Human capital and performance appraisal in the public sector: An empirical investigation from employees’ and senior managers’ perspective

Human capital is often considered as one of the most fundamental requirements for high organizational performance, whereas key driver for the achievement of higher levels of employees' productivity is considered the employment of a suitable performance appraisal system. Based on this perspective, we assume that every organization needs to establish an effective appraisal system which will be sufficient to facilitate employees’ continuous development. This is especially relevant for public sector organizations that in some countries implement fundamentally flawed performance appraisal systems. On the verge of the transition from the bureaucratic to the new public management model, the organizational units of the public sector seem to have an excellent opportunity to redesign their key processes, including human capital appraisal forms. This paper explores the context and role of a few critical human capital practices, which are mainly related to employees’ self-evaluation and performance appraisal, and are currently implemented in the Greek public sector. To attain our goal, an empirical investigation was conducted via a questionnaire survey to specifically determine whether self-evaluation and appraisal problems exist, in particular in terms of objectivity, consistency, adequacy, and credibility. The questionnaires were addressed both to employees and senior managers. The empirical results obtained, highlight some core problems that the public sector faces, with regard to existing self-evaluation systems and appraisal practices. These, among others, include the following: a lack of objectivity both in employees’ self-evaluation and in their appraisals assessed by the senior managers; inconsistencies between the way the public servants perceive the range and quality of their merits and those included in their job description; mistrust and lack of reliability on employees’ evaluation reports and selection criteria. Finally, some policy reformations are proposed to cope with these problems.