The Importance Of Performance Appraisal And Performance Management

It is also fundamental to pay attention to the importance of how to effectively manage the people in the organization to succeed in the achievement of the company’s goals. For this purpose, there are two important concepts that need to be defined: Performance Appraisal (PA) and Performance Management (PM). PA has traditionally been used to evaluate employee’s performance in an individual basis. These evaluations were usually carried out by the Human Resources (HR) department and consisted in just one retrospective review a year (Torrington et al. 2014). Nowadays PA is considered to be one approach inside performance management systems (PMS) and focuses more on looking forward and in the employee commitment and motivation. Indeed, it can be said that PA is a key element of the PMS. In recent years PMS are considered to be the tools to manage employees effectively (Torrington et al. 2014). Performance management is a ‘line manager driven’ process (Torrington et al. 2014). Performance management is a planned system which key elements are agreement of the job requirements and objectives, measurement of the results compared to objectives, feedback, positive reinforcement

Otherwise it would be difficult for employees to do a good job if they are not aware of performance expectations. Then, these objectives will be ‘translated to individual-level objectives’ (Torrington et al., 2014). The firm needs to make sure employees are not only given a description of objectives, it is vital that they understand the performance expectations. Employees will carry out their tasks. In the next step individuals will be assessed and feedback will be given (Torrington et al. 2014). Managers have a key role monitoring, giving extra training or coaching if needed. The last stage of the cycle will be linking reward to performance (Torrington et al.