FOR MORE CLASSES VISIT tutorialoutletdotcom Many practitioners, as well as scholars paid significant attention to the subject. Designing a performance appraisal system integrates several functions, such as: employee monitoring, setting up objectives and values, monitoring and evaluating hiring, training and retaining strategies [1].

1. Analyse the subject:performance appraisal for engineers
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Many practitioners, as well as scholars
paid significant attention to the subject.
Designing a performance appraisal system
integrates several functions, such as:
employee monitoring, setting up objectives
and values, monitoring and evaluating hiring,
training and retaining strategies [1].
One aspect that needs to be pointed out is
the organizational context, which might
present an important influence on the
performance evaluation field [2]. Moreover,
recent studies indicate significant connection
between the organization’s characteristics
and the proclivity in adopting a formal
performance appraisal [3]&[4].
Aside the structural features of the
organization, other three factors are cited in
empirical studies to be influential of the
implementation of performance appraisal
systems, that is: workforce particularities,
level of job control and related human
resources practices [5]. Abstract
Present paper aims to discuss the pros
and cons of the implementation of a staff
appraisal system within the organizational
framework, with particularities, unforeseen
related costs and expected outputs. We

2. analyse the components of the system and the
procedures to be put in place in a critique
view of most common practices, as well as
unwanted facets of implementing a staff
evaluation system using insufficient or frail
management instruments.
Keywords: staff performance indicators
performance appraisal, HRM
JEL Classification: M5, M12 1. Introduction
The organization naturally seeks ways to
become more competitive in its sector,
exploiting all possible sources of competitive
advantage, thus pursuing a progressively
more proactive performance management.
Success of a company depends on many
factors, some possible to control (mainly
internal ones), other outside the company’s
range of control. Amongst the internal ones,
the most cited is the human factor, meaning
that commonly we find that success is a
direct result of the performance of the
employees. We can then state that the quality
of the human capital is crucial for any
company, enabling it to build and maintain a
competitive advantage in a knowledge
economy framework, along with technology
and innovation, as pillars of the
competitiveness in the sector.
The question then rises on how we
measure human resource performance and
most importantly, how do we maintain or
ameliorate it in a systematic, formal and
programmatic way. 2. Purpose and constrains
Performance
Appraisal

3. implementation of the
System One of the most obvious objectives is that
implementing a Performance Appraisal
System assists the organization into directing
the efforts and competencies of its staff
towards maximizing performance. This is
done by means of measuring, reviewing and
developing individual performance.
According to Brown and Haywood [4],
the performance appraisal system is adopted
when the employer strives to obtain benefits
from the use of practice that is to obtain a
tangible return on the investment. But we
actually find that it is used as a management
tool in order to influence performance
overall, rather than to obtain clear results
based on the effort of implementation.
During the Performance Appraisal
process there are some areas that are 399 “Ovidius” University Annals,
Economic Sciences Series
Volume XIII, Issue 2 /2013 discussed, namely: job responsibilities,
performance objectives and competencies.
Focusing on providing feedback on staff
competencies grants an effective personal
development at work. Problem that arises
often is that direct supervisor (generally
conducting the appraisal) and the subordinate
being appraised do not agree completely as to
the criteria on which the effort of the
evaluated staff is to be assessed. Or,
agreement between the two parties in terms
of evaluation criteria is essential in order to
maintain the fairness of the process in the
eyes of the subordinate being appraised.
We consider that in real life economy,

4. failing to match the criteria of the appraisal
process, thus to maintain a perceived fairness
of the performance appraisal system
generates the main reason why performance
appraisals tend to be disgraced within
organizations. We shall examine the
situations and possible solutions to be
implemented in order to avoid the entire
process being compromised by lack of
coherence in finding the particular set of
combined indicators that can be accepted as
relevant both by the appraiser and by the
employee under evaluation.
We can depict three dimensions of a
formal appraisal system implementation [5]
the type of indicators used to rate staff
performance, the person(s) carrying out the
appraisal and the frequency of the process.
Each of these dimensions singularizes the
way the system is implemented in the
organizational framework. well apply for organizations whose activities
can be quantified as such – meaning that
measurable outputs can be defined and
counted by the appraiser. As a consequence,
the motivational wage is a function of the
rating given by the appraisal process, as in
measurable raise or decrease of wages could
be depicted from the periodical evaluation. It
is not always the case, or, to be more
specific, it is rarely the case that (only)
quantitative performance can be used.
According to Prendergast [6] not many
organizations use such a system of indicators
in the economic reality and deploy instead a
mechanism in which the employees'

5. bonus/wages depends on a subjective
evaluation of their performance by the
appraiser. Such mechanisms are called
Principal-Agent models with subjective
evaluation [7].
As stated before, job descriptions often
contain a variety of tasks to be performed by
the employee, which makes it difficult to
evaluate performance using a singular set of
objective indicators. Instead, subjective
appreciation, based on the evaluator best
judgment
address
the
issue
of
complementarity of tasks, presenting in
addition the advantage of increasing the
flexibility of the process. The obvious
disadvantage is that it also increases the level
of dissatisfaction of the appraised employee,
whose perception of inequity might also
upsurge due to lack of tangible, verifiable
and clearly defined criteria of rating. On the
other hand, the use of mainly objective
criteria as source of rating can determine
employee to focus excessively on high
scoring at these ones, thus neglecting other
aspects such as initiative, team-player or
communication abilities. It triggers out the
mechanism of “misalignment of incentives”
[1]
The appropriate mix of objective and
subjective criteria has to be found and put in

6. place in order to maximize the effectiveness
of the process.
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7. place in order to maximize the effectiveness
of the process.
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