Performance appraisal is a part of organizing business because it helps to re-evaluate employees according to specific criteria. In research from Chartered Institute of Personnel and Development (2016), the fundamental theories of the certification system are social comparison theory, feedback intervention theory, and equity theory. A performance appraisal system is an excellent way to assess employees since people strive to fit in with society, get feedback on their work, and achieve fairness.
People are social creatures; therefore, one tends to compare themselves with the milieu. It has long been proven that in a work setting, an individual measures success based on two criteria: personal performance and comparison with peers. Unique accomplishment is an essential factor because it reflects hard skills and helps in the promotion. Simultaneously, comparison affects personality factors and forces one to be a leader in the field. The analogy is a motivator to get better and constantly improve a person’s skills and competencies.
Feedback is crucial since it helps one to see and correct mistakes. Performance appraisal provides an opportunity to receive a reaction to the work done. It is necessary for analysis, error correction, and subsequent competent work. Furthermore, a person sees at what level his performance indicators are, what, and where needs to be corrected to get social satisfaction. The timely feedback received allows the employee to act immediately, which is good for the business and individuals.
The theory of justice is necessary to balance the effort spent and the result got. Each person internally feels whether the work is worth the energy that they spent on a particular task. The feeling is a subjective parameter; therefore, a comparison theory is needed as a system. Employees at the highest levels understand that they have worked hard, so they achieved a high level, while weak performers receive low scores and are motivated to work harder.
Performance appraisal is an excellent tool because it helps the business grow and motivate the employees. People’s tendency to compare helps them strive for better performance and rewards. Feedback provides an opportunity to analyze and correct specific errors. A fair balance maintains a social system in which the best performers feel valued and the worst work harder to achieve results. Certification helps employees and businesses to develop; therefore, it is an integral part of corporate management.
Chartered Institute of Personnel and Development. (2016). Rapid evidence assessment of the research literature on the effect of performance appraisal on workplace performance. Web.