Performance Appraisal in Retail industry of UK – A Case Study Of Tesco, Asda and Sainsburys

1.1 BACKGROUND INFORMATION AND RATIONALE

As seeing the continuous changes within the periphery of social political and economic, factors around the world, the companies focus more over their Human Resource Management (HRM) policies for development. However, very little consensus has been made in the literature over which method /policies should be implemented for generating of “high performance” or “high involvement” from the workforce. Previous literature highlights the effectiveness of learn production model and focused on the diffusion of work practices (Womack et al. 1990). Osterman (1994), for instance evaluated the move towards penetration of four practices of the organization like as: team work quality circles job rotation, and TQM. Although in the current situation the literature has given more emphasis on analyzing the increasing performance effects of human resources management (HRM) practices regarding pay, careers and training. Appelbaum et al. (2000), recognizes the three main element of the high performance work system like as (1) pay and promotion policies (2) opportunities to participate and (3) training practices.

The training approach is believed as a common complement to work that provide increased opportunities to the participants in making effective use of resources. Further, the collective incentive schemes like as profit sharing, pay for knowledge, compensation and other benefit which encourage employees to attain the goal of company through their enhanced effort (Appelbaum et al. 2000 ; Whitfield, 2000).

The Performance appraisal is an approach through which the management may inform employees how to perform in accordance with the demand of the company. Even though, this approach evaluates the feedback either written or verbal for improvement of the task given and consequently improving the skills of the participants. Therefore the formal meaning of the performance appraisal is the process which evaluate employee performance on a regular basis at all levels (Cascio, 2006).

The perspective of HRM planning recommends that retail banks would get more benefit in attainment of their objective through the use of their HRM practices. The performance appraisal systems is designed to reward employees in the organization through giving them specific training, promotional offers, and an understanding job designs which allow them to get incentive and pay package. The Performance appraisal (PA) approach is believed to be the most important human resource practices through which the organizational goal may be attained and also helps in improving the working efficiency and skills of the employees. Levy and Williams (2004) come up with an extensive review which focuses more on the appraisals process stated in the various forms of literature. Some of the key factors that work in the development of Performance appraisal are rating errors, appraisal feedback rater training and information processes. However the present trend of literature highlights the factors of evaluation like as turnover intention, performance and employee job satisfaction (Poon, 2004; Kuvaas 2006). Similarly the other form of experimental literature generally evaluates little observation which exists within one or two organization.

Further, it was also believed that there the performance appraisal must be evaluated on a frequent basis for timely execution of plans and fulfilling the objectives of the organization.

AIMS AND OBJECTIVES

This research aims to study the role of performance appraisal in strategic HRM implementation. The research is conducted with reference to retailers in UK (Tesco, Asda, and Sainsbury). The research attempts to accomplish following objectives:

LITERATURE REVIEW

2.1 INTRODUCTION

The attainment of high performance in the time of globalization, highly competitive era becomes the need of every company around the world. The human resources plays an important role in achieving the objective of the company within a profit-oriented or nonprofit-oriented organization and with managing organizational efficiency and effectiveness, physical and, financial sources in the desired way. Performance appraisal is said to be one of the most bungle part of management. The applicability of rating is believed to be more based on the objective rather than on the subjective nature. The supervisors and managers’ efficient skills help in providing a good guideline for the attainment of better result of the organization and also by improving the working efficiency and the skills of the workers through applying various appraisal criteria.

However some researcher also believes that the feedback helps more in obtaining the desired result. The moral is believed to be the emotional and the mental condition of an individual or group with regards to their function in terms of the performance of their task by gaining loyalty confidence or enthusiasm. On the other hand some researcher believes that the morale acts as a broad term which comprises of smaller concepts like as job satisfaction, intrinsic motivation, experienced organizational commitment, pride in one’s work and work meaningfulness. This research helps the researcher in exploring various aspects of relationship among the different types of management styles and employee self-esteem. , it is necessary for the organization to provide necessary facility to improve the competencies of the employees to feel free so that they may shoulder the responsibilities. This way the individuals may feel more motivated towards the attainment of organizational objectives through constant practices and their contribution for getting performance appraisals. In this research the researcher has focused on the following points for getting more understanding about the performance appraisal and the development of employee’s morale which are illustrated in details given as under.

(i) Performance Appraisal: This is also believed to be the most challenging section of the Human Resource Management (HRM) in terms of employee- supervisor relationship. The performance appraisal helps in finding out the best possibility in improving the effectiveness of performance of employees through rewards on nonperformance, conduct of performance appraisal to punish the low performers, clearing the doubts with the timely meeting through which the difficulties may be minimized to attained the desired outcome

(ii) Performance Appraisal and Employee Morale: A performance appraisal system is the result of serious planning hard work fulfilling strategic needs of the organization, careful thinking and the integration of the developmental and administrative characteristics.

(Iii) Performance Appraisal and Productivity: The tools of evaluation and improvement machinery are often considered to be based on the fact that what approach would be implemented for the improvement of outcome

(iv) Performance Appraisal and Customer Retention: The retention of skilled employees are believed to be the most common concern of very organization. Therefore, the critical evaluation of the workers improve the efficiency of unskilled employees, where as the appraisal of highly-skilled employees encourage them to perform in accordance by improving their ability. This way the organization may improve the working efficiency of employees and side wise will be able to attain the objectives of the organization to remain in the competition

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2.2 PERFORMANCE APPRAISAL

As per the view of Steers and Black (1994), the term performance appraisal is said to be one of the most bungle part of management. However this is also believed to be the most challenging section of the Human Resource Management (HRM) in terms of employee- supervisor relationship (Coutts and Schneider, 2004). However, number of managers believes that the formal appraisal process is very much frustrating and problematic in nature for the management development process. According to a research conducted by Coutts and Chneider (2004) over the United States police departments and was found that the performance appraisal system of the US police department is not so effective for the HR system and hence it constitutes a poor monetary, technological, human, investment.

On the other hand the performance appraisal is believed to be more result oriented on the terms of performance. The applicability of rating is believed to be more based on the objective rather than on the subjective nature (Ivancevich, 2001). Although the biases rating and errors, diverge the employees from carrying out actual task. The reduction in the error helps the management in improving the utility reliability and validity of performance appraisal systems.

The literature of performance appraisal helps in finding out the best possibility in improving the effectiveness of performance of employees through rewards on nonperformance, conduct of performance appraisal to punish the low performers, clearing the doubts with the timely meeting through which the difficulties may be minimized to attained the desired outcome (Deluca, 1993); further, the use of basic flawed appraisals, through focusing over the aspects of encouraging the individual talent which is the main reason for discouraging the inconsistencies within the teamwork/collaboration, even the performance appraisal helps in accelerating the poor performance .The supervisors, and managers efficient skills help in providing a good guideline for the attainment of better result of the organization and also by improving the working efficiency and the skills of the workers through applying various appraisal criteria. (Segal, 2000). However some researcher also believes that the feedback helps more in obtaining the desired result (Horvath & Andrews, 2007).

2.3 PERFORMANCE APPRAISAL AND EMPLOYEE MORALE

As defined by the Merriam-Webster Collegiate Dictionary the moral is believed to be the emotional and the mental condition of an individual or group with regards to their function in terms of the performance of their task by gaining loyalty confidence or enthusiasm. McKnight, Ahmad, and Schroeder (2001) in their research articles focus on the closeness and importance of employee-management relationship however, they also defines the moral as the degree at which an employee feels comfort in his or her work environment. On the other hand some researcher believes that the morale acts as a broad term which comprises of smaller concepts like as job satisfaction, intrinsic motivation, experienced organizational commitment, pride in one’s work and work meaningfulness. Lubans (2000) argues that the progress of an organization is very much affected by the low morale.

Dealing effectively with the people is believed to be the major role and responsibility played by the managers. However, most of the employees feel that their morale is often affected by the style of the management and their seniors. Therefore it is important for every managers to recognize that same one size policy must be maintained for all the employees. Although the different people have different view and responses over the different styles of management; so recognizing the need of individual employees helps in determining what is the best method to improve the efficiency of employees .The management must act towards building an initiative by various motivational and management controls tools to boost the morale of different employees. Further, it was also believed that a close employee-management relationship have the potential to improve the familiarity and trust by opening new vistas of opportunity for employees as well as for the managers.

This research helps the researcher in exploring various aspects of relationship among the different types of management styles and employee self-esteem. However, these management style and employee self-esteem are termed as the according to – Fedor et al (2001) who evaluates the use of various power based on the characteristics and behavior of manager’s knowledge and expertise (expert power) and coercive power. Although the hypothesis made during the studies on the basis of coercive power some times affects the employees morale adversely, Fedor et al (2001) were able to find that the supervisors exercised both their referent and expert power by the help of effective communication.

Scott (2001) in her statement to boost the moral of the staff believes that the management style generally creates a negative view among the employees. However, Scott also believes that the micro-managing is really reducing the working efficiency, commitment and spirit of staff. Therefore it is very necessary for the managers to make all the clarification about the rules goals opportunity at the time of actual performing of the work. Furthermore, the central problem associated with the micro-managing is that this approach forces the employee to believe that the management doesn’t trust them despite their performance, duties, skillfulness and accuracy at workplace.

However, the constant transformations and the instability of our economy has made many organizations and businesses houses more dependent on the research centers and special libraries. That’s why the managers feel constant problems in encouraging and motivating the employee’s sprit at the work. For instance in the time of restructuring and downsizing the staff of a hospital , Burke (2002) argues the concept of nutshell: which is believed to be the degree to which a facility supports its employees on the issues which directly affects staff satisfaction .So in order to re vitalized the working efficiency of staff the managers must produce examples before their subordinates by creating a positive work environment at the time of delivering inspirational messages successfully to convince their employees (Bennett 2001).

The managers also helps the solo librarians in maintain their morale by allowing them to participate in the decision-making process of the organization. It was also recognized that the solo librarian is very much helpful to provide valuable insight and information during times of change in shorting out the problems of the management and the employees.. Therefore, in regard to improve the morale and employee productivity within the organization it became vital for the managers to allow employees to participate in various management functions to attain the objective.. The approach will force employees to work more efficiently in the attainment of organizational goal (“Employee Tips” 1998).

The employees must be provided with every kind of information including the risk factor so that the may protect themselves as well as the objective of the organization but if they are uninformed them. This may cause to some serious problems regarding their jobs and improve the negative aspects about the company in the market, the task of the managers to look into the both positive and negative aspects of company’s future in terms of any slight change. The open communication and debate within the company must be conducted before introducing any new initiative (Messmer 2001b). Further, it was also believed that the informed employees are happier employees who don’t have any doubt in his mind and he may cooperate well among the different function of the organization.

For obtaining better result the work environment of the organization must be made hassle free, where the management professional creates a sense of belonging among staffs that the company is very much committed towards them for their growth also. Scott (2001) recommends that the employees shows less concern over the pay check if they feels satisfied by the work environment which provides them growth opportunity like as proper training ,guidelines in order to boost up their education and skill. Furthermore, Scott also urges the managers for not following the present trend followed buy many companies in cutting their cost in education budget which is supposed to be the most vital for improvement in the companies productivity at work place.

On the other hand if the management wants to earn high profit then it must have to maintain high employee morale among the segments of the firm by empowering employees so that they may work independently towards the development of the organization. Consequently providing the rooms to the employees for committing mistakes helps them in boosting their self confidence and efficacy for growing professionally by improving the moral. Number of articles in this regard focus that the employees are responsible for improving their own morale at the work place by controlling the way they react over certain issues that affect their morale. Tschohl (1999) and Messmer (2001, 2002) argues that the employees who shows their potential with high moral do not believe on the management for encouraging them growth opportunity and satisfactory work environment. Further, these viewpoints in the articles also suggest that management must play an active role in improving the morale of their employees, who are accountable for the development of the organization

The performance appraisals always serve the motivational and administrative function in achieving the objectives of the organization by the dynamic control measure (Analoui and Fell, 2002) Sadly, lots of firms implement metrics without giving any earlier evaluation to the metrics on human behavior and its consequences (Hammer, 2007).However, this approach is said to be true for evaluation of performance (Bowman, 1994; Gray, 2002).

While evaluating the issues and the concept of performance appraisal (Khoury and Analoui, 2004 and Locke et al., 1981), argues that abandoning the practice is not only impractical but this would slow down the process of performance evaluation measure we would argue that (Antonioni, 1994; Lawler, 1994). However most of the researcher believes this performance appraisal process is only a mode for achieving the organizational needs by satisfying the stakeholders, employees, executives and managers.

Although it is very hard to believe that any performance appraisal is free from criticism.. According to the review of the literature across various disciplines and experiences every evaluation systems have their own merit and demerit which are useful in gaining functional and strategic information. A performance appraisal system is the result of serious planning hard work fulfilling strategic needs of the organization, careful thinking and the integration of the developmental and administrative characteristics (Boice and Kliener, 1997) but this performance appraisal process is not such process through which the development may be attained overnight. . This performance appraisal perspective may be grouped into 11 characteristics like as : open communication, ease of use, employee job relatedness, review procedures, appeal procedures, validity, formalization, reliability, standards and measurements, trained appraisers and accessibility to results.

The formalization of performance appraisal system need to be open and clear in all the aspect and the approach must suggest that how to achieve the desired target. This is also believed that many organizational leaders also feel difficulty in expressing and accomplishing the appraisal function (Losyk, 2002). However while understand the managerial sphere most of the firm sometimes, completely ignores the usefulness of the evaluation system , feedback control measure and by eliminate potential problems to attain the goal of the organization (Somerick, 1993) . Therefore, the satisfaction of the senior leaders is very necessary for formalizing the value of performance appraisal metric for implementation of improvement initiatives, decision-making, problem-solving, inspiration, and the successful alignment and adjustment of strategy.

In this regard to attain the competitive advantages firms should identify the internal weaknesses to improve the working efficiency of the employees (Humphreys, 2007). Further, all the factors implemented in the performance appraisal must be evaluated properly. The factors of performance appraisal is said to be an employment test conducted on the basis of uniform guidelines over the selection procedures of employee (Allan, 1994), but the personality characteristics, tenuously related job factors and general traits, must be avoided. Only factors affect in the appraisal should be taken into the account for evaluating the performance (Martin and Bartol, 1998). Therefore such evaluation procedure helps in improving the reliability of the process to obtain better result.

The creation of job-oriented performance the managers must initiate in creating a variety of approaches by which the objectives may be attained at various level (Martin and Bartol, 1998). This also happens because the different jobs have different requirement within an organization (Sales Agency Management, 1999; Marsden, 1999). Furthermore, the improvements in the working efficiency and the task given by the firms have different implication with a certain point of time for developing organization performance and employees morale. Thus, the weaker job-related measures are not believed to be sufficient in attaining the organization’s objectives through their strategy.

Researcher believes that the morale acts as a broad term which comprises of smaller concepts like as job satisfaction, intrinsic motivation, experienced organizational commitment, pride in one’s work and work. Therefore it is important for every manager to recognize that same one size policy must be maintained for all the employees.

So recognizing the need of individual employees helps in determining what is the best method to improve the efficiency of employee’s .The management must act towards building an initiative by various motivational and management controls tools to boost the morale of different employees. it is very necessary for the managers to make all the clarification about the rules goals opportunity at the time of actual performing of the work. So in order to re vitalized the working efficiency of staff the managers must produce examples before their subordinates by creating a positive work environment at the time of delivering inspirational messages successfully to convince their. The employees must be provided with every kind of information including the risk factor so that the may protect themselves as well as the objective of the organization

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2.4 PERFORMANCE APPRAISAL AND PRODUCTIVITY

The term performance appraisal and productivity are generally used among the spheres of commercial circles and academics although there are numerous definitions explained and given in the literature. There fore it is believed to be most confusing and interlinked with the terms like as effectiveness profitability and efficiency (Thomas and Baron, 1994).The tools of evaluation and improvement machinery are often considered to be based on the fact that what approach would be implemented for the improvement of outcome. On the other hand, this approach may be regarded as a pragmatic process which helps in the improvement and understanding of the facts relating to the growth of competitiveness, success of the organization.

On the other hand the productivity is believed as the most vital factors which helps in manufacturing company’s competitiveness, many researchers believes that the productivity is often treated inferior to the factors influencing processes of production (Broman, 2004). Further it was also believed that there is a huge difference among the actual and proposed aspects of productivity. As this term is widely used, so it is often interpreted in various aspects and the actual productivity being disregarded frequently, which is not efficient for making decision (Tangen, 2002; Forrester, 1993)? Furthermore, the term productivity is believed to be a multidimensional approach used in the process of performance appraisal. There are number of approaches which are widely defined in terms of useful practices ratio. Broman (2004) recommends that it is very necessary to make a clear distinction among the specific mathematical dentition and a concept related with the effective characteristic and behavior of research approach. In this way there are two concepts that comes in the definition (a) the term productivity is closely associated with the availability and the use of resources. (b) The creation of value is the most powerful objective. Thus, it was also said that the higher productivity is achieved when all the resources are used properly by producing the desired outcome. An important feature of productivity is to eliminate the problems and waste in regard to improve productivity.

Broman (2004) argues that there are inherent similarities among the various dentitions of productivity however the main content of the productivity remains to be the same in certain aspects. Ghobadian and Husband (1990), recommends that among the same similar definition there are three broad categorizations of production namely: (1) the technological concept: this approach deals with the interlinking of ratio among the outputs and factor of production. (2) The engineering concept: This approach establishes the actual line of difference among the potential of the actual result factors. (3) The economist concept: This approach stress on the capability of allocation of resource.

Most specifically some of these measures are related with the inputs of subset - partial productivity; where as the other believes in implementing all inputs which is termed as a total productivity (Grossman, 1993; Sumanth, 1994). Additionally, there are different concepts associated with different aspect of productivity like as for the manufacturing organizations the physical and monetary factors are very much in demand. Even though it is very difficult to measure the “physical efficiency” of any manufacturing process Gold (1980).

In addition it was also said that the meaning of productivity varies from situation to situation depending upon the context. For instance according to the strategic perspective of productivity the senior may have distinct view than the operational managers’ view of productivity. This line of thought explains that the term productivity must be viewed from different angle at each level in regard to achieve high productivity. Further, in a broader sense the term productivity covers both aspect of operational and economic status of the company. Although the performance may be described as the term umbrella that is believed to be helpful in the success of a company.

In a study Slack et al. (2001) explores some of the following guideline which every company focus upon accomplishing high-performance operations:

It is assumed that the high quality operation reduces the wastage of time and effort in the working of a task. This approach also produces fast service to the customers where they are internal or external to the company. The fast service also minimizes the level of in-process as well as reducing administrative overhead.

Flexible operations are yet another good option which helps the company in reducing the risk in the changing atmosphere of the world market without disrupting the rest of the operation. Low cost operations helps the company in attaining the objectives through higher profits which allows the company in meeting its all need at the stipulated period of time to sell their product at a competitive price in the said market.

Therefore, while taking concern about all those performance factors related with the quality a company is able to fulfill all its requirement of productivity s (Al-Darrab, 2000). Although the quality concept is said to have a wide variety of option available in relation to the product and the implementation of process with the help of tangible and intangible resources. The concept of productivity and quality often seem to be different but both of them are studied in a group to improve the productivity.

The attainment of high performance in the time of globalization, highly competitive era becomes the need of every company around the world. The human resources plays an important role in achieving the objective of the company within a profit-oriented or nonprofit-oriented organization and with managing organizational efficiency and effectiveness, physical and, financial sources in the desired way (Slack et al. 2001). Therefore, in order to attain the organizational objectives the process of production have to travel from variety of complex processes like as assessment of performance appraisal, reviews or ratings ,managing human resources, performance management etc. Similarly, the workers also require the feedback about their performance in order to follow the guidelines and for improving their skills.

The aim of the company may be achieved through the improvement in the productivity. Achieving the higher rate of productivity would improve the level of company’s operations and efficiency where as the level of productivity is encouraged by the improvement of the productivity or performance of the workers of the organization, while the motivational factors are also believed to be important for improving the employees productivity. However, the work motivation encourages the employees to improve their efficiency and sincerity towards the organization (Al-Darrab, 2000). Similarly the managers must create such motivational work environment for overall development of the employees and the organization by serving the societal need.

The term productivity may be defined as the ratio among the companies input and output. However, the productivity of work is dependent on the motivational factor which helps in improving the higher productivity and vice versa. Among the fully competitive era every organization is focusing more on the factors of improving their work productivity. It is also believed that the higher productivity will increase the profitability of the company in improving the performance.

Thus it is also important to understand the concept that how the performance appraisal system It helps in improving the productivity of a company. Silberman (2003) found that an effective performance management helps in improving the morale and productivity of the organization. Meanwhile, as per the views of Bruce (2002), the improvement in the productivity and the motivational aspect is the demand of every company who wants to ensure the factors of understanding must be known to every one involved in the program. On the other hand it was also said that the managers must have the sight to view and recognize the factors that increases the level of productivity and morale for the organization by maintaining a positive relation with performance. So in order to accelerate the growth the organization the managers must implement effective approach of performance appraisal to enhance the employees through the motivation schemes and a good salary package.

The working efficiency of ever individual is very necessary for improving the productivity of the company. Some other factors are also important for the company as this affects the productivity of the company, like as: (a) Attitude (b) Work Attendance / Absenteeism and (c) skills.. Although the organizational factors like as turnover, technology and absenteeism is believed to be most crucial and influential factors of job performance.. The improvement in the Job performance is mainly based on the hard work of motivation (Mitchell, 1982).

Mitchell also stated that before the actual commencement of motivational system in the organization the firm must make sure that proper planning and evaluation system is maintained for good performance appraisal in order to attain better result.

It is also believed that the employees working in an organization do possess different values and characteristic as they comes from various backgrounds.. Consequently every employee has different requirement and desires. The variations in the identity of individual affect the performance / productivity of their work. However, the productivity of employees may be improved through various motivational works. The difference in the behavior and characteristic of members force the manager to apply different motivational plan to improve the productivity.

As per the survey conducted by the Employers and Manufacturers Association (EMAs), they found that the poor employee performance, reduces the level of productivity and the performance of employees which would also affects the company's productivity (Atkins, 2009).

The improvement in the productivity is believed to the big problem for the employers, it becomes difficult for him to judge the motivational aspect employed for public or private concerns by making effective coordination. The performance appraisal systems have to play a pivotal role in the human resources management. The evaluation of performance is said to be another factor that help in controlling the organization for improvement of employee’s actions. The performance appraisal also helps in obtaining useful information for taking right decision regarding the training programs incentives, compensation, transfers and promotions of employees.

However some companies require typical performance appraisal system for improving the morale and the efficiency of work for the progress of the company (Chen & Chu, 2007). The assessment of performance is related with the motivational factors of the employees in the organization. Further the feedback process helps the employee’s into checking their problems for not achieving the desired goal of the organization (Latham and Wexley, 1994).

As per the view of Mathis and Jackson (2000), factors affecting the individual performance of the workers are categorized as (a) motivation, (b) ability, (c) Relationship with the organization (d) support and (e) existence of work. Further Gibson (1987) argues that there are three main factors that help in the performance appraisal (a) -Organizational factors like as : reward systems job design, organizational structure leadership, (b) Psychological factors like as : personality, roles, perception, job satisfaction motivation and attitudes and (c) Individual factors: skill, social, family background, demographic levels experience of employment, and ability, of a person.

In regards to the performance appraisal definition given by Grote (2002) it was found that the Performance appraisal is a formal management system that helps in evaluation of an individual’s performance in relation to the growth of the organization. The performance appraisal is a process that that evaluates the work of an employee in comparison to the desired standard of the organization while communicating the required information to those employees (Mathis and Jackson, 2000).

Therefore, in view to an effective way of performance appraisal Messmer (2000) argues that there are numeral elements that determine the assessment of performance like as formulation of objectives, improving the performance skills, creating efficient atmosphere, providing space and desired resource, creating ranking in terms of performance, behavior, assessment/ development of worker etc.

ACAS booklet (2005) come up with the general principles for formulating a good performance assessment system which would help the organization in achieving its desired objectives in regard to the performance appraisal and uplifting the morale of employees . However, the objectives of performance appraisal is to review the performance, potential, training identify needs and doing career planning for the employees and the growth of the organization ACAS Booklet (2005) and to assess whether the employees are efficient to receive financial rewards in respect to the task given to them or not. Furthermore, the performance appraisal can be attained at any point of time within the normal course of the organization on an annual basis but some time it become the need of the organization to do it more frequently. However, the regular performance appraisal helps in grater understanding of subject of job and growth of the organization (Nathan et al., 1991). Mathis & Jackson (2000) argues that the process of appraisal must be done once or twice a year for getting the desired result .However, for fresher’s this approaches may be tested regularly after 90 days after employment and at six months, annually thereafter to obtain best result. Anderson in Towers (1996) also has the same view regarding that the performance appraisals must be conducted frequently to obtain better result.

Bhatia (2010), also argues that the gap within each step in the assessment process should not be more than 4-5 working days and may be increased up to 15 - 35 days. Although, Jafari, et.al (2009), also highlights the same conceptual framework in the assessment of employees performance for improving the working efficiency of the organization.. Similarly this structure is based on six factors like as the cost of method, training needs, evaluation, ability to compare, excite staff to be better and free of error.

The term productivity is believed to be a multidimensional approach used in the process of performance appraisal. In addition it was also said that the meaning of productivity varies from situation to situation depending upon the context. Further, in a broader sense the term productivity covers both aspect of operational and economic status of the company.

Similarly, the workers also require the feedback about their performance in order to follow the guidelines and for improving their skills. The motivational factors are also believed to be important for improving the employee’s productivity. The term productivity may be defined as the ratio among the companies input and output. However, the productivity of work is dependent on the motivational factor which helps in improving the higher productivity and vice versa. Thus it is also important to understand the concept that how the performance appraisal system It helps in improving the productivity of a company. So in order to accelerate the growth the organization the managers must implement effective approach of performance appraisal to enhance the employees through the motivation schemes and a good salary package.

2.5 PERFORMANCE APPRAISAL AND CUSTOMER RETENTION

The retention of skilled employees is believed to be the most common concern of very organization. Therefore, the critical evaluation of the workers improve the efficiency of unskilled employees, where as the appraisal of highly-skilled employees encourage them to perform in accordance by improving their ability .This way the organization may improve the working efficiency of employees and side wise will be able to attain the objectives of the organization to remain in the competition (Rappaport, Bancroft, & Okum, 2003). In the literature there are ample of examples which explains the cause of quitting of employees but very less examples given how and by what way to retain the employees in the organization (Griffeth, Hom, & Gaertner, 2000). For instance Maertz and Campion found that very little research have been done on the retention processes and the factors that determine these quitting processes. Steel, Griffeth, and Hom (2002) argues that this happens because most often the company overlooked the reasons of people stay than to people leave.

The retention of employees is believed to be most critical element of an organization and also said to be most common approach to the talent management. However this approach is defined as the implementation of integrated strategies which helps in improving the productivity of the employees as well as the organization for future business needs (Lockwood, 2006).

Thus, understanding the cause of employees retention on an average basis is the main objective of the organization in order to meet the needs, but the factors affecting the retention differs from organization to organization (Griffeth & Hom, 2001). However, many researchers believes the policies of blanket retention may be disadvantageous if the strategies built for improvement may not be implemented in accordance with the organization demand (Steel et al., 2002).

In regard to the differences at various level of job lots of talent management programs were conducted focusing on the retention and development of the employees further the benefits were given to those employees who have the potential to occupy the top leadership positions in the near future within the organization. The literature review and the list of retention factors are not believed to be sufficient in terms of turnover and employee retention condition (Hom & Griffeth, 1995; Griffeth et al., 2000). However, more emphasis is given on the testing the relative frequency which helps in understanding the behavior of employees’ through open-ended explanations.

Thus, after many years , Mobley and colleagues come up with the revised framework which helps the in understanding the behavior of employees while offering pay, promotion, and excellent supervision in the organization, even though his evaluation focus on the new aspects that helps in influencing the retention factor of employees (Mobley et al., 1979). Further, the job satisfaction and work attitude are believed to be the elementary factors of employee’s retention (Steers, 1977). Although the researcher also recommended that the committed employees are expected to remain within the organization because they value the goals and opportunities provided by the organization through timely elimination of their problems at work (Griffeth et al., 2000). On the other hand the traditional factors focus on studying the retention and employee turnover with closed ended survey questionnaires. However, the benefit of the open-ended survey is also taken for the retention of employees. This view point is also related with the repetition of employees and focus group (Griffeth & Hom, 2001).

Another advantage of content analysis approach is believed to be the evaluation of outcome predictor variables in regard to the hypotheses made for the study, associated with designs based on self report. Although the large-scale coding, for open-ended survey was not possible of data prior to the advent of earlier due to the qualitative data analysis software. Now a day the researcher has good options to evaluate the opportunity for developing extensive coding structures for larger format of textual information or data.

Meyer and Smith (2000) believe that the training must be provided to the managers so that all employees get surety of fair treatment from the organizational side. The timely facilitation of meeting with the employees and the sub-ordinates improve the better coordination and understanding of problems on both side of the fence. Although establishing a general census over sensitive issues within the organization helps in providing better feedback, performance appraisal. Further a well designed policies help in job satisfaction and providing informational justice to the employees of the organization.

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In this way it was also found that the employees having more flexible plans are more centered towards gaining the traditional benefit and do have higher perceptions of procedural justice (Cole and Flint, 2004; 2005). Further, the flexible strategies were made to allocate the employer contribution in the efficient working of the policies produced by the organization outcomes like as pensions, health insurance and other benefit. In order to earn benefit from the facilities provided to the employees the employers are becoming facilitators rather than providers.

Although providing the requisite benefit to the employees helps the organization in making decisions with the supplied accurate information. It was also suggested that the firm take a proactive measure to understand the behavior and perceptions of employees working in an organization for the purpose of employee’s retention including improved job satisfaction. The retention of employees is believed to be most critical element of an organization and also said to be most common approach to the talent management. However this approach is defined as the implementation of integrated strategies which helps in improving the productivity of the employees as well as the organization for future business needs. Understanding the cause of employees retention on an average basis is the main objective of the organization in order to meet the needs, but the factors affecting the retention differs from organization to organization.

The timely facilitation of meeting with the employees and the sub-ordinates improve the better coordination and understanding of problems on both side of the fence. Although establishing a general census over sensitive issues within the organization helps in providing better feedback, performance appraisal. Further, the flexible strategies were made to allocate the employer contribution in the efficient working of the policies produced by the organization outcomes like as pensions, health insurance and other benefit .Thus in order to earn benefit from the facilities provided to the employees the employers are becoming facilitators rather than providers.

2.6 PERFORMANCE APPRAISAL AND COMPETITIVE SUSTAINABILITY

The perception of sustainable competitive advantage (SCA) comes from the strategic management literature, on the resource-based view (RBV) of the firm (Barney, 1991, 2002) believes that in order to gain from the sustainable competitive advantage the firms must possess desired capability and the resources which are prove to be beneficial in attaining the objective of the organization.. Furthermore, more emphasis has been given on the factors of marketing in regard to gain from competitive advantage in a said marketplace through SCA.

Barney (1991) recognized the four main factors which help in attaining SCA. However these factors are inimitable, valuable, non-substitutable and rare, whereas the entire concept is associated with the competitor’s ability at the same time. Amit and Schoemaker (1993) also recognized the appropriateness of SCA. Similarly, Barney (2002, p.173) also come up with the similar view with a different approach known as “exploitable by organization” SCA. Therefore going through the resource based thinking in the RBV literature, the four main features comes in the limelight regarding the RCs valuable, appropriable, rare and inimitable (VARI).

The literature produces number of evidences over the sustainable competitive advantage SCA and also believes the four important factors are beneficial for RCs. Recently, Barney (2002) proposed the VRIO (valuable, rare, costly to imitate, exploitable factors) for the organization as a framework which explains how a firm’s RCs may contribute towards the development of VRIO. The structure helps in exploring the hidden characteristic that influences firm’s performance and competitiveness.

The competitive markets are highly influenced by technological innovation and stiff competition in the globalised, markets. However the competence-based management provides interaction among a company’s strategy and the human resource systems (Santos, 2000). The technological changes are very much important for developing human competences to attain objectives of the organization in terms of success from competitive advantage (Drejer and Riis, 1999). Further the main objective of developing competences is to improve the attitudes, skills, knowledge of the employees for their jobs (Sandberg, 2000).

The Human resource management comprises of systems like as selection, staff’s, evaluation of performance appraisal, career management, compensation and motivation practices (Sandberg, 2000). However the human resources system may help a company in accelerating the competitiveness through implementing a competence-based management approaches. Although the models for competence-based management are spread to the wider area in regard to the individual abilities and the core competences of a company. However, the framework of competences is mainly understood as a connection that attaches the people’s development with the company’s strategy (Le Deist and Winterton, 2005).

Further the individual talent is recognized as the performance appraisal given at all levels of an organization while looking at the success of a company from its competitive framework. It was also believed that if the company once became aware about the need of individual competences then it would also be able to find out new ways for developing its human resources through changing approaches applied by the management.

Assuming this approach, Dutra (2001) also says that Organizations and people are the most necessary ingredients that capsulate in the development of organization through exchange in the level of continuous process and competence. A company train its employees by putting then in some situation through transferring its assets to the people in order to improve their skills .In return the staffs provide the competencies in the service by reliable production of goods and services by accepting the new challenges. Therefore, the company must formulate strong competences in regard to attain the objective of the organization. The regular gaining of knowledge and competences opens new doors of opportunities for the growth of employees and the employers (Fleury and Fleury, 2004). Although the development of individual competences is a common feature of the management.

The integration of strategic planning and the competence-based management system helps the company in proper execution of work and efficient implementation of tools and technology to raise the performance of employees and the institution at all level. Further the progress of the organization may be evaluated through four most common approaches: staff’s learning and growth, internal processes, customers, and finance. Kaplan and Norton (1997) also explore the importance of creating a policy for the feedback system in order to validate test, and modify the theory and the assumptions made for the implementation of business policies.

In order to execute the well maintained function of the organization it is necessary to do proper planning by making a balance among the objectives and the program implemented to obtain the desired outcome . Expectations and the deficiencies must be measured to evaluate the impacts and performance by the feedback obtained. Similarly, the necessary skills and knowledge must be developed through proper training and improvement of project management activities.

As a result, the factors of competence must be studied in accordance with the human performance and the factors of performance appraisal. Thus in this way the individual development may attained for satisfying the business needs (Moore et al., 2002). The staff’s appraisal is said to be very necessary for the development of organization, resources and the management to implement policies.

In order to attain the organizational goal each individual must perform to their optimum level however the focus must be maintained till the end of the project till it is not be achieved. The competences help in improving the skills language and understanding the behavior of the employees and the managers who help in the attainment of desired performance and improvement in the work (Conde, 2001). As per the view of Dutra (2001), one of the most difficult task of the management is to evaluate the performance of the employees in regard to the result by determining the person’s ability and company performance by doing the business.

Dejours (1997) also highlights the factors affecting the performance appraisal for evaluating a job which may take place in two ways by maintaining: (a) social relationships and (b) evaluating its usefulness. Further the evaluation of the social, economic or technical, usefulness of the individual is associated with the workplace and the person who is responsible for its operation like as organizer, boss, or manager. Although the evaluation of social setting is also said to be associated with the job and production relationships which belong to a collective group?

The current research focus on the models of performance appraisal which is based on the attitudes and behavior but doesn’t focus on reviewing the functional features of each job (Moore et al., 2002). However, the researcher also reinforces the growing influence of technology, and other functional requisites for the improvement of the organizational learning in regard to the competences (Drejer and Riis, 1999).

According to Zarifian (2001), nobody may fore individuals to improve his competency level, but a company may create favorable conditions to improve their skills and knowledge for their development. Thus, it is believed that the motivation of employees became the most necessary part for developing competences. Therefore, it is necessary for the organization to provide necessary facility to improve the competencies of the employees to feel free so that they may shoulder the responsibilities. This way the individuals may feel more motivated towards the attainment of organizational objectives through constant practices and their contribution for getting performance appraisals.

Thus the evaluation of the feedback process helps in organizing the data in accordance with methods applied in the process of production to get better result and employees may be provided with the appraisals which enable the entire organization to recycle their policies and competences. Although lots of researcher has focused the challenges faced by the managers to evaluate the impact of developing competences in accordance with the performance of the company (Mansfield, 2004).

Further more this situation become ineffective if the learning process of each individual are assumed to be evaluated. Becker et al. (2001) focuses on the performance appraisal systems are more interrelated aspect in regard to the development of the organization as a whole. Similarly while implementing a company’s policies the human resource managers must be competent to understand what exactly is the demand of the organization from the employees and which way is believed to be more effective for the attainment of the goal of the company and by what way the human force is applied to contribute for the improvement for their skills. So this aim is only attained if the managers are really competent to execute the entire task at the stipulated period of time.

Finally the researcher conclusion said that the satisfactory performance appraisals are based on two factors: (a) To improve the decision-making function within the sector which is responsible for execution of policies, the improvisation of growth of company’s policies; and (b) it also help in providing better allocation of resources, by defining the direct relations among the human resource, investments and policies of the company regarding their assets.

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3.7 SUMMARY

The term performance appraisal and productivity are generally said to be the two faces of a single coin. The performance appraisal helps in finding out the best possibility in improving the effectiveness of performance of employees through rewards on nonperformance, conduct of performance appraisal to punish the low performers, clearing the doubts with the timely meeting through which the difficulties may be minimized to attain the desired outcome.

Therefore it is important for every manager to recognize that same one size policy must be maintained for all the employees. The term productivity is believed to be a multidimensional approach used in the process of performance appraisal. In addition it was also said that the meaning of productivity varies from situation to situation depending upon the context. Further, in a broader sense the term productivity covers both aspect of operational and economic status of the company.

This research aims to study the role of performance appraisal in strategic HRM implementation. Further the researcher attempts to accomplish following four objectives like as (1) To examine how effective is performance appraisal in boosting employee morale; (2) To examine how effective is performance appraisal in increasing productivity and firm’s bottom-line; (3) To examine as whether performance appraisal help firms attracting and retaining qualified staff; and (4) To examine as whether performance appraisal help in remaining competitive in the changing marketplace.