Final answer:
In practice, performance evaluations are disliked and often fail to improve performance or motivate employees. Evaluations may be used to communicate concerns, reinforce good performance, discuss rewards or consequences, and document poor performance. Self and peer ratings in 360-degree methods may be unreliable but can provide a learning opportunity.
Step-by-step explanation:
In theory, performance appraisals should be an asset for an organization wishing to achieve its goals, and most employees will actually solicit feedback regarding their jobs if it is not offered. However, in practice, many performance evaluations are disliked by organizations, employees, or both, and few of them have been adequately tested to see if they do in fact improve performance or motivate employees.
One of the reasons evaluations fail to accomplish their purpose in an organization is that performance appraisal systems are often used incorrectly or are of an inappropriate type for an organization's particular culture.
Performance appraisals are typically documented several times a year, often with a formal process and an annual face-to-face meeting between an employee and their supervisor. The meeting is used for the supervisor to communicate specific concerns about the employee's performance and to positively reinforce elements of good performance.
It may also be used to discuss specific performance rewards or consequences. Part of the function of performance appraisals is to document poor performance to support decisions to terminate an employee.
Few studies have assessed the effectiveness of 360-degree methods, but self and peer ratings were found to be unreliable as an assessment of an employee's performance. However, the variability in ratings can provide a learning opportunity for employees as they discuss the reasons for the discrepancies with their supervisor.