Processing developments in employee performance and reward

Purpose The purpose of this paper is to surface and discuss issues associated with employee performance appraisal as a multi-staged social interaction reportedly the butt of managerial dissatisfaction, especially when used to inform decisions around pay and other rewards. Design/methodology/approach To substantiate the territory, existing management-based evidence from the published literature is curated and discussed to frame issues for investigation under the rubric of performance appraisal as an activity that may be understood as combining interaction between forms of administrative, social and psychologically oriented control. Primary evidence, drawn from recent research sponsored by the Chartered Institute of Personnel and Development, which combines data sets informed by a survey of HR specialists and a follow-on focus group, is then used to illustrate views on relevant themes across a sample of UK-based private, public and third sector organizations (n=715). Findings A significant number of organizations apply performance appraisal approaches, somewhat mediated by sector and size, and in turn use the results to inform various forms of HRM decision making - in particular reward management. While claims have been circulating in popular media suggesting the widespread abandonment of traditional performance appraisal, and while the study finds dissatisfaction regarding the utility of existing bureaucratic elements of appraisal mechanisms, the position is more nuanced. Practical implications Corporate management attention is drawn to choices of the extent to which they are investing in building line management capabilities to address the consequences of policy decisions to amplify the importance of informal alongside formal performance management processes, and potential reward decision making, mindful of the indeterminate character of the employment relationship and its dynamic, socially constructed character. Social implications Performance appraisal may benefit from re-interpreting the balance between emphasis on administrative, social and self-control, given changing expectations among workforce members and those who evaluate organizational effectiveness in contemporary society, and the ongoing contested nature of organizational control. Originality/value Employee performance appraisal as an institutional process central to organizational control systems is a topic of interest to both organizational effectiveness academics and the managerial practitioners they study. Using data that broadly represent recent developments in managerial practice across UK plc, the paper informs reflection on theory and practice.