Appraisal System in Small Software Company

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 Appraisal system (MBO)

A managing director along with his friends started a small software company. It is operating very informally and they are still with him 5 years on. The company has 4 directors including the MD. Each director has

adapted to the role which suits him as follows; Research and Development,
Marketing, Sales and HRM manager. This is a small software company so it
has approximately twenty staff members altogether which includes the managing director, directors, managers, professionals, supervisors and functional staff. There is lack of progress in most of the staff, they are

not moving on, developing or growing, although they are good at what they
do. So there is a need of a performance management system in the company to
establish an appraisal system. This essay includes the options for implementing a good appraisal system along with its benefits to all staff.
Furthermore, this talk about the management by objectives appraisal system,
its process, benefits and limitation of applying this system to the company
at all levels and how it will improve communication and reinforce a work
culture and will increase creativity and innovation among the staff. It also discusses the different department and its objectives. The organisation will set their own targets and work on them. Awards are given

only to those who receive a good rating on the basis of rating. Performance management system (PMS) is the process of measuring effectiveness, recognising training needs and developing motivation through

feedback performance toward attaining set goals for the organisational development. In this process each employee shares the objectives of the organisation. PMS connects individual performance objectives with the operating departments and organisational objectives and provides the method

of achieving these goals. The basic rationale of performance management is
to link individual and organizational objectives and achieve them for the
success of the company. The core of performance management is to prepare a
structure to direct, monitor, motivate and refine the performance of individuals. This approach suits the theory of modern organisational structure. There are different appraisal systems for performance management

Performance appraisal system (PAS) is an important function usually implemented by the human resource department within organizations. It is a
system which is used to evaluate the performance of an employee considering
quality, quantity, cost, and time. It provides knowledge which helps decision making about promotion and salary and which helps to strengthen
good workplace practices. This performance appraisal is a type of management process to maximise the employees’ contribution and performance.
Performance appraisal identifies training needs by motivating the work improvement and helping to set the future performance. The appraisal system
recognises achievements. It enables reciprocal communication concerning both performance and goals. It encourages a strong sense of individual responsibility by goal setting. It provides room for career

development.
Supervisors build their management skills and develop good working relationships with the staff. Then identify the weaknesses and reward strong performance. Management set corporate goals according to human resources and encourages improved productivity. A good appraisal system can

be of any type depending on the kind of company and staff. For example management by objectives, competency based appraisal system, staff appraisal of managers, team based appraisal, and customer based appraisal

and a 360 degree system.
In this software company the management by objectives (MBO). Performance
appraisal system can be applied more successfully because it is a small organisation with limited HR expertise and limited resources. Moreover, the
success of managing by objective depends upon the interest of the top management...
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