The most maligned (and also dreaded) aspect of human resource management is the process of evaluating an employee's job performance-often referred to as "performance appraisal." Yet performance appraisal is helpful to, and often even essential to, accomplishing important goals of all organizations. This article is designed to move closer to an ideal performance appraisal system. Research was conducted to ascertain all problems that are occurring with present performance appraisal systems. A list of 76 performance appraisal problems was reduced to 4 general categories. Performance appraisal systems are improved by rectifying common shortcomings (e.g. reducing biases, training those involved, using formats with research substantiation). However, the most important changes required 1) clarifying the goals of performance appraisal, 2) focusing on both results and behavior appraisals, 3) adding an appraisal category, 4) better timing, and 5) better involving constituencies.
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. …