Question 4 – What are some common employee complaints about appraisal systems that have led to employee negativity and cynicism? What are the costs of an ineffective appraisal system? What are the characteristics of a performance appraisal system that is likely to meet organizational objectives (and reduce the degree of negativity)?

Common employee complaints (Longenecker & Fink):
· Unclear expectations
· Lack of feedback and fairness
· Ambiguous language
· Insufficient merit pay
· Receiving criticism without developmental feedback or ideas on how to improve

Costs of an ineffective appraisal system (Longenecker & Fink):
When appraisals are ineffective, they create a number of serious problems that have a direct, negative impact on performance at a variety of levels.

Employee/manager Level
1. De-motivate employees
2. waste people’s critical time and resources
3. damage the manager–subordinate working relationship
4. stifle employee growth and development
5. frustrate managers;
6. breed added cynicism and negative attitudes among employees and managers alike.

Organizational Level
7. create inaccurate documentation of an employee’s actual contribution to the organization;
8. damage the link between an individual’s performance and his/her corresponding merit pay increase;
9. open the door for potential employee appeals or challenges to the review process and lead to expensive and time consuming litigation;
10. and damage the overall credibility of an organization’s human resources management function

Additional (or variations of) consequences also discussed in lecture:
· less effective employees;
· lower achievement of organizational objectives;
· poor understanding of performance expectations;
· less identification of employees' training & career needs;
· employment decisions (promotion, compensation, termination) may not be backed up by documented

Characteristics of a performance appraisal system that is likely to meet organizational objectives:

(Longenecker & Fink)
Effective system design:
1. clearly defined value-added purpose for appraisals
2. employee/manager involvement in appraisal system design
3. user friendly job related rating forms and procedures
4. properly educated/trained personnel and employees

Effective managerial system practices:
5. effective performance planning
6. ongoing appraisal and coaching
7. raters who are motivated to conduct effective and candid appraisals

Effective appraisal system support:
8. top management support/appraisal practice
9. appraisal outcomes linked to performance ratings
10. ongoing systems review and corrective action

(Lecture notes)
Legal Perspective
· prevail in the event of a lawsuit
· courts require “job-relatedness” and “fairness”

Elements of a legal performance appraisal system:
· Assess critical behaviors essential to successful job performance - focus on work outcomes (in short, related to the job descriptions).
· Clearly define all terms, train raters and develop an appraisal guidebook.
· Justify all ratings in writing.
· Communicate standards of performance.
· Provide feedback of results.
· Develop an effective appeal mechanism