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Testing the effectiveness of Performance Appraisals

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




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