A Review of Performance Appraisal Practices nad Policy Options. A Case Literature

A of Performance Appraisal Practices nad Policy Options. A Case Study on a Local Nightclub - The Plug - Literature review Example An effective, valid, strong and accurate appraisal system for rating the performance of employees is indispensable in ensuring effective functioning of the performance management system and helping the organization attain competitive advantage ((Kuvaas, 2006:506; Boachie-Mensah & Seidu, 2012; Abdulakadir, Isaika, and Adedoyin, 2012:124). The outcome of the appraisal process, the accuracy of employee ratings as well as perceived effectiveness of the appraisal process is critical as such inputs are often used by organizations to make various decisions in promotion and compensation, administrative, and training and development. Performance appraisal systems also make it possible for employees to understand their capability development and their performance, and in this sense keep employee morale high and improve organizational health. This is possible through an effective and fair appraisal system (Boachie-Mensah and Seidu, 2012). Various research studies have explored performance Appra isal systems and the need for such systems to work effectively in organizations. This section reviews literature on performance appraisal practices and policy options by looking at main approaches in performance appraisal, objectives of performance appraisal programs, issues surrounding performance appraisal systems, the managerial role and employee perceptions in performance appraisal, and performance appraisal practices in the entertainment / nightlife industry. Background of Performance Appraisal Performance Appraisal has been in existence since the industrial revolution where it was used a means of monitoring organizational output (Fandray, 2001). However during the earlier days, it was used more as a negative procedure than a positive one. It was often linked to punishment and reactivity to poor performance (Kennedy & Dresser, 2001). This implies that the performance appraisal focused on punishment of employees for poor performance as a way of motivating the employees to perfor mance highly. However, overtime the performance appraisal has continually evolved over the years. Kennedy and Dresser (2001:8) note that, as years passed organizations gradually refined their performance measurement techniques that focused on improving performance, with the trend focusing more on a move towards rewards than punishment. In the past three decades, researchers and practitioners have vigorously and critically analysed and examined the effectiveness of how various performance appraisals are used within different organisational contexts (Kondrasuk, 2011). Though there have been a wide array of studies on effectiveness of performance appraisal system, no consensus has yet been reached concerning what type of performance appraisal universally best meets the desired objectives of various organisational contexts. This implies that different performance appraisal systems are suitable for different organisational contexts. Definition of Performance Appraisal and main approaches Various scholars have defined performance appraisal in a number of ways. Armstrong (2006:450) defined it as steps involved in assessing the performance of employees, recording such performance and providing feedback to the employees. It is a formal employee monitoring system (Cardy & Dobbins, 1994; Ikramullah, et al, 2012: 144), which often involves evaluation of employees performance based on the opinions and judgments of supervisors, workers, managers, peers and subordinates (Jackson & Schuler, 2003:455). On the other hand, Nath (2011:648) defines it as formal procedures employed in evaluating employee’s contributions, possibilities and potentials within an organization. This