Performance Appraisal Effectiveness: Concerns, Directions and Implications

Abstract

Performance appraisal (PA) has increasingly become part of a more strategic approach to integrate human resource (HR) activities and business policies and may now be seen as a generic term covering a variety of activities through which the organisations seek to assess employees and develop their competence, enhance performance and distribute rewards. As several purposes in the organisations. It is a tool for acknowledging good performance, identifying areas in need of improvement and providing documentation to justify many management decisions. Conducting PAs on employees’ performance should be more than a simple checklist of -do's and don'ts. It is a review and discussion of an employee's performance of assigned duties and responsibilities. The appraisal is based on results obtained by the employee in his/her job and not on the employee's personality characteristics. The appraisal measures skills and accomplishments with reasonable accuracy and uniformity. It provides a way to help identify areas for performance enhancement and to help promote professional growth. It should not, however, be considered as the supervisor's only communication tool. Thus, both practice and research have moved away from a narrow focus on psychometric and evaluation issues to developmental PA, which may be defined as any effort concerned with enriching attitudes, experiences - and skills that improves the effectiveness of the employees. The purpose of this study was to examine the PA system in the Indian firms. A total of 12 in-depth personal interviews with the HR managers in the Indian firms were used in order to answer the following questions. What are the characteristics of the PA process used in the Indian firms? What are the purposes of the PA systems in the Indian firms? What are the problems produced by the performance appraisal systems in the Indian firms? What are the different areas to be improved in the appraisal systems?