Performance appraisal is designed to look backward in order to look forward. In recent years, widespread attention has been paid to the role of performance appraisal as a critical tool in human resource management. The amount of writing in this area has increased dramatically, it is doubtful that significant progress has been made in developing appraisal system that can be both effective and acceptable to users. Bernadin and Smith (1981), for example, concluded that despite all the controversy surrounding various appraisal measures, empirical research suggests that no particular method is clearly superior to the rest.
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Henderson (1981, p. 8) lamented, ” It is unlikely that any managerial problem has so successfully resisted solution than arriving at an acceptable, useful, and valid method for appraising performance. ” It is not very difficult to assemble a long list of reasons why performance appraisal does not or will not work in a particular organization. The problem with most such lists that I have identified, however, is that they tend to ignore the really fundamental issues that determine performance appraisal effectiveness.
The first purpose of this review is to analyze theoretical aspects of performance appraisal system. The second purpose of this review is to discuss and analyze performance appraisal system (EPAP) of Commonwealth Bank of Australia (CBA). This review will summarize some issues/problems related to EPAP and some constraints that exist in CBA. CBA needs to consider and address these issues/problems and constraints to enhance motivation and performance of employees.
This review will also recommend some policies or actions for CBA’s current EPAP based on the assessment. Theoretical Aspects of Performance Appraisal Performance management is about performance. Bates and Holton (1995, pp 32-36) defined performance as “is multi-dimensional construct, the measurement of which varies depending on a variety of factors. ” On the individual basis performance is a record of the person’s accomplishments. Kane (1996, pp 123-45) argues that performance “is something that the person leaves behind and that exists apart from the purpose. ”
Performance management can be defined as a strategic and integrated approach to delivering sustained success to organization by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors (Armstrong and Baron 1998). Bartol et all (2010, p. 405-406) defined performance management as “a collective range of activities conducted by an organization aimed at enhancing individual, group or unit-level performance, with the overarching purpose of improving organizational performance in the long term.
” The scope of performance management process is broader than of the performance appraisal process. Noe et all (2010) believe that performance management is one of the keys to achieve competitive advantage and performance appraisal is one of the three parts of performance management. These three parts are: defining performance (primarily through job analysis), measuring performance (through performance appraisal) and feeding back performance information (through performance feedback).
Performance appraisal (PA) refers to all those procedures that are used to evaluate the personality, the performance and the potential of its group members. Noe et all (2010, p. 351) defines PA as “the process through which an organization gets information how well an employee is doing his or her job. ” PA is not always well designed, applied and used just like any other management activities. However, table 1 will describe why performance appraisal is so attractive to HR management (Bartol et all 2010).
The focus earlier was on ‘what he is’. In PA, the focus is shifted to ‘how he performs’ in work-oriented activities such as job knowledge, accuracy, clarity, analytical mind, ability to carry on operation their logical ends. PA is thus, competence, contribution and commitment and not chance, chemistry and convenience. Management by Objectives (MBO) is an example of performance-based appraisal approach that involves setting objectives and comparing performance against those objectives (Noe et all 2010).