A performance appraisal is a formal, structured system that compares employee performance to established standards. Assessment of job performance is shared with employees being appraised through one of several primary methods of performance appraisals. Elements in performance appraisal methods are tailored to the organization's employees, jobs, and structure. They include objective criteria for measuring employee performance and ratings that summarize how well the employee is doing. Successful appraisal methods have clearly defined and explicitly communicated standards or expectations of employee performance on the job. (Allen, pg 28, 2002)
After reading the scenario between Jennifer and Mel's argument on evaluating the workers performance formally or informally, I have to agree with Jennifer. Giving performance appraisals formally ensures that compensation and other reward disbursements are consistent with actual salesperson performance. It also identifies that particular salesperson that might be promoted, whose employment should be terminated, and to supply evidence to support the need for termination. (Dessler, pg 313)
Formal evaluations also determine the specific training and counseling needs of individual salespeople and the overall sales force. It provides information for effective human resource planning identifies criteria that can be used to recruit and select salespeople in the future, and it advises salespeople of work expectations. All in all formal evaluations motivates salespeople, helps them to set career goals, and improves their performance. (www.business.bond.edu.au/mktg13-310)
To a degree I could see Mel's point of view as well. According to Peter Wildblood who is the founder of Wildblood Performance Appraisal Systems ...