Literature review on performance evaluation By Ramneek Bawa PhD management Shoolini University An employees future is closely dependent appraisal-promotions,

continuation of employment and salary increase. And this is done by performance evaluation by the human resource department were the decision are both objective and subjective. From a researchers point of view if we observe the performance evaluation method to judge the employee, it is a very powerful tool to give justified benefit to the employee and the organisation itself. The beauty of performance evaluation is the it is unbiased and solely dependent on the performance of the employee. This technique is not a new one in human resource, it came into existence in early 1980s the same time when the management theories were been shaped by the earlier management gurus. According to the research of Arvey and Murphey (1998), there were hundreds and thousands of researches had been taken place between the periods of 1950 to 1980 which merely focused on the different types of rating scales. To this Landy and Farr (1980) further reviewed and researched on this and came up with performance raters and processes in organizational context. And till date performance appraisal is one of such method that allows for optimization of labour with the passage of time the definition of performance evaluation has been changed from being only to evaluate job done to find areas of skill deficit for further development ,identify excess potential that could be better utilized and communicate objectives more accurately to workers. General electric company evaluates the performance of its corporate managers, including the group of GEs top executive in India, on five growth traits. The traits are inclusiveness, imagination/courage, expertise, external focuses, and clear thinking. By evaluating its, 5,000 top managers on these traits. As mentioned in Stephen P. Robbins 13th edition organizational behaviour, Pearson prentice hall 2009. This shows that the purpose of any such system is not only to measure the performance of human resources but also to find areas of skill deficit for further development, identify excess potential that could be better utilized and communicate objectives more accurately to workers. By doing so, business move one step closer to the achievement of their set goals & objectives. It becomes a valuable asset within itself for maintaining records of workers that are legally viable, that can protect the business when dealing in cases of dismissals and demotions. This is especially important in todays society because the increasing Legislation and regulation. Traditional appraisal systems were often closed, meaning that individuals were not allowed to see their own reports. Since the mid-1900s, most companies have rejected closed evaluations in favour of open appraisals that allow workers to benefit from criticism and praise.

If we look back another change in appraisal techniques since the mid-1900s has been a move toward greater employee participation. This includes self-analysis, employee input into evaluations, feedback, and goal setting by workers. Appraisal systems have also become more results-oriented, which means that appraisals are more focused on a process of establishing benchmarks, setting individual objectives, measuring performance, and then judging success based on the goals, standards, and accomplishments. Likewise, appraisals have become more multifaceted, incorporating a wide range of different criteria and approaches to ensure an effective assessment process and to help determine the reasons behind employees' performance. The latest approach to this is the 360 degree evaluation. It provides evaluation from full circle from boss to peers to customers etc. the number of appraisal can be ramging from 3 to 4 to 25 or even more but the point is that now the performance evaluation is decentralized that is, it has shifted from human resource managers observation to whole organisational observation and evaluation. The fruitful part of performance evaluation is providing the feed back. But it has been observed that mostly managers are reluctutent in providing a feedback, or sometimes the approach is not correct. To support this bill gates conducted a project report in Microsoft requiring users to rate their experience with a computer .when we had the computers the users had worked with ask for an evaluation of its performance ,the responses tend to be positive. But when we had a second computer ask the same people to evaluate their encounters with the first machine, the people were significantly more critical. Their reluctant to criticize the first computer was that they didnt wanted to hurt its feelings even though they knew it was a machine! Similar is the case with the managers and employees. Both of them show reluctant behaviour to express the feedback. The employee tend to become defensive. Here its the manager who has to present it as tool for employee to be more constructive and basis for improving performance. Hindustan uniliver Ltd (HUL), FMCG major has one of the most sophisticated and effective performance evaluation system in India. It uses the bell curve concept for performance evaluation. The reason behind it is that employers are observing that 80:20 rule is showing good results. I.e. their 20 % employees are generating 80 % of profit for the company and for this they have to be awarded adequately. Not only this ,every year the HR team of Johnson & Johnson carries a Credo feedback survey based on a 60 year old protocol written by its founder to test the climate and culture within an organization.

Keeping the System Alive

The greatest challenge for many organizations is keeping the performance management system viable after the first year or two. A 1995 survey indicated that 44% of 218 companies with performance management systems had changed systems in the previous two years and that another 29% expected to do so. Other studies have shown most organizations replace their system on average every 34 years.

It is important to periodically monitor the system, revise portions of it when necessary, and refresh peoples interest in the system. Too often, organizations ignore the system and then are faced with completely dismantling it after the system has become woefully out of step with the times, or employees mistrust its use.