Performance Review Analysis: Employee Performance and Productivity

This report provides an in-depth analysis of performance reviews, examining their impact on employee performance and organizational productivity. It begins with an executive summary outlining the study's focus on the advantages and disadvantages of performance reviews. The introduction establishes that while performance reviews are often intended to improve employee performance, research suggests they may be ineffective and even detrimental. The analysis delves into the common belief that performance reviews are useful tools for measuring employee performance, fostering communication, and promoting career development. However, the report presents evidence from various studies highlighting the negative consequences of performance reviews, such as employee dissatisfaction, financial costs, biased feedback, and questionable reliability. The analysis includes data indicating the limited meaningfulness of performance reviews and their potential to cause frustration and resentment among employees. The report concludes that performance reviews may have a negative impact on both employees and organizations, despite their intended purpose of enhancing productivity. The report is supported by a bibliography of relevant sources.

Performance Review
Student’s Details

PERFORMANCE REVIEW 1
Executive Summary
Performance review is an important tool to measure the employee’s performance annually. In
This study advantage and disadvantage of performance review have been discussed. This study
also comprises evidence that performance review is pointless in increasing employee’s
performance, besides it impacts adversely to employee’s motivation and performance. This
discussion also covers negative impacts of employee’s performance in organizational
productivity.

PERFORMANCE REVIEW 2
Table of Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Analysis.......................................................................................................................................................3
Conclusion...................................................................................................................................................5
Bibliography................................................................................................................................................6

PERFORMANCE REVIEW 3
Introduction
Performance review refers to an average evaluation of overall employee performance
throughout the year and providing rewards, promotion, and demotion because of the same. It is
usually believed that performance review is an effective tool to improve the performance of
employees and organizational productivity (Ayomikun, 2017). But various research studies
identified that performance review has no impact on the improvement of employee's
performance and it is pointless (Cappelli & Conyon, 2017). This discussion covers brief analysis
of performance review an employee’s performance.
Analysis
Studies find that performance review is an important tool to measure employee's
performance through the year or in a certain period. Performance review of employees includes
an evaluation of all information related to the performance of the employees which identify the
strengths and weakness area of employees related to work performance which gives scope for
improvement. Performance reviews are the best tools for employee's growth and career
development within the organization (Brown, ’Kane, Mazumdar, & McCracken, 2018). Besides
performance review is a tool to promote communication between employees and managers, and
managers provide feedback to employees to improve and enhance their performance in the
organization. Besides performance reviews foster a healthy relationship between employees and
managers (Knight, 2011).
But studies revealed that performance reviews impact adversely to employee's
performance and have more harm than to good for both managers and employees. Economists
and business executives believe that failure and success of an organization widely depend on the

PERFORMANCE REVIEW 4
quality of employees and performance reviews is not a tool to measure the quality of employees,
thus, using this tool for organizational success is a pointless process. Whereas performance
review is an unsupportive factor for employees and it gives a sense of humiliation to employees
when they recognized as lower performers in the organization (Woolston, 2019).
Apart from employees dissatisfaction annual reviews of performance also results in major
financial cost and time. Every year, reviewing employee's performance leads to great financial
resources and valuable time of managers in developing and implementing suitable performance
review methods. Also, in the case of low-performance results of employee's leads punishment
and demotions of employees, eventually, the productivity of the organization suffers again in
form of dissatisfied and demoted employees (Kampkötter, 2016). Besides, poor communication,
biased feedback, and meaningless goals also have adverse effects on organizational performance.
Reliability of the performance reviews is always questionable and unsure. This figure
shows that on 17% performance reviews are meaningful.

PERFORMANCE REVIEW 5
Source: (Leadership IQ, 2020)
Literature revealed that performance reviews lead to frustration, anger, and resentment in
employees when their performance identified poor and below the standard. Sometimes
employees have a valid and appropriate reason for the below the standard performance, but
without considering these reasons give a tag of below performer to employees results in
employee’s frustration and resentful. Sometimes performance reviews set performance levels
and capabilities in employees' subconscious mind that they cannot perform more than a certain
level which again results in low organizational productivity. Whereas in some cases, employees
disagree on the results of the review and believe that they are already doing an adequate job and
there is no scope to improvement at their end, in such case performance reviews are meaningless
(Javidmehr & Ebrahimpour, 2015).

PERFORMANCE REVIEW 6
Conclusion
Thus, available literature revealed that there is no use of performance reviews in
organization infect it leads a negative impact on the employees and organizations instead of a
positive impact on organizational productivity.

PERFORMANCE REVIEW 7
Bibliography
Ayomikun, O. D. (2017). Effectiveness of Performance Appraisal System and its Effect on
Employee Motivation . Nile Journal of Business and Economics, 15-39.
Brown, C. T., ’Kane, ,. O., Mazumdar, B., & McCracken, M. (2018). Performance Management:
A Scoping Review of the Literature and an Agenda for Future Research. Human
Resource Development Review, 1-26.
Cappelli, P., & Conyon, J. M. (2017). What Do Performance Appraisals Do? ILR review, 88-
116.
Javidmehr, M., & Ebrahimpour, M. (2015). Performance appraisal bias and errors: The
influences and consequences. INTERNATIONAL JOURNAL OF INTERNATIONAL
JOURNAL OF, 286-302 .
Kampkötter, P. (2016). Performance appraisals and job satisfaction. The International Journal of
Human Resource Management, 2-26.
Knight, R. (2011, November 3). Delivering an Effective Performance Review. Retrieved March
4, 2020, from Harvard Business review: https://hbr.org/2011/11/delivering-an-effective-
perfor
Leadership IQ. (2020). Performance Appraisal: New Data Reveals Why Employees And
Managers Dislike Them. Retrieved March 7, 2020, from Leadership IQ:
https://www.leadershipiq.com/blogs/leadershipiq/performance-appraisal-new-data-
reveals-why-employees-and-managers-dislike-them

PERFORMANCE REVIEW 8
Woolston, C. (2019, May 3). Why appraisals are pointless for most people. Retrieved March 4,
2020, from BBC: https://www.bbc.com/worklife/article/20190501-why-appraisals-are-
pointless-for-most-people