This article provides short notes on Performance Appraisal Systems (PAS).

Concept of Performance Appraisal Systems:

In the recent years, with the increased emphasis on the human resources management function, some organisations have begun using the performance appraisal systems for the development of their employees also. Traditionally, most of the organisations are inclined to use ‘Performance Appraisal Systems’ (PAS) with a view to deciding and determining the increments, promotions and other rewards for their personnel.

There was hardly any attempt on their part for using PAS:


(i) To provide a feedback to the concerned personnel in relation to the clevel of their actual performance vis-a-vis the level of performance expected of them, and

(ii) To guide them how they could utilise their capabilities in a better way.

How PAS useful for Personnel Development:

Normally, the PAS used for development of employees involves the setting of annual targets at the beginning of the year by the employees in consultation with their superiors. These mutually agreed targets provide a common basis to the employee and his superior for evaluating the performance at the end of the year under appraisal.


Target-setting enhances the employees’ understanding of the job content and expectations.

Based on this evaluation, the employee and his superior can determine the nature of actions to be taken, such as—attending formal training courses, on-the-job training, job rotation, etc., so that relatively weak areas are overcome for overall performance improvement. Such approach assesses efficient utilisation of personnel consistent with their capabilities and potentialities.

In an environment of ‘group dynamics’ and ‘group relationships’, the PAS serves as a basis for strategic personnel planning and as a tool for motivation, communication and equity. In such cases, performance appraisal rates all personnel in the same group on an uniform basis and permits the making of comparisons among personnel and thereby enhances the process of employee development.

Again, the PAS can also be used to update regularly the personnel data base. This data base could then be utilised for various purposes, like identifying people who may be provided job rotation (for desired management development) or preparing lists of eligible people (based on job attributes desired) who may be considered for filling up vacancies in the organisation whenever needs for such placement arise.


This considerably enhances the credibility of the organisation’s personnel placement activity, a part of the total personnel development function. Problems when using the PAS for personnel development:

The following major problems are experienced:

(i) Problem in setting and evaluating objectives for the entire year in advance.

(ii) Subjectivity problem in evaluating non-quantitative objectives, such as the quality of services provided, development of subordinates, etc.


(iii) Problem relating to the very nature of managerial jobs for which wider perspective concerning the changes in operating conditions is called for rather than fixed targets.

(iv) Problem in feedback and counselling.

(v) Problem in training and development.

(vi) Problem in motivating people in relatively low cadres.