Page 192 - DCOM102_DMGT101_PRINCIPLES_AND_PRACTICES_OF_MANAGEMENT

Principles and Practices of Management

Notes areas/key result areas), work planning and for improving the overall performance of the
organisation.
Career is a sequence of attitudes and behaviours associated with the series of job and work
related activities over a person’s lifetime. Yet in another way, it may be defined as a succession
of related jobs, arranged in hierarchical order, through which a person moves in an organisation.

11.1 Concept and Functions of Performance Appraisal

Performance means the degree or extent with which an employee applies his skill, knowledge
and efforts to a job, assigned to him and the result of that application. Performance appraisal
means analysis, review or evaluation of performance or behaviour analysis of an employee. It
may be formal or informal, oral or documented, open or confidential. However, in organisations
we find the formal appraisal system in a documented form. It is therefore, a formal process to
evaluate the performance of the employees in terms of achieving organisational objectives.
The primary functions of performance appraisal are:

1. To identify and define the specific job criteria. Many organisations at the beginning of the
year set key performance areas (KPS) or key result areas (KRAs) for employees based on
mutual discussions.
2. To measure and compare the performance in terms of the defined job criteria, KRAs and
KPAs are also designed so that they can help in measuring job performance in quantitative
or qualitative terms.
3. To develop and justify a reward system, relating rewards to employee performance.

4. To identify the strengths and weaknesses of employees and to decide on proper placement
and promotion.
5. To develop suitable training and development programmes for enriching performance of
the employees.
6. To plan for long-term manpower requirements and to decide upon the organisational
development programmes needed, duly identifying the change areas (for overall
improvement of the organisation).
7. To identify motivational reinforcers, to develop communication systems and also to
strengthen superior-subordinate relationships.

11.2 Objectives of Performance Appraisal

A performance appraisal system tries to serve various purposes and attain a number of objectives.
The major objectives of a performance appraisal system may be classified as remedial,
developmental, innovative and motivational.
1. Developmental objectives stimulate growth of the employees both in their present and
future jobs. Thus, it identifies training and development needs, ensures placement and
promotion, etc.
2. Innovative objectives are for discovering ways to deal with a new job and also to identify
and develop better ways for existing jobs.
3. Motivational objectives are for rewards, motivation, effective communication and also
for better interpersonal relations.

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