HR analytics and performance appraisal system: A conceptual framework for employee performance improvement

Abstract

Purpose

This paper aims to explore the role of human resource (HR) analytics on employees’ willingness to improve performance. In doing so, the paper examines issues related to the performance appraisal (PA) system which affect employees’ willingness to improve performance and how HR analytics can be a potential solution to deal with such issues.

Design/methodology/approach

The paper develops a conceptual framework along with propositions by integrating both academic and practitioner literatures, in the field of HR analytics and performance management.

Findings

The paper proposes that the use of HR analytics will be negatively related to subjectivity bias in the PA system, thereby positively affecting employees’ perceived accuracy and fairness. This further positively affects employees’ satisfaction with the PA system, which subsequently increases employees’ willingness to improve performance.

Research limitations/implications

The paper provides implications for both researchers and practitioners in the performance management area for improving employees’ performance by applying HR analytics as a strategic tool in the PA system. It also provides implications for future researchers to empirically test the conceptual framework in different organizational settings.

Originality/value

The paper offers insights into how the use of HR analytics can deal with issues of subjectivity bias in the PA system and positively affects employees’ willingness to improve performance.

Citation

Sharma, A. and Sharma, T. (2017), "HR analytics and performance appraisal system: A conceptual framework for employee performance improvement", Management Research Review, Vol. 40 No. 6, pp. 684-697. https://doi.org/10.1108/MRR-04-2016-0084