According to Gillian Hibberd (2011) (strategic director – resources and business transformation – at Buckinghamshire County Council) performance appraisal, after dismissing people, is the task managers do hate performing the most. Since appraisal meetings are essentially held to provide managers and their reports the occasion to plan for the incoming future, whenever the economic landscape is dominated by uncertainty and likely economic hardships this task is perceived by managers as even more unpleasant and trickier. Indeed, many managers consider it as a waste of time at best and as a process hampering performance, rather than improving it, at worst.
- The need for them to justify, during their unfolding, their feedback on their reports performance and support these with practical examples;
- Their lack of skills to effectively chair meetings;
- The insufficient time to properly prepare the meetings.
In order to provide a consistent answer to this question, it is first and foremost necessary to define both performance appraisal and reward management and hence identify the differences, if any, existing between the two.
Albeit a remarkable difference between the two processes does indeed actually exist, some employers, misinterpreting the meaning and scope of each of them, design and introduce performance appraisal systems assuming to have introduced within their business performance management processes; mistake which is very unlikely to produce effective, valuable results.
In general, performance appraisal can be considered as a process aiming at assessing and rating (Armstrong, 2006) or reviewing (Torrington et al, 2008) employee performance.
This definition of performance management is, in general, consistent with that formulated by Armstrong (2006), it is also coherent with the definition of performance management provided by Clark (2005), who suggests that PM aims at establishing “a framework in which performance by human resources can be directed, monitored, motivated and refined, and that the link in the cycle can be audited.”
The distinctive feature of performance management and performance appraisal emerged so far is hence represented by their different nature: PA is seen as a system, whereas PM is seen as a process. Moreover, whilst PA is episodic, usually carried out once a year in occasion of the annual performance review meeting, PM is intended to establish a constant link between managers and individuals. PM hence actually aims at building between manager and employees a relationship based on mutual respect, trust and understanding; whereas PA is based on a top-down relationship.
PM can be hence basically regarded as a forward-looking approach, since the aim of the constant relationship between managers and reports it fosters is essentially based on coaching and favouring the development and growth of individuals. In contrast, PA can be considered as a retrospective journey in the individual previous working year, where managers, very often perfunctorily, “judge” the performance of their reports. It clearly consequently emerges that PM is inspired by the concept of “management by agreement or contract”, whereas PA is based on the concept of “management by command” (Armstrong, 2006).
Whilst PM is indeed intended to establish and nurture a continuous relationship between manager and individuals, PA is based on forms, whose layout is designed and developed by the HR function, which more often than not are destined to be forgotten in some remote organisational archive.
Differently from PA, PM ultimately aims at combining individual and organisation wants and objectives and at finding a common point where these two different needs can meet and be met.
As maintained by Armstrong and Baron (2004), PM has to be intended as a means aiming at helping organisations to determine and settle the objectives individuals are expected to attain, give employees what it takes to achieve those objectives (that is opportunities for training and learning) and influence individuals to behave consistently with the organisational culture and values.
By reason of its direct involvement in the attainment of broader and long-run objectives, PM can clearly be considered strategic, in contrast to PA, which is indeed concerned only with short to mid-run goals (CIPD, 2011). Yet, whilst PM is embracing a whole range of activities aiming at improving the overall organisational performance, insofar as it can definitely be considered holistic, PA is only concerned with individual performance and as such it represents a distinct system, rather than an integrated process.
To accrue employees’ negative perception of PA very often also contributes the lack of clarity as regards the purposes it actually aims at achieving (Torrington et al. 2008). PA can indeed potentially focus on: development, reward, motivation, identification of good potentials and poor performers, but more often than not it turns to be an ineffective tool just because it is expected to cover too many areas, making it difficult for the same managers to identify its final truly objective.
With particular reference to those cases in which PM is extended to an organisation entire staff, the merit element of pay has been deemed as exceedingly irrelevant to motivate staff and in some cases even counterproductive in that perceived as “insulting” by employees (Torrington et al, 2008).
In this case, ad hoc training sessions provided in favour of all of the managers taking the role of appraisers, that is to say consistency workshops, can definitely turn to be very helpful to enable these to use the ratings in a consistent and coherent way and build a “level of common understanding about rating levels” (Armstrong, 2006).
Notwithstanding, the problems emerging in the bid of establishing a direct link between financial reward and PM are not just limited to the measurement aspect. Hendry et al (2000), for instance, claim that achieving the pre-set objectives in a rapidly changing environment is revealing to be increasingly difficult in that the direct control exercised by individuals to the attainment of their own objectives is often sorely limited. Yet, it is simultaneously growing the significance of the impact of the interdependency of the efforts made by different employees, not necessarily working in the same team or group, for the attainment of their or of their colleagues objectives.
Albeit the number of businesses still connecting pay with PM is sensibly declining, there still is in the UK a considerable number of organisations linking PM to pay (Armstrong and Baron, 2005).
Longo, R., (2011), Performance Appraisal V Performance Management, HR Professionals, [online].
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