INDUSTRIAL LAW

MBA-W-10


ASSIGNMENT # 1
NAME:MALIHA RASHID
STUDENT ID: 7575
SUBMITTED TO: PROFESSOR
RUKHSAR


A RESEARCH REPORT ON EFFECT OF
PERFORMANCE APPRAISAL ON THE
ORGANIZATION AND THE EMPLOYEE


ABSTRACT
Performance Appraisal technique has been measured as the utmost significant tool for an
organization. The knowledge it provides is highly useful in making decisions regarding various
personal aspects such as promotion and merit increases. Performance measures also link
information gathering and decision making processes which offer a basis for assessing the
effectiveness of personal category heads Such as recruiting, selection, training and
compensation. This inquiry will focus on examining the outcome of the performance appraisal
on an individual as well as on the Organizations. The main point of development of
the system is the employee satisfaction and hence, this research study is being acquitted for
the same reason of the employee appraisal system. The view of human resources is the most
important and critical. The well efficient work force is needed in the industry so as to grow in
the competitive world.
INTRODUCTION
The performance appraisal is the process of obtaining, analyzing, and recording information
about the relative worth of an employee to the organization. Performance appraisal is an
analysis of an employee's recent successes and failures, personal strengths and Weaknesses,
and suitability for promotion or further training.
Performance' appraisal is a formal, organised system of measuring and evaluating an
Employees job related activities and aftermath to find out how and why the employee is
presently carrying out on the job and how the employee can perform more realistically in the
future so that the employee organization and society all profit.
Performance Appraisal has been considered as the most impostant as for the knwoledge it
provides is highly important and useful in making assessments regarding different personal
aspects such as promotion and advancements in career. Performance measures also connects
information collection and decision making system which provides a ground for assess the
effectiveness of employees sub-deppartments such as recruiting, selecting, training and
reimbursements. Actual information plays a critical role in the organization as a complete. They
assist in finding out the flaws in the chief areas.




Rewards of Performance Appraisal
It has been told that performance appraisal is an security and stock savings for the company
which can be warranted and vindicated by following advantages:

Promotion: Performance Appraisal helps the supervisors to outline the stimulation Programs
for efficient employees.

Compensation: Performance Appraisal helps in outlining the compensation plans for
employee. Performance Appraisal helps to give importance to the performance. Compensation
plans which include bonus, high salary rates, extra benefits and allowances. The benchmark and
norm should be capability ,skill and aptitude rather than seniority and superiority.

Employees Development: The organized methodical procedure of performance appraisal
assists the supervisors to chalk out training policies and resources with plans. It assists to
examine the powers behind and flaws of employees so that new jobs can be created and
drafted for efficient employees.

Selection Validation: Performance Appraisal helps the supervisors to figure out the
strength, rationality cogency and worth of the selection technique or modus operandi.

Communication: For an organization, effective interaction between employees and
employers is highly thoughtful and responsible way. Through performance appraisal,
communication can be soughtfor example, the employers can accept the reason and accept
capability of subordinates. The minion and inferior can also comprehend and build a faith and
assurance assertion in higher authority. It creates the moral fiber of the work and rapidly
increase the morale of employees.

Motivation: Performance appraisal works as a motivation agent. whilst evaluating
performance of employees, a persons efficiency can be sorted out if the gopals are attained.
This easily inspires a person for good job and assists him to perk up his functioning in the day to
come.

Here are the gears depleted by the organizations for Performance Appraisals by
Their employees.
Ranking/classifications
Contrast evaluation
Mixed Distribution
Hidden Report
Essay assessments
Vital Incident
Checklists/worksheets
Graphical Rating Scales
BARS
Artficial Choice Method
MBO
Field Review Tool
Operational Test

REVIEW OF LITRATURE
Performance appraisal is an analysis of an employee's recent successes and failures, Personal
strengths and weaknesses, and suitability for promotion or further training. Many researchers
have conducted research on this topic as gave follows.

A number of researchers study the topic of performance appraisal. Eichel and Bender
(1984), Levinson (1992) Mbiti (1994), Davis (1995), Edwards & Ewin (1996) Richi
(1996), (Wagner and Goffin, 1997), Quchi (1997) Strebler (1997); Akinyele and Obamiro
(2005), Makiney and Levy (1998) Cascio (1998), Moulder (2001) and Armstrong (2001) did
research on performance appraisal in different parts of the world. Levinson (1992) investigates
the importance of the processes of identification of the employee with the manager. Mbiti
(1994) evaluates the human temperaments as the reasons why we need to appraise
employees. (Edwards &Ewin, 1996) study the topic 360 Feedback from multiple sources and its
effect. )
Armstrong (2001), evaluates human resource practices and performance
Appraisal. Michel and Bender (1984) reveal performance evaluations were designed primarily
as tools for the organization to use in controlling employees. He states that past performance
was used to guide or justify manager His method of appraisal was subjective. Davis (1995),
disclose that performance management is a joint
A process that involves both the supervisor and the members of staff, who identify common
goals, which correlate to the higher goals of the institution, managements actions in dealing
with the employee and performance appraisal provided the basis for salary, retention,
discharge, or promotion decisions. As used to guide or justify managements actions in dealing
with the employee. He also finds that If employees are effectively appraised, then the
organization will experience increased productivity and improved quality of output, and for
effective development and utilization of the human talent, performance appraisal plays a key
role as it enables an organization to identify objectively the employees strengths and
weaknesses organization regardless of industry. Molder (2001), reveals that appraisals are
useful in setting goals and in fostering improved communications among work groups and
between employees and supervisors. This study predicts that performance appraisals are
valued for defining expectations and measuring the extent to which expectations are met.
It states state that appraisals can make clear to employees where they are having success and
where they need to improve performance. Armstrong (2001) conceals that performance
management provides an integrated and continuous approach to the management of
performance than is provided by traditional performance appraisal schemes. Unlike traditional
methods of management of command, performance management is based on the principle of
management by agreement. Numerous of studies have been done by the researchers on the
topic performance appraisal, considering various aspects in different areas, but nobody
concentrated on factors like an effective tool for development, co-operation and teamwork
and competition that I have considered and the present research will concentrate on the
above said topic.

CONCLUSION
The research shows that performance appraisal plays an important part in an organized system.
Performance appraisal helps in evaluating and assessing the employees' performance in
comparison to the standards fixed. It helps in assessing the capabilities of various employees
and employees contribution towards the organization. It helps in determining the training
needs of the employees. From the employee point of view he will get to know that what are his
strength and weaknesses and which improvements he has to do. It helps an individual to
determine the proper career path.
The process of performance appraisal has to be carried out for the benefits of management and
at the same time, it also motivates employees for the action required by the management of
the organization. The performance appraisal plays a very vital role in the organization in
achieving the goals of the organization.
To conclude, we can say that performance appraisal is an indispensable part that provides very
advantageous both to the individuals and the organization.
REFERENCES
Armstrong, M. 2001. A handbook of human resource management practice 8t h Ed.
London: Kogan Page
Davis, R (1995). Choosing performance management, holistic approach Journal, Cupa
Publication.
Edwards, M. R., and Ewen, A. J., (1996). 360-Degree Feedback: The Powerful New Model for
Assessment and Performance Improvement. New York: AMACOM
Michel, E. & Bender, H. E. (1984). Performance Appraisal A Study of Current
Techniques. New York. American Management Association.
Levinson HA (1992). Psychologist looks at executive development, Harvard Business Review.
McKinney, Jeanne D. & Levy, Paul E.(1998). The Influence of Self Ratings versus Peer
Rating son Supervisors Performance Judgments. Organizational Behavior and Human
Decision .Processes, Vol. 74.
Mbiti R (1994). Performance Appraisal System, Personnel Hand book
Moul4.Davis R (1995). Choosing performance management, holistic approach Journal,
Culpa Publication, AMERICA.
Richi. LH (1996). A skillful Approach to high productivity, HR Magazine, Vol.3
Wagner, Stephen H. & Goffin, Richard D. (1997). Differences in Accuracy of Absolute and
Comparative Performance Appraisal Methods. Organizational Behavior
And Human Decision Processes, Vol. 70, No. 2, 95 103.