CHAPTER I INTRODUCTION

Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. Human Resource management is evolving rapidly. Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process. Performance appraisal is a method of evaluating the behavior of employees in the work spot, normally including both the quantitative and qualitative aspects of job performance. Performance here refers to the degree of accomplishment of the tasks that make up an individuals job. It indicates how well an individual is fulfilling the job dema nds. Performance is always measured in terms of results. PERFORMANCE APPRAISAL Performance appraisal is a process of assessing, summarizing and developing the work performance of an employee. Appraisals regularly record an assessment of an employees performance, potential and developmental needs. The appraisal is an opportunity to take an overall view of work content, loads and volume to look back on what has been achieved during the reporting period. In the organizational context, Performance appraisal is a systematic evaluation of personnel by superiors or others who are familiar with the performance of personnel. In other word, it is a systematic and objective way of judging the relative worth or ability of an employee in performing his job.

DEFINITION Performance appraisal is a method of evaluating the behavior of employees in the works pot, normally including both the quantitative and qualitative aspects of job performance. Performance here refers to the degree of accomplishment of the tasks that make up an individuals job. It indicate how well an individual is fulfilling the job demands. Performance is always measured in terms of results. According to Flippo, Performance appraisal is defined as a systematic, periodic and so far as humanly possible, an impartial rating of an employees excellence in matters pertaining to his present and to his potentialities for a better job. OBJECTIVES OF PERFORMANCE APPRAISAL Providing feedback Facilitating promotion decisions Facilitating lay-off or downsizing decisions Encouraging performance improvement Motivating superior performance Setting and measuring goals Counseling poor performers Determining compensation changes Encouraging coaching and monitoring Supportive manpower planning Determining individual training and development needs Determining Organizational training and development needs Validating hiring decisions Improving overall Organizational performance

FACTORS AFFECTING PERFORMANCE APPRAISAL Organizational structure Organizational leadership Environmental constraints Interdependence of subsystems USES OF PERFORMANCE APPRAISAL

Performance improvement Compensation adjustment Determines informational inaccuracies Placement decision Carrier planning and development Training and development needs Staffing process deficiencies Feedback to Human Resource

Job analysis, job description and job specification Performance appraisal is a process not to be undertaken in isolation of various human resource functions. It begins with job analysis, job description and job specification. These helps in establishing the standard performance. Establishing standards of performance Appraisal system requires performance standards, which serve as a bench marks against which performance is measured. The standards set for performance must be clearly defined and unambiguous. They should be attainable by a nominal employee. To be useful, standards should relate to the desired result of each job. Performance standards must be clear to both the appraiser and appraise. The performance standards or goals must be developed with the supervisors to ensure that all the relevant factors have been included. Communicating performance standards to employees The performance standards specified in the second step are to be communicated and explained to the employees (both appraiser and appraise) so that they come to know what is expected of them.

Measuring actual performance After the performance standards are set and accepted, the next step is to measure the actual performance. This requires choosing the right technique of measurement, identifying the internal and external factors influencing performance and collecting information on results achieved. It can be affected through personal observation, written and