The History Of The Performance Appraisal System Business Essay



Section 1: The History of the Performance Appraisal System

1.1 The purpose of the Appraisal System

1.1.1 The Right method for the best results

1.2 Outcomes of the System

1.2.1 Improving performance, personal development

1.2.2 Drawing and developing an Employee career

1.2.3 Reducing employee absenteeism and turnover

1.2.4 Reducing discrimination

1.3 Motivating employees through the appraisal system

Section 2: Performance Appraisal: Management Decisions and challenges

2.1 Management decisions

2.1.1 Compensation and Reward System

2.1.2 Training employees for better results

2.2 Challenges faced during the appraisal process

2.2.1 Fighting errors that deteriorate the effective appraisal process

2.3 Performance Appraisal system for more organizational commitment



Section 1: The Design and Implementation of an Effective Performance Appraisal System

1.1 The performance appraisal process

1.1.1 Developing an evaluation form

1.1.2 Identifying performance measures

1.1.3 Setting guidelines for feedback

1.1.4 Identifying disciplinary and termination procedures

1.1.5 Establishing an evaluation schedule

1.2 Preparing and conducting an effective interview

1.2.1 Preparing for the interview

1.2.2 Evaluating the interview

1.3 Software for implementing a performance appraisal system

1.3.1 Software created for the benefits of everyone

Section 2: The Relationship between Performance Appraisal System and organizational culture and change management

2.1 Organizational Culture

2.1.1 Characteristics of organizational culture

2.1.2 Organizational culture and performance

2.2 Change Management

2.3 Relationship between Performance appraisal and change management ‘

2.4 steps to use to fight smartly any resistance of change


Nowadays, organizations are facing an increased global competition and that due to the political change, economic change and the fast growth in information and technologies. Therefore, this fact induced the majority of the organizations all over the world to rethink their usual work system that should fit with the current situation of the market and that in order to maintain their competitive position and face the increased demands for more improvements in quality and business outcomes. This system is based on the adoption of an innovative, high performance, new and flexible workplace that leads to increase the employee satisfaction and motivation. The switch from the tayloristic system to the pyramidal Hierarchical system, then to a centralized organizational structure, job rotation, to achieve nowadays eliminating or reducing the hierarchical structures and encouraging the team work, involving employees from the lower lever to the upper level in decision making and enhancing the communication channel between these two levels consisted an important evidence of the link between the company growth and success with the employee job satisfaction.

Many researchers have shown the current employment situation in the Middle East Region. The results illustrated that there is a big relationship between a company culture and values and the employees’ job satisfactions, productivity, turnover rate and economic growth for businesses. According to a study made by in July 4, 2012, has shown the impact of employees happiness, commitment, loyalty and lack of responsibilities on the absenteeism rate. This fact will cause lot of problems such as decreased productivity, possible loss of the business and issues with employees’ morale. Solutions proposed to be implemented in The Middle East Countries could be enhancing the reward system, training employees in addition to following some changes in the company values and culture that fit with the global external and internal situation in the same time.

The majority of the private and public organizations in Lebanon suffered from the impact of the war. However, after the war phase, organizations worked to recuperate and regain their stability and achieve more growth and success. For those reasons, public and private Lebanese institutions created new processes and strategies of rebuilding, so they aimed to reconstruct and restore the organization structure from one side and their human resources potential from the other side. In fact, renovation process will be failed in case of the absence improvement of human resources potentials. So, the majority of the organizations believed that by implementing some changes which maintain the employees’ interest will affect their performance level positively so productivity will be also increased. So in order to achieve these purposes, conducting the employee performance appraisal system is very essential and should be considered as a must in every organization.

In this research, we will find some answers to the following questions that can guide to the improvement of the topic: What kind of challenges such system may face? How employees will be dealing with a performance appraisal system? How could it affect their behavior? What strategies should be followed by managers during the implementation process in order to overcome any problem or resistance from the employees’ side? What actions to be taken after the implementation process? How can such system lead to change in the organizational culture and management?

Therefore, the human resources department has a crucial role in the organizational development as developing and maintaining a strong human resources department is considered as an art that leads to the employee satisfaction and motivation. The greater the employee satisfaction level is, the higher the organization benefits from its employees trust and commitment. Each organization has as a primary goal achieving high level of performance and that through increasing its employees’ productivity and efficiency. So in order to reach this goal and in order to attain high level of performance advancement, highly satisfied labor force is a must as a satisfied employee will be able to expand additional effort to an efficient and effective job performance and the productivity will definitely increase.

There is an important relationship between the employee evaluation system, employee job satisfaction performance and productivity and the company culture, values. Many strategies and plan should be taken into consideration by the company management, in order to achieve better performance and better results.





The first chapter of the research will develop the concept of the employee performance appraisal system, how this system can lead to employee motivation and job satisfaction that will definitely affect in a positive or negative way an employee performance and his/her career future in the organization. In addition, many challenges and barriers the process of the employee appraisal will be faced, so what are these challenges and how both managers and employees can overcome these barriers together? What is the relationship between an employee performance appraisal system and the organization commitment?

All these issues will be developed and proved in the core of this chapter.

Section 1: The History of the Performance Appraisal System

In this section, we will state some definitions of the performance appraisal system, what are the major objectives and purposes of conducting such system, what are the available methods used during the implementation and what are the criteria confirming the effectiveness of the decided method. In addition, implementing an effective and well organized employee performance appraisal system affect the employee behavior and attitudes. How these benefits can be defined? Finally, some researches’ have shown the relationship between the employee evaluation and their motivation.

1.1 The purpose of the Appraisal System

According to Flippo, one of the important personalities in the field of Human resources, "performance appraisal is the systematic, periodic and an impartial rating of an employee’s excellence in the matters pertaining to his present job and his potential for a better job."

Based on this say, Performance appraisal can be defined as a systematic process that helps managers observing, analyzing and evaluating the performance of their employees or group of employees in term of quality , quantity , cost and time (Erdogan, 2002) so work performance can be developed and organizational goals and objectives can be achieved effectively. In the same time, employees will recognize the gaps in performing their daily tasks, profit from the feedback received and have clear career guidance. (Lansbury, 1988). In addition, the appraisal system provide managers with the ability to take some decisions including employees’ promotion, transfer, incentives, pay increase and even training needs (Anchit Gaurav).

Performance appraisal is considered as an important bond in the process of change in the organizational culture and that due to many reasons; it focuses on setting goals throughout the organization, helps employees understand their roles and responsibilities and increases the organizational effectiveness by defining the main objectives and goals and the way implementing them.

The majority of the organizations are implementing the appraisal process and that for various reasons. In reference to Yehuda Baruch (1996), Performance appraisal is conducted for two major purposes. First, it’s considered as a developmental method (Wendy R. Boswelljohn W. Boudrea, 2000) and exists to serve diversity of management purposes such as decision making including training needs, salaries management, demotion, promotion, termination and others. Second, the performance appraisal system is used as an evaluation system and improves the developmental practices of an employee (Campbell, D. and Lee, C., 1988; Farh, J.L., Cannella, A.A. and Bedeian, A.G., 1991)

Boice and Kleiner (1997) focused more on the importance of the communication during the appraisal process so the employees will have the opportunity to know their current situation and what their managers are expecting from them to do.

In brief, the purposes of conducting any appraisal system are concentrated at least in four reasons (Journal of Human Resource Education, Vol. 1, No. 1, summer 2007, 1-22)

Promoting organizational effectiveness and efficiency

Enhancing individual

Maintaining control of employees’ behaviors and attitudes.

Making the administrative processing simple and ease.

1.1.1 The Right method for the best results

In general, the evaluation methods should be simple and easy so it can be understood by all the company’s members. Choosing the appropriate methods is affected by many factors such as the nature of the job, the organization system and the employee type. These evaluation methods can be classified into various categories; an employee can be evaluated by comparing his/her current work to another so the employee capabilities and capacities in performing his/her tasks can be identified. Here we are talking about the Comparative appraisal. Another way can be used is assessing each employee’s performance independently from the other employees based on the important job related behaviors. The output based appraisal is another approach that consists of concentrating more on the work products as a main purpose. The management by objectives (MBO) is the most used developed and applied method in this approach.

Some methods used in the employee evaluation are classified into traditional and modern methods. Modern performance appraisals are defined as a structure formal interaction between managers/supervisors and employees that usually have the form of interviews that may be annual or semiannual. The job performance of employees is discussed and analyzed so the weaknesses and strengths and gaps in performance are identified so decisions for more improvement and skills can be taken and developed in addition to the decision that are related to pay increases, bonuses, promotions for good performance in addition to the demotion, dismissal and decrease in pay for poor performance. Modern methods include MBO, 360 degree feedback, Behavioral Appraisal, and others.

On the other hand, the traditional methods are the methods that rely on the numerical or scalar rating process where supervisors are requested to rate the employees against a number of attitudes and specific objectives. The rating scale, essays, critical incidents, checklist can be considered as examples on the traditional methods.

1.2 Outcomes of the System

The effective performance appraisal process has many positive influences on the employees inside a company. It helps them have a learning opportunity about themselves, knowledge about how they are performing their task and daily jobs, and learning about "the management values" (Beer, 1981). Reference to Stephan and Dorfman (1989), the effective performance appraisal, is an enhancement in the accuracy of employee performance and is a link between performance on executing tasks and the potential for reward.

Outcomes of a performance appraisal don’t only cover the employees’ interests but it influences the whole organization.

1.2.1 Improving performance, personal development

Employees are considered as the lifeblood of the company and they are the only vital factor in the success of any business. Therefore, employees’ behaviors and attitudes can significantly influence the direction and objectives of the company business plan. Therefore, employee performance evaluation is one of the various ways that was created to amplify employee morale, recover job performance and largely enhance productivity. These strategies include a conventional system of pay raise, coverage of significant benefits and the practice of open two-way communication.

One of the most obvious of an appraisal system Is the swap of a face-to-face discussion in a one-on-one meeting with every worker in the company, an employee assessment sessions is an ultimate platform for measuring the situation and fact for both employees and managers and ensure that they are on the same line. Furthermore, this exchange provides the workers the opportunity to share the main issues and provides suggestions to increase efficiency, having good communication between the employees and their manager helps reducing obstacles and improving operations.

A constructive attitude cannot be imposed to a worker but in fact a positive work environment and an appreciative contribution help creating employees’ self-esteem and positive behavior as they will understand the importance of their role they play in the growth of the company. Without appreciating the employees, there work effectiveness will decrease and they feel taken for granted. Moreover, employees who don’t get any response on the practice of their daily tasks will lack confidence in their job, if they are doing well or if there is any other better method.

1.2.2 Drawing and developing an Employee career

Performance review is an important element of the employee career development. The evaluation process assists to measure the performance of the employees and weight up their input towards the organizational goals. Performance appraisal plays the role of the association between the organizational objectives and success and the employees personal goals.

It can be also called as potential appraisal, assists in identifying each employee unseen talents and potentials and the identification of these talents can provide the opportunity for superior responsibilities and better positions in the future. The performance review in its concept can be defined as a developmental in nature.

Moreover, the appraisal system is also strongly related to other HR strategies and activities as it helps identifying the training and development conditions, decisions like employee promotions, demotions, compensation and others decisions. Referring to the evaluation result, employees will be able to develop their career goals, reach innovative level of competencies and draw their own career growth. The appraisal system creates a push to the employees to fortify their strengths and defeat their weaknesses.

1.2.3 Reducing employee absenteeism and turnover

A research conducted in September 2012 by the Redefining Business leadership shown that 71% of the employees in china declared sick when in fact they are not. 54% of the employees in India quit their jobs and the higher rate of the turnover can be obviously realized for the younger employees between 16 and 24 (60%). For this reason, companies should focus their attention on the most essential resources.

One of the important reasons that motivates and makes an employee stays in his/her current job or lead him to find better opportunities somewhere else is the of the working relationship between this employee and his/her management and this through designing and implementing an effective performance appraisal system. Without this process, employees will feel underestimated when their contributions and efforts to the organization are not being effectively evaluated or recognized. This situation will lead to negative attitudes such as absenteeism and makes the employee act in a negative way toward their job. So a not well organized performance appraisal will deteriorate the willingness of an employee to stay within his/her current job.

In addition, through a performance appraisal system, constructive communication between managers and employees will be improved. This situation will create a kind of commitment and loyalty to the work and the organization. Adding to that, communication will provide the opportunity for both parts to share and agree on the short and long term professional goals that should be SMART.

In brief, turnover rate inside an organization is not only related to financial motivational tools but the relationship between the employees and their management , focusing on this important resource, let them be integrated in any decision or any activity will make the employee more committed, their effort are realized and they are considered as an important value. In this case there will be a negative relationship between the employee absenteeism and turnover and the efficient appraisal system.

1.2.4 Reducing discrimination

Many studies have illustrated that employees in an organization are treated based on their gender, race, age, ethnicity, culture or religion of the employee (Murphy and Cleveland, 1995). Such behavior can be summarized by the discrimination act inside the organization. This behavior at work usually lead to poor work quality, decrease productivity, reduce employee commitment, trust, loyalty, satisfaction and morale so the total rate of absenteeism and employee turnover will increase. Therefore, employee performance evaluation is considered as an essential source of ethical issues. Evaluators who have a moral responsibility to fairly and truthfully evaluate the performance of their employee (Kerssens-van Drongelen and Fisscher, 2003) will make the performance appraisal system effective and the results will considered by the employee as fair and equal. So each individual regardless their race, gender, ethnicity or religion will be compensated or punished based on his/her personal efforts. The result will be more commitment, loyalty and confidence in the work and the company itself.

1.3 Motivating employees through the appraisal system

Organizations should focus on its employee’s satisfaction and motivation. Each individual has his/her specific needs and exceptions that can be defined as physiological needs, security needs, social needs, self-esteem needs for recognition and needs from more achievement ( As per Maslow hierarchy of needs. 1954). Mumford (1976) stated other needs including an individual need for knowledge, for recognition, the need for meaningful work and a kind of autonomy in addition to moral needs.

According to Herzberg, goods feelings about a job appear when employees are performing well their job and they are considered professional in their field. Providing a challenging work, recognition of achievement, increased job responsibilities and providing opportunity for growth and advancement are considered as motivators’ elements that guide to bigger productivity, increase employee loyalty and commitment, reduce the absenteeism rate, improve quality of the team or group and guide to job satisfaction. In brief, employees’ motivation is considered as "a force that energizes behaviors, gives direction to behavior and underlines the tendency to persist" (Barte & Martinin, 1998). Managers have the responsibility of creating and providing their employee a suitable work environment and any failure in providing such climate can increase employee frustration and lead to ineffective performance and job dissatisfaction.

Three basic things an employee performance appraisal system can provide and lead to the employee motivation as shown in figure 1.

First, the remuneration system defined through the appraisal system. This means that if an employee receives adequate pay and benefits, this employee will be happy but not motivated. However, if the remuneration is important, this employee is more motivated and more prolific.

Second, Gaps in performance will be defined. So in order to fill these gaps and enhance some performance issues in an employee work, training will be the best method. The objective of the training consists of enhancing the employee career, provides opportunities for more advancement and achievements.

Finally, new individual objectives, goals and responsibilities are established. So employees will feel thrilled and motivated to reach new targets and new results.

Figure 1: Employee motivation

Source: European Journal of Business and Management ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online) Vol 3, No.4, 2011

Section 2: Performance Appraisal: Management Decisions and challenges

In this section, we will develop how the result of the evaluation system affect the management decisions, the main issues a manager may face during and even before the evaluation process, and finally how it can be linked to the organizational commitment.

2.1 Management decisions

At the present time, organizations are facing an increased global competition and that due to the political change, economic change and the fast growth in information and technologies. Therefore, this fact induced the majority of the organizations all over the world to rethink their usual work system that should fit with the current situation of the market and that in order to maintain their competitive position and face the increased demands for more improvements in quality and business outcomes. This system is based on the adoption of an innovative, high performance, new and flexible workplace.

In order to create a healthy work environment, organizations should focus on the work behavior so productivity requirements will be met and individual goals will be satisfied through the reward system. For an effective control over its human resources and their productivity level, managements tend to use the appraisal system as short-term goals focused rather than long-term strategic planning. On one hand, the purpose of the appraisal system is to focus on each employee strengths and weaknesses, in the skills, abilities and behavior and to focus on the employee motivation. On the other hand, it also focuses on improving work behaviors and plan for future growth within the company. Therefore, management decisions based on the appraisal results will include the following issues: employee career planning, defining compensations programs and training needs.

2.1.1 Compensation and Reward System

One of the purposes of the employee evaluation is to identify the level of an employee performance. So employees who are performing well their tasks and achieve the desired goals in an effective and efficient way in addition to their positive behavior toward their job should be appreciated and positively rewarded. In contrast, employees achieving unsatisfactory results, some actions should be taken into consideration.

It’s obvious that we find an important link between an employee efforts and reward. (Kessler and Purcell, 1992; Campbell et al., 1998; Fay and Thompson, 2001; Beer and Cannon, 2004; Latham et al., 2005).

According to Henderson (1989), Reward decisions are related to two main dimensions; first, the results of the objectives achieved and second the way these objectives were reached in term of output quality competencies, abd professional development. In addition, the reward system is not only based on the results but it also should focus on the how creating a satisfactory work environment and assuring a high level of motivation through searching for competent teams and developing employees.

Three behavioral purposes can be found in a reward system.

First, implementing a reward system in a company will help attract and maintain the qualified and competent employees.

Second, the reward system is considered as one of the motivational tools used to encourage employees for more improvement and higher performance.

Third, such system helps maintaining employee commitment to the company and to follow some particular behavior valuable to the organization without ant supervision.

As a results, the organization management has the responsibility to seriously work on enhancing a efficient compensation system as from one hand compensation system will retain goods employees and on the other hand make sure that an employee productivity is in relation to the reward system.

As employee motivation and satisfaction is not only linked to "money" therefore two types of reward have been created.

The intrinsic reward or it can be also called by "Psychological Reward". Such type of rewards can include for example the following steps: providing challenging task to the employees, involving them in decision making, employee of the month, employee promotion. Intrinsic rewards are qualitative in nature.

The extrinsic reward or also known as the "Financial reward" (according to Maslow Hierarchy of needs) and is quantitative in nature as it can include the following: pay increase, bonuses, paid leaves, and others.

2.1.2 Training employees for better results

Performance appraisals are normally carried out to allow the employees compare their current performance with their manager‘s expectations and identify gaps in performance that requires training and improvement.

Training needs process used in an organization shed the light on the main activities that managers should amend to be performed effectively and in an appropriate way in addition to determine the company long term profitability.

Two main benefits can be received from assessing training needs and conducting the implementation of this process: first, employee productivity will increase and employee turnover will decrease in addition to the financial gain due to the increased productivity.

Once preparing for the training, a manager should include the following essential issues in order to have beneficial results such as the company strategies and plans, the employees’ goals and targets already shared and agreed during the evaluation process, the current employees’ performance results and the employees future expectations.

Not only should the new employees participate in the training sessions but also the good and current ones so the company can invest in the development of their skills.

2.2 Challenges faced during the appraisal process

Employees’ evaluation can partially make things better however it can make them worse as well. In the most cases, managers, supervisors and employees may not have enough comprehensive of the job expectations and job description, the evaluation process, leadership training and how linking the results to the compensation structure.

Poor Structure of an employee job description

The purpose of a job description is to describe the main he main task to be performed and clarify the responsibilities of each employee. However a job description doesn’t always state clearly what and how managers are excepting from their employees to perform. This situation will affect the evaluation process as managers will not be able to complete an accurate and inclusive performance appraisal in addition employees will not be able to get an apparent idea on the specific expectations based on them this employee will be rated.

Unstructured Appraisal process

Another challenge might be faced during the implementation of a performance appraisal system is related to an employee file review, the ability of comparing and employee previous performance rating in opposition to their present performance ,determining the relevant employee attitudes and behaviors minutes. This can be explained by the weak preparation before conducting the evaluation meeting so biased results will be obtained. In this case training both employees and managers before the implementation will be a good solution.

Leadership Training is considered one of the chief challenges in the evaluation process as leaders will be taught to be fair and objective, to have the ability of helping the employees establishing realistic and attainable goals for the future assessment period, to learn how conducting effective meeting through creating a positive environment and two way conversation during the interview.

Linking an employee performance only to financial Compensation: the management simply recompenses its employees based on each individual performance rating without matching each individual performance impact to the business goals. Employees have the right to know how their increase compares to others, what are the standard issues based on them they are rewarded and how their salary and remuneration are calculated.

Further to the above challenges, managers and supervisors should be responsive of the widespread errors caused by a biased performance evaluation system. First, managers tend to rate their employees in the middle and avoid rating them too lower or too high. We talk about the central tendency error. Second, managers compare an employee to other employees rather than focusing on the job performance standards. This is the concept of contrast error. Third, managers tend to link bad performance to internal reasons and good performance to external factors. Here we talk about the false attribution. Another error can be faced during the evaluation process is the Halo error that happen when a manager develops a positive impression of an employee’s skill in one area so high rating will be given across all rating criteria.

Furthermore, in some cases, managers rate their employees that they see more comparable to themselves with good ratings in addition when managers rely on the last week or month before the appraisal.

Finally, women are usually evaluated more negatively than men, this situation managers tend to skip each individual specific characteristics, power and efforts and fall in the stereotyping error.

2.2.1 Fighting errors that deteriorate the effective appraisal process

As shown in the previous part, there are many factors that affect the performance appraisal process and block its success. However, many actions can be taken into consideration and applied in order to overcome these dilemmas. What strategy a company should implement in order to avoid the above stated challenges? There are many steps that could be taken within an organization to reduce the negative issues that happen during the process. The major thing to be is to have a look on the problems noted so possible solutions can be discovered.

Steps to be considered can be defined as follow:

Developing accurate performance measures

Train evaluators

Use multiple raters

Figure 2: Performance appraisal errors and solution

Performance appraisal errors and solutions

Common errors


Central Tendency error

Contrast error

False attribution error

Halo error

Distribution error

Similarity error

Recency error

Stereotyping error

Developing Accurate Performance measures

Use Multiple criteria

Reduce the use of the traits-based evaluation

Train evaluators

Use multiple raters

2.3 Performance Appraisal system for more organizational commitment

Organizational commitment can be defined as an employee strong identification with and involvement to the organization. According to Armstrong (2006), when we talk about organizational commitment, three main factors exist: first, when employees trust in and accept the organization’s values and goals, second when employees are willing to expect significant effort on behalf of his/her company and finally when employees have a strong desire to sustain membership in the organization that they belong to.

An effective performance appraisal system allows an employee to share the process and decisions related to the implementation of this process. This can include the following:

First, the purpose of the evaluation consists of tracking the employee gaps in performance. Therefore making the employees asses their personal activities and declare their own expectation can be considered as an effective way.

Second, objective and positive communication is one of the most important factors that make employees more comfortable. During the communication period, managers will have the opportunity to clarify the current situation of their employees, highlight what the company is excepting from them to do, sharing and agreeing on the future goals and targets to achieve, what are the steps to be taken in order to enhance the employee performance and planning for a better career so the degree of satisfaction will increase. More the employees are satisfied and motivated greater will be their commitment to the organization and their job and better will be their job performance.

According to Baron and Grinberg (1990) ,the emotional and physical dependence upon the organization is considered as a valuable manner for meeting with organizational.

This means that an employee who is strongly committed tend to show himself with the organization, increase the degree of participation and involvement to the organization activities and benefit from his belongings to it.

Performance appraisal make an employee feel more responsible, more independent and attracted to the job, all these factors will lead to an organizational commitment. (Thomas & Feldman, 2008).

Figure 2: Organizational commitment

Sources: European Journal of Social Sciences – Volume 18, Number 2 (2010)

In brief, if the performance appraisal results will lead to a negatives attitude, the results will affect the whole organization and not only the job itself and vice versa.



In order to reach the benefits stated in the first chapter and in order to overcome any threat might be faced during the evaluation process, organizations must have a well designed system to be implemented in the right place at the right time. What kind of strategies should be established? How these strategies should be conducted and implemented? Who is responsible on the success of the whole process? How the company’s profile, culture and management can affect and be affected by this process? So in order to have answers on the proposed questions, the following sections will develop the implementation of the performance appraisal system and the relationship between this system and the company’s management and culture.

Section 1: The Design and Implementation of an Effective Performance Appraisal System

In this section we will discuss the process of a performance appraisal system enclosing the ability of choosing the right evaluation form, stating and highlighting the standard measures to be used during the evaluation in addition to the set of the guidelines to follow for feedback. Moreover, communication is one of the essential methods that make the evaluation process effective and successful. Therefore, preparing a well designed interview sessions with the employee can increase the employee truthfulness, trust and commitment in addition to feel more comfortable as the friendship relation with their managers will be created. Finally, as most of managers considered the appraisal process a waste of time; many companies have created software to make the managers and employees life easier, simple and quick.

1.1 The performance appraisal process

The concept of the performance appraisal has become a fact of life in the majority of the organizations and that because of its process and the benefits that presents such as improving managerial and supervisory skills, enhancing the leadership spirit, improving employee’s commitment and others. Performance appraisal process, steps and strategies have been created, designed and implemented.

Having a standardized process of implementing an evaluation process is very essential and mandatory as it ensures that each member is judged fairly, decisions made are kept out of any discrimination. In addition, the standardized process improves employees’ morale and consist a motivational tool since the employees will feel more comfortable and enjoy their daily task as they will be able to focus more and be more energetic.

Five main steps have been created and designed.

1.1.1 Developing an evaluation form

Employees’ performance appraisal should be fair, consistent and objective in order to defend the employee interests and welfare. In order to ensure the steadiness of the system, one way can be presented which is employing a standard evaluation form for every evaluation will occur. This form should meet only the initial job performance areas. This will make the appraisal process more momentous and pertinent and provide both supervisors and employees with the opportunity to highlight the issues that being the most significant since not all the employees job related performance must be covered during the evaluation process.

Many job performance areas should be integrated in the evaluation form needed in the evaluation of the most staff positions. These areas include job knowledge, employee’s skills, quality and quantity of work, work practice and attitude (can be classified as mentioned in Figure 3)

FIGURE 3: Evaluation Form Sample

Other areas can be added to the evaluation form other than the above stated ones which is related to the assessment of the job performance in managerial positions. Those points can be as follow: the manager skills and ability to motivate and provide supervisions, communication skills and the power of developing and maintaining a team, ability in problem solving and decisions making.

1.1.2 Identifying performance measures

In order to have a performance evaluation process conducted objectively, standard measures should be defined, created and characterized as valid, reliable, acceptable, feasible and specific.

One of the most important steps to be considered in identifying the performance measures is having an organized, detailed and correct job descriptions for each positions in the company where the defined quantity and quality goals of an employee job are highlighted in the this job descriptions.

Another step to be considered in determining the standard performance measures, other than the job descriptions and choosing the main components of job to be measured, meeting and working with employees from each position to coordinate and cooperate gathering quantitative and qualitative data and measurements that reveal the work mission and goals.

Standard performance measures have the ability of impartially measuring some subjective job performance areas for instance work habits. Measures to be considered in this case include the employees’ attendance; the adequate number of time an employee has the right to reach the company tardily, identifying the absenteeism rates for each employee. Moreover, taking initiative and coordinating the work with others can also be a part of the standard performance measures. In case of the absence of any worker, his/her colleague can be a back up for this person or play the role of a temporary replacement.

1.1.3 Setting guidelines for feedback

Feedback is the purpose of the performance evaluation. Therefore it’s very important to identify prior to the implementation of the performance evaluation system what type of feedback that should be provided, how this feedback should be gave and how to get the employees responses in return. Three major issues to be considered are as follow:

Providing A Balanced Feedback: as focusing only on the employee strengths is not sufficient however the evaluator should understand the individual weaknesses that affect his/her performance and role in exercising their practices in this case, Employees will be able to go through challenges with more self assurance since they will be provided with the needed support for more improvement and achievements.

Defining expectations for development: that identify the way how the employers aim to help and share the employee in meeting these expectations.

Valuing the feedback got from the employee: the evaluators should know the opinion of the employees evaluated if they agree on the results and feedback obtained and ask them to share the decisions to be taken for their development.

1.1.4 Identifying disciplinary and termination procedures

Disciplinary and termination procedures should be defined since poor performer will always exist even after the evaluation process and after communicating the results and the management exception. Therefore, managers should be prepared to deal with such situation. The plan should include the following actions:

First, when an employee act and behave in a negative way, the verbal warning should be applied in this case. This should be addressed to the employee in private.

Second, the written warning makes the picture obvious to the employee how critical his/her performance problem is and how his/her situation in maintaining the job is not stable. In The written warning manager should describe the problem occurred, how should the employee act and behave and what manager is excepting from him/her to do in order to overcome the problem faced and future actions to be taken in case the written warning didn’t lead to any better results ( such as salary decrease, demotion, and others). Finally both manager and employee should sign on the warning.

Third Termination: the reason of taking this action should be completely objective to avoid being in a defensive position.

1.1.5 Establishing an evaluation schedule

After designing and organizing the performance evaluation form, measures, the feedback procedures and the disciplinary practices, manager should decide when the evaluation process should be conducted. Some companies conduct the performance appraisal process every year, every 6 months or quarterly. Disregarding employees’ evaluation may harm employees’ self-esteem and performance since they will feel that they are devalued.

1.2 Preparing and conducting an effective interview

The performance appraisal interview plays an essential role in providing managers a better understanding of an employee’s learning requirements. In her article "employee engagement to commitment"(2012), Sarah Cook considered the appraisal interview as a tool designed to generate better awareness of learning needs. According to her, this tool should focus on the individual and the quality of the discussion and not only on the form of the appraisal. In order to have an effective appraisal interview, managers should determine the major purposes and objectives to achieve in addition to how managers and employees should prepare separately the interview process.

1.2.1 Preparing for the interview

Both managers and employees are responsible and play an important role in conducting an effective performance appraisal interview. Therefore, each part should establish a plan and prepare before going to the interview.

Before conducting the interview, many steps should be followed by managers in order to have a successful sufficient meeting and in order to gain the employee trust so accurate feedback can be made.

First, the date and time of the meeting should be assigned and agreed with employees. In addition, deciding the place where the evaluation will be conducted so the employee will feel relaxes and benefit from a private and comfortable meeting. Added to that and in order to have the feel more contended and less anxious, evaluator should provide facilities and prepare the atmosphere For example, setting the chairs side by side or choosing a table that has a spherical shape. A further step to be added is managers should have already gathered the needed information and materials. In the next step, manager should intend the opening of the interview and decide on the topic of meeting that may include issues on current events such as the economical or political situation or even personal or social issues and plan to close it. After that, managers should plan the approach as the strengths areas of the employee performance are highlighted and job segments to be enhanced should be planned.

FIGURE 4: Preparation for the PAI by managers

From the employees’ side, they should collect detail related to their previous activities and accomplishments in addition to the reasons that led this employee behaving in a specific way and affect his/her performance in a good or bad way. Second, employees will be able to conduct a self appraisal incase it was asked by their manager.

1.2.2 Evaluating the interview

After conducting the interview, manager should evaluate and find out the effectiveness of this meeting, what steps should be considered in order to improve future interviews. So many questions need to be answered by managers: what issues would be covered in the future interviews weren’t highlighted in the current one? What issues shouldn’t be discussed and should not be included in the future? Did I really listen deeply to my employee and gave him/her the chance to freely and frankly express? Have both part understood clearly the results of the interview and expectations agreed? The answer on the above subjects will be very helpful to the manager in order to be able to conduct his/her coming interviews effectively.

In brief, conducting a performance appraisal interview can be considered as a complicated process in the performance appraisal system. In order to have a successful process, good and organized preparation is an essential solution.

1.3 Software for implementing a performance appraisal system

The majority of managers consider employee performance appraisal process waste of time. Therefore, we can find in some companies an unorganized evaluation system conducting once per year and in ineffective way. However, each manager should always bear in mind the main key goals leading to a successful and competitive organization including these basics

working on the employee current level of performance for more improvements across the company

categorizing the best performers considered as the keys for more succession and rewarding them based on their performance results

having the ability to find the employees with low and average performance

Finding out the employees satisfaction and if they consider their selves as a part of the organization and in the right place.

Software has been created by many companies as a service presented to the companies in order to handling a quick and effective appraisal process with the accurate results.

Employee performance appraisal software presents an innovative, progressive approach to overseeing the employee performance online. Such systems are not only a computerized review; however it also helps creating a good relationship between the management and the employees as they will be rated fairly and objectively. This will guide to better productivity, an effective tools for change and behavior modification and development of competences among the employees

For example, Oracle has created a system called by "ePerformance" which is a web-deployed performance management solution. This solution consists of reorganizing the major evaluation features of the development business process including planning, coaching and employees rewards system. Oracle has created such system not only to be considered as computerized but also is collaboration between managers, workers and HR.

1.3.1 Software created for the benefits of everyone

Many benefits are presented by the creation of computerized and online programs responsible in conducting the employee evaluation. These benefits enclose four levels in the organization: HR level, department, executive’s level, managers and employees levels.

HR Level: as HR are now playing an essential strategic role in helping the organization having a strong skillful workforce, HR administration can obtain from using the appraisal software the most suitable and cost-effective system in carrying out an effective performance evaluation, identifies and aligns goals, identify employee outline, enhance the talented people inside.

Executive level: appraisal software allows this organizational level to simply realize how the employee goals are matching the organization objectives and purposes. In addition, they will be able to discover the gaps in performance and what level so corrective actions taken quickly.

Managers level: Software are the good method can be used by managers to match and track their team members’ performance to the set goals, provide them with the significant and constructive feedback and coach and support them for more progression.

Employees’ level: employees will feel by using such evaluation system linked and integrated as they will be able to access their own page in which they can find the excepted goals to be reached from their side, the development plans, feedback and other point easily and quickly.

Section 2: The Relationship between Performance Appraisal System and organizational culture and change management

In general, the employees are the image of the company and they are part of its culture and management. Therefore, many researches illustrated that there is a relationship between the performance appraisal system and company’s culture. This relationship is that employee evaluation process can lead to some changes in the company’s management and culture. What are these changes? Are these changes accepted easily by all the employees? If not, what steps should be taken overcome the resistance on any change?

2.1 Organizational Culture

Culture is the concept of diverse attributes that identify an organization and differentiate it from the other ones so each organization can have its own specificity (Forehand and Von Gilmer, 1964). According to Schein (1990), organizational culture is the set of values, behavior and attitudes designed and followed by organizations as a manner for the organization success, continuity and growth. In brief, we can understand by the organizational culture as added knowledge, beliefs in the company, set of communication, values and behaviors shared and understood by a large group of people (Titiere, 1959).

Added to that, organizational culture is a cognitive approach that provide the employees with clear explanation and learning concept of how to think and how taking and sharing decisions (Pettigrew, 1079).

2.1.1 Characteristics of organizational culture

Many characteristics have been stated related to the organizational culture. First of all, culture is a set of norms including the amount of work completed, the level of coordination and collaboration between the employee and the organizational management.

Second, culture inside an organization is the established rules defined and clarified among the employees from the top to down level. These rules enclose the identification of the behavioral issues linked to productivity, cooperation between groups and members and the employees and customer relationship.

Third, culture can also characterize by its pragmatic behavioral reliability that consist of sharing and accepting the formal measures that are part of the organization profile.

Finally, organization culture consists of encouraging the coordination between all the organizational levels for better results, more improvement and in order to reach more work effectively and effectiveness and enhances quality of work for a better service and high quality of product.

2.1.2 Organizational culture and performance

Organizational culture influences the organizational process, the employees work and affect their performance. as one of the above mentioned characteristics is to integrate the employees in the company decision making and encouraging the communication and tend more to respect and follow the organizational norms and values. This situation will affect the employees’ performance positively in addition to the ability and courage of achieving the overall goals set.

For this reason, managers and supervisors are asked to develop and maintain a strong culture so values, objectives and norms should introduced to the employees so they can deeply understand the company culture and can be familiar with the organization system and work process and improve the performance level. In addition to the development of the employees’ awareness that following the company culture is a clue to the individual and company culture (Pettigrew, 1979).

Adding to enhancing the employees’ commitment, a strong culture assists in developing the employees’ self-confidence, reduce job stress and develop the ethical behaviors (Saffold, 1998).

Furthermore, according to Vatter and Heskett (1992), organizational culture and employee performance are linked to maintaining the company competitive advantage in addition to the raise in the income due to the growth in productivity and performance.

Reference to the studies conducted by Katter and Hackett on the relationship between the culture and salary, this figure shows the 765% of the income increase between 1977 and 1988 in firms characterized by a strong culture, however only 1% income increased during this period in the companies without a strong culture.

Figure 5: Influence of culture on growth in the incomes

Source: Sean Gallagher, 2008

2.2 Change Management

By definition, the concept of the change is the transition from one situation to another one. Change management is conducted in four levels: corporate strategies, organization structures, work procedures and technologies so the organization by conducting internal changes can deal with changes in the external environment. In addition, change management is defined as a process and techniques to direct individuals to accept any business alteration to achieve the desired business outcomes.

According to Lewin’s model of change management developed in 1940, change inside any organization pass through 3 stages: first, unfreeze stage in which the whole organization is prepared to recognize any necessary change may occur so new beliefs, values and attitudes are identified to them. As per Lewin "Motivation for change must be generated before change can occur". Second, the change stage

Introducing the change to the employees will create a kind of uncertainty and ambiguity. So the second stage in this model illustrate that people start deliberating step by step from this ambiguity and search for new manners to do things so they will start believe in the new process or system and behave in a way to collaborate the new direction .

The final stage in this model is the refreeze, when all individual are adapted in the new system introduced and this system is incorporated into the daily business and when the employees will have confidence and feel comfortable with this change , the management can be ready to refreeze its situation.

Figure 6: Lewin’s model of change management

Source: Journal of American Medical informatics Association, Managing Change, v.7(2); Mar-Apr 2000

2.3 Relationship between Performance appraisal and change management

The performance appraisal process can play a major role in the organizational change; it makes the process of the change in the company’s culture easy and simple. This process provided the opportunity to a company to become a learning organization and that through the interactive communication between the management and its employees, the common agreed and shared goals set and the efforts toward the career development of the employees. Conducting the appraisal process frequently makes it as an integrated practice in the company’s strategies and helps the employees understanding their responsibilities of their daily work and lifts their professional development.

The appraisal process is considered as a way that leads to the organizational culture shift and that because the system focuses on setting goals throughout the organization, makes the role and responsibilities clear and understood by the employees and managers, shows the prospective positive upshot on the recruitment process, it boost the organizational effectiveness and competiveness and make clear to the company’s management what to do and how to act through a formal and structured approach and consist a substantiation of the advantageous effects of team rewards. Due to these reasons, the performance appraisal is deliberated as an imperative association in the course of change in the organization culture.

Evaluating the employees, discussing the results with them and implementing correctives actions will create a shift inside the company from its present state to some desired future state.

Reference to Thomas S, Bateman and Carl P. Zeithaml in their book Management: Function and Strategy, change inside the organization is a must as the whole environment is facing continuous changes and advancement in technology, globalization of the markets, strong completion. According to those authors "Today, businesses are bombarded by incredibly high rates of change from a frustratingly large number of sources…. Inside pressures come from top managers and lower-level employees who push for change. Outside pressures come from changes in the legal, competitive, technological, and economic environments." Therefore and in order to maintain an organization competitiveness and survival and in order to face any threat coming from the external environment, focusing on the employee motivation, satisfaction, training and developing their efforts will make them more committed to the company and they’ll feel that they are part of the success or failure of any activity of the company they belong.

According to Bateman and Zeithaml, "Change commonly occurs because the organization experiences some difficulty but sometimes the most constructive change takes place not because of problems but because of opportunities". Changes inside the company are not only for the purpose of facing any threat however it’s also a manner for more opportunities to start new businesses. Discovering gaps in the employees’ performance allows any organization to be aware of not only its current performance but the performance of which it’s competent as well.

Organizational change includes 4 major areas: changes in the company’s strategy, changes in technology, the company structure and its people. An alteration in one of these areas generates alteration of the 3 others and that because they are related and linked to each others. Company tends to change its people attitudes and behaviors in order to increase their effectiveness and fit with any change may occur. And since changes in the work environment may affect the employees attitudes, sometimes negatively, therefore the science of organization development was established to deal with changing people on the job and that through determined techniques such as education and training, team building, and career planning. Individuals, groups and organizations should be motivated to change, however if people don’t recognize gaps in their performance or if they believe that the gap is not a big deal, they will not feel motivated for any improvement and they will defy changes that the management is trying to introduce.

2.4 steps to use to fight smartly any resistance of change

Many number of steps the management can use to conquer any resistance to change. One of the important steps is providing education and communication so employees know more about the nature of the change and the logic behind it. For this purpose, report, memo, presentations and even individual discussions can be considered as tools. Another step consists of allowing the employees participate in the design and implementation stages of the change attempt. Additional step is to supply the employees with the needed resources for the change, encourage their effort and listen to their problem.

Negotiation and rewards can also be considered as ways to overcome any resistance to change. Managers offer employees tangible incentives to guarantee their cooperation, or following tactics which consists of offering a resistance leader an important position in the change effort. A final alternative is coercion which consists of punishing any individual resisting the management decision for change.

In brief, according to Bateman and Zeithaml , "Effective change managers are familiar with the various approaches and capable of flexibly applying them according to the situation.




The Research Methodology

In this chapter, we are going to elaborate the facets of methodology to be used so the research objectives and purposes will be reached and that through designing, implementing and analyzing the sample obtained from an organization.

Multiple methods can be considered. In this research, the qualitative approach will be used considering the CHI – SQUARE study in addition to a small case studying the situation in the company. In this part, we will rely on the result of the interview done with the HR manager at "Librex".

Section 1: Data collection, sampling and data treatment

Data collection and overview about the organization used as sample are the two major elements employed to identify all the required details in a proper way.

1.1 Data collection

Data collection stage used in a study simply describes the way of gathering information needed to conduct a study and collect them from various ways in order to reach more specific results. Data collection is considered as a significant facet of any type of research study and any imprecise data collection can moderate the purpose of the study and ultimately guide to illogical results.

In this study, the primary date collected consists of using the quantitative approach. For this purpose, a questionnaire was created and provided in December 2012 to a specific number of employees from an organization to be completed.

After that, the primary data collected from the questionnaire will be combined with secondary data provided during the interview conducted by the HR manager in organization.

1.2 Sample

"Librex" is a company founded first in Canada in 1987 to be relocated to Zalka - Lebanon, and directed by the 4 Bechalani Brothers in 1999. The company’s job consists of producing and selling a range of quality and innovative goods for household and office use (Waterex, Crystello, watercrown, Ritello).

The company aims to maintain good relationships with its customers which explain the presence of the company in more than 30 countries. Therefore, the focus of "Librex" was on its people. According to the company chairman "M. Sam Bechalani" the success of the group is related to the success of its people so the concept of "a company with the best people wins" was always followed here. Training sessions and professional conference programs were organized in order to provide the employees with the needed energy, motivation and inspiration to reach more goals and target.

Total number of employees working currently at "Librex" Lebanon is 150. In my study, the 150 employees have been asked to fill the questionnaire. We have 32 employees not responding and 14 employees provided unserious answers and incomplete.

Figure 7: Sample of the study

150 employees (100%)

150 - 32= 118

118 – 14= 104 employees

In this company, we have 150 employees (100%), 150 employees should answer the questionnaire. From 150 employees, we have 32 which didn’t answer and 14 answered in an illogical way.

As a result, in my study, I will use the answers based on 104 employees.

104*100/150= 69. 33%

1.3 Methodology treatment

In this part, we will illustrate how conducting a CHI-SQUARE test for independence. By definition, the CHI-SQUARE is a test applied when you need to compare the observed data with data you anticipate to attain based on the defined hypothesis. It’s used to specify if there is a significant relationship between two variables or not and what type of relationship exists.

The CHI-SQUARE test course is considered proper when the subsequent circumstances are met:

Each sample observation should independent

The total frequency should be great so Each population should be at least 10 times as great as its relevant sample.

The sampling method should be accidental sampling

If sample data are presented in a contingency table, the predictable frequency for each cell of the table should be minimum 5.

In the implementation of this method, four steps should be followed:

1- Stating the Hypothesis

2- Formulating an analysis plan

3- Evaluating sample data

4- Interpreting results

1.3.1 Stating the Hypothesis

Assume that the first Variable (Variable A) has r levels, and the second Variable (Variable B) has c levels. The null hypothesis claims that recognizing the level of the first variable does not help to predict the level of the second one. That is the variables are independent.

H0: Variable A and Variable B are independent.

Ha: Variable A and Variable B are dependent.

We can understand by the alternative hypothesis is that the level of the first variable can help you predict the level of the second one.

Note: The existence of the alternative hypothesis evokes that the variables are linked; however this link is not necessary causal

1.3.2 Formulate an Analysis Plan

This step illustrates the use of the sample date to accept of refuse the null hypothesis. The following elements should be specified by the analysis plan:

Significance level. Usually, researchers select significance levels equal to 0.01. 0.05 Or 0.10; however any value between 0 and 1 can be used.

Test method. Use the chi-square test for independence to find out if there is a significant relationship between two categorical variables or not.

1.3.3 Analyze sample data

Using sample data, find the degrees of freedom, expected frequencies, test statistic, and the P- value associated with the test statistic. The approach described in this step is shown in the sample problem at the end of this lesson.

Degree of freedom. The degrees of freedom (DF) is equal to:

DF= (r-1) * (c-1)

r = number of levels for one categorical variable

c= number of levels for the other categorical variable

Expected frequencies. The expected frequency counts are computed separately for search level of one categorical variable at each level of the other categorical variable. Computer r * c expected frequencies, according to the following formula.

E r, c= (nr * nc) / n

Er,c = the expected frequency count for level r of Variable A and level c of Variable B

nr = total number of sample observations at level r of Variable A

nc = total number of sample observations at level c of Variable B

n = the total sample size.

Test statistic. The test statistic is a chi-square random variable (X2) described by the this equation:

Or,c= observed frequency count at level r of Variable A and level c of Variable B.

Er,c= expected frequency count at level r of Variable A and level c of Variable B.

P-value. The P-value is the probability of observing sample statistic as extreme as the test statistic. Since the test statistic is a Chi-square, use the Chi-square Distribution Calculator to assess the probability associated with the test statistic. Use the degrees of freedom computed above.

1.3.4 Interpret Results

If the sample findings are unlikely, given the null hypothesis, the null hypothesis will be rejected. Typically, this involves associating the P-value to the significance level, and rejecting the null hypothesis when the P-value is less than the significance level.

1.4 Eviews Implementation:

By choosing the Chi-square tests option, EView generates statistics for analyzing the independence of the series in the group. The test statistics are built on the distance between the definite cell count and the count expected under independence.

Besides, EViews states the subsequent two test statistics for overall independence among all series in the group:

n i, j, k and i, j, k = actual and overall expected count in each cell.

Under the null hypothesis of independence, the two statistics are disseminated X2 with IJK – (I-1) – (J-1) – (K-1) - 1 degrees of freedom (I, J, K describe the number of categories for each series).

Section 2: Variables characteristics

In this section, we are going to detail the independent and dependent variables. First, the independent variables are defined as the employees’ commitment, career development and goals. Second, the dependent variables are related to the changes in the organizational strategies and culture.

2.1 Dependent variables implemented at "Librex"

Due to the increased demands, advanced technology and due to the robust competition between companies that created a dynamic global business environment in order to be the first in responding to the market demands, the majority of organizations are totally aware of the necessity for change in its management, strategies and culture. Many challenges "Librex" faced and is still facing in adopting any changes inside the company. These challenges will be discussed and developed in the core of the subsequent part in addition to the plans took by the management of this company in order to overcome any threat and in order to make the employees realize, accept and follow any new strategies.

According to the human resources manager in this company, performing any change is one of the most complicated leadership challenges since the management will have to keep the following activities including set of goals, members’ roles, procedures, values, communication system, attitudes and believes linked. Therefore, people responsible in designing and implementing any modification successfully should obviously understand the current situation and identify the way things are at the present. Once everything is recognized, a question should be asked: "where the company desires to go and where it aims to be?" so strategic direction can be defined. Finally, managers and superiors have an important role in spreading the concept and purpose of taking the decision in adopting any change and convince individuals to adjust their behavior to fit with the company’s new culture and process. This is the hardest part.

Consequently, training managers is one of the booming steps can be taken in order to guarantee the positive result of the change process.

According to the HR manager observations, individuals’ reaction over the change can be classified into 3 categories. Some people may refuse to obey to the new strategies and policies set and that because they don’t have the ability and capability to be quickly acclimatized to the new situation. Others used to follow the previous strategies and have the same purposes even if they are aware of the negative results of being always in the same situation and finally the minority of people believes in the current strategy for the whole organization growth and success.

Three consequent tools can be considered in convincing individuals.

1- Leadership tools in which new vision about the future is published.

2-Management tools in which new roles are defined and new measurement and control system are specified such as promotion, incentives tools, recruiting, training, ect.

3- Power tool in which managers may use their total power in making individuals obeying to the company’s new decisions and that through punishing and threatening them in case the above stated tools didn’t work.

Below figure 8 (organizational tools for change mind) clarifies these steps.

Sources: by Steve Denning, RADICAL MANAGEMENT: Rethinking leadership and innovation, 07/23/2011

During a specific period, The Company has faced a high turnover rate from the different departments which cost the company a lot. According to the HR manager after observing the employees behaviors with the coordination of their managers and after conducting the exit interviews, the main reasons led to this rate in turnover are defined as follow: first, lack communication between the employees and their managers. Communication is very important and is one of the most important factors that make an employee feel comfortable, motivated and feel as part of the business success. However, this weak communication had a negative influence on the employees work as some of them didn’t have a clear understand on their job description, what that they have do and what they should done in the future in addition to the uncomfortable work atmosphere.

The second reason is that the employee results and achievements weren’t clearly evaluated and appreciated. Evaluating employees in very important and that for many reasons; managers and employees will be able to identify the current situation, draw future plans, and identify the reward decisions such as promotion, pay increase bonus and others. Evaluating the employees and listen to them will reinforce the employee loyalty and commitment to the work and company.

Another reason is that the employees don’t feel that they were paid fairly based on their job and performance. Finally, building their career inside the company is difficult as the majority of them believe that they were not in the right place.

All these above reasons and many others affect some employees’ attendance, work results, relationship with others which led to leave the company in a voluntary and involuntary way.

According to the chairman Mr.Sam Bechalani, "the focus of Librex Group is on people" as in his opinion the success of the whole business is related to its individuals efforts. Many corrective actions were taken in order to increase the employee satisfaction and commitment and reduce the obvious turnover rate.

The company with the coordination of the HR department encouraged managers to follow the employee performance evaluation process. For this purpose, many conference sessions were conducting in order to show and prove the importance of taking this action as part of their duties seriously. Employees’ appraisal process is now conducted by some managers. In some department, this process is performed quarterly and in others departments it’s carried out twice per year. However, some departments didn’t took this process seriously and considered it as waste of time so evaluating their individuals is conducted once per year as a quick meeting.

Due to this, what managers are expecting from their employees is to make better sales, achieve the defined goals and targets each period of time, employees are having now more focus on the whole organization goals and not responding only to their individual aims.

Furthermore, financial needs are one of the main purposes of the employee to produce and as much as they have more financial revenues, their effort and enthusiasm will increase. For this purpose, the salary raise policy is applied yearly in the company. As after conducted an evaluation process, each employee will have additional percentage on his/her current salary based on his/her overall all performance and results presented during this year. So this is very important to conduct a clear and correct performance appraisal process in order to provide each employee his/her right fairly.

Moreover, the company relied on the financial temptations in order to attract new and good candidates to be part of its business. So it mentioned on its website its employee’s efforts and work are rewarded with cash in addition to lots of recognitions.

Adding to the financial rewards and in order to inspire the employees to do the best, the company planned to appreciate this effort by providing some prizes, offering trips and paid vacations to its distributors and representatives.

Another corrective action took consisted of making people drawing their own goals, objectives and targets that fit with their individuals’ purposes and the company interest in the same time. The employees are given the opportunity to be the own boss, work for themselves and master their own activities. Making people not only aiming to purchase products and services to sell them again but also providing them with the responsibility of designing successful programs and plans to work on it. In addition, employees benefit from flexible working hours so they decide when they want to work. This strategy pushes the employees to be more responsible and loyal.

All the above strategies took into consideration by the company’s management make the company gain the majority of its employees trust and commitment. Trust and transparency are two major aspects that lead to the employee satisfaction, motivation and affect productivity and retention. Once trust is lost, unethical behavior will occur and the company will start losing the capable members treated unfairly searching for new opportunity and better benefits.

In brief, the main factors for any business include the good communication between employees and managers, sharing the employees in the decision making problem solving and goal settings, taking care of the employees career development and assisting in making their career path inside the company clear, providing the employees with the opportunity to understand very well the values and culture, letting them aware of the importance of respecting these values and the importance of respecting any decisions of change took by the management so they can directly accept and follow any new strategy for the best of the company’s success and continuity in addition to treating them fairly and give them what they deserve financially and morally. Training the employees and managers is very important so all the above points can be easily understood shared and followed in addition to enhancing each part skills and ability for more growth and advancement.

Any company should not only have a purpose of selling and generating profits however it should be also a space selling skills that includes interpersonal, motivational and organizational skills. These will create transparency, trust, and commitment. In addition, it reduces the turnover rate and unethical behaviors inside the company.


Andy Meisler, "Dead Man's Curve," Workforce Management, July 2003

Adebanjo, Dotun. "Corporate Restructuring: Managing the Change Problem from Within." Leadership and Organization Development Journal. September 1996.

Austin, Mary Ruth. "Managing Change." Manage. August 1997.

Andy Mare, Types of Performance Evaluation - What's So Special About 360 Degree Feedback?,, Apr 23, 2012

Archer North Performance Appraisal System, 2010

al mountada al arabi lil mawared al bachariya, 2012 (

Anne F. Marrelli, The Performance Technologist’s Toolbox: Critical Incidents, NOV/DEC 2005

Anti Essays. Retrieved November 3, 2012

Betty Tu, THE MANAGER'S HELPDESK: Leading Change Effectively After the Performance Review, 26/3/2010

Bateman, Thomas S., and Carl P. Zeithaml. Management: Function and Strategy. Homewood, IL: Irwin, 1990.

Brigid Trenerry, Ms Hayley Franklin & Dr Yin Paradies, Preventing race-based discrimination and supporting cultural diversity in the workplace, Melbourne School of Population Health, March 2012

Bob Ferdinand, MANAGEMENT TRAINING NEEDS ANALYSIS (TNA), Industrial and Commercial Training, Iss: 5 pp. 27 – 31, 2008

Chris Joseph, Challenges in Performance Appraisal, Demand Media, Small Business

Carruthers, F. Nothing but the truth. Australian Financial Review, p. 78. 2003, November 14

Clark, S., Whittall, A.,Performance management develops productivity. Winnipeg Sun. 2003, November 14

CSR Middle east, july 4, 2012

Dick Grote, Forced Ranking: Making Performance Management Work, Harvard Business School, , 11/14/2005

Dove, Rick. "The Principles of Change." Automotive Manufacturing and Production. March 1997.

Drucker, P., "The Practice of Management", Harper, New York, 1954; Heinemann, London, 1955; revised edn, Butterworth-Heinemann, 2007


Dick Grote, the complete Guide to Performance Appraisal, the Performance Appraisal Question and Answer book and Discipline Without punishment, 11/14/2005

European journal of social sciences, volume 10, number 3, 2009

encyclopedia of Industrial and Organizational Psychology, 2007, p407

Fakhar Shahzad, Rana Adeel Luqman, Ayesha Rashid Khan, Lalarukh Shabbir, Impact of Organizational Culture on Organizational Performance, INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS, VOL 3, NO 9, JANUARY 2012

Giovanni Azzone, Tommaso Palermo, Adopting performance appraisal and reward systems: A qualitative analysis of public sector organisational change, Journal of Organizational Change Management, Vol. 24 Iss: 1 pp. 90 – 111, 2011

G.Meenakshi, Multi source feedback based performance appraisal system using Fuzzy logic decision support system, Cornell University library, 8 Mar 2012

Hurst, David K. "When It Comes to Real Change, Too Much Objectivity May Be Fatal to the Process." Strategy and Leader-ship. March-April 1997.

High Performance Workplace Practices, and Job Satisfaction: Evidence from Europe, Thomas K. Bauer,2004

Habib Ahmad, Khursheed Ahmad, Idrees Ali Shah , Relationship between Job Satisfaction, Job Performance Attitude towards Work and Organizational Commitment, European Journal of Social Sciences – Volume 18, Number 2 (2010)

HOWARD ]. KLEIN, SCOTT A. SNELL, and KENNETH N. WEXLEY, Systems Model of the Performance Appraisal Interview Process, INDUSTRIAL RELATIONS, Vol. 26, No. 3Fall 1987

Iskandar,A, 1964,Bureaucracy in Lebanon Department of political studies and public Administration, Beirut: American University of Beirut

Jennifer Alsever, What Is Forced Ranking?, MoneyWatch, March 20, 2007

JU Jacksonville University, Performance Appraisal Interview Guide, Human Resources Departmen, 2010

Johnson Graduate School of Management, Cornell University, Can performance appraisal systems help reduce turnover and absenteeism?: It depends on national culture, Redefining Business leadership, September 2012

Journal of Human Resource Education, Vol. 1, No. 1, summer 2007, 1-22

John Knibbs, Stephen Swailes, Implementing Performance Review and Career Planning, Management Decision, Vol. 30 Iss: 1, 2005

June M.L. Poon, Effects of performance appraisal politics on job satisfaction and turnover intention, Personnel Review, Vol. 33 Iss: 3 pp. 322 – 334, 2004

James Beebe ,Office of Economic Development, Washington, DC 20521-9003,Volume 54, Number 1 / Spring 1995


Kevin R. Murphy, Jeanette Cleveland, Understanding Performance Appraisal: Social, Organizational, and Goal-Based Perspectives, January 3, 1995

Kulno Türk, Performance appraisal and the compensation of academic staff in the University of Tartu, Baltic Journal of Management, Vol. 3 Iss: 1 pp. 40 – 54, 2008

Ligh Richard, the effects of PA on organizational performance, small business.2012

Matthew Boyle, "Performance Reviews: Perilous Curves Ahead," Fortune, May 28, 2001.

Maurer, Rick. "Transforming Resistance." HR Focus. October 1997.

McCallum, John S. "The Face Behind Change." Ivey Business Quarterly. Winter 1997.

Michelle Brown, Douglas Hyatt, John Benson, "Consequences of the performance appraisal experience", Personnel Review, Vol. 39 Iss: 3, pp.375 – 396, 2010

MCB university press: ISSN 0043-8022, volume 46-number 6-1997,pp 197-201)

Michelle Brown, Douglas Hyatt, John Benson, Consequences of the performance appraisal experience, Personnel Review, Vol. 39 Iss: 3 pp. 375 – 396, 2010

Maimona Jabeen, Impact of Performance Appraisal on Employees Motivation, European Journal of Business and Management, Vol 3, No.4, 2011

Pollack, David M.; Pollack, Leslie J, Academic journal article from Public Personnel Management, Vol. 25, No. 4, 1996

Peter Drucker MBO, Management By Objectives, Kalyan City Life, 6/12/2010

Performance Appraisal, Yahoo!INC, July,06,2010

Recardo, Ronald J. "Overcoming Resistance to Change." National Productivity Review. Spring 1995

Robert L. Laud, Performance Appraisal and its Link to Strategic ManagementDevelopment, Management Decision, Vol. 27 Iss: 4, 2007

Rama RAO,appraisal problems and solutions, December 14 2007

SEC UNION NTEU CHAPTER 203, ARTICLE 13, Performance Appraisal System, 2006

Samuel A. Culbert, Get Rid of the Performance Review! It destroys morale, kills teamwork and hurts the bottom line. And that's just for starters, the Wall Street Journal, June 21 2012

Schwartz, Andrew E. "Eight Guidelines for Managing Change." Supervisory Management. July 1994.

Trahant, Bill, W. Warner Burke, and Richard Koonce. "Twelve Principles of Organizational Transformation." Management Review. September 1997.

Thomas K. Bauer, High Performance Workplace Practices and Job Satisfaction: Evidence from Europe, IZA DP No. 1265, August 2004

University of Cambridge Judge Business School, Management by objectives, It may seem obvious that managers must have somewhere to go before they set out on a journey Oct 21st 2009

Ul Mujeeb Ehtesham, Tahir Masood Muhammad, Shakil Ahmad Muhammad, Relationship between Organizational Culture and Performance Management Practices: A Case of University in Pakistan, Journal of Competitiveness , 2011

Victor S. Maas, Raquel Torres-González , Subjective Performance Evaluation and Gender Discrimination, Amsterdam Business School University of Amsterdam, November 2010

Wanda Thibodeaux, The Objectives and Aspirations for Performance Appraisals, Demand Media, 2007

Wallington, Patricia M. "Making Change." CIO. April 1, 2000.


Ruth Mayhew, Three Performance Appraisal Methods in Human Resources Management

Ruth Mayhew, Challenges in Performance Appraisal, E how money

Diane ToddHow Does a Performance Review Help Improve Employee Job Performance

Susan M. Heathfield, Why Organizations Do Employee Performance Evaluation Goals of Employee Performance Evaluation, Guide note: performance appraisal