The organization’s overall objectives cannot be kept on track or attained if there are not adequate performance appraisal models setup within the organization. Without reliable, valid and quantifiable performance appraisals (which require clear, quantifiable job goals and descriptions) there is not way for managers to effectively gauge an employee’s performance of lack of it. Performance appraisals have as their main goal the objective of “maintaining or improving performance…beyond this important consideration, there are several additional reasons for conducting formal periodic appraisals. Chief among these is to aid supervisors in making decisions about compensation. Periodic appraisals also help managers evaluate subordinates’ suitability for training and development, and for job changes, such as promotions, transfers, demotions or dismissals…it also opens lines of communication between supervisors and subordinates,” (Vecchio, 1995: 260).
Perhaps the area of motivation is most where performance appraisals interact with other elements of the organization. This is because performance appraisals allow for compensation levels to be determined and other motivational factors such as, job redesign, promotion decisions, goal achievement evaluation and recognition of individual performance. There are formal and informal systems of performance appraisal. Formal systems of appraisal are usually setup on a structured scale and occur at regular intervals, usually once or twice a year. They are complex, form-oriented evaluations which allow for the manager to effectively evaluate the employee and their performance. Informal evaluations need to occur in combination with formal evaluations. Informal evaluations may be as simple as an employee and their supervisor talking over a cup of coffee in the morning, or it may include a luncheon in order to discuss a new aspect
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