We are considering either turning our existing performance appraisal form into an Internet-based application or purchasing a web-based performance appraisal system. Is either a good idea?

Yes. There are several significant advantages that a sophisticated, Internet-based performance appraisal system has when compared with a standard paper-and-pencil approach:

- It eliminates the administrative chore of physically delivering forms to appraisers and appraisees.

- It makes it easier for the appraiser to keep track of performance data on a regular basis.

- It can serve as a tickler system to encourage the appraiser to add information and to complete the administrative requirements of the system.

- It can integrate performance appraisal training with the forms and procedural guidelines.

- It can allow a great deal of data-mining, so that the organization can easily get a great deal of information on performance management activities and results throughout the organization.

There are also some major concerns that must be addressed:

- Effective web-based systems that incorporate best practices are expensive.

- Some users may perceive the systems as difficult to learn and cumbersome to use.

- Using a web-based approach may require a significant amount of technical support.

- The ease of meeting the organization's performance management requirements through technology may encourage managers to have fewer face-to-face discussions about performance.

- There are significant security concerns that must be addressed and resolved.

- Web-based systems are most easily used in organizations where almost everyone has easy access to the Internet.

But Internet-based performance management systems certainly represent the future. They make it much easier for managers to meet their performance-management responsibilities and encourage more frequent communication between raters and ratees. One major benchmarking study found that online performance management systems significantly reduce administrative burdens and increase accuracy. Companies that had implemented sophisticated systems also found that automated performance management systems provided these major benefits:

- Increased consistency and reduced subjectivity

- Improved review quality

- Improved timeliness of completion and delivery

- Immediate access for senior managers to performance information throughout their organizations

- Eased entry of new employees into the organization and immediate communication of performance expectations

- Ability to provide just-in-time training at the moment that the user was setting goals or writing an appraisal

- Reduced training costs

- Reduced time spent drafting and reviewing performance appraisals, thus allowing more time for manager/employee interactions

- Allowing for continuous updates of performance expectations

In fact, the results and impact attributed to electronic performance management at some companies are truly staggering. For example, Chrysler Corp., claims that as direct result of automated performance management, 78 percent of managers cited improved quality of feedback, 80 percent cited ease of writing, and 62 percent cited reduced writing time. On the employee side, 83 percent felt review comments were more meaningful, and 78 percent felt that they had received more value-added feedback.

In addition to these benefits to appraisers and appraisees from Internet-based systems, human resources managers and senior executives discover that administrative costs are reduced, reviews are conducted more frequently and with higher quality, and the amount of important information available about performance throughout the organization is far greater and easy to collect than it ever was before.

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