CHAPTER 2

LITERATURE SURVEY

2.1 REVIEW OF LITERATURE

Performance is an outcome, or result of an individual’s actions. An individual’s

performance therefore becomes a function of ability and motivation. Performance Assessment
(also performance appraisal, evaluation, measurement) becomes a continual review of the job
related task accomplishments or failures of the individuals within the organization. A major
consideration in performance improvement involves the creation and use of performance
measures or indicators; which are measurable characteristics of products, services, processes, and
operations the company uses to track and improve performance.

SHELLEY describes performance appraisal as the process of obtaining, analyzing

and recording information about the relative worth of an employee. The focus of the
performance appraisal is measuring and improving the actual performance of the employee and
also the future potential of the employee. Its aim is to measure what an employee does. Shelley
again considers performance appraisal as a systematic way of reviewing and assessing the
performance of an employee during a given period of time and planning for his future. It is a
powerful tool to calibrate, refine and reward the performance of the 8 employee. By focusing the
attention on performance, performance appraisal goes to the heart of human resource
management and reflects the management's interest in the progress of the employees.

MOATS corroborate SHELLEY’s position and further add that performance

appraisal is a process by which organizations evaluate employee performance based on preset
standards. Moats describes the main purpose of appraisals as helping managers effectively staff
companies and use human resources, and, ultimately, improving productivity. According to
Moats when conducted properly, appraisals serve the purpose Shelley describes by: (1) showing
employees how to improve their performance, (2) setting goals for employees, and (3) helping
managers to assess subordinates' effectiveness and take actions related to hiring, promotions,
demotions, training, compensation, job design, transfers, and terminations.
 EDWIN B.FILIPPO defined has the term performance appraisal as “A systematic
,periodic and so far as humanly possible, an impartial rating of an employee’s excellence in
matters pertaining to his present to his present job and his potentialities for a better job”.

STEPHAN and PACE argued that the performance has many outcomes; however,
the two most important outcomes of performance are productivity and quality. Productivity
simply means the number of things that can be produced at the lowest value. Quality refers to
producing the most products and services with no defects at the lowest possible cost. They
assured performance achieves much more than just quality and productivity, and it involves
working to enhance production, paying attention to quality and managing technology in creative
and innovative ways, helping others when they need it, and coming in an hour early or staying a
little late to make improvements in the way something is being done. Performance behaviors are
a broad set of activities that leaders encourage and expect from employees and themselves.

ARMSTRONG mentioned that high performance can be achieved by appropriate

behavior, particularly discretionary behavior, and efficiently leveraging essential knowledge,
skills and competencies. Also, performance management need to scrutinize how outcomes are
produced, in order to gain the information required to consider what has to be done to those
consequences.

According to BRUMBACH performance refers to both behaviors and results.

Behaviors derive from the performer, and convert performance from thought to action. Behaviors
are not just the instruments for results, they are also outcomes in their own right – the product of
mental and physical effort applied to tasks – and can be judged apart from results.