Linking the Performance Appraisal Process to Employee Motivation and Merit Pay

There are many questions to consider when addressing performance appraisals, motivation, and merit pay, including, What is a performance appraisal? What is performance management? What key areas of responsibility should be addressed on a performance appraisal? What is employee motivation? Should the performance appraisal be linked to a reward system? and What is merit pay? As much as is written and taught about performance appraisals and performance management there is still misunderstanding about the process and the business objective the appraisal process serves. Critical decisions, such as promotions, selection, compensation and termination hinge on the content of performance appraisals. Yet, there are few reviewers who have an adequate understanding of the process. Reviewers have to know how to generate fair, accurate, meaningful appraisals, and how to present them in a constructive way. Employee ratings must be consistent, reliably measured, and valid in terms of repeatability. Roles and responsibilities must be clearly defined, intelligible expectations must be set and agreed to, and to enhance the probability of acceptance by both parties, joint development of goals, objectives, measurements and performance levels must be developed. A critical use of performance appraisals should be for motivational purposes. Some motivational elements to consider include the opportunity for advancement, recognition of accomplishments, challenging work assignments, responsibility level for work, and opportunity for growth. There are too few firms taking advantage of the opportunity to link performance appraisals with motivational opportunities. The worker’s perception of performance frequently is based on the relationship between effort, performance, and reward. But, what happens when the reward is perceived as inadequate? Is the timing of the reward close enough to the performance appraisal itself to be identifiable? Is the reward offered meaningful and of sufficient quantity or quality