Why Performance Management? / The Role of Performance Appraisal

Why Performance Management?

In today’s rapidly changing business environment, organizations are concerned about competition, the quality of their products and services, and operating more efficiently. Gaining the cooperation and active involvement of employees is critical to an organization’s success. Providing them with a clear sense of how their activities and assignments are connected with the organization’s missions and goals facilitates such involvement. It is management’s role to provide direction and feedback to accomplish these intentions, and Performance Management is the mechanism by which it all happens.

The Role of Performance Appraisal

The annual Performance Appraisal is the formalization of the ongoing process of the Performance Management. It can provide a fair and accurate basis for salary decisions and pay-for-performance programs. It is also the mechanism by which we can let our employees how they are doing on focused objectives or goals, and know how well they are meeting standards or expectations. Effective performance management makes possible the establishment of an Employee Development Plan to improve performance in the current job, and prepare employees for future assignments or responsibilities. Finally, it provides the vehicle for setting individual objectives and goals for the coming appraisal period.

The Performance Appraisal process can be a powerful tool. It is, however, a subtle and complex process, and therefore managers must be thoroughly trained in the process to fully reap the rewards.