Purposes and uses of Appraisal

Appraisals serve different organizational and individual needs. Some important are discussed below.

The Conference Board Study:

An extensive study by The Conference Board showed that the objectives of appraisals on the basis of the frequency mentioned were the following:

1. management development,
2. performance appraisal,
3. performance improvement,
4. compensation,
5. potential identification,
6. feedback,
7. work-force planning, and
8. communication

However, when respondents were asked how the companies used appraisals, the ranking differed and showed the following results:

(1) performance feedback
(2) compensation administration
(3) promotion decisions
(4) identification of management development needs
(5) work-force planning and
(6) validation of selection procedures.

The differences between the stated objectives of appraisals and the way they were used may be an important reason for the dissatisfaction with appraisals that was indicated by some of the personnel managers participating on this study. Note also that the objectives and uses of appraisals have a different orientation. In determining compensation, or often even in evaluating performance, superiors assume the role of judges. In contrast, when the aim is to develop subordinates, managers need to be counselors, helpers, and teachers.

The General electric Studies:

Some of the best-known studies on performance appraisals were done at the General Electric Company. The findings of the initial study showed that (1) criticism had a negative impact in goal accomplishment, (2) praise had little effect, (3) specific goals improved performance, (4) critical appraisal resulted in defensiveness and inferior performance, (5) coaching should be done on a day-to-day basis rather than once a year. (6) joint objective setting, not criticism improved performance, (7) meetings with the primary purpose of improving performance should not be conducted at the same time that salary or promotion is being considered, and (8) subordinates’ participation in setting objectives improved performance.

In light of the findings, General Electric developed a new appraisal program called “Work Planning and Review” (WP&R). This new approach emphasized frequent discussions of performance of performance without summary ratings. Moreover, salary actions were discussed at separate meetings. Finally, problem solving and joint objective setting were emphasized. The experience at General Electrical suggests that the two purposes of performance appraisal should be separated because if the appraisal is used as the basis for salary action, the superior assumes the role of a judge, while in the attempt to motivate employees the manager takes the role of a coach. It is through recognizing the split roles in performance appraisal and by setting specific goals mutually agreed upon by the superior and the subordinates that productivity can be improved.

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