Business strategy, performance appraisal and organizational results

Abstract

PurposeThe purpose of this study is to analyze how the design of performance appraisal is influenced by the competitive strategy of the firm. Then, this paper examines if the alignment between appraisal and strategy impacts firm performance.Design/methodology/approachThe study sample includes 258 Spanish firms in the manufacturing and services sectors. This information was gathered through questionnaires addressed to the CEO and the senior human resources manager. Several econometric models are estimated, using robust regression analysis and including a set of relevant control variables.FindingsA positive relationship is found between an innovation strategy and developmental performance appraisal. A cost strategy has a negative impact on the adoption of developmental performance appraisal. The findings also confirm that firms with a quality strategy and developmental appraisal have higher performance. In addition, firms adopting an innovation strategy and administrative appraisal enjoy higher return of equity.Research limitations/implicationsFuture research should analyze the dynamics of the relationships between appraisal, strategy and performance to rule out the flaws of cross-sectional data. Another potential extension is the analysis of the interactions of the design of other human resources management practices with both competitive strategy and firm performance.Practical implicationsFirms can improve performance by aligning performance appraisal design with strategy. Those with an innovation strategy should choose administrative appraisal, and those competing on quality should focus on developmental appraisal.Originality/valueThis paper compares the theoretical recommendations on performance appraisal for different competitive strategies, what firms actually do, and the impact that the alignment between appraisal and strategy has on firm performance.

Innovation and human resource management: a systematic literature review

“…Baruk (2017) clarifies that employer branding is important, and necessary for companies, such as employer brands, to establish strategies that allow them to achieve organizational innovation. From the viewpoint of Bayo-Moriones et al (2020), HR and their performance evaluation must be aligned with the company's innovation strategy.…”

Managing the most important asset: a twenty year review on the performance management literature

“…The early PA literature focused on assessing employee performance, developing metrics and determining evaluation results (Simmons, 2002). Gradually, the focus turned to wider employee objectives such as organisational justice (Farndale and Kelliher, 2013), trust (Brown and Benson, 2005), knowledge exchange (Wang and Wang, 2014), creativity (Bayo-Moriones et al , 2020) and organisational loyalty (Cravens et al , 2015; Whiting et al , 2008). Recent research has also focused on the qualitative elements of PA, whereas previous studies had focused on quantitative features such as rating scales (Brutus, 2010).…”

“…The majority of the research in this category focuses on the accuracy of rating scales or measurement techniques (Richard et al , 2009). Some of the research in this field looks at the influence of rating quality on various employee and organisational outcomes (Kavanagh, 2007; Bayo-Moriones et al , 2020). We anticipate that the topic will continue to gain popularity as a result of its relevance to modern writing.…”

Pengaruh Penilaian Dan Mentoring Terhadap Peningkatan Kinerja Karyawan Rumah Sakit Islam Nasrul Ummah

“…Penilaian kinerja mencerminkan kebutuhan pemberi kerja untuk pengukuran kinerja pekerja yang komprehensif (Heywood, Jirjahn, & Struewing, 2017). Evaluasi kinerja pekerja untuk mengontrol penyebaran mereka dan mengelola proses HRM tertentu yang sesuai (Bayo-Moriones et al, 2021). Berdasarkan pendapat di atas, penilaian kinerja merupakan evaluasi yang dilakukan oleh pimpinan terhadap karyawan di suatu bidang tertentu yang sesuai dengan standar kinerja yang ada.…”