Page 63 - DMGT517_PERFORMANCE_MANAGEMENT_SYSTEM

Performance Management System

Notes Last year, the company had asked 500 employees to leave following such an appraisal.
Analysts held that although the staff cut was for under-performance, it is possible that
in times of slowdown companies might come up with more stringent standards for
performance.
TCS’ current utilisation rate (the proportion of staff working on projects) is 75 per cent, said
the spokesperson. This does not mean that 25 per cent are benched, for the rest consist of
administrative and other staff who are not directly on projects, she said
Source: www.thehindubusinessline.com

Discuss the key techniques of performance appraisal.

5.4 Summary

It is a process of estimating or judging the value, excellent qualities or status of a person or
thing. It is a process of collecting, analyzing, and evaluating data relative to job behavior
and results of individuals. The appraisal system is organized on the principle of goals and
management by objectives.
Performance appraisal can be either formal or informal. Formal appraisals are usage of
former systems schedule regular sessions in which to discuss an employee’s performance.
Informal appraisals are unplanned, often just chance statements made in passing about an
employee’s performance.
The main difference between the performance management and appraisal systems is their
respective emphasis and spirit. Good organizations in the past have used essentially their
performance appraisal systems as performance management systems.

Performance appraisal plans are designed to meet the needs of the organization and the
individual. It is increasingly viewed as central to good human resource management.
Organizations use performance appraisals for three purposes: administrative, employee
development and programme assessment. Programme appraisal commonly serve an
administrative purpose by providing employers with a rational for making many personnel
decisions, such as decisions relating to pay increases, promotions, demotions, terminations
and transfers.
There are two types of performance appraisal systems which are normally used in
organizations: (i) close ended appraisal system and, (ii) open ended appraisal system.

5.5 Keywords

Close Ended Appraisal System: In this, a confidential report is submitted on the performance of
the employee.
MBO: It involves the setting out clearly define goals of an employee in agreement with his

superior.
Open Ended Appraisal System: In this, the performance of the individual is discussed with him,
and he is ranked in a five or ten point rating scale.

Performance Appraisal: It is a systematic evaluation of present potential capabilities of personnel
and employees by their superiors, superior’s or a professional form outside.
Self Appraisal: It gives a chance to the employee to look at his/her strengths and weaknesses, his
achievements, and judge his own performance.

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