THE ROLE OF PERFORMANCE APPRAISAL IN THE CONTEXT OF PERFORMANCE MANAGEMENT SYSTEMS

Performance management is a complex concept that integrates all business activities and creates a continuous system for improvement. One of the key ingredients in an efficient performance management system is a well-designed performance appraisal that integrates the individual goals with the team and organization goals. When designing a performance appraisal system one has to consider the many existing techniques, tools and sources of error. Also, when defining the expected results and KPI’s for measurement, it is important to know the difference between output and outcome. The present paper aims to synthetize, through a literature review, the main aspects of performance appraisal in the context of performance management, pointing out its advantages and disadvantages.