Significance of performance appraisal or evaluation systems Essay Example

that affect the company's growth. In essence, a performance appraisal is a method that enables management to identify employees who have performed well and deserve rewards like bonuses, pay raises, training or promotion. Whether referred to as performance appraisal, employee appraisal or evaluation system, this method assesses work-related performance mainly based on quality, quantity, cost and time. It is important for employees to achieve both quality and quantity in their output to become eligible for the rewards system (Wikipedia Contributors, 2007a).

According to Archer North and Associates (2006a), the practice of employee appraisal dates back to the Second World War as a formal management system for evaluating work performance. However, the roots of performance appraisal can be traced to Frederick Winslow Taylor's "time and motion study" during the early 20th century. It is worth noting that while Taylor did not take full credit for this natural occurrence in the field of human resource management, the appraisal is universal because it is human nature to evaluate the performance of immediate people with whom we work and ourselves. This natural tendency to evaluate others leads to subconscious judgment of performance, including subordinates, in a nominal, arbitrary, and informal manner due to the absence of a structured appraisal system.

Unfair judgment procedures in the workplace can lead to serious motivational, ethical, and legal issues (Archer North and Associates, 2006a). Properly conducted employee evaluations offer various benefits, such as recognizing good performance and providing recommendations for improvement. It also allows for open communication between employees and management regarding work-related queries and contributions to the company. Employee feedback can also help improve operations from their perspective (Employee Evaluations). Regular employee

appraisals can help identify and address potential issues early on.

By implementing a comprehensive evaluation system, employees are able to gain a better understanding of the requirements set forth for them. This feedback may include commendations or critique regarding their job performance and professional conduct. In addition to this, performance appraisals can assist managers in identifying praiseworthy employees who deserve recognition or underperforming employees who require close monitoring and coaching to enhance their productivity. Effective communication is crucial in this process as it allows management to accurately determine the needs and issues within the workplace (Employee Evaluations).