Performance appraisals form one of the most important and effective systems of evaluating business human resources in the modern business environment. This has been the case due to its efficacy in improving the employees’ loyalty, general morale, and productivity which are very essential in deriving the necessary competitive advantage in the market place. Following the high dynamism that has been posted by the modern business operating environment mainly drawn from globalization and technological advancements, the need for performance appraisals has drastically risen.
As George and Scott (2009, 62-65) point out, the concept has been strongly inculcated in most of the businesses as part of their intrinsic culture to enhance continuous growth and development. Though managers as well as scholars have been sharply split over the purposes of performance appraisals and their efficacies in the current business environment, the demand for evaluation has been projected to continue in the present upward as a major guarantee for higher productivity in the future (Mathis and Jackson, 2003, 96-99).
This essay seeks to develop a cohesive analysis of the purposes of performance appraisal and its effectiveness in the modern business environment. To effectively establish this interlink, an inclusive evaluation of the system is given using the related theoretical basements that dictate its general orientation. By reviewing the necessary supportive literature, the essay also provides the necessary examples to support the effectiveness of performance appraisal in the modern business setting in promoting higher productivity.
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Discussion Performance appraisal is a system applied in businesses to assess the employees’ performance in relation to the set targets and objectives. According to Wyco (2003, 17-22), this assessment is linked to the demand for harmonizing the strategic management plans with growth and developmental objectives of a business unit. To add to that, it entails evaluation of the employees potential to determine a company's overall potential in meeting its goals and aims.
One major question that has been posted to the proponents of the system is how to effectively articulate this evaluation without negatively affecting the employees’ morale which is necessary for higher productivity. Finally it assesses the employees’ developmental needs as part of the major facilitating facets in promoting higher performance through staff performance. Unlike the anti-performance appraisal school claims, this system provides a highly integrated system that factors all the underlying factors to generate the most appropriate concussions.
It is worth noting that depending on the type and size of a business firm, the performance appraisal may assimilate a highly diversified nature which is either general or particularistic. According to Sturge (2002, 41-45), performance appraisal was derived as one of the business management tools based on the need to understand how businesses can grow and increase their overall productivity as well as the demand for greater employees’ satisfaction.
It is worth noting as Sturge (2002, 49-53) further explains; all aspects of business operations are based on the need to generate high levels of productivity as the main link to improved profitability. The benefits accrued from performance appraisal are perhaps mostly evident to an organization as a whole. Gerry et al (2008) indicate that application of performance appraisal in organizations greatly improves their overall productivity and profitability from its systems.
The ability to assess and cite the areas that need improvement in an organization acts as the major facet in dictating the levels that can be achieved in its overall performance. Due to the current business environment dynamics, regular assessment provide an organization with the necessary trends that a business is following and therefore offers a major insight for cohesive changes to generate better results.
Though employees form only one single component in a business setting, organizations consider performance appraisals to totally involve all of its branches in that they form the operationalization board upon which all the decision are effected. Besides, it assists in the generation of the culture of change for an organization in search for improvement. As Kurt Lewin indicated in his theory of change management, assimilation of change culture forms the best platform for continuous improvement in an organization (Edward et al, 2006, 54-57).
Bourne et al (2003, 14-19) argues that organizations are like ships sailing in calm waters and therefore subject to changes with time which require clear evaluation and assimilation of the best models that can guarantee its strategic plans achievement. Performance appraisal can therefore be considered to be the main stepping stone for an organization to achieve its strategic goals. As indicated earlier, organizations operate as blocks which must cohere to the central authorities if productivity is to increase and profitability promoted.
Performance appraisals therefore become necessary pointers for areas that require changes in an organization. To the managers of an organization, performance appraisal is of paramount importance as it not only aids in their understanding of the staff, but provides them with the correct platform for enhancing their development. Arguably, the ability of the managers to perfect their duties in an organization is based on their understanding of the operating systems towards the same objectives. The managers’ work is therefore highly simplified in relation to the business objectives and expectations.
During the year 2007 annual report, the management of Coca Cola Company indicated that the paradigm shift assimilated in its performance appraisals since the year 2003 was the main facilitating factor for its managers’ cohesion with the staff and the organizations strategies (Robert, 2008, 34-36). Due to the ability to understand the exact human resources capacity, the management was able to plan for higher productivity without inducing undue pressure to the staff. According to Joan (2008, 56-61), the negative feedback from the staff is strongly facilitated by interlinks between the mangers and employees.
Indeed, as indicated earlier, performance appraisal seeks to bring the staff and the management closer to each other to pro-actively address variant issues relating to productivity. This interlink therefore provides a holistic self perpetuating system with a set of alternative management options from both stakeholders through effective communication. According to Belak (2003, 49-51), the benefits of performance appraisal should be viewed from a holistic point of view where the involved parties input towards higher levels of staff productivity in included.
In this respect, Belak continues to say that staff is one of the most important aspects that an organization have and therefore requires to harmonize its strategies to achieve its overall mission and vision (2003, 59-65). It is from this consideration that the performance appraisal application is oriented at enhancing the staff's satisfaction and strong sense of identity. As Benham (2001, 19-23) indicates, it is the mode of performance appraisal assimilated by a company that dictates its acceptability by the staff.
One of the most remarkable benefits to the staff is the ability of the performance appraisal to establish the need for enhancing the best operating environment for them. Researchers indicate that poor working environment forms one of the major aspects that lead to reduced productivity and profitability. Effectiveness in this case as Delpo (2007, 39-41) put it, is derived from the ability of the staff to have the best tools and equipments for performing the different tasks. Performance appraisal is also beneficial to the staff by seeking their further professional development to be able to perform their tasks with greater levels of efficiency.
In the modern era where most of the business operations are based on application of information technology, performance appraisals recommends further training on particularistic aspects that enhance their overall output. By providing the necessary avenue for their professional development, Jensen (2007, 51-54) argues that the employees joins the global pool of human resources, a notion that strongly generates the necessary sense of identity for them. Jensen (2007, 61-64) continues to say that the sense of identity puts the staff at the international level and thereby increasing their demand both locally and internationally.
According to Langdon (2002, 29-33), upgrading of staff acts as a direct ladder upon which they use to get promotions and increases in their payments. The modern business environment is highly particularistic and dependent on the ability of the staff to professionally dispense their duties. However, as it has become a tradition for most of the business entities, staff promotion are generally based on their experience and recommendations they get from the performance appraisals. Nicholson (2003, 71-79) argues that performance appraisal have turned out to be the main tool in determining the need for promotions in most of the organizations.
Over 20% of the banking institutions in US use the performance appraisals in determining the promotions to be assimilated to staff and their respective rewards. According to Schumann (2001, 93-111), the ability of staff is also advantaged from use of performance appraisal by providing greater levels of communication with the management. As indicated in the definition of performance appraisal, it seeks to establish the different aspects that hinder the staff from effectively dispensing their duties optimally. One of the mostly cited obstacles to high productivity of the staff is poor communication with the staff.
By seeking to enhance higher levels of communication between the employees and the managements, it becomes much easier to address all the problems affecting the staff to enhance higher production from them. Schumann continues to say that the system further generates identity, commitment, and a sense of value for the staff (2003, 93-111). In most of the cases, performance appraisals have advocated for reduction of the general management hierarchy to promote higher levels of autonomy necessary to derive commitment and innovation from them.
In his model of organization cultural dynamics, Hatch indicated that staff should be made to understand their position in the process by creating an enhancing environment that they can embrace and therefore perpetuate (2000, 85-102). As indicated earlier, performance appraisal seeks to establish and therefore promote all aspects of the staff that can promote their performance and therefore raise productivity. One such system is the staff culture that seeks to promote their beliefs and values which determine the general relationship between them.
In this respect, the staff values and beliefs are generally promoted as one of the major objectives to validate use of teams, joint operations, and change demands that result to win win situations for both the organization and the staff. Hatch (2000, 105-106) further indicates that the ability to bring in new ideas into an organization human resources culture is indeed much easier as opposed to its reinvention. Over the years, the terms performance appraisal and performance management have been used interchangeably.
However, this consideration is wrong in that; as performance appraisal indicate consequent reviews with reference to the employee performance; performance management is applied on an extended platform which includes all areas where the people meet like schools, gathering, businesses and meetings among others. To add to that, as performance management seeks to enhance greater productivity and thus profitability from an expanded evaluation of the staff, performance management only seeks to embed technology in the management of behavior and the results (Neal, 2001, 56-59; Nigel, 2006, 65).
It is however generally acceptable that both terms are used with reference to evaluation of performance at different settings. As Silverman (2003, 32-34) indicates, performance appraisal is seen as a management function in most of the business units as opposed to being a challenge. As indicated earlier, management appraisal indicates the need for further formalization of an ongoing process in a business unit to enhance greater productivity. Through conducting periodic performance appraisals, the management is able to generate the necessary information on the areas that require to be addressed to achieve its different objectives.
For instance, the appraisal provide accurate information to the management to enhance effective decision making on the need for further training, higher remuneration, or provision of better working tools among others. Due to the process nature, analysts generally agree that it is highly complex and if given the wrong approach, it may turn out to be a major challenge for organizations. Lack of enough resources at a time when the appraisal calls for establishment of different aspects that require finances like training may turn the process into a major challenge especially to the small and medium enterprises.
Arguably, performance appraisals form one of the best systems upon which organizations can rely on to enhance individual and group performance. According to Roberts (2002, 333-342), performance appraisals seek to generate the necessary standards that the staff can be able to attain and therefore establish all the facilitating frameworks towards the same objectives. In this respect, the individuals become center of focus and the determining force for all the auxiliary facets that can assist in enhancing strategic goals realization.
It is from this consideration that aspects such as further training, competitive remuneration, and establishment of the best reward systems becomes major icons in dictating how well the staff can be able to work in tandem to an organization's main objective of increasing overall productivity. In its management plans, Dell Company Inc indicates the need for performance appraisal to be able to not only raise its profits, but promote the general creativity and innovation that has made it remain on top of the computer production and market (Carla and Leavitt, 2004, 74-76).
As indicated earlier, this notion generates the necessary organization culture that is strongly based on long term profitability of any business enterprises. Over the years, the demand for a holistic system that clearly interlinks the objectives of an organization with the management styles effectively superimposed on the correct organization culture has intensified.
As Hatch (2000, 59-62) indicates, communication forms one of the most important aspects that generate holistic inclusion of the different stakeholders in the management decision making table. Even as some scholars cite possible resistance owing to the employees’ view of the appraisal as part of the main tool to raise their workload and enhance greater surveillance, the notion of effective communication brings out a sense of identity and link between the top management and the lower levels of employees.
Under this consideration, the management uses performance appraisals to generate an understanding of its staff and employees in relation to the overall productivity. As indicated in the definition, effective management should be able to generate empirical understanding of all aspects of an organization production to generate the most effective solution of improving its productivity.
According Nigel (2009, 78-83), performance appraisals provide an intrinsic consideration upon which the management is able to not only get information regarding the staff, but the necessary requirements that can be used to raise its production. Performance appraisals valuable organizations seek to include the staff in the process by enhancing their understanding of the process and therefore providing the best platform for application of its demands. Conclusion
Performance appraisals form one of the most important and effective systems of evaluating business human resources performance in the modern business environment. This has been anchored by the appraisals main purpose in the modern business setting which require harmonic and holistic regular assessment to not only determine employees’ efficiency but generate the best methods that can be assimilated in improving the overall productivity and profitability.
Though scholars and managers have held different views on the purpose and overall ability of performance appraisals to promote productivity and overall profitability, the modern business operations demand clear empirical understanding of all the facilitating facets of the system to generate cohesive harmony in augmenting the human resources to raise their productivity. It came out from the essay that the managers indeed benefits greatly from the appraisals in that their ability to make the correct decisions is strongly anchored by the generated findings.
To add to that, the organization equally benefits from the appraisals in that the whole process is aimed at generating an increased capacity in production and therefore profitability. To the staff as the center of focus by the whole process, the benefits are indeed very many owing to the organizations’ need to facilitate their capacity to increase production from their work. The three main components have been cited to assimilate a general culture of change and therefore generating higher levels of production and profitability too.
It came out clearly that performance appraisals strongly anchor the ability of the management to make the different decisions, by enhancing the necessary feedback of the employees at the lower levels of management. To add to that, the performance appraisals as it was evident throughout the paper, anchors the individual motivation, and creativity through effective cooperation generated by assimilation of the necessary organization culture which interlinks them with the management and the working environment.
It is from this consideration that this paper concludes by calling for inculcation of performance appraisals into all the business operations as the major system of enhancing greater interaction of the management, the staff, and their working environment in raising the overall productivity and profitability. References list Belak, T. 2003. Performance appraisals: are you “punishing” with paper or charting a course for the stars. Louisville, Kentucky: Transformata Publishing. Benham, P. 2001. Performance appraisal: A radical view.
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