Chapter 1: Introduction
This research paper seeks to examine the relationship between strategic performance and appraisal systems in contemporary organizations. Strategic management in organizations refers to setting goals, procedures, and objectives to gain a competitive advantage. The strategies aim at making businesses distinct from their competitors while attracting consumers to the market. Stakeholders in business entities use strategic management approaches to execute short- and long-term organizational projects. Some strategies include innovation, product segmentation, and corporate social responsibility. On the other hand, a performance appraisal system refers to identifying, evaluating, and developing the work performance of employees to aid in the process of achieving the organization’s goals and processes. The organization has to track the performance progress of each employee to keep them accountable for their roles at the workplace.
The definition of the appraisal system and strategic management incorporates objectives and goals. Consequently, the purpose of both strategic management and performance appraisal is to deliver the existing objectives and stay ahead of competitors. The performance appraisal system denotes the type of assessment used by an organization to measure performance. There are different assessment methods. One of the evaluation techniques is straight ranking appraisal where employees are ranked from the best performers to poor performers. Another assessment criterion is grading where employees are assigned specific grades for their performance in different areas. There is also the management-by-objective method of review. The employees and managers set goals under the approach and measure them at the end of the agreed time. Organizations may also assess their employees based on their behaviors and conduct at the workplace. Lastly, organizations can adopt a 360-degree assessment method where employees and managers are assessed. Organizations use one or a combination of the frameworks to evaluate the employees with a view of improving performance.
The purpose of this study is to examine the relationship between strategic management and performance appraisal systems. The study will evaluate whether managers consider their strategies when selecting the appraisal system or consider other factors. Also, the study will assess the implications of selecting an appraisal system based on the existing strategies in different organizations and the impacts of ignoring organizational strategies when deciding on the performance of the appraisal system. The findings will be crucial in the organizational and human resource management field setting the stage for further research.
Statement of Problem
A brief literature review reveals that there is little to no information on balancing between appraisal systems and organizational strategies. Most researchers in the field tend to focus on how appraisal systems boost organizational performance. Also, many scholars are interested in understanding how appraisal systems affect employee motivation, performance, and job satisfaction. Hence, the research paper will focus on determining the roles of organizational strategies when formulating appraisal systems. Failing to conduct this study will mean that the appraisal system continuously does not contribute to strategic management. A case study for analysis is the McDonald’s performance appraisal system (Goldsmith & Carter, 2010). Before 2003, McDonald had an informal and less structured performance evaluation system that did not reflect its strategies (Goldsmith & Carter, 2010). Consequently, it would not match its competitors or expand its business. The same challenge faces modern organizations. A lack of an appraisal system reflecting strategic approaches risks the success of an organization, business expansion, and employee empowerment.
I will approach the research using the goal orientation theory of performance appraisal. The theory acknowledges the fact that people strive to achieve set goals, obtain new skills and improve their competencies (Garavaglia-McGann, 2019). The theory is vital in explaining employers’ approaches to appraisal systems. The goal orientation theory will provide employees with a clear focus on the company. They will dedicate their efforts towards enabling their organizations to achieve their strategies.
Purpose of Study
The purpose of the qualitative study research is to understand the relationship between organizational strategies and appraisal systems. Each organization uses different strategic approaches to remain relevant and competitive (Subekti, 2021). The focus is on identifying whether the performance appraisal system should align with strategic management and how the stakeholders can achieve the objective (Zondo, 2018). The researcher’s goal is to aid managers in developing an appraisal system that would aid them in attaining organizational objectives while enhancing employee performance, attracting investors, and motivating labor capital.
I will use a qualitative exploratory study design method to advance the study. The aim is to understand the relationship between strategic management and performance appraisal that researchers could use in future studies. The variables in the study are strategic management and performance appraisal systems. The research will target managers and employees in American companies. The participants will give their views on the performance appraisal system and how they contribute to achieving organizational aims. In particular, the managers will state how they craft employee assessments within their organizations. The research will be conducted in California in the manufacturing industry. A total of 100 participants from five different companies will participate in the study. They will be selected randomly to participate in the study. Random sampling is preferable in the study because it creates an equal chance of selecting participants with different attributes (Reeger, 2019). I will collect data using questionnaires. Each participant will respond to thirty questions that will be sent via their emails. Employees’ questions will be different from managers’. Data will be analyzed using the thematic data analysis approach. The study’s findings will help organizations to create evaluation techniques that suit their organizational culture.
Introduction to Theoretical or Conceptual Framework
The study’s purpose is to determine the relationship between strategic management and performance appraisal systems. Organizations use performance systems to promote accountability, responsibility, and performance among the employees and the leaders (Subekti, 2021). However, there is less research on the connection between strategic management and appraisal systems. The qualitative research method is used to answer the research questions. The qualitative research method involves using non-numerical data when conducting the research (Roth, 2006). The research approach is suitable for the study because I am focused on the employees’ and managers’ experiences, concepts, and opinions on the relationship between strategic management and appraisal systems. The goal of this research prospectus is not to delve into statistics but instead, understand whether the organizational leaders make appraisal systems related to their strategies and the employees’ perceptions of the same (Subekti, 2021). Another rationale for using the qualitative research method is the richness of information it will provide. Unlike the quantitative method, qualitative research will provide immense data to understand the relationship between strategic management and the appraisal system (Roth, 2006). The other advantage of utilizing the qualitative research method is to understand the specific issues that influence appraisal systems for different organizations.
Introduction to Research Methodology and Design
A case study research design shall be used in the research process. The case study involves a detailed study of a particular phenomenon or organization. I will use the case study design because my focus is to undertake a thorough analysis of the selected organization. I will assess the specific strategies and appraisal system in detail to understand whether there is a connection between organizational strategies and performance criteria. The rationale for favoring a case study method is the depth of collected data. Also, case study analysis requires less money and thus, will be a convenient way to conduct the study. Lastly, the case study design will make the comparison of different information easy.
The goal of the study is to help managers understand the correlation between the variables of strategic management and the performance evaluation system. The qualitative case study design method will help managers to gain in-depth information on the topic (Roth, 2006). Also, the research will capture the detailed findings from the study that will assist in decision-making for managers with an interest in aligning organizational management and performance appraisal systems. Also, case study analysis will allow for analysis of existing company documents to get the correct accurate information for the research.
The study will involve 100 participants from five American companies. The participants will involve managers and employees working in the selected company. The participants in the research will be identified through a random sampling technique. The rationale for using the random sampling technique is to provide an equal chance for participants to partake in the study (Zondo, 2018). Participation shall be voluntary, and information privacy will be upheld. Data will be collected through questionnaires and interviews. The questions will be sent via emails to each of the selected employee participants. As a further means to gain depth of information, I will visit the selected companies’ sites to interview the managers and their opinions on the relationship between strategic management and appraisal performance (Zondo, 2018). Therefore, the organizational management in the selected companies will provide information through interviews. The data on five companies will provide reliable and valid data on the state of the performance evaluation system and strategic management.
Research Questions
RQ1
How does strategic management affect the nature of performance systems in organizations?
RQ2
How do organizations align strategic management with performance appraisal systems?
RQ3
How does lack of alignment between strategic management approaches and performance appraisal systems affect organizational performance?
RQ4
How can performance appraisal systems be aligned to strategic management to enhance organizational productivity?
Significance of Study
Strategic management is one of the newest concepts that emerged and became popular in the last half of the 20th century. It is based on economic theory, international theory, and industrial organization (The historical development of the Strategic Management Discipline, 2015). Industrial theory directs organizations towards evaluating the importance of strategic behaviors and involves concepts like critical analysis and diagnosis. Strategic management’s role in the current business environment is helping organizations to work in a dynamic, complex, and uncertain business environment (The historical development of the Strategic Management Discipline, 2015). Performance appraisal also emerged in the 20th century. Businesses used appraisals to justify incomes. Later, the process became grounded on material outcomes. Employees who exceeded expectations received a pay rise and those performing dismally received a punishment of a pay cut.
Currently, managers must be strategic in business settings to make them have a competitive edge. Similarly, executives should constantly assess their employees to ensure they maintain high-performance standards at the organization. Many studies have focused much on the relationship between the performance appraisal system and employee motivation, satisfaction, and performance. Moreover, these studies provide research results on how performance appraisal affects overall organizational performance.
Zondo (2018) researched the influence of a 360-degree performance appraisal on labor productivity in an automotive manufacturing organization. His research aimed at explaining a decline in labor productivity in South Africa in the manufacturing sector. The study was based on one of the manufacturing industries in the country. The scholar discovered no connection between labor productivity in the company with the 360-degree performance appraisal system. They recommended an alternative appraisal method and strategies that would raise labor productivity at the companies. The finding is crucial to the topic of the relationship between strategic management and performance appraisal methods. The failure to enhance labor performance is attributable to the performance appraisal system.
Other scholars have directed their efforts in understanding the association performance appraisal system and employee performance, job satisfaction, and motivation. One particular scholar is (Subekti, 2021). The purpose of the study was to determine the influence employee assessment has on motivation and satisfaction. The researcher drew all the participants from PT Pupuk Kaltim. The total number of participants was 140 selected through clustered sampling. The author did data analysis through the Smart Partial Least Square (SmartPLS). The results showed that the performance appraisal system affects employees’ satisfaction and motivation and not performance. A direct comparison between the two studies by (Zondo, 2018) and (Subekti, 2021) shows that the performance appraisal system had no impact on employee performance and organizational performance. Essentially, a performance appraisal system aims to drive employees towards organizational goals and objectives. These studies show that there may be zero to little connection between strategic management and performance appraisal systems and push me to research the correlation between strategic management and performance appraisal systems.
As already discussed, many studies have exhausted the effects of a performance appraisal system on employee and organizational performance, motivation, and job satisfaction. These studies show that employee evaluation bolsters motivation and job satisfaction and has no significant impact on delivery. However, none of the researchers has further aimed at understanding why appraisals do not impact performance. It is within that perspective that this research will delve into a study aiming to determine whether management systems are related to appraisal systems.
Introduction (Chapter 1)
The goal of this study paper is to look into the relationship between strategic performance and appraisal methods in today’s businesses. Setting goals, methods, and objectives to acquire a competitive advantage is referred to as strategic management in organizations. The techniques are designed to differentiate firms from their competitors while also drawing customers to the market. Strategic management approaches are used by stakeholders in business entities to execute short- and long-term organizational projects. Innovation, product segmentation, and corporate social responsibility are examples of strategies. A performance assessment system, on the other hand, refers to the process of detecting, evaluating, and developing employee work performance in order to aid in the achievement of the organization’s goals and processes. The company must keep track of each employee’s growth in order to hold them accountable for their work.
