizations from performing at their peak (Staff of Employee Recruitment & Retention, 2010). However, Grote (2010) points out that PA has more influence on individual careers and work lives than any other management process. Performance appraisal can both make a business more efficient and help keep employees motivated. Evaluating people at regular intervals, appraisals help firms show where their employees excel, where they can improve, and how well they have followed the goals set by the firm.
PURPOSE OF THE PAPER
What would be an ideal performance appraisal (PA)? From the supervisor's perspective, it would probably be an appraisal that would be accurate and helpful in improving the employee's job performance and making administrative decisions (e. g. pay raises) about the employee. From the employee's perspective it would probably be an appraisal that would fully capture all that the employee has contributed in the job to the employer and enable continued career growth for the employee. From society's view it would probably be an appraisal that fairly assesses the employee's performance and is used justly in the employment situation to make the organization more useful to society. The purpose of this paper is to develop an ideal PA--or come as close as possible to a panacea in this area. To accomplish this we need to define PA and its goals, understand how PA is usually conducted, list the problem areas encountered in typical performance appraisals, and then propose an ideal PA to meet the concerns. The ideal PA system proposed here will seek to rectify the problem areas and achieve the goals of PA. The ideal PA system is meant to be theoretical but with enough details to make it pragmatically useful now. We start with the general background and the specific definition of PA.
BACKGROUND OF PA
Finding that the typical PA is disliked by both the appraiser and the appraise is not unexpected as it started as a negative procedure. The use of performance appraisals became institutionalized as a way of monitoring organizational output during the Industrial Revolution when bureaucratic organizations proliferated (Fandray, 2001). Use of performance appraisals during this epoch was usually linked to reactivity and punishment for poor performance (Kennedy & Dresser, 2001). In other words, the PA mechanism focused on the threat of punishing employees for poor performance as a means for motivating them to achieve higher performance standards. …