Literature Review:

The definition of performance appraisal management has changed since it became

evident in 1990s. In 1990s Flower defined performance appraisal management as “the

organization of work to achieve the best possible results, from this simple view point,

performance management is not a system or a technique, it is the totality of the day to day

activities of all managers”. [1] Flower pointed performance management as day to day

activities of the manager to achieve best possible results.

Then in 1998 Armstrong and Baron defined Performance Management as “both a

strategic and an integrated approach to delivering successful results in organizations by

improving the performance and developing the capabilities of teams and individuals”. [2]

According to them performance management is a systematic approach to achieve

maximum results as well as developing the employees and to achieve this a defined

process should be used.

In 2006 the Society for Human Resource Management defined the Performance

Management as "performance management is the organized method of monitoring results

of work activities, collecting and evaluating performance to determine achievement of

goals, and using performance information to make decisions, allocate resources and

communicate whether objectives are met."[3] The SHRM defined Performance

Management as an organized method to evaluate the factors related to work and them use

that information in future tasks.

In 2011 Professor of Management, Sir Wayne Cascio defined Performance Management

as "Performance appraisal is the systematic description of an employee's job relevant

strengths and weaknesses."[4] According to Sir Wayne this is a systematic description of

an employee’s strengths and weakness as compared to job relevant factors.

So after going through these different definitions of Performance Management we

observe that at the start the purpose of Performance Management was to achieve best

possible results. But with the time it was realized that an employees strengths and

1 http://www.who.int/hrh/documents/en/Assessing_quality.pdf2 http://www.managementstudyguide.com/performance-management.htm3 http://www.insala.com/Articles/performance-management-software/performance-management-current-trends.asp4 http://kalyan-city.blogspot.com/2011/05/performance-appraisal-of-employees.html

weakness identification is also necessary and with the help of this employee development

is essential. This will help in achieving better results.

According to Richard A. Albright Jr [5] Performance Appraisal Management is a misused

tool of management, a Performance Appraisal method is defined after a lot of effort by

the HRM but managers try their best to delay the process of Performance Appraisal. The

main reason is the wrong perspective of Performance Management which can result in

the employees ending up on opposite sides. There remain misconception among

employees about the purpose of Performance Management, they think its only purpose is

pay increase and promotion. This is not right. There are a number of reasons for the

Performance Appraisal which if cleared to the employees would motivate them towards

the Performance Appraisals.

So what is the real point of performance appraisals, generally, the aim of the practice is

to:

Give feedback on performance to employees.

Identify employee training needs.

Document criteria used to allocate organizational rewards.

Form a basis for personnel decisions: salary increases, promotions, disciplinary

actions, etc.

Provide the opportunity for organizational diagnosis and development.

Facilitate communication between employee and administrator.

Validate selection techniques and human resource policies to meet federal Equal

Employment Opportunity requirements

These all factors combine to improve the performance of an individual as well as the

team. The performance of an individual depends on his own ability as well as the

environment available to him so it would be unfair if we do not count both of these

factors while doing Appraisals of the certain employees.

5 What Is The Purpose Of The Performance AppraisalRichard A. Albright Jr

Recent theoretical developments have enabled the empirical study of trust for specific

Referents in organizations. It is found that the implementation of a more acceptable

performance appraisal system increases trust for top management. The 3 proposed factors

of trustworthiness (ability, benevolence, and integrity) mediated the relationship between

perceptions of the appraisal system and trust. [6]

In term of Performance Appraisal practices in organizations, it seems likely that the focus

of content of appraisal will continue in the immediate future on the achievement of goals,

objectives or assessment of competencies. The concept of goal orientation originated in

the educational literature and is defined as an orientation towards ones ability. [7]

Armstrong proves in his journal [8] that though the name has changed of Performance

Appraisal Management over time but the main concept behind these theories is the same.

There have been many developments in these practices but they have been evolutionary.

They have not happened because of any revolutionary new approaches derived from

HRM theory. The fact that the pace of change in personnel management is faster now

than before the 1980s is not attributable to the advent of HRM as a philosophy. It has

been forced on organizations by the rapidly changing business, political, economic and

social environment.

Michael Armstrong along with Angela Baron discus issues related with Performance

Appraisal Management in their book. [9] which include:

The problem of gaining the commitment of the line managers to Performance

Management and of getting to do it well or do it at all.

The process is problematic because of complexity and difficulties involved in one

person attempting to sum up the performance of another. Performance Appraisal

requires certain skills which many managers not posses.

The prevalence of poorly designed or poorly administered Performance

Management schemes.

6 Journal of Applied Psychology 1999, Vol. 84, No. I, 123-136 By Roger C. Mayer(Baylor University) and James H. Davis (University of Notre Dame)7 Journal of occupational and organizational psychology (2001), 74, 473-487 printed in Great Britain. By Clive Fletcher.8 Employee Relations, Vol. 22 No. 6, 2000, pp. 576-593.9 Managing performance: performance management in action By Michael Armstrong, Angela Baron

The tendency of managers to adopt a unitary frame of reference, when in reality

organizations are more likely to be pluralistic in the sense that there are divergent

interests and that it should be acknowledged.

Management indulges in rhetoric about development but often do not put their

espoused view into practice.

Appraisal ignores system factors.

Appraisal is inconsistent and fundamentally subjective process.

Performance Management is wrongly focused on financial rewards.

Performance Management is a means of oppressive or coercive control.

Both. line managers and employees tend to be disenchanted with Performance

Management