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Functions and Implementation of Performance Appraisal Systems in New Zealand Organizations

University of Waikato

Michael O'Driscoll

University of Waikato

We conducted a survey of 89 randomly selected New Zealand organizations with at least 300 employees to determine 1) what purposes performance appraisal systems serve, 2) characteristics of those systems, and 3) any difficulties organizations have had in implementing them. Human resource directors indicated that appraisal information was used most often to give individual performance feedback. Links between appraisals and pay were widespread, but generally indirect and informal. In contrast to the emphasis of past research on rating errors and cognitive processes in performance evaluations , primary difficulties identified by these human resource directors were 1) managers failing to discuss and improve performance problems with subordinates, and 2) the setting of vague performance objectives. The most frequently cited change which organizations made and were considering making was simplifying appraisal forms and procedures. Ways in which organizations can improve how appraisal systems meet their primary objectives and overcome difficulties are discussed.

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