Performance management and appraisal systems often fall short of expectations. Many employees spend half the year trying to forget their last performance review and the other six months dreading their next one.
Instead of creating and maintaining healthy supervisory-employee relationships, performance appraisal is often viewed in a negative way, from the top manager down to the individual worker. Such a negative attitude, of course, isn't conducive to organizational efficiency and employee morale.
In critically reviewing past and present performance appraisal systems, a little perspective on the background of performance appraisals is in order. Performance management is not new. Researchers found a reference to performance management, an "Imperial Rater," in the Wei Dynasty in China which flourished during the third century A.D. Although performance management theory and practice in the United States started with the Industrial Revolution in the late 18th century, the widespread use of performance appraisal techniques with blue-collar employees didn't start until after World War 1. Appraisal systems for measuring managerial and professional employee performance weren't used extensively until about 1955.
The earliest performance appraisal programs during the Industrial Revolution were relatively crude and simple. Workers were evaluated and paid primarily on the basis of quantity output-the number of "pieces" they satisfactorily turned out. Frequently, management provided for bonuses and other tangible rewards to recognize employee contributions to the company.
It was not until later that managers recognized that in many jobs, the quality of work produced also affected an individual worker's impact on the organization. Then, evaluation procedures and compensation plans were expanded to incorporate work quality, in addition to quantity.
Various appraisal systems used were based on standards set up to measure worker performance. In the simplest systems, those standards were established through direct observations by the boss, often with a stop watch in hand. In the more-elaborate systems, detailed standards were developed in advance for every small movement of the worker. For example, you could find in such standards, phrases like reaches two inches," "grasps and pulls upward," or "releases the widget within five seconds," and so forth. Performance elements contained in the stop-watch approach, as well as the detailed worker standards, were then combined in approving time standards for each job on a production line.
Work output gradually shifted from directly-measurable physical activity to more-complex tasks requiring the application of greater skill, knowledge, and ability. That's when more elaborate performance standards or yardsticks became necessary. At first, these yardsticks were very subjective in nature, and were typically based on the supervisor's assessment of the character and personality traits seen in subordinates. The character and personality assessment was then combined with the boss' overall evaluation of quality and quantity of work produced.
Among the personality and character traits assessed were such ambiguous elements as loyalty, honesty, attitude, initiative, cooperation, resourcefulness, and ambition. Many early appraisal systems also covered elements like attendance, promptness, compliance with job instructions, acceptance of responsibility, and adherence to tour-of-duty rules.
Thus, early performance measurement was often highly-subjective and allowed rating officials far too much personal latitude. When faced with worker complaints and appeals of their performance ratings, supervisors had a difficult time explaining their evaluation subjectivity. Management needed a better way to appraise employee performance that would emphasize more job-relatedness and easier-measured elements with the core factors being work quality and quantity. …