Human resources management is getting more important nowadays as it helps company to accomplish their target, and achieve sustainability and competitive advantage. According to many researchers, most of the successful companies in 21 century are the one who focused on the development of integrated human resource system. Human Resource Management focuses on personnel related areas such as job design, resource planning, performance management system, recruitment, selection, compensations and employee relations (Marquardt 2004, p.2).
Kumar’s 2005 study (cited Newstrom and Davis, 1993) show that a generation ago, appraisal systems tended to emphasize employee traits, ...view middle of the document...
2.0 Performance Appraisal (PA)
2.1 Definition of Performance Appraisal
The term “performance appraisal” refers to the assessment, at regular period of time, of an employee’s performance at work.
Performance appraisal has been defined as the distinct, formal, organizationally sanctioned event, usually occurs once or twice a year, which has clearly stated performance aspects or criteria that are used in the evaluation process. Other than that, it is an evaluation process, where quantitative scores are assigned based on the judged level of the employee’s job performance on the dimensions used, and the scores are shared with the employee being evaluated. (Denisi and Pritchard, 2006)
2.2 Purpose and advantages of the performance appraisal
Understanding the role, objectives, benefits and purpose of PA is important to all employers. Base on Malcolm and Jackson (2002), there is three main purpose of appraisal. First is to measure the extent to which an individual may be awarded a salary increase compared with his or her peers. This is the reward review component. Second, performance review, is to identify any training needs and, if needed, to provide training and development to enable an individual to help the organization to achieve its objectives. Finally, potential review where appraisal is used in reviewing the potential of an employee by attempting to predict work that the employee may be capable of in the future.
Appraisal systems was exist to improve organizational efficiency by ensuring the employees perform to the best of their ability, develop their potential, and earn suitable reward. The appraisal process is all about the direct communication between supervisor and employee. Usually, employee will be given feedback from the supervisor. The feedbacks help to direct the individual to the organization goals. Besides, the employee will know how they are performing and where they could improve from the feedback. Managers identify the strengths and weaknesses of the employees so that new jobs can be designed for the employees.
There is no doubt that, performance appraisal can help to improve the employees’ performance and hence the overall organization performance will increase via productivity, efficiency and customer services. Based on Coyle-Shapiro and Conway (2004), employees who receive developmental program from the organization tend to be more loyal and obligated to repay the organization through high work performance. Moreover, employees who involved in developmental activities would have the perceptions of being value and being part of the organization. Therefore, they will probably reciprocate by way of higher affective commitment to the organization (Lee and Bruvold, 2003). The organization is benefits through identifying quality employees, noting areas for employees’ improvement, and by using the system as a basis for human resource planning.
2.3 Disadvantages of Performance Appraisal
Usually, the main rater of performance...