PERFORMANCE APPRAISAL SYSTEMS Group A1: Pauline, Swati, Rasmus and Fabienne.

CONTENTS Introduction to Performance Appraisal System Positive and Negative Effects on Motivation Positive and Negative Effects on Behaviours and Teamwork Summary of Disadvantages Conclusion

Performance Appraisal Systems Performance Appraisal (PA) organizes time set aside to discuss performance management within a company. One-on-one discussions. Two way relationships between leaders, managers and employees with the intention to guide individuals towards the organization’s goals. The individual gets feedback on their performance. Action will be taken based on such feedback gathered through these discussions. The purpose of PA is to determine the performance level of individuals in the organizations and to improve the current performance through this feedback.

Positive and Negative Effects on Motivation If not done right – creates de-motivation. If done right – creates motivation (Gomez- Mejia, 1990) Positive effectNegative effect Giving tangible rewards has a positive effect on motivation(Milne, 2007) Appraisal systems which focus on individuals creates a demotivated competitive team culture(Elmuti, Kathawala, & Wayland, 1992) Compliment those who gets motivated for being recognised (Becton, Giles, & Schraeder, 2007) Appraisal systems can ruin the internal motivation some employees have (Becton, Giles, & Schraeder, 2007) Setting, the right goals and expectations motivates(Gomez-Mejia, 1990) Tangible rewards will increase over time- we simply want more (Shore, 2004)

Positive and Negative Effects on Behaviours and Teamwork Positive effectNegative effect Feeling of accomplishmentCreates Low Self-Esteem Identifying Training Needs/ Areas for Improvement Pressure to perform Leadership DevelopmentCreates Biases and Labels Identifying areas of strength encourages to working harder The increasingly widespread teamwork focus in many industries is promoting self-monitoring as a 'people skill'. Thus, self-monitoring may affect performance ratings, particularly in cases where appraisals occur in a team setting in which social skills play a substantial role (Miller et al, 2000). Documented History of Employee Performance Competition between team members Creates Fear Richards (2009)Pearce and Porter (1986)

Summary of Disadvantages Encourages competitiveness, which may eventually demotivate and cause negative social effects between individuals, which will in turn, effect team work. The PA standardizes the individuals. Organizations are made up of different characters who respond differently to different methods of motivation. All team may receive the same amount of credibility. Not a fair conclusion on the individuals in a team who’s work effort and standard may vary, despite their difference in contribution. Negative feedback and pressure may affect the quality of work and cause decreased level of performance.

Conclusion Any PA is successful if followed correctly. However, the areas of difficulty will be due to the individuals varying characters and levels of discipline. It should be up to the employee to be proactive. Employees should be engaged. Employee Engagement: win-win solution. It cannot be required, but only offered by the employee. Employees must engage out of choice. They will promote the brand and be committed to the organization and its values. Promote positive employer-employee relationship; which will help attract and retain employees

References Becton, J. B., Giles, W. F., & Schraeder, M. (2007). Evaluating and rewarding OCBs: Potential consequences of formally incorporating organisational citizenship behaviour in performance appraisal and reward systems. Employee Relations, Pearce, J. L., Porter, L. W., (1986) Employee responses to formal performance appraisal feedback. Duarte, T. N, Goodson, R. J and Klich R. N (1994), ‘Effects of Dyadic Quality and Duration on Performance Appraisal’, Academy of Management Journal, Vol. 37, No. 3, Smart Management (2010), Advantages and Disadvantages of Performance Management, available online at: management/ (accessed ) management/ Richards, L (2009) ‘The effects of performance appraisal on organizational performance’, available online at: performance-1762.html (accessed ) performance-1762.html Elmuti, D., Kathawala, Y., & Wayland, R. (1992). Traditional Performance Appraisal Systems: The Deming Challenge. Management Decision, Gomez-Mejia, L. R. (1990). Increasing Productivity: Performance Appraisal and Reward Systems. Personnel Review, Milne, P. (2007). Motivation, Icentives and organisational culture. Journal of Knowledge management, Janice S Miller, Robert L Cardy. Journal of Organizational Behavior. Chichester: Sep Vol. 21, Iss. 6; pg. 609 Janice S MillerRobert L CardyJournal of Organizational BehaviorSep 2000 Lam, Simon S. K.; Schaubroeck, J. Total quality management and performance appraisal: An experimental study of process versus Individual Approaches. Journal of Organizational Behavior, Jul99, Vol. 20 Issue 4, p445, 12p;