The basis of the majority of performance appraisals within the modern workplace is one person (a supervisor or manager) rating another, an inherently subjective process. There are variations such as 360 degree appraisals that include the opinions of others such as customers and peers/colleagues in the process but it is the action of one person passing judgement upon another that is subjective in nature and the root cause of many of the problems encountered in the research associated with performance appraisals.
Performance appraisals are of importance to the organisation, as they often provide the only measure of an individual's contribution and as such the means for identifying either over or under achievement. This information identifies strengths and weaknesses among employees, locating areas for necessary training and development and helps employers implement appropriate reward policies designed to improve the performance of the employees and (as a consequence) the employer (Burns 1996, p.166).
They are often also the only means of evaluating the degree of success associated with the various aspects of the recruitment and selection process. "The most fundamental and most difficult problem in any selection research program is to obtain satisfactory criterion for measures of performance on the job against which to validate selection procedures" (Thorndike 1949, p. 119). From the point of view of an employee, performance appraisals should provide timely and accurate feedback on what the employer expects, how well the employee is meeting those expectations, and what the employee should do to improve his or her performance (Burns 1996).
Modern performance theory and practice started with the industrial revolution in the late 18th century, although the widespread use of performance appraisal techniques didn't occur until post World War I. The earliest appraisal systems, despite focusing on just one measure; quantity output, could perhaps be viewed as...