2. 1. 1. Literature survey and details on Performance management The central part of Performance management is rating employee’s performance as synergy. Performance management is the process through which managers ensure that employee’s activities and outputs contribute to the organization’s goals . The main requirements of the process are to know what activities and output is desired, to observe whether they occur, and to provide feedback to help employees meet expectations. While taking feedback from different sources, managers and employees identify performance problems and try to resolve those problems.
It provides an opportunity for the employee and performance manager to develop goals and jointly create a plan for achieving those goals. Development plans contributes to organizational goals and the professional growth of the employee. Performance Management being the most critical area of human resource management, the department relies on evaluation results in determining the soundness of much developmental decision, which have direct impact on the business surplus. The Process of Performance Management Figure 2. 1 Process of Performance Management 
Purpose of Performance Management  1. Strategic purposes – To achieve the business objective of an organization, effective performance management plays a vital role. Performance management does this help by linking employee’s behaviour with the organizational goals. It starts defining what the organization expects from each employee and at the same time it measures the performance of each employee’s to identify either the expectations are met or not. Depending upon performance measurement, the organization can take corrective action such as training, incentives or discipline.
Performance management can achieve strategic purposes on the following condition. * When performance measurements are truly linked with the organizational goals. * When the goals and feedback about performance are communicated to the employees. 2. Administrative purpose – It is the way where organization uses the system to provide information for day to day decisions about salary, benefits and recognition programs. Decision making related to employee retention, termination for poor behaviour, hiring and layoffs are supported by erformance management. As the administrative decisions are supported by performance management, the information in performance appraisal can have a great impact on the future of individual employees. 3. Development purpose – It serves as basis for developing the employee’s knowledge and skills. When the employee’s met expectations they become more valuable. Employees get aware of their strength, weakness and areas of improvement by feedback of effective performance management. Tools of performance management  . Performance and development reviews 2. Learning and development 3. Coaching. 4. Objectives and Performance Standards 5. Competency and competencies 6. Measurement Pay 7. Team based work 8. 360 degree appraisal 9. Performance problem solving Criteria for effective performance management  Figure 2. 2 criteria for effective performance management  The aim of the performance management should be achieving employee behaviour and attitude which supports the organization goals, strategy, and culture.
If the organization strategy changes the human resource personnel should help the managers assess how the performance management system should change to serve the new strategies. Example: – If a company emphasizes customer service, then its performance management system should define the kinds of behaviour that contribute to good customer service. Focus of Performance management  1. Performance improvement 2. Employee development 3. Satisfying the needs and expectations of stakeholders 4. Communication and involvement Conclusion
In today’s management scenario Performance appraisals have become a tool of much importance. With the help of objective and fair HR practices, Performance management can prove to be the best. The outputs of which could be used for Organization development rather than for mere employee efficiency improvement. If challenged casual and subjective appraisals will not be able to stand the test of fairness and legality. Firms are thus being forced to emphasize a participative but joint management by objectives followed by a participative, joint-periodic appraisal, to bring more clarity into the system.