'Appraisal systems formalize the review part of the performance cycle' (Torrington & Hall,1995). Performance appraisal deals with the measurement of performance

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Performance appraisal is a keystone of the performance management. 'Appraisal systems formalize the review part of the performance cycle' (Torrington & Hall,1995). Performance appraisal deals with the measurement of performance. Despite the unpopularity of performance appraisal it is generally accepted among managers that there should be some means by which performance can be measured, monitored and controlled (Bratton and Gold, 2003).

There are many definitions of performance appraisal. However, the ACAS 2003 as recorded by Foot and Hook (2005) clearly define it as,

Appraisals regularly record an assessment of an employee's performance, potential and development 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 and agree objectives for the next.

Performance appraisals provide an opportunity for managers and their staff to meet on an annual, six monthly or even quarterly basis to discuss past and present performance issues. Performance appraisal is not simply a time for the employer to review the employee's performance, it is also an opportunity for the employee to address any concerns. Both parties will be looking for feedback and an understanding of what future action is required on both sides.

Appraisal is not a "one size fits all" process. The right appraisal system is the one best fit for your organisations culture and suitability for its purpose (www.performancemanagement.co.uk). This would suggest that not all organisations have the same purpose from their appraisal system, which is also true. The main reason today why organisations use performance appraisal is that, 'quality feedback improves performance' (Gillen, 1995). It has become part of the drive towards competitive advantage. There are however many other functions of appraisal that organisations may specifically be interested in. Torrington and Hall (1995) highlight that appraisal can be used to,
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Improve current performance, provide feedback, increase motivation, identify training needs, identify potential, let individuals know what is expected of them, focus on career development, award salary increases and solve job problems. It can be used to set out job objectives, provide information for human resource planning and career succession, assess the effectiveness of the selection process and as a reward or punishment in itself.

All the purposes of performance appraisal above, according to Randall et al (1984) can be divided into three categories. These are performance, potential and reward. It has been suggested that an organisations appraisal ...

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