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