Performance management & Performance appraisal

Nowadays, every company has their human resources department that plays a large part of an organizations and a key to affect business succeeds or not. There are two core threads of human resources department are individual and organizational learning, individual and organizational performance. Human resource management should possess a good management systems and framework; ensure human ability is all used to achieve organization goals. Include strategic human resources management, equal employment opportunity, staffing, talent management and development, total rewards, risk management and worker protection, employee and labor relations.

The best organizations understand that managing human resources effectively involves more than focusing only on current employees. It requires a long-term perspective that is responsive to the concerns of current employees; potential future employees and recent employees no longer work for. At the same time, the organizations strive to manage employees effectually, face to many challenges, for instance manning teams, the multicultural workforce, globalization, ethics and corporate social responsibility and metros. Human resources department responsible to provide effectual performance management and system to assist the company is going smooth.

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Performance management

The purpose of performance management is one of the most important and positive developments, achievement of high performance by the organization, managing the business. This is the process of identifying, measuring, managing and developing the performance in an organization. There are showing how well employees perform and finally improve performance level. The further explain that create strategic, integrated process, develop a culture of constantly success to organizations by improving the performance of the people who work in them and by developing the capabilities of individual contributors and teams (Cardy & Leonard , 2011).

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The development of individuals with competence and commitment, working towards to shared meaningful objectives within an organization that supports the achievement. When the direction is correctly, performance management is a systematic analysis and measurement of workers performance. Also it is a critical and necessary component for individual and organizational effectiveness. When manage a group of workers or others, report the feedback to boss. It must be
a process needed for improvement to occur. In performance management, it is getting the right workers into the production line or suitable staff into the system in a very important part of the overall process (Bergstedt, 2010). Performance appraisal

Performance appraisal are part of a performance management system, it is ongoing process of evaluating and reviews of employee performance over time. Provide an opportunity for formal communication between management and the employees, concerning each employee what performing on organization. Create two-way interaction between people. It is a good opportunity and let employee express what their comment to bosses is. Open lines of communication throughout the year help to make effective working relationships.

Allow management to make decisions about employees within the organization from this communication. Appraisals to make evaluative decisions concerning the workforce including pay raises, promotions, demotions, training, and development and so on. It cans measures skills and realization with reasonable accuracy and uniformity. The management can depend on this reliable information for making strategic planning, may enhance productivity for the firm as well. It provides a way to help identify areas for performance enhancement and to help promote professional growth. Each employee is entitled to a thoughtful and careful appraisal (Harzing, Pinnington, 2011, p.20-28).

The success of the process depends on the supervisor's willingness to complete a constructive and objective appraisal and on the employee's willingness to respond to constructive suggestions and to work with the supervisor to reach future goals. Difference between performance management and performance appraisal Performance management focus is on performance management, identifies measures, manages, and develops the performance of people in the organization. It is designed to improve worker performance over time. Emphasis is on performance improvements of individuals, teams and the organization.

It will continue process with periodical performance review discussions and then performance planning, analysis, review, development and improvements. Defining and setting performance standards are an integral part and designed by the human resources department but monitored under the each departments. Developmental needs are identified in the beginning of the year on the basis of the competency requirements for the coming year. There is review via mechanisms. However performance appraisal focus is on performance appraisal and ratings. It is just a part of the performance management process. Identifies measures, evaluates the employee’s performance, and then discusses that performance with the employee. Normally it is an annual exercise though periodic evaluations are made.

The main functions are on ratings and evaluation. The most important component is rewards and recognition of good performance of staff. Designed and monitored by the human resource department. Developmental needs are identified at the end of the year on the basis of the appraisal of competency gaps. There are review mechanisms to ensure objectivity in ratings. (Fraser, 2007) Characteristics of an unsuccessful performance management system Normally, the good performance possesses ability, motivation and opportunity.

It should make use of employee skills and have adequate incentives to urge them willingness to do the job. Provide work in an environment with support and way for expression. Unfortunately, driven by the some situational constraints including physical environment, working conditions, use of outcome of appraisal complexity of job, interdependence and lack of financial or human resources to make performance management system be an unsuccessful (Armstrong & Baron, 2005, p. 78-85). Causes of Failure of a performance management system have legislation affirmative action, lack of raters, less training, rating inflation or deflation, unclear purpose, without or ignore feedback, unfair reward system, appraisal instruments, performance Standards, rating accuracy, accountability of raters, management Commitment, no trust and participation and acceptance. ( Luecke & Hall,2006, p.93-98)

Characteristics of a successful performance management system Successful performance management system can manage performance over time to ensure that remain productive, and hopefully become even more capable, as progress in their careers. Designing an effective performance management system should including mirror the corporate culture, clear definition and communications of what good performance ensure all senior management support and understand the level of performance. It may train managers in this performance management. To set a clear expectation for employee, acknowledging that people are doing a good job and recognizing them for a job well done. To set a clear manifest that performance in the company is differentiated and that differences in performance are recognized through the reward system.

Differentiate performance fairly and effectively; through actions to show poor performance is being address, high performance will have a great rewards. Set an expectations or employee development, adjust the system if needed. Even compete performance management have a well strategic, developmental and administrative, also need line managers and senior management behave in a same way and support. That would be accomplished to achieve the organization goals. (Roberts Alan, 2012)

An unsuccessful versus a successful performance management system When an unsuccessful compare a successful performance management system, if under unsuccessful performance management system. Without any clear objective, goals and fair rules in this organization. The whole company will face to employee leave, low morale and not belong to the company. Without employee support and the bad relationship between company. The business must be going worst. On the contrary, if company has a good performance management system with a clear fairly and effectively goals, the employee and management will all support and try the best to achieve goals. The business will be getting better for each part under a pleased environment. (Bhattacharyya, 2011, p.47-52) Some common errors and eliminated

The common errors including distributional errors occur in three forms, severity or strictness, central tendency and leniency. There are based on a standard normal distribution. In severity or strictness error, the rater evaluates everyone or nearly everyone. Similarity error occurs when raters evaluate subordinates that judge or consider more similar as better employees. All have a tendency to feel more comfortable with people who feel are more similar. The similarity is based on demographic characteristics such as race. Allow this feeling of comfort with similar individuals to be reflected in the performance appraisal process.

It can avoid similarity error by embracing diversity and objectively evaluating individual employees based on their actual performance. Contrast error is the rater compares and contrasts performance between two employees, rather than using absolute measures of performance to measure each employee. For example, the rater may contrast a good performer with an outstanding performer, and as a result of the significant contrast. This would be a contrast error. It can avoid contrast error by objectively evaluating individual employees based on actual performance. Management must use the ranking method correctly; each individual based on the items on the assessment form then rank the individuals based on their assessments.

Halo and horn occurs when the evaluator has a generally positive or negative impression of an individual, and the evaluator then artificially extends that general impression to many individual categories of performance to create an overall evaluation of the individual that is either positive or negative In other words, if employees are judged by their supervisor to be generally good employees, and the supervisor then evaluates each of the areas of their performance as good, regardless of any behaviors or results to the contrary, the supervisor is guilty of halo error. It can avoid halo error by remembering that employees are often strong in some areas and weaker in others, and need to objectively evaluate individual employees based on actual performance for each and every item of assessment.

Appraisal politics is refers to evaluators purposefully contorting a rating to achieve personal or organization goals. Factors other than performance affect the performance appraisal. These factors are internal in the appraisal system and the organization system. It is occur when raters are accountable to the employee and rated, it appear competing rating goals and direct linking current between performance appraisal and most desirable rewards. In order to lessen this matter, managers should keep in mind and pay attention a fair appraisal system. Central tendency error occurs when raters evaluate everyone under the control as average nobody is either really good or really bad.

Proximity error states that similar marks may be given to items that are near each other on the performance appraisal form, regardless of differences in performance on those measures. Regency error occurs when raters use only the last few weeks or month of a rating period as evidence of their ratings of others. Attribution error. In simplified terms, attribution is a process where an individual assumes reasons or motivations such as attitudes, values, or beliefs for an observed behavior. Reducing rater errors is offer reeducating rating errors. Rater training undertaken to make managers aware of rating errors and helps develop strategies for minimizing those errors. This is consisting of the participants view vignettes designed to elicit rating errors, for example contrast.

Rater Error Training called frame-of-reference training as well, emphasize the multidimensional nature of performance and raters with the actual content of various performance dimensions. Moreover, accuracy training seems can increasing accuracy and provided the training allows raters to practice making ratings and training feedback.

Create a fair system should include train raters on the appropriate use of the process as discussed previously, build top management support for the appraisal system and actively discourage distortion, give raters some latitude to customer performance objectives and criteria for their rates, recognize employee accomplishments that are not self-promoted, make sure constraints for example a budget. Also make sure that appraisal processes are consistent across the company and foster a climate of openness to encourage employees to be honest the weakness. (Salaman, Storey & Billsberry, 2005, p.19-27) Conclusion

In conclusion, this essay is proving that good performance management is one of the most important positions in the company. Seeing that it can help employee and management together to achievement the goals under high performance. At the same time, human resources department is a very chief role to develop perfect performance management system and need to avoid some common error. Thus, that’s why human resources are a big part in the organization and influence the whole company. Word count: 2013

Armstrong Michael & Baron Angela (2005): Managing Performance: Performance Management in Action, Chartered Institute of Personnel and Development, CIPD House London, p. 78-85

Bergstedt Martin, (2010) [online] Available at: [Accessed October 27, 2012].

Bhattacharyya Dipak Kumar, (2011): Performance Management Systems and Strategies, Dorling Kindersley India Pvt Ltd, licensees of Pearson Education in South Asia p.47-52

Cardy Robert L & Leonard Brian, (2011): Performance Management: Concepts, Skills, and Exercises Second Edition, M.E.Sharpe, Inc New York, p.134-156

Fraser Ross, (2007) [online] Available at: [Accessed July 5 2007]. Harzing Anne-Wil, Pinnington Ashly, (2011): International Human Resources Management Third Edition, SAGE Publications Asia-Pacific Ltd Singapore p.20-28

Luecke Richard, Hall Brian J, (2006): Performance Management: Measure and Improve the Effectiveness of Your Employees, Harvard Business School Press p.93-98

Roberts Alan, (2012) [online] Available at: [Accessed June 25, 2012].

Salaman Graeme, Storey John, Billsberry Jon, (2005): Strategic Human Resource Management: Theory and Practice Second Edition, Published in association with The Open University p.19-27

Updated: Jul 06, 2022
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Performance management & Performance appraisal. (2016, May 11). Retrieved from

Performance management & Performance appraisal essay
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