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