IMPORTANCE AND ROLE OF PERFORMANCE APPRAISAL
Performance appraisal has been considered a most significant and indispensable tool for an organisation. The information it provides is highly useful in making decisions regarding various aspects such as promotions. Performance measures also link information gathering and decision-making processes which provide a basis for judging the effectiveness of personnel sub-divisions such as recruiting, selection, training, and compensation. Accurate information plays a vital a role in the organisation as whole. They help to pinpoint weak areas in the primary systems (e.g. marketing, finance, and production). It is easier for managers to see which employees need training or counselling.
According to Mc Gregor, "Formal Performance Appraisal plans are designed to meet three needs, one of the organisation and the other two of the individual, namely :
(i) They provide systematic judgements to back up salary increases, transfers, demotions or terminations.
(ii) They are means of telling a subordinate how he is doing and suggesting needed changes in his behaviour attitude, skills, or job knowledge. They let him know " where he/she stands" with the boss.
(iii) They are used as a base for coaching and counselling the individual bythe superior.
OBJECTIVES OF PERFORMANCE APPRAISAL
On the basis of appraisal procedures of various companies in India, the main objectives of employee performance appraisal are:
1. For Maintaining Inventory:
Performance appraisal enables an organisation to maintain an inventory of the number and quality of all managers and to identify and meet their training needs and aspirations.
2. For Determining Increments:
This method rewards, and provides a reliable index for aims at determining increment greater responsibility. promotions and transfers to positions of
3. For Maintaining Individual and Group Development:
The objective of performance appraisal is to maintain individual and group development by informing the employee of his performance standard.
4. For Suggesting Ways of Improvement:
This system helps in suggesting ways of improving the employee's performance when he is not found to be up to the mark during the review period.
5. For Identifying Training Needs:
Performance appraisal aims to identify training and development needs and evaluate the effectiveness of training and development programmes.
6. For Planning Career Development:
The other objective of performance appraisal is to plan career development based on potentialities.
It can be said that performance appraisal is an important personnel management tool. It is a judgement of the characteristics, traits and performance of employees and has a wide range of utility.
According to Cummings, " the overall objective of performance appraisal is to improve the efficiency of an enterprise by attempting to mobilise the best possible efforts from individuals employed in it. Such appraisals achieve four objectives including the salary reviews, the development and training of individuals, planning job rotation and assistance promotions. In brief, the main purpose of performance appraisal is to provide the 'deadlock' and research data for improving the overall personnel information system."
RELATED TOPIC
Characteristics of Human Resource Management
Objective of Human Resource Management
Scope of Human Resource Management
