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Performance Appraisal: A Workplace Dilemma al Affiliation Table of Contents 2 Introduction 3 Purpose of Performance Appraisals 5 Benefits of Performance Appraisals 6 Problems with Current Performance Appraisal Systems 12 Importance of Performance Appraisals and Measures to Improve Effectiveness 15 Discussion 18 Conclusion 20 References 21 Abstract All across the country supervisors have been evaluating their employees on a regular (annual, bi-annual, or on interval, etc.) basis.  These evaluations often become ground or justification for granting a raise, promotion, retention, or even termination.  In the case of termination, or denial of promotion, objectivity becomes of paramount importance.  While many have tried to understand the rationale of the performance appraisal process that has been in place for some time, the method used by supervisors and managers continues to be ineffective in the ever increasing and anticipated request for unbiased reports.  Even though new methods have been developed, there are many parts of the performance appraisal that is still in need of improvement and perfection.   There is a high level of concern on the part of personnel managers to develop standard performance objectives since employees are increasingly resisting signing their annual performance reviews. It is difficult to develop valid measurements when the average job description is generic and responsibilities are often ambiguous. When supervisors are not clear about their expectations, they are often pressured to make unfair decisions about employees based on reputation and hearsay as opposed to a formal means of evaluation. An unbiased appraisal should be consistent with the established objectives. The paper is intended to proffer current practices on performance appraisals in public organizations and to present comparative findings and recommendations that will, hopefully, lead to improvement in employee morale and performance.  Introduction Performance appraisals or evaluations are crucial element of the maintenance function of human resources management. Through it, the employee should receive one’s due share of benefits in terms of remuneration, rewards and sanctions, psychological motivation, wholesome and safe working environment, among others. Performance appraisals are supposed to encourage continuance and stability, not only of the workers, but also of managerial personnel from the frontline to top management. The paper aims to examine and evaluate various practices and policies on performance appraisal systems and procedures as revealed by diverse authors whose researches have been published in peer reviewed academic journals. Likewise, the discourse hereby aims to proffer relevant issues that emerge on performance appraisal as a relevant organizational concern affecting both managers and employees. Diverse peer reviewed academic journals in the area of public personnel management and administration were evaluated in terms of determining parallel issues on the dilemma faced by both supervisors and employees when subjected to the process of performance evaluation. The preparation for the paper required significant reviews, analysis and evaluation of diverse secondary information on performance appraisals in public organizations. The results of reviewing academic journals on the subject are proposed to be presented in the following structure: a presentation of the major dilemma on performance evaluation as seen from two points of views: that of the employees being evaluated, and from the perspective of the managers or supervisors doing the ratings. Concurrently, there were studies that indicate a significant impact of receiving low ratings on employees in terms of future career plans and paths that employees choose to take and the effects on alternative decisions that face the employees: the decision to leave; to seek reform; to stick with the organization; to drop out, or wait for better opportunities. Other relevant concerns such as the benefits of performance appraisals and their validity in improving employee performance and productivity would likewise be discussed. Further, highlights of these secondary sources would be evaluated to determine the importance of fairness, or the presence of biases in conducting performance evaluation within organizations. In addition, the role of incentives or rewards in the design of performance appraisals schemes to effectively motivate employees towards the accomplishment of goals would also be examined. A discussion of the significant findings would be critically analyzed with the objective of determining consistencies or major deviations from one scholarly study to another. The discourse would be followed by suggestions, recommendations on ways of improving performance appraisal process and programs to address the identified problems and to enhance awareness for human resources practitioners in both public and private organizations for possible applications and future research. There were twelve major articles that were reviewed and evaluated with topic ranging from the effectiveness of performance appraisals, its ability to motivate employees, dealing with poor performers, innovations and implications in human resources management, the influence of leadership and trust, and systemic bias. Majority of the authors evaluated the effect of performance appraisal programs and systems on employees of public organizations and federal agencies in terms of assessing prominent problems from the points of view of employees and managers, consequences and effect on the organization, and identifying the most crucial elements that are deemed relevant to categorize performance appraisal systems as effective. After closely reviewing the articles, the paper analyzed the issues that emerged in terms of comparative similarities in contentions and disparities in arguments. Purpose of Performance Appraisals According to Martires (2004), the evaluation of performance is another maintenance function of human resources management which encourages continuance and stability of the work force. Other purposes of performance appraisal revealed from the research were: for compensation (Heneman, 2003); and to provide developmental feedback and to link rewards to performance (Oh & Lewis, 2009). The “provision of clear, performance-based feedback to employees” was cited by Jawahar (2010) from the research of Carrol and Schneier (1982) as one of the primary purposes of formal performance appraisal programs. Reinke (2003) averred that there are two main purposes of performance appraisals: developmental or to focus on growth; and summative to peruse a judgmental approach in evaluating the performance of employees. Likewise, Fox (n.d.) have relayed the purposes of performance appraisals from different perspectives: for managers – as an opportunity for direct control; for personnelists – “rationality, consistency and litigation avoidance” (Fox, n.d., p. 60); and for employees – “it offers recognition and just deserts” (Fox, n.d., p. 60). The determination of organizational effectiveness which is the degree to which objectives of an organization are achieved is a cardinal task of management. The contribution of each employee in attaining these objectives is tantamount to measuring the extent by which the employee has in fact achieved the defined goal. Therefore, performance evaluation is the assessment of achievement of objectives. Brown et al. (2010) averred that performance appraisal is a function of both performance appraisal procedures and treatment focusing on four indicators: clarity of role and purpose, extent of communication and flow of information, level of trust the employee has for their supervisor, and fairness throughout the process. Benefits of Performance Appraisals Longenecker and Nykodym (1996) examined the potential benefits of performance appraisals and revealed that the appraisal process serves as a communication tool, a means to increase motivation and productivity, an arena for discussion of future career prospects for growth and development, as a basis for wage administration, and as a framework for decision making process relative to human resources concerns. Brown, Hyatt and Benson (2010) likewise validated the ability of performance appraisals in increasing employee performance and productivity through “greater employee identification with the commitment to objectives of the organization (Brown et al., 2010, p. 377); financial incentives which are contingent on performance (Brown et al., 2010, p. 378) and through encouragement of retention. Likewise, Eremin, Wolf and Woodard (2010) acknowledged the critical role of performance appraisals in merit based pay system. Fox (n.d.) has emphasized the benefits of performance appraisals only in terms of servings as tools to identify weaknesses; provides opportunities to communicate personal development goals, and presents the most appropriate devise for accurate documentation for personnel matters (p. 61). Table 1, shown on the next page, illustrates the results gathered on the advantages and disadvantages of performance appraisals, together with the purpose or hypotheses of each research and the corresponding findings, as gathered from various secondary sources. Table 1: Advantages and Disadvantages of Performance Appraisal Source Purpose/Hypotheses Advantages of Appraisal Disadvantages of Appraisal Findings/Arguments  Longenecker and Nykodym “to explore the potential benefits and problems associated with performance appraisal in the public sector and discuss ways to improve this pervasive practice” (p. 151)  communication tool; means to increase motivation and productivity; arena for discussion of future career prospects for growth and development; basis for wage administration; framework for decision making process    “AP was conversely perceived as being less to effective… as a vehicle for improving the employee motivation or performance and linking merit pay to employee performance” (p. 157)  Brown, Hyatt and Benson 1st:“a low quality PA experience will be associated with lower levels of job satisfaction relative to those with high or mixed quality PA experiences (p. 380). 2nd: “a low quality PA experience will be associated with lower levels of organizational commitment relative to those with high or mixed quality PA experiences” (p. 381). 3rd: “a low quality PA experience will be associated with higher intention to quit relative to those with high or mixed quality PA experiences (p. 381).  greater employee identification with the commitment to objectives;  rating poor performers  1st: Low quality experiences are associated with lower levels of job satisfaction (p. 389) 2nd: There is a significant negative relationship between low quality PA experience and organizational commitment. 3rd: There is a negative relationship between the quality of the PA experience and intention to quit (p. 390). Stratton Identified problems from review of literature; presented grievance procedure; and conditions and formats for appeal are discussed and effective format recommended. Troublesome (Latham & Wesley, 1981, p.1); Components are susceptible to error (Landy & Farr, 1980); disagreement between accuracy and legitimacy of standards are common (Nash & Carroll, 1975); and intentional and inadvertent biases. There is a need to establish an appeal system to benefit management more than employees (p. 177).  Eremin, Wolf and Woodard  “employees’ grade level does have an effect on their annual performance evaluation ratings” (p. 13).  merit based pay system  issue of fairness and equity; lack of trust in management, and lack of resources or money for rewards The performance rating of an employee is affected by grade level; and hierarchy may have an effect on fairness of assessment system as the assessment process is grade biased (p. 16).  Daley  “the greater the difficulty a supervisor has with performance assessment, the performance improvement plan, and management support, as well as with the more specific functions related to adequate time for the process to work, training, and whether the employee is still in the work unit, the greater the likelihood for exit and neglect and a decreased expression of voice and loyalty” (p. 52).    need to exercise objectivity in identifying performance problems; lack of management support Dealing with poor performance is part of supervisors’ job; difficult issues are faced by supervisors in terms of objectively identifying performance problems, management support; and time consumed to address these problems; and further work on interrelationships between E-V-L-N is needed Reinke   “to measure employee and supervisor acceptance of the appraisal process and explore variables that may shape this acceptance” (p. 24).    unfair perception of employees  Trust is “the most important predictor of an attitude toward a performance appraisal process, in this instance, acceptance of the process” (p. 33). Understanding of the system is relevant. Fox  Aims to present persuasiveness, problems and stances HR professionals take regarding performance evaluations  servings as tools to identify weaknesses; provides opportunities to communicate personal development goals, and presents the most appropriate devise for accurate documentation for personnel matters  objectivity, accuracy of rating instruments, disappoints majority of the workforce  They should be abolished or their use subverted (p. 67).   Problems with Current Performance Appraisal Systems While eminent advantages are presumed to be realized from performance appraisal systems, some research have divulged the presence of biases due to various factors, to wit: favoritism and politics (Heneman, 2003) and issue of fairness and equity, lack of trust in management, and lack of resources or money for rewards (Eremin, et.al, 2010). On the other hand, supervisors expressed difficulties in handling poor performers as revealed from appraisal reports due to the need to exercise objectivity in identifying performance problems (Daley, 2008). Management support was likewise another factor stated by Daley (2008) as precluding plans for performance improvement. Further, the time consumed to address performance problems tend to neglect other pressing responsibilities. An article written by Eremin, Wolf and Woodard (2010) examined and verified the existence of systemic bias by evaluating performance appraisal ratings from three federal agencies (U.S. Department of Education, U.S. Department of Housing and Urban Development, and the Environmental Protection Agency) (Eremin et al., 2010, p. 7). The effect of perceived presence of biases in performance appraisals were revealed to have a crucial and significant impact on its ability to create a positive stance on employee performance and on its goal of providing equitable compensation. The unfair perception of employees on the performance appraisal system is likewise noted in the study conducted by Reinke (2003) as the author noted that the human factor in the process is highly contributory to producing bias. Further, the author revealed that there are eminent factors that were identified to have increased the propensity for fairness and acceptability of the rating system. These factors are: rating form, organizational characteristics, individual characteristics, predicted by frequency of appraisal, supervisors’ knowledge of ratees’ duties and level of performance, level of mutual goal setting, favorability of the appraisal, two-way communication in appraisal interview, and perceived job relevance (Reinke, 2003). The element of trust was isolated and considered “the most important predictor of an attitude toward a performance appraisal process, in this instance, acceptance of the process” (Reinke, 2003, p. 33). Factors such as credibility (based in perceived trustworthiness and expertise); ability (skills and competency); benevolence (“the extent to which a trustee is believed to want to do good to the trustor” (Mayer, Davis, & Schoorman, 1995, p. 719); integrity (behavior according to principles); and leadership that are deemed crucial to establish trust in the employee – supervisor relationship. The role of managers, as leaders in the rating process is perceived by employees as instrumental in providing either a fair and accurate rating or a biased one. This was validated by Gabris and Ihrke (2000) when they emphasized that “leadership behaviors play an important role in shaping employee attitudes toward the appraisal process” (35). Concurrently, the problem of rating poor performers is discussed in the study conducted by Brown et al. (2010) regarding significant repercussions in terms of future performance of employees’ deemed to be given low ratings. The authors discussed the impact of low quality performance appraisals to three indicators of efficiency (job satisfaction, organizational commitment, and intent to quit) (Brown et al., 2010, p, 376). Daley (2008) identified consequences of performance appraisals as fourfold measure of organizational engagement: Exit (E) – decision to leave; Voice (V) – seek reform; Loyalty (L) – stick with the organization; and Neglect (N) – drop out or wait for better opportunities. Daley’s (2008) findings originated from Albert O. Hirschman’s Exit, Voice and Loyalty typology of responses to dissatisfaction indicating that employees respond in patterns identified as either leaving the organization (exit), actively seeking reform through voicing out their resentments; or deciding to ultimately remain in the organization and be loyal despite job dissastifaction (Hirschman, 1970). Brown et al. (2010) revealed negative relationships between low quality performance appraisal experience and organizational commitment, and intention to quit. Daley (2008) indicated that “the less support supervisors feel they receive from upper-level managers, the more likely they are to consider exit, the less voice they sense, the less loyalty they possess, and the more neglect they exhibit” (Daley, 2008, p. 54). Fox (n.d.) noted problems in performance appraisals in terms of concerns on objectivity, accuracy of rating instruments and has revealed that the tool actually disappoints majority of the workforce (p.65). Fox (n.d.), likewise cited Becker and Klimoski (1989) to support the finding that there exists a direct relationship between low ratings and poor performance. As averred, “it is possible that [incidents of negative feedback] are disheartening and, as such, de-motivating; in fact, such events may build resentment on the part of the subordinate. Thus, negative expressions may not only stem from, but also lead to poorer performance” (Becker and Klimoski, 1989, p. 356). Importance of Performance Appraisals and Measures to Improve Effectiveness The need for performance appraisals and evaluation, despite issues of biases and difficulties in application and in addressing poor performers, was deemed relevant and worthy by both managers and employees (Longenecker & Nykodym, 1996). The relevance of the performance appraisals in organizations was likewise contended by Roberts & Pavlak (1996) as recognized by both employees and managers. The challenging issues that face organizations is designing an appropriate and effective performance appraisal system free from biases and serves clearly identified goals. As suggested by Eremin et al. (2010), biases could be addressed through a closer evaluation of current performance evaluation systems and by increasing the training of evaluators. Longenecker & Nykodym (1996) presented both managers’ views and subordinates’ perspectives on improving the performance appraisal system. The authors disclosed that managers suggested more resources to reward exemplary performance (consistent with more employee involvement and increased training for managers. From among the available rewards as disclosed by Eremin et al. (2010), the following are pronounced: financial incentives, performance rewards (spot rewards, special act), training opportunities, special assignments, public recognition, and promotion opportunities, among others. On the other hand, subordinates suggested that for performance appraisal systems to be improved, organizations must focus on the evaluators’ (or managers’) need to engage in effective planning, monitoring and solicitation of feedback (Jawahar, 2010). Concurrently, from the points of view of subordinates, an effective performance appraisal system must be have clarity in standards, an environment clear of negatives, preceded by ongoing feedback, and conducted by well prepared and knowledgeable managers (Longenecker & Nykodym, 1996). Table 2 summarizes comparative perceptions of the managers and subordinates’ on performance appraisals in public organizations from the secondary sources reviewed herein: Table 2: Managers and Subordinates’ Perceptions of Performance Appraisals SOURCE MANAGER’S PERCEPTIONS SUBORDINATES’ PERCEPTIONS  Longenecker and Nykodym AP was effective as tools for communication and improving manager-subordinate relationships AP was ineffective as tools for communication and improving manager-subordinate relationships Longenecker and Nykodym An effective AP depends on: clarity in standards environment clear of negatives preceded by ongoing feedback conducted by well prepared and knowledgeable managers Longenecker and Nykodym Improvement must focus on: design issues spread appraisals over the year reduce the amount of paperwork clarification of AP purpose operational perspectives increase consistency in ratings reduce divisiveness support issues effective appraisals suggestions for rater training Improvement must focus on: manager needs appraisal effectiveness improvement thru more effective planning more ongoing feedback better monitoring Daley Costs of poor performers in the organization are: lost productivity, bad examples set for other personnel, and inefficiency in team effort Lovich, Shaffer,Hopkins, & Yale Supervisors are less favorable for employee involvement in performance appraisals (p. 221) Employees are more favorable for participative involvement in performance appraisals (p. 220) Interestingly, Daley’s hypothesis indicated as “the greater the difficulty a supervisor has with performance assessment, the performance improvement plan, and management support, as well as with the more specific functions related to adequate time for the process to work, training, and whether the employee is still in the work unit, the greater the likelihood for exit and neglect and a decreased expression of voice and loyalty” (Daley, 2008, 52), was duly supported. Lovich, Shaffer, Hopkins & Yale (1980) have revealed that despite disparities in the degree of employee involvement and participation in the performance appraisal programs, both acknowledged to a parallel degree the crucial relevance of undertaking these performance evaluation programs for merit based purposes. Despite the difficulty in handling performance assessment, supervisors acknowledged that performance appraisals are part of their functions as managers and leaders. The current research could use this information to focus on ways of addressing biases and on improving the appraisal and evaluation systems after taking into consideration the relevant factors noted by various authors. Discussion The highlights of the findings proffered by various authors emphasize the relevance of performance appraisal systems despite the presence of clearly identified workplace dilemma. Both employees and managers confirm that performance appraisals are a valuable tool to serve their defined purposes of monitoring the developmental progress of employees and thereby enable decision makers to appropriately link performance to compensation or a system of compensation and rewards. The findings have likewise confirmed the presence of biases where the performance rating of an employee is affected by grade level and hierarchy may have an effect on fairness of assessment system (Eremin et al., 2010, p. 16). Despite validation to the perceived unfairness and accuracy, human resource management practitioners have persistent to contend that there are ways to address this particular dilemma. A closer and more objective evaluation of the appraisal systems need to be undertaken The effectiveness of performance appraisal systems was revealed to be based on factors perceived by employees and managers differently. Longenecker and Nykodym (1996) averred that for an appraisal system to be effective, the following aspects must be addressed: satisfies the needs of parties involved; requires skills and willingness of managers to do so; and there is a shared understanding of purpose by managers and employees. As eventually revealed, managers deemed to consider appraisal performance more favorably than subordinates. Both personnel and managers strongly believe that there is a need to improve current appraisal systems to ultimately categorize them as effective in addressing the respective needs. Subordinates indicated and expressed from the study of Longenecker and Nykodym (1996) that an effective appraisal system should satisfy the following elements, to wit: clarity in standards; a working environment clear of negatives; an appraisal system that is preceded by ongoing feedback; and finally, conducted by well prepared and knowledgeable managers. Managers have been found to focus on three distinct issues that need to be enhanced: design issues, operational perspectives and support issues (Longenecker and Nykodym, 1996). On the hand, subordinates expressed the need to center on the managers’ ability to conduct performance appraisals through: more effective planning, more ongoing feedback, and better monitoring. The crucial role of feedback as both an appraisal and management tool was validated and supported by Jawahar (2010) as influencing ratees’ future performance in the organization. Other recommendations are worth noting: (1) there should be a shift of focus from ‘job’ to ‘work’ evaluation (Heneman, 2003); (2) a properly developed appraisal performance can serve both managers and subordinates (Longenecker and Nykodym, 1996); (3) employees with low quality performance appraisal ratings were more likely to be dissatisfied with the job, be less committed to the organization, and more likely to contemplate leaving the organization (Brown, et.al, 2010). As the purpose of performance appraisal is to determine the development and progress of the personnel to appropriately link remuneration and rewards, the relevance of ensuring that these systems adhere to the standards perceived by both employees and managers to be effective, accurate, and fair are crucial. Finally, there is a direct link that supports the level of employee satisfaction to financial performance (Marketing Innovators International, Inc., 2005). It has been clearly validated that “satisfied employees generate satisfied customers, who in turn build long-term relationships—and spend more money” (Marketing Innovators International, Inc., 2005, p. 6). With the correlations effectively verified and supported, both public and private organizations must work towards addressing systemic biases and improving the system to reinforce the fact that performance appraisals would never be a workplace dilemma. Conclusion The current research has presented diverse practices on performance appraisals in public organizations from a review of various literatures on the subject. Comparative findings focusing on the purpose of performance appraisals, as seen from the perspectives of human resources practitioners, including managers and employees were determined; as well as the benefits and problems that were identified by an array of experts and professionals on this field of endeavor. The most crucial finding of the paper reveals that despite the disparities in contentions on the role, use and importance of performance appraisals, both managers and employees continue to acknowledge its need as a tool for gauging employee’s performance and as a basis for meritorious remuneration. By exposing the dilemmas and the suggested focus for improvement, hopefully, future efforts and research would center on techniques and measures that would lead to improvement in employee morale, through justifiable and equitable performance appraisal programs, not only in public organizations, but in private enterprises, as well. References Becker, T. E. & Klimoski, R. J. (1989). “A Field Study of the Relationship between the Organizational Feedback Environment and Performance.” Personnel Psychology, 42(2), pp. 343 – 358. Brown, M., Hyatt, D. & Benson, J. (2010). “Consequences of the Performance Appraisal Experience.” Personnel Review, Vol. 39, No. 3, pp. 375 – 396. 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