Performance Appraisal (PA) is the process that is used to evaluate the personality, performance and potential of the employees of an organization. It is a process of evaluating and communicating to an employee how he or she is performing the job and establishing a plan for improvement. Hence, it is a system of review and evaluation of job performance to assess accomplishments and to evolve plans for development.

Performance appraisal means evaluating an employee’s current and/or past performance relative to his performance standards. According to Newstrom, “It is the process of evaluating the performance of employees, sharing that information with them and searching for ways to improve their performance’’. It is the step where the management finds out how effective it has been at hiring and placing employees. It is recommended that in addition to an annual formal performance appraisal, informal performance appraisals should be conducted two or three times a year.

The main purpose of any organization is to make sure that all the employees work towards the strategic goal of the company. For this purpose, it is crucial that the company should define well-defined and clear goals and work efforts to each employee. Each employee should clearly know his goals and work effort. He should know, towards which direction he is working each day. It is essential that the goals and work effort defined should be specific, measurable, challenging, practically feasible and encourages participation.

to translate job reqPerformance Criteria helps uirements into levels of acceptable or unacceptable employee behaviour. It is essential to define ‘Performance Criteria’ for conducting a performance appraisal. Hence, ‘performance criteria’ is an important determinant of performance.