Abstract:
Effective performance appraisal systems contain two basic systems operating in
conjunction: an evaluation system and a feedback system. The main aim of the evaluation
system is to identify the performance gap (if any). This gap is the shortfall that occurs
when performance does not meet the standard set by the organization as acceptable.
The main aim of the feedback system is to inform the employee about the quality
of his or her performance. One of the best ways to appreciate the purposes of
performance appraisal is to look at it from the different viewpoints of the main
stakeholders: the employee and the organization.
In this thesis a detailed study of LMK Resources was carried out and it was seen
that the present appraisal system failed to provide the necessary linkage between
employee performance and the organization’s objectives. Moreover the rating system was
chock-full with the rating errors such as: contrast effect, first impression errors, halohorns
effect, similar-to-me effect, central tendency, recency effect and stereotyping
A new appraisal system for LMK Resources was proposed which incorporated a
new technique for measuring performance based on 360 degree feedback. While the
traditional appraisal is exclusively one way (supervisor measures appraisee) the 360
degree appraisal takes feedback from the appraisee, supervisors, peers, subordinates and
even the clients.
The 360 degree performance appraisal will have the following advantages over
the traditional appraisal - improved feedback from more sources, team development,
personal and organizational performance development, managing employee career
development, reducing the risk of discrimination, improved customer service and
employee training need assessment.
