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Study of Performance Appraisal System and Its Effectiveness in an Organization Free essay! Download now

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Study of Performance Appraisal System and Its Effectiveness in an Organization

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Study of Performance Appraisal System and Its

Effectiveness in an Organization


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Chapter 1: Introduction
Chapter 2: Objective and Methodology of the Study
Chapter 3: Organization Profile
Chapter 4: Performance Appraisal- Theoretical Review
Chapter 5: Performance Appraisal System in

The Link to Rewards

Recent research (Bannister & Balkin, 1990) has reported that appraisees seem to have greater acceptance of the appraisal process, and feel more satisfied with it, when the process is directly linked to rewards. Such findings are a serious challenge to those who feel that appraisal results and reward outcomes must be strictly isolated from each other. There is also a group who argues that the evaluation of employees for reward purposes, and frank communication with them about their performance, are part of the basic responsibilities of management. The practice of not discussing reward issues while appraising performance is, say critics, based on inconsistent and muddled ideas of motivation.

In many organizations, this inconsistency is aggravated by the practice of having separate wage and salary reviews, in which merit rises and bonuses are decided arbitrarily, and often secretly, by supervisors and managers.

There are basically three purposes to which performance appraisal can be put. First, it can be used as a basis for reward allocation. Decision as to who gets salary increase, promotion, and other rewards are determined by their performance evaluation. Second, these appraisals can be used for identifying areas where development efforts are needed. The performance appraisal is a major tool for identifying deficiencies in individuals. Finally it can be used as a criterion against which selection devices and development programs are validated. As a key input into management's reward and punishment decision, performance appraisals can motivate or de-motivate employees.

Three different approaches exist for doing appraisals. Employees can be appraised against

1. Absolute standards

2. Relative standards

3. Objectives


Since organisations exits to achieve goals, the degree of success that individual employees have in reaching their individual goals is important in determining organisation effectiveness.

Performance system is fundamentally, a feed back process, which require sustained commitment. The cost of failure to provide such feedback may result in a loss of key professional employees, the continued poor performance of employees who are not meeting performance standards and a loss of commitment by employees, in sum, the myth that the employee know what. they are doing without adequate feedback from management can be an expensive fantasy.


1. Establishing Performance Standard

2. Communicate Performance expectations to employees

3. Measure actual performance

4. Compare actual performance with standards

5. Discussion with the employees and identification development programs to bridge the gap.

6. Initiate action


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