Human Resources Essay

3043 Words Sep 8th, 2011 13 Pages
Do you think performance appraisal should be done? Is it worth the cost? Discuss.

Performance Appraisal is the process whereby the HR Department procures analyzes and document facts about the performances of the employees of the organization. These processes are usually done annually. As described by Margaret Francis
"Performance appraisals provide a formal, recorded, regular review of an individual's performance, and a plan for future development. In short, performance and job appraisals are vital for managing the performance of people and organizations." ls are important for staff motivation, attitude and behavior development, communicating organizational aims and fostering positive relationships between management
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How does that relate to the costs of performance appraisal?

The main cost that Nickols tries to get people to believe related to performance appraisals is in TIME -- the time of the manager and the time of the employee. Nickols calculates that time, multiplies it by salary figures to get his numbers. But it doesn't take into account that the money companies pay for "time" is a fixed cost. Salaries are a fixed cost unless you alter the number of salaries, and thus, employees. Whether employees are making widgets, or in the washroom smoking pot, the costs for their time (salary) is the same.

So, if you eliminate the TIME spent on performance appraisals, do you save any real money? No. Because you continue to pay the salaries of all of the people spending the time. In fact, there are no real savings (fixed cost) by eliminating performance appraisals UNLESS you actually reduce your staff.

The Costs


The costs cited by the Internet respondents run the gamut from obviously quantifiable or hard costs to soft costs or costs that are much more difficult to quantify. The preceding discussion can be viewed in large measure as a discussion of the soft costs. The following discussion focuses on the hard costs. These consist chiefly of the direct and indirect expenses associated with the following activities:

preparing appraisals setting goals and objectives

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