Evolution and Change
Chapter 13: Beyond performance appraisal: To performance management and firm-level performance
Having reviewed the various angles of performance appraisal (PA) formats and their potential, as well as trends in the marketplace towards alternatives to classical PA, we now turn to a wider perspective and theoretically anchored approach to the whole notion of performance appraisal systems (PASs) and performance management (PM) techniques that brazenly broadens the scope of discussion concerning the future of performance evaluation in general. The discussion is based on Angelo DeNisi and Caitlin E. Smith’s (2016) ground-breaking treatise, ‘Performance appraisal, performance management, and firm-level performance: A review, a proposed model, and new directions for future research’ (2014). The central question addressed in their paper is: While it is intuitively obvious that aggregates of increased individual performance should translate into improved organizational performance (and teams would appear to present a microcosm of that notion), what, nevertheless, is the real relationship between individual performance improvements that are outcomes of performance appraisals (and other performance management techniques) and what DeNisi and Smith (2014) call firm-level performance? In the paper, the authors argue that the direct links are tenuous and, consequently, they build up a thoroughly substantiated case for a completely new model of performance evaluation that expands the discussion on performance appraisal (rating formats) from the relatively narrow confines of traditional performance appraisal to the wider domain of performance management. The reader is referred to the complete paper for an in-depth coverage. Based on DeNisi and Smith’s admirable odyssey through the literature in search of the genie that links performance appraisal, performance management, and firm-level performance, we are satisfied to recount the key themes in the paper that, inter alia, demonstrate where research can and should be heading.
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