All organizations must face up to the challenge of how to evaluate, utilize and develop the skills and abilities of their employees to ensure that organizational are achieved, and also to ensure that individuals gain as much satisfaction as possible from their jobs while making effective contributions. As competition in many markets becomes more intense and global in nature, the importance of performance appraisal has been recognizing as a key element of strategic human resource management (ANDERSON, 1993).
Performance appraisal may be defined by Dessler (1997) as any procedure that involves:Setting work standardsAssessing the employee's actual performance relative to these standsProviding feedback to the employee with the am of motivating to eliminate performance deficiencies or to continue to perform above par.
And four principal activities of the performance appraisal cycle were identified by Mohrman, Resnick-West and Lawler (1989). Illustrated in figure below:Figure The performance appraisal cycleSource: Mohrman, Resnick-West & Lawler (1989)A performance appraisal contains three steps: define the job, appraise performance, and provide feedback.
A wide range of methods are used to conduct performance appraisals, from the simplest of ranking schemes through objective-based, standard-based and competency-based system to complex behaviorally anchored rating schemes (Snape et al., 1994). Such as (Dessler, 1997):1. Graphic Rating Scale Method: it lists traits and range of performance values for each trait.
2. Alternation Ranking Method: ranking employees from best to worst on a trait or traits.
3. Paired Comparison Method: for every trait (quantity of work, quality of work, and so on), every subordinate is paired with and compared to every other subordinate.
4. Forced Distribution Method: it is similar to grading on a curve. With this method, predetermined percentages of rates are placed in performance categories.
5. The Management by Objectives (MBO) Method: it requires the manager to get specific measurable goals with each...