It is necessary for a business organization to carry

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It is necessary for a business organization to carry out the activity of performance appraisal periodically as it entails twofold beneficial effect. To a business it does help to grow strengthening total organizational competencies and creating effectiveness and efficiency. To the employees, making them realize their full potential, it becomes a source to motivate them to do their jobs in the best way. 21.3.2 Objectives of Performance Appraisal Performance Appraisal can be done with following objectives in mind: 1. To maintain records in order to determine compensation packages, wage structure, salaries raises, etc. 2. To identify the strengths and weaknesses of employees to place right men on right job. 3. To maintain and assess the potential present in a person for further growth and development. 4. To provide a feedback to employees regarding their performance and related status. 5. To provide a feedback to employees regarding their performance and related status. 6. It serves as a basis for influencing working habits of the employees. 7. To review and retain the promotional and other training programs. Objectives The main objective of performance appraisals is to measure and improve the performance of employees and increase their future potential and value to the company. Other objectives include providing feedback, improving communication,
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192 understanding training needs, clarifying roles and responsibilities and determining how to allocate rewards. Providing Feedback Providing feedback is the most common justi fi cation for an organization to have a performance appraisal system. Through its performance appraisal process the individual learns exactly how well he/she did during the previous twelve months and can then use that information to improve his/her performance in the future. In this regard, performance appraisal serves another important purpose by making sure that the boss’s expectations are clearly communicated. Facilitating Promotion Decisions Almost everyone in an organization wants to get ahead. How should the company decide who gets the brass rings? Performance appraisal makes it easier for the organization to make good decisions about making sure that the most important positions are fi lled by the most capable individuals. Facilitating Layoff or Downsizing Decisions If promotions are what everybody wants, layoffs are what everybody wishes to avoid. But when economic realities force an organization to downsize, performance appraisal helps make sure that the most talented individuals are retained and to identify poor performers who effects the productivity of the organization. (India's largest software services provider TCS axed 1,000 jobs in the country due to non- performance by its employees.
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