Review of literature addressing individual performance appraisal



Armstrong (2006, p. 497) defines performance as 'a matter not only of what people achieve but how they achieve it' and Williams (2002) adds 'performance is something that people actually do and can be sealed in terms of each individual's proficiency. Performance consists of goal directed actions that are under the control of the individual, regardless of whether they are cognitive and motor or interpersonal.'

Both Armstrong's and William's definitions of performance clearly indicate that performance is more than about outputs or results, it is also pertains to the actions or behaviours displayed or illustrated to achieve results.

The LGPS has a need to manage performance as the Ministry of Education in its strategic plan has set benchmark standards in its drive for 'Quality Education For All'.  In this plan the focus of government's policy is a comprehensive modern education system backed by knowledge, skills and aptitudes attained by individuals. As indicated in the background the school has not been achieving desired and agreed results. In terms of output the school has been below average and it is believed by the administration of the school that the results of the school are contributed by the behaviours of the teachers.

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Due to the issues with performance at LGPS 'measurement is an important concept. It is the basis for providing and generating feedback, it identifies where things are going well to provide the foundations for building further success, and it indicates where things are not going so well, so that corrective action can be taken.' Armstrong (2006) This definition may help LGPS strongly based on the service provided at the school. It identifies strengths and how to pursue them as well as the weaknesses and how to develop and capitalize on them. Performance agreements also play a pivotal role in measuring and managing performance also as they 'define expectations in the form of a role profile that sets out role requirements in terms of key result areas and competencies required for effective performance. It describes what individuals are expected to do but also indicates what support they will receive from their manager.'(Armstrong 2006, p. 504) It is a method that can be used for establishing expectations, accountability and consequences for not meeting a standard of excellence. The purpose therefore of these agreements is to establish and ensure quality performance criteria are met. According to Armstrong and Baron (1998) 'many organizations use SMART (Specific, Measurable, Agreed, Realistic, Time related) criteria to measure performance.

At LGPS the performance agreement is known as the syllabus which must be completed at the end of the school's year. The syllabus outlines what is required to be taught in each subject area for every class. Once a teacher agrees to teach a particular class; both the principal and teacher then agree on the actions the teacher will execute and agree on the expected results from executing those actions. Although this process is seen as a psychological contract between the parties, it gives clear role definitions, accountability and staff development to improve performance and their career progression, in future (Fletcher 2004). The concept of psychological contract is supported by the views of (Boxall and Purcell 2003) who state that 'it could be useful in analysing the quality of individual employment relationships within the firm.' Consequences or reprimand should follow if the performer does not deliver as agreed.

Two alternative ways of measuring performance are the competency based approach which is based on three stages; know how, know and know when (Rauls, 2001) and the balanced score card (Kaplan and Norton 1992).

Performance Appraisal and Performance Management

'People often confuse performance appraisal and performance management believing that they are one and the same.' (Bacal, 2004, p.5)

Armstrong (2006, p.500) outlines 'performance management is a continuous and much wider concept than performance appraisal, more comprehensive and more natural process of management that clarifies mutual expectations, emphasizes the support role of managers who are expected to act as coaches rather than judges, and focuses on the future.'

Performance management system takes into consideration the objectives of the organization therefore giving a holistic view of an employee's performance. On the other hand performance appraisal is an integral part of this system as it is essential to achieve the organization's desired outputs. Performance appraisal identifies and allocates responsibility to the appropriate persons with the corporation that can realize the organization's goals in the short and long terms.

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According to a CIPD (2005) survey performance appraisal is often the central pillar of the performance management process. It was discovered that 65% of organizations survey used individual annual performance appraisal and 27% twice yearly.

LGPS performance management system is known as Performance Management Appraisal Process (PMAP). During the school year there are regular "class checks". This is where the principal visits the teacher's class and there is a review of what has been taught in the classroom and if it is in line with the syllabus and how are the students responding.

Another element of the PMAP system is the performance appraisal which is conducted annually by the principal and vice principal with teachers.

The researcher is of the view that if the administration of the school does not fully understand the differences neither of the systems will be effective. The administration of the school should note that performance appraisal is the vehicle by which the organizational goals and objectives are translated into individual objectives (Fletcher 2004).

Bacal (2004, p.5) argues that a manager should communicate about performance all year long. At LGPS the administrators can consider to share information about work progress, potential barriers and problems, and how the manager can help the employee.' (Bacal, 1999,p.69)

From the organization perspective, successful performance management is key to achievement of corporate goals. It is argued that performance appraisal is the central component of performance management, and so it must be that for an organization, the purpose of appraisal is attainment of corporate goals.

Performance Appraisal

Armstrong (2006, p. 500) defines performance appraisal as 'the formal assessment and rating of individuals by their managers at, usually, an annual review meeting.' This view is expounded by Coens and Jenkins (2000, p. 14) add that 'performance appraisal is a mandated process in which, for a specified period of time, all or a group of employees' work performance, behaviours or traits are individually rated, judged or described by a person other than the rated employee and the results are kept by the organization.'

From the above definitions performance appraisal can be viewed as a structured and formal discussion between a superior and a subordinate that occurs at least annually in the form of an interview where the subordinate's performance for the period is reviewed.

At LGPS this process occurs annually. The performance appraisal form is known as the "confidentiality form". This form is filled out by the principal and vice principal about the teachers. Discussions are then held with each individual teacher about their performance.

In research conducted by Bolce & Kilner (1997) they alluded to the fact that although companies both in the private and public sector had different methodologies in the application of performance appraisal systems the most successful all had similar characteristics.

It was stated by Marsdon (1999) that any performance appraisal system that did not consistently measure work performance accurately cannot be considered an effective one. LGPS may need to consider how performance is measured at the school. The researcher is of the view that measurement may not be consistent. Armstrong (2006) identified the following as the criteria for assessing performance in the performance appraisal process:

"Achievements in relation to objectives

The level of knowledge and skills possessed and applied (competences);

Behaviour in the job as it affects performance (competencies);

The degree to which behaviour upholds the core values of the organisation;

Day to day effectiveness."

One of the most important elements of an effective performance appraisal system is open and honest communication.

Purpose of Performance Appraisal

Kleiner (1997) suggest 'the overall purpose of performance appraisal is to let an employee know how his or her performance compares with manager's expectations.' Fletcher (2006) takes a more balanced view, suggesting that for 'performance appraisal to be constructive and useful, there needs to be something in it for the appraiser and appraise.'

In Trinidad and Tobago according to the joint committee on standards for education evaluation (1998) 'performance appraisal is done in order to fulfil the requirements of state statutes, board and policy and union contracts.'

Yonungcourt, Levia and Jones (2007) suggest that 'the common purpose of performance appraisal tends to be aimed at the measurement of individuals, and consider that this focus is insufficient.

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Caruth and Humphreys (2008) add to this view point by suggesting 'it is a business imperative the performance appraisal system includes characteristics to meet the organizational needs and all its stakeholders.' Bach (2000) suggests that 'one of the underlying principles of performance appraisal schemes is to elicit corporate compliance.'

Murphy and Cleveland (1995) suggest 'a key purpose of performance appraisal is to determine pay and other financial compensation'.

It can be concluded that the purpose of performance appraisal is to achieve the organization's goals, set employees' objectives, evaluate individual performance against objectives, improve performance and reward employees.

The purpose identified in the literature is similar to those outlined in the PMAP System of LGPS which states "If the appraisal is to be effective, staff must see the process attempting to meet their needs otherwise the system will not work. Performance appraisal should result in benefits for the teacher, the administrators and the institution."

Although performance appraisal is increasingly considered one of the most important Human Resource practices (Boswell & Boudreau 2002) critics suggest that the process is inherently flawed. For instance, (Reid, Barrington and Brown 2006) state that 'performance appraisal is not always an effective substitute for constructive feedback overtime by a manager.' Not all organizations provide such a positive managerial environment, but it is a start, this should be done through group discussions and participative approaches so that the system assesses criteria like training.

Errors were also identified which can distort the validity of the performance appraisal process. Grint (1993) identified the problem of the 'horn effect', Furnham (1993) states that there are a variety of distortions which can arise from the appraisal process which surround the human interface between the appraise and the appraiser. Also, another problem identified was the 'halo effect' (Bach 1998).

Some appraisal errors that occur at LGPS are the "contrast error", "central tendency" and "personal bias". According to Ivancevich (2004) a contrast effect 'is a rating error that occurs when a rater allows an individual's prior performance or other recently evaluated individuals to affect the ratings given to an employee.'

Central tendency is 'a rating tendency to give rates an average rating on each criterion' (Ivancevich 2004). For instance at LGPS there is a rating scale of 1- 5 and most people receive a combination of two's and three's. Another common error is that of personal bias which is 'the bias a rater has about individual characteristics, attitudes and backgrounds that influence a rating more than performance' (Ivancevich 2004).

There is much research which suggests that appraisal is not practiced well or welcomed in some cases. Roberts and Pregitzer (2007) suggest that performance appraisal is a yearly rite of passage that triggers dread and apprehension in the most experienced, battle hardened managers. Brown (2001) cites major problems in Towers Perrin Performance Appraisal practices. He cites lack of training for managers particularly important.

Fletcher (1993) cites a study where 80% of respondents were dissatisfied with their appraisal scheme, in particular with multiplicity of objectives. Rees and Porter (2003) cite that a common problem is that schemes have too many objectives.

Many organizations try to get too much from one appraisal scheme, and try to use one scheme to fulfil all three purposes. This is unlikely to work, and usually results in the scheme falling into disrepute. (Foot and Hook 2002). The researcher agrees with this view and it may be that at LGPS too much emphasis is placed on performance and little on training and development and rewards.

What is consistent with all literature is that objectives of performance appraisals are a combination of backward / forward planning.

Reviewing performance

LGPS has a formal Performance Appraisal system is known as PMAP.

Armstrong (2006, p.509) states that 'performance reviews provide a focal point for the consideration of key performance and development issues and the review should be rooted in the reality of the employee's performance. It is concrete, not abstract and it allows managers and individuals to take a positive look together at how performance can become better in the future and how any problems in meeting performance standards and achieving objectives can be resolved.' (p.509)

Rogers (1999) highlights that setting objectives and targets remain the core activity of performance appraisal, but in practice is poorly conducted with little regard for ensuring that organization and individual objectives are aligned as closely as possible.

If people do not know what is expected of them, there is a good chance that their behaviour will not conform to expectations (Youngcourt, 2007). Simmons (2002) cited research on appraisal in universities which suggested that their appraisal was not particularly successful in increasing clarity of job responsibilities.

LGPS may consider 'that the purpose of reviewing performance is to improve the school's performance through the enhanced performance of teachers. (Fisher 1996, p.11)

The performance review meeting

According to (Armstrong, 2006, p. 510) there are twelve golden rules for conducting a performance review meeting. They are be prepared, work with a clear structure, create the right atmosphere, provide good feedback, use time productively, use praise, let individuals do most of the talking, invite self - assessment, discuss performance not personality, encourage analysis of performance, don't deliver unexpected criticisms and agree measurable objectives and a plan of action.'

The appraisal interview should be conducted in an open and non threatening manner to help reduce anxiety or doubt appraises may have (Harrison & Goulding 1997). Trust between appraiser and appraise is an important factor. This is even more important when there seems to be a reluctance or inability to collate objective information to inform the appraisal process (Piggott - Irvine 2003).

Rating Performance

There are different methods that can be used to assess performance. A wide range of methods are used to conduct performance appraisals, from the simplest of ranking schemes, to complex competency and or behavioural anchored rating schemes (Snape, Redman & Bamber 1994). LGPS uses the ranking method which can be considered the simplest of all and according to Nel et al (2001, p. 524) 'ranking involve the ordering of individuals according to overall merit or selected performance factors, from the best to the worst performer.'

The rating system at LGPS staff is simplistic. Staff are deemed to have either 1, 2, 3, 4 & 5.



1- Outstanding

Exceptional alike in personality, capacity and performance

2 - Very Good

A very able and effective officer

3 - Good

An efficient officer

4 - Fair

Performs duties moderately

5 - Unsatisfactory

Definitely not up to the duties of the grade

It is human nature that employees themselves generally do not want to hear bad news, especially about themselves (Ashford 1999).

Fairness of the system is considered important. At LGPS some of the teachers often express how unfair the appraisal system is especially with the central tendency and personal bias ratings. In a research by Cook and Crossman (2004) it was suggested that the perceived fairness of the system contributes to overall perception of fairness. The principal of the school may adopt this method to increase the overall view of fairness at the school. There are other studies on appraisal fairness especially with the appropriateness of rating systems. For instance a study Henderson (1984) suggested that 'almost all employees are extremely wary of performance ratings.' Also a study by Harrison and Goulding (1997) revealed that 'subjectivity can be a problem where appraisers and appraises are colleagues, also managers may be uncomfortable with criticising staff they work closely with, and a tendency towards centralised ratings could apply'.

Bacal (1999) argued that 'managers tend to avoid confrontation by scoring generously' and Rees and Porter (2003) stated 'giving criticism in a constructive way can be a very delicate subject'. Further research by Armstrong and Murlis 1998 and Brumbach 2003 suggest that the ratings system can be perceived as a dishonest annual ritual.

Although it is outlined in the PMAP the description of each rating it appears that the administration of the school has their ideas on the descriptions and teachers are often confused about the ratings which are given.

An alternative to the traditional feedback mechanism is the 360 degree feedback.

Outcomes of the system

Improving Performance / Training and Development

Rogers (1999) suggests that one of the key components of performance appraisal is solving problems; that is improving performance. There are training programmes and workshops in different areas such as subjects, conflict management but do not have the desired results as they are not implemented or designed properly. Thus, Pigott - Irvine (2003) cited research that suggested 'the need to distance appraisal and disciplinary processes.' This thought is very important especially at LGPS where teachers claim that there is personal bias at the appraisal interview.

Research by Wilson and Western (2000) suggest that appraisers take the lead in determining the training and development to take place. If this is the case, it is of concern, as personal development requirements may take a poor second place to immediate on the job training. Rees and Porter (2003) suggest that care needs to be taken in establishing realistic priorities and to recognise the potential conflict between individual and organizational needs.

In order for training and development to be successful the administrators need to identify with individuals of the organization and not the organization itself. Establishing or implementing organizational directed goals instead of individual directed goals can cause mishaps.


The use of performance appraisal basically entails trying to reward employees for their past work, while hoping that the incentive of a good reward will encourage other employees also to strive to work harder in the future. In recent years many organizations have sought to motivate their employees by linking rewards, using a system like performance related pay, to excellent performance at work. ( Foot and Hook 2002)

Performance Related Pay (PRP) is best described 'as the explicit link of financial reward to individual, group or company performance (Armstrong and Murlis 1991). The current LGPS performance appraisal system is linked to pay. Based on the results of each teacher's performance appraisal they receive an increment depending on their salary range.

There are different thoughts concerning PRP.

According to Stiffler (2006, p. 106) 'without a link between individual measures of performance and appropriate rewards for achieving success, there is no effective way to steer an organisation. Kirkpatrick (2006, p.6) is of the opinion 'that managers need to give workers encouragement in order to perform,' and Armstrong and Murlis(1996, p.28-29) states 'it is widely believed that money is the best motivation.'

The following is a list of criteria which were critical to successfully linking appraisal to financial rewards.

"Rewards are clearly lined and proportionate to effort and results

Clear, fair and understood criteria are used to judge performance

Clear and meaningful targets are set

Employees and managers can easily monitor performance against targets

The reward scheme is properly designed, implemented and maintained

The scheme is designed to ensure individuals cannot receive inflated awards unrelated to their performance

Employees are involved in the development and operation of the scheme" (Rogers 1999)

There is much research on the subject of appraisal leading to pay. Research by Simmons (2002) uncovered strong opposition from respondents in the Higher Education (HE) and Further Education (FE) sectors linking appraisal to pay, citing divisive criteria and the impact on teams performance in particular. Marsden and French (1998) undertook research at the Inland Revenue on the impact of an appraisal scheme linked to performance related pay. They found that the scheme had the general effect of reducing motivation and teamwork.

Miller (2006,p.43) 'managers should not assume that money is the ultimate incentive for performance.' Managers should advantage their organization's incentive programmes. Managers and team leaders also need to know what element their teams are motivated to steer each person toward the applicable organizational incentive with a view to maximising its effectiveness on the employee's performance.

Williams (2002) suggested formal commendations and awards, favourable mention in the company publications, freedom concerning job duties and or hours, increased responsibility and more involvement in setting goals as non financial rewards for employees.

Motivation and job satisfaction

Poon's (2004) detailed research into this area concluded that manipulation of ratings or inconsistent ratings did have an effect on job satisfaction. However, a well developed and executed performance appraisal system can have a positive impact. Research by Langridge (2004) concluded that new systems of performance appraisal and management development have helped to revitalise a UK Housing Association. The system implemented separated out financial bonuses from the individual performance review, which was overwhelmingly supported by all staff.

According to Armstrong (2001), motivation is concerned with the factors that influence people to behave in certain ways.

Herzberg, Mausner, and Snyderman (1957) identified two types of motivation (intrinsic and extrinisic) which we still recognise today. Armstrong (2001) elaborates as follows:

Intrinsic motivation - the self -generated factors that influence people to behave in a particular way or to move in a particular direction. These factors include responsibility, autonomy, scope to use and develop skills and abilities, interesting and challenging work opportunities for advancement.

Extrinsic motivation - what is done to or for people to motivate them. This includes rewards, such as increased pay, praise, or promotion, and punishment, such as disciplinary action, withholding pay or criticism.

Influential Theories of Motivation

As Armstrong(2001) stipulated, several theories of motivation have been accepted in literature

Instrumentality theory, which argues that rewards or punishments (carrots and sticks) serve as a means of ensuring that people behave or act in desired ways.

Content theory, which focuses on the content of motivation. It states that motivation is essentially about taking action to satisfy needs and identifies the main needs that influence behaviour (Maslow 1954; Herzberg, 1957).

Process theory, which focuses on the psychological processes which affect motivation, by reference to expectations (Vroom 1964) goals (Latham and Locke 1979) and perceptions of equity (Adams, 1965).

Armstrong and Murlis (1996, p. 29) are of the opinion that 'reward processes are more likely to improve motivation, performance and commitment if they are operated fairly and rewards are equitable in the sense that they are commensurate with the value of the job and of the person to the organisation.'


It is part of human nature to feel aggrieved when employees are not recognised or rewarded sufficiently for good performance. Nel (1997 p. 214) points out that a grievance is defined as an occurrence, situation or condition that justifies the individual lodging a complaint. This definition applies well at the school as it is viewed from the point of an employee being aggrieved after a performance appraisal process.