Critically assess the importance of performance appraisal as an Essay

Critically assess the importance of performance appraisal as an integrative function of human resource management - Essay Example One of such tools is the performance appraisal system which elaborates on the evaluation of the individual employee performances and likewise suggests the determination of the reward system. However, being linked with employee performances in a direct way, the tool can be identified to impose various limitations and complexity issues for the modern day management. Based on this notion, it has often been argued that performance appraisal performs a vital function to determine the sustainability of an organisation by a large extent (Rees & Porter, 2004). Emphasising on this particular aspect, the discussion hereby deals with the role of performance appraisal system to support the success of an organisation by gaining sustainability in terms of enhanced employee loyalty and consistent augmentation in their productivity. The sole intention of the essay is thus to critically discuss about the importance of performance appraisal system taking into account the case example of Rother Homes, a major player in the market of UK housing association. Importance of Performance Appraisal as an Interpretive Function of HRM Performance appraisal can be identified as one of the most important tools considered in the modern day applications of HRM to evaluate the performance of the employees effectively in an organisation (The University of Texas- Pan America, 2008). It is in this context that an appropriately executed performance appraisal tends to make the organisation familiar with the employee’s performances and their capacity to work. The feedback obtained from the performance appraisal is often useful for the organisation to accurately decide upon the employees’ reward in terms of promotion or demotion. Hence, a properly executed performance appraisal program helps the organisation to identify the shortfalls of the employees and effectually work on the indentified issues. Moreover, it helps to conduct management development program efficiently and prepare qual ity workforce for the future operations (Dargham, n.d.). Although formulating standards is regarded as quite difficult in the application of HRM, it is also necessary to establish standards for measuring and evaluating the overall employee performances accurately and effectively. In order to ensure that the performance appraisal is effective in an organisation, it must include the features in terms of validity and reliability being free from biases and relevance (Khan, n.d.). Illustrating the Importance of Performance Appraisal in Rother Homes Separating the Financial Bonus from Performances In the case of Rother Homes, it has been witnessed that the management attempts to relate financial incentives with the performance appraisal system in order to motivate the employees to contribute their best in the organisational process. However, in executing the process, the organisation tends to lack analysing its impact on the employees which in turn indicates a major lacuna of the entire p erformance appra