Evolution of Performance Appraisal

 

                  

 

Prior to World War II, performance appraisal systems tended to exclude top management, generally used graphic-rating scales and had just one or two forms for all employees regardless of the job performed or skills necessary (Spriegel, 1962).

In the second decade of 20th century, Psychologists and Sociologist gave a new direction to management thought. More emphasis was given to group behaviour, human relations, morale and motivation. Increase attention was given to the man behind the machine, his behaviour, his observable and measurable traits (Balasubramanian, 2002).

These systems appraised individuals on the basis of previously established performance dimensions, using a standard, numerical scoring system. They focused on past actions instead of future goals and were always conducted by the supervisor with little input from the employee (Wiese & Buckley, 1998).

Historically, performance appraisals have been used for administrative purposes, such as retention, discharge, promotion, and salary administration decisions (Murphy & Cleveland, 1995). However, in this early era, with weak human resource management departments and a lack of understanding of performance appraisal systems, administrative decisions were often made independently of, and even ran counter to, performance appraisals (Whisler & Harper, 1962).

In addition to, and perhaps because of, supervisors who did not take performance appraisals seriously, the unions of this era advocated seniority-based decisions over performance-based decisions. Thus, a loose correlation between appraisal results and administrative decisions was permitted, which gave individual supervisors discretionary power in relation to human resource outcomes e.g. promotions, salary increases (Wiese & Buckley, 1998)

By the early 1950s, 61% of organizations regularly used performance appraisals, compared with only 15% immediately after World War II (Wiese & Buckley, 1998). By the 1950s in America and the 1960s in Europe, around a 50% to 75% of bigger companies had some performance appraisals process (Furnham, 2004).

Efficiency rating systems were used in several forms by US Federal agencies long before its Congress enacted the Performance Rating Act of 1950. The efficiency rating was based on several factors, such as attendance, application, habits, and ability. The system applied to all civilian personnel in the classified service, and their promotions and within-grade pay increased were based solely on the ratings (Comptroller General of the United States, 1978).

In 1957, performance appraisal emerged based on Management by Objectives. Employees were appraised on the basis of shortterm goals, jointly set by the employee and the manager, rather than traits (McGregor, 1957). A shift in the purpose of performance appraisal system towards employee development and feedback came into force (Fedor, 1991) as cited by (Wiese & Buckley, 1998).

In the US, passage of the Civil Rights Act of 1964 and the 1966 and 1970 Equal Employment Opportunity Commission Guidelines for Regulation of Selection procedures created a need for improvement in organizational appraisal practices. These legal considerations exerted strong pressure on organizations to formalize, validate, and organize appraisal systems (Murphy & Cleveland, 1995).

By the end of 20th century, performance appraisal appears to be nearly universal, and the apparent importance of performance appraisal as a tool for managing human resources has increased. Innovative use is now being made in some organizations of a self-appraisal system, especially for managers and higher-level professionals. Advocates of the self-appraisal approach say it has these advantages:

 

• It motivates the incumbent to take more responsibility for his own performance and growth. 
• Appraisal can be performed as often as believed necessary throughout the year because it can be initiated by the person being assessed.
• It can be clearly focused on job behaviour, avoiding confusion with other issues such as compensation, promotion, lateral transfer, or training; 
• Performance ambiguity is decreased, creating the potential for more timely and specifically-focused job behavioural changes (Pratt, 1991). 
  

 

The introduction and growth of strategic performance management systems such as the Balanced Scorecard that cut across organisational levels, linking strategic, operational and individual performance management in organisations. Individual performance management systems start to be aligned to corporate strategies, to create a clear line of sight. Individual objectives and performance measures are based on and continuously aligned with the organisational ones, to enable clear accountability at individual level towards the achievement of organisational goals (Brudan, 2009).

Performance Appraisal Approach and Measure in different timelines are indicated in Table 1.

01. Performance Appraisal Approach and Measure in different timelines

Time Frame	Approach	Measure
3 rd AD	Qualitative judgement on character	How
Pre 1800s	First examples of traits / competencies	How
1800s	Narrative report	What / How
1920s	Task based output e.g., ‘piece work’	What
1950s	Trait-based, critical incident technique	How
1960s	Management by Objective	What
1970s	Assessment Centre	How
1980s	Hybrid	What / How
1990s	Performance Management	What / How
1990s	Competency Development	How
1990s	360 feedback / evaluation	How
1990s	Balanced scorecard	What / How

Source: Mills, 2002

 

Performance appraisals are being used in almost all the organizations across the world in some form. The performance management system has been continuously evolving in every industry to cope up with current scenario, which enables individuals to work in alignment with organisational goal. In 21st century, performance management system has become an integral part of Employee Engagement. Hence, the organizations take their decisions on modifying the system as per their own context. (Rath A, 2018)

 

List of references

 

Ø  Balasubramaniam COL, 2002, Personnel Management, Everest Publishing House, 5th Edition.

Ø  Bruden A, 2009, Integrated Performance Management: Linking Strategic, Operational and Individual Performance, available at http://www.pma.otago.ac.nz/pma-cd/papers/1090.pdf, viewed 12 August 2010.

Ø  Comptroller General of the United States, 1978, Federal Employee Performance Rating Systems Need Fundamental Changes, Comptroller General’s Report to the Congress, Washington D.C, March 3, 1978.

Ø  Dessler G, Gary & Varkkey BIJU, 2011, Human Resource Management, Twelfth Edition, Pearson Publication.

Ø  Fedor DB,1991, Recipient respounses to performance feedback: a proposed model and its implications, Research in Personnel and Human Resources Management, Vol. 9 (annually), 73-120.

Ø  Furnham A, 2004, “Performance management systems”, European Business Journal, Vol. 16, Nr. 2, 83-94.

Ø  Mcgregor D, 1962, an uneasy look at performance appraisal, In T.L. Whisler& S.F. Harper (Eds.), Performance appraisal: Research and practice. New York:Holt: Rinehart and Winston, Inc

Ø  Mills C,2002, Performance Management under The Microscope, Shri Publication, A Historical Flowchart of Performance Management Approaches

Ø  Murphy KR & Cleveland JN, 1995, Understanding Performance Appraisal: Social, Organizational and GoalBased Perspectives, Sage, Thousand Oaks, and CA.

Ø  Pratt HJ, 1991, Principles of Effective Performance Management, ARMA Records Management Quarterly, 25(1), 28. Retrieved November 3, 2007, from ABI/INFORM Global database. (Document ID: 770088).

Ø  Rath A, 2018, “Evolution of Performance Management System”, Volume No.06, Issue 02.

Ø  Spirigel, 1962, Company practices in appraisal of managerial performance, Personnel, Vol. 39, 77.

Ø  Wiese DS & Buckley MR, 1998, “The evolution of the performance appraisal process”, Journal of Management History, Vol. 4 No. 3, 233-249.