| Summary: | The project’s research aim was the assessment of the effectiveness of the current performance appraisal system (PAS) of the Cyprus Tourism Organisation (CTO) in relation to the enhancement of individual and organisational performance and the project’s outcome was the production of suitable recommendations for the attention of the Board of Directors, the Management and the Trade Unions. The recommendations will assist CTO in changing the current PAS for purposes of enhancing individual and organisational performance i.e. the introduction of an effective PAS at CTO. The change of the current PAS was explored and it is feasible because the inhibitors of change can be mitigated. Through the implementation of the project’s recommendations, the stakeholders will benefit since the recommended effective PAS will transform the culture and enhance the employees’ and CTO’s performance and that will reflect on tourism and the economy of Cyprus. The enhancement of performance and the added value at all levels are particularly important and relevant in today’s economic climate. Through the availability of the project to the academic and practitioner community, other researchers and similar organisations (e.g. the government and public sector organisations in Cyprus) will benefit since they will have the opportunity to refer to the project and borrow ideas and conduct further research and extend existing knowledge. The project can be considered as an original contribution to the knowledge and practice of performance appraisals because it is unique (a type of research that nobody else conducted before). The research approach that was used was that of the case study. The project was a qualitative study (in depth analysis and understanding) and the research techniques that were used were the following: literature, studies of the government and other public sector organisations in Cyprus, organisational documentation-regulations of the current PAS, insider/practitioner-researcher perspective, interviews, questionnaire (the opinion of the CTO employees was obtained through the interviews and questionnaire). The information that was collected from the above sources (triangulation) was analysed both quantitatively and qualitatively. It was concluded that the performance appraisals were not employed as they should under the current PAS (both inherent and implementation weaknesses). Most of the participants believed that the current PAS was ineffective as it did not enhance their performance, motivation, job satisfaction, ownership, responsibility or commitment and it needed to change. Most of the participants believed in the factors of an effective PAS. Most of the participants believed that the main factors of an effective PAS (feedback, participation, goals) were not present under the current PAS. In consequence, the absence of the above factors (ineffective PAS) has not led to the enhancement of most of the participants’ performance. The features of the recommended PAS are the following: -Introduction of the goals method for purposes of assessing performance (the goals will be jointly set and agreed, “smart”, consistent with the organisational goals and revised when necessary). -Measurement of performance against the goals through fact-based evidence. -Assessment of performance by suitable appraisers (their selection will be determined by the tasks and position of each appraisee). -Examination of appeals by other independent persons only (senior employees who will be educated and trained) who will ratify or amend the performance assessments conducted by the appraisers. -Introduction of the rating scales and 360 degree feedback methods (in combination) for purposes of development. The selection of the most suitable 360 degree feedback respondents (superiors, subordinates, peers, business associates) will be determined by the tasks and position of each appraisee. The usefulness of the rating scales method can be maximised through the following: sufficient scale, explanation of the scale, development of the assessment criteria according to the job requirements of each position and assignment of weights according to the significance of the criteria, specific, clearly defined and explained criteria, justification of the ratings with examples. -Participation of the appraisees in their performance and development assessments through self-assessment. -Consideration and discussion of the assessment results of the performance and development methods during the appraisal interview for purposes of drafting an agreed action plan in relation to the appraisees’ performance improvement and further development. -Introduction of a formal and informal feedback mechanism. The informal feedback mechanism (on a continuous basis) will consist of the following: communication, coaching, monitoring of performance. The formal feedback mechanism (once or twice a year) will consist of the following: assessments for purposes of performance and development, appraisal interview, agreed action plan for the future. -Education and training of the appraisers and the appraisees for purposes of implementing the formal and informal feedback mechanisms. -Computerisation of the recommended PAS for purposes of administering the system more effectively and efficiently. -The recommended PAS will be linked to a new reward system but the two systems will be separate. The features of the new reward system will be the following: the rewards will be based on the appraisees’ performance (performance assessments under the recommended PAS), the rewards will not be awarded at the same time as the assessments of performance, provision of non-monetary rewards to all the appraisees who will meet their performance targets, provision of monetary rewards to the appraisees with the highest performance (ranking). -Monitoring and evaluation of the recommended PAS (as well as the new reward system) by the Management, the employees (appraisers and appraisees) and the Trade Unions on an ongoing basis and making amendments if necessary.
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