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Performance evaluations/appraisals in a matrix organization
Part three of this article will examine performance evaluations in particular as they apply to the complexities of the matrix organization. Matrix management has become a standard within certain industries. As employees become cross-functional, it is necessary, in the name of competition, to take advantage of these resources whenever and wherever their value is maximized. As such, we need to realize that there is a need to effectively evaluate the contribution that an individual can make throughout the firm. Ultimately, we need to understand not necessarily how to evaluate, but who should evaluate an employee in a matrix environment. Employees need to be properly trained with the necessary skills and abilities. "This is particularly true for the matrix structure as it inherently creates a state of constant conflict with its multiple-boss model and simultaneous pursuit of multiple objectives" ([14] Sy and Cote, 2004). This research raises an important point, if success hinges on the development of the employees, and we accept that the employee evaluation plays an important role in development, an effective model needs to be established for complex matrix organizations.
With very little research focused on the subject, we will determine what tools can help a successful appraisal system, as well, establish under what conditions an appraisal system will fail in a matrix organization. Research strongly suggests that project personnel find there is a clear distinction between the position and responsibility of a project manager versus that of a functional manager ([3] Dunne et al. , 1978).
According to [12] Stanleigh (2006), there are some alarming statistics with respect to performance appraisals within a matrix organization. For example, 750 organizations around the globe participated in the research, and found that "68 percent of respondent organizations had no process in place for employee performance evaluation of team members. Only 36 percent had any reward or recognition for the project manager and 44 percent said they provide reward and recognition for project team members" ([12] Stanleigh, 2006).
Based on the research, the most effective method by which to evaluate project personnel in a matrix organization is by means of a multi-rater system. In combining data from several sources, an effective, integrated and complete assessment of the individual's strengths, weaknesses,...