Analyzing Formal Performance: Benefits and Drawbacks in Organizations

This essay examines the benefits and drawbacks of formal performance analysis within organizations, highlighting its significance in human resources. The analysis covers how effective performance appraisals enhance decision-making competencies by providing detailed information on employee performance, aiding in strategic staffing, and offering a framework for compensation and suspension decisions. Additionally, well-implemented evaluations serve as progress charts, indicating improvements or declines in job performance. However, formal performance discussions can foster internal competition among employees, potentially leading to resentment and communication breakdowns, and are often prolonged and expensive, requiring extensive administrative effort and time. From a manager's perspective, performance evaluations motivate the establishment of clear expectations and regular feedback, improving the understanding of employee strengths and weaknesses and driving employee motivation and performance. The essay references various studies emphasizing the importance of ethical behavior, organizational justice, and effective feedback in the performance appraisal process.

Running head: MANAGING HUMAN RESOURCES
MANAGING HUMAN RESOURCES
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1MANAGING HUMAN RESOURCES
Benefits of Formal Performance Analysis to Organizations
Formal performance discussion is considered as an essential part of the human resources
area’s contribution to an organization. However, a successful formal work performance’s
assessment would assist in eradicating complexities related to the quality of work and behaviour
and can further encourage employee to increase their level of contribution to the organization.
 Enhance the Decision-Making Competencies- Effective performance appraisals helps
organizations to gather detailed information on employee performance further improving
the process of decision making and also facilitates to organize the open positions with
existing employees in order to reinforce the organization and encourage loyalty.
Performance evaluation further provides a detailed framework while performing decision
making activities related to compensation and suspensions (Dusterhoff, Cunning and
MacGregor 2014). It is significant to note that if any company transforms into the
adverse party to any sorts of lawsuits or grievances, a properly implemented performance
assessment can either disprove or underpin claims.
 Planning Advancements- A well-implemented performance evaluation can be utilized
as a chart progress whereby assessing performance appraisals from one standard period to
another helps to provide both the organization and the employee with evaluated
indicators of progress, lack of productivity or deterioration in areas of job performance
(Fletcher and Williams 2013).
Drawbacks for Organisations in Using Formal Performance Analysis

2MANAGING HUMAN RESOURCES
A formal performance discussion involves employees, employers along with strategic
managerial personnel thus are considered as a complex procedure. Thus, organizations must
effectively supervise the process of performance appraisal for its well-functioning.
 Threats related to internal competition- Formal performance discussion creates severe
competition among employees to obtain job positions and remuneration. Thus, it could
increase the level of resentment, failure in between team members to communicate in an
effective manner (Sekaran and Bougie 2016). However, this could further lead to factors
related to dysfunction of the team or to the department of the organization further
resulting to attain goals and performance standards of the organization.
 Prolonged and Expensive System- Performance appraisals are considered as an
expensive procedure that incorporates extensive administrative activities, patience and
time (Dusterhoff, Cunning and MacGregor 2014). Furthermore, several assignments tend
to lose its efficiency as staffs get prolonged induction with advanced technologies and
skills.
Benefits for managers in implementing performing evaluation
Effective performance evaluation seeks to motivate managers to establish expectations
and further provide unofficial reviews and feedbacks on the regular basis in order to facilitate
effective employee development and achievements.
 Managers’ Understanding of Employee’s Strengths and Weaknesses- Effective
performance facilitates managers to have an improved understanding of the skills and
competence level of the employees. An enhanced employee evaluation, managers’ level
of expertise in comprehending the strengths and weaknesses of the employees (Jacobs,

3MANAGING HUMAN RESOURCES
Belschak and Den Hartog 2014). Furthermore, managers can develop a sense of the way
they can increase the motivational level of the employees starting from leading by
appropriate examples to justified allocation of work.
 Employees are motivated to enhance their level of performance- A well-established
performance evaluation process enhances the performance level of the individuals, teams
as well as departments. Managers further establish objectives with employees and further
supervise their performance and also perform performance feedbacks (Dusterhoff,
Cunning and MacGregor 2014). Furthermore, formal performance discussion
accomplishes essential human requirements which are to be identified and valued that
facilitate improved level of self-esteem and encouragement in regards to optimal
performance.

4MANAGING HUMAN RESOURCES
References
Dusterhoff, C., Cunningham, J.B. and MacGregor, J.N., 2014. The effects of performance rating,
leader–member exchange, perceived utility, and organizational justice on performance appraisal
satisfaction: Applying a moral judgment perspective. Journal of business ethics, 119(2), pp.265-
273.
Fletcher, C. and Williams, R., 2013. Appraisal, feedback and development: Making performance
review work. Routledge.
Jacobs, G., Belschak, F.D. and Den Hartog, D.N., 2014. (Un) ethical behavior and performance
appraisal: the role of affect, support, and organizational justice. Journal of business
ethics, 121(1), pp.63-76.
Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
John Wiley & Sons.