UNIT – I Lesson 1 HRM – AN OVERVIEW Lesson Outline Nature of ...

Introduction
Appraisal is the evaluation of worker, quality or merit. In the organizational
context, performance appraisal is a systematic evaluation of personnel by superiors or
others familiar with their performance. Performance appraisal is also described as merit
rating in which one individual is marked as better or worse in comparison to others. The
basic purpose of merit rating is to ascertain an employee’s eligibility for promotion.
However performance appraisal would be used to decide training and development, salary
increase, transfer and discharge also C. Heyel defines, “performance appraisal is the
process of evaluating the performance and qualifications of the employee in terms of the
requirements of the job for which he is employed, for the purposes of administration
including placement, selection for promotion, providing financial rewards and other
actions which require differential treatment among the members of a group as
distinguished from actions affecting all members equally”. Beach has defined,
“performance appraisal is the systematic evaluation of the individual with regard to his or
her performance on the job and his potential for development.
Performance appraisal is a systematic and objective way of judging the relative
worth or ability of an employee in performing his job. It emphasizes on two aspects;
systematic and objective. All performances are to be evaluated in the same manner,
utilizing the same approaches. This would facilitate appraisal of different persons
comparable. This makes it systematic, as such an appraisal is taken periodically according
to plan; it is not left to chance. This makes the system objective. Both those who rate and
who are rated knows the system of performance appraisal and its training. Human bias
and prejudices are set aside, and so objective in this respect also.
Objectives
The objectives of performance appraisal are as follows:
1. Salary increase:
Performance appraisal plays a role in making decision about salary increase.
Normally salary increase of an employee depends on how he is performing his job. The
hike in salary to different employees may be according to their efficiency and ranking.
2. Promotion
Performance appraisal plays a role in making decision about promotion. Normally
internal promotion of an employee depends on how he is performing his job. There is
continuous evaluation of his performance either formally or informally. Most of the