Performance Appraisal : A Key to HR Assessment and Development

Performance Appraisal (PA) has been one of the most researched issues in the fields of Industrial Organizational Psychology and Human Resource Management. A review of literature have depicted that a positive and significant correlation exist between high performance and the firm’s financial performance. This paper explores the performance appraisal practices of selected Indian companies. It provides an insight into the concept of performance appraisal, the methods and approaches of performance appraisal and the appraisal process etc. The study observes that at L& T performance of human resources is appraised at three levels i.e. self appraisal by employee reviewing his past performance, critical attributes appraisal by immediate supervisor. Finally, the superior along with the employee carries out performance and development planning for the future period. At Voltas limited, PA strives to identify competency gaps and aims at employees’ development. At CMC Limited, performance appraisal is known as Performance Department Review (PDR), self appraisal and appraisal by immediate manager is part of appraisal process. It is evident that in the selected companies appraisal is mostly based on self appraisal and appraisal by the immediate superior. The study observes that Performance appraisal is indispensable to be aware of each employee’s abilities, competencies and relative merit and worth for the organization. Finally, PA is a pre requisite for the success of any organization as it aims at identification of competency gaps and taking steps to bridge such gaps through appropriate HR development measures to face the challenges of competitive world