Importance of Performance Appraisal

Topics: Strategic management, Balanced scorecard, Management Pages: 5 (1264 words) Published: April 13, 2010
A major challenge for every business owner or manager is to have employees who are passionate about what they do and constantly strives to perform at their best. Many managers take the integrated approach known as Performance Management, to manage the performance, consisting of setting goals, training employees and then appraising and rewarding them (hrm). It can be explained as a process that consolidates goal setting, performance appraisal and development into single, common system, the aim of which is to ensure that the employee’s performance is supporting the strategic aims. (hrm book 315).. A performance management system would be only effective when the employees in Mambo are clear about their duties and job standards and the organizational goals so that they work with their full potential to meet organizational objectives. Mambo should develop a well planned performance management system as it will provide information on taking decision about the promotion and salary of the new as well as currently employed staff members. Moreover it would provide the senior management (Brett and Simone) to review the employee’s work related behaviour and developing a plan for correcting any deficiencies both for manager and employee as well. During the implementation of the performance management system the organisation has to expressly pay attention to fostering and improving the behavioral factors of performance management, in order to increase the chances of better result by the use of performance management system. A key element of Performance Management System is Performance Appraisal as it identifies, evaluates and develops employee performance to meet employee and organizational goals Brett and Simone have to choose an appraisal method so that actual performance can be measured as to what has been set in the organisation. Selecting one appropriate method from many is not easy as. It is

The classification of appraisal methods helps make it more straightforward. If conducted properly appraisals can achieve a number of benefits for all parties. The organization, the manager and the appraisee can: establish current levels of performance and benchmark across departments or functions; identify ways of improving performance, individually and collectively; set clear goals for the future; assess potential and desire for development; establish the appropriate means of motivation; and improve communication throughout. Mambo would be benefited in reviewing the performance of the employees by using the balance scorecard method as it is a measurement –based management system that translates organizational vision and strategy into action. (hrm 321). Under the balanced scorecard system, financial measures are the outcome, but do not give a good indication of what is or will be going on in the organization. Measures of customer satisfaction, growth and retention is the current indicator of company performance, and internal operations(efficiency, speed, reducing non-value added work, minimizing quality problems) and human resource systems and development are leading indicators of company performance(hrm 321) A performance measurement system such as the Balanced Scorecard allows an agency to align its strategic activities to the strategic plan. It permits -- often for the first time -- real deployment and implementation of the strategy on a continuous basis.( ( balance score card, bsc,and performance management, David Chaudron, oct 2000 ( By this approach Mambo can track and improve its strategic performance and results by developing, measuring, collecting and analyzing the data from both internal business processes and external business processes and can get feedback needed to guide the planning efforts. This method not only analyses how the organisation has been doing, but also how well it is doing (“current indicators”) and can expect to do in the future (“leading...
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