Article: Performance Appraisal and Performance Management

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IOSR Journal of Business and Management (IOSRJBM) ISSN: 2278-487X Volume 3, Issue 5 (Sep,-Oct. 2012), PP 01-06 www.iosrjournals.org

From Performance Appraisal to Performance Management
1

Ms. Leena Toppo, 2Dr. (Mrs.) Twinkle Prusty
1,2

(Faculty of Commerce, Banaras Hindu University, INDIA)

ABSTRACT: Performance appraisal and performance management were one of the emerging issues since last decade. Many organizations have shifted from employee’s performance appraisal system to employee’s performance management system. This paper has focused to study the evolution of employee’s performance appraisal system, critics the system suffered and how the performance management system came to the practice. The main purpose of this paper is to differentiate these two systems, employee’s performance appraisal and management system. This paper uses a review of the literature to evaluate the development of appraisal system and argues the critic areas of appraisal system. The review identified as advancement in the management field and growing complexity in corporate sectors demand more capable HR, so mare appraisal of employee’s performance is not sufficient. Employee’s contribution should be aligned with organizational objectives and strategy. Performance management eliminates the shortcomings of performance appraisal system to the some extent. Keywords: Human resource (HR), HR development, performance appraisal, performance management, performance evaluation. I. INTRODUCTION Organizations are run and steered by people. It is through people that goals are set and objectives are realized. The performance of an organization is thus dependent upon the sum total of performance of its members. The success of an organization will therefore depend on its ability to measure accurately the performance of its members and use it objectively to optimize them as a vital resource (Biswajeet 2009). In the present highly competitive environment, organizations have to ensure peak performance of their employees continuously in order to compete and survive at the market place effectively (Prasad 2005). Performance of an individual can be defined as the record of outcomes produced as specified job functions or activities during a specified time period (Bernardin 2007). The term performance refers to a set of outcome produced during a certain period of their job time and does not refer to the traits, personal characteristics, or competencies of the performer. The evaluation of employee‟s performance reveals the contribution of an individual in the organization‟s objectives. People do not learn unless they are given feedback on the results of their actions. For corrective actions to take place feedback must be provided regularly and it should register both successes and failures (Biswajeet 2009). Appraisal is the evaluation of worth, quality or merit, so performance appraisal of employees means the evaluation of their performance performed during a certain period of time. In the organizational context, performance appraisal is a systematic evaluation of personnel by supervisors or others familiar with their performance (L.M. Prasad). Performance appraisal is also described as merit rating in which an individual is rated as better or worse in comparison to others. This is one of the oldest and most universal practices of management (Tripathi 2005). This is a process which reveals that how well employees perform their jobs when the performance compared with the predetermine set of standards (L Mathis & John H. Jackson). Merit rating is used basically for promotion of employees. However performance appraisal is more comprehensive term for such activities, because its use extends beyond ascertaining eligibility for promotion. Such activities may be training and development, salary increase, transfer, discharge, etc. besides promotion (Prasad, 2005). According to Beach (1980), “Performance appraisal is a systematic evaluation of the individual with...
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