While many companies carry out one form or the other Performance Appraisal System (PAS), which is a subset of PMS, many have not come to gribs with the uses of this wonderful management tool.
Having been involved in setting up, reviewing and execution of PMS in several companies, my experience/observation are as follows:-
- The usefulness of a PAS is directly proportional to it's complexity.
- The benefits to all parties is directly related to the simplicity of the goal setting process.
- PAS has more acceptability when used for more than salary increment.
- PAS becomes a disincentive for performance when not used for salary increment.
- All parties become happier when PAS is used for profit sharing.
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