Pay for Performance, Performance Appraisal, and Total Quality Management

Abstract

What is the future of performance appraisal in the public sector? Today, performance appraisal systems lie in contention between two major management movements: pay for performance and Total Quality Management (TQM). Appraisal is viewed as an essential, if difficult, ingredient in pay for performance and, just as clearly, as a threat to TQM programs. On the one hand, performance appraisal systems are intricate, complicated, and troublesome but necessary; on the other, they are inconvenient, subversive, and troublesome but unnecessary. How can performance appraisal navigate between this Scylla and that Charybdis? Performance appraisal has developed over the course of a century into a complex and costly management support tool. Although objective appraisal systems provide accurate measures of employee performance, they require both organizational support and maintenance. For supervisors and managers, the appraisal system is an instrument. How they use it will depend on both their perception of the organization's needs and how well they have been trained in its use. Performance appraisal is a pivotal management technique. It is used in judgmental work force decisions, such as promotion, demotion, retention, transfer, and pay, and for employee development via feedback and training; it also serves the organization as a means for validating selection and hiring procedures, promoting employee-supervisor understanding, and supporting an organization's culture. When the quality of an individual's work performance is examined, performance appraisal is the preferred instrument. Ideally, performance appraisal is a lens that focuses the decision-making process on the appropriate jobrelated criteria. It becomes the means for assuring that a career is opened to talent and that the individual is rewarded for meritorious performance.