Performance Management Outsourcing

Performance Appraisal is a very important & crucial activity for organizations that are looking for growth and profit maximization in this ever-increasing competitive environment,

·         In simple terms performance appraisal may be understood as the assessment of an individual’s performance in a systematic way' the performance being measured against such factors as job knowledge' (quality' (quantity of output' initiative' leadership abilities' supervision' dependability' co-operation' judgment' versatility' health' and the like. Assessment should not be confined to past performance alone. Potentials of the employees for future performance must also be assessed.

 

·         Today’s working culture demands a great deal of commitment and effort from the employees' who in turn naturally expect a great deal more from their employers. The development of much more participative style of management in many organizations is a positive step towards meeting such heightened expectations. This participative style can be expressed in a variety of practical ways. "or e.g. work teams' (quality circles' and of course regular performance appraisals.

 

This process has very a high implication on various other 9% functions' like recruitment' training' manpower planning etc.

 

ü  It is important that the employees are aware of their goals' how to achieve them' how they are matching up to them' what should be done if they are not. There is not one right way of doing the performance appraisals. The most appropriate route to be taken will depend upon the current style and status of the organization.

 

ü  Performance Appraisal must be seen as an intrinsic part of a manager’s responsibilities' not an unwelcome an time consuming addition to them. !t is about improving performance and ultimately the effectiveness all a part of the manager’s remit.

 

Purpose of Performance Appraisal

 

The purpose of Performance Appraisal is to determine an employee’s worth to the organization. It is a continuous process and made at regular intervals. The purposes of performance appraisal fall in two categories:

 

1.             Administrative; and

2.             Self-improvement.

1.             Administrative purpose:

 

A.      Promotions

This is perhaps the most important administrative use of performance appraisal. It is in interest of the management to promote employees into positions where they can perform most effectively. A properly developed and administrative performance appraisal system can aid in determining whether individuals should be considered for promotions. The system must rate employee for the present job and his potentialities for the higher job. A person performing his job well does not necessarily mean that he is fit for promotion.

 

B.       Transfers

 In an organisation, it may be necessary to consider various types of personnel actions such as transfers, lay offs, demotions, and discharges. In some cases, such actions are called for because of unsatisfactory performance while in other cases it may be called for due to economic conditions over which the organisation has no control because of changes in production process. Such actions can be justified if they are based on performance appraisal.

 

C.       Wage and salary administration

 In some cases, the wage increases are based on the performance appraisal reports. In some cases, appraisals and seniority are used in combination.

 

D.      Training and development

An appropriate system of performance appraisal can be helpful in two ways. First, it can help in identifying the areas of skills or knowledge in which numerous employees are not up to par, thus pointing out general training deficiencies which presumably should be corrected by additional training, interviews, discussions, or counseling. Secondly, these appraisals help in spotting the potentials to train and develop them to create an inventory of executive skills. It can also provide the areas where the employee/executive could be further trained and positioned to meet retirement and expansion situations.

 

E.       Personnel research

Performance appraisal helps in research in the field of personnel management. Various theories in human relationships are the outcome of efforts to find out the cause and effect relationship between the personnel and their performance.

The following diagram would help us understand the basic purpose a good performance appraisal system would do to us.