If we want to know how well the employees are doing, we’ve got to measure their performance-not necessarily an easy task. Many factors go into the performance evaluation process, such as why do we do them, who should benefit from the evaluation, what type of evaluation should be used, and what problems might be encountered. Performance management systems involve a number of activities. They are more than simply reviewing what an employee has done. These systems must fulfill several purposes.
PURPOSE OF PERFORMANCE MANAGEMENT SYSTEMS Nearly three decades ago, performance evaluations were designed primarily to tell employees how they had done over a period of time and to let them know what pay raise them would be getting. This was the “feedback” mechanism in place. Although this may have served its purpose then, today there are additional factors that must be addressed. Specifically, performance evaluations should also address development and documentation concerns. Performance appraisal must convey to employees how well they have performed on established goals. It’s also desirable to have these goals and performance measures mutually set between the employee and the supervisor. Without proper two-way feedback about one’s own effort and its effect on performance, we run the risk of decreasing an employee’s motivation.