A composite model for employees' performance appraisal and improvement

Purpose – The purpose of this paper is to develop an innovative method of performance appraisal that will be useful for designing a structured training programme. Design/methodology/approach – Employees' performance appraisals are conducted using new approaches, namely data envelopment analysis and an integrated fuzzy model. Interpretive structural modelling is used to design a training programme for employees. Findings – Performance appraisals using data envelopment analysis focus on output enhancement, while an integrated fuzzy model using quality function deployment (QFD) and multi‐attribute decision‐making focuses on input enhancement. For overall and continuous improvement of employees' knowledge, skills and attributes, this composite model provides an in‐depth analysis and also offers a means for designing a structured and effective training programme through interpretive structural modelling. Research limitations/implications – In data envelopment analysis, the number of employees for performance appraisal should be equal to or greater than three times the selected number of input and output factors. In the integrated fuzzy model, the number of main factors should not exceed seven for pairwise comparison. The size of the QFD matrix should not be more than 30. Practical implications – The factors selected for appraisal and the method of appraisal should be known by the employees concerned. Consensus among all those concerned is necessary for effective application and utilization of the model. Social implications – This model provides a means to increase the knowledge, skills and attributes of employees by adopting a structured approach to designing a training programme for employees of various categories. The approaches used are well‐established and can be applied in many other fields. Originality/value – In this paper, approaches used for appraisals and designing training programmes are new to this field of study, although they have been successfully proven in many other fields. The results obtained using these methods are useful for helping management to make decisions on training needs, bonuses, incentives and promotions. For the employees, a structured training programme design improves their KSA, quality and standards.