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When Appraisal Systems Fail Featured

The French revolution was a peculiar point in history in that quick judgements and vindications were carried out not only for those that were initially perceived to be perpetrators of social injustice, but shortly after, even for those that were deemed to be the paladins of the people. Thus Louis XVI, Marie Antoinette, but also Maximilien Robespierre and Louis de Saint-Just had opportunity to taste the effectiveness of Joseph Guillotine’s nefarious invention. Within organisations, employees often fear the appraisal much in the same way as the French monarchs feared the guillotine and it is important that organisations develop the appropriate processes, technical tools, and the right communication channels to ensure that the employees’ fear is averted.

In what follows, consideration will be given to technical characteristics relating to good appraisal systems, and an attempt will be made to outline how these characteristics can be espoused within the company’s cultural milieu.

In its essence, the performance appraisal system is a measurement tool, which is used by organisations to “assess employees and develop their competence, enhance performance and distribute rewards” (Fletcher, 2001, p. 474). Performanceappraisalsallowmeasurement and comparisons between individuals but also provide persons information relating to their strengths, weaknesses and training needs (Cleveland, Murphy and Williams, 1989; Falcone and Sachs, 2007). Despite holding a strong importance within organisational structures, performance appraisals are one of the human resources activities rated most unpopular among employees (Jackman and Strober, 2003) and have been found to be strongly related to turnover intention, particularly when administered incorrectly (Rudman, 2003).

Performance appraisals interact with political, financial, economic and organisational systems and attempting to manipulate variables in the former without consideration to the latter, could potentially lead to inaccurate interventions (Wiese and Buckley, 1998).

Improving Measurement Ratings

As with all measurement tools, it is important to carry out an evaluation of the system’s effectiveness and measures in relation to reliability, validity and fairness (Armstrong, 2006; Kaplan and Sacuzzo, 1997).

Reliability relates to the consistency of measures (Armstrong, 2006) and in this instance it is important to arrive at a system where consistent ratings are provided over time, across assessors (rater reliability managers rating the same employee in a similar manner), and across work tasks (internal consistency ratings are presented consistently across the different work departments).

Arnold, Silvester, Patterson, Robertson, Cooper and Burnes, (2005) provide criteria for improving assessment procedures. Amongst other factors, the authors suggest the importance of standardisation and structure in the process. Having a common set of procedures for different administrators can allow a more rigorous assessment and strengthening of reliability indices (Arthur, 2008).

Armstrong (2006), reflecting trends in literature, argues for the need of having trained assessors engaged in the assessment process. Training interviewers in the use of performance appraisal rating systems has been found to increase the psychometric strengths of the tools used, as trained raters have been shown to produce ratings that are more accurate than raters who do not receive this training (Arthur, 2008).

Improving The Validity And Employee Reactions In The Performance Appraisal System

Validity relates to the extent to which a tool measures what it purports to measure (Kaplan and Sacuzzo, 1997). Performance appraisals are tools designed to measure ‘performance’ and unless this concept is clearly defined the validity of all ratings becomes immediately jeopardised (Cokins, 2009).

Arthur (2008) suggests that assessment procedures should be job-related and evidence based, meaning that they should have good construct validity (they should cover the domains they seek to assess). ‘Hard’ information such as time taken on tasks, could be coupled with ‘soft’ information such as performance ratings by managers to increase the job-relatedness of any appraisal process. Key Performance Indicators (KPIs) could be identified in collaboration with supervisors and managers within the organisation.

The issue of participant reaction to the use of measurement tools is a growing concern across psychometric instruments (Arnold, et al., 2005), however this is possibly more so in the performance appraisal literature. The concept of employee reactions relates to face validity, but it also extends its domain to attitudes and perceptions. The significance of employee reactions has been highlighted given the risks of legal questioning of the systems and possible litigation. In addition, performance appraisals, when run inadequately, can lead to a reduction in performance and outputs (Rudman, 2003).

Performance Appraisal Systems – Technical Considerations

A distinction that is generally drawn between performance appraisal systems is that of traitbased assessments, which aim at obtaining a rating of the characteristics of the person, and behaviour-oriented ratings, which focus on the presence or absence of key behaviours. There is general agreement that behaviour ratings, particularly when worded in positive terms (Asmuß, 2008), are perceived more favourably than trait based ratings (Arnold et al., 2005).

A procedure aimed at improving the quality of performance ratings is the Behaviourally Anchored Rating Scales (BARS). When using BARS, raters are presented with specific and measurable behaviours associated with discrete points on each scale, thereby allowing a clear delineation of the meaning of each point (Arthur, 2008). More recent developments, have seen the use of the Behaviour Observation Scales (BOS), which also incorporate reference to the frequency of behaviours (Arthur, 2008). Despite technical progress and developments, research has failed to indicate unequivocally the superiority of an approach over another, due to the mixed evidence in the results (Arnold et al., 2005). As a general trend, employee involvement in decision making has been closely associated with employee satisfaction, decreased turnover, and increased citizenship behaviours amongst others (Levinson, 2008). For example, Howard (2005) demonstrated how involvement of employees in the development of BARS scales led to increased ownership of the system and to better outcomes in the systems evaluation.

Tools should assess employees in a fair way, discriminating between them on job-relevant issues, however not as a result of in-group characteristics. There is a general consensus that direct discrimination is unacceptable, however in some instances, tests also encounter challenges in relation to adverse impact, whereby members of one group obtain systematically lower scores than another group (Kaplan and Sacuzzo, 1997). It will be important to ascertain that any performance appraisal system used within a given organisation meets these pre-requisites prior to implementation.

Evaluating The Effectiveness Of The Performance Appraisal System

Devising an appraisal system is an important first task, however equally important is the evidence garnered over time documenting that the system is in fact an effective means for providing feedback, developing employees and handing out rewards.

Evaluating the performance appraisal system itself requires turning the investigative lens towards the tool itself. Despite the importance of evaluation of outcomes, academics and practitioners present limited guidelines in relation to the evaluation of performance appraisal systems (Arthur, 2008).

Levy and Williams (2004) see performance appraisal effectiveness as resting on three main concepts, namely Rater Error and Biases, Rating Accuracy and Appraisal Reactions. Their system calls for an evaluation of the reliability of performance appraisal tools (emphasising rater errors and biases as well as rater accuracy), and validity (with particular emphasis on appraisal reactions).

Rater Errors And Biases And Rating Accuracy

Rating errors and biases, as well as inaccuracies can compromise the effectiveness of a given rating or evaluation system (Levy and Williams, 2004).

The authors argue that the effectiveness of the tool depends on the correspondence of organisational members’ views on constructive behaviour and the information obtained from the appraisal. They suggest that through the use of construct analysis, a qualitative approach featuring interviewing and observation, it should be possible to arrive at the construct of what represents good performance.

Appraisal Reactions

While a tool may provide strong mathematical indices in relation to reliability, validity and fairness, the perception held by the employees is ultimately as significant, if not more so than the numerical properties (Levy and Williams, 2004; Arnold et al., 2005).

This consideration, has led researchers to describe employee reactions as one of the cornerstones for the evaluation of performance appraisal systems. This viewpoint, whilst acknowledging the validity of psychometric information, places due weight on cognitive considerations and individual factors.

Cokins (2009) suggests that higher favourability ratings in performance appraisals can be achieved by adequate notice, fair hearing and judgement based on evidence. In essence, the viewpoint emphasises the importance of the technical merits of the systems, the appropriate communication of such matters to employees and the consistent implementation of the systems.

Feedback on the use of the system should be sought by both the administrators and the employees engaged in the appraisal process.

Tools such as employee satisfaction surveys, could be used to identify a base line estimate on the current standing of the performance system used in the organisation, whilst also presenting additional information on other aspects of organisational functioning (Cokins, 2009).


An effective measurement and reward system can go a long way in promoting a meritocratic culture and can act as a means for motivating and retaining talent within the organisation. When “rolling the dice” in the appraisal system, it is important that technically correct and fair judgements are made in that otherwise there is the very significant risk that the persons judging will end up themselves being the subject of vindication.

Last modified onSunday, 24 May 2015 19:04
Calvin Cassar

Calvin Cassar is currently employed as Human Resources Manager at FTIAS, part of FTI GmbH, a multi-national company operating in the tourism industry. He holds particular interest and expertise in recruitment, assessment and quantitative analyses having gained exposure in these through academic as well as work experiences.

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