Managing Research, Development, and Innovation: Managing the Unmanageable, Third Edition

10.5. PERFORMANCE APPRAISAL AND ORGANIZATION PRODUCTIVITY

Organizational productivity can be defined as the ratio of outputs to inputs. Inputs can be determined by the level of resources invested. Outputs can be conceived as income minus costs. For a profit-making organization, profitability can provide a good measure of the organization's productivity. We must keep in mind that behavior is shaped by its consequences. If we want specific behaviors to occur, we need to use an appraisal system that rewards them when they occur.

Output measures for a research organization can be subjective or objective, quantitative or nonquantitative, and discrete or scalar and can include some measure of quality (Anthony and Young, 2002). While the measurement ...