Performance Appraisal: Two Steps Forward, One Step Back?

This article reports the findings of a recent study of performance appraisal systems in Australian industry, updating earlier research data in view of contemporary organizational and industrial relations changes. Research results suggest that, while substantial forward steps have been made, organizations still have some way to go in their pursuit of ‘best practice’ appraisal schemes. Performance appraisal (PA) is still a popular HRM tool, with increased employee coverage and an emphasis on Management by Objectives. There is some evidence that organizations are more closely customizing their PA systems, sometimes in conjunction with quality programs, to meet their specific HR objectives. Conversely, the objectives of many PA systems remain short‐term rather than strategic, and there appears to be a decline in the use of formal PA feedback mechanisms. Overall, this survey suggests a focus on performance evaluation rather than training and development, and increasingly a ‘hard’ HRM perspective capitalizing on current industrial relations changes.