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I am a M.A. in industrial/organizational psychology. Most of my experience has been in human resources and change management. My passion lies in employee assessment, organizational development and employee opinions. Website: www.IanMondrow.com LinkedIn Profile: http://linkd.in/drBYoC

Sunday, September 12, 2010

Comparison of online and traditional performance appraisal systems

Everyday, more HR departments are beginning to utilize technology to simplify some of the required functions utilizing employee self-service, managerial self-service, and human resource information systems. These are otherwise referred to as electronic human resource management (eHRM). The most popular form allows employees to monitor their own HR information or benefits, often referred to as the employee self-service (ESS). In addition, the managerial self-service (MSS) allows managers to access HR tools via interview, assisting them in administering pay, developing employees or managing performance. Human resource information systems (HRIS) have become essential for all corporations as it stores and analyzes information about the organization's personnel.

A Performance Appraisal (PA) system can be utilized in a MSS or both a MSS and ESS, in which employees can access information about their review. Transitioning to an electronic performance appraisal assist in archiving previous appraisals and allows for easy comparisons.

Payne, Horner, Boswell, Schroeder and Cheyne (2009) decided to evaluate PAs on the following constructs:
  • Rater Accountability: The requirement to justify a score and/or provide feedback.
  • Security: Employees being able to access only their information and supervisors only being able to view information of those who report to them.
  • Quality: Ratings and feedback provide constructive and useful feedback that can be utilized to improve performance.
  • Satisfaction: The extent to which the PA meets the needs and expectations of company personnel.
  • Utility: The extent to which the employee acquired information that demonstrates to the employee how he/she can improve their performance.
  • Participation: The extent to which employees feel involved in the PR process.The researchers utilized 631 staff employees within a specific division of a Southern US University whom were partaking in their annual PA. A total of 235 individuals participated. 152 out of 272 (56%) evaluated the online PA system and 83 of 359 (23%) evaluated the traditional PA (paper and pencil). 67% of the respondents in the Online PA group were female and 69.9% of the tradition PA group were female. Respondents evaluated all items on a 5-point scale (1 = strongly disagree, 5 = strongly agree).


The researchers have found several significant findings between online and traditional (paper and pencil) performance appraisals (PAs). Employees that partook in the online appraisal (M = 3.6,SD = .72) rated supervisor accountability higher than those who took the traditional appraisal (M = 3.3, SD = .7; F (1,158) = 8.4, p < .05).

In addition, participants in online PAs (M = .17, SD = .62) reported higher levels of participation than the traditional PAs (M = .08, SD =.55; F(1,158) = 9.50, p <.05).

In regards to quality, the pen & paper PA (M = 3.51, SD = .75) was rated significantly higher than the online PA (M = 3.12, SD = .83; F(1,158) = 8.04, p < .05). Since this is the first time an electronic PA was administered, people may have been unaware of how to properly use it. Results may have differed if the online PA was used in previous appraisals. It appears that switching to an online lowers the perceived quality among employees initially and organizations should be sure to communicate the transformation properly to reduce this occurrence.

Although it was hypothesized that the online PA would create a higher sense of security, no significant difference was present between the groups. Some individuals understand how security is increased using an online PA, while others are believe there is a threat to security.

No significant difference was present in regards to utility. There was no significant difference in regards to satisfaction.

The study did not follow ideal experimental guidelines, such as random sampling, and thus there may be a threat to validity in the study. However, this research can be used as a framework for upcoming studies. Future studies may want to evaluate other variables including: age, type of job, job level and personality difference.

What does this study tell HR professionals?
The study clearly demonstrates that whenever an organization changes its approach to PA, that it should clearly communicate how the process will change. Employees should undergo training on how the new system works and how it can assist them on their job. Employees should also be informed on how an electronic PA will increase the overall security. Furthermore, the study shows that people are more likely to fill out electronic PAs than tradition PAs and personnel feel that managers are obligated to provide background information to accompany the ratings. Therefore, it is in an organization's best interest to implement this type of procedure since it simplifies the entire PA process and will have no affect on employee satisfaction.

Work Cited
Payne, S.C., Horner, M.T., Boswell, W.R., Schroeder, A.N., & Stine-Cheyne, K.J. (2009). Comparison of online and traditional performance appraisal systems. Journal of Managerial Psychology, 24(6), 526-544.

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