The history of performance appraisal is quite brief. Its roots in the early 20th century can be traced to Taylor's pioneering Time and Motion studies. But this is not very helpful, for the same may be said about almost everything in the field of modern human resources management.
As a distinct and formal management procedure used in the evaluation of work performance, appraisal really dates from the time of the Second World War - not more than 60 years ago.
Yet in a broader sense, the practice of
appraisal is a very ancient art. In the scale of things
historical, it might well lay claim to being the world's
second oldest profession!
The human inclination to judge can create serious
motivational, ethical and legal problems in the
workplace. Without a structured appraisal system, there
is little chance of ensuring that the judgements made
will be lawful, fair, defensible and accurate.
The process was firmly linked to material outcomes. If an employee's performance was found to be less than ideal, a cut in pay would follow. On the other hand, if their performance was better than the supervisor expected, a pay rise was in order.
consideration, if any, was given to the developmental
possibilities of appraisal. If was felt that a cut in
pay, or a rise, should provide the only required impetus
for an employee to either improve or continue to perform
a result, the traditional emphasis on reward outcomes was
progressively rejected. In the 1950s in the United
States, the potential usefulness of appraisal as tool for
motivation and development was gradually recognized. The
general model of performance appraisal, as it is known
today, began from that time.
many organizations - but not all - appraisal results are
used, either directly or indirectly, to help determine
reward outcomes. That is, the appraisal results are used
to identify the better performing employees who should
get the majority of available merit pay increases,
bonuses, and promotions.
Whether this is an appropriate use of performance
appraisal - the assignment and justification of rewards
and penalties - is a very uncertain and contentious
these two extremes lie various schools of belief. While
all endorse the use of performance appraisal, there are many
different opinions on how and when to apply it.
For example, how many people would gladly admit their
work problems if, at the same time, they knew that their
next pay rise or a much-wanted promotion was riding on an
appraisal result? Very likely, in that situation, many
people would deny or downplay their weaknesses.
Such reluctance is not difficult to understand. Appraisers often know their appraisees well, and are typically in a direct subordinate-supervisor relationship. They work together on a daily basis and may, at times, mix socially. Suggesting that a subordinate needs to brush up on certain work skills is one thing; giving an appraisal result that has the direct effect of negating a promotion is another.
The result can be resentment and serious morale damage, leading to workplace disruption, soured relationships and productivity declines.
On the other hand, there is a strong rival argument which claims that performance appraisal must unequivocally be linked to reward outcomes.
The advocates of this approach say that organizations must have a process by which rewards - which are not an unlimited resource - may be openly and fairly distributed to those most deserving on the basis of merit, effort and results.
There is a critical need for remunerative justice in organizations. Performance appraisal - whatever its practical flaws - is the only process available to help achieve fair, decent and consistent reward outcomes.
has also been claimed that appraisees themselves are
inclined to believe that appraisal results should be
linked directly to reward outcomes - and are suspicious
and disappointed when told this is not the case. Rather
than feeling relieved, appraisees may suspect that they
are not being told the whole truth, or that the appraisal
process is a sham and waste of time.
There is also a group who argues that the evaluation of employees for reward purposes, and frank communication with them about their performance, are part of the basic responsibilities of management. The practice of not discussing reward issues while appraising performance is, say critics, based on inconsistent and muddled ideas of motivation.
many organizations, this inconsistency is aggravated by
the practice of having separate wage and salary reviews,
in which merit rises and bonuses are decided arbitrarily,
and often secretly, by supervisors and managers.