Performance appraisal: essential characteristics for strategic control

Abstract

Purpose The purpose of this paper is to demonstrate the need for and propose a more aligned and integrated standard for performance evaluation to enhance effective strategic control. Design/methodology/approach The paper reviews the various issues creating discontent with the performance appraisal systems within many organizations and demonstrates how these problems inhibit successful strategic control. It attempts to cogently incorporate the performance appraisal characteristics needed for the exercise to function as a critical organizational control metric and a useful feedback mechanism for strategic management of the firm. Findings The paper finds that, whereas performance evaluation has received reasonably robust examination in the human resources literature, explicit guidance toward the integration with strategic control is inadequate. Without consistent alignment between these functions, however, performance appraisal becomes an exercise in futility instead of a vital control measurement, often resulting in not only personnel dissatisfaction, but also, more importantly, an impediment to systematic strategy implementation. Research limitations/implications The paper offers a viewpoint based upon the authors' experiences and a review of the literature. It aims to stimulate a broader understanding and discussion of the crucial link between performance evaluation and strategic control. Practical implications Although it is possible to theoretically separate the human resource function of performance appraisal from broader strategic management processes, such an approach is not realistic for organizational leaders charged with strategy execution. These leaders would benefit from a framework for ensuring this important HR function also meets the requirements for operative strategic control. Original/value While many in the literature have focused on how to conduct legal and efficient performance evaluations, guidance on crafting such appraisals as control metrics is insufficient. The paper endeavors to provide this direction.

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