The Effectiveness of Employee Performance Appraisal System in Health Sector: Evidence from Iranian organizations

Abstract

Introduction: Performance appraisal is a formal process to review and improve the organizational performance of employees regularly. Despite the appropriate organizational frameworks for performance appraisal, they are not apparently addressing the operational realities of health care organizations. This study thus aimed to examine the effectiveness of the current performance appraisal system of employees at Tehran University of Medical Sciences (TUMS) from the perspective of employees. Methods: The data were collected from 504 TUMS employees using researcher-developed questionnaire following the validation. It consisted of 46 questions covering such various dimensions as performance expectations, communication of performance objectives to employees, self-assessment, performance metrics, surveyors, and performance appraisal results. ANOVA, t-test, Post hoc and Tukey statistical tests were used during analysis process by SPSS 22. Results: The performance appraisal system was not found as effective as expected from the employees’ perspective and the scores for all its dimensions dropped below the average. The overall performance appraisal score was 2.71 (out of 5). There was also a significant correlation between the employees’ education and organizational job group and the score of performance appraisal (p<0.0001). Conclusion: The current appraisal system according to the results is not well functioning. Therefore, it seems necessary to make urgent changes. The lack of active participation from employees and managers in performance appraisal development process, and the subsequent low motivation to improve their performance seems to be a persistent challenge. A fairly desirable solution might be to decentralize the appraisal processes rendering more authority to managers and supervisors along with empowering managers.