| Performance appraisal is one of the popular | | | | Nokia. Nokia has incorporated performance |
| concepts among the multinational and local | | | | appraisals in its compensation plans for its |
| companies. The concept has been defined by | | | | employees. The company has adopted the |
| DeVries et al., (1981) as the process which | | | | philosophy of pay-for-performance and |
| allows firms to measure and consequently | | | | therefore measuring and gauging different |
| evaluate an employee's achievements and | | | | performance indicators of each employee is |
| behavior over a certain period of time. The | | | | essential to the company. Nokia is an |
| basic purpose of using performance appraisal | | | | innovative firm with a global matrix |
| techniques within an organization is to align | | | | structure and a typical line management |
| the employee's efforts with the overall | | | | configuration at the country level. Therefore |
| objective of the firm. | | | | the performance appraisal system called |
| | | | 'Investing in People' has been designed as |
| There has been a widespread discussion within | | | | 360 degree feedback and electronic briefing |
| the academic circles as to how to define | | | | sessions (Pollitt, 2004), which are perfectly |
| performance (Papers4you.com, 2006). Drawing | | | | aligned with the structure and overall aim of |
| upon Briscoe & Schuler (2004) performance can | | | | the company. |
| be viewed as a combination of several | | | | |
| variables, such as motivation, ability, | | | | It can be concluded from the discussion that |
| working conditions and expectations. It has | | | | valuable organizational objectives are served |
| been established that there are certain | | | | with the help of performance appraisals and |
| factors that affect employees' performance | | | | organizations should use the technique by |
| more than others. These factors, according to | | | | aligning the performance parameters with |
| Dowling et al (1999) include the compensation | | | | their overall mission and vision. |
| package; the nature of task; support from | | | | |
| higher management; the working environment | | | | References: |
| and the overall corporate culture. | | | | |
| | | | Briscoe, D. & Schuler, R. (2004), |
| There are many advantages mentioned in the | | | | "International Human Resource Management" 2nd |
| literature regarding the use of performance | | | | Ed., Routledge |
| appraisals within an organization | | | | |
| (Papers4you.com, 2006). It has been suggested | | | | Dowling et al (1999), "International Human |
| that it improves the communication between | | | | Resource Management - Managing People in a |
| the higher to lower level management; | | | | Multinational Context" 3rd Ed., International |
| identify areas of improvement; show employees | | | | Thomson Publishing |
| training needs; help in promotion, retention | | | | |
| and termination decisions; and means of | | | | DeVries, D.L., Morrison, A.M., Shullman, |
| managerial control (Fletcher, 1992). In order | | | | S.L., Gerlach, M.L. (1981), "Performance |
| to take full advantage of the performance | | | | Appraisal On The Line, Center for Creative |
| appraisals, the goal in designing such | | | | Leadership", Greensboro, NC |
| systems should be congruent to the overall | | | | |
| aim and vision of the company. For instance, | | | | Fletcher, C. (1992), "Performance management: |
| it is evident that there is a direct | | | | its nature and research base", in Developing |
| correlation between the performance of | | | | a Performance-oriented Culture (Eds), |
| employees and their rewards as businesses do | | | | Association for Management Education and |
| seek creation of wealth as their primary | | | | Development |
| goal. Therefore one of the increasingly | | | | |
| adopted uses of performance appraisals is to | | | | Pollitt, D. (2004), "Nokia Connects HR Policy |
| motivate employees to perform better by | | | | with Company Success", Human Resource |
| linking it with reward packages. | | | | Management International Digest, Vol. 12 No. |
| | | | 6, p30-32 |
| The concept and its uses can be further | | | | |
| explained with the help of the example of | | | | Papers For You (2006) "P/HR/244. |