Productivity Implications of Performance Appraisal System (Full Version)

The measure and optimisation of this relationship between the input and output in any organization is the “Productivity”. The closed cycle economic concept has confirmed that the manpower is the key contributor to the corporate performance. Hence, high performance manpower in any corporate unit should directly reflect a high productivity end result. The performance of manpower is assessed through a “Manpower performance appraisal system”. In 1961 Peter Drucker popularised the Management by Objectives (MBO) method. The MBO is thus a performance oriented system. Hence in this doctoral research work, the Preliminary Hypothesis was coined as “Productivity is directly linked to the Performance Appraisal system” or Productive persons are always good performers. In order to establish the hypothesis, samples were chosen from 4 different type of corporate units, with 10 sectors in each. In order to be realistic, 25 top performing (A – Grade) employees were drawn from each of the sample organisation. They were randomly sampled and normally distributed sectarian survey to provide a least-error probability. The total samples were, 10 organisations X 4 typess X 25 employees = 1,000 top performing employees. The standard criteria and contents of the performance appraisal method was also pre-established. The total production data from January to December 1974 was used, to test the validity of the preliminary hypothesis. From 12 diversified organisations spread over 4 types, Productivity had a positive relation for 300 Performance Appraisal Toppers, subject to the correct and up to date Sector Management Information System (MIS). From 28 diversified organisations spread over 4 types, Productivity had a negative relationship for 700 Performance Appraisal Toppers, because of inadequate Sector Management Information System (MIS). The preliminary hypothesis was hence considered “null”. The hypothesis was revised as “Productivity (Pr) is linked to the Performance Appraisal System (Pa) through the corporate Management Information ...