The modern organization is under great pressure as a result of the unstable and competitive global environment in which it operates. If such an organization is to gain and maintain a competitive advantage, then it must effectively manage its resources. Managing the human aspect of the organization is a particularly vital and but complex process as the success of the entire organization is reliant on its workforce.
The performance appraisal process is an essential tool for motivating employees and developing their performance. According to Fisher et al (1999) performance appraisal should be aligned with the human resource strategy which is referred to as Performance Management. It is the process of planning and monitoring performance, developing the employee, reviewing or assessing performance, and rewarding good performance (Crossman, 2008). When these abovementioned processes function together and support each other effective performance management in the organization is achieved.
The organization determines its strategic goals; work systems are organized in order that these goals could be accomplished; and personnel must be employed with the abilities adequately execute their tasks. Standards of acceptable performance must also established for each task. These standards should be easy to comprehend, straightforward, measurable, and verifiable. They should also be fair, achievable and flexible so that they could be changed as strategic goals and the environment changes (www.opm.gov).
Information gathered through the performance management exercise would identify the most productive and improved employees, those whose performance have remained the same or those whose performance have declined; as well as the factors which affected performance either positively or negatively.
Benefits of Performance Management Systems
Armstrong (2006) posits that performance management systems develop the performance of employees as it relates to organizational...